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 (earliest event reported):        April 9, 2009

EMRISE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-10346	77-0226211
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	file number)	Identification No.)

9485 Haven Avenue, Suite 100

Rancho Cucamonga, California 91730

(Address of principal executive offices) (Zip code)

(909) 987-9220

(Registrant’s telephone number, including area code)

Not applicable

(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:

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

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

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

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Item 1.01.              Entry Into a Material Definitive Agreement.

Amendment to Loan Documents

Background Information

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 Number 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, which Credit Agreement has been amended by that certain Amendment Number 1 to Loan Documents, dated August 20, 2008, that certain Amendment Number 2 to Loan Documents, dated February 12, 2009, and that certain Forbearance Agreement and Amendment No. 3 to Loan Documents, dated March 20, 2009 (as amended, the “Credit Agreement”).

On March 20, 2009, the Borrowers and the Lender entered into a Forbearance Agreement and Amendment Number 3 to Loan Documents (the “Third Amendment”) pursuant to which, among other things, the Borrowers and Lender agreed to enter into a further amendment to the Credit Agreement in order to reset certain financial covenants contained therein (the “Fourth Amendment”) on or prior to April 10, 2009.

Amendment to Forbearance Agreement and Amendment No. 3 to Loan Documents

On April 9, 2009, the Borrowers and the Lender entered into an Amendment to Forbearance Agreement and Amendment No. 3 to Loan Documents (the “Amendment to Third Amendment”) pursuant to which the date by which the Borrowers and Lender must enter into the Fourth Amendment was extended from April 10, 2009 to April 15, 2009.  The extension was required as a result of vacation days and holidays that resulted in the Lender and Borrowers requiring further time to negotiate the terms of the financial covenants.  Pursuant to the Third Amendment, the Lender agreed to forbear on its rights with respect to certain events of default under the Credit Agreement until the parties enter into the Fourth Amendment.  The Amendment to Third Amendment is filed as Exhibit 10.1 to this report.

Subject to the amendments to the Credit Agreement described above, the description of the Credit Agreement in the Company’s Current Reports on Form 8-K filed on December 6, 2007, August 26, 2008, February 13, 2009, and March 26, 2009 are incorporated herein by reference.

The foregoing summary of the terms of the credit facility and the Amendment to Third Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the agreements filed as exhibits to this report or incorporated herein by reference.  The agreements filed as exhibits to this report or incorporated herein by reference, contain representations and warranties made by the parties thereto. The assertions embodied in such representations and warranties are not necessarily assertions of fact, but a mechanism for the parties to allocate risk.  Accordingly, investors should not rely on the representation and warranties as characterizations of the actual state of facts or for any other purpose at the time they were made or otherwise.  The agreements filed as exhibits to this report or incorporated

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herein by reference are not intended as documents for investors to obtain factual information about the current state of affairs of the parties to the agreements.  Rather, investors should look to other disclosures contained in the Company’s reports under the Exchange Act.

Item 9.01               Financial Statements and Exhibits.

(d)     Exhibits:

Exhibit No.	Description
10.1	Amendment to Forbearance Agreement and Amendment Number 3 to Loan Documents, dated April 9, 2009, by and among EMRISE Corporation, EMRISE Electronics Corporation, CXR Larus Corporation, RO Associates Incorporated, Advanced Control Components, Inc., Custom Control Components, Inc. and GVEC Resource IV Inc.

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SIGNATURES

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

	EMRISE CORPORATION
Dated: April 10, 2009	By:	/s/ D. JOHN DONOVAN
		D. John Donovan, Vice President of Finance and Administration (principal financial officer)

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INDEX TO EXHIBITS ATTACHED TO THIS REPORT

Exhibit No.	Description
10.1	Amendment to Forbearance Agreement and Amendment Number 3 to Loan Documents, dated April 9, 2009, by and among EMRISE Corporation, EMRISE Electronics Corporation, CXR Larus Corporation, RO Associates Incorporated, Advanced Control Components, Inc., Custom Control Components, Inc. and GVEC Resource IV Inc.

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EX-10.1

Exhibit 10.1

AMENDMENT TO FORBEARANCE AGREEMENT AND AMENDMENT NO. 3 TO LOAN DOCUMENTS

THIS AMENDMENT TO FORBEARANCE AGREEMENT AND AMENDMENT NO. 3 TO LOAN DOCUMENTS (this “Amendment”), is entered into as of April 9, 2009, by and among GVEC RESOURCE IV INC. (“Agent”), as Agent and as a Lender, EMRISE CORPORATION, a Delaware corporation (“Parent”), and Parent’s Subsidiaries that are signatories hereto (collectively with Parent, “Borrowers”).

W I T N E S S E T H

WHEREAS, 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 August 20, 2008 (the “First Amendment”), that certain Amendment Number 2 to Loan Documents, dated February 12, 2009 (the “Second Amendment”), and that certain Forbearance Agreement and Amendment No. 3 to Loan Documents, dated March 20, 2009 (the “Third Amendment”) (as further amended, restated, supplemented, or modified from time to time, the “Credit Agreement”);

WHEREAS, pursuant to Section 7 of the Third Amendment, on or prior to April 10, 2009, the parties to the Credit Agreement agreed to enter into an amendment to the Credit Agreement to amend the financial covenants set forth in Sections 6.16(a), (b), and (c) of the Credit Agreement;

WHEREAS, the parties to the Credit Agreement wish to obtain additional time to comply with Section 7 of the Third Amendment;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the Loan Documents as follows:

1.             DEFINITIONS.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Third Amendment, as amended hereby.

2.             FORBEARANCE PERIOD.  Agent and Lenders acknowledge that the Forbearance Period is in effect as of the date hereof and agree that until the expiration of the Forbearance Period, it will forbear from exercising their respective default-related rights and remedies against Borrowers, including, but not limited, accelerating the Obligations or terminating any Commitments under the Credit Agreement, solely with respect to the continuation of the Specified Defaults during the Forbearance Period.

3.             AMENDMENT TO THIRD AMENDMENT.  Section 7 of the Third Amendment is hereby amended by deleting the first sentence of Section 7 of the Third Amendment and inserting the following sentence in its place:  “On or prior to April 15, 2009, the parties to the Credit Agreement shall enter into an amendment to the Credit Agreement to amend the financial covenants set forth in Sections 6.16(a), (b), and (c) of the Credit Agreement (the “Fourth Amendment”).”

4.             CONSTRUCTION.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF CALIFORNIA.

5.             ENTIRE AMENDMENT; EFFECT OF AMENDMENT.  This Amendment, and the terms and provisions hereof, constitutes the entire agreement 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 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 Amendment conflict with those of the Credit Agreement or other Loan Documents, the terms and provisions of this Amendment shall control.  This Amendment is a Loan Document.

6.             COUNTERPARTS; TELEFACSIMILE EXECUTION.  This 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 Amendment by signing any such counterpart.  Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

7.             MISCELLANEOUS.

(a)           Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “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 Amendment.

(b)           Upon the effectiveness of this 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 Amendment.

[signatures on next page]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered on the date first written above.

EMRISE CORPORATION		EMRISE ELECTRONICS CORPORATION
By:	/s/ D. John Donovan	By:	/s/ D. John Donovan
Title:	Vice President Finance and Administration	Title:	Secretary and Chief Financial Officer
CXS LARUS CORPORATION		RO ASSOCIATES INCORPORATED
By:	/s/ D. John Donovan	By:	/s/ D. John Donovan
Title:	Secretary and Chief Financial Officer	Title:	Secretary and Chief Financial Officer
CUSTOM COMPONENTS, INC.		ADVANCED CONTROL COMPONENTS, INC.
By:	/s/ D. John Donovan	By:	/s/ D. John Donovan
Title:	Treasurer and Secretary	Title:	Treasurer and Secretary
		GVEC RESOURCE IV INC., as Agent and a Lender
		By:	[ILLEGIBLE]
		Title:	Authorized Signatory
		By:	[ILLEGIBLE]
		Title:	Director

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