**RELEASE      AND SETTLEMENT AGREEMENT**

**SERVICE      AIR GROUP INC.**

**SAGCA**

**SERVICE      AIR GROUP, INC.**

**SAG**

| A.   | SAGCA                and SAG entered into a share exchange agreement with an effective                date of                April 1, 2006 (the “**Exchange                Agreement**”),                which the parties hereby agree to rescind and                cancel; |
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| B.   | Pursuant                to the terms of the Exchange Agreement, SAGCA issued 4,125,000 Class                B                Non-Voting Shares (the “SAGCA Shares”) to SAG and SAG issued 4,125,000                restricted shares of common stock (the “SAG Shares”) to                SAGCA; |
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| C.   | The                parties have agreed to, among other things, release one another from                all                claims and issues that they now may have or which may arise against                one                another, in connection with the Exchange Agreement and share issuances                made pursuant thereto in consideration for the return of the SAGCA                Shares                and the SAG Shares, subject to the terms and conditions contained                herein. |
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| **1.  ** | **DEFINITIONS** |
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| 1.1   | Any                capitalized term not defined herein shall have the meaning as set                out in                the Exchange Agreement. |
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| **2.  ** | **TRANSFER                OF SAGCA SHARES** |
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| 2.1   | SAG                and SAGCA acknowledge and consent to the immediate transfer to the                other                party, or their nominees (the “**Transferees**”)                of the SAG Shares or SAGCA Shares, as applicable, held by them. For                the                purposes of this paragraph 2.1,                the parties agree to execute the Consent to Transfer attached hereto                as                Schedule "A"                and Schedule “B”. |
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| 2.2   | SAG                and SAGCA hereby agree to execute and deliver all such further documents,                do or cause to be done all such further acts and things, and give                all such                further assurances as may be necessary to give full effect to the                transfer                of the SAG and SAGCA Shares. |
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| **3.  ** | **RELEASES                OF AND BY SAGCA** |
|--------------------|---------------------------------------------|

| 3.1   | SAG                hereby agrees that, upon execution and transfer of the SAG and SAGCA                Shares in accordance with the provisions of this Agreement, all claims                will be fully satisfied and extinguished and SAG will remise, release                and                forever discharge SAGCA, and its directors, officers and employees                from                any and all manner of actions, causes of action, suits, debts, sums                of                money, due accounts, dues, bonds, covenants, contracts, claims, demands,                damages, costs, expenses and any and all legal obligations of any                and                every kind and nature whatsoever, at law or in equity or under any                statute, whether known or unknown, suspected or unsuspected and which                SAG                had or may now have or which it hereafter may have for or by reason                of any                matter, cause or thing and, in particular, but without limitation,                for or                by reason of any matter, cause or thing which has been or may be                sustained                in consequence of SAG’s relationship with                SAGCA. |
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| 3.2   | SAGCA                hereby agrees that, upon execution and transfer of the SAG and SAGCA                Shares in accordance with the provisions of this Agreement, all claims                will be fully satisfied and extinguished and SAGCA will remise, release                and forever discharge SAG from any and all manner of actions, causes                of                action, suits, debts, sums of money, due accounts, dues, bonds, covenants,                contracts, claims, demands, damages, costs, expenses and any and                all legal                obligations of any and every kind and nature whatsoever, at law or                in                equity or under any statute, whether known or unknown, suspected                or                unsuspected and which SAGCA had or may now have or which it hereafter                may                have for or by reason of any matter, cause or thing and, in particular,                but without limitation, for or by reason of any matter, cause or                thing                which has been or may be sustained in consequence of SAGCA’s relationship                with SAG. |
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| 3.3   | Each                party acknowledges that in making this Agreement they have been advised                and have had an opportunity to obtain independent legal advice, they                have                exercised their own independent judgment and they have not been influenced                to any extent whatsoever by any representations, statements or conduct                of                any description whatever on the part of any other parties to this                Agreement. |
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| **4.  ** | **GENERAL** |
|--------------------|-------------|

| 4.1   | Except                as herein otherwise provided, no subsequent alteration, amendment,                change                or addition to this Agreement will be binding upon the parties hereto                unless reduced to writing and signed by the                parties. |
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| 4.2   | This                Agreement will enure to the benefit of and be binding upon the parties                and                their respective heirs, executors, administrators, successors, and                assigns. |
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| 4.3   | The                parties will execute and deliver all such further documents, do or                cause                to be done all such further acts and things, and give all such further                assurances as may be necessary to give full effect to the provisions                and                intent of this Agreement. |
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| 4.4   | This                Agreement will be governed by and construed in accordance with the                law of                British Columbia. |
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| 4.5   | Any                notice required or permitted to be given under this Agreement will                be in                writing and may be given by delivering, sending by electronic facsimile                transmission or other means of electronic communication capable of                producing a printed copy, or sending by prepaid registered mail posted                in                Canada and the United States, the notice to the addresses set forth                on the                first page of this agreement (or to such other address or facsimile                number                as any party may specify by notice in writing to another party).                Any                notice delivered or sent by electronic facsimile transmission or                other                means of electronic communication capable of producing a printed                copy on a                business day will be deemed conclusively to have been effectively                given on                the day the notice was delivered, or the transmission was sent                successfully, as the case may be. Any notice sent by prepaid registered                mail will be deemed conclusively to have been effectively given on                the                third business day after posting; but if at the time of posting or                between                the time of posting and the third business day thereafter there is                a                strike, lockout, or other labour disturbance affecting postal service,                then the notice will not be effectively given until actually                delivered. |
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| 4.6   | This                Agreement may be executed in several counterparts, each of which                will be                deemed to be an original and all of which will together constitute                one and                the same instrument. |
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| 4.7   | The                provisions herein contained constitute the entire agreement between                the                parties and supersede all previous understandings, communications,                representations and agreements, whether written or verbal, between                the                parties with respect to the subject matter of this                Agreement. |
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| 4.8   | In                this Agreement, wherever the singular or masculine is used the same                will                be deemed to include the plural, feminine or body politic or corporate                and                also the successors and assigns of the parties hereto and each of                them                where the context of the parties so                require. |
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**IN      WITNESS WHEREOF**

**SERVICE      AIR GROUP INC. (BC, Canada)**

**SERVICE      AIR GROUP, INC. (NJ, USA)**

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**SCHEDULE "A"**

**SERVER      AIR GROUP INC.**

**Th**

** **

**SERVICE      AIR GROUP INC. (BC, Canada)**

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**SCHEDULE "B"**

**SERVER      AIR GROUP INC.**

**Th**

** **

**SERVICE      AIR GROUP INC. (NJ, USA)**