Common use of The Settlement Clause in Contracts

The Settlement. On [date] the Plaintiffs and Defendants executed a Settlement Agreement providing for the settlement of the Action (“Settlement”), which is subject to approval by the Court. The Settlement Agreement provides for the payment of USD$2,125,000 (“Settlement Amount”) in consideration of the full and final settlement of the claims of Class Members. The Settlement Amount includes all legal fees, disbursements, taxes and administration expenses. The Settlement provides that if it is approved by the Court, the claims of all Class Members asserted or which could have been asserted in the Action will be fully and finally released, and the Action will be dismissed. The Settlement is not an admission of liability, wrongdoing or fault on the part of the Defendants, all of whom have denied, and continue to deny, the allegations against them. If you are a Class Member, you will be bound by the outcome of the Action, including the terms of the Settlement if approved, unless you opt out of the Action. Class Members who do not opt out will (i) be entitled to participate in the Settlement; (ii) be bound by the terms of the Settlement; and (iii) not be permitted to bring other legal proceedings in relation to the matters alleged in the Action against the Defendants, or any person released by the approved Settlement. Conversely, if you are a Class Member who opts out of the Action (an “Opt Out Party”), you will not be able to make a claim to receive compensation from the Settlement Amount but will maintain the right to pursue your own claim against the Defendants relating to the matters alleged in the Action. If you are a Class Member and wish to opt out, you must submit a written election to do so, together with required supporting documentation (“Opt Out Election”), to [Administrator] (“Administrator”). To be a valid, the Opt Out Election: (a) must contain a statement of intention to opt out of the Action by you or a person authorized to bind you; (b) for Class Members who acquired Northern Dynasty securities during the period from and including [date] to and including [date], must provide a listing of all transactions during that period showing, for each transaction, the type of transaction (purchase or sale), the number of securities and the date of the transaction, and state the number of Northern Dynasty securities held at the close of trading on the TSX Venture Exchange on [date]; (d) must be supported by documents to evidence such transactions, in the form of trade confirmations, brokerage statements or other transaction records acceptable to the Administrator to verify the transactions; (e) must contain your name, address, telephone number and email address; and (f) may, at your option, contain a statement of your reason for opting out. Your Opt Out Election must be postmarked no later than 11:59pm Vancouver (Pacific) time on [date] (“Opt Out Deadline”). Opt Out Elections may be sent by mail or courier to: [Administrator contact details] An Opt Out Election that does not contain all of the required information or is postmarked after the Opt Out Deadline will not be valid, which means that you will be bound by the outcome of the Action, including the Settlement, if it is approved. You may revoke an Opt Out Election by delivering to the Administrator by mail or courier a written statement that you wish to revoke the Opt Out Election, which must be postmarked on or before 11:59pm Vancouver (Pacific) time on [date].

The Settlement. On [date] the Plaintiffs For and Defendants executed a Settlement Agreement providing for the settlement of the Action (“Settlement”), which is subject to approval by the Court. The Settlement Agreement provides for the payment of USD$2,125,000 (“Settlement Amount”) in consideration of the full settlement of any and final all claims that are, could have been, or might in the future be asserted by Capstone against Borrower arising out of, or in connection with, the Capstone Claim, the parties agree as follows: (a) In payment under the Financing Agreements, and in settlement of the claims Capstone Claim, Borrower shall deliver to Capstone $1,500,000 in readily available funds (the “Settlement Payment”), which shall be paid by Borrower to Capstone as follows: (i) a good faith nonrefundable deposit of Class Members$150,000 shall be paid upon the execution and delivery of this Settlement Agreement (the “Deposit”). (ii) $1,350,000 (the “Payment Balance”) shall be paid on or before the October 21, 2008, TIME BEING OF THE ESSENCE (the “Settlement Payment Due Date”). Upon the execution and delivery of this Settlement Agreement, Borrower shall execute and deliver its Promissory Note with respect to the Payment Balance, to Capstone. The Settlement Amount includes all legal fees, disbursements, taxes and administration expenses. The Settlement provides that if it is approved Promissory Note shall be secured by the CourtCollateral (as defined in the PO Financing Agreement and the Factoring Agreement). (b) The Borrower hereby assigns to Capstone under and pursuant to the Discount Factoring Agreement all of Borrower’s rights, title and interest in and to the claims accounts receivables identified on Schedule 1 attached hereto and made a part hereof (the “Assigned Receivables”). Borrower represents and warrants to Capstone that Borrower has, and is transferring to Capstone, good and indefeasible title to all of the Assigned Receivables, free and clear of all Class Members asserted liens, claims and encumbrances of any kind or which could have been asserted type, whatsoever. (c) The Financing Agreements shall remain in the Action will be fully and finally releasedplace, in accordance with their respective terms, and the Action will be dismissed. The Settlement is not an admission of liability, wrongdoing or fault on the part of the Defendants, all of whom have denied, Borrower and Capstone shall continue to deny, the allegations against them. If you are a Class Member, you will be bound by the outcome of the Action, including the terms comply therewith until full and indefeasible payment of the Settlement if approvedPayment has been made to Capstone, unless you opt out at which time (x) the Financing Agreements shall be terminated and (y) all of Capstone’s right, title and interest in and to the Action. Class Members who do Interim Receivables (defined below) that have not opt out will been collected by CBC shall be assigned by CBC to the Borrower. (d) Upon the later to occur of (i) be entitled the full and indefeasible payment of the Settlement Payment to participate in Capstone (the Settlement; “Settlement Payment Date”), and (ii) be bound the payment by Borrower of all amounts due and payable by it during the terms of Interim Factoring Period (defined below) under the SettlementFactoring Agreement, if any (i) Capstone shall execute and deliver the release letter (the “Release Letter”) to Guarantor in substantially the form attached hereto as Exhibit A; (ii) Capstone shall file UCC-3 termination statements terminating their liens on Borrower’s assets granted pursuant to the Financing Agreements; and and (iii) Capstone and Borrower shall execute and deliver the Release Agreement (the “Release Agreement”) in substantially the form attached hereto as Exhibit B. (e) From the date of this Agreement until the Settlement Payment Date (the “Interim Factoring Period”) Borrower shall submit all of its Accounts Receivable (as defined in the Factoring Agreement) to CBC for collection only, and not for factoring under the Factoring Agreement (the “Interim Receivables”). The aggregate amount of funds collected by CBC with respect to the Interim Receivables (the “Interim Receivables Collection Amount”) shall be credited against the Payment Balance. For the purposes of this Agreement, the Assigned Receivables shall not be permitted deemed to bring other legal proceedings be, and shall not be included in relation the Interim Receivables. (f) Notwithstanding anything contained in this Agreement to the matters alleged contrary, including without limitation Section 1(e), in the Action event that the Settlement Payment is not paid in full by 5:00 pm on the Settlement Payment Due Date, TIME BEING OF THE ESSENCE, the Interim Receivables Collection Amount shall not be credited against the DefendantsPayment Balance. (g) During the Interim Factoring Period all governmental fees, charges and taxes relating to, or arising out of, the sale of goods giving rise to the Interim Receivables (the “Receivables Expenses”) shall be timely paid by Borrower. In the event that any person released by Receivables Expense becomes past due, Borrower shall have ten (10) days from the approved Settlementdate that any such Receivable Expense became due and payable to pay such Receivables Expense in full (the “Expense Cure Period”). ConverselyIn the event that Borrower fail to pay any such Receivables Expense within the Expense Cure Period, if you are a Class Member who opts out of CBC shall have the Action right, but not the obligation, to pay all amounts necessary to satisfy such Receivables Expense (an the “Opt Out PartyCure Amount”), you will not in which case an amount equal to the product of (i) two (2) and (ii) the Cure Amount shall be able to make a claim to receive compensation deducted from the Settlement Amount but will maintain the right to pursue your own claim against the Defendants relating Interim Receivables Collection Amount. (h) Notwithstanding anything to the matters alleged contrary contained in the Action. If you are a Class Member and wish to opt out, you must submit a written election to do so, together with required supporting documentation (“Opt Out Election”), to [Administrator] (“Administrator”). To be a valid, the Opt Out Election: (a) must contain a statement of intention to opt out of the Action by you or a person authorized to bind you; (b) for Class Members who acquired Northern Dynasty securities during the period from and including [date] to and including [date], must provide a listing of all transactions during that period showing, for each transaction, the type of transaction (purchase or sale), the number of securities and the date of the transaction, and state the number of Northern Dynasty securities held at the close of trading on the TSX Venture Exchange on [date]; (d) must be supported by documents to evidence such transactionsthis Settlement Agreement, in the form of trade confirmations, brokerage statements event that at any time Capstone is required to return all or other transaction records acceptable to the Administrator to verify the transactions; (e) must contain your name, address, telephone number and email address; and (f) may, at your option, contain a statement of your reason for opting out. Your Opt Out Election must be postmarked no later than 11:59pm Vancouver (Pacific) time on [date] (“Opt Out Deadline”). Opt Out Elections may be sent by mail or courier to: [Administrator contact details] An Opt Out Election that does not contain all any portion of the required information Settlement Payment to Borrower or is postmarked after its successors or assigns, the Opt Out Deadline will not Release Letter and the Release Agreement shall be validnull and void, which means that you will be bound by the outcome of the Action, including the Settlement, if it is approved. You may revoke an Opt Out Election by delivering to the Administrator by mail or courier a written statement that you wish to revoke the Opt Out Election, which must be postmarked on or before 11:59pm Vancouver (Pacific) time on [date]ab initio.