Environmental Protection Alternative Measures Agreement

BETWEEN
THE ATTORNEY GENERAL OF CANADA

AND
BARRY JOSEPH GARDYN (hereinafeter reffered to as « Mr. Gardyn »)

AND
2920654 CANADA INC. (hereinafeter reffered to as « Handee Products »)

WHEREAS Mr. Gardyn and Handee Products have been charged for alleged violations under the Canadian Environmental Protection Act, 1999 (called CEPA, 1999 in this agreement);

WHEREAS the prosecution of the offences is not barred at law and in the opinion of the Attorney General of Canada sufficient evidence to proceed with the prosecution of the offences exists;

WHEREAS the Attorney General of Canada is satisfied that Environmental Protection Alternative Measures (Measures) would not be inconsistent with the purposes of the Act in this case;

WHEREAS Mr. Gardyn and Handee Products having been advised of the right to be represented by counsel accept responsibility for the acts or omissions that form the basis of the alleged offences and fully and freely consent to participate in the Measures;

WHEREAS the Attorney General of Canada has consulted with the Minister of the Environment, and has considered the surrounding circumstances, the nature of the alleged offences, and all other factors to be considered as prescribed by CEPA, 1999;

WHEREAS the Attorney General of Canada, Mr. Gardyn and Handee Products agree that an Environmental Protection Alternative Measures Agreement is the most appropriate means of resolving all matters pertaining to this case;

THEREFORE, the Attorney General of Canada, Mr. Gardyn and Handee Products enter into an Environmental Protection Alternative Measures Agreement with the following provisions :

PURPOSE
The express purpose of this Agreement is to further the goals and objectives of CEPA, 1999 and its regulations.

FACTS

Mr. Gardyn and Handee Products have been charged with :

Count 1:

On or about April 1st 2002, did unlawfully import in Canada pressurized containers containing CFC, to wit: « Party Crazy String » containers, contrary to subsection 18(1) of the Ozone-depleting Substances Regulations, (1998), DORS/99-7, and its modifications, committing thereby an offence punishable on summary conviction under subsections 272(1) and 272(2)b) of the Canadian Environmental Protection Act (1999), S.C. 1999, c. 33.

Count 2:

On or about July 23rd 2002, did unlawfully import in Canada pressurized containers containing CFC, to wit: « Party Crazy String » containers, contrary to subsection 18(1) of the Ozone-depleting Substances Regulations, (1998), DORS/99-7, and its modifications, committing thereby an offence punishable on summary conviction under subsections 272(1) and 272(2)b) of the Canadian Environmental Protection Act (1999), S.C. 1999, c. 33.

Count 3:

On or about August 23rd 2002, did unlawfully import in Canada pressurized containers containing CFC, to wit: « Party Crazy String » containers, contrary to subsection 18(1) of the Ozone-depleting Substances Regulations, (1998), DORS/99-7, and its modifications, committing thereby an offence punishable on summary conviction under subsections 272(1) and 272(2)b) of the Canadian Environmental Protection Act (1999), S.C. 1999, c. 33.

Count 4:

On or about July 25th 2002, did unlawfully sell to S. Rossy Inc., pressurized containers, to wit: « Party Crazy String » containers, each of these containing less than 10 Kg of CFC, contrary to subsection 19a) of the Ozone-depleting Substances Regulations, (1998), DORS/99-7, and its modifications, committing thereby an offence punishable on summary conviction under subsections 272(1) and 272(2)b) of the Canadian Environmental Protection Act (1999), S.C. 1999, c. 33.

Count 5:

On or about August 29th 2002, did unlawfully sell to S. Rossy Inc., pressurized containers, to wit: « Party Crazy String » containers, each of these containing less than 10 Kg of CFC, contrary to subsection 19a) of the Ozone-depleting Substances Regulations, (1998), DORS/99-7, and its modifications, committing thereby an offence punishable on summary conviction under subsections 272(1) and 272(2)b) of the Canadian Environmental Protection Act (1999), S.C. 1999, c. 33.

Count 6:

On or about September 3rd 2002, did unlawfully sell to S. Rossy Inc., pressurized containers, to wit: « Party Crazy String » containers, each of these containing less than 10 Kg of CFC, contrary to subsection 19a) of the Ozone-depleting Substances Regulations, (1998), DORS/99-7, and its modifications, committing thereby an offence punishable on summary conviction under subsections 272(1) and 272(2)b) of the Canadian Environmental Protection Act (1999), S.C. 1999, c. 33.

Charges were laid in Montreal, Quebec on September 2nd, 2004.

Mr. Gardyn and Handee Products have been advised and understand that the following acts form the basis of the offences that they are alleged to have committed :

2920654 Canada Inc. (Handee Products) and Barry Joseph GARDYN imported in Canada, on April 1st 2002, July 23rd 2002 and August 23rd 2002, pressurized containers, "Party Crazy String", containing CFC.

2920654 Canada Inc. (Handee Products) and Barry Joseph GARDYN sold to S. Rossy Inc., on July 25th 2002, August 29th 2002 and September 3rd 2002, and in the United States these pressurized containers, "Party Crazy String".

On September 26th 2002, Environment Canada bought a pressurized container, "Party Crazy String", at a DOLLARAMA store in the Galerie les Rivières at Trois-Rivières, as part of an investigation into the possibility that these pressurized containers would contain CFCs, which happened to be the case.

Mr. Gardyn and Handee Products do not deny participation or involvement in the commission of the alleged offences and accept responsibility for the above acts.

MEASURES
Mr. Gardyn and Handee Products shall create a standard operating procedure and policy for the management of importation and selling of products containing CFC applicable to its operations in Canada, as regulated under the Ozone-depleting Substances Regulations, (1998), DORS/99-7 and the CEPA, 1999 within four (4) months of the signing of this Agreement. Mr. Gardyn and Handee Products will supply a copy to Environment Canada.

This standard operating procedure and policy shall be incorporated into Mr. Gardyn and Handee Products Environmental Management System within six (6) months of the signing of this Agreement.

Moreover, if pressurized containers, "Party Crazy String", are still in the possession of Mr. Gardyn and Handee Products, they shall be destroyed in accordance with the CEPA, 1999 within three (3) months of the signing of this Agreement and submit an affidavit attesting the destruction to Attorney General of Canada.

Mr. Gardyn and Handee Products shall submit for publication by the « Canadian Association of Importers and Exporters », a Canadian publication for the importers, an article or paid advertising space describing the facts of this case, issues related to CFCs and the essential terms of this agreement, including availability and benefits of EPAMs. This article has to be approved by Environment Canada and will be completed within three (3) months of the signing of this Agreement.

Mr. Gardyn and Handee Products shall make a voluntary payment of $100,000 payable to the Receiver General of Canada in trust for the Environmental Damages Fund, as administered by the Regional Director General, Environment Canada, Quebec Region (418) 648-4077. Four payments of 25,000$ will be done by the following dates: July 15th, 2005, January, 15th, 2006, July 15th, 2006 and January 15th 2007.

COMPLIANCE SCHEDULE
Mr. Gardyn and Handee Products agree that they shall comply with all the measures, terms and conditions of this Agreement by January 15th, 2007.

VERIFYING COMPLIANCE WITH THIS AGREEMENT
The Parties agree that the Manager of the Enforcement Division of Environment Canada will supervise and monitor compliance with this Agreement.

INSPECTION AND OTHER ENFORCEMENT ACTIVITIES
Nothing in this Agreement bars CEPA, 1999 enforcement officers and analysts from conducting inspections or investigations which they are legally authorized to conduct.

REPORTING
Mr. Gardyn and Handee Products agree that they shall submit progress reports on how they are meeting the terms and conditions specified within this Agreement for each 6 (six) month period, beginning at the date of the signature of this Agreement until the termination of this Agreement. All reports required to be submitted under this Agreement will be delivered to the Manager of the Enforcement Division of Environment Canada within seven (7) days of the end of the reporting period.

Reports relating to the administration of or compliance with this Agreement will become part of the supervision record as well as part of the compliance history of Mr. Gardyn and Handee Products.

Mr. Gardyn and Handee Products agree that all progress reports shall be signed by a duly authorized officer.

CONFIDENTIAL INFORMATION
All information contained in and obtained by virtue of this Agreement is subject to the provisions of the Access to Information Act and CEPA, 1999.

Trade secrets, financial, commercial, scientific or technical information that is and is treated as confidential information, information the disclosure of which could reasonably be expected to result in material financial loss or gain or could reasonably be expected to prejudice the competitive position of any person, or information which could reasonably be expected to interfere with contractual or other negotiations of any person, will remain confidential and not be disclosed, except as provided for in the Access to Information Act and CEPA, 1999.

This Agreement shall be filed with the court, as part of the court record of the proceedings to which the public has access, in accordance with the provisions of section 300 of CEPA, 1999.

Notwithstanding the above, reports relating to the administration of or compliance with this Agreement will be accessible to the public in accordance with Section 301 of CEPA, 1999. The final progress report will be made available to the public and to the court in accordance with Sections 300(2) and 301. Interim progress reports will not be made available to the public under Sections 300(2) and 301.

RESERVATION OF RIGHTS
The Attorney General of Canada reserves the right to seek injunctive relief in the event of any violation of the requirements of this Agreement.

PENALTIES
Failure on the part of Mr. Gardyn and Handee Products to comply with the provisions in this Agreement is an offence under Section 272 (1)e) of CEPA, 1999. The Parties acknowledge that CEPA, 1999 provides that if this EPAM is not complied with, Mr. Gardyn and Handee Products may be prosecuted for failing to comply with the EPAM and for the original offence.

In the event that Mr. Gardyn and Handee Products fail to comply with the stipulations of this Agreement, Mr. Gardyn and Handee Products are liable on conviction to the penalties provided for pursuant to CEPA, 1999.

FORCE MAJEURE
A Force Majeure is an event resulting from circumstances beyond the control of Mr. Gardyn and Handee Products that causes or may cause a delay in compliance with any provision of this Agreement. If a Force Majeure event occur, Mr. Gardyn and Handee Products shall notify the Attorney General of Canada in writing as soon as practicable, but in any event within seven (7) days of when Mr. Gardyn and Handee Products first knew of the event or should have known of the event by the exercise of due diligence. The notice shall invoke the Force Majeure provisions of this Agreement and describe the anticipated length of time during which Mr. Gardyn and Handee Products will not be able to comply with this Agreement.

In the event that a Force Majeure occurs, Mr. Gardyn and Handee Products shall bring an application to vary in accordance with Section 303 of CEPA, 1999. The application shall be made to the Attorney General of Canada and a copy of the application shall be sent to the Department of the Environment.

INTENT AND INTERPRETATION OF THE AGREEMENT
This Agreement constitutes the entire Agreement among the Parties. The Parties acknowledge that there are no representations among the Parties other than those expressly set out in this Agreement.

This Agreement supersedes all previous negotiations, arrangements, letters of intent, offers, proposals, representations and information conveyed, whether oral or in writing, among the Parties.

SEVERABILITY
The provisions of this Agreement shall be severable should be for any reason Mr. Gardyn and Handee Products be lawfully excused from performing any of the terms of this Agreement for which they are responsible. For greater certainty, the remaining provisions of this Agreement shall remain in full force and effect.

TIME OF THE ESSENCE
Time is of the essence in this Agreement.

GOVERNING LAW
This Agreement shall be governed by the laws of Canada including the provisions of CEPA, 1999 and its regulations, and any definitions that apply to this Agreement are those provided for in CEPA, 1999 and its regulations, and those also specified in this Agreement.

WARRANTY
Mr. Gardyn and Handee Products warrant that the obligations they have undertaken in this Agreement will be performed by persons who are competent, qualified and have the appropriate knowledge and skill.

CERTIFICATION
Mr. Gardyn and Handee Products certify that on the date of the coming into force of this Agreement, Mr. Gardyn and Handee Products are not required to undertake any activity or refrain from the taking of any activity constituting the measures negotiated in this Agreement by any federal, provincial, territorial or municipal law, or court order.

Mr. Gardyn and Handee Products further certify that moneys expended on fulfilling the alternative measures does not come from government financial grants.

Mr. Gardyn and Handee Products also certify that the person whose signature appears below is an officer of the corporation who has been duly authorized to sign this Agreement and bind the corporation.

VARIATION OF AGREEMENT
An Application to vary this Agreement shall be made in accordance with section 303 of CEPA, 1999. The Application shall be made to the Attorney General of Canada and a copy of the Application shall be sent to the Department of the Environment.

TERMINATION OF THIS AGREEMENT
This Agreement shall terminate when the terms and conditions have been fulfilled to the satisfaction of the Attorney General of Canada or otherwise in accordance with the applicable provisions of CEPA, 1999.

ASSIGNMENT
This Agreement shall not be assigned without written consent.

NOTICE
Whenever in this Agreement, it is required or permitted that notice or demand be given or served by any Party to or on the other Parties, such notice or demand will be in writing and will be validly given or sufficiently communicated if forwarded by registered mail, priority post mail or facsimile as follows :
The address for delivery is:

To Mr. Gardyn and Handee Products:

Fax :

To the Attorney General of Canada:

Department of Justice
200 René-Lévesque Blvd. West
Est Tower, 9th Floor
Montreal (Quebec) H2Z 1X4
Attention : Me Marie-Eve Moore
Phone: (514) 496-4523
Fax : (514) 496-8121

To the Department of the Environment:

Réjean De Ladurantaye
Regional EPAM Representative
Environment Canada
105 rue McGill, 4th Floor
Montreal, Quebec H2Y 2E7
Phone (514) 283-0181

The Parties may change their respective adresses for delivering notice of change as herein provided.

WAIVER
No condoning, excusing or overlooking by any of the Parties of any default by the other Parties at any time on times in permitting or observing any of the Parties respective covenants will operate as a waiver of or otherwise affect the rights of the Parties in respect of any continuing or subsequent default. No waiver of these rights will be inferred from anything done or omitted by the Parties except by a variation of this Agreement in accordance with Section 303 of the CEPA, 1999.

IN WITNESS WHEREOF the Parties have executed this Agreement this 28th day of April 2005.

EXECUTED on behalf of the Attorney General of Canada

__________________________________
Marie-Eve Moore
Agent for the Attorney General of Canada

__________________________________
Robert Benoit
Agent for the Attorney General of Canada

SEALED, ATTESTED TO AND DELIVERED BARRY JOSEPH GARDYN and 2920654 CANADA INC. (Handee Products) by

Per:
_____________________________

Per:
_____________________________