PROMISSORY NOTE SETTLEMENT
AGREEMENT
THIS PROMISSORY NOTE SETTLEMENT
AGREEMENT (the “Agreement”) is made effective this 31
st day of October, 2008 (the “Effective
Date”), by and between Nitro Petroleum Incorporated, (the
“Company”), with a principal business address of 7250
N.W. Expressway, Oklahoma City, Oklahoma 73132 and Paradisus
Investment Corp. (“Paradisus”), with a principal
business address of 7 – Magnolia Place, Osoyoos, British
Columbia, Canada V0H1V1.
WITNESSETH
WHEREAS, the Company has borrowed an
aggregate of $140,000 from Paradisus pursuant to the terms of
certain demand promissory notes issued by the Company in favor of
Paradisus, all of which bear interest at a rate of four percent
(4%) per annum (collectively, the “Notes”).
WHEREAS, the table below sets forth
(i) the date each Note was entered into, (ii) the original
principal amount of each Note, (iii) the unpaid principal amount of
each Note as of the Effective Date, (iv) the accrued and unpaid
interest owed on each Note as of the Effective Date, and (v) the
total amount of principal and accrued and unpaid interest due on
each Note as of the Effective Date:
|
Date of Promissory
Note
|
Original Principal Amount of
Promissory Note
|
Unpaid Principal Amount of
Promissory Note
|
Accrued and Unpaid
Interest
|
Total Principal and Interest
due on Promissory Note
|
|
November 9, 2005
|
$5,000
|
$5,000
|
$651
|
$5,651
|
|
December 13, 2005
|
$35,000
|
$35,000
|
$4,197
|
$39,197
|
|
February 9, 2006
|
$100,000
|
$100,000
|
$11,072
|
$111,072
|
|
Total
|
$140,000
|
$140,000
|
$15,920
|
$155,920
|
WHEREAS, the aggregate amount of the
total principal and accrued and unpaid interest due on all of the
Notes as of the Effective Date is $155,920 (referred to hereafter
as the “Settlement Amount”).
WHEREAS, the Company desires to pay
the Settlement Amount through the issuance of shares of its common
stock, par value $0.001 per share (the “Common Stock”)
and Paradisus desires to accept shares of the Company’s
Common Stock in full satisfaction of the Settlement Amount pursuant
to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of
the foregoing, the covenants herein contained, and other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
|
|
1.
|
Payment of Settlement
Amount .
|
(a) Valuation
of Common Stock . The parties agree that, for purposes of
paying the Settlement Amount, each share of the Company’s
Common Stock shall be valued at $0.05 per share (the “Per
Share Value”). The parties determined the Per Share Value
through negotiation and, as such, the parties recognize,
acknowledge and agree that the Per Share Value may not be
indicative of the true value of a share of the Company’s
Common Stock.
(b) Issuance of
Shares . Based on the Per Share Value, simultaneously with the
execution and delivery of this Agreement, the Company shall issue
and deliver to Paradisus a stock certificate or stock certificates
representing a total of 3,118,400 shares (the “Settlement
Shares”) of the Company’s Common Stock in full
satisfaction of the Settlement Amount. The stock certificate(s) for
the Settlement Shares shall be freely tradable and bear no legends
restricting transfers of the Settlement Shares.
2.
Cancellation of the Notes . Paradisus hereby assigns,
transfers and surrenders for cancellation each of the Notes to the
Company. Simultaneously with the execution of this Agreement,
Paradisus shall deliver to the Company each of the Notes, duly
endorsed as terminated and cancelled. Paradisus acknowledges that
upon its receipt of the Settlement Shares pursuant to Section 1(b)
above and delivery of the Notes pursuant to this Section, it shall
have no further rights to any payments under the Notes.
3.
Release of the Company . Paradisus, on behalf of its
officers, directors, shareholders, assigns, successors, agents,
representatives, attorneys and all other persons or entities
who/which have or could have made claims through or based on any of
its rights, hereby release and
