Common use of CONSIDERATION AND METHOD OF PAYMENT Clause in Contracts

CONSIDERATION AND METHOD OF PAYMENT. 3.01 Subject to the terms and conditions of this Agreement, the Vendor hereby sells, assigns and transfers to the Purchaser and the Purchaser hereby buys from the Vendor the Purchased Assets for the aggregate sum of: (1) $5,171,173.00 (which sum represents 80% of the Purchase Price), subject to Adjustment as set out in paragraph 3.04; PLUS (2) that amount (the "Remaining Balance of the Purchase Price") as shall be determined in accordance with the terms of paragraph 3.05 herein; (both amounts together are referred to herein collectively as the "Purchase Price") 3.02 For all purposes (including federal and state income tax purposes), the parties agree to allocate the aggregate of the Purchase Price (as adjusted pursuant to the First Adjustment or the Second Adjustment - collectively referred to herein as the "Adjustment") among the Purchased Assets as follows (the "Allocation"): (i) $103,423.50 shall be allocated to the Fixed Assets owned by DKWS and listed on Schedule "B"; (ii) $103,423.50 shall be allocated equally to the covenants of DKWS, JWK, TK and the Trust as set forth in the Non-Competition Agreements attached as Schedule "F" hereto; (iii) $2,482,163.00 shall be allocated to the Goodwill, and (iv) $2,482,163.00 shall be allocated to the Purchased Book of Business. Each of Purchaser and Vendor shall file, in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), an Asset Acquisition Statement on Form 8594 with its federal income tax return for the tax year in which the Closing Date occurs, and shall contemporaneously provide the other party with a copy of the Form 8594 being filed. The Form 8594 shall be consistent with the Allocation. Each of Purchaser and Vendor also shall file any additional Forms 8594 from time to time as are required to reflect any Adjustment to the Purchase Price as required hereunder or any alteration in the allocation required by the Purchaser's auditor, and again shall contemporaneously provide the other party with a copy of the additional Form 8594 being filed. If there is an Adjustment in the Purchase Price resulting from the application of Article 3.00 hereof, then the amounts allocated to Goodwill and the Purchased Book of Business shall each be reduced by an equal amount corresponding to one half of the Adjustment. Once the amount of the Remaining Balance of the Purchase Price has been determined then the parties hereto agree to allocate such amount equally between Goodwill and the Purchased Book of Business. The final version of each additional Form 8594 as agreed to by Purchaser and Vendor shall be timely filed by each of Purchaser and Vendor. All indemnification payments made pursuant to Article 6.00 hereof shall be treated as adjustments to the Purchase Price. 3.03 The Purchase Price shall be subject to Adjustment (as more particularly set forth in this Article 3.00) and be paid as follows: (a) a down payment on the Closing Date in the sum of $1,656,173.00 (the "Down Payment") which shall be disbursed and distributed as follows; (i) $103,423.50 shall be disbursed to DKWS or to the account of DKWS in full and final payment for the Fixed Assets and, this sum (or such part thereof as is necessary) shall be applied by DKWS towards the liabilities of DKWS as set forth on Schedule "S" attached hereto (the "DKWS Liabilities") and any other trust account deficiencies of DKWS existing as at the Closing Date; (ii) $25,855.88 shall be disbursed to DKWS or to the account of DKWS in full and final payment for the Non-Competition Agreement and, this sum (or such part thereof as is necessary) shall be applied by DKWS towards the DKWS Liabilities and any other trust account deficiencies of DKWS existing as at the Closing Date; (iii)$396,173.00 shall be disbursed to DKWS on behalf of the Trust (as a partial payment for the Purchased Assets excluding the Fixed Assets) and, this sum shall be applied by DKWS towards the DKWS Liabilities and any other trust account deficiencies of DKWS existing as at the Closing Date; (iv) $25,855.88 shall be disbursed to the Trust or to the account of the Trust in full and final payment for the Non-Competition Agreement; (v) $728,153.00 shall be disbursed to the Trust or to the account of the Trust as a partial payment for the Purchased Assets excluding the Fixed Assets; (vi) $25,855.88 shall be disbursed to JWK or to the account of JWK in full and final payment for the Non-Competition Agreement; (vii)$25,855.88 shall be disbursed to TK or to the account of TK in full and final payment for the Non-Competition Agreement; and (viii) $325,000.00 shall be disbursed to GVC Financial Services, LLC ("GVC") on behalf of the Vendor; (b) on the Closing Date, the Purchaser shall provide the Escrow Agent with a promissory note (the "Promissory Note"), attached as Schedule "O" hereto, drawn in favour of the Vendor in the principal amount of $3,515,000.00 (the "Principal Amount"). The Promissory Note shall be held by the Escrow Agent and dealt with in accordance with the terms of paragraph 3.04 and the Escrow Agreement attached as Schedule "L" hereto. (c) on the Closing Date, the Purchaser shall provide the Escrow Agent with a promissory note (the "Final Note"), attached as Schedule "Q" hereto, drawn in favour of the Vendor in the with the principal amount left in blank. The Final Note shall be held by the Escrow Agent and dealt with in accordance with the terms of paragraph 3.05 and the Escrow Agreement . 3.04 The Promissory Note shall be dealt with in accordance with the following terms: (a) within 5 days of the end of the 14th month after the Closing Date, the Purchaser shall prepare a Purchase Price reconciliation to show the actual Commissions Earned from the Business. If the actual Earned Commission revenue from the Business for the one year period from the Closing Date is less than $3,000,000.00, then the Purchase Price will be adjusted downward in accordance with the following formula: (Earned Commissions x 2.155 x 0.8) - $5,171,173.00 = the "First Adjustment" if after the application of the formula the First Adjustment results in a negative number, then the Purchase Price and the Principal Amount of the Promissory Note shall be reduced by an amount equal to that negative number. For greater clarification, the First Adjustment cannot have the effect of increasing the Purchase Price, the First Adjustment can only lower the Purchase Price; (b) if after the First Adjustment is determined, there is no reduction in the Purchase Price, then there shall be no changes made to the Promissory Note by the Escrow Agent; (c) if after the First Adjustment is determined, there is a reduction in the Purchase Price, then the Escrow Agent shall amend the Promissory Note by reducing the Principal Amount (and, after taking into account any and all sums paid to The Trust pursuant to the Promissory Note up to and including the date of the First Adjustment, any amortization schedules related thereto) by the amount of the First Adjustment as determined in accordance with paragraph 3.04(a); (d) the First Adjustments to be made pursuant to this paragraph shall be made within 15 months of the Closing Date; (e) within 5 days of the end of the 26th month after the Closing Date, the Purchaser shall prepare a Purchase Price reconciliation to show the actual revenues (the "Revenues") received by the Purchaser from those joint venture agencies set forth on Schedule "M"over the period beginning on October 1st, 2004 and ending on September 30th, 2005 (the "JV Period"). If it is determined that the Revenues over the JV Period is less than the sum of $115,000.00, then the Purchase Price will be adjusted downward in accordance with the following formula: ($115,000.00 - Revenues over the JV Period) x 2.155 x 0.8 = the "Second Adjustment" if after the application of the formula the Second Adjustment results in a positive number, then the Purchase Price and the Principal Amount of the Promissory Note shall be reduced by an amount equal to that positive number. For greater clarification, the Second Adjustment cannot have the effect of increasing the Purchase Price, the Second Adjustment can only lower the Purchase Price; (f) if after the Second Adjustment is determined, there is no reduction in the Purchase Price, then there shall be no changes made to the Promissory Note by the Escrow Agent and the Escrow Agent shall deliver the Promissory Note to the Trust; (g) if after the Second Adjustment is determined, there is a reduction in the Purchase Price, then the Escrow Agent shall amend the Promissory Note by reducing the Principal Amount (and, after taking into account any and all sums paid to the Trust pursuant to the Promissory Note up to and including the date of the Second Adjustment, any amortization schedules related thereto) by the amount of the Second Adjustment as determined in accordance with paragraph 3.04(e) and once done shall deliver the amended Promissory Note to the Trust; (h) the Second Adjustment to be made pursuant to this paragraph shall be made within 27 months of the Closing Date; and (i) the Parties agree that the Revenues over the JV Period and the Earned Commission revenue from the Business shall be calculated on a pre-tax basis. 3.05 The Final Note shall be dealt with in accordance with the following terms: (a) within 60 days of the end of the September 30, 2008, the Purchaser shall prepare a Purchase Price reconciliation (the "Reconciliation") to show the actual Commissions Earned from the Business over the period beginning on October 1st, 2007 and ending on September 30th, 2008 (the "Period"), and shall deliver the Reconciliation to the Escrow Agent and The Trust; (b) once the Earned Commission for the Period has been determined, then the Remaining Balance of the Purchase Price shall be calculated in accordance with the following formula: Earned Commissions for the Period x 2.00 x 0.2 = the Remaining Balance of the Purchase Price; (c) after the Remaining Balance of the Purchase Price has been determined, the Escrow Agent shall complete the Final Note (attached as Schedule "Q" hereto) by filling in the principal amount thereof with such number as is equal to the Remaining Balance of the Purchase Price and attaching the appropriate amortization schedule thereto and once done, the Escrow Agent shall then deliver the Final Note to The Trust; and (d) the Parties agree that Earned Commission for the Period shall be calculated on a pre-tax basis. 3.06 In order to secure the payments to be made to the Trust in accordance with the terms of the Promissory Note and the Final Note, the Purchaser agrees to grant to the Trust a security interest in the assets of the Purchaser and to provide the Trust with a General Security Agreement (attached as Schedule "U" hereto) in respect of those assets (the "Security"). 3.07 The Trust hereby covenants and agrees with the Purchaser that any and all payments due, any and all obligations owing and any and all Security taken or granted pursuant to the Promissory Note and the Final Note shall be subordinate to any and all senior debt financing, whether present or future, which has been or may be obtained by the Purchaser now or at any time into the future, and the Trust hereby agrees to execute a Subordination Agreement and Power of Attorney (attached hereto as Schedule "R) in order to give effect to this paragraph. 3.08 The Trust may, from time to time and during normal business hours, employ a professionally qualified independent third party auditor (acceptable to the Purchaser) to audit the books and records of the Purchaser which relate to the Business and Purchased Assets in order to verify the amounts of: a) the First Adjustment; b) the Second Adjustment; c) the Remaining Balance of the Purchase Price; and d) the payments (and the timing thereof) to be made to the Trust in accordance with the Promissory Note or the Final Note; If the audit discloses a discrepancy unfavourable to the Trust in the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price of three per cent (3%) or more, then the Purchaser shall promptly pay for the cost of the audit and shall make or cause to be made all of the necessary adjustments as disclosed in the audit to the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price as the case may be. If the audit discloses a discrepancy in the payments (or the timing thereof) to be made to the Trust in accordance with the terms of the Promissory Note or the Final Note, then the Purchaser shall promptly pay for the cost of the audit and shall forthwith bring all of the payments due under the Promissory Note or the Final Note up to date in accordance with the results of the audit and the terms of the Promissory Note and/or the Final Note (as the case may be). If the audit discloses a discrepancy unfavourable to the Trust in the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price of less than three per cent (3%) or if the audit does not disclose a discrepancy in the payments (or the timing thereof) to be made to the Trust in accordance with the terms of the Promissory Note or the Final Note, then the Trust shall be responsible for the costs of the audit. 3.09 All rights of Adjustment and set off set forth in Article 3.00 shall survive the completion of this Agreement.

CONSIDERATION AND METHOD OF PAYMENT. 3.01 Subject to the terms and conditions of this Agreement, the Vendor AVL hereby sells, assigns and transfers to the Purchaser and the Purchaser hereby buys from the Vendor AVL the Purchased Assets for the maximum aggregate sum of: of $7,000,000 and the minimum aggregate sum of $6,000,000 (1) $5,171,173.00 (which sum represents 80% of the Purchase Price), subject to Adjustment as set out in paragraph 3.04; PLUS (2) that amount (the "Remaining Balance of the Purchase Price") as shall be determined in accordance with the terms of paragraph 3.05 herein; (both amounts together are referred to herein collectively as the "Purchase Price"). 3.02 For all purposes (including federal and state income tax purposes), the parties agree to allocate the aggregate of the Purchase Price (as adjusted pursuant to the First Adjustment or the Second Adjustment - collectively referred to herein as the "Adjustment"" as defined herein) among the Purchased Assets as follows (the "Allocation"): (i) $103,423.50 50,000 shall be allocated to the Fixed Assets owned by DKWS AVL and listed on Schedule "B"; (ii) $103,423.50 100,000 shall be allocated equally to the covenants of DKWSAV, JWKAVL, TK DV and the Trust RW as set forth in the Non-Competition Agreements attached as Schedule "F" hereto; (iii) $2,482,163.00 25,000 shall be allocated to the covenant of RV as set forth in the Non-Solicitation Agreement attached as Schedule "G" hereto; (iv) $3,412.500 shall be allocated to the Goodwill, and (ivv) $2,482,163.00 3,412,500 shall be allocated to the Purchased Book of Business. Each of Purchaser and Vendor AVL shall file, in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), an Asset Acquisition Statement on Form 8594 with its federal income tax return for the tax year in which the Closing Date occurs, and shall contemporaneously provide the other party with a copy of the Form 8594 being filed. The Form 8594 shall be consistent with the Allocation. Each of Purchaser and Vendor AVL also shall file any additional Forms 8594 from time to time as are required to reflect any Adjustment to the Purchase Price as required hereunder or any alteration in the allocation required by the Purchaser's auditor, and again shall contemporaneously provide the other party with a copy of the additional Form 8594 being filed. If there is an Adjustment in the Purchase Price resulting from the application of Article 3.00 hereof, then the amounts allocated to Goodwill and the Purchased Book of Business shall each be reduced by an equal amount corresponding to one half of the Adjustment. Once the amount of the Remaining Balance of the Purchase Price has been determined then the parties hereto agree to allocate such amount equally between Goodwill and the Purchased Book of Business. The final version of each additional Form 8594 as agreed to by Purchaser and Vendor AVL shall be timely filed by each of Purchaser and VendorAVL. All indemnification payments made pursuant to Article 6.00 hereof shall be treated as adjustments to the Purchase Price. 3.03 The Purchase Price shall be subject to Adjustment (as more particularly set forth in this Article 3.00) and be paid as follows: : (a) a down payment $5,500,000 on the Closing Date in the sum of $1,656,173.00 (the "Down Payment") which shall be disbursed and distributed as follows; (i) $103,423.50 50,000 shall be disbursed to DKWS AVL or to the account of DKWS AVL in full and final payment for the Fixed Assets and, this sum (or such part thereof as is necessary) shall be applied by DKWS towards the liabilities of DKWS as set forth on Schedule "S" attached hereto (the "DKWS Liabilities") and any other trust account deficiencies of DKWS existing as at the Closing DateAssets; (ii) $25,855.88 25,000 shall be disbursed to DKWS AVL or to the account of DKWS AVL in full and final payment for the Non-Competition Agreement and, this sum (or such part thereof as is necessary) shall be applied by DKWS towards the DKWS Liabilities and any other trust account deficiencies of DKWS existing as at the Closing DateAgreement; (iii)$396,173.00 iii)$25,000 shall be disbursed to DKWS on behalf DV or to the account of the Trust (as a partial DV in full and final payment for the Purchased Assets excluding the Fixed Assets) and, this sum shall be applied by DKWS towards the DKWS Liabilities and any other trust account deficiencies of DKWS existing as at the Closing DateNon-Competition Agreement; (iv) $25,855.88 25,000 shall be disbursed to the Trust RW or to the account of the Trust RW in full and final payment for the Non-Competition Agreement; (v) $728,153.00 25,000 shall be disbursed to the Trust AV or to the account of the Trust as a partial payment for the Purchased Assets excluding the Fixed Assets; (vi) $25,855.88 shall be disbursed to JWK or to the account of JWK AV in full and final payment for the Non-Competition Agreement; (vii)$25,855.88 vi) $25,000 shall be disbursed to TK RV or to the account of TK RV in full and final payment for the Non-Competition Solicitation Agreement; (vii)$5,065,000 shall be disbursed to AVL (as a partial payment for the Purchased Assets excluding the Fixed Assets); and (viii) $325,000.00 260,000 shall be disbursed to GVC Financial ServicesEmmett Lescroart or to the account of Emmett Lescro▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ commissions owed to him ▇▇ ▇▇▇; (b) $500,000 shall be delivered to the firm of Sykes, LLC Bourdon, Ahern & Levy, PC ("GVCAVL's Counsel") on behalf the Closing Date ▇▇ ▇▇ held in escrow and dealt with in accordance with the terms of the VendorAVL Escrow Agreement attached as Schedule "Q" hereto; and (bc) on the Closing Date, the Purchaser shall provide the Escrow Agent with a promissory note (the "Promissory Note"), attached as Schedule "O" hereto, drawn in favour of the Vendor AVL in the principal amount of $3,515,000.00 (the "Principal Amount")1,000,000. The Promissory Note shall be held by the Escrow Agent and dealt with in accordance with the terms of paragraph 3.04 and the Escrow Agreement attached as Schedule "L" hereto. (c) on the Closing Date, the Purchaser shall provide the Escrow Agent with a promissory note (the "Final Note"), attached as Schedule "Q" hereto, drawn in favour of the Vendor in the with the principal amount left in blank. The Final Note shall be held by the Escrow Agent and dealt with in accordance with the terms of paragraph 3.05 and the Escrow Agreement . 3.04 The Promissory Note shall be dealt with in accordance with the following terms: (a) within 5 days of the end of the 14th month after the Closing Date, the Purchaser shall prepare a Purchase Price reconciliation to show the actual Earned Commissions Earned from the Business. If the actual Earned Commission revenue from the Business for the one year period from beginning on September 1st, 2004 and ending on August 31st, 2005 (the Closing Date "Period") is less greater than or equal to $3,000,000.004,000,000, then the Purchase Price shall be crystalized at $7,000,000 and no further Adjustment (as defined herein) shall be made to the Purchase Price or the Promissory Note; (b) if the actual Earned Commission revenue from the Business for the Period is less than $4,000,000, then within 5 days of the end of the 26th month after the Closing Date, the Purchaser shall prepare a Purchase Price reconciliation to show the actual Earned Commissions from the Business. If the actual Earned Commission revenue from the Business for the one year period beginning on September 1st, 2005 and ending on August 31st, 2006 (the "Second Period") is less than $4,000,000, then the Purchase Price and Promissory Note will be adjusted downward in accordance with the following formula: (Earned Commissions from the Second Period x 2.155 x 0.81.75) - $5,171,173.00 7,000,000 = the "First Adjustment" if after the application of the formula the First Adjustment results in a negative number, then the Purchase Price and the Principal Amount principal amount of the Promissory Note shall be reduced by an amount equal to that negative number. For greater clarification, the First Adjustment cannot have the effect of increasing the Purchase Price, the First Adjustment can only lower the Purchase PricePrice and, in no event shall the Adjustment cause the Purchase Price to be less than $6,000,000 ; (bc) if after the First Adjustment is determined, there is no reduction in the Purchase Price, then there shall be no changes made to the Promissory Note by the Escrow Agent; (cd) if after the First Adjustment is determined, there is a reduction in the Purchase Price, then the Escrow Agent shall amend the Promissory Note by reducing the Principal Amount principal amount (and, after taking into account any and all sums paid to The Trust AVL pursuant to the Promissory Note up to and including the date of the First Adjustment, any amortization schedules related thereto) by the amount of the First Adjustment as determined in accordance with paragraph 3.04(a); (d) the First Adjustments to be made pursuant to this paragraph shall be made within 15 months of the Closing Date; (e) within 5 days of the end of the 26th month after the Closing Date, the Purchaser shall prepare a Purchase Price reconciliation to show the actual revenues (the "Revenues") received by the Purchaser from those joint venture agencies set forth on Schedule "M"over the period beginning on October 1st, 2004 and ending on September 30th, 2005 (the "JV Period"3.04(b). If it is determined that the Revenues over the JV Period is less than the sum of $115,000.00discovered that, then the Purchase Price will be adjusted downward in accordance with the following formula: ($115,000.00 - Revenues over the JV Period) x 2.155 x 0.8 = the "Second Adjustment" if after the application of the formula the Second Adjustment results in a positive number, then the Purchase Price and the Principal Amount of the Promissory Note shall be reduced by an amount equal to that positive number. For greater clarification, the Second Adjustment cannot have the effect of increasing the Purchase Price, the Second Adjustment can only lower the Purchase Price; (f) if after the Second Adjustment is determined, there is no reduction in the Purchase Price, then there shall be no changes made to the Promissory Note by the Escrow Agent determined and the Escrow Agent shall deliver the Promissory Note to the Trust; (g) if after the Second Adjustment is determined, there is a reduction in the Purchase Price, then the Escrow Agent shall amend the Promissory Note by reducing the Principal Amount (and, after taking into account any and all sums paid to the Trust AVL pursuant to the Promissory Note up to and including the date of the Second determination of the Adjustment, AVL owes the Purchaser a refund (the "Refund Amount") on any amortization schedules related thereto) by monies paid to AVL pursuant to the amount Promissory Note (as a result of the Second Adjustment as determined in accordance with paragraph 3.04(eAdjustment), then AVL shall within thirty (30) and once done shall deliver days notice of such Refund Amount pay the amended Promissory Note Refund Amount to the TrustPurchaser; (he) the Second Adjustment Adjustments to be made pursuant to this paragraph shall be made within 27 months of the Closing Date; and (i) the Parties agree that the Earned Commission Revenues over the JV Period and the Earned Commission revenue from the Business shall be calculated on a pre-tax basis. 3.05 The Final Note shall be dealt with in accordance with the following terms: (a) within 60 days of the end of the September 30, 2008, the Purchaser shall prepare a Purchase Price reconciliation (the "Reconciliation") to show the actual Commissions Earned from the Business over the period beginning on October 1st, 2007 and ending on September 30th, 2008 (the "Period"), and shall deliver the Reconciliation to the Escrow Agent and The Trust; (b) once the Earned Commission for the Period has been determined, then the Remaining Balance of the Purchase Price shall be calculated in accordance with the following formula: Earned Commissions for the Period x 2.00 x 0.2 = the Remaining Balance of the Purchase Price; (c) after the Remaining Balance of the Purchase Price has been determined, the Escrow Agent shall complete the Final Note (attached as Schedule "Q" hereto) by filling in the principal amount thereof with such number as is equal to the Remaining Balance of the Purchase Price and attaching the appropriate amortization schedule thereto and once done, the Escrow Agent shall then deliver the Final Note to The Trust; and (d) the Parties agree that Earned Commission for the Period shall be calculated on a pre-tax basis. 3.06 In order to secure the payments to be made to the Trust in accordance with the terms of the Promissory Note and the Final Note, the Purchaser agrees to grant to the Trust a security interest in the assets of the Purchaser and to provide the Trust with a General Security Agreement (attached as Schedule "U" hereto) in respect of those assets (the "Security"). 3.07 The Trust hereby covenants and agrees with the Purchaser that any and all payments due, any and all obligations owing and any and all Security taken or granted pursuant to the Promissory Note and the Final Note shall be subordinate to any and all senior debt financing, whether present or future, which has been or may be obtained by the Purchaser now or at any time into the future, and the Trust hereby agrees to execute a Subordination Agreement and Power of Attorney (attached hereto as Schedule "R) in order to give effect to this paragraph. 3.08 The Trust may, from time to time and during normal business hours, employ a professionally qualified independent third party auditor (acceptable to the Purchaser) to audit the books and records of the Purchaser which relate to the Business and Purchased Assets in order to verify the amounts of: a) the First Adjustment; b) the Second Adjustment; c) the Remaining Balance of the Purchase Price; and d) the payments (and the timing thereof) to be made to the Trust in accordance with the Promissory Note or the Final Note; If the audit discloses a discrepancy unfavourable to the Trust in the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price of three per cent (3%) or more, then the Purchaser shall promptly pay for the cost of the audit and shall make or cause to be made all of the necessary adjustments as disclosed in the audit to the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price as the case may be. If the audit discloses a discrepancy in the payments (or the timing thereof) to be made to the Trust in accordance with the terms of the Promissory Note or the Final Note, then the Purchaser shall promptly pay for the cost of the audit and shall forthwith bring all of the payments due under the Promissory Note or the Final Note up to date in accordance with the results of the audit and the terms of the Promissory Note and/or the Final Note (as the case may be). If the audit discloses a discrepancy unfavourable to the Trust in the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price of less than three per cent (3%) or if the audit does not disclose a discrepancy in the payments (or the timing thereof) to be made to the Trust in accordance with the terms of the Promissory Note or the Final Note, then the Trust shall be responsible for the costs of the audit. 3.09 All rights of Adjustment and set off set forth in Article 3.00 shall survive the completion of this Agreement.

CONSIDERATION AND METHOD OF PAYMENT. 3.01 Subject to the terms and conditions of this Agreement, the Vendor hereby sells, assigns and transfers to the Purchaser and the Purchaser hereby buys from the Vendor the Purchased Assets for the aggregate sum of: of $1,747,188.00 (1) $5,171,173.00 (which sum represents 80% of the "Purchase Price"), subject to Adjustment as set out in paragraph 3.04; PLUS (2) that amount (the "Remaining Balance of the Purchase Price") as shall be determined in accordance with the terms of paragraph 3.05 herein; (both amounts together are referred to herein collectively as the "Purchase Price"). 3.02 For all purposes (including federal and state income tax purposes), the The parties agree to allocate the aggregate of the Purchase Price (as adjusted pursuant to the First Adjustment or the Second Adjustment - collectively referred to herein as the "Adjustment") among the Purchased Assets as follows (the "Allocation"): (i) $103,423.50 35,000.00 shall be allocated to the Fixed Assets owned by DKWS and listed on Schedule "B"; (ii) $103,423.50 30,000.00 shall be allocated equally to the covenants covenant of DKWS, JWK, TK and the Trust Vendor as set forth in the Non-Competition Agreements Agreement attached as Schedule "F" hereto; (iii) $2,482,163.00 5.00 shall be allocated to the covenant of the Shareholder as set forth in the Non-Competition Agreement attached as Schedule "F" hereto; (iv) $4,995.00 shall be allocated to the covenant of Johns as set forth in the Non-Competition Agreement attached as S▇▇▇▇▇le "F" hereto; (v) $838,594.00 shall be allocated to the Goodwill, ; and (ivvi) $2,482,163.00 838,594.00 shall be allocated to the Purchased Book of Business. Each of Purchaser and Vendor shall file, in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), an Asset Acquisition Statement on Form 8594 with its federal income tax return for the tax year in which the Closing Date occurs, and shall contemporaneously provide the other party with a copy of the Form 8594 being filed. The Form 8594 shall be consistent with the Allocation. Each of Purchaser and Vendor also shall file any additional Forms 8594 from time to time as are required to reflect any Adjustment Adjustments to the Purchase Price as required hereunder or any alteration in the allocation required by the Purchaser's auditor, and again shall contemporaneously provide the other party with a copy of the additional Form 8594 being filed. If there is an Adjustment in the Purchase Price resulting from the application of Article 3.00 hereof, then the amounts allocated to Goodwill and the Purchased Book of Business shall each be reduced by an equal amount corresponding to one half of the Adjustment. Once the amount of the Remaining Balance of the Purchase Price has been determined then the parties hereto agree to allocate such amount equally between Goodwill and the Purchased Book of Business. The final version of each additional Form 8594 as agreed to by Purchaser and Vendor shall be timely filed by each of Purchaser and Vendor. All indemnification payments made pursuant to Article 6.00 hereof shall be treated as adjustments to the Purchase Price. 3.03 The Purchase Price shall be subject to Adjustment adjustment (as more particularly set forth in this Article 3.00, the "Adjustment) and be paid as follows: (a) a down payment to the Vendor on the later of October 1st, 2003 or the Closing Date in the sum of $1,656,173.00 174,719.00 (the "Down Payment") which shall be disbursed and distributed as follows); (ib) on the Closing Date the Purchaser shall provide the sum of $103,423.50 shall be disbursed to DKWS or to the account of DKWS in full and final payment for the Fixed Assets and, this sum (or such part thereof as is necessary) shall be applied by DKWS towards the liabilities of DKWS as set forth on Schedule "S" attached hereto 1,397,750.00 (the "DKWS LiabilitiesInitial Deposit") and any other trust account deficiencies of DKWS existing as at the Closing Date; (ii) $25,855.88 shall be disbursed to DKWS or to the account of DKWS in full and final payment for the Non-Competition Agreement andEscrow Agent, this sum (or such part thereof as is necessary) shall be applied by DKWS towards the DKWS Liabilities and any other trust account deficiencies of DKWS existing as at the Closing Date; (iii)$396,173.00 shall be disbursed to DKWS on behalf of the Trust (as a partial payment for the Purchased Assets excluding the Fixed Assets) and, this which sum shall be applied by DKWS towards deposited into the DKWS Liabilities Escrow Fund and any other trust account deficiencies of DKWS existing as at the Closing Date; (iv) $25,855.88 shall be disbursed released to the Trust or to Vendor in accordance with the account of terms paragraph 3.05 and the Trust in full and final payment for the Non-Competition Agreement; (v) $728,153.00 shall be disbursed to the Trust or to the account of the Trust Escrow Agreement attached as a partial payment for the Purchased Assets excluding the Fixed Assets; (vi) $25,855.88 shall be disbursed to JWK or to the account of JWK in full and final payment for the Non-Competition Agreement; (vii)$25,855.88 shall be disbursed to TK or to the account of TK in full and final payment for the Non-Competition AgreementSchedule "L" hereto; and (viii) $325,000.00 shall be disbursed to GVC Financial Services, LLC ("GVC") on behalf of the Vendor; (bc) on the Closing Date, the Purchaser shall provide the Escrow Agent with a promissory note (the "Promissory Note"), attached as Schedule "O" hereto, drawn in favour of the Vendor in the principal amount of $3,515,000.00 174,719.00 (the "Principal AmountFinal Payment")) and bearing no interest. The Promissory Note shall be held by the Escrow Agent and dealt with in accordance with the terms of paragraph 3.04 and the Escrow Agreement attached as Schedule "L" hereto. (c) on the Closing Date, the Purchaser shall provide the Escrow Agent with a promissory note (the "Final Note"), attached as Schedule "Q" hereto, drawn in favour of the Vendor in the with the principal amount left in blank. The Final Note shall be held by the Escrow Agent and dealt with in accordance with the terms of paragraph 3.05 and the Escrow Agreement . 3.04 The Promissory Note shall be dealt with in accordance with the following terms: (a) within 5 days of the end of the 14th month after the Closing Date, the Purchaser shall prepare a Purchase Price reconciliation to show the actual Commissions Earned from the Business. If the actual Earned Commission revenue from the Business for the one year period from the Closing Date is less than $3,000,000.00, then the Purchase Price will be adjusted downward in accordance with the following formula: (Earned Commissions x 2.155 x 0.8) - $5,171,173.00 = the "First Adjustment" if after the application of the formula the First Adjustment results in a negative number, then the Purchase Price and the Principal Amount of the Promissory Note shall be reduced by an amount equal to that negative number. For greater clarification, the First Adjustment cannot have the effect of increasing the Purchase Price, the First Adjustment can only lower the Purchase Price; (b) if after the First Adjustment is determined, there is no reduction in the Purchase Price, then there shall be no changes made to the Promissory Note by the Escrow Agent; (c) if after the First Adjustment is determined, there is a reduction in the Purchase Price, then the Escrow Agent shall amend the Promissory Note by reducing the Principal Amount (and, after taking into account any and all sums paid to The Trust pursuant to the Promissory Note up to and including the date of the First Adjustment, any amortization schedules related thereto) by the amount of the First Adjustment as determined in accordance with paragraph 3.04(a); (d) the First Adjustments to be made pursuant to this paragraph shall be made within 15 months of the Closing Date; (e) within 5 days of the end of the 26th month after the Closing Date, the Purchaser shall prepare a Purchase Price reconciliation to show the actual revenues (the "Revenues") received by the Purchaser from those joint venture agencies set forth on Schedule "M"over the period beginning on October 1st, 2004 and ending on September 30th, 2005 (the "JV Period"). If it is determined that the Revenues over the JV Period is less than the sum of $115,000.00, then the Purchase Price will be adjusted downward in accordance with the following formula: ($115,000.00 - Revenues over the JV Period) x 2.155 x 0.8 = the "Second Adjustment" if after the application of the formula the Second Adjustment results in a positive number, then the Purchase Price and the Principal Amount of the Promissory Note shall be reduced by an amount equal to that positive number. For greater clarification, the Second Adjustment cannot have the effect of increasing the Purchase Price, the Second Adjustment can only lower the Purchase Price; (f) if after the Second Adjustment is determined, there is no reduction in the Purchase Price, then there shall be no changes made to the Promissory Note by the Escrow Agent and the Escrow Agent shall deliver the Promissory Note to the Trust; (g) if after the Second Adjustment is determined, there is a reduction in the Purchase Price, then the Escrow Agent shall amend the Promissory Note by reducing the Principal Amount (and, after taking into account any and all sums paid to the Trust pursuant to the Promissory Note up to and including the date of the Second Adjustment, any amortization schedules related thereto) by the amount of the Second Adjustment as determined in accordance with paragraph 3.04(e) and once done shall deliver the amended Promissory Note to the Trust; (h) the Second Adjustment to be made pursuant to this paragraph shall be made within 27 months of the Closing Date; and (i) the Parties agree that the Revenues over the JV Period and the Earned Commission revenue from the Business shall be calculated on a pre-tax basis. 3.05 The Final Note shall be dealt with in accordance with the following terms: (a) within 60 days of the end of the September 30, 2008, the Purchaser shall prepare a Purchase Price reconciliation (the "Reconciliation") to show the actual Commissions Earned from the Business over the period beginning on October 1st, 2007 and ending on September 30th, 2008 (the "Period"), and shall deliver the Reconciliation to the Escrow Agent and The Trust; (b) once the Earned Commission for the Period has been determined, then the Remaining Balance of the Purchase Price shall be calculated in accordance with the following formula: Earned Commissions for the Period x 2.00 x 0.2 = the Remaining Balance of the Purchase Price; (c) after the Remaining Balance of the Purchase Price has been determined, the Escrow Agent shall complete the Final Note (attached as Schedule "Q" hereto) by filling in the principal amount thereof with such number as is equal to the Remaining Balance of the Purchase Price and attaching the appropriate amortization schedule thereto and once done, the Escrow Agent shall then deliver the Final Note to The Trust; and (d) the Parties agree that Earned Commission for the Period shall be calculated on a pre-tax basis. 3.06 In order to secure the payments to be made to the Trust in accordance with the terms of the Promissory Note and the Final Note, the Purchaser agrees to grant to the Trust a security interest in the assets of the Purchaser and to provide the Trust with a General Security Agreement (attached as Schedule "U" hereto) in respect of those assets (the "Security"). 3.07 The Trust hereby covenants and agrees with the Purchaser that any and all payments due, any and all obligations owing and any and all Security taken or granted pursuant to the Promissory Note and the Final Note shall be subordinate to any and all senior debt financing, whether present or future, which has been or may be obtained by the Purchaser now or at any time into the future, and the Trust hereby agrees to execute a Subordination Agreement and Power of Attorney (attached hereto as Schedule "R) in order to give effect to this paragraph. 3.08 The Trust may, from time to time and during normal business hours, employ a professionally qualified independent third party auditor (acceptable to the Purchaser) to audit the books and records of the Purchaser which relate to the Business and Purchased Assets in order to verify the amounts of: a) the First Adjustment; b) the Second Adjustment; c) the Remaining Balance of the Purchase Price; and d) the payments (and the timing thereof) to be made to the Trust in accordance with the Promissory Note or the Final Note; If the audit discloses a discrepancy unfavourable to the Trust in the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price of three per cent (3%) or more, then the Purchaser shall promptly pay for the cost of the audit and shall make or cause to be made all of the necessary adjustments as disclosed in the audit to the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price as the case may be. If the audit discloses a discrepancy in the payments (or the timing thereof) to be made to the Trust in accordance with the terms of the Promissory Note or the Final Note, then the Purchaser shall promptly pay for the cost of the audit and shall forthwith bring all of the payments due under the Promissory Note or the Final Note up to date in accordance with the results of the audit and the terms of the Promissory Note and/or the Final Note (as the case may be). If the audit discloses a discrepancy unfavourable to the Trust in the First Adjustment, the Second Adjustment or the Remaining Balance of the Purchase Price of less than three per cent (3%) or if the audit does not disclose a discrepancy in the payments (or the timing thereof) to be made to the Trust in accordance with the terms of the Promissory Note or the Final Note, then the Trust shall be responsible for the costs of the audit. 3.09 All rights of Adjustment and set off set forth in Article 3.00 shall survive the completion of this Agreement.the