Exhibit 10.6
ESCROW AGREEMENT
THIS AGREEMENT dated for reference July 6, 2009
BETWEEN:
GEMCO MINERALS INC. (Inc. No. P97000072960), a company incorporated
pursuant to the laws of the state of Florida, USA and
extraprovincially registered in the province of British Columbia
(Registration No. A0065596), having its registered address at #102 -
00000 Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Borrower")
AND:
W.Y. ATAP INVESTMENTS INC. (Inc. No. BC0682546), a British Columbia
company having an address at #300 - 31935 South Fraser Way,
Abbotsford, British Columbia, V2T 5N7
(the "Lender")
AND:
XXXXXXXXXXX X. XXXXXX, Barrister and Solicitor, #000 - 00000 Xxxxx
Xxxxxx Xxx, Xxxxxxxxxx, XX X0X 0X0
(the "Escrow Holder")
WHEREAS:
A. The Borrower has borrowed Two Hundred Fifty Thousand Dollars ($250,000.00)
from the Lender.
B. The Lender has requested that as security for the payment of the Loan, the
Borrower place 2,500,000 shares in the capital stock of the Borrower in escrow
with the Escrow Holder until the Borrower has paid the full amount of the Loan.
A.
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NOW, THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and covenants contained herein and subject to the terms and conditions
hereinafter set out, the parties hereto agree as follows:
1. The Borrower has delivered to the Escrow Holder a sealed envelope (and the
Escrow Holder hereby acknowledges receipt thereof) containing the following
documents which shall be held by the Escrow Holder in escrow subject to the
terms and conditions of this Agreement:
(a) Share Certificate_________________ representing TWO MILLION FIVE
HUNDRED THOUSAND (2,500,000) COMMON SHARES in the capital stock of
GEMCO MINERALS INC. registered in the name of the Lender and endorsed
in blank for transfer; (the "Shares")
(b) A Resolution of the Directors of the Borrower consenting to the
transfer of the shares represented by the said Share Certificate to
the Lender;
(c) A Promissory Note from the Borrower to the Lender; and
(d) A copy of the Commitment Letter and Loan Agreement.
(collectively referred to as the "Escrow Documents").
2. The Escrow Holder shall hold the Escrow Documents in escrow and undelivered
and:
(a) Unless then prohibited by an Order of a court of competent
jurisdiction, shall deliver the Escrow Documents to the Borrower twenty
(20) days after receipt by the Escrow Holder of a Statutory Declaration
sworn by a Director of the Borrower ("20 day period") stating that the
Borrower's obligations set out in the Loan Agreement and Commitment Letter
have been
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or have not been satisfied, unless within the 20 day period the Escrow Holder
shall have received from the Lender a Statutory Declaration sworn by any one or
all of the Lenders stating that they are entitled to the Escrow Documents in
which event the Escrow Holder shall continue to hold the Escrow Documents in
escrow until directed to deliver them by an Order of a court of competent
jurisdiction or by written instructions signed by both the Lender and the
Borrower; or
(b) Unless then prohibited by an Order of a court of competent jurisdiction,
shall deliver the Escrow Documents (if the Escrow Documents have not already
been delivered to the Borrower pursuant to subparagraph 2(a) herein) to the
Lender twenty (20) days after receipt by the Escrow Holder of a Statutory
Declaration sworn by a director of the Lender (the "20 day period") stating that
the Borrower is in default under the terms of the Loan Agreement and Commitment
Letter and Promissory Note and specifying the default, and that such default
continued for 7 days after written notice from a Lender or the Lenders. Unless
within the 20 day period, the Escrow Holder shall receive from the Borrower a
Statutory Declaration sworn by a Director of the Borrower stating that the
Borrower is entitled to the Escrow Documents in which event the Escrow Holder
shall continue to hold the Escrow Documents in escrow until directed to deliver
them by an Order of a court of competent jurisdiction or by written instructions
signed by both the Lender and the Borrower; whichever event shall first occur.
(c) Upon receipt of the Statutory Declaration referred to in subparagraph (a) of
this paragraph, the Escrow Holder shall forthwith give notice in writing to the
Lender of such receipt and shall send with such notice a copy of the Statutory
Declaration, and upon receipt of the Statutory Declaration referred to in
subparagraph (b) of this paragraph, the Escrow Holder shall forthwith give
notice in writing to the Borrower of such receipt and shall send with such
notice a copy of the Statutory Declaration.
(b)
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3. The remedies of the Lender hereunder are in addition to and shall be
concurrent with and without prejudice to and not in substitution for any rights
and remedies at law or in equity which the Lender may have to enforce its rights
under the Loan Agreement and Commitment Letter and Promissory Note.
4. Until and unless the Escrow Holder receives a Statutory Declaration from a
director of the Lender as is contemplated in paragraph 2(b) hereof and pursuant
to which it delivers the Escrow Documents to the Lender, the Borrower shall:
(a) be entitled, subject to the provisions of the British Columbia Company
Act, to exercise all voting rights with respect to the Shares for all
purposes other than as are restricted by this Agreement;
(b) not be entitled to transfer the Shares without first obtaining the
prior written consent of the Lender, the Lender agrees to consent to a
transfer to parties that qualify as a "related person" to the Borrower
or the original shareholders of the Borrower as defined in Section
251(5)(2) of the Income Tax Act (Canada) or a subsidiary corporation
provided the transferee agrees to enter into a separate agreement
agreeing to be bound by the terms of this Escrow Agreement.
5. Any notice to be given under this Agreement shall be duly and properly given
if mailed by prepaid registered post in British Columbia during a period when
the post office is operating normally, addressed as follows, any such notice
shall be deemed to be received three (3) days after the hour of posting. In the
event there occurs a postal interruption during the period after posting the
notice, which could effect the delay of the mail in its ordinary course, then
notice shall only be effectively given if actually delivered. Any notice
delivered to the party to whom it is addressed shall be deemed to have been
given and received on the day it was delivered, provided that if such day is
note a business day, then the notice shall be deemed to have been given and
received on the 3.
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business day next following such day:
(a) To the Lender:
c/x XXXX & COMPANY
Legal Counsel
#300 - 00000 Xxxxx Xxxxxx Xxx,
Xxxxxxxxxx, XX X0X 0X0
Attention: Xxxxxxxxxxx X. Xxxxxx
(b) To the Borrower:
x/x Xxxx X. Xxxx
#000 - 00000 Xxxxxxx Xxxxxxxx Xxxxxxx,
XX X0X 0X0
Attention: Xxxx X. Xxxx
(c) To the Escrow Holder: XXXX & COMPANY Legal Counsel #300 -
00000 Xxxxx Xxxxxx Xxx, Xxxxxxxxxx, XX X0X 0X0 Attention:
Xxxxxxxxxxx X. Xxxxxx
or such other address as the parties hereto may from time to time designate by
notice in writing to the other.
6. The Borrower acknowledges that the Escrow Holder has and continues to act as
legal advisor and counsel to the Lender, and may hereafter act also as legal
advisor and counsel to the Lender and the Borrower hereby consents thereto and
waives any objections they may have in respect thereto
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and acknowledges that they have received legal advice with respect to this
Escrow Agreement from their own legal counsel.
7. The Borrower shall pay from time to time the reasonable fees and expenses of
the Escrow Holder in connection with the performance of the Escrow Holder's
duties hereunder, conditional upon Borrower's approval.
8. The Borrower shall indemnify and save harmless the Escrow Holder of and from
all claims, demands, damages, loss and expense of and from all claims, demands,
damages, loss and expense arising out of his performance of his duties
hereunder.
9. The Escrow Holder shall be deemed to have no notice or knowledge of the
contents of the sealed envelope delivered hereunder and shall have no
responsibility in respect of such loss of the Escrow Documents except the duty
to exercise such care in the safekeeping thereof as he would exercise if the
Escrow Documents were his own property.
10. The Escrow Holder shall have the right to appoint a substitute escrow holder
in his place, which substitute escrow holder shall hold the Escrow Documents and
Trust Funds on the same terms as herein contained.
11. This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
assigns.
12. This Agreement may be executed in several counterparts and by facsimile,
each of which will be deemed to be an original and all of which will together
constitute one and the same instrument.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement in the
presence of the witnesses names on this 6 day of July, 2009.
SIGNED by GEMCO MINERALS INC. in the ) GEMCO MINERALS INC. by its
presence of: authorized signatories:
Signature of Witness
/s/ Xxxxx Xxxxxxx /s/ Xxxx Xxxxx
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10921 000 00xx Xx.
Xxxxxx, X.X.
------------------
Address of Witness
Businessman
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Occupation of Witness
SIGNED by W.Y. ATAP INVESTMENTS INC. ) W.Y. ATAP INVESTMENTS INC. by its
in the presence of: authorized signatory:
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Signature of Witness
/s/ Xxxx Xxxxxxxx
--------------------- -----------------
Address of Witness XXXX XXXXXXXX
XXXX XXXXXXXX
Occupation of Witness
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SIGNED in the presence of :
---------------------
Signature of Witness
/s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------
--------------------- XXXXXXXXXXX X. XXXXXX
Address of Witness
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Occupation of Witness
