ESCROW AGREEMENT
THIS
AGREEMENT
dated as
of this 17th
day of
May, 2007
BETWEEN:
BLACKSANDS
PETROLEUM, INC.,
a
corporation incorporated under the laws of Nevada,
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(the
“Lender”)
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-
and -
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ACCESS
ENERGY, INC.,
a
corporation incorporated under the laws of Ontario,
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(the
“Borrower”)
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-
and -
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FRASER
XXXXXX CASGRAIN LLP, a
limited liability partnership existing under the laws of the Province
of
Alberta,
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(the “Escrow
Agent”).
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RECITALS:
1.
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The
Lender and the Borrower are negotiating the terms and conditions
of an
investment by the Lender in the Borrower (the “Investment”)
such that the Borrower will issue and the Lender will acquire shares
of
the Borrower’s common stock that will total approximately 75% of the
Borrower’s issued and outstanding common stock immediately after the
Investment and related
transactions;
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2.
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The
Borrower and the Buffalo River Dene Development Corporation (“BRDDC”)
have executed a joint venture agreement (the “JVA”)
which, by its terms, creates no legal rights or obligations for
either
party;
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3.
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It
is a condition of any Investment that the JVA be amended (the
“Amendment”)
to become enforceable upon both the Borrower and the BRDDC and
to grant
the Borrower exclusive rights (the “Exclusive
Rights”)
to explore and develop the oil and gas reserves described in the
JVA;
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4.
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The
Borrower wishes to borrow C$250,000 from the Lender as working
capital
(the “Loan”), a condition of which is BRDDC agreeing to the
Amendment;
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5.
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The
Lender is willing to make the Loan, subject to the terms and conditions
of
a loan agreement (the “Loan
Agreement”)
and promissory note (the “Note”);
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6.
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The
parties hereto other than the Escrow Agent (the “Parties”)
desire to establish the terms and conditions pursuant to which
an escrow
account will be established and maintained;
and
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7.
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The
foregoing recitals are made by the
Parties;
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NOW
THEREFORE in
consideration of the premises and mutual agreements hereinafter set out and
of
other consideration (the receipt and sufficiency of which are acknowledged
by
each party), the parties agree as follows:
1.
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Interpretation
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(a)
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Defined
Terms
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All
capitalized terms not defined in this Agreement shall have the meanings assigned
to them in the Loan Agreement.
(b)
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Governing
Law
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This
Agreement shall be construed, interpreted and enforced in accordance with,
and
the rights of the parties shall be governed by, the laws of the Province
of
Ontario and the laws of Canada applicable therein.
(c)
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Calculation
of Time
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In
this
Agreement, a period of days shall be deemed to begin on the calendar day
of the
event which began the period and ends at 5:00 p.m. (Toronto time) on the
last
day of the period. A “Business
Day”
means
any day which is not: (i) a Saturday, or Sunday; or (ii) a day observed as
a
holiday under a law of the Province of Ontario or a federal law of Canada
applicable in the Province of Ontario. If any period of time is to expire
hereunder on any day that is not a Business Day, the period shall be deemed
to
expire at 5:00 p.m. (Toronto time) on the next succeeding Business Day. If
any
act (including the giving of notice) is otherwise required by the terms hereof
to be performed on a day which is not a Business Day, such act shall be valid
if
performed on the next succeeding Business Day.
(d)
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Waiver
of Rights
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Any
waiver of, or consent to depart from, the requirements of any provision of
this
Agreement shall be effective only if it is in writing and signed by the party
giving it, and only in the specific instance and for the specific purpose
for
which it has been given. No failure on the part of any party to exercise,
and no
delay in exercising, any right under this Agreement shall operate as a waiver
of
such right. No single or partial exercise of any such right shall preclude
any
other or further exercise of such right or the exercise of any other
right.
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(e)
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Amendments
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This
Agreement may be amended only with the written consent of the Lender, the
Borrower and the Escrow Agent.
(f)
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Severability
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Any
provision in this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
(g)
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Entire
Agreement
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This
Agreement constitutes the entire understanding and agreement of the parties
with
respect to the subject matter of this Agreement and supersedes all prior
agreements or understandings, written or oral, between the parties with respect
to the subject matter hereof.
(h)
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Number
and Gender
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In
this
Agreement, unless the context requires otherwise, words in one gender include
all genders and words in the singular include the plural and vice
versa.
(i)
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Heading
and Sections
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The
division of this Agreement into Sections or Subsections and other subdivisions,
the inclusion of headings are for convenience of reference only and shall
not
affect the construction or interpretation of this Agreement. The headings
in the
Agreement are not intended to be full or precise descriptions of the text
to
which they refer.
2.
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Delivery
of BRDDC Documents
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A
Direction (as defined below) will only be executed by the Lender upon the
delivery to Lender of the following duly executed documents (collectively,
the
“BRDDC
Documents”)
acceptable in form and substance to Lender in its sole discretion:
(i)
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A
duly executed copy of the Amendment;
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(ii)
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A
certificate from an officer of BRDDC attesting to the due authorization
of
the JVA and the Amendment together with the authorizing resolutions
and
other evidence of due
authorization;
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(iii)
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A
certificate from an officer of BRDDC attesting to the final form
of the
JVA and the Amendment and the validity of execution
thereof;
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(iv)
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A
certificate from a representative of BRDDC attesting to the incumbency
of
the certifying officer; and
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(v)
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Opinions
of counsel to BRDDC and Borrower in such form and substance as
would be
generally expected in a transaction of this nature drafted in accordance
with U.S. best practices;
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3.
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Deposit
of Escrowed Property
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(a)
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Escrowed
Funds
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The
Lender shall deposit with the Escrow Agent C$250,000 (the “Escrowed Funds”) with
the Escrow Agent by way of wire transfer to the wire transfer details set
out in
Schedule “A” hereto. The Escrowed Funds shall continue to be held by the Escrow
Agent and released by the Escrow Agent solely in accordance with the terms
of
this Agreement.
(b)
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Loan
Documents
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Simultaneously
with the execution of this Agreement, the Lender and Borrower shall deposit
with
the Escrow Agent executed copies of the Loan Agreement and Note. The Loan
Agreement and the Note together shall be known as the “Loan
Documents.” The
Loan
Documents shall continue to be held by the Escrow Agent and released by the
Escrow Agent solely in accordance with the terms of this Agreement.
(c)
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Acknowledgement
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The
Escrow Agent acknowledges receipt of the Loan Documents and will acknowledge
receipt of the Escrowed Funds, promptly upon receipt of same in its account,
and
thereafter agrees to continue to hold and to release the Escrowed Funds and
the
Loan Documents in accordance with the provisions of this Agreement.
4.
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Release
from Escrow
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(a) Release
on Joint Direction
If,
at
any time prior to the Expiry Date (as hereinafter defined), the Escrow Agent
receives an executed joint written direction (the “Direction”)
in the
form attached hereto as Schedule “B” executed on behalf of the Borrower and the
Lender then the Escrow Agent is hereby irrevocably directed to release the
Escrowed Funds to the Borrower immediately by wire transfer as set out in
the
Direction and to release the Loan Documents immediately by providing the
Loan
Documents to the Lender. Lender’s execution of a Direction shall be within its
sole discretion.
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(b)
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Absence
of Authorization to Release from
Escrow
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If
at
5:00 p.m. (Toronto time) on June 1, 2007 or such later date as the Parties
may
agree in writing (and deliver such writing to the Escrow Agent) prior to
such
date and time (the “Expiry
Date”),
the
Escrow Agent has not received an executed Direction, the Escrow Agent is
hereby
irrevocably directed to return the Escrowed Funds to the Lender and to destroy
the Loan Documents.
5.
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The
Escrow Agent
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(a)
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General
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The
Escrow Agent shall be fully protected in acting upon any direction, instrument,
certificate or paper in good faith believed by it to be genuine and signed
by
the proper person or persons, and the Escrow Agent shall be under no duty
to
make investigations or inquiry as to any statements contained in any such
writing but may accept the same as conclusive evidence of the truth and accuracy
of the statements therein contained.
(b)
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Indemnity
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The
Parties will (in addition to any right of indemnity by law given to the Escrow
Agent) indemnify and hold the Escrow Agent as well as the Escrow Agent’s
partners, employees and agents harmless against any and all liabilities,
losses,
claims, damages, penalties, actions, suits, demands, costs and expenses,
including without limiting the foregoing, reasonable legal fees and expenses,
arising from or in connection with any actions or omissions which the Escrow
Agent takes as escrow agent under this Agreement, provided that such action
or
omission is taken in good faith and without negligence or is taken on advice
and
instructions given to the Escrow Agent by the representatives of both Parties.
In no case shall the Parties be liable under this Section 4(b) with respect
to
any claim against the Escrow Agent unless both Parties are notified by the
Escrow Agent, in writing, of the written assertion of a claim against the
Escrow
Agent, promptly after the Escrow Agent has received any such written assertion
of a claim or shall have been served with a summons or other legal process,
giving information as to the basis of the claim. The Parties shall undertake
the
investigation and defence of any such claim and the Escrow Agent shall have
the
right to retain other counsel, at the expense of the Escrow Agent, to act
on its
behalf, provided that if the Escrow Agent reasonably determines that a conflict
of interest exists which makes the representation by counsel chosen by the
Parties not advisable, the reasonable fees and disbursements of such other
counsel by the Parties.
Notwithstanding
any other provision of this Agreement this indemnity shall survive the removal
or resignation of the Escrow Agent in connection with any and all of its
duties
and obligations under this Agreement and the termination of this
Agreement.
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(c)
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Counsel
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The
Escrow Agent may employ such counsel and advisors as it may reasonably require
for the purpose of discharging its duties under this Agreement and the Escrow
Agent may act and shall be protected in acting in good faith on the opinion
or
advice or other information obtained from any such counsel or advisor in
relation to any matter arising under this Agreement.
(d)
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Replacement
of Escrow Agent
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The
Escrow Agent may resign and be discharged from all further duties under this
Agreement by giving 14 days’ notice in writing of its resignation to the
Parties. The Parties may at any time on 14 days’ notice in writing, signed by
both of the Parties remove the Escrow Agent and appoint a new escrow agent
in
its place. In the event of the Escrow Agent resigning or being removed or
becoming incapable of acting under this Agreement, the Parties shall forthwith
appoint a new escrow agent and any escrow agent so appointed may resign and
shall be subject to removal in the same manner as was the original Escrow
Agent.
In the case of the appointment of a new Escrow Agent under this Agreement,
the
predecessor Escrow Agent shall transfer the Escrowed Funds and the Loan
Documents to the new Escrow Agent duly appointed and shall thereupon be released
from any further duties under this Agreement. Upon its appointment, the new
Escrow Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had originally been named in this Agreement as
Escrow
Agent, without any further assurance, conveyance, act or deed.
6.
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General
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(a)
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Notice
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Any
notice or other communication or writing required or permitted to be given
under
this Agreement or for the purposes of this Agreement (a “Notice”)
shall
be sufficiently given if delivered personally or if transmitted by facsimile
transmission (with original to follow by mail):
(i)
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if
to the Lender at:
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Xxxxx
0000, 000 0xx
Xxxxxx
XX
Xxxxxxx,
Xxxxxxx
Xxxxxx
X0X 0X0
Attention: Xxxxxx
Xxxxxxxxx
Fax
No.: (000)
000-0000
6
With
a
copy to:
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00 xxxxx
Xxx
Xxxx,
XX 00000
Attention: Xxxx
X.
Xxxxxxxxxx
Fax
No.: 000-000-0000
(ii)
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if
to the Borrower at:
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Access
Energy, Inc.
Xxxxx
0000, 000 Xxx Xxxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Xxxxxx
Attention: Xxxx
Xxxxxxxxx
Fax
No. 000-000-0000
With
a
copy to:
Fraser
Xxxxxx Casgrain LLP
1
First
Canadian Place
000
Xxxx
Xxxxxx Xxxx
Xxxxx
0000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention:
Xxxx
Xxxxxx
Fax
No.:
(000)
000-0000
(iii)
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if
to the Escrow Agent to it at:
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Fraser
Xxxxxx Casgrain LLP
1
First
Canadian Place
000
Xxxx
Xxxxxx Xxxx
Xxxxx
0000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention:
Xxxx
Xxxxxx
Fax
No.:
(000)
000-0000
or
at
such other address as the party to whom such notice is to be given shall
have
last notified the party giving the same in the manner provided in this Section.
Any notice so delivered shall be deemed to have been given and received on
the
day it is so delivered at such address, provided that if such day is not
a
Business Day then the notice shall be deemed to have been given and received
on
the Business Day next following the day it is so delivered. Any notice so
transmitted by facsimile transmission shall be deemed to have been given
and
received on the day of its confirmed transmission (as confirmed by the
transmitting medium), provided that if such day is not a Business Day then
the
notice shall be deemed to have been given and received on the Business Day
next
following such day.
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(b)
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Assignment
|
Subject
to the foregoing, this Agreement may not be assigned by any party without
the
written consent of the other parties. This Agreement shall enure to and be
binding upon the successors and permitted assigns of the parties.
(c)
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Termination
|
This
Agreement shall terminate when the Escrowed Funds and the Loan Documents
have
been released in accordance with the terms of this Agreement. Sections 4
(a),
(b), (c) and (d) of this Agreement shall survive the termination of this
Agreement.
(d)
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Further
Assurances
|
Each
Party shall from time to time execute and deliver or cause to be executed
and
delivered all such further documents and instruments and do or cause to be
done
all further acts and things as the other Party may reasonably require as
being
necessary or desirable in order to effectively carry our or better evidence
or
perfect the full intent and meaning of this Agreement or any provision
hereof.
(e)
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Counterparts
|
This
Agreement may be executed in counterparts, each of which shall be deemed
to be
an original and each of which together shall constitute one and the same
instrument. To evidence its execution of an original counterpart of this
Agreement, a Party may send a copy of its original signature on the execution
page hereof to the other Party by facsimile transmission or email of a .pdf
file
and such transmission shall constitute delivery of an executed copy of this
Agreement to the receiving Parties as of the date of receipt thereof by the
receiving Party.
8
IN
WITNESS WHEREOF
this
Agreement has been duly executed by the parties hereto.
BLACKSANDS PETROLEUM, INC. | ||
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By: |
/s/
Xxxxxx
X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx |
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Title: President |
I have the authority to bind the corporation. | ||
ACCESS ENERGY, INC. | ||
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By: | /s/ Xxxx Xxxxxxxxx | |
Name:
Xxxx Xxxxxxxxx
Title:
President
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||
I have the authority to bind the corporation. | ||
FRASER XXXXXX CASGRAIN LLP | ||
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|
|
By: | /s/ Fraser Xxxxxx Casgrain LLP | |
Name:
Fraser Xxxxxx Casgrain LLP
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||
I have authority to bind the partnership | ||
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9
SCHEDULE
A
Correspondent
Bank
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Wachovia
Bank N.A.
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New
York, New York
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ABA
#000000000
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Swift
#XXXXXX0XXXX
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Account
with:
|
Bank
of Montreal
|
Swift
#XXXXXXX0
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International
Banking H.O., Montreal
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Account
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#00024602240
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Beneficiary:
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Fraser
Xxxxxx Casgrain Trust
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10
JOINT
WRITTEN INSTRUCTIONS
The
undersigned have executed an escrow agreement (“Escrow Agreement”), dated May
16, 2007, by and among Blacksands Petroleum, Inc., Access Energy, Inc. and
Fraser Xxxxxx Casgrain LLP as escrow agent. Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Escrow
Agreement.
The
undersigned hereby direct the Escrow Agent to release the Escrowed Funds
to the
Borrower.
The
undersigned hereby direct the Escrow Agent to release the Loan Documents
to the
Lender.
Dated:
May ___, 2007
BLACKSANDS PETROLEUM, INC. | ACCESS ENERGY, INC. | ||||||
By: | By: | ||||||
Name: Xxxxxx X. Xxxxxxxxx |
Name:
Xxxx Xxxxxxxxx
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||||||
Title:
President
|
Title:
President
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||||||
By: | |||||||
Name:
Title:
Director
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