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Settlement agreement: Groupe OSL Inc.

Signed September 2, 2005

This document is a translation.

TRANSACTION AGREEMENT entered into at Montréal on

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, 5th Floor, City of Montréal, Province of Quebec, H2Z 1X4, herein acting and represented by Ms. Micheline Van Erum, his representative, duly authorized to act.

(hereinafter called "the Government of Canada")

AND:

GROUPE OSL INC., a body corporate legally incorporated under the Canada Business Corporations Act, having its head office at 1100 de la Gauchetière Street West, Windsor Station, Suite C-18, City of Montréal, Province of Quebec, H3B 2S2.

(hereinafter called " Groupe OSL")

AND:

OSL MARKETING COMMUNICATIONS INC., a body corporate legally incorporated having its head office at 1100 de la Gauchetière Street West, Windsor Station, Suite C-18, City of Montréal, Province of Quebec, H3B 2S2.

(hereinafter called "Publicité Martin")

WHEREAS Groupe OSL does business in the field of communications and is the controlling shareholder of OSL MARKETING COMMUNICATIONS INC.

WHEREAS OSL MARKETING COMMUNICATIONS INC. has succeeded to the rights of a corporation previously known as Publicité Martin Inc. as a result of various mergers and acquisitions that occurred in 2003.

WHEREAS Publicité Martin entered into a contract to provide sponsorship services to the Department of Public Works and Government Services Canada ("PWGSC) " acting on behalf of the Government of Canada during the years 1996, 1997 and 1998.

WHEREAS Publicité Martin was paid by PWGSC for sponsorship services.

WHEREAS PWGSC paid the invoices issued by Publicité Martin, which amounted to $98,250.

WHEREAS the Government of Canada is of the opinion that these invoices were not due because Publicité Martin, acting through its then controlling shareholder Jacques Paradis, did not render the services for which it issued the invoices and was paid.

WHEREAS fraud charges under paragraph 380(1)(a) of the Criminal Code were brought against the said Jacques Paradis on October 21, 2004, with regard to his actions in connection with the "Montréal Expos" event and involving the invoices described in the two preceding paragraphs.

WHEREAS the Government of Canada commenced an action against Publicité Martin and Jacques Paradis to recover $98,250.00 and the docket number for the proceedings is 500-17-024768-056.

WHEREAS Groupe OSL wishes to settle the action brought against Publicité Martin by the Government of Canada.

WHEREAS the Government of Canada also wishes to settle the action brought against Publicité Martin, but only against Publicité Martin.

THIS 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 wish to settle the Government of Canada's claim against Publicité Martin for the sum of $50,000.00, payable as follows: $25,000.00 by certified cheque payable upon the signing hereof by Groupe OSL; and $25,000.00 payable by certified cheque no more than six (6) months after the date of signing hereof by Groupe OSL
  3. Upon payment of the $25,000.00 balance, the Government of Canada shall grant Publicité Martin and Groupe OSL a full and final release from the amounts claimed in the aforementioned action.
  4. It is understood that the Government of Canada retains the right to claim from Jacques Paradis the balance of the amount initially claimed from Publicité Martin and Jacques Paradis, that is to say, $48,250.00 plus any accrued interest and additional indemnity that may have been due on the total amount claimed.
  5. The Government of Canada hereby assigns to and subrogates Groupe OSL and OSL MARKETING COMMUNICATIONS INC. in its rights of action for the amount of $50,000.00 against Jacques Paradis, and Groupe OSL Inc. and OSL MARKETING COMMUNICATIONS INC. hereby accept this assignment.
  6. 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 Publicité Martin Inc., OSL MARKETING COMMUNICATIONS INC. and Groupe OSL Inc. under, or stemming directly or indirectly from, the sponsorship contracts that are the subject of the aforementioned action, or any contract, agreement or obligation of any nature whatsoever that may have been entered into by, or exist between, the parties with regard to sponsorship 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 of the aforementioned action 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.
  7. Publicité Martin Inc., OSL MARKETING COMMUNICATIONS INC. and Groupe OSL Inc. 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 contracts that are the subject of the aforementioned action, the measures taken to recover that amount, or any contract, agreement or obligation of any nature whatsoever that may have been entered into by, or may exist between, the parties with regard to sponsorship, or relating thereto, and Publicité Martin Inc., OSL MARKETING COMMUNICATIONS INC. and Groupe OSL Inc. declare that they have signed, contemporaneous with the signing of this Agreement, a Declaration of Settlement Out of Court of the aforementioned action 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.
  8. It is understood that the waivers set out in paragraphs 6 and 7 above apply only to the sponsorship contracts covered by the aforementioned action and to the measures initiated to recover the amounts claimed in that action.
  9. 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, and Groupe OSL Inc., OSL MARKETING COMMUNICATIONS INC. and Publicité Martin Inc., hereby give each other a full and final release, as well as their respective representatives, employees, agents, organizations, administrators, 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, administrators, officers, shareholders, assignees or assigns under, or stemming directly or indirectly from, the sponsorship contracts that are the subject of the aforementioned action, or any contract, agreement or obligation of any nature whatsoever that may have been entered into by, or exist between, the parties with regard to related sponsorships.
  10. This Agreement is not confidential, and Groupe OSL and OSL MARKETING COMMUNICATIONS INC. are hereby informed that the Government of Canada intends to make it public by, in particular, posting it on the government Internet site. However, all communications between the parties, their counsel and their representatives, including all documents and information leading to the signature of this Agreement, remain privileged and confidential and cannot be disclosed except by agreement between the parties or by an order of a Court or body having jurisdiction to issue such an order of disclosure.
  11. This Agreement shall be binding on the parties and their respective successors and assigns.
  12. The parties hereby give Desjardins Ducharme 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 of the aforementioned action.
  13. It is understood that the Government of Canada may have this transaction homologated in accordance with the provisions of the Code of Civil Procedure in the event that Groupe OSL fails to pay the amount of $25,000.00 when it falls due.
  14. The parties hereby agree to take any action and sign any document that could be reasonably required by any of the parties to give effect to the provisions of this Agreement.
  15. 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 that have been given full and final release with respect to the discharged claims. This section does not prevent any party hereto from continuing or commencing proceedings against Jacques Paradis in respect of claims covered by this Agreement.
  16. Subject to the same limitation, 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 that have been given full and final release with respect to the discharged claims.
  17. The parties hereby declare and guarantee that they have not assigned, and will not assign, to any person, their rights under the contracts that are subject of the aforementioned action, or under sponsorship contracts entered into with PWGSC, nor any related right of action, claim, remedy or indemnity with respect to the discharged claims, subject to the assignment of the right of action for $50,000.00 against Jacques Paradis.
  18. 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.
  19. Each of the parties hereby declares and guarantees that they have the right, power and authority to enter into this Agreement.
  20. This Agreement constitutes a transaction agreement within the meaning of articles 2631 et seq. of the Civil Code of Québec.

IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED AT

MONTRÉAL, this ____ day ____ of ____ 2005

THE ATTORNEY GENERAL OF CANADA

Per: [signature of Micheline Van Erum]
Micheline Van Erum

MONTRÉAL, this ____ day ____ of ____ 2005

GROUPE OSL INC.
( Groupe OSL)

Per: [signature of Robert Otis, President]
Robert Otis, President

MONTRÉAL, this ____ day ____ of ____ 2005

OSL MARKETING COMMUNICATIONS INC.
(Publicité Martin)

Per: [signature of Robert Otis, President]
Robert Otis, President

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