Document:

Exhibit 10.1
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                         EXECUTIVE EMPLOYMENT AGREEMENT

         This Executive  Employment  Agreement  (this  "Agreement")  is made and
entered into as of December 30, 2004, to be effective as of January 1, 2005 (the
"Effective Date"), by and between  MedSolutions,  Inc., a Texas corporation (the
"Employer"),  and Matthew H.  Fleeger,  an  individual  resident of the State of
Texas (the "Executive").

                                   WITNESSETH
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         WHEREAS,  the Executive has certain skills,  experience,  and abilities
that are  valuable  to the  success  of the  Employer's  operations  and  future
profitability;

         WHEREAS,  the Employer desires to employ and retain the services of the
Executive  as a full  time  employee  in the  position  of  President  and Chief
Executive Officer,  and the Executive desires to work for and be employed by the
Employer in such positions; and

         WHEREAS,  the Employer and the Executive  desire to set forth the terms
and conditions pursuant to which the Executive will be employed by the Employer.

         NOW,  THEREFORE,  in consideration of the foregoing premises and of the
mutual  covenants  and  undertakings  contained  herein,  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties to this Agreement hereby agree as follows:

Article 1:        EMPLOYMENT TERM AND DUTIES

         1.01  Employment.  The Employer  hereby employs the Executive,  and the
Executive  hereby  accepts  employment  by the  Employer,  upon  the  terms  and
conditions set forth in this Agreement.

         1.02  Term.   Unless  earlier   terminated  as  herein  provided,   the
Executive's  employment  with the  Employer  pursuant  to this  Agreement  shall
commence  on the  Effective  Date and shall end on the final day of the Term (as
defined in this Section 1.02). For purposes of this Agreement,  the "Term" shall
mean a period of time  commencing on the  Effective  Date and  continuing  until
December 31, 2007,  at which time the Term shall  automatically  renew for up to
two (2) subsequent one year term(s) (each, an "Extension Term"),  each until the
next  anniversary  of the  Expiration  Date,  subject to either party  providing
written  notice to the other  party of its intent not to renew the Term at least
90 days before the end of the then-current Term or Extension Term. The Extension
Term(s)  shall  be  governed  by the  terms  and  conditions  set  forth in this
Agreement,  provided that the Executive's compensation during any such Extension
Term(s) may be renegotiated by the Executive and the Employer. The date on which
the Term,  or any  subsequent  renewal  thereof ends,  shall be the  "Expiration
Date".

         1.03  Duties  and  Services.  The  Executive  will be  employed  as the
President and Chief Executive Officer of the Employer at 12750 Merit Drive, Park
Central  VII,  Suite 770,  Dallas,  Texas  75251,  and will have such duties and

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perform such services as are customary of such  positions and those  assigned or
delegated to the Executive by the Board of Directors. Subject to his suffering a
Disability  (as  defined in Article 4 of this  Agreement),  the  Executive  will
devote his business time,  attention,  skill,  and energy to the business of the
Employer and will use his best efforts to promote the success of the  Employer's
business.

Article 2:        COMPENSATION

         2.01 Salary.  Subject to the  provisions of Article 4 of this Agreement
that relate to  compensation  of the Executive  following the termination of the
Employment  Period (as defined in Article 8 of this  Agreement),  the  Executive
will be paid a minimum annual base salary of $200,000 (such amount, as it may be
changed from time to time, is  hereinafter  referred to as the "Salary") for the
duration of the Term and any Extension  Terms. The Salary as currently in effect
will  automatically  be increased five percent (5%) on each  anniversary date of
the Effective  Date for the duration of the Term and any Extension  Term(s).  In
addition, the Salary will automatically be increased to match any greater amount
of base salary  (i.e.,  excluding  any amounts paid in the form of  commissions,
bonuses,  etc.) paid to any new employee joining the Employer or other successor
entity as a result of any acquisition of or by the Employer;  any such automatic
Salary  increase  shall be effective  beginning as of the date on which such new
employee's  employment   commences.   The  Employer  shall  withhold  from  each
installment of the Salary all applicable  federal,  state,  and local income and
other  payroll  taxes.  In the  event  of  the  termination  of the  Executive's
employment by the Employer  without Cause (as defined below) within 12 months of
(i) the  consummation  of a  reorganization,  merger  or  consolidation  with an
entity,  or any other  event (or series of related  events) in which the persons
who hold a majority of the outstanding  equity securities of the Employer before
such  transaction  do not  own at  least a  majority  of the  equity  securities
entitled to vote to elect directors (or persons  serving in a similar  capacity)
of the  entity  surviving  such  transaction,  or (ii) a  disposition  of all or
substantially all of the assets of the Employer, the Executive shall be entitled
to a  lump  sum  payment,  the  amount  of  which  shall  be  determined  by the
Compensation  Committee  of the Board of  Directors,  but in no event  shall the
amount of such payment be less than the Executive's aggregate  compensation from
the  Employer  (including  Salary  and  Benefits)  during  the  24-month  period
immediately preceding the effective date of such event or disposition.

         2.02 Bonuses. Executive shall receive a one-time bonus in the amount of
$25,000  payable  on  April  15,  2005.  Executive  shall  also be  entitled  to
additional  bonuses from time to time as the Employer's  Board of Directors,  in
its sole  discretion,  may determine  pursuant to the Employer's  bonus plans or
programs.  Executive is currently  eligible for  participation in the Employer's
executive target bonus program as described on Exhibit A attached hereto.

         2.03  Benefits.  For  the  duration  of the  Employment  Period  and as
otherwise set forth herein,  the Executive and his dependents  (if  applicable),
will be permitted to participate in such pension,  stock option,  bonus,  health
insurance,  disability income insurance, and other employee benefit plans of the
Employer that may be in effect from time to time to the extent the Executive and
his  dependents  are eligible for  participation  under the terms of such plans.
Notwithstanding the foregoing, the Employer shall provide the Executive with (i)
disability  income  insurance,  and  (ii)  health  insurance  benefits  for  the

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Executive and the member(s) of his immediate family. The Employer shall also pay
to the  Executive,  in addition to any other  benefits,  a car  allowance in the
amount  of $500 per month  and in  addition  reimburse  the  Executive  for fuel
purchases  relating  to his use of a vehicle  in the  performance  of his duties
hereunder.

Article 3:        FACILITIES AND EXPENSES

         The Executive will use the office space, equipment,  supplies, and such
other facilities, property, and personnel as are currently being provided by the
Employer  for such  purposes to perform  his duties  under this  Agreement.  The
Employer will  reimburse the Executive for reasonable  expenses  incurred by the
Executive in the  performance  of his duties in accordance  with the  Employer's
employment  policies in effect from time to time;  provided,  however,  that the
Executive must file written  expense  reports with respect to such expenses,  in
accordance  with the Employer's  employment  policies,  before the Executive may
receive such reimbursement.

Article 4:        TERMINATION

         4.01 Termination of Employment Period.

                  (a)  Death  of the  Executive.  The  Employment  Period  shall
terminate immediately and automatically upon the death of the Executive.

                  (b)  Termination  by the Employer.  The Employer may terminate
the  Employment  Period  (i)  immediately  upon  the  delivery  of a  Notice  of
Termination (as defined in Section 4.01(d) of this Agreement) by the Employer to
the Executive  setting forth the facts that  indicate that a  determination  has
been made that the Executive has a Disability in accordance with Section 4.02 of
this Agreement; (ii) immediately upon delivery of a Notice of Termination by the
Employer to the  Executive  setting  forth the facts that indicate that an event
constituting  Cause (as defined in Section 4.03 of this Agreement) has occurred,
or on such  later  date as may be set forth in such  Notice of  Termination;  or
(iii) at any time  without  Cause  effective  as of the 30th day  following  the
delivery of a Notice of Termination by the Employer to the Executive, or on such
later date as may be set forth in such Notice of Termination.

                  (c) Termination by the Executive.  The Executive may terminate
the Employment  Period (i) immediately  upon delivery of a Notice of Termination
by the Executive to the Employer setting forth facts that indicate that an event
constituting  Good Reason (as  defined in Section  4.04 of this  Agreement)  has
occurred  within the 30 days  immediately  prior to the date of delivery of such
Notice of Termination;  or (ii) at any time without Good Reason  effective as of
the 360th day following the delivery of a Notice of Termination by the Executive
to the  Employer,  or on such later  date as may be set forth in such  Notice of
Termination.

                  (d) Notice of Termination.  For purposes of this Agreement,  a
"Notice of  Termination"  shall mean a written  notice  (delivered in accordance
with Section 7.06 herein) that indicates the specific  termination  provision in

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this  Agreement  upon which the person  intending  to terminate  the  Employment
Period  is  relying  and  sets  forth  in   reasonable   detail  the  facts  and
circumstances  that provide a basis for  termination  of the  Employment  Period
under such termination provision.

         4.02 Definition of  "Disability."  For purposes of this Agreement,  the
Executive  will be deemed  to have a  "Disability"  under  any of the  following
conditions:  (a) for  physical or mental  reasons,  the  Executive  is unable to
render and perform  substantially  and continuously  the Executive's  duties and
services as required  by this  Agreement  for 12  consecutive  weeks,  or for 16
nonconsecutive  weeks  during  any  12-month  period,  or (b) the  prognosis  or
recommendations  of the  Examining  Doctor (as defined in this Section 4.02) are
such that the Executive would be unable to render and perform  substantially and
continuously  the  Executive's  duties and services  under this Agreement for 12
consecutive  weeks, or for 16  nonconsecutive  weeks during any 12-month period.
Upon the request of either party hereto  following  written notice to the other,
the  Disability  of the Executive  will be  determined by a medical  doctor (the
"Examining  Doctor")  who shall be  selected as follows:  the  Employer  and the
Executive shall each select a medical doctor, and those two medical doctors will
select  a  third  medical  doctor  who  will  be  the  Examining   Doctor.   The
determination  of the Examining  Doctor as to whether or not the Executive has a
Disability will be binding on both parties hereto.  The Executive must submit to
a reasonable number of examinations by the Examining  Doctor,  and the Executive
hereby   authorizes   the  disclosure  and  release  to  the  Employer  of  such
determination  and the results of such  examinations.  If the  Executive  is not
legally   competent,   the   Executive's   legal  guardian  or  duly  authorized
attorney-in-fact  will act in the Executive's  stead under this Section 4.02 for
the purposes of submitting the Executive to examinations  and providing any such
authorizations of disclosure.

         4.03  Definition  of "Cause." For purposes of this  Agreement,  "Cause"
shall mean: (a) the Executive's  material and persistent  failure to perform his
duties and services in accordance  with this  Agreement,  unless such failure is
due to the Executive's Disability, or the Executive's material violation of this
Agreement or any material  inaccuracy of any  representation  or warranty of the
Executive  contained  herein,  unless,  for  any  such  failure,  violation,  or
inaccuracy  which is capable of being cured,  the Executive  cures such failure,
violation, or inaccuracy within 30 days of the Employer providing written notice
to  the  Executive  of  such  failure,   violation,   or  inaccuracy;   (b)  the
appropriation (or attempted appropriation) of a material business opportunity of
the Employer,  including attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of the Employer;  (c) the
theft, fraud, or embezzlement of any of the real or personal property,  tangible
or intangible,  of the Employer or any of its Affiliates;  (d) the commission of
an act of fraud upon, or bad faith or willful misconduct toward, the Employer or
any  of  its  Affiliates;   (e)  conduct   constituting   gross   negligence  or
recklessness,  as  determined  by the Employer in its sole  discretion,  that is
materially injurious to the Employer, a customer of the Employer,  or any of the
Employer's Affiliates; or (f) the conviction of or the entering of a guilty plea
with  respect  to, a felony,  the  equivalent  thereof,  or any other crime with
respect to which imprisonment is a possible punishment.

         4.04  Definition of "Good Reason." For the purposes of this  Agreement,
the  phrase  "Good  Reason"  means (i) the  Employer's  material  breach of this
Agreement  and the  Employer's  failure  to remedy  such  breach  within 30 days

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following the delivery of written  notice of such breach by the Executive to the
Employer;  (ii) the  assignment  by the Employer to the  Executive,  without the
prior written consent of the Executive,  of  responsibilities or duties that are
substantially  different  from the duties and services set forth in Section 1.03
of this  Agreement;  or (iii) the  relocation  of the  Executive's  office to an
office  located more than fifty (50) miles from 12750 Merit Drive,  Park Central
VII, Suite 770, Dallas, Texas 75251.

         4.05  Effect of  Termination  of  Employment  Period;  Post-Termination
Benefits.  Upon the  termination  of the  Employment  Period in accordance  with
Section 4.01 of this  Agreement,  the  Executive's  obligation  to render to the
Employer the services  described in Section 1.03 of this  Agreement  shall cease
(although  the  Term  shall  not  terminate),  and the  Employer  shall  pay the
Executive or, in the event of his death while amounts remain payable  hereunder,
his  Designated  Beneficiary  (as defined in this Section  4.05),  if at all, as
follows:

                  (a) Termination by the Employer with Cause or by the Executive
without Good Reason.  If the Employment  Period is terminated in accordance with
Section 4.01(b)(ii) or Section 4.01(c)(ii) of this Agreement, the Executive will
be entitled to receive solely that portion of his Salary,  payable in accordance
with the Employer's normal payroll practices, accrued by the Executive as of the
date of the termination of the Employment Period;  provided,  however,  that the
Executive shall not receive, and shall not be entitled to receive, any Salary or
Benefits  (except  for  Salary  and  Benefits  accrued  prior to the date of the
termination of the Employment  Period) during the remainder of the  then-current
Term or Extension  Term  following such  termination,  or thereafter,  except as
otherwise  required in accordance  with federal or state law or the terms of the
plans governing the benefits provided hereunder.

                  (b)  Termination  by  the  Employer  without  Cause  or by the
Executive with Good Reason. If the Employment Period is terminated in accordance
with Section 4.01(b)(iii) or Section 4.01(c)(i) of this Agreement,  the Employer
will pay to the  Executive,  in accordance  with the  Employer's  normal payroll
practices,  the customary  installments of the Salary and the Benefits that were
provided to the Executive during the Employment Period, if applicable, until the
Expiration Date.

                  (c)  Termination  upon Death or Disability.  If the Employment
Period is terminated in accordance with Section  4.01(a) or Section  4.01(b)(i),
the Employer will pay to the disabled Executive or to the Executive's Designated
Beneficiary,  as the case may be,  in  accordance  with  the  Employer's  normal
payroll  practices,  the customary  installments  of the Salary and the Benefits
that were provided to the Executive during the Employment Period, if applicable,
until  the  Expiration  Date  (ii) less the  amount  of any  insurance  proceeds
collected  or to be collected by the  Executive  or his  Designated  Beneficiary
pursuant to any insurance policies for which the Employer has paid the premiums.
Following such date,  the Executive or the  Executive's  Designated  Beneficiary
shall  have  no  right  to  receive,  and the  Employer  shall  have no  further
obligation to pay to the Executive,  further  monthly  installments of Salary or
Benefits.  For the  purposes  of this  Agreement,  the  Executive's  "Designated
Beneficiary" means such individual beneficiary or trust, located at such address
as the Executive  may  designate by written  notice to the Employer from time to
time or, if the Executive fails to give written notice to the Employer of such a

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beneficiary,  the Executive's estate; provided,  however, that,  notwithstanding
the preceding sentence,  the Employer shall have no duty under any circumstances
to attempt to open an estate on behalf of the  Executive,  to determine  whether
any beneficiary designated by the Executive is alive, to determine the existence
of any trust, to determine whether any person or entity purporting to act as the
Executive's  personal  representative  (or the trustee of a trust established by
the  Executive)  is duly  authorized  to act in that  capacity,  or to locate or
attempt to locate any  beneficiary,  personal  representative,  or trustee.  For
purposes of this agreement,  the primary  beneficiary will be Valerie R. Fleeger
and the secondary beneficiary will be Beverly L. Fleeger.

                  (d)  Accrued  Benefits.  Unless  otherwise  required  by  this
Agreement,  federal or state law, or the terms of the relevant  plans  providing
Benefits hereunder,  the Executive's accrual of the Benefits pursuant to Section
2.03 hereof will cease on the date of the termination of the Employment  Period,
and the Executive will  thereafter be entitled to accrued  Benefits  pursuant to
such plans only as provided in such plans.

Article 5:        NON-DISCLOSURE COVENANT

         5.01 Confidential Information Defined. For the purposes of this Article
5, the phrase  "Confidential  Information"  means any and all of the  following:
trade  secrets  concerning  the  business  and  affairs of the  Employer  or its
Affiliates,  product  specifications,  data, know-how,  formulae,  compositions,
processes, designs, sketches, photographs, graphs, drawings, samples, inventions
and ideas,  past,  current,  and planned research and  development,  current and
planned  distribution  methods  and  processes,   customer  lists,  current  and
anticipated customer requirements,  price lists, market studies, business plans,
computer software and programs  (including object code, machine code, and source
code), computer software and database  technologies,  systems,  structures,  and
architecture  (and  related  formulae,  compositions,  processes,  improvements,
devices,  know-how,  inventions,  discoveries,  concepts,  ideas,  designs,  and
methods); information concerning the business and affairs of the Employer or its
Affiliates   (which  includes   historical   financial   statements,   financial
projections  and budgets,  historical  and  projected  sales,  capital  spending
budgets  and  plans,  the  names and  backgrounds  of key  personnel,  personnel
training techniques and materials,  however  documented);  and notes,  analysis,
compilations,  studies,  summaries,  and other  material  prepared by or for the
Employer or its  Affiliates  containing  or based,  in whole or in part,  on any
information   included  in  the   foregoing.   Notwithstanding   the  foregoing,
Confidential  Information  shall not include any information  that the Executive
demonstrates  was or became  generally  available  to the public other than as a
result of a disclosure of such  information by the Executive or any other person
under a duty to keep such information confidential.

         5.02 Acknowledgment by the Executive.  The Executive  acknowledges that
(a) during the Employment  Period and as part of his  employment,  the Executive
will be  afforded  access to  Confidential  Information  that the  Employer  has
devoted  substantial  time,  effort,  and resources to develop and compile;  (b)
public disclosure of such Confidential  Information would have an adverse effect
on the  Employer and its  business;  (c) the  Employer  would not disclose  such

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information  to the  Executive,  nor employ or continue to employ the  Executive
without the  agreements  and  covenants set forth in this Article 5; and (d) the
provisions  of this  Article 5 are  reasonable  and  necessary  to  prevent  the
improper use or disclosure of Confidential Information.

         5.03 Maintaining Confidential Information. In consideration of the
compensation and benefits to be paid or provided to the Executive by the
Employer under this Agreement and the acknowledgments set forth above, the
Executive, during the Employment Period, the Term, and at all times thereafter,
agrees and covenants as follows:

                  (a) Employer Information. The Executive will hold in strictest
confidence the  Confidential  Information and will not disclose it to any Person
(defined  below) except with the specific prior written  consent of the Employer
or as may be required by court order,  law,  government  agencies with which the
Employer  deals in the ordinary  course of its business,  or except as otherwise
expressly  permitted by the terms of this  Agreement.  Any trade  secrets of the
Employer will be entitled to all of the protections and benefits  afforded under
applicable laws. If any information that the Employer deems to be a trade secret
is ruled by a court of competent  jurisdiction  not to be a trade  secret,  such
information  will,  nevertheless,  be considered  Confidential  Information  for
purposes of this Agreement. The Executive hereby waives any requirement that the
Employer  submit proof of the economic  value of any trade secret or post a bond
or other security. The Executive will not remove from the Employer's premises or
record (regardless of the media) any Confidential Information of the Employer or
its Affiliates,  except to the extent such removal or recording is necessary for
the performance of the Executive's duties. The Executive acknowledges and agrees
that all Confidential Information,  and physical embodiments thereof, whether or
not developed by the  Executive,  are the exclusive  property of the Employer or
its Affiliates, as the case may be.

                  (b) Third Party Information. The Executive recognizes that the
Employer and its  Affiliates  have  received and in the future will receive from
third parties their confidential or proprietary information subject to a duty on
their parts to maintain the  confidentiality  of such  information and to use it
only  for  certain  limited  purposes.  The  Executive  agrees  that he owes the
Employer, its Affiliates,  and such third parties,  during the Employment Period
and thereafter,  a duty to hold all such confidential or proprietary information
in the  strictest  confidence  and not to disclose  it to any Person  (except as
necessary  in  carrying  out his duties  for the  Employer  consistent  with the
Employer's  agreement  with such  third  party) or to use it for the  benefit of
anyone  other than for the  Employer  or such third party  (consistent  with the
Employer's  agreement  with  such  third  party)  without  the  express  written
authorization of the Employer or its Affiliate, as the case may be.

                  (c) Returning Employer  Documents.  The Executive agrees that,
at the time of the termination of the Employment  Period, he will deliver to the
Employer  (and will not keep in his  possession  or deliver to any other Person)
any  and  all  devices,  records,  data,  notes,  reports,   proposals,   lists,
correspondence,   specifications,  drawings,  blueprints,  sketches,  materials,
equipment,  other  documents  or  property,  or  reproductions  of  any  of  the
aforementioned  items  belonging to the Employer or any of its  Affiliates,  and
their  respective  successors  or assigns,  regardless of whether such items are

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represented in tangible,  electronic,  digital,  magnetic or any other media. In
the event of the termination of the Employment  Period,  the Executive agrees to
sign and deliver the "Termination Certification" attached hereto as Exhibit B.

         5.04 Disputes or Controversies.  The Executive recognizes that should a
dispute or  controversy  arising from or relating to this Agreement be submitted
for  adjudication  to any court or other third party,  the  preservation  of the
secrecy  of  Confidential   Information  may  be  jeopardized.   All  pleadings,
documents,  testimony,  and records  relating to any such  adjudication  will be
maintained in secrecy and will be available for inspection by the Employer,  the
Executive,  and their  respective  attorneys  and  experts,  who will agree,  in
advance and in writing, to receive and maintain all such information in secrecy,
except as may be limited by them in writing.

Article 6:        NON-COMPETITION AND NON-INTERFERENCE

         6.01 Covenants Regarding Competitive  Protection.  The Employer and the
Executive  hereby mutually agree that the nature of the Employer's  business and
the  Executive's  employment  hereunder  are based on the  Employer's  goodwill,
public perception,  and customer relations.  Therefore,  in consideration of the
acknowledgments  set forth in  Section  5.02  herein  and the  compensation  and
benefits to be paid to the Executive  pursuant to this Agreement,  the Executive
hereby agrees and covenants to each and all of the following:

                  (a)  Noncompete.  During the  Restricted  Period  (as  defined
below),  the  Executive  will  not,  directly  or  indirectly,  in any  capacity
whatsoever,  individually or on behalf of any other person or entity,  engage or
invest in,  own,  manage,  operate,  finance,  control,  or  participate  in the
ownership,  management,  operation,  financing,  or control of, be employed  by,
associated  with, or in any manner  connected with, lend the Executive's name or
any similar name to, lend the Executive's credit to or render services or advice
to, any  business  engaged or about to become  engaged  in the  Business  of the
Employer,  or any of its  Affiliates,  in the Market Area.  For purposes of this
Agreement, the "Business" of the Employer, or its Affiliates, includes all those
businesses,  products,  and services that are presently or hereafter marketed by
the Employer,  or its Affiliates,  or that are in the  development  stage at any
time during the Employment Period; and any other business in which the Employer,
or any of its  Affiliates,  are  engaged in at any time  during  the  Employment
Period.

                  (b) Solicitation of Customers.  During the Restricted  Period,
the Executive  hereby  covenants and agrees that he will not, either directly or
through an  Affiliate,  solicit any Person that is a Current  Customer  (defined
below) of the Employer or its  Affiliates  for  purposes of selling  products or
services to such Person that are in  competition  with the products and services
offered or sold by the Employer or its Affiliates.

                  (c) Solicitation of Employees.  During the Restricted  Period,
the  Executive  hereby  agrees  not to  employ,  either  directly  or through an
Affiliate,  any  current  employee  of the  Employer  or its  Affiliates  or any
individual  who was an employee of the  Employer or its  Affiliates  at any time
during Employment  Period,  and agrees not to solicit,  or contact in any manner
that could reasonably be construed as a solicitation, either directly or through

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an Affiliate,  any employee of the Employer or its Affiliates for the purpose of
encouraging  such employee to leave or terminate his or her employment  with the
Employer or its Affiliates.

                  (d) Solicitation of Vendors. During the Restricted Period, the
Executive hereby agrees not to solicit, either directly or through an Affiliate,
a current  vendor or supplier of the Employer or its  Affiliates for purposes of
encouraging such vendor or supplier to cease or diminish  providing  products or
services to the Employer or its  Affiliates,  or to change  adversely  the terms
under which such vendor or supplier  provides  such  products or services to the
Employer or its Affiliates.

                  (e) Interference.  During the Restricted Period, the Executive
hereby agrees not to interfere with the Employer's  relationship with any person
who at the relevant time is an employee,  contractor,  supplier,  or customer of
the Employer or its Affiliates.

                  (f) Restricted  Period. For purposes of this Section 6.01, the
term "Restricted  Period" means the duration of the Employment  Period and until
the  later to occur of (i) the date  that is 12  months  after  the  termination
thereof or (ii) in the event that this  Agreement is  terminated  in  accordance
with Section  4.01(b)(ii) or Section  4.01(c)(ii),  the  Expiration  Date of the
then-current Term or Extension Term.

                  (g) Market Area.  For purposes of this Section 6.01,  the term
"Market  Area"  means  any  state or  province  in  which  the  Employer  or its
Affiliates have provided goods or services within the twelve months prior to the
later of the last day of the Restricted Period or the Expiration Date.

         6.02 Scope. The Executive  acknowledges and agrees that the Employer is
engaged in or intends to be engaged in business throughout the United States and
that the  marketplace  for the Employer's  businesses,  products and services is
nationwide, and includes the states listed in Section 6.01(f) of this Agreement,
and thus the geographic area, length and scope of the restrictions  contained in
Section 6.01 are  reasonable  and necessary to protect the  legitimate  business
interests of the Employer.  The duration of the agreements  contained in Section
6.01 shall be extended for the amount of any time of any  violation  thereof and
the time, if greater,  necessary to enforce such provisions or obtain any relief
or damages for such violation through the court system. The Employer may, at any
time on written notice approved by its Board, reduce the geographic area, length
or scope of any  restrictions  contained  in Section 6.01 and,  thereafter,  the
Executive shall comply with the restriction as so reduced, subject to subsequent
reductions.  If any  covenant in Section  6.01 of this  Agreement  is held to be
unreasonable,  arbitrary,  or  against  public  policy,  such  covenant  will be
considered to be divisible with respect to scope, time, and geographic area, and
such lesser scope, time, or geographic area, or all of them, as an arbitrator or
a court of competent jurisdiction may determine to be reasonable, not arbitrary,
and not against  public  policy,  will be effective,  binding,  and  enforceable
against the Executive. In the event of termination of the Executive's employment

                                       9
<PAGE>

with the  Employer  for any  reason,  the  Executive  consents  to the  Employer
communicating  with the Executive's new employer,  any entity in the Business or
through or in connection  with which the Executive is restricted  hereunder,  or
any other party about the restrictions and obligations  imposed on the Executive
under this Agreement.

Article 7:        GENERAL PROVISIONS

         7.01   Injunctive   Relief  and   Additional   Remedy.   The  Executive
acknowledges  that the injury that would be suffered by the Employer as a result
of a breach of the  provisions  of Articles 5 and 6 hereof might be  irreparable
and that an award of monetary damages to the Employer for such a breach would be
an  inadequate  remedy.  Consequently,  the  Employer  will have the  right,  in
addition  to any  other  rights  it may have,  to  obtain  injunctive  relief to
restrain any breach or threatened  breach or otherwise to  specifically  enforce
the provisions of Articles 5 and 6 hereof.

         7.02  Covenants  of  Articles  5 and 6 are  Essential  and  Independent
Covenants.  The  covenants by the  Executive  in Articles 5 and 6 are  essential
elements of this Agreement, and without the Executive's agreement to comply with
such  covenants,  the Employer  would not have  entered  into this  Agreement or
employed or continued  the  employment  of the  Executive.  The Employer and the
Executive have  independently  consulted their respective  counsel and have been
advised in all respects  concerning  the  reasonableness  and  propriety of such
covenants,  with specific regard to the nature of the business  conducted by the
Employer. If the Executive's employment hereunder expires or is terminated, this
Agreement  will continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Executive in Articles 5 and 6.

         7.03  Representations  and Warranties by the  Executive.  The Executive
represents  and warrants to the Employer  that (a) the Executive has never taken
any  action of the types set forth in  Section  4.03(b)  though  (f) and (b) the
execution  and  delivery by the  Executive of this  Agreement  does not, and the
performance by the Executive of the Executive's  obligations hereunder will not,
with or  without  the  giving of notice or the  passage  of time,  or both:  (i)
violate any judgment, writ, injunction,  or order of any court,  arbitrator,  or
governmental  agency applicable to the Executive;  or (ii) conflict with, result
in the  breach of any  provisions  of or the  termination  of, or  constitute  a
default  under,  any agreement to which the Executive is a party or by which the
Executive is or may be bound.

         7.04  Obligations  Contingent on  Performance.  The  obligations of the
Employer  hereunder,  including its obligation to pay the compensation  provided
for herein,  are contingent upon the Executive's  performance of the Executive's
obligations hereunder.

         7.05 Binding Effect;  Delegation of Duties  Prohibited.  This Agreement
shall inure to the benefit of, and shall be binding upon, the parties hereto and
their  respective  successors,   assigns,   heirs,  and  legal  representatives,
including  any entity with which the  Employer  may merge or  consolidate  or to
which all or substantially  all of its assets may be transferred.  The covenants
of the Executive under this Agreement, being personal, may not be delegated.

         7.06 Notices. All notices, consents,  waivers, and other communications
under this  Agreement  must be in  writing  and will be deemed to have been duly
given when (a) delivered by hand (with  written  confirmation  of receipt),  (b)

                                       10
<PAGE>

sent by facsimile (with written  confirmation of receipt),  provided that a copy
is mailed by registered mail, return receipt requested,  or (c) when received by
the addressee,  if sent by a nationally  recognized  overnight  delivery service
(receipt  requested)  or, (d) mailed by  registered or certified  mail,  postage
prepaid and return receipt requested,  in each case to the appropriate addresses
and facsimile  numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):

If to Employer:            MedSolutions, Inc.
                           12750 Merit Drive
                           Park Central VII, Suite 770
                           Dallas, Texas 75251
                           Attn: Chairman of the Board
                           Facsimile: (972) 931-2550

With a copy to:            Fish & Richardson P.C.
                           5000 Bank One Center
                           1717 Main Street
                           Dallas, Texas 75201
                           Attn: Steven R. Block
                           Facsimile: (214) 747-2091

If to the Executive:       ___________________________________
                           ___________________________________
                           ___________________________________

                           Facsimile:  (___) ___ - ____

With a copy to:            ___________________________________
                           ___________________________________
                           ___________________________________

                           Facsimile: (___) ___ - ____

         7.07 Entire Agreement;  Amendments.  This Agreement contains the entire
agreement  between the parties  with  respect to the subject  matter  hereof and
supersedes all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof. This Agreement may not
be amended  orally;  but only by an agreement  in writing  signed by the parties
hereto.

         7.08 Governing  Law;  Venue.  THIS  AGREEMENT  SHALL BE GOVERNED BY AND
CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE  STATE OF TEXAS  WITHOUT  GIVING
EFFECT TO THE CONFLICT OF LAWS RULES OR CHOICE OF LAW RULES  THEREOF.  VENUE FOR
ANY ACTION  BROUGHT  HEREUNDER  SHALL BE PROPER  EXCLUSIVELY  IN DALLAS  COUNTY,
TEXAS.

                                       11
<PAGE>

         7.09  Headings;  Construction.  The  headings  in  this  Agreement  are
provided  for  convenience   only  and  will  not  affect  its  construction  or
interpretation.   All  references  to  "Article,"   "Articles,"   "Section,"  or
"Sections" refer to the corresponding Article, Articles, Section, or Sections of
this Agreement unless otherwise specified. All words used in this Agreement will
be construed to be of such gender or number as the circumstances require.

         7.10  Severability.  If any provision of this Agreement is held invalid
or  unenforceable by an arbitrator or any court of competent  jurisdiction,  the
other  provisions of this  Agreement  will remain in full force and effect.  Any
provision of this Agreement held invalid or unenforceable only in part or degree
will  remain  in full  force  and  effect  to the  extent  not held  invalid  or
unenforceable.

         7.11  Counterparts.  This  Agreement  may be  executed in any number of
counterparts,  each of which  shall be an  original,  but all of which  together
shall constitute one instrument.

         7.12 Telecopy  Execution and Delivery.  A facsimile,  telecopy or other
reproduction  of this  Agreement may be executed by one or more parties  hereto,
and an executed  copy of this  Agreement may be delivered by one or more parties
hereto by facsimile or similar electronic  transmission device pursuant to which
the signature of or on behalf of such party can be seen,  and such execution and
delivery shall be considered valid,  binding and effective for all purposes.  At
the request of any party hereto, all parties hereto agree to execute an original
of this  Agreement  as well as any  facsimile,  telecopy  or other  reproduction
hereof.

         7.13 Survival of  Obligations.  The obligations of the Employer and the
Executive  under this Agreement which by their nature may require either partial
or total  performance  after  the  expiration  of the Term  shall  survive  such
expiration.

         7.14  Withholding  and Set  Off.  All  payments  and  benefits  made or
provided under this Agreement  shall be subject to withholding as required under
applicable  law.  The  Employer is further  authorized  to  withhold  and setoff
against any such  payments and benefits any amounts that the  Executive may come
to owe the  Employer,  whether  as a result of any breach of this  Agreement  or
otherwise.

         7.15  Arbitration.  Any controversy or claim arising out of or relating
to this  Agreement,  or  violation  of  this  Agreement,  shall  be  settled  by
arbitration   in  accordance   with  the  Rules  of  the  American   Arbitration
Association, and judgment rendered by the arbitrator may be entered in any court
having jurisdiction thereover. The arbitration shall be conducted in the city of
the  Employer's  principal  executive  office  at the time such  arbitration  is
initiated,  unless otherwise agreed by the parties thereto. The arbitrator shall
be deemed to possess the power to issue mandatory orders and restraining  orders
in connection with such  arbitration;  provided,  however,  that nothing in this
Section  7.15 shall be  construed as to deny the Employer the right and power to
seek and obtain injunctive  relief in a court of competent  jurisdiction for any
breach or  threatened  breach of the  Employer's  agreements  contained  in this
Agreement.

                                       12
<PAGE>

Article 8:        CERTAIN DEFINITIONS

         For  purposes of this  Agreement,  the  following  terms shall have the
meanings indicated below:

         "Affiliate"  shall mean, as to any Person,  any Person  controlled  by,
controlling,  or under common  control  with such Person,  and, in the case of a
Person  who  is an  individual,  a  member  of the  family  of  such  individual
consisting  of  a  spouse,  sibling,  in-law,  lineal  descendant,  or  ancestor
(including by adoption),  and the spouses of any such individuals.  For purposes
of this definition,  "control" (including the terms  "controlling",  "controlled
by" and "under common control with") of a Person means the possession,  directly
or indirectly,  alone or in concert with others, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of securities, by contract or otherwise, and no Person shall be deemed
in control of another solely by virtue of being a director, officer or holder of
voting  securities  of any  entity.  A Person  shall be  presumed to control any
partnership of which such Person is a general partner.

         "Current Customer" shall mean any Person who is currently utilizing any
product or service  sold or provided by the  Employer or any of its  Affiliates;
any Person who  utilized  any such  product or service  within the  previous  12
months;  and any  Person  with whom the  Employer  or any of its  Affiliates  is
currently conducting negotiations concerning the utilization of such products or
services.

         "Employment  Period"  shall mean the period  during which the Executive
has an  obligation  to render to the Employer all or any portion of the services
described in Section 1.03 of this Agreement.  The Employment  Period shall in no
event, however, extend past the Expiration Date.

         "Person"  shall  have the  meaning  given  in  Section  3(a)(9)  of the
Securities  Exchange Act of 1934,  as amended,  as modified and used in Sections
13(d)(3) and 14(d)(2) of such act.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the date first written above.

                                    EMPLOYER:

                                    MEDSOLUTIONS, INC.

                                    By: /s/ Matthew H. Fleeger
                                    Name: Matthew H. Fleeger
                                    Title: President & CEO

                                    EXECUTIVE:

                                     /s/ Matthew H. Fleeger
                                    -----------------------
                                    [NAME]

                                       14
<PAGE>

                                    EXHIBIT A
                                    ---------

                         EXECUTIVE TARGET BONUS PROGRAM
                         ------------------------------

If the  Employer's  EBITDA  (defined  as the  sum of  earnings  before  interest
expense,  income tax expense,  depreciation  expense, and amortization  expense)
during any fiscal year during the Employment Period,  beginning with fiscal year
2005,  falls within any EBITDA  target range as set forth below,  the  Executive
shall be granted a bonus (a "Bonus")  in the amount  which  corresponds  to such
target range as also set forth below.  Each Bonus,  if any,  shall be payable to
the  Executive  in the form of a stock  option to purchase a number of shares of
the Employer's common stock, par value $.001 (the "Common Stock"),  equal to the
amount of such Bonus at an exercise price per share of Common Stock equal to the
Fair Market Value (as such term is defined in the  Employer's  2002 Stock Option
Plan or any  successor  plan  thereto) of such Common Stock as of the  effective
date that such option is granted; provided,  however, that in the event that the
Executive  becomes the owner of equity  securities of the Employer  representing
more  than 10% of the  total  combined  voting  power of all  classes  of equity
securities of the Employer,  the exercise  price per share of Common Stock shall
be  equal  to 110% of the  Fair  Market  Value  of such  Common  Stock as of the
effective date that such option is granted;  provided further, however, that the
Executive shall have the option, in his sole discretion, to receive up to 50% of
the amount of any such  Bonus in the form of cash in lieu of such stock  option.
Any Bonus to which the  Executive  is entitled  shall be payable  within 90 days
after the end of the fiscal year to which such Bonus relates.

--------------------------------------------------------------------------------
        EBITDA Target Range                            Bonus Amount
----------------- --------------------------------------------------------------
   At least:        But less than:

----------------- ----------------- --------------------------------------------
   $1,000,000         $1,100,000                          $25,000
----------------- ----------------- --------------------------------------------
   $1,100,000         $1,200,000                          $30,000
----------------- ----------------- --------------------------------------------
   $1,200,000         $1,300,000                          $35,000
----------------- ----------------- --------------------------------------------
   $1,300,000         $1,400,000                          $40,000
----------------- ----------------- --------------------------------------------
   $1,400,000         $1,500,000                          $45,000
----------------- ----------------- --------------------------------------------
   $1,500,000         $1,600,000                          $50,000
----------------- ----------------- --------------------------------------------
   $1,600,000         $1,700,000                          $55,000
----------------- ----------------- --------------------------------------------
   $1,700,000         $1,800,000                          $60,000
----------------- ----------------- --------------------------------------------
   $1,800,000         $1,900,000                          $65,000
----------------- ----------------- --------------------------------------------
   $1,900,000         $2,000,000                          $70,000
----------------- ----------------- --------------------------------------------
   $2,000,000         $2,100,000                          $75,000
----------------- ----------------- --------------------------------------------
   $2,100,000             NA        The  Executive and the Board of Directors of
                                    the Employer, or a duly authorized committee
                                    thereof,  shall  negotiate the amount of the
                                    Executive's  Bonus in good faith;  provided,
                                    however,  that such amount shall in no event
                                    be  less  than  the sum of  $75,000  plus an
                                    additional   $5,000  for  each  $100,000  of
                                    EBIDTA over $2,100,000.
----------------- ----------------- --------------------------------------------

<PAGE>

                                    EXHIBIT B
                                    ---------

                            TERMINATION CERTIFICATION
                            -------------------------

         This is to certify that the undersigned has complied with all the terms
of  the  Employment  Agreement  (the  "Employment   Agreement")  signed  by  the
undersigned with MedSolutions, Inc., a Texas corporation (the "Employer"). It is
further certified that the undersigned does not possess, nor has the undersigned
failed to return to the Executive any  Confidential  Information  (as defined in
the Employment  Agreement).  It is further  certified that the  undersigned  has
destroyed  all  tangible  copies and have  erased any  electronic,  digital,  or
magnetic  representations  or manifestations  of the foregoing.  The undersigned
further  agrees  that,  in  compliance  with  the  Employment   Agreement,   the
undersigned  will preserve as  confidential  all  Confidential  Information  and
information of third parties as provided in the Employment Agreement.

Date:______________________

                                               _________________________________
                                               [Name]<PAGE>

EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

         This Securities Purchase Agreement (this "AGREEMENT") is dated as of
December 29, 2004, among Emrise Corporation, a Delaware corporation (the
"COMPANY"), and the investors identified on the signature pages hereto (each, an
"INVESTOR" and collectively, the "INVESTORS").

         WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined below)
and Rule 506 promulgated thereunder, the Company desires to issue and sell to
each Investor, and each Investor, severally and not jointly, desires to purchase
from the Company certain securities of the Company, as more fully described in
this Agreement.

         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:

                                   ARTICLE I.
                                   DEFINITIONS

         1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:

                  "ACTION" means any action, suit, inquiry, notice of violation,
proceeding (including any partial proceeding such as a deposition) or
investigation pending or threatened in writing against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, local or foreign), stock market, stock exchange or
trading facility.

                  "AFFILIATE" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under Rule
144.

                  "BUSINESS DAY" means any day except Saturday, Sunday and any
day which is a federal legal holiday or a day on which banking institutions in
the State of New York or the State of California are authorized or required by
law or other governmental action to close.

                  "CLOSING" means the closing of the purchase and sale of the
Securities pursuant to Article II.

                  "CLOSING DATE" means the Business Day immediately following
the date on which all of the conditions set forth in Sections 5.1 and 5.2 hereof
are satisfied, or such other date as the parties may agree.

                  "COMMISSION" means the Securities and Exchange Commission.

<PAGE>

                  "COMMON STOCK" means the common stock of the Company, par
value $.0033 per share, and any securities into which such common stock may
hereafter be reclassified.

                  "COMMON STOCK EQUIVALENTS" means any securities of the Company
or any Subsidiary which entitle the holder thereof to acquire Common Stock at
any time, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.

                  "COMPANY COUNSEL" means Rutan & Tucker, LLP.

                  "COMPANY DELIVERABLES" has the meaning set forth in Section
2.2(a).

                  "DISCLOSURE MATERIALS" has the meaning set forth in Section
3.1(h).

                  "EFFECTIVE DATE" means the date that the initial Registration
Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                  "GAAP" means U.S. generally accepted accounting principles.

                  "INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in
Section 3.1(p).

                  "INVESTMENT AMOUNT" means, with respect to each Investor, the
Investment Amount indicated on such Investor's signature page to this Agreement.

                  "INVESTOR DELIVERABLES" has the meaning set forth in Section
2.2(b).

                  "INVESTOR PARTY" has the meaning set forth in Section 4.7.

                  "LIEN" means any lien, charge, encumbrance, security interest,
right of first refusal or other restrictions of any kind.

                  "MATERIAL ADVERSE EFFECT" means any of (i) a material and
adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material and adverse effect on the results of operations,
assets, prospects, business or condition (financial or otherwise) of the Company
and the Subsidiaries, taken as a whole, or (iii) an adverse impairment to the
Company's ability to perform on a timely basis its obligations under any
Transaction Document.

                  "NEW YORK COURTS" means the state and federal courts sitting
in the City of New York, Borough of Manhattan.

                  "OUTSIDE DATE" means January 15, 2004.

                                       2

<PAGE>

                  "PER UNIT PURCHASE PRICE" equals $1.44.

                  "PERSON" means an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.

                  "PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

                  "REGISTRATION STATEMENT" means a registration statement
meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Investors of the Shares and the Warrant Shares.

                  "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company and the
Investors, in the form of EXHIBIT B hereto.

                  "RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "SEC REPORTS" has the meaning set forth in Section 3.1(h).

                  "SECURITIES" means the Shares, the Warrants and the Warrant
Shares.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SHARES" means the shares of Common Stock issued or issuable
to the Investors pursuant to this Agreement (excluding any Warrant Shares).

                  "SHORT SALES" include, without limitation, all "short sales"
as defined in Rule 3b-3 of the Exchange Act and Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps and
similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers.

                  "SUBSIDIARY" means any "significant subsidiary" as defined in
Rule 1-02(w) of the Regulation S-X promulgated by the Commission under the
Exchange Act.

                  "TRADING DAY" means (i) a day on which the Common Stock is
traded on a Trading Market (other than the OTC Bulletin Board), or (ii) if the
Common Stock is not listed on a Trading Market (other than the OTC Bulletin
Board), a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is
not quoted on any Trading Market, a day on which the Common Stock is quoted in
the over-the-counter market as reported by the National Quotation Bureau

                                       3

<PAGE>

Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
shall mean a Business Day.

                  "TRADING MARKET" means whichever of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ National Market, the NASDAQ
SmallCap Market or OTC Bulletin Board on which the Common Stock is listed or
quoted for trading on the date in question.

                  "TRANSACTION DOCUMENTS" means this Agreement, the Warrants,
the Registration Rights Agreement, and any other documents or agreements
executed in connection with the transactions contemplated hereunder.

                  "WARRANTS" means the Common Stock purchase warrants in the
form of EXHIBIT A, which are issuable to the Investors at the Closing.

                  "WARRANT SHARES" means the shares of Common Stock issuable
upon exercise of the Warrants.

                                  ARTICLE II.
                                PURCHASE AND SALE

         2.1 CLOSING. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Investor, and
each Investor shall, severally and not jointly, purchase from the Company, the
Shares and the Warrants representing such Investor's Investment Amount. The
Closing shall take place at the offices of Bryan Cave LLP, 1290 Avenue of the
Americas, New York, NY 10104 on the Closing Date or at such other location or
time as the parties may agree.

         2.2 CLOSING DELIVERIES. (a) At the Closing, the Company shall deliver
or cause to be delivered to each Investor the following (the "COMPANY
DELIVERABLES"):

                  (i) a facsimile copy of a certificate evidencing a number of
Shares equal to such Investor's Investment Amount divided by the Per Unit
Purchase Price, registered in the name of such Investor;

                  (ii) a Warrant, registered in the name of such Investor,
pursuant to which such Investor shall have the right to acquire the number of
shares of Common Stock equal to 25% of the number of Shares issuable to such
Investor pursuant to Section 2.2(a)(i);

                  (iii) the legal opinion of Company Counsel, in agreed form,
addressed to the Investors; and

                  (iv) the Registration Rights Agreement, dul y executed by the
Company.

                                       4

<PAGE>

             (b) At the Closing, each Investor shall deliver or cause to be
delivered to the Company the following (the "INVESTOR DELIVERABLES"):

                  (i) its Investment Amount, in United States dollars and in
immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose; and

                  (ii) the Registration Rights Agreement, duly executed by such
Investor.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

         3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
makes the following representations and warranties to each Investor:

             (a) SUBSIDIARIES. The Company has no direct or indirect
Subsidiaries other than as specified in the SEC Reports. Except as disclosed in
SCHEDULE 3.1(A), the Company owns, directly or indirectly, all of the capital
stock of each Subsidiary free and clear of any and all Liens, and all the issued
and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights.

             (b) ORGANIZATION AND QUALIFICATION. The Company and each Subsidiary
are duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. The Company and each Subsidiary are duly
qualified to conduct its respective businesses and are in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

             (c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith. Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,

                                       5

<PAGE>

reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.

             (d) NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or charter documents,
or (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect.

             (e) FILINGS, CONSENTS AND APPROVALS. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than (i) the filing with the Commission of one or more Registration
Statements in accordance with the requirements of the Registration Rights
Agreement, (ii) filings required by state securities laws, (iii) the filing of a
Notice of Sale of Securities on Form D with the Commission under Regulation D of
the Securities Act, (iv) the filings required in accordance with Section 4.5,
(v) notification to the Company's transfer agent of the issuance of the Shares
and Warrant Shares and (vi) those that have been made or obtained prior to the
date of this Agreement.

             (f) ISSUANCE OF THE SECURITIES. The Securities have been duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens. The Company has reserved from its duly authorized
capital stock the shares of Common Stock issuable pursuant to this Agreement and
the Warrants in order to issue the Shares and the Warrant Shares.

             (g) CAPITALIZATION. The number of shares and type of all
authorized, issued and outstanding capital stock of the Company, and all shares
of Common Stock reserved for issuance under the Company's various option and
incentive plans, is specified in the SEC Reports. Except as specified in the SEC
Reports and SCHEDULE 3.1(G), no securities of the Company are entitled to
preemptive or similar rights, and no Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents. Except as specified
in the SEC Reports, there are no outstanding options, warrants, scrip rights to

                                       6

<PAGE>

subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. The issue and sale of the Securities will not, immediately or with
the passage of time, obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Investors) and will not result in
a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.

             (h) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed all
reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as the Company was required by
law to file such reports) (the foregoing materials being collectively referred
to herein as the "SEC REPORTS" and, together with the Schedules to this
Agreement (if any), the "DISCLOSURE MATERIALS") on a timely basis or has timely
filed a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing. Such financial statements have been prepared in accordance with
GAAP applied on a consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.

             (i) PRESS RELEASES. The press releases disseminated by the Company
during the twelve months preceding the date of this Agreement taken as a whole
do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made and
when made, not misleading.

             (j) MATERIAL CHANGES. Since the date of the latest audited
financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports, (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables, accrued expenses and
other liabilities incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company's

                                       7

<PAGE>

financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock, and (v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any
request for confidential treatment of information.

             (k) LITIGATION. To the Company's knowledge, there is no Action
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
except as specifically disclosed in the SEC Reports, could, if there were an
unfavorable decision, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof (in his or her capacity as
such), is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty, except as specifically disclosed in the SEC Reports. There has
not been, and to the knowledge of the Company, there is not pending any
investigation by the Commission involving the Company or any current or former
director or officer of the Company (in his or her capacity as such). The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

             (l) LABOR RELATIONS. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.

             (m) COMPLIANCE. Except as specifically disclosed in SCHEDULE
3.1(M), neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body, or (iii) is or has been in violation of
any statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect. The Company is in compliance with all effective
requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and
regulations thereunder, that are applicable to it, except where such
noncompliance could not have or reasonably be expected to result in a Material
Adverse Effect.

             (n) REGULATORY PERMITS. The Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their

                                       8

<PAGE>

respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, and neither the
Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such permits.

             (o) TITLE TO ASSETS. The Company and the Subsidiaries have title in
fee simple to all real property owned by them that is material to their
respective businesses and title in all personal property owned by them that is
material to their respective businesses, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance, except as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect.

             (p) PATENTS AND TRADEMARKS. The Company and the Subsidiaries have,
or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have could, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect (collectively, the "INTELLECTUAL PROPERTY
Rights"). Neither the Company nor any Subsidiary has received a written notice
that the Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person. Except as set forth in the
SEC Reports, to the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.

             (q) INSURANCE. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged. The Company has no reason to believe
that it will not be able to renew its and the Subsidiaries' existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business on terms
consistent with market for the Company's and such Subsidiaries' respective lines
of business.

             (r) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set forth
in the SEC Reports, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

                                       9

<PAGE>

             (s) INTERNAL ACCOUNTING CONTROLS. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as
defined in Exchange Act rules 13a-15 and 15d-15) for the Company and designed
such disclosure controls and procedures to ensure that material information
relating to the Company, including its Subsidiaries, is made known to the
certifying officers by others within those entities, particularly during the
period in which the Company's Form 10-K or 10-Q, as the case may be, is being
prepared. The Company's certifying officers have evaluated the effectiveness of
the Company's controls and procedures in accordance with Item 307 of Regulation
S-K under the Exchange Act for the fiscal quarter ended September 30, 2004 (such
date, the "EVALUATION DATE"). The Company presented in its most recently filed
Form 10-K or Form 10-Q the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Except as disclosed in the Form 10-Q,
since the Evaluation Date, there have been no changes in the Company's internal
controls (as such term is defined in Item 308(c) of Regulation S-K under the
Exchange Act) that have materially affected or, to the Company's knowledge, are
reasonably likely to materially affect, the Company's internal controls.

             (t) SOLVENCY. Based on the financial condition of the Company as of
the Closing Date (and assuming that the Closing shall have occurred), (i) the
Company's fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company's existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the
Company's assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof, and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).

             (u) CERTAIN FEES. Except as described in SCHEDULE 3.1(U), no
brokerage or finder's fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Investors shall have no obligation with
respect to any fees or with respect to any claims (other than such fees or
commissions owed by an Investor pursuant to agreements made by such Investor
which fees or commissions shall be the sole responsibility of such Investor)

                                       10

<PAGE>

made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this
Agreement.

             (v) CERTAIN REGISTRATION MATTERS. Assuming the accuracy of the
Investors' representations and warranties set forth in Section 3.2(b)-(e), no
registration under the Securities Act is required for the offer and sale of the
Shares and Warrant Shares by the Company to the Investors under the Transaction
Documents. The Company is eligible to register the resale of its Common Stock
for resale by the Investors under Form S-1 promulgated under the Securities Act.
Except as specified in SCHEDULE 3.1(V), the Company has not granted or agreed to
grant to any Person any rights (including "piggy-back" registration rights) to
have any securities of the Company registered with the Commission or any other
governmental authority that have not been satisfied.

             (w) LISTING AND MAINTENANCE REQUIREMENTS. Except as specified in
the SEC Reports, the Company has not, in the two years preceding the date
hereof, received notice from any Trading Market to the effect that the Company
is not in compliance with the listing or maintenance requirements thereof. The
Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with the listing and maintenance
requirements for continued listing of the Common Stock on the Trading Market on
which the Common Stock is currently listed or quoted. The issuance and sale of
the Securities under the Transaction Documents does not contravene the rules and
regulations of the Trading Market on which the Common Stock is currently listed
or quoted, and no approval of the shareholders of the Company thereunder is
required for the Company to issue and deliver to the Investors the Securities
contemplated by Transaction Documents.

             (x) INVESTMENT COMPANY. The Company is not, and is not an Affiliate
of, and immediately following the Closing will not have become, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

             (y) NO ADDITIONAL AGREEMENTS. The Company does not have any
agreement or understanding with any Investor with respect to the transactions
contemplated by the Transaction Documents other than as specified in the
Transaction Documents.

             (z) DISCLOSURE. The Company confirms that neither it nor any Person
acting on its behalf has provided any Investor or its respective agents or
counsel with any information that the Company believes constitutes material,
non-public information except insofar as the existence and terms of the proposed
transactions hereunder may constitute such information. The Company understands
and confirms that the Investors will rely on the foregoing representations and
covenants in effecting transactions in securities of the Company. All Disclosure
Materials provided to the Investors regarding the Company, its business and the
transactions contemplated hereby, furnished by the Company (including the
Company's representations and warranties set forth in this Agreement) are true
and correct and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.

                                       11

<PAGE>

         3.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor
hereby, for itself and for no other Investor, represents and warrants to the
Company as follows:

             (a) ORGANIZATION; AUTHORITY. Such Investor is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate, limited liability
company or partnership power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents and otherwise
to carry out its obligations thereunder. The execution, delivery and performance
by such Investor of the transactions contemplated by this Agreement has been
duly authorized by all necessary corporate or, if such Investor is not a
corporation, such partnership, limited liability company or other applicable
like action, on the part of such Investor. Each of this Agreement and the
Registration Rights Agreement has been duly executed by such Investor, and when
delivered by such Investor in accordance with terms hereof, will constitute the
valid and legally binding obligation of such Investor, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.

             (b) INVESTMENT INTENT. Such Investor is acquiring the Securities as
principal for its own account for investment purposes only and not with a view
to or for distributing or reselling such Securities or any part thereof, without
prejudice, however, to such Investor's right at all times to sell or otherwise
dispose of all or any part of such Securities in compliance with applicable
federal and state securities laws. Subject to the immediately preceding
sentence, nothing contained herein shall be deemed a representation or warranty
by such Investor to hold the Securities for any period of time. Such Investor is
acquiring the Securities hereunder in the ordinary course of its business. Such
Investor does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities.

             (c) INVESTOR STATUS. At the time such Investor was offered the
Securities, it was, and at the date hereof it is, and on each date on which it
exercises Warrants it will be, an "accredited investor" as defined in Rule
501(a) under the Securities Act. Such Investor is not a registered broker-dealer
under Section 15 of the Exchange Act.

             (d) GENERAL SOLICITATION. Such Investor is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

             (e) ACCESS TO INFORMATION. Such Investor acknowledges that it has
reviewed the Disclosure Materials and has been afforded (i) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing in the Securities;
(ii) access to information about the Company and the Subsidiaries and their
respective financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and
(iii) the opportunity to obtain such additional information that the Company

                                       12

<PAGE>

possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the
investment. Neither such inquiries nor any other investigation conducted by or
on behalf of such Investor or its representatives or counsel shall modify, amend
or affect such Investor's right to rely on the truth, accuracy and completeness
of the Disclosure Materials and the Company's representations and warranties
contained in the Transaction Documents.

             (f) CERTAIN TRADING ACTIVITIES. Such Investor has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Investor, engaged in any transactions in the securities
of the Company (including, without limitations, any Short Sales involving the
Company's securities) since the earlier to occur of (1) the time that such
Investor was first contacted by the Company or Roth Capital Partners, LLC
regarding an investment in the Company and (2) the 30th day prior to the date of
this Agreement. Such Investor covenants that neither it nor any Person acting on
its behalf or pursuant to any understanding with it will engage in any
transactions in the securities of the Company (including Short Sales) prior to
the time that the transactions contemplated by this Agreement are publicly
disclosed.

             (g) INDEPENDENT INVESTMENT DECISION. Such Investor has
independently evaluated the merits of its decision to purchase Securities
pursuant to the Transaction Documents, and such Investor confirms that it has
not relied on the advice of any other Investor's business and/or legal counsel
in making such decision. Such Investor has not relied on the business or legal
advice of Roth Capital Partners, LLC or any of its agents, counsel or Affiliates
in making its investment decision hereunder, and confirms that none of such
Persons has made any representations or warranties to such Investor in
connection with the transactions contemplated by the Transaction Documents.

             (h) BLUE SKY. The address for notice set forth under such
Investor's name on its signature page hereof is such Investor's residence for
Blue Sky purposes.

The Company acknowledges and agrees that no Investor has made or makes any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

         4.1 (a) Securities may only be disposed of in compliance with state and
federal securities laws. In connection with any transfer of the Securities other
than pursuant to an effective registration statement, to the Company, to an
Affiliate of an Investor or in connection with a pledge as contemplated in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act.

                                       13

<PAGE>

             (b) Certificates evidencing the Securities will contain the
following legend, until such time as they are not required under Section 4.1(c):

                  [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON
                  EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE
                  SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND
                  EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
                  IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
                  AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
                  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                  ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
                  TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
                  THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
                  SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
                  THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
                  REASONABLY ACCEPTABLE TO THE COMPANY. [THESE SECURITIES AND
                  THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES]
                  [THESE SECURITIES] MAY BE PLEDGED IN CONNECTION WITH A BONA
                  FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

             The Company acknowledges and agrees that an Investor may from time
to time pledge, and/or grant a security interest in some or all of the
Securities pursuant to a bona fide margin agreement in connection with a bona
fide margin account and, if required under the terms of such agreement or
account, such Investor may transfer pledged or secured Securities to the
pledgees or secured parties. Such a pledge or transfer would not be subject to
approval or consent of the Company and no legal opinion of legal counsel to the
pledgee, secured party or pledgor shall be required in connection with the
pledge, but such legal opinion may be required in connection with a subsequent
transfer following default by the Investor transferee of the pledge. The
Investor shall provide prompt notice to the Company of such pledge. At the
appropriate Investor's expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of the Securities
including the preparation and filing of any required prospectus supplement under
Rule 424(b)(3) of the Securities Act or other applicable provision of the
Securities Act to appropriately amend the list of selling stockholders
thereunder.

             (c) Certificates evidencing the Shares and Warrant Shares shall not
contain any legend (including the legend set forth in Section 4.1(b)): (i)
following a sale or transfer of such Securities pursuant to an effective
registration statement (including the Registration Statement), or (ii) following
a sale or transfer of such Shares or Warrant Shares pursuant to Rule 144
(assuming the transferor is not an Affiliate of the Company), or (iii) while
such Shares or Warrant Shares are eligible for sale under Rule 144(k). The
Company may not make any notation on its records or give instructions to any

                                       14

<PAGE>

transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Section, except for stop transfer instructions for Affiliates of
the Company.

         4.2 FURNISHING OF INFORMATION. As long as any Investor owns the
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as any Investor owns Securities, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Investors and make publicly available in accordance with Rule 144(c) such
information as is required for the Investors to sell the Shares and Warrant
Shares under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell the Shares and
Warrant Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144.

         4.3 INTEGRATION. The Company shall not, and shall use its best efforts
to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Investors, or that
would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market in a manner that would require
stockholder approval of the sale of the securities to the Investors.

         4.4 SUBSEQUENT REGISTRATIONS. Other than pursuant to the Registration
Statement, prior to the Effective Date, the Company may not file any
registration statement (other than on Form S-8) with the Commission with respect
to any securities of the Company.

         4.5 SECURITIES LAWS DISCLOSURE; PUBLICITY. By 9:00 a.m. (New York time)
on the Trading Day following the execution of this Agreement, and by 9:00 a.m.
(New York time) on the Trading Day following the Closing Date, the Company shall
issue press releases disclosing the transactions contemplated hereby and the
Closing. On the Trading Day following the execution of this Agreement the
Company will file a Current Report on Form 8-K disclosing the material terms of
the Transaction Documents (and attach as exhibits thereto the Transaction
Documents), and on the Trading Day following the Closing Date the Company will
file an additional Current Report on Form 8-K to disclose the Closing. In
addition, the Company will make such other filings and notices in the manner and
time required by the Commission and the Trading Market on which the Common Stock
is listed. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Investor, or include the name of any Investor in any
filing with the Commission (other than the Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market, without the prior written consent of such Investor, except to
the extent such disclosure is required by law or Trading Market regulations.

                                       15

<PAGE>

         4.6 LIMITATION ON ISSUANCE OF FUTURE PRICED SECURITIES. During the six
months following the Closing Date, the Company shall not issue any "Future
Priced Securities" as such term is described by NASD IM-4350-1.

         4.7 INDEMNIFICATION OF INVESTORS.

             (a) In addition to the indemnity provided in the Registration
Rights Agreement, the Company will indemnify and hold the Investors and their
directors, officers, shareholders, partners, employees and agents (each, an
"INVESTOR PARTY") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation (collectively, "LOSSES") that any such Investor Party
suffers or incurs as a result of or relating to any misrepresentation, breach or
inaccuracy of any representation, warranty, covenant or agreement made by the
Company in any Transaction Document.

             (b) In addition to the indemnity provided in the Registration
Rights Agreement, each Investor, severally and not jointly, will indemnify and
hold the Company and its directors, officers, shareholders, partners, employees
and agents (each, a "COMPANY PARTY") harmless from any and all Losses that any
such Company Party suffers or incurs as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Investor in any Transaction Document.

             (c) The provisions contained in Section 5(c) of the Registration
Rights Agreement relating to conduct of indemnification proceedings and Section
5(d) of the Registration Rights Agreement relating to contribution shall apply
to any indemnification required under this Section 4.7 as if those provisions
were set forth herein. The indemnification and contribution agreements contained
or incorporated into this Section 4.7 are in addition to any liability that the
Investor Party and Company Party may have to one another.

         4.8 NON-PUBLIC INFORMATION. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Investor
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Investor
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Investor shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.

         4.9 LISTING OF SECURITIES. The Company agrees, (i) if the Company
applies to have the Common Stock traded on any other Trading Market, it will
include in such application the Shares and Warrant Shares, and will take such
other action as is necessary or desirable to cause the Shares and Warrant Shares
to be listed on such other Trading Market as promptly as possible, and (ii) it
will take all action reasonably necessary to continue the listing and trading of
its Common Stock on a Trading Market and will comply in all material respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of the Trading Market.

                                       16

<PAGE>

         4.10 USE OF PROCEEDS. The Company will use the net proceeds from the
sale of the Securities hereunder for working capital purposes and potentially
for acquisitions and not for the satisfaction of any portion of the Company's
debt (other than payment of trade payables and accrued expenses in the ordinary
course of the Company's business and consistent with prior practices), or to
redeem any Common Stock or Common Stock Equivalents.

                                   ARTICLE V.
                         CONDITIONS PRECEDENT TO CLOSING

         5.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE INVESTORS TO
PURCHASE SECURITIES. The obligation of each Investor to acquire Securities at
the Closing is subject to the satisfaction or waiver by such Investor, at or
before the Closing, of each of the following conditions:

             (a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing as though made
on and as of such date;

             (b) PERFORMANCE. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing;

             (c) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents;

             (d) ADVERSE CHANGES. Since the date of execution of this Agreement,
no event or series of events shall have occurred that reasonably could have or
result in a Material Adverse Effect;

             (e) NO SUSPENSIONS OF TRADING IN COMMON STOCK; LISTING. Trading in
the Common Stock shall not have been suspended by the Commission or any Trading
Market (except for any suspensions of trading of not more than one Trading Day
solely to permit dissemination of material information regarding the Company) at
any time since the date of execution of this Agreement, and the Common Stock
shall have been at all times since such date listed for trading on a Trading
Market; and

             (f) COMPANY DELIVERABLES. The Company shall have delivered the
Company Deliverables in accordance with Section 2.2(a).

         5.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY TO SELL
SECURITIES. The obligation of the Company to sell Securities at the Closing is
subject to the satisfaction or waiver by the Company, at or before the Closing,
of each of the following conditions:

                                       17

<PAGE>

             (a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Investor contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made on and as of such date;

             (b) PERFORMANCE. Each Investor shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by such Investor at or prior to the Closing;

             (c) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents; and

             (d) INVESTORS DELIVERABLES. Each Investor shall have delivered its
Investors Deliverables in accordance with Section 2.2(b).

                                  ARTICLE VI.
                                  MISCELLANEOUS

         6.1 FEES AND EXPENSES. At the Closing, the Company shall pay to Bryan
Cave LLP $25,000 as partial reimbursement of Roth Capital Partners LLC for its
legal fees in connection with the preparation of the Transaction Documents, it
being understood that Bryan Cave LLP has only rendered legal advice to Roth
Capital Partners LLC, and not to the Company or any Investor in connection with
the transactions contemplated hereby, and that each of the Company and each
Investor has relied for such matters on the advice of its own respective
counsel. Except as specified in the immediately preceding sentence, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of the Transaction
Documents. The Company shall pay all stamp and other taxes and duties levied in
connection with the sale of the Shares to the Investors.

         6.2 ENTIRE AGREEMENT. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.

         6.3 NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile (provided the sender
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later
than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day

                                       18

<PAGE>

following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:

         If to the Company:         Emrise Corporation
                                    9485 Haven Avenue, Suite 100
                                    Rancho Cucamonga, CA 91730
                                    Facsimile: (909) 987-9228
                                    Attn.: Chief Financial Officer

         With a copy to:            Rutan & Tucker, LLP
                                    611 Anton Blvd., 14th Floor
                                    Costa Mesa, CA 92626-1998
                                    Facsimile: (714) 546-9035
                                    Attn.: Larry Cerutti, Esq.

         If to an Investor:         To the address for notices set forth under
                                    such Investor's name on the signature pages
                                    hereof;

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

         6.4 AMENDMENTS; WAIVERS; NO ADDITIONAL CONSIDERATION. No provision of
this Agreement may be waived or amended except in a written instrument signed by
the Company and the Investors holding a majority of the Shares. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right. No
consideration shall be offered or paid to any Investor to amend or consent to a
waiver or modification of any provision of any Transaction Document unless the
same consideration is also offered to all Investors who then hold Shares.

         6.5 TERMINATION. This Agreement may be terminated prior to Closing:

             (a) by written agreement of the Investors and the Company; and

             (b) by the Company or an Investor (as to itself but no other
Investor) upon written notice to the other, if the Closing shall not have taken
place by 6:30 p.m. Eastern time on the Outside Date; PROVIDED, that the right to
terminate this Agreement under this Section 6.5(b) shall not be available to any
Person whose failure to comply with its obligations under this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such time.

                                       19

<PAGE>

         In the event of a termination by the Company pursuant to this Section,
the Company shall promptly notify all non-terminating Investors. Upon a
termination in accordance with this Section 6.5, the Company and the terminating
Investor(s) shall not have any further obligation or liability (including as
arising from such termination) to the other and no Investor will have any
liability to any other Investor under the Transaction Documents as a result
therefrom.

         6.6 CONSTRUCTION. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

         6.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Any Investor may assign any
or all of its rights under this Agreement to any Person to whom such Investor
assigns or transfers any Securities, provided such transferee agrees in writing
to be bound, with respect to the transferred Securities, by the provisions
hereof that apply to the "Investors."

         6.8 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.7 (as to each
Investor Party).

         6.9 GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of the any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right

                                       20

<PAGE>

to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its reasonable attorneys' fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding.

         6.10 SURVIVAL. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery of the
Securities.

         6.11 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

         6.12 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         6.13 RESCISSION AND WITHDRAWAL RIGHT. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Investor exercises a right, election, demand
or option under a Transaction Document and the Company does not timely perform
its related obligations within the periods therein provided, then such Investor
may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.

         6.14 REPLACEMENT OF SECURITIES. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities. If a replacement
certificate or instrument evidencing any Securities is requested due to a
mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

                                       21

<PAGE>

         6.15 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

         6.16 PAYMENT SET ASIDE. To the extent that the Company makes a payment
or payments to any Investor pursuant to any Transaction Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

         6.17 INDEPENDENT NATURE OF INVESTORS' OBLIGATIONS AND RIGHTS. The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a transaction with multiple Investors and not because it was required or
requested to do so by any Investor.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGES FOLLOW]

                                       22

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

                                      EMRISE CORPORATION

                                       By:______________________________________
                                            Name:
                                            Title:

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                      SIGNATURE PAGES FOR INVESTORS FOLLOW]

                                       23

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

                                             NAME OF INVESTOR

                                             ___________________________________

                                             By: _______________________________
                                                 Name:
                                                 Title:

                                             Investment Amount: $ ______________

                                             Tax ID No.: _______________________

                                             ADDRESS FOR NOTICE

                                             c/o: ______________________________

                                             Street:____________________________

                                             City/State/Zip:____________________

                                             Attention:_________________________

                                             Tel:_______________________________

                                             Fax:_______________________________

                                             DELIVERY INSTRUCTIONS
                                             (IF DIFFERENT FROM ABOVE)

                                             c/o: ______________________________

                                             Street:____________________________

                                             City/State/Zip:____________________

                                             Attention:_________________________

                                             Tel:_______________________________

                                       24

<PAGE>

        ATTACHMENT TO EXHIBIT 10.1 LISTING INVESTORS AND NUMBER OF SHARES
        -----------------------------------------------------------------

         Number
         of Common
         Shares            Record Holder
         ------            -------------

         1,459,000         JLF Offshore Fund, Ltd.

           938,000         JLF Partners I, LP

           331,000         Guggenheim Portfolio Company XXVIII

            72,000         JLF Partners II, LP

         2,500,000         The Pinnacle Fund, L.P.

         1,400,000         Bonanza Master Fund Ltd.

         1,365,000         Roaring Fork Capital SBIC, L.P.

           900,000         Lagunitas Partners LP

           200,000         Gruber & McBaine International

           165,000         Jon D. Gruber & Linda W. Gruber

            85,000         J. Patterson McBaine

           864,000         Microcapital Fund LP

           486,000         Microcapital Fund Ltd.

           868,500         Omicron Master Trust

           345,000         Stratford Partners, L.P.

           300,000         Select Contrarian Value Partners, L.P.

           225,000         Precept Capital Master Fund, G.P.

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

         12,503,500        Total Shares

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