Document:

exv10w10

Exhibit 10.10

First Amendment

To The

First Interstate BancSystem, Inc.

Deferred Compensation Plan

Recitals

	A.	 	Section 9.10 of the First Interstate BancSystem, Inc. Deferred Compensation Plan (the
“Plan”) gives First Interstate BancSystem, Inc. (the “Plan Sponsor”) the right to amend the
Plan at any time.
	 
	B.	 	On July 26, 2006, the Board of Directors of the Plan Sponsor delegated authority to the First
Interstate BancSystem, Inc. Benefits Committee (the “Committee”) to amend the Plan to modify
Plan design, including without limitation any modification of Plan provisions governing
eligibility and/or benefits, in any manner which the Benefits Committee has determined will
not cause any substantial increase in the cost to the Plan Sponsor or its subsidiaries of
maintaining the Plan, or any substantial reduction in the overall level of benefits provided
to employees under the Plan.
	 
	C.	 	The following are amendments to the Plan adopted by the Committee as of the date specified
below.

Amendment of Plan

	1.	 	Increase in percentage of compensation that may be deferred.
	 
	 	 	Section 2.1(d) of the Plan is amended to read as follows:

The maximum amount of Compensation that may be deferred each Plan Year is
100% of the Eligible Individual’s Compensation, net of payroll taxes and
any other wage deductions required by law or by the Employer’s policies,
procedures or other benefit plan documents.

	2.	 	Permitted delay of distribution for purposes of Section 162(m).
	 
	 	 	A new Section 5.9 shall be added to the Plan as follows:

Section 162(M) Deferral. Notwithstanding
any provision to the contrary, distributions under the Plan may be
delayed to the extent that the Administrator reasonably anticipates
that if the payment were made as scheduled, the Employer’s deduction
with respect to such payment would not be permitted due to the
application of Code Section 162(m), provided that the requirements of
Code Section 409A are met with respect to such delay.

			
	 	 	 
	First Amendment to the First Interstate BancSystem, Inc. Deferred Compensation Plan
	 	 
	Prepared by Holland & Hart LLP	 	1

 

 

	3.	 	Change in date of payment of Personal Goals Accounts.
	 
	 	 	Section 5.3(b) of the Plan shall be amended to read as follows:

Contributions made to Personal Goals Accounts effective on or before
December 31, 2008 shall be paid on the January 1st of the Year of
Distribution selected by the Participant according to Section
4.1(b). Contributions made to Personal Goals Accounts effective
on or after January 1, 2009 shall be paid on the December 31st of the
Year of Distribution selected by the Participant according to
Section 4.1(b).

All other
provisions of the Plan shall remain unamended and in full force.

	 	 	 	 	 
	 

	 	/s/ Terry Moore	 	 
	 

	 	 

By: Terry Moore, Secretary
	 	 
	 

	 	Date: Oct 24, 2008	 	 

			
	 	 	 
	First Amendment to the First Interstate BancSystem, Inc. Deferred Compensation Plan
	 	 
	Prepared by Holland & Hart LLP	 	2exv10w1

 

EXHIBIT
10.1

SETTLEMENT AGREEMENT

     Settlement Agreement (the “Agreement”) dated March  , 2010, among 7293411 Canada Inc.
(“Offeror”) and Holden L. Ostrin (“Holden”), Neil Wechsler and Gary Wechsler (collectively, “HNG”
and together with Offeror, the “Parties”)

     RECITALS

	 	(a)	 	Optimal Group Inc. (“Target”) owns all of the issued and outstanding shares
of OGOP Payments Inc. (“Vendor”) and Vendor is the registered and beneficial owner of
1000 common shares of Optimal Merchant Services Inc. (“Corporation”), which shares
represent all of the issued and outstanding shares of Corporation (collectively, the
“Shares”);
	 
	 	(b)	 	Pursuant to a support agreement (the “Support Agreement”) between Offeror and
Target dated the date hereof, the board of directors of Target has agreed to cooperate
with Offeror to support Offeror’s offer (the “Offer”) to acquire all of the
outstanding Class “A” shares of Target and to recommend in the director’s circular to
be prepared in connection with the Offer that all holders of Class “A” shares of
Target tender their Class “A” shares to Offeror, all on and subject to the terms and
conditions of the Support Agreement;
	 
	 	(c)	 	Target and each of HNG entered into an Executive Employment Agreement each
dated as of March 5, 2004, (collectively, the “Employment Agreements”) in respect of
each of their employment with Target;
	 
	 	(d)	 	Upon completion of all the transactions contemplated by the Offer, including
a Subsequent Acquisition Transaction (the “Closing”), Offeror intends to cause Target
to terminate HNG’s employment;
	 
	 	(e)	 	The completion of the Offer in accordance with the terms and conditions of
the Support Agreement will constitute a Change of Control and the Employment
Agreements provide that, following a Change of Control, Target (or Offeror, as the
case may be) shall, upon termination of HNG’s employment, among other things, pay to
HNG the Basic Payments and the Termination Payments and perform the Insurance
Covenants and the Medical Insurance Covenant;
	 
	 	(f)	 	Pursuant to Letter Agreements dated July 2, 2009 (the “Letter Agreements”),
each of HNG agreed to a 30% reduction on 80% of his Base Salary (the “Reduction in
Salary Payments”) that would be reimbursed upon the occurrence of a Change of Control;
and
	 
	 	(g)	 	The Parties wish to enter into this Settlement Agreement for the purposes of
settling and providing for the terms and conditions which will govern the termination
of HNG’s employment with Target and the granting of mutual releases in settlement
thereof.

 

 

     In consideration of the foregoing and the mutual agreements contained in this Agreement (the
receipt and adequacy of which are acknowledged), the Parties agree as follows.

Section 1 Definitions

     All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in
the Support Agreement. Capitalized terms in this Agreement shall have the following meanings:

     “Basic Payments” has the meaning ascribed thereto in the Employment Agreements.

     “Base Salary” has the meaning ascribed thereto in the Employment Agreements.

     “Change of Control” has the meaning ascribed thereto in the Employment Agreements.

     “Closing Date” means the date of Closing.

     “Forced Savings Amount” means an amount equal to 20% of the Base Salary of each of HNG, before
giving effect to any salary reductions pursuant to the Letter Agreements or otherwise.

     “Insurance Covenants” has the meaning ascribed thereto in the Employment Agreements.

     “Medical Insurance” has the meaning ascribed thereto in the Employment Agreements.

     “Termination Payments” has the meaning ascribed thereto in the Employment Agreements.

     “Transition Period” means the period starting on the Closing Date and ending on January 31,
2011.

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Section 2 Other Defined Terms

     In addition to the defined terms in Section 1, each of the following capitalized terms shall
have the meaning ascribed thereto in the corresponding Section:

	 	 	 
	Term	 	Reference
	Agreement

	 	First page
	Closing

	 	Recitals
	Consideration

	 	Section 6
	Corporation

	 	Recitals
	Employment Agreements

	 	Recitals
	Forgiveness Reorganization

	 	Section 5(a)
	Letter Agreements

	 	Recitals
	Holden

	 	First page
	HNG

	 	Recitals
	Intervenor

	 	Intervention
	Parties

	 	First page
	Plan

	 	Section 5(a)
	Portfolio

	 	Section 6
	Offeror

	 	Recitals
	Reduction in Salary Payments

	 	Recitals
	Releasees

	 	Section 17
	Releasors

	 	Section 17
	Revised Settlement Agreement

	 	Section 16
	Shares

	 	Recitals
	Superior Offeror

	 	Section 16
	Support Agreement

	 	Recitals
	Target

	 	Recitals
	Tax Payments

	 	Section 5(d)
	Vendor

	 	Recitals

Section 3 Termination of Employment

     Provided that all of the conditions set forth in Section 12(1) have been met on or prior to
the Closing, on and subject to Closing:

	 	(a)	 	each of HNG’s employment with the Corporation shall be terminated; and
	 
	 	(b)	 	the Employment Agreements and Letter Agreements shall be terminated and have
no further force or effect, including (the restrictive covenants contained in Article
9 of each of the Employment Agreements) and the Employment Agreements and Letter
Agreements shall be entirely replaced and superseded by the terms and conditions of
this Agreement.

Section 4 Reduction of Basic Payments and Termination Payments

     Provided that all of the conditions set forth in Section 12(1) have been met on or prior to
the Closing, on and subject to Closing, HNG hereby agree to reduce the aggregate amounts of the
Basic Payments and the Termination Payments they are entitled to receive pursuant to their
respective Employment Agreements to an amount equal to the sum of the Consideration and the Tax
Payments.

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Section 5 Settlement of Basic Payments and Termination Payments

     In full and final settlement of the Corporation’s obligations to pay to each of HNG the Basic
Payments and the Termination Payments in accordance with the Employment Agreement, Offeror shall:

	 	(a)	 	on or prior to Closing, cause the forgiveness of any outstanding intercompany
debt of Corporation without consideration (the “Forgiveness Reorganization”) in
accordance with the plan to be provided by RSM Richter prior to Closing and acceptable
to the Parties (the “Plan”);
	 
	 	(b)	 	on Closing and after completion of the Forgiveness Reorganization, cause
Vendor to transfer all of the Shares to or as directed by each of HNG, in accordance
with the allocations to be set out by HNG by written notice to Offeror on or prior to
Closing;
	 
	 	(c)	 	on Closing, cause Target to remit to the relevant Canadian and provincial tax
authorities an amount equal to 35% of the value of the Consideration, on account of
the withholding obligation of Target with respect to the Consideration attributable to
each of HNG; and
	 
	 	(d)	 	on Closing, remit or cause Target to remit, certified cheques to or as
directed by each of HNG in an aggregate amount equal to 13.22% of the Consideration,
in accordance with the allocations to be set out by HNG by written notice to Offeror
on or prior to Closing (together with the remittance described in this Section 5(c),
the “Tax Payments”).

Section 6 Consideration

     The consideration for the Shares (the “Consideration”) shall be equal to the value ascribed
to the two business portfolio assets of Vendor known as the “Moneris” and “UBC” assets (the
“Portfolio”) in the independent valuation of RSM Richter to be provided by RSM Richter prior to
Closing and in form and content acceptable to the Parties, acting reasonably (the “Valuation”).

Section 7 Valuation and Tax Arrangements

     The Parties have used the value ascribed to the Portfolio in the Valuation for the purposes of
determining the fair market value of the Shares. Such value shall be used in respect of any tax
filings or positions made or taken by the Parties. All fees, costs and expenses associated with
such Valuation shall be assumed and paid by Offeror or Offeror shall cause Target to assume and pay
such costs and expenses, as the case may be.

Section 8 Employment Related Covenants

	 	(a)	 	On the Closing Date, Offeror shall cause to be put in place medical insurance
coverage for each of HNG, which coverage shall provide each of HNG and their
respective families with health, life, dental and other insurance coverage in Canada
and the United States equivalent to the coverage currently maintained by Target for
the benefit of its senior executives and HNG. Such coverage shall be for a term of
five (5) years commencing on the Closing

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	 	 	 	Date, which coverage shall be prepaid by Offeror or Offeror shall cause
Target to prepay such coverage, as the case may be, on or prior to Closing (the
“Medical Insurance Covenant”).

	 	(b)	 	On the Closing Date, Offeror shall or shall cause Target to, pay to each of
HNG the aggregate amount of his respective Base Salary that was reduced during the
Reduction Period (as such term is defined in the Letter Agreements), calculated up to
the Closing Date.
	 
	 	(c)	 	On the Closing Date, Offeror shall or shall cause Target to, pay to each of
HNG their respective Forced Savings Amount, in each case, accrued from January 1, 2010
through to the Closing Date.
	 
	 	(d)	 	On the Closing Date, Offeror shall or shall cause Target to, forgive the
indebtedness of Holden L. Ostrin to Target on account of a home loan granted to him in
1996 and Offeror shall or shall cause Target to, reimburse Holden for any taxes
incurred by Holden in connection with such forgiveness and taxes incurred by Holden as
a result of the payment by Target (or Offeror, as the case may be) of such taxes.

Section 9 Vendor’s Representations and Warranties

     Offeror hereby represents and warrants as follows to HNG at the date of this Agreement and at
the Closing Date and acknowledges and confirms that HNG is relying upon such representations and
warranties in connection with the transactions contemplated herein:

	 	(a)	 	Incorporation and Qualification. Offeror is a corporation incorporated and
existing under the laws of its jurisdiction of incorporation;
	 
	 	(b)	 	Corporate Authority. The execution and delivery of and performance by
Offeror of this Agreement and the transactions contemplated thereby have been
authorized by all necessary corporate action on the part of Offeror ; and
	 
	 	(c)	 	Execution and Binding Obligation. This Agreement has been duly executed and
delivered by Offeror and constitutes a legal, valid and binding Agreement of Offeror
enforceable against it in accordance with its terms subject only to any limitation
under applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement
and other laws of general application affecting the enforcement of creditors’ rights,
and (ii) the discretion that a court may exercise in the granting of equitable
remedies such as specific performance and injunction.

Section 10 HNG’s Representations and Warranties

     Each of HNG represents and warrants to Offeror with respect to himself at the date of this
Agreement and at the Closing Date and acknowledges and confirms that Offeror is relying on such
representations and warranties in connection with the transactions contemplated herein:

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	 	(a)	 	Execution and Binding Obligation. This Agreement has been duly executed and
delivered by him and constitutes a legal, valid and binding Agreement enforceable
against him in accordance with its terms subject only to any limitation under
applicable laws relating to (i) bankruptcy, winding-up, insolvency, arrangement and
other laws of general application affecting the enforcement of creditors’ rights, and
(ii) the discretion that a court may exercise in the granting of equitable remedies
such as specific performance and injunction;
	 
	 	(b)	 	Securities Laws. He is acquiring the Shares as principal and not as agent;
and
	 
	 	(c)	 	No Other Agreements. All outstanding agreements between any of HNG and
Target have been publicly disclosed or have been provided by HNG to Offeror.

Section 11 Post Closing Covenants

     At Closing:

	 	(a)	 	Ownership of all electronics currently being utilized directly and regularly
by HNG in carrying on their business, including computers, cell phones and
Blackberries, will be transferred to HNG (to the extent not already owned);
	 
	 	(b)	 	Ownership of all office furniture and contents of office (anything on walls,
etc.) currently being utilized directly and regularly by HNG will be transferred to
HNG (to the extent not already owned);
	 
	 	(c)	 	HNG will be entitled to the office space currently being utilized directly
and regularly by HNG up until the end of the Transition Period, including access to
the kitchen on a rent free basis. After the Transition Period, Offeror shall or shall
cause Target to, and HNG shall agree on a fair and appropriate rent for any premises
still occupied by HNG. Notwithstanding the foregoing, in the event that Target (or
Offeror, as the case may be) desires to abandon the lease or decides to sublease all
or part of the premises occupied by HNG, Offeror shall or shall cause Target to,
provide HNG with a 3 month notice setting out Target’s (or Offeror’s, as the case may
be) plans in which case HNG shall either match the terms of any sublease or shall
vacate the premises at the end of the period specified in the notice;
	 
	 	(d)	 	Offeror shall or shall cause Target to, maintain and pay and HNG will be
entitled to use the existing parking spots currently being utilized directly and
regularly by HNG during the Transition Period;
	 
	 	(e)	 	During the Transition Period, Offeror shall or shall cause Target to,
maintain and pay and HNG will be entitled to use the existing Videotron access
currently being utilized directly and regularly by them;

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	 	(f)	 	Offeror shall or shall cause Target to, transfer at no cost to HNG the
Optimal Group name/URL/domain name and server with free bandwidth during the
Transition Period;
	 
	 	(g)	 	HNG will be entitled at no cost to technical support as needed from Costa
Lappas (or any replacement) during the Transition Period, after which time such
support shall be provided and billed at cost until the end of the current lease;
	 
	 	(h)	 	Offeror shall or shall cause Target to, transfer at no cost to HNG
individual, direct-dial, phone numbers;514-738-8885;514-738-1622 and 514-738-8355
(fax) and HNG shall be entitled, at no cost, to the use of telephone and fax services
during the Transition Period, after which time such use shall be provided and billed
at cost until the end of the current lease; and
	 
	 	(i)	 	HNG shall be entitled at no cost to support provided by Robin Kahn (or any
replacement) during the Transition Period, after which time such support shall be
provided by any person designated by Target and shall be billed to HNG at cost until
the end of the current lease.

Section 12 Conditions of Closing

	(1)	 	Conditions for the Benefit of HNG. The transactions contemplated hereby are subject to the
following conditions to be fulfilled or performed, which conditions are for the exclusive
benefit of HNG and may be waived, in whole or in part, by HNG in their sole discretion:

	 	(a)	 	The Closing shall have occurred no later than June 30, 2010;
	 
	 	(b)	 	The representations and warranties of Offeror contained in this Agreement
shall be true and correct as of the Closing Date with the same force and effect as if
such representations and warranties had been made on and as of such date;
	 
	 	(c)	 	Offeror shall not, as of the Closing Date, be in breach of any of its
covenants hereunder;
	 
	 	(d)	 	Offeror shall deliver or cause to be delivered to HNG the following in form
and substance satisfactory to HNG:

	 	(i)	 	evidence that Vendor has completed the Forgiveness
Reorganization in accordance with the Plan;
	 
	 	(ii)	 	evidence that the taxes pursuant to Section 5(c) have been
remitted by Target (or Offeror as the case may be) to the appropriate Canadian
and provincial tax authorities;
	 
	 	(iii)	 	share certificates representing the Shares duly endorsed for
transfer to HNG or accompanied by an irrevocable share transfer power of
attorney duly executed in blank by Vendor;

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	 	(iv)	 	resignations of the officers and directors of the Corporation
(other than HNG) and releases in favour of HNG and Corporation by such
officers and directors;
	 
	 	(v)	 	a release signed by Target in favour of HNG in the same form
set out in Section 17; and
	 
	 	(vi)	 	a certified copy of the resolution of the directors (and, if
required, a resolution of the shareholders) of the Corporation approving the
transfer of the Shares to HNG.

	(2)	 	Conditions for the Benefit of Offeror. The transactions contemplated hereby are subject to
the following conditions to be fulfilled or performed, which conditions are for the exclusive
benefit of Offeror and may be waived, in whole or in part, by Offeror in its sole discretion:

	 	(a)	 	The Closing shall have occurred no later than June 30, 2010;
	 
	 	(b)	 	The representations and warranties of HNG contained in this Agreement shall
be true and correct as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of such date; and
	 
	 	(c)	 	HNG shall not, as of the Closing Date, be in breach of any of its covenants
hereunder.

Section 13 Survival of Representations and Warranties

     The representations and warranties of Offeror and HNG shall survive the Closing for the period
provided for at law.

Section 14 Termination

     This Agreement may, by notice in writing given prior to or on the Closing Date, be terminated:

	 	(i)	 	by mutual consent of the Parties;
	 
	 	(ii)	 	by HNG if any of the conditions in Section 12(1) have not been met or
satisfied on or prior to the Closing Date or if the Closing Date does not occur on or
prior to June 30, 2010 or on or before such later date as the Parties agree to in
writing, provided that HNG may not terminate this Agreement under this Section 14(ii)
if they have failed to perform any one or more of their obligations or covenants under
this Agreement to be performed at or prior to Closing and the Closing has not occurred
because of such failure;
	 
	 	(iii)	 	by Offeror if any of the conditions in Section 12(2) have not been met or
satisfied on or before June 30, 2010 or on or before such later date as the Parties
agree to in writing, provided that Offeror may not terminate this Agreement under this
Section 14(iii) if it has failed to perform any one or

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	 	 	 	more of its obligations or covenants under this Agreement to be performed at or
prior to Closing and the Closing has not occurred because of such failure; or

	 	(iv)	 	Subject to Section 16, if the Support Agreement is terminated for any reason
whatsoever.

Section 15 Effect of Termination

	(a)	 	Each Party’s right of termination under Section 14 is in addition to any other rights it may
have under this Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies. Nothing in this Article limits or affects any other rights or causes
of action any Party may have with respect to the representations, warranties and covenants in
its favour contained in this Agreement. If a Party waives compliance with any of the
conditions, obligations or covenants contained in this Agreement, the waiver will be without
prejudice to any of its rights of termination in the event of non-fulfilment, non-observance
or non-performance of any other condition, obligation or covenant in whole or in part.
	 
	(b)	 	If this Agreement is terminated pursuant to Section 14, all obligations of the Parties under
this Agreement will terminate, except that:

	 	(i)	 	each Party’s obligations under Section 18 and Section 19 will survive
termination indefinitely;
	 
	 	(ii)	 	if this Agreement is terminated under the circumstances referred to in
Section 16, Section 16 will survive termination for the period indicated in such
Section; and
	 
	 	(iii)	 	if this Agreement is terminated by a Party because of a breach of this
Agreement by the other Party or because a condition for the benefit of the terminating
Party has not been satisfied because the other Party has failed to perform any of its
obligations or covenants under this Agreement, the terminating Party’s right to pursue
all legal remedies will survive such termination unimpaired.

Section 16 Superior Proposal

     If the Support Agreement is terminated by the Target prior to the Expiry Time in accordance
with section 8.1 (h) of the Support Agreement, then HNG agree that they would enter into an
agreement with the Person making the Superior Proposal (the “Superior Offeror”) providing for the
same terms and conditions set out herein (with applicable changes to reflect the fact that the
Superior Offeror is the new offeror) (the “Revised Settlement Agreement”) except that:

	 	(a)	 	the Superior Offeror shall agree to pay for, in addition to the professional
fees and expenses referred to in Section 18, all incremental professional fees and
expenses incurred by HNG from the date the Support Agreement is terminated to the date
the transactions contemplated by the Superior Offeror are completed without the
C$200,000 limitation set out in Section 18; and

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	 	(b)	 	the Revised Settlement shall contain a closing condition in favour of HNG
that as at the closing date of the transactions contemplated in the Superior Offer, no
event or condition shall have occurred, or shall exist, that individually or in the
aggregate is or would reasonably be expected to be material and adverse to the
condition (financial or otherwise), properties, assets, liabilities, obligations,
business, operations or prospects of Corporation.

     Notwithstanding anything in this Agreement to the contrary, the Parties agree that HNG’s
covenant in this Section 16 shall expire and any Revised Settlement Agreement entered into shall,
at the option of HNG, be terminated by HNG and have no further force or effect in the event the
Superior Proposal made by the Superior Offeror has not been completed within 90 days after the
Support Agreement is terminated in accordance with section 8.1(h) of the Support Agreement.

Section 17 Mutual Release, Discharge and Transaction

     In consideration for the transactions to be effected pursuant to the Agreement, the receipt
and sufficiency of which are hereby acknowledged by the Parties and the Target, at Closing, each of
HNG, on the one hand, and Offeror and Target, on the other hand, on behalf of themselves and on
behalf of their affiliates, successors, assigns and legal representatives (collectively in such
capacity the “Releasors”) irrevocably and unconditionally release and forever discharge the other
as well as each of their affiliates, successors, assigns, directors, officers and legal
representatives (collectively in such capacity the “Releasees”), of and from all manner of actions,
causes of action, suits, demands, debts, accounts, covenants, contracts, damages and all other
claims whatsoever of any nature, character and description, whether contractual, quasi-delictual,
legal or otherwise, whether known or unknown, which any of the Releasors ever had, now has or may
in the future have against any of the Releasees with respect to events, acts or omissions which
relate to dates or periods on or prior to the Closing Date. Notwithstanding the foregoing, nothing
herein shall affect or release any of the Parties’ rights or obligations under or pursuant to: (i)
this Agreement (including the covenants, representations and warranties therein and the
transactions referred to therein) and related agreements, certificates and instruments or (ii) any
indemnification obligations Offeror and Target (and each of their affiliates, successors, assigns,
directors, officers and legal representatives) may have in favour of HNG (and each of their
affiliates, successors, assigns, directors, officers and legal representatives) pursuant to any
statute, by-law or other constating document, insurance policy (including, the directors and
officers insurance policy referred to Section 6.2 of the Support Agreement) or any other agreement
or arrangement in connection with any one of HNG having acted as a director or officer of
Intervenor or any of its affiliates.

     The present release, discharge and transaction constitutes a transaction within the meaning of
article 2631 and following of the Civil Code of Québec and shall enure to the benefit of each of
the Releasees and shall be binding upon the Releasors and their affiliates successors, affiliates
and legal representatives.

     On Closing, Offeror shall cause Target to execute a release in favour of HNG in the same form
as set out above in this Section 17.

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Section 18 Expenses

     Offeror shall be responsible for up to a maximum of C$200,000 of HNG’s professional fees and
expenses in connection with the transactions contemplated hereunder, including any such fees
incurred in connection with the Offer, before taxes and disbursements.

Section 19 Announcements

     No press release, public statement or announcement or other public disclosure with respect to
this Agreement or the transactions contemplated in this Agreement may be made except with the prior
written consent of the Parties, or if required by Law or a Governmental Entity.

Section 20 Time is of the Essence

     Time shall be of the essence of this Agreement.

Section 21 Gender and Number

     Any reference in this Agreement to gender includes all genders. Words importing the singular
number only shall include the plural and vice versa.

Section 22 Headings, etc

     The division of this Agreement into Sections and the insertion of headings are for convenient
reference only and are not to affect its interpretation.

Section 23 Currency

     All references in this Agreement to dollars, or to $ are expressed in Canadian currency unless
otherwise specifically indicated.

Section 24 Certain Phrases, etc.

     In this Agreement (A) the words “including”, “includes” and “include” mean “including (or
includes or include) without limitation”, and (B) the phrase “the aggregate of”, “the total of”,
“the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without
duplication, of”. Unless otherwise specified, the words “Section” followed by a number mean and
refer to the specified Section of this Agreement. In the computation of periods of time from a
specified date to a later specified date, unless otherwise expressly stated, the word “from” means
“from and including” and the words “to” and “until” each mean “to but excluding”.

Section 25 Enurement

     This Agreement shall become effective when executed by the Parties and after that time shall
be binding upon and enure to the benefit of the Parties and their respective heirs, executors,
legal personal representatives, successors and permitted assigns. Neither this Agreement nor any
of the rights or obligations under this Agreement shall be assignable or transferable by either
Party without the consent of the other Party, except that HNG may assign this Agreement in whole or
in part to any of their respective affiliates.

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Section 26 Entire Agreement

     This Agreement constitutes the entire agreement between the Parties with respect to the
transactions contemplated in this Agreement and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the Parties with respect to the subject
matter of this Agreement, including, the Employment Agreements and the Letter Agreements. There
are no representations, warranties, covenants, conditions or other agreements, express or implied,
collateral, statutory or otherwise, between the Parties in connection with the subject matter of
this Agreement, except as specifically set forth in this Agreement. The Parties have not relied
and are not relying on any other information, discussion or understanding in entering into and
completing the transactions contemplated by this Agreement.

Section 27 Waiver

	(1)	 	No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver
of any other provision (whether or not similar), nor shall such waiver be binding unless
executed in writing by the Party to be bound by the waiver.
	 
	(2)	 	No failure on the part of any Party to exercise, and no delay in exercising any right under
this Agreement shall operate as a waiver of such right; nor shall any single or partial
exercise of any such right preclude any other or further exercise of such right or the
exercise of any other right.

Section 28 Further Assurances

     Each of the Parties covenants and agrees to do such things, to attend such meetings and to
execute such further documents and assurances as may be deemed necessary or advisable from time to
time in order to carry out the terms and conditions of this Agreement in accordance with their true
intent.

Section 29 Severability

     If any provision of this Agreement shall be determined to be illegal, invalid or
unenforceable, that provision shall be severed from this Agreement and the remaining provisions
shall continue in full force and effect.

Section 30 Governing Law

     This Agreement shall be governed by and interpreted and enforced in accordance with the laws
of the Province of Québec and the federal laws of Canada applicable therein.

Section 31 Counterparts

     This Agreement may be executed in any number of counterparts (including counterparts by
facsimile) and all such counterparts taken together shall be deemed to constitute one and the same
instrument.

Section 32 French Language

     Les Parties à cette convention reconnaissent qu’ils ont exigé que ce qui précède soit rédigé
et signé en anglais et s’en déclarent satisfaits.

[Signature page follows]

- 12 -

 

     IN WITNESS WHEREOF the Parties have executed this Settlement Agreement.

	 	 	 	 	 
	 	7293411 Canada Inc.

 	 
	 	By:  	/s/
Richard Yanofsky 	 
	 	 	Authorized Signing Officer 	 
	 	 	 	 
	 
	 	/s/ Holden L. Ostrin	 
	 	Holden L. Ostrin

	 
	 	/s/ Neil Wechsler 	 
	 	Neil Wechsler 

	 
	 	/s/ Gary Wechsler 	 
	 	Gary Wechsler 
	 
	 	 	 

- 13 -

 

	 	 	 	 	 

Intervention

Optimal Group Inc. (the “Intervenor”) hereby intervenes to this Settlement Agreement for the
purposes of being bound by and accepting the benefit of Section 16 of this Settlement Agreement.

The Intervenor agrees that upon Termination of this Agreement in accordance with Section 14, the
Intervenor shall no longer be bound by or benefit from the provisions of Section 16, except if this
Settlement Agreement is terminated in the circumstances described in Section 16, in which case the
Intervenor will continue to be bound by and benefit from the provisions of Section 16 for the
period described therein.

IN WITNESS WHEREOF the Intervenor has executed this Intervention to Settlement Agreement on March
16, 2010.

	 	 	 	 	 
	 	Optimal Group Inc.

 	 
	 	By:	 	/s/ Leon P. Garfinkle	 
	 	 	 	Authorized
Signing Officer
 	 
	 	 	 
	 

- 14 -

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