CASH CONSIDERATION RECEIVED BY EACH SELLER AT CLOSING
AS SET FORTH IN SECTION 2.2(A)); PROVIDED, HOWEVER, THAT IF BUYER BREACHES THE
OBLIGATION SET FORTH IN SECTIONS 2.6(F)(II) OR (VI) AND THE EFFECT OF SUCH
BREACH ON OPERATING INCOME CAN BE CALCULATED, SELLER'S SOLE REMEDY SHALL BE AN
ADJUSTMENT TO THE CALCULATION OF OPERATING INCOME FOR THE APPLICABLE MEASUREMENT
PERIOD TO REFLECT SUCH EFFECT.
FOR THE AVOIDANCE OF DOUBT, IF THE DEFERRED
PURCHASE PRICE PAYMENTS ARE DEEMED EARNED IN THE MAXIMUM DEFERRED PURCHASE
AMOUNT PURSUANT TO THIS SECTION 2.6(F), THE DEFERRED PURCHASE PRICE PAYMENTS
SHALL BE PAID WITHIN FIVE (5) BUSINESS DAYS AFTER THE ORIGINALLY SCHEDULED
FILING DATE FOR EMRISE'S FORM 10-Q WITH THE SECURITIES AND EXCHANGE COMMISSION
COVERING THE QUARTERLY PERIOD DURING WHICH THE APPLICABLE MEASUREMENT PERIOD
ENDS.
(G)
SECURITY FOR DEFERRED PURCHASE PRICE.
THE
DEFERRED PURCHASE PRICE AND THE SUBORDINATED CONTINGENT NOTES SHALL BE SECURED
BY THE ASSETS OF THE COMPANY PURSUANT TO THE SECURITY AGREEMENT IN THE FORM OF
EXHIBIT 2.4(B)(III) (THE "SECURITY AGREEMENT").
(H)
GUARANTY.
EMRISE SHALL DELIVER A GUARANTY
IN THE FORM OF EXHIBIT 2.4(B)(IV) (THE "GUARANTY"), WHICH GUARANTY SHALL
GUARANTY ALL OF BUYER'S OBLIGATIONS UNDER THIS AGREEMENT AND ALL RELATED
AGREEMENTS, INCLUDING, WITHOUT
26
LIMITATION, PAYMENT BY BUYER OF THE DEFERRED PURCHASE PRICE, IF ANY, AND PAYMENT
BY BUYER OF THE SUBORDINATED CONTINGENT NOTES.
(I)
ACCELERATION.
IF BRAND'S EMPLOYMENT IS
TERMINATED WITHOUT CAUSE (AS DEFINED IN THE BRAND EMPLOYMENT AGREEMENT) OR BRAND
TERMINATES HIS EMPLOYMENT FOR GOOD REASON (AS DEFINED IN THE BRAND EMPLOYMENT
AGREEMENT) PRIOR TO THE TERMINATION DATE, (A) BUYER SHALL PAY TO SELLERS IN
PROPORTION TO THE PERCENTAGE FOR EACH SELLER SET FORTH IN SECTION 2.2(C) AN
AMOUNT EQUAL TO THE DIFFERENCE OF (I) THE MAXIMUM DEFERRED PURCHASE PRICE AMOUNT
MINUS (II) ANY PREVIOUSLY PAID DEFERRED PURCHASE PAYMENTS (THE "ACCELERATION
EVENT AMOUNT"), AND (B) SUBJECT TO ANY ADJUSTMENT TO THE PRINCIPAL BALANCE OF
THE SUBORDINATED CONTINGENT NOTES PURSUANT TO SECTION 2.5(B), THE PRINCIPAL
BALANCE OF THE SUBORDINATED CONTINGENT NOTES IN THE AGGREGATE SHALL BE SET TO
$2,000,000 (WITH THE PRINCIPAL AMOUNT OF EACH SUBORDINATED CONTINGENT NOTE IN
PROPORTION TO THE CASH CONSIDERATION RECEIVED BY EACH SELLER AT CLOSING AS SET
FORTH IN SECTION 2.2(A)).
PAYMENT OF THE ACCELERATION EVENT AMOUNT SHALL BE
MADE BY BUYER AS SOON AS PRACTICABLE BUT NOT MORE THAN TEN (10) BUSINESS DAYS
AFTER TERMINATION OF BRAND'S EMPLOYMENT.
SELLERS AGREE THAT PAYMENT BY BUYER OF
THE ACCELERATION EVENT AMOUNT SHALL BE DEEMED TO CONSTITUTE PERFORMANCE IN FULL
AND DISCHARGE BY BUYER OF ITS OBLIGATION UNDER THIS AGREEMENT TO MAKE THE
DEFERRED PURCHASE PRICE PAYMENTS.
THE PAYMENT SHALL BE MADE BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS TO SUCH ACCOUNTS AS SELLERS SHALL DESIGNATE IN
WRITING TO BUYER.
FOR THE SAKE OF CLARITY, A TERMINATION FOR CAUSE OR BRAND'S
RESIGNATION WITHOUT GOOD REASON, WILL NOT TRIGGER THE PAYMENT IN THE FIRST
SENTENCE OF THIS SECTION 2.6(I); PROVIDED, THAT SELLERS SHALL STILL BE ENTITLED
TO THE DEFERRED PURCHASE PRICE PAYMENTS, IF ANY.
(J)
SENIOR INDEBTEDNESS.
EMRISE AND BUYER
COVENANT