Common use of Calculation and Payment of Purchase Price Clause in Contracts

Calculation and Payment of Purchase Price. 3.1 Subject to the provisions of Section 3.2 below, the purchase price for the Purchased Shares (the "Purchase Price") shall be Two Million And Seven --------------- Hundred And Seventy-Three Thousand Eight Hundred And Eighty-Eight Dollars ($2,773,884). 3.2 The Purchase Price shall be paid by the Purchaser to the Vendor as follows: (a) at the time of execution of the Letter of Intent, the Purchaser paid to the Vendor $10,000 (the "Deposit") by cheque; and ------- (b) at the Time of Closing, the Purchaser shall pay the Vendor $1,763,884 (the "Initial Payment"), subject to the provisions of Section --------------- 3.3 and Article 4 below; (c) on the 90th day following the Closing Date, the Purchaser shall pay to the Vendor $100,000 (the "First Non-Adjustable Payment") provided ----------------------------- that if there has been a Net Asset Reduction Amount then all or part of the First Non-Adjustable Payment shall be accelerated and paid by the Purchaser to the Vendor on the Release Date up to a maximum of the Net Asset Reduction Amount; (d) on the 180th day following the Closing Date, the Purchaser shall pay to the Vendor $100,000 (the "Second Non-Adjustable Payment") provided ----------------------------- that if there has been a Net Asset Reduction Amount exceeding $100,000 then all or part of the Second Non-Adjustable Payment shall be accelerated and paid by the Purchaser to the Vendor on the Release Date up to a maximum of the amount by which the Net Asset Reduction Amount exceeds $100,000; and (i) $150,000 payable to the Vendor on the 90th day following the Closing Date; (ii) $150,000 payable to the Vendor on the 180th day following the Closing Date; (iii) $200,000 payable to the Vendor on the 270th day following the Closing Date; and (iv) $300,000 payable to the Vendor on the 360th day following the Closing Date; All payments to the Vendor shall be made by certified cheque or bank draft. 3.3 The amount of the Initial Payment comprising the Purchase Price to be paid to the Vendor, as provided in Subsection 3.2(b) above, shall be adjusted in the circumstances and in the manner as setout in Section 4.1 below. Page 27 of 75 - Share Purchase Agreement Initial ----------- 3.4 The amount of the Four Payments comprising the Purchase Price to be paid to the Vendor, as provided in Subsection 3.2(e) above, shall be adjusted in the following circumstances and in the following manner: (a) If an event occurs within the first 3 month period following the Closing Date that causes a WM Loss, then the unpaid portion of the Four Payments (the "Unpaid Portion") will be reduced by 65%, and the amount of -------------- the reduction of the Four Payments will be deducted from the Purchase Price; (b) If an event occurs within the second 3 month period following the Closing Date that causes a WM Loss, then the Unpaid Portion will be reduced by 60%, and the amount of the reduction of the Four Payments will be deducted from the Purchase Price; (c) If an event occurs within the third 3 month period following the Closing Date that causes a WM Loss, then the Unpaid Portion will be reduced by 55%, and the amount of the reduction of the Four Payments will be deducted from the Purchase Price; or (d) If an event occurs within the fourth 3 month period following the Closing Date that causes a WM Loss, then the Unpaid Portion will be reduced by 50%, and the amount of the reduction of the Four Payments will be deducted from the Purchase Price; For the purpose of calculating the Unpaid Portion referenced in this Section 3.4, the Unpaid Portion shall be equal to the amount that would be due in the future, if each of the Four Payments which is due after the date of the occurrence that causes a WM Loss had been payable to Vendor daily during the 90 day period following the Closing Date applicable to such of the Four Payments, (for greater certainty, that part of the Unpaid Portion, calculated daily, for the period from the Closing Date until the date of the occurrence that causes a WM Loss, shall not be reduced and therefore shall be paid to the Vendor in full). Notwithstanding the foregoing, the following shall apply if a reduction to the Unpaid Portion occurs pursuant to Subsections 3.4(a), (b), (c) or (d) above: (i) the amount of the Unpaid Portion which is not reduced (that is, the other 35%, 40%, 45% and 50% in the case of Subsections 3.4(a), (b), (c) and (d) above, respectively) shall be paid to the Vendor in full; (ii) one reduction at most (that being the earliest to occur, if any) shall apply to the Unpaid Portion (for greater certainty, there shall not be cascading reductions of the Unpaid Portion); (iii) if, during the period commencing from the date of the occurrence that causes a WM Loss and ending on the date that is one year after the Closing Date (the "Payment Period"), the --------------- cumulative revenue from the sale of the Corporation's products to Walmart is greater than 35% of the amount which is the product obtained by multiplying the number of days in the Payment Period by $7,142.86, then any previous reduction of the Unpaid Portion shall be immediately reversed and added back to the Purchase Price and paid to the Vendor by the Purchaser; and Page 8 of Xxxxxxx Share Purchase Agreement Initial ------------ Page 28 of 75 - Share Purchase Agreement Initial ----------- (iv) if, during the period commencing from the date of the occurrence that causes a WM Loss and ending on the date that is the same number of days after the Closing Date as are the number of days in the Payment Period (the "Adjustment Period"), the ------------------ cumulative revenue from the sale of the Corporation's products to Walmart is greater than 35% of the amount which is the product obtained by multiplying the number of days in the Adjustment Period by $7,142.86, then any previous reduction of the Unpaid Portion shall be immediately reversed and added back to the Purchase Price and paid to the Vendor by the Purchaser. 3.5 Any payments actually made by the Corporation after the Effective Date to or for the benefit of Xxxx Xxxxxxxx pursuant to the agreement between the Corporation and Xxxx Xxxxxxxx dated December 31, 2003 a copy of which is attached as Schedule "3.5" shall reduce the Purchase Price and shall be deducted from the next payment of the Purchase Price due to the Vendor on the day that is 90, 180, 270 or 360 days after the Closing Date and all remaining obligations under such agreement due more than 360 days after the Closing Date shall be deducted from the final payment of the Purchase Price due to the Vendor 360 days after the Closing Date. 3.6 The Purchaser shall use its best efforts during the one year immediately following the Closing Date to retain Walmart as a customer of the Corporation and to increase the revenues from the sale of the Corporation's products to Walmart during such one year period.

Calculation and Payment of Purchase Price. 3.1 Subject to the provisions of Section 3.2 below, the purchase price for the Purchased Shares (the "Purchase Price") shall be Two Million And Seven --------------- Hundred And Seventy-Three Thousand Eight Hundred And Eighty-Eight Dollars ($2,773,884). 3.2 The Purchase Price shall be paid by the Purchaser to the Vendor as follows: (a) at the time of execution of the Letter of Intent, the Purchaser paid to the Vendor $10,000 (the "Deposit") by cheque; and ------- (b) at the Time of Closing, the Purchaser shall pay the Vendor $1,763,884 (the "Initial Payment"), subject to the provisions of Section --------------- 3.3 and Article 4 below; (c) on the 90th day following the Closing Date, the Purchaser shall pay to the Vendor $100,000 (the "First Non-Adjustable Payment") provided ----------------------------- that if there has been a Net Asset Reduction Amount then all or part of the First Non-Adjustable Payment shall be accelerated and paid by the Purchaser to the Vendor on the Release Date up to a maximum of the Net Asset Reduction Amount; (d) on the 180th day following the Closing Date, the Purchaser shall pay to the Vendor $100,000 (the "Second Non-Adjustable Payment") provided ----------------------------- that if there has been a Net Asset Reduction Amount exceeding $100,000 then all or part of the Second Non-Adjustable Payment shall be accelerated and paid by the Purchaser to the Vendor on the Release Date up to a maximum of the amount by which the Net Asset Reduction Amount exceeds $100,000; and (i) $150,000 payable to the Vendor on the 90th day following the Closing Date; (ii) $150,000 payable to the Vendor on the 180th day following the Closing Date; (iii) $200,000 payable to the Vendor on the 270th day following the Closing Date; and (iv) $300,000 payable to the Vendor on the 360th day following the Closing Date; All payments to the Vendor shall be made by certified cheque or bank draft. 3.3 The amount of the Initial Payment comprising the Purchase Price to be paid to the Vendor, as provided in Subsection 3.2(b) above, shall be adjusted in the circumstances and in the manner as setout in Section 4.1 below. Page 27 of 75 - Share Purchase Agreement Initial -----------. 3.4 The amount of the Four Payments comprising the Purchase Price to be paid to the Vendor, as provided in Subsection 3.2(e) above, shall be adjusted in the following circumstances and in the following manner: (a) If an event occurs within the first 3 month period following the Closing Date that causes a WM Loss, then the unpaid portion of the Four Payments (the "Unpaid Portion") will be reduced by 65%, and the amount of -------------- the reduction of the Four Payments will be deducted from the Purchase Price; (b) If an event occurs within the second 3 month period following the Closing Date that causes a WM Loss, then the Unpaid Portion will be reduced by 60%, and the amount of the reduction of the Four Payments will be deducted from the Purchase Price; (c) If an event occurs within the third 3 month period following the Closing Date that causes a WM Loss, then the Unpaid Portion will be reduced by 55%, and the amount of the reduction of the Four Payments will be deducted from the Purchase Price; or (d) If an event occurs within the fourth 3 month period following the Closing Date that causes a WM Loss, then the Unpaid Portion will be reduced by 50%, and the amount of the reduction of the Four Payments will be deducted from the Purchase Price; For the purpose of calculating the Unpaid Portion referenced in this Section 3.4, the Unpaid Portion shall be equal to the amount that would be due in the future, if each of the Four Payments which is due after the date of the occurrence that causes a WM Loss had been payable to Vendor daily during the 90 day period following the Closing Date applicable to such of the Four Payments, (for greater certainty, that part of the Unpaid Portion, calculated daily, for the period from the Closing Date until the date of the occurrence that causes a WM Loss, shall not be reduced and therefore shall be paid to the Vendor in full). Notwithstanding the foregoing, the following shall apply if a reduction to the Unpaid Portion occurs pursuant to Subsections 3.4(a), (b), (c) or (d) above: (i) the amount of the Unpaid Portion which is not reduced (that is, the other 35%, 40%, 45% and 50% in the case of Subsections 3.4(a), (b), (c) and (d) above, respectively) shall be paid to the Vendor in full; (ii) one reduction at most (that being the earliest to occur, if any) shall apply to the Unpaid Portion (for greater certainty, there shall not be cascading reductions of the Unpaid Portion); (iii) if, during the period commencing from the date of the occurrence that causes a WM Loss and ending on the date that is one year after the Closing Date (the "Payment Period"), the --------------- cumulative revenue from the sale of the Corporation's products to Walmart is greater than 35% of the amount which is the product obtained by multiplying the number of days in the Payment Period by $7,142.86, then any previous reduction of the Unpaid Portion shall be immediately reversed and added back to the Purchase Price and paid to the Vendor by the Purchaser; and Page 8 of Xxxxxxx Share Purchase Agreement Initial ------------ Page 28 of 75 - Share Purchase Agreement Initial ----------------------- (iv) if, during the period commencing from the date of the occurrence that causes a WM Loss and ending on the date that is the same number of days after the Closing Date as are the number of days in the Payment Period (the "Adjustment Period"), the ------------------ cumulative revenue from the sale of the Corporation's products to Walmart is greater than 35% of the amount which is the product obtained by multiplying the number of days in the Adjustment Period by $7,142.86, then any previous reduction of the Unpaid Portion shall be immediately reversed and added back to the Purchase Price and paid to the Vendor by the Purchaser. 3.5 Any payments actually made by the Corporation after the Effective Date to or for the benefit of Xxxx Xxxxxxxx pursuant to the agreement between the Corporation and Xxxx Xxxxxxxx dated December 31, 2003 a copy of which is attached as Schedule "3.5" shall reduce the Purchase Price and shall be deducted from the next payment of the Purchase Price due to the Vendor on the day that is 90, 180, 270 or 360 days after the Closing Date and all remaining obligations under such agreement due more than 360 days after the Closing Date shall be deducted from the final payment of the Purchase Price due to the Vendor 360 days after the Closing Date. 3.6 The Purchaser shall use its best efforts during the one year immediately following the Closing Date to retain Walmart as a customer of the Corporation and to increase the revenues from the sale of the Corporation's products to Walmart during such one year period.