Settlement agreement: Paul Coffin and 2794101 Canada Inc.

Signed August 11, 2005

TRANSACTION AGREEMENT entered into on the dates and in the places mentioned hereinafter:

BETWEEN:
THE ATTORNEY GENERAL OF CANADA, on behalf of Her Majesty the Queen in right of Canada, c/o the Department of Justice Canada, 200 René-Lévesque Blvd. West, 5^th Floor, City of Montréal, Province of Quebec, H2Z 1X4, herein acting and represented by Mr. Henri Béridian, his representative, duly authorized to act herein.

(hereinafter called "the Government of Canada")

AND:
2794101 CANADA INC., body corporate legally incorporated under the Canada Business Corporations Act, doing business under the name COMMUNICATION COFFIN, having its head office at 716 Taschereau Blvd., City of Ste-Thérèse, Province of Quebec, J7E 4E1, herein acting and represented by Paul R. Coffin, President, duly authorized to act herein pursuant to a resolution adopted by the sole director on August 11, 2005.

(hereinafter called "Communication Coffin")

AND:
PAUL R. COFFIN, businessman, residing and domiciled at 716 Taschereau Blvd., City of Ste-Thérèse, Province of Quebec, J7E 4E1.

(hereinafter called "Paul R. Coffin")

WHEREAS Communication Coffin is a communications agency that entered into contracts to provide sponsorship and advertising services to the Department of Public Works and Government Services Canada ("PWGSC") acting on behalf of the Government of Canada; for the purposes of this Agreement, PWGSC is understood as referring to the Government of Canada;

WHEREAS Communication Coffin was paid by PWGSC for sponsorship and advertising services that were not rendered or had already been paid for or for services that had no value.

WHEREAS Paul R. Coffin personally certified, for the invoices issued to PWGSC, that the billed services had been rendered for the purposes of each sponsorship and advertising contract.

WHEREAS PWGSC paid the invoices issued by Communication Coffin for each sponsorship and advertising contract.

WHEREAS on September 10, 2003, fraud charges pursuant to paragraph 380(1)(a) of the Criminal Code were brought against Paul R. Coffin concerning a number of sponsorship and advertising contracts with PWGSC and the invoices issued by Communication Coffin, as appears in the charges in docket number 500-01-013379-034 in the records of the Superior Court in the District of Montreal.

WHEREAS on March 11, 2005, a civil action was brought by the Government of Canada against Communication Coffin and Paul R. Coffin in the matter of the aforesaid sponsorship and advertising contracts with PWGSC and the invoices issued by Communication Coffin, as appears in docket number 500-17-024768-056 in the records of the Superior Court in the District of Montreal (the "Civil Judicial Proceedings").

WHEREAS the Government of Canada is claiming from Communication Coffin and Paul R. Coffin additional sums in connection with another sponsorship and advertising contract with PWGSC (hereinafter the "Government's additional claim").

WHEREAS Communication Coffin is claiming from the Government of Canada sums for services rendered in connection with sponsorship and advertising contracts with PWGSC (hereinafter "Coffin's claim").

WHEREAS Communication Coffin and Paul R. Coffin have acknowledged that they owe the Government of Canada the sum of $1,556,625 with respect to the sponsorship and advertising contracts with PWGSC that are the subject of the Civil Judicial Proceedings.

WHEREAS Communication Coffin and Paul R. Coffin have acknowledged that they owe the Government of Canada the sum of $33,559 with respect to the sponsorship and advertising contract with PWGSC that is the subject of the Government's additional claim.

WHEREAS the Government of Canada has acknowledged that it owes Communication Coffin the sum of $105,834 for services rendered under sponsorship and advertising contracts with PWGSC that are the subject of Coffin's claim.

WHEREAS Communication Coffin and Paul R. Coffin certify that they have paid the taxes owed on the full amount that they have received from the Government of Canada.

WHEREAS Communication Coffin and Paul R. Coffin have stated in an affidavit dated August 11, 2005, that all information of a financial nature submitted to the Government of Canada or its representatives as part of this settlement was, to the best of their knowledge, complete and representative of the financial situation of Communication Coffin and Paul R. Coffin.

WHEREAS the parties wish to settle the Civil Judicial Proceedings, the Government's additional claim, Coffin's claim and all other claims in connection with the sponsorship and advertising contracts with PWGSC, as well as all disputes between them, according to the terms and conditions set out in this Transaction Agreement (hereinafter called the "Agreement"), which form an indivisible whole.

THAT HAVING BEEN SAID, FOR GOOD AND VALUABLE CONSIDERATION, THE EXISTENCE AND SUFFICIENCY OF WHICH ARE HEREIN ACKNOWLEDGED, THE PARTIES TO THIS AGREEMENT AGREE TO THE FOLLOWING:

1. The above preamble is part of this Agreement.
2. The parties hereto declare to have settled the claims in connection with the sponsorship and advertising contracts that are the subject of the Civil Judicial Proceedings, the Government's additional Claim and Coffin's claim for the sum of $1,000,000 in capital, interest and additional indemnity and costs.
3. The Government of Canada acknowledges having received $1,000,000 from Communication Coffin and Paul R. Coffin in full and final settlement, for which full and final release is given.
4. The Government of Canada hereby waives and abandons all past, present and future rights, claims, remedies or indemnities of any nature whatsoever that it has, could have, or claims to have against Communication Coffin and Paul R. Coffin under, or stemming directly or indirectly from, the sponsorship and advertising contracts that are the subjects of the Civil Judicial Proceedings, the Government's additional claim, Coffin's claim or of any contract, agreement or obligation of any nature whatsoever that may have been entered into by, or exists between, the two parties with regard to sponsorship or advertising services, or relating thereto, and the Government of Canada declares that it has signed, contemporaneous with the signing of this Agreement, a Declaration of Settlement Out of Court for the Civil Judicial Proceedings, on the basis of each party paying its own costs, the original of which will be entered into the Court record in the very near future in accordance with paragraph 11 of this Agreement.
5. Communication Coffin and Paul R. Coffin hereby waive and abandon all past, present and future rights, claims, remedies or indemnities of any nature whatsoever that they have, could have, or claim to have against the Government of Canada under, or stemming directly or indirectly from, the sponsorship and advertising contracts that are the subject of the Civil Judicial Proceedings, the Government's additional claim, Coffin's claim or of any contract, agreement or obligation of any nature whatsoever that may have been entered into by, or exists between, the two parties with regard to sponsorship or advertising services, or relating thereto, and Communication Coffin and Paul R. Coffin declare that they have signed, contemporaneous with the signing of this Agreement, a Declaration of Settlement Out of Court for the Civil Judicial Proceedings, on the basis of each party paying its own costs, the original of which will be entered into the Court record in the very near future in accordance with paragraph 11 of this Agreement.
6. It is agreed that the waivers set out in paragraphs 4 and 5 pertain only to the sponsorship and advertising contracts between Coffin Communication and/or Paul R. Coffin, of the first part, and PWGSC, of the second part, to the exclusion of all other contract types.
7. In addition to the waiver referred to in paragraph 5, Coffin Communication and Paul R. Coffin further waive any claim to, assignment of and/or direct or indirect conveyance of any and all tax benefits under Federal law that could result from the payment made pursuant to this Agreement.
8. In consideration of the signing of this Agreement and other good and valuable consideration, the existence and sufficiency of which are herein acknowledged, the Government of Canada, of the first part, and Coffin Communication and Paul R. Coffin, of the second part, hereby give each other a full and final release, as well as their respective representatives, employees, agents, directors, officers, shareholders, assignees or assigns as concerns all past, present and future rights, claims, remedies or indemnities of any nature whatsoever that they have, could have, or claim to have against the other party or its representatives, employees, agents, directors, officers, shareholders, assignees or assigns under, or stemming directly or indirectly from, the sponsorship and advertising contracts that are the subjects of the Civil Judicial Proceedings, the Government's additional claim, Coffin's claim and any contract, agreement or obligation of any nature whatsoever that may have been entered into by, or exists between, the parties with regard to sponsorship or advertising services, or relating thereto.
9. This Agreement is not confidential, and Communication Coffin and Paul R. Coffin are hereby informed that the Government of Canada intends to make it public by, in particular and not exclusively, posting it on the government Internet site. However, communications between the parties and their solicitors and representatives, including all documents and information leading to the conclusion of this Agreement, remain privileged and confidential, and shall not be disclosed by anyone of the parties hereto, unless the parties have agreed to its release, a party is ordered to do so by a court with jurisdiction to compel the production of the information or a party is strictly authorized to disclose such information under the Privacy Act, the Access to Information Act or other applicable statutes.
10. This Agreement shall be binding on the parties and their respective successors and assigns.
11. The parties hereby give Lavery, de Billy irrevocable instructions to file in the Court record, as soon as possible following the signing of this Agreement by the parties, the Declaration of Settlement Out of Court for the Civil Judicial Proceedings.
12. The parties hereby agree to take any action and sign any document that could be reasonably required by either of the parties to give effect to the provisions of this Agreement, but without such party incurring any liability or costs.
13. The parties hereby agree not to directly or indirectly participate with, assist, help or act in co-operation with, in any manner whatsoever, any other person in any claim or remedy against either of the parties to this Agreement, who have been given full and final release with respect to the discharged claims.
14. The parties hereby agree not to make any claims or initiate any proceedings against any person who could claim under any applicable law, or otherwise, a contribution or indemnity against either of the parties to this Agreement who have been given full and final release with respect to the discharged claims.
15. The parties hereby declare and guarantee that they have not assigned, and will not assign, to any person, their rights under the contracts at issue in the Civil Judicial Proceedings, the Government's additional claim, Coffin's claim as well as under sponsorship and advertising contracts with PWGSC, nor any related right of action, claim, remedy or indemnity with respect to the discharged claims.
16. Each of the parties acknowledges and declares that they have read and understood the terms and conditions of this Agreement, and that they have sought and obtained legal advice.
17. Each of the parties hereby declares and guarantees that they have the right, power and authority to enter into this Agreement.
18. This Agreement constitutes a contract of transaction pursuant to articles 2631 et seq. of the Civil Code of Québec.

MONTRÉAL, this 11 day of August, 2005

THE ATTORNEY GENERAL OF CANADA

Per: [signature of Henri Béridian]
Henri Béridian

MONTRÉAL, this 11 day of August, 2005

2794101 CANADA INC.
(Communication Coffin)

Par : [signature de Paul R. Coffin ]
Paul R. Coffin

MONTRÉAL, this 11 day of August, 2005

______________________________________
PAUL R. COFFIN, personally