8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 7, 2012

EMRISE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-10346	77-0226211
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2530 Meridian Parkway, Durham, NC		27,713
(Address of principal executive offices)		(Zip Code)

(408) 200-3598

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01 Entry into a Material Definitive Agreement.

Credit Agreement with GVEC Resource IV Inc.

On November 30, 2007, the Company and certain of its subsidiaries (collectively with the Company's subsidiaries that later became party to the agreement pursuant to that certain Amendment 1 to Loan Documents dated August 20, 2008, the “Borrowers”) entered into a Credit Agreement with GVEC Resource IV Inc. (the “Lender”), an affiliate of Private Equity Management Group LLC (“PEM”), which Credit Agreement has been amended from time to time (as amended, the “Credit Agreement”).

On February 8, 2012, the Lender accepted a Second Amended and Restated Term Loan A Note, which was amended for terms both of principal repayment and maturity date (the “Note”). The Note will be payable interest only on a monthly basis through February 28, 2013 (the “Maturity Date). The Note will be payable at a rate of 15.5% per annum until paid in full, plus any applicable default rate or late fees. Notwithstanding the foregoing, the Note requires a one-time principal payment to the Lender on or before February 29, 2012 in the amount of $500,000.00. In addition, if the Company pays certain amounts of principal before certain dates, the remainder of the principal amount will be deemed paid in full. Under this provision, if the Company pays the below listed amount by the corresponding date, the remaining unpaid balance of the principal amount will be forgiven. If such payments are not made, then the remaining principal amount will be due on the Maturity date of February 28, 2013.

(i) $200,000 by April 30, 2012; or

(ii) $225,000 at any time from May 1, 2012 through June 30, 2012; or

(iii) $250,000 at any time from July 1, 2012 through August 31, 2012.

The proceeds from the sale of the CXR Halcyon telecommunications product line (as described in Item 8.01) will be used to pay a portion of the $500,000 due to the Lender under the terms of the Note on February 29, 2012.

The foregoing description of the Note is qualified in its entirety by reference to the full text of the Note, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.

On February 8, 2012, the Borrowers and the Lender entered into Amendment Number 17 to Loan Documents (“Amendment 17”), which amends the Credit Agreement as of such date to modify the Note, as further described herein.

The foregoing description of Amendment 17 is qualified in its entirety by reference to the full text of Amendment 17, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.2 and incorporated herein by reference.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information in Item 1.01 under the heading “Credit Agreement with GVEC Resource IV Inc.,” is incorporated by reference into this Item 2.03.

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Item 8.01Other Events.

Sale of CXR Halcyon Product Line

On February 7, 2012, CXR Larus Corporation (“CXR Larus”), a wholly-owned subsidiary of EMRISE Corporation (the “Company”), entered into an agreement with LDDF Incorporated, doing business as TesCom, relating to the sale of certain assets relating solely to the CXR Halcyon product line of telecommunications test equipment (the “Product Line”).

At the closing of the sale, CXR Larus received net proceeds of $300,000. The consideration for the Product Line consisted of $300,000 in cash less any amount of cash collected in respect of any accounts receivable in connection with sales of product shipped by CXR Larus on or after November 15, 2011 (the “Purchase Price”). As previously discussed, the proceeds from the sale of the Product Line will be used to pay a portion of the $500,000 due to the Lender under the terms of the Note on February 29, 2012.

Press Release

On February 10, 2012, the Company issued a press release regarding the modification of the Note, the issuance of Amendment 17 and completion of the sale of the Product Line.

A copy of the Company's press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated herein by reference.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits.

Exhibit No.Description

10.1 Second Amended and Restated Term Loan A Note, dated February 8, 2012, executed by EMRISE Corporation, EMRISE Electronics Corporation, and CXR Larus Corporation in favor of GVEC Resource IV Inc.*

10.2 Amendment Number 17 to Loan Documents dated as of February 8, 2012 by and among EMRISE Corporation, EMRISE Electronics Corporation and CXR Larus Corporation, GVEC Resources IV Inc. and Private Equity Management Group LLC.*

99.1 Press Release issued by the Company entitled "EMRISE Corporation and Lender Amend Loan Terms, Allows Payoff of Remaining Loan at Discount of Up to 30%", dated February 10, 2012.*

* Filed herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 10, 2012		EMRISE CORPORATION
	By:	/s/ Brandi L. Festa
		Brandi L. Festa
		Principal Accounting and Financial Officer

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EXHIBIT INDEX

Exhibit No.Description

10.1 Second Amended and Restated Term Loan A Note, dated February 8, 2012, executed by EMRISE Corporation, EMRISE Electronics Corporation, and CXR Larus Corporation in favor of GVEC Resource IV Inc.*

10.2 Amendment Number 17 to Loan Documents dated as of February 8, 2012 by and among EMRISE Corporation, EMRISE Electronics Corporation and CXR Larus Corporation, GVEC Resources IV Inc. and Private Equity Management Group LLC.*

99.1 Press Release issued by the Company entitled "EMRISE Corporation and Lender Amend Loan Terms, Allows Payoff of Remaining Loan at Discount of Up to 30%", dated February 10, 2012.*

* Filed herewith.

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EX-10.1

Exhibit 10.1

SECOND AMENDED AND RESTATEDTERM LOAN A NOTE

$1,000,000.00    Irvine, California    February 8, 2012

FOR VALUE RECEIVED, EMRISE CORPORATION, a Delaware corporation (“Parent”), EMRISE ELECTRONICS CORPORATION, a New Jersey corporation (“EEC”), and CXR LARUS CORPORATION, a Delaware corporation (“CXR”) (each of Parent, EEC, and CXR is referred to herein individually as a “Borrower” and, collectively, as the “Borrowers”), hereby jointly and severally promise to pay GVEC RESOURCE IV INC., a company organized under the laws of the British Virgin Islands or its registered assigns (“Payee”), on or before February 28, 2013 (or such earlier date of termination of this Note, whether by prepayment, or by acceleration, the “Maturity Date”), the lesser of (a) ONE MILLION DOLLARS AND ZERO CENTS ($1,000,000.00), and (b) the unpaid principal amount of Second Amended and Restated Term Loan A made by Payee to the Borrowers under the Credit Agreement referred to below, all as more particularly set forth herein. The principal hereof and all interest thereon shall be due and payable as provided below.

Borrowers also hereby jointly and severally promise to pay interest on the unpaid principal amount hereof, from the date hereof until paid in full, as follows, notwithstanding anything to the contrary set forth in that certain Credit Agreement, dated as of November 30, 2007 (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among Borrowers, the Lenders that are signatories thereto, and Payee, as Arranger and Agent:

From the date hereof and continuing on the same day each month thereafter through the Maturity Date, Borrowers shall pay interest only on the outstanding principal amount hereof at a fixed per annum rate equal to fifteen and one half percent (15.5%). On the Maturity Date, all outstanding principal and interest, if any, and any unpaid fees or costs, and all other amounts due under the Credit Agreement shall be paid in full. Notwithstanding the foregoing, (A) Borrowers shall make a one time principal payment to Payee on February 29, 2012 in the amount of FIVE HUNDRED THOUSAND DOLLARS AND ZERO CENTS ($500,000.00), and (B) provided that Borrowers make an additional principal payment to Payee in the amount of (i) TWO HUNDRED THOUSAND DOLLARS AND ZERO CENTS ($200,000.00) by April 30, 2012, or (ii) TWO HUNDRED TWENTY FIVE THOUSAND DOLLARS AND ZERO CENTS ($225,000.00) at any time from May 1, 2012 through June 30, 2012, or (iii) TWO HUNDRED FIFTY THOUSAND DOLLARS AND ZERO CENTS ($250,000.00) at any time from July 1, 2012 through August 31, 2012, plus (iv) any unpaid fees or costs then due in accordance with the provisions of the Credit Agreement, then the remaining principal balance due under this Note, and all other amounts due under the Credit Agreement, shall be deemed to be paid in full and Payee shall, at Borrowers’ expense, terminate all liens and security interests in favor of Payee.

This Second Amended and Restated Term Loan A Note is issued pursuant to and entitled to the benefits of the Credit Agreement, to which reference is hereby made for a more complete statement of the terms and conditions under which Second Amended and Restated Term Loan A

1

Exhibit 10.1

evidenced hereby was made and is to be repaid, including but not limited to any default rates and other fees and costs.

All payments of principal and interest in respect of this Second Amended and Restated Term Loan A Note shall be made in lawful money of the United States of America in same day funds to Agent’s Account for the account of the Lender Group or at such other place as shall be designated in writing for such purpose in accordance with the terms of the Credit Agreement. Payee hereby agrees, by its acceptance hereof, that before disposing of this Second Amended and Restated Term Loan A Note or any part hereof it will make a notation hereon of all principal payments previously made hereunder and of the date to which interest hereon has been paid; provided, the failure to make a notation of any payment made on this Second Amended and Restated Term Loan A Note shall not limit or otherwise affect the obligations of the Borrowers hereunder with respect to payments of principal of or interest on this Second Amended and Restated Term Loan A Note.

This Second Amended and Restated Term Loan A Note is subject to mandatory prepayment and to prepayment at the option of Borrowers, each as provided in the Credit Agreement.

THIS SECOND AMENDED AND RESTATED TERM LOAN A NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWERS AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Second Amended and Restated Term Loan A Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be, due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement.

The terms of this Second Amended and Restated Term Loan A Note are subject to amendment only in the manner provided in the Credit Agreement.

No reference herein to the Credit Agreement and no provision of this Second Amended and Restated Term Loan A Note or the Credit Agreement shall alter or impair the obligations of Borrowers, which are absolute and unconditional, to pay the principal of and interest on this Second Amended and Restated Term Loan A Note at the place, at the respective times, and in the currency herein prescribed.

Borrowers promise, jointly and severally, to pay all costs and expenses, including reasonable attorneys’ fees, all as provided in the Credit Agreement, incurred in the collection and enforcement of this Second Amended and Restated Term Loan A Note. Borrowers and any endorsers of this Second Amended and Restated Term Loan A Note hereby consent to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder.

2

Exhibit 10.1

Subject to the terms and conditions of that certain Amendment Number 17 to Loan Documents dated as of even date herewith, by and among Borrowers, Payee and , Private Equity Management Group LLC, as Payee’s court-appointed receiver, this Second Amended and Restated Term Loan A Note completely amends and restates that certain Amended and Restated Term Loan A Note issued by Borrowers to Payee on or about August 31, 2010 (the “Original Note”), which Original Note shall, upon execution and delivery of this Second Amended and Restated Term Loan A Note be of no further force or effect.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Borrowers have caused this Second Amended and Restated Term Loan A Note to be duly executed and delivered by its officer thereunto duly authorized as of the date and at the place first written above.

EMRISE CORPORATION	EMRISE ELECTRONICS CORPORATION
By: /s/ Carmine Oliva	By: /s/ Carmine Oliva
Name: Carmine Oliva	Name: Carmine Oliva
Title: Chief Executive Officer	Title: President
CXR LARUS CORPORATION
By: /s/ Carmine Oliva
Name: Carmine Oliva
Title: President

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EX-10.2

Exhibit 10.2

AMENDMENT NUMBER 17 TO LOAN DOCUMENTS

This AMENDMENT NUMBER 17 TO LOAN DOCUMENTS (this “Seventeenth Amendment”) is entered into as of February 8, 2012, by and among GVEC RESOURCE IV INC. (the “Agent”), as Agent and as a Lender, PRIVATE EQUITY MANAGEMENT GROUP LLC, a Delaware limited liability company (“PEMG”), EMRISE CORPORATION, a Delaware corporation (“Parent”), and Parent’s Subsidiaries that are signatories hereto (collectively, with Parent, the “Borrowers” and each individually, a “Borrower”), with reference to the following facts:

A.    Borrowers, Agent and the Lenders named therein are parties to that certain Credit Agreement, dated as of November 30, 2007, as amended by that certain Amendment Number 1 to Loan Documents, dated as of August 20, 2008, that certain Amendment Number 2 to Loan Documents, dated as of February 12, 2009, that certain Forbearance Agreement and Amendment Number 3 to Loan Documents, dated as of March 20, 2009 (as amended by that certain Amendment to Forbearance Agreement and Amendment Number 3 to Loan Documents, dated as of April 9, 2009), that certain Amendment Number 4 to Loan Documents, dated as of April 14, 2009, that certain Amendment Number 5 to Loan Documents, dated as of August 14, 2009, that certain Amendment Number 6 to Loan Documents, dated as of November 3, 2009, that certain Amendment Number 7 to Loan Documents, dated as of November 13, 2009, that certain Amendment Number 8 to Loan Documents, dated as of December 31, 2009, that certain Amendment Number 9 to Loan Documents, dated as of April 13, 2010, that certain Amendment Number 10 to Loan Documents, dated as of May 3, 2010, that certain Amendment Number 11 to Loan Documents, dated as of May 17, 2010, that certain Amendment Number 12 to Loan Documents, dated as of June 1, 2010, that certain Amendment Number 13 to Loan Documents, dated as of June 17, 2010, that certain Amendment Number 14 to Loan Documents, dated as of July 16, 2010, that certain Amendment Number 15 to Loan Documents, dated as of July 31, 2010 and that certain Amendment Number 16 to Loan Documents, dated as of August 31, 2010 (as further amended, restated, supplemented or modified from time to time, the “Credit Agreement”).

NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:

1.Defined Terms. Capitalized terms not otherwise defined herein shall have the same meanings as set forth in the Credit Agreement.

2.    Representations and Warranties.

(a)    Each Borrower hereby represents and warrants that, after giving effect to this Seventeenth Amendment, no Event of Default or failure of condition has occurred or exists, or would exist with notice or lapse of time or both under the Credit Agreement.

(b)    All representations and warranties of Borrowers in this Seventeenth Amendment and the Credit Agreement are true and correct as of the date hereof, and shall survive the execution of this Seventeenth Amendment.

3.    Amendments. The following provisions of the Credit Agreement hereby are amended and restated to read as follows:

(a)    Section 2.2(a) shall be deemed to be amended and restated in its entirety to read as follows:

“(a)    Subject to the terms and conditions of this Agreement, on August 31, 2010, Lenders shall be deemed to have made a term loan (the “Second Amended and Restated Term Loan A”) to Borrowers in an amount not to exceed One Million Dollars ($1,000,000).”

(b)    The third sentence of Section 2.2(c) hereby is amended and restated in its entirety to read as follows:

“The Second Amended and Restated Term Loan A shall be repaid in accordance with the terms and conditions of that certain Second Amended and Restated Term Loan A Note.”

(c)    The Amended and Restated Term Loan A Note shall be replaced in its entirety with the Second Amended and Restated Term Loan A Note.

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Exhibit 10.2

(d)    The defined term “Amended and Restated Term Loan A” in the Credit Agreement shall mean and refer to the “Second Amended and Restated Term Loan A.”

4.    Default. In addition to all other Events of Default under the Credit Agreement, Borrowers’ failure to pay any amount when due under this Seventeenth Amendment or to perform any covenant or other agreement contained in this Seventeenth Amendment, or any other document entered into pursuant hereto, including but not limited to the Second Amended and Restated Term Loan A Note, shall constitute Events of Default under this Seventeenth Amendment and the Credit Agreement

5.    Consent. Notwithstanding any provision in the Credit Agreement to the contrary, Lenders hereby consent and approve of the sale of assets by CXR Larus Corporation of the test equipment line of products marketed under the CXR Halcyon name to LDDF Incorporated.

6.    Conditions Precedent. The effectiveness of this Seventeenth Amendment is subject to Agent’s receipt of all of the following:

(a)    this Seventeenth Amendment and such other agreements and instruments reasonably requested by Agent pursuant hereto (including such documents as are necessary to create and perfect Agent’s interest in the Collateral, and including but not limited to the Second Amended and Restated Term Loan A Note, substantially in the form attached hereto as Annex Q), each duly executed by each Borrower;

(b)    payment by Borrowers to PEMG of an amendment fee in the amount of Ten Thousand Dollars ($10,000), which shall be nonrefundable as of the date hereof;

(c)    payment by Borrowers of all legal fees and expenses incurred through (which shall be due and payable on, and nonrefundable as of the date of this Seventeenth Amendment (which shall be remitted via wire transfer according to the instructions set forth on Exhibit A hereto); and

(d)    such other documents and completion of such other matters as Agent may reasonably deem necessary or appropriate.

7.    Release.

(a)    Each Borrower acknowledges that neither Agent, any Lender nor PEMG (the “Released Parties”) would enter into this Seventeenth Amendment without Borrowers’ assurance hereunder. Except for the obligations arising hereafter under this Seventeenth Amendment, each Borrower hereby absolutely discharges and releases the Released Parties, any person or entity that has obtained any interest from any of them under the Credit Agreement or otherwise and each of the Released Parties’ and such entities’ former and present partners, stockholders, officers, directors, employees, successors, assignees, agents and attorneys from any known or unknown claims which any Borrower now has against any of them of any nature, including any claims that any Borrower, its successors, counsel, and advisors may in the future discover they would have now had if they had known facts not now known to them, whether founded in contract, in tort or pursuant to any other theory of liability, including but not limited to any claims arising out of or related to the Credit Agreement or the transactions contemplated thereby.

(b)    Each Borrower waives the provisions of California Civil Code Section 1542, which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

(c)    The provisions, waivers and releases set forth in this section are binding upon each Borrower and each Borrower’s shareholders, agents, employees, assigns and successors in interest. The provisions, waivers and releases of this section shall inure to the benefit of the Released Parties and their respective agents, employees, officers, directors, assigns and successors in interest.

(d)    Each Borrower warrants and represents that such Borrower is the sole and lawful owner of all right, title and interest in and to all of the claims released hereby and no Borrower has heretofore assigned or transferred or purported to assign or

2

Exhibit 10.2

transfer to any person any such claim or any portion thereof. Each Borrower shall indemnify and hold harmless Agent, each Lender and PEMG from and against any claim, demand, damage, debt, liability (including payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced) based on or arising out of any such assignment or transfer.

(e)    The provisions of this section shall survive payment in full of the Obligations, full performance of all the terms of this Seventeenth Amendment and the Credit Agreement, and/or Agent’s, any Lender’s or PEMG’s actions to exercise any remedy available under the Credit Agreement or otherwise.

8.    Consultation of Counsel. Each Borrower acknowledges that such Borrower has had the opportunity to be represented by legal counsel of its own choice throughout all of the negotiations that preceded the execution of this Seventeenth Amendment. Each Borrower has executed this Seventeenth Amendment after reviewing and understanding each provision of this Seventeenth Amendment and without reliance upon any promise or representation of any person or persons acting for or on behalf of Agent. Each Borrower further acknowledges that such Borrower and its counsel have had adequate opportunity to make whatever investigation or inquiry they may deem necessary or desirable in connection with the subject matter of this Seventeenth Amendment prior to the execution hereof and the delivery and acceptance of the consideration described herein.

9.    Miscellaneous.

(a)    Successors and Assigns. This Seventeenth Amendment shall be binding upon and shall inure to the benefit of Borrower and Agent and their respective successors and assigns; provided, however, that the foregoing shall not authorize any assignment by Borrower of its rights or duties hereunder.

(b)    Integration. This Seventeenth Amendment and any documents executed in connection herewith or pursuant hereto contain the entire Seventeenth Amendment between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Seventeenth Amendment; except that any financing statements or other agreements or instruments filed by Agent with respect to Borrower shall remain in full force and effect.

(c)    Course of Dealing; Waivers. No course of dealing on the part of Agent or its officers, nor any failure or delay in the exercise of any right by Agent, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Agent’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Agent thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Agent.

(d)    Time is of the Essence. Time is of the essence as to each and every term and provision of this Seventeenth Amendment and the other Credit Agreement.

(e)    Legal Effect. The Credit Agreement remains in full force and effect. If any provision of this Seventeenth Amendment conflicts with applicable law, such provision shall be deemed severed from this Seventeenth Amendment, and the balance of this Seventeenth Amendment shall remain in full force and effect.

(f)    Choice of Law and Venue; Jury Trial Waiver; Judicial Reference; Service of Process. Section 12 of the Credit Agreement hereby is incorporated herein by this reference as though fully set forth.

(g)    Upon the effectiveness of this Seventeenth Amendment, each reference in the Credit Agreement to “this Seventeenth Amendment,” “hereunder,” “herein,” “hereof” or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended by this Seventeenth Amendment.

(h)    Upon the effectiveness of this Seventeenth Amendment, each reference in the Loan Documents to the “Credit Agreement” “thereunder,” “therein,” “thereof or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended by this Seventeenth Amendment.

(i)    Assignment and Indemnity. Borrower consents to Agent’s assignment, in accordance with Section 13 of the Credit Agreement, of all or any part of Agent’s rights under this Seventeenth Amendment and the Credit Agreement.

3

Exhibit 10.2

10.    Entire Amendment; Effect of Seventeenth Amendment. This Seventeenth Amendment, and the terms and provisions hereof, constitutes the entire Seventeenth Amendment among the parties pertaining to the subject matter hereof and supersedes any and all prior or contemporaneous amendments relating to the subject matter hereof. Except as expressly set forth in this Seventeenth Amendment, the Credit Agreement and other Loan Documents shall remain unchanged and in full force and effect. To the extent any terms or provisions of this Seventeenth Amendment conflict with those of the Credit Agreement or other Loan Documents, the terms and provisions of this Seventeenth Amendment shall control. This Seventeenth Amendment is a Loan Document.

11.    Counterparts; Electronic Transmission. This Seventeenth Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Seventeenth Amendment by signing any such counterpart. Delivery of an executed counterpart of this Seventeenth Amendment by electronic mail shall be equally as effective as delivery of an original executed counterpart of this Seventeenth Amendment. Any party delivering an executed counterpart of this Seventeenth Amendment by electronic mail also shall deliver an original executed counterpart of this Seventeenth Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Seventeenth Amendment.

[Balance of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties have caused this AMENDMENT NUMBER 17 TO LOAN DOCUMENTS to be executed and delivered on the date first written above.

EMRISE CORPORATION	EMRISE ELECTRONICS CORPORATION
By: /s/ Carmine Oliva	By: /s/ Carmine Oliva
Name: Carmine Oliva	Name: Carmine Oliva
Title: Chief Executive Officer	Title: President
CXR LARUS CORPORATION
By: /s/ Carmine Oliva
Name: Carmine Oliva
Title: President
	GVEC RESOURCE IV INC.,
	as Agent and a Lender
	By: PRIVATE EQUITY MANAGEMENT GROUP LLC, its Court-Appointed Receiver
	By: /s/ Jim LeSieur
	Name: Jim LeSieur
	Title: Chief Operating Officer
PRIVATE EQUITY MANAGEMENT GROUP LLC
By: /s/ Jim LeSieur
Name: Jim LeSieur
Title: Chief Operating Officer

[Signature Page to Amendment Number 17 to Loan Documents]

ANNEX Q(Second Amended and Restated Term Loan A Note)

[hard copy to be attached]

EXHIBIT A(Wire Transfer Instructions)

M&T Bank25 South Charles Street, 18th FloorBaltimore, MD 21201
Account Name: DLA Piper US LLP Operating Account
Account #: 074-8148-5
ABA Transit #: 022000046
Swift Code: MANTUS33INT
Reference: 018212-000004 (tz18133)
Law Firm Tax Identification Number: 52-0616490

EX-99.1

Exhibit 99.1

NEWS	EMRISE
	CORPORATION
	2530 Meridian Parkway
	Durham, NC 27713
	(408) 200-3040 (408) 550-8340
	www.emrise.com
CONTACT:	Allen & Caron Inc
Brandi Festa	Rene Caron (investors) Len Hall (media)
Director Finance and Administration	(949) 474-4300
bfesta@emrise.com	rene@allencaron.com
	len@allencaron.com

EMRISE CORPORATION AND LENDER AMEND LOAN TERMS,

ALLOWS PAYOFF OF REMAINING LOAN AT DISCOUNT OF UP TO 30%

DURHAM, NC - February 10, 2012…EMRISE CORPORATION (OTCBB: EMRI), a multi-national manufacturer of defense and aerospace electronic devices and communications equipment, announced today that it has signed an agreement with GVEC Resource IV Inc. and Private Equity Management Group LLC (PEM) its former primary lender in the U.S. (collectively the Lender), to amend the terms of the existing $1 million interest bearing note (Note) that extends its due date to February 28, 2013, revises the principal repayment terms and includes provisions for the Company to receive a discount of up to 30 percent in consideration for early payment.

The Company also announced today that its San Jose, CA-based subsidiary, CXR Larus Corporation (CXR Larus), has sold certain assets related solely to the CXR Halcyon telecommunications test equipment product line to LDDF Incorporated, located in Austin, TX and doing business as TesCom, for $300,000 in an all cash transaction. With the sale of the CXR Halcyon test equipment product line, EMRISE will now be positioned to focus its resources on its core telecommunications products, which the Company believes will drive the future growth of its Communications Equipment business unit.

EMRISE Chairman and CEO Carmine T. Oliva said proceeds from the sale of the test equipment product line will be used to pay a portion of the $500,000 payment on the Note that is due the Lender on February 29, 2012 under the terms of the recent amendment to the Note. Oliva also said if EMRISE makes an additional payment of $200,000 to the Lender on or before April 30, 2012, the remaining unpaid principal amount of the Note will be deemed paid in full, resulting in a $300,000, or 30 percent, discount from the original $1 million principal balance of the Note.

Oliva noted that if the Company pays off the Note by April 30, 2012, it would eliminate the expense of the 15.5 percent interest rate on the Note and could save the Company more than $64,000 in interest expense over the next 10 months.

“We intend to pay off this Note early, which will be an important milestone for EMRISE as we focus on growing the Company and increasing value to our stockholders,” Oliva added. “It will close a difficult and uncertain chapter in the history of EMRISE, and mark the final payment of what at one time were

1

Exhibit 99.1

loan balances to the Lender of approximately $26 million. It will also finally eliminate the overhang of the debt and the stigma of the Company's business relationship with the Lender.”

Full terms of the amendment to the existing credit agreement with its Lender and terms of the sale of the assets related to CXR Larus' telecommunications test equipment product line are contained in a Form 8-K to be filed today with the U. S. Securities and Exchange Commission.

About EMRISE Corporation

EMRISE designs, manufactures and markets electronic devices, sub-systems and equipment for aerospace, defense, industrial and communications markets. EMRISE products perform key functions such as power supply and power conversion; radio frequency (RF) and microwave signal processing; and network access and timing and synchronization of communications networks. The use of its power supplies, RF and microwave signal processing devices and subsystems in on-board in-flight entertainment and connectivity systems is a primary growth driver for the Company's Electronic Devices business segment. The Company's network access and timing and synchronization products are primary growth drivers for the Company's Communications Equipment business segment. EMRISE serves the worldwide base of customers it has built in North America, Europe and Asia through operations in the United States, England and France. EMRISE is a publicly traded company whose common stock trades on the OTCBB under the symbol EMRI. For more information go to www.emrise.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

With the exception of historical information, the matters discussed in this press release, including without limitation EMRISE's ability to make an additional payment of $200,000 on or before April 30, 2012, the ability to receive a discount of up to 30 percent, and the ability to drive the future growth of the Communications Equipment business unit are forward-looking statements that involve a number of risks and uncertainties. The actual future results of EMRISE Corporation could differ from those statements. The Company also refers you to those factors contained in the "Risk Factors" Section of EMRISE's Annual Report on Form 10-K for the year ended December 31, 2010, its Quarterly Reports on Form 10-Q, its Current Reports on Form 8-K filed in recent months, and other EMRISE filings with the SEC.

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