RECITALS:

                                                                    EXHIBIT 10._

                              SETTLEMENT AGREEMENT




     THIS SETTLEMENT AGREEMENT is entered into as of this 22nd day of May, 2002
by and between Goldstate Corporation, a Nevada corporation ("Goldstate") and
Tarmac Management Ltd., a corporation ("Tarmac").



                                    RECITALS:

     WHEREAS, Goldstate has incurred substantial monetary obligations concerning
its business operations and associated contractual relationships;

     WHEREAS, Goldstate and Tarmac have entered into contractual relations
pursuant to which Tarmac has agreed to provide certain consulting services to
Goldstate on an as-needed basis including, but not limited to, managerial,
financial, administrative and investor relations;

     WHEREAS, during fiscal year 2002, Goldstate incurred an aggregate of
$110,883.94 to Tarmac relating primarily to fees incurred for services rendered
by Tarmac to Goldstate including, but not limited to, managerial, financial,
administrative and investor relations (the "Debt");

     WHEREAS, Goldstate and Tarmac have settled their differences regarding the
Debt and wish to set forth their settlement agreement;

     WHEREAS, Goldstate desires to settle the Debt by issuing shares of its
restricted common stock, par value $0.0003 (the "Common Stock") at the rate of
$0.10 per share (which amount is based upon the average of the open and close
price of $0.08 of Goldstate's shares of Common Stock traded on the OTC Bulletin
Board as of May 20, 2002); and

     WHEREAS, Tarmac desires to convert the Debt and accept the issuance of
1,108,839 shares of Common Stock of Goldstate;

     WHEREAS, Goldstate and Tarmac desire to release one another from any and
all further liability as related to the aforesaid Debt.




     NOW, THEREFORE, in consideration of the aforesaid recitals and mutual
promises contained herein, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:


                                    AGREEMENT

     1. Goldstate agrees to issue to Tarmac 1,108,839 shares of its restricted
Common Stock, at $0.10 per share, as of May 22, 2002, as full and complete
satisfaction and payment of the Debt.

     2. Tarmac agrees to accept the issuance of 1,108,839 shares of the
restricted Common Stock of Goldstate as full and complete satisfaction and
payment of the Debt.

     3. Goldstate and Tarmac shall agree to release each other and forever
discharge any and all claims, manner of actions, whether at law or in equity
suits, judgments, debts, liens, liabilities, demands, damages, losses, sums of
money, expenses or disputes, known or unknown, fixed or contingent, which it now
has or may have hereafter, directly or indirectly, individually or in any
capacity against each other, their successors and assigns, as well as its
present or former owners, directors, officers, stockholders, employees, agents,
heirs, by reason of any act, omission, matter, cause, or thing whatsoever, from
the beginning of time to, and including the date of the execution of this
Agreement, relating to the aforesaid Debt.

     4. Tarmac acknowledges that the issuance of the 1,108,839 shares of Common
Stock (i) has not been registered under the Securities Act of 1933, as amended
(the "1933 Securities Act"); (ii) is in reliance on the exemption provided by
Section 4(2) of the 1933 Securities Act, (iii) are being acquired solely for
Tarmac's own account without any present intention for resale or distribution,
(iv) will not be resold without registration under the 1933 Securities Act or in
compliance with an available exemption from registration, unless the shares of
Common Stock are registered under the 1933 Securities Act and under any
applicable state securities law or an opinion of counsel satisfactory to
Goldstate is delivered to Goldstate to the effect that any proposed distribution
of the shares of Common Stock will not violate the registration requirements of
the 1933 Securities Act and any applicable state securities laws, and (v) that
Tarmac understands the economic risk of an investment in the Common Stock and
has had the opportunity to ask questions of and receive answers from Goldstate's
management concerning any and all matters related to the acquisition of the
Common Stock.

     4. This Settlement Agreement shall be effective as of May 22, 2002 and
shall be binding upon and insure to the benefit of the parties hereto and their
respective successors.


                                            Goldstate Corporation



Date:_____________                          By:__________________________
                                                         President




                                            Tarmac Management Ltd.

Date:______________                         By: __________________________
                                                         President