EHIBIT 4.2
SETTLEMENT AGREEMENT
THIS AGREEMENT made effective the 31st day of July, 2000
BETWEEN: COAST FALCON RESOURCES LTD.
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A British Columbia Company
(the "Company")
AND: PEMCORP MANAGEMENT INC.
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A British Columbia Company
(the "Creditor")
WHEREAS:
A. As of the date of this Agreement, the Company owes the Creditor the sum of
$80,250 for management consulting services for the thirty months ended July 31,
2000 (the "Debt");
B. The Creditor understands and acknowledges that the Company is experiencing
financial difficulty and does not have the ability to pay the Debt and as a
consequence has agreed to accept common shares of the Company having nominal
value and a note in full settlement and satisfaction of the Debt.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and the covenants contained herein the parties hereto agree as follows:
1. For the purpose of this Agreement, "Settlement Date" means the date
that is 5 business days after the date on which the Company receives
approval from its shareholders to issue the "Settlement Shares" in
partial settlement and satisfaction of the Debt in accordance with the
terms of this Agreement.
2. The Creditor hereby agrees to accept a promissory note in the amount
of $21,400, substantially in the form attached hereto as Schedule A
(the "Note"), and 1,471,250 non-assessable shares in the common stock
of the Company, after the Company gives effect to a minimum ten (old
shares) for one (new share) reverse split of its common stock (the
"Reverse Split"), at a deemed price of $0.04 per share, post reverse
split, (the "Settlement Shares"), in full settlement and satisfaction
of the Debt.
3. The Creditor hereby agrees and acknowledges that the number of shares
of the Company issued in settlement of $58,850 of the Debt is
arbitrary and was arrived at through negotiations, there is no active
market for the shares of the Company and the Company has not
represented to the Creditor that the Settlement Shares have or will
ever have a realizable value equal to the face amount of the Debt or
any realizable value whatsoever.
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4. Subject to the issuance and receipt of the Note and the Settlement
Shares on the Settlement Date, the Creditor hereby forever releases
and discharges the Company from the Debt.
5. The consummation of the transaction contemplated hereby is subject the
Company receives approval from its shareholders to issue the
Settlement Shares and the Reverse Split. If such approval is not
obtained and the Reverse Split is not made effective by September 15,
2000 this Agreement shall be terminated and have no further force or
effect unless the parties hereto agree otherwise.
6. This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their respective heirs, successors and assigns.
7. Time is of the essence of this Agreement.
8. This Agreement shall be construed in accordance with the laws of the
province of British Columbia.
9. The undersigned have the requisite authority to enter into this
Agreement.
10. This Agreement may be executed in as many counterparts as may be
necessary and by facsimile, each of such counterparts so executed will
be deemed to be an original and such counterparts together will
constitute one and the same instrument and notwithstanding the date of
execution will be deemed to bear the day and year first above written.
11. This Agreement represents the entire agreement between the parties.
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx, Director
Coast Falcon Resources Ltd.
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Director
Pemcorp Management Inc.
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SCHEDULE "A"
PROMISSORY NOTE
As required by the Settlement Agreement made by and between the undersigned and
Pemcorp Management Inc. ("PMI") effective July 31, 2000, the undersigned hereby
promises to pay, on or after September ___, 2000 upon demand without interest,
the sum of TWENTY ONE THOUSAND FOUR HUNDRED DOLLARS ($21,400.00) to PMI.
DATED at Vancouver, B.C. this ____ day of September, 2000.
COAST FALCON RESOURCES LTD.
As per:
______________________________
Authorized Signatory
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