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Ex.10.L
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement"), dated as of November
29, 1996, is entered into by and between XXXXXXXX XX. 0 XXXXX XXXXXXX, a Georgia
joint venture, party of the first part, hereinafter referred to as "Seller", and
QUEEN SAND RESOURCES, INC., a Nevada corporation, party of the second part,
hereinafter referred to as "Buyer".
RECITALS:
A. Seller is the record owner of 100% working interest (and not less
than a 78% net revenue interest) in the oil, gas and mineral leases more
particularly described in Exhibit "A" hereto, together with identical interests
in and to all property and rights incident thereto or derived therefrom,
including, without limitation, all xxxxx, materials, equipment, personal
property and fixtures located thereon or used in connection therewith and all
agreements, operating agreements, unitization agreements, communitization
agreements, leases, permits, rights-of-way, easements, licenses, options, orders
and other agreements in any way relating thereto (collectively, the
"Properties").
B. For all periods of Seller's ownership of the Properties, Q.S.& S.
Exploration Co., Inc. ("QSS"), and Northland Operating Company ("Northland")
have operated the Properties pursuant to that Operating Agreement dated August
1, 1994, by and between QSS, as operator, and Seller, as non-operator (the
"Operating Agreement"), and the understandings effective February 1, 1996, by
and between Northland, as operator, and the Seller, as non-operator (the
"Northland Agreement"
C. The Operating Agreement and Northland Agreement shall,
contemporaneous with consummation of the transactions contemplated hereby, be
terminated by Seller and QSS and Seller and Northland, each pursuant to a
Termination Agreement in substantially the form attached hereto as Exhibit "B"
(the "Termination Agreement").
D. Buyer desires to purchase and Seller desires to sell the Properties,
upon and subject to the further terms and conditions and for the consideration
set forth herein.
NOW, THEREFORE, in consideration of the premises, the covenants set
forth herein and the benefits to be derived hereunder, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
1.01 The following terms shall have the following meanings:
"Affiliate" shall mean any entity, excluding Seller and Buyer, that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with either the Seller or Buyer, as
applicable.
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"Assignment" shall mean the assignment, conveyance and xxxx of sale
covering the Properties in the form attached hereto as Exhibit "C".
"Closing" shall mean the closing of the transactions contemplated
herein as provided in Article III hereof.
"Closing Date" shall mean the date on which Closing occurs as provided
in Section 3.01.
"Federal and State Leases" shall have the meaning ascribed to such term
in Section 6.05 hereof.
"Losses" shall mean, for purposes of Section 10.02 hereof, any and all
direct or indirect demands, claims, payments, obligations, actions or causes of
action, assessments, liabilities (including, without limitation, environmental
liabilities), costs and expenses paid or incurred or diminutions in value of any
kind or character (whether or not known or asserted prior to the date hereof,
fixed or unfixed, conditional or unconditional, xxxxxx or inchoate, liquidated
or unliquidated, secured or unsecured, accrued, absolute, contingent or
otherwise), including without limitation, penalties, interest on any amount
payable to a third party as a result of the foregoing and any legal or other
expenses reasonably incurred in connection with investigating or defending any
claims or actions, whether or not resulting in any liability, and all amounts
paid in settlement of claims or actions arising under Section 10.02 hereof.
"Permitted Encumbrances" shall mean any and all of the following liens,
charges, defects and encumbrances affecting the Properties:
(a) The terms, conditions, restrictions, exceptions,
reservations, limitations and other matters contained in the
agreements, instruments and other documents which create or reserve to
Seller its interest in any of the Properties, provided that the same do
not reduce the net revenue interest (or increase the working interest
without proportionately increasing the net revenue interest) of Seller
in the Property affected thereby below 78%.
(b) Royalties, overriding royalties, division orders,
reversionary interests, production payments, net profits interests and
similar burdens affecting any Property if the net cumulative effect of
such burdens does not operate to reduce the net revenue interest (or
increase the working interest without proportionately increasing the
net revenue interest) of Seller in the Property affected thereby to
less than 78%;
(c) Any obligations or duties affecting the Properties to any
municipality or public authority with respect to any franchise, grant,
license or permit and all applicable laws, rules and orders of any
governmental authority;
(d) All rights to consent by, required notices to, filings
with or other actions by governmental entities in connection with the
sale or conveyance to Buyer of the
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Properties, if the same are customarily obtained contemporaneously with
or subject to such sale or conveyance;
(e) Existing operating agreements, unit agreements, gas
purchase or sale contracts and any and all other agreements which are
customary in the oil and gas exploration, development, production or
extraction business or in the business of processing of gas and gas
condensate of production for the extraction of proper products
therefrom, which will not reduce the net revenue interest (or increase
the working interest without proportionately increasing the net revenue
interest) of Seller in the Property affected thereby below 78%;
(f) Any rights in the Properties existing in favor of third
parties, to the extent that the interests of such third parties,
whether presently or when transferred to such third parties in
accordance with the rights of such parties, will not reduce the net
revenue interest (or increase the working interest without
proportionately increasing the net revenue interest) of Seller in the
Property affected thereby below 78%;
(g) Any encumbrance, title defect or other matter (whether or
not constituting a Title Defect) waived or deemed waived by Buyer
pursuant to Article V hereof;
(h) Any lien, charge, defect and encumbrances specifically
enumerated in Exhibit "D".
"Properties" shall have the meaning ascribed to such term in Recital
No. 1 above.
"Purchase Price" shall mean the price set forth in Section 2.02.
"Closing Statement" shall have the meaning ascribed to such term in
Section 2.03.
"Records" shall mean and include all original, or photocopies of
original, agreements, documents, geological computer programs, logs, tapes,
maps, books, files and any other information in the possession of Seller
relating to the Properties.
"Title Defect" shall mean that Seller's title to a Property shall be
subject to one or more of the following conditions:
(a) Seller's title shall be subject to an outstanding
mortgage, deed of trust, pledge, enforceable lien or encumbrance (other
than a "Permitted Encumbrance") or other adverse claim, deficiency or
uncertainty which would cause Seller's title to be less than
"defensible"; that is, capable of being defended against any claims or
encumbrances;
(b) Seller shall, as of the Effective Date, own less than a
78% net revenue interest with respect to a Property;
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(c) Seller's rights and interests in a Property shall be
subject to being reduced by virtue of the exercise by a third party of
reversionary, back-in or similar rights not reflected in the
calculation of Seller's 78% net revenue interest; or
(d) Seller shall be in default (and such default shall be
continuing) under any provision of a lease, farmout agreement or other
agreement affecting a Property, which default adversely affects the
value of said Property.
"Title Review Period" shall have the meaning ascribed to such term in
Section 5.01(a) hereof.
ARTICLE II
PURCHASE AND SALE
2.01 Sale of Properties. Subject to and upon the terms and conditions
hereinafter set forth, Seller shall, effective as of January 1, 1996 at 7:00
A.M. in the locality where the Properties are situated (the "Effective Date"),
sell, transfer, assign and convey unto Buyer, and Buyer shall purchase and
acquire from Seller, all of Seller's right, title and interest in and to the
Properties pursuant to an assignment, conveyance and xxxx of sale in the form
attached hereto as Exhibit "C" (the "Assignment").
2.02 Purchase Price. The purchase price for the Properties shall be the
sum of the following (the "Purchase Price"):
(a) Cash at Closing. $100,000 payable at Closing by wire
transfer or certified funds, less such amounts due and payable to Buyer
pursuant to Section 2.03 of this Agreement; and
(b) Shares of Buyer. 92,000 shares of common stock in Buyer's
parent, QUEEN SAND RESOURCES, INC. (the "Issuer"), a Delaware
corporation (the "Shares").
(i) Shares Not Currently Registered; Limitations on
Transferability. The Seller acknowledges that the Shares it is
acquiring pursuant to this Agreement have not been, and except
as provided for in Section 2.02(b)(iv) herein, will not be,
registered under the Securities Act of 1933 as amended (the
"Securities Act") or qualified under applicable state
securities law and that the transferability thereof is
restricted by the registration provisions of the Securities
Act as well as such state laws. Based upon the representation
and agreements being made by it herein, the Shares will be
issued to and individual designated by the Seller pursuant to
an exemption from such registration provided by Section 4(2)
of the Securities Act and applicable states securities law
qualification exemptions.
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(ii) Acquisition for Investment Purposes. The Seller
represents that it is acquiring the Shares for its own
account, for investment purposes only, and not with a view to
resale or other distribution thereof, nor with the intention
of selling, transferring, or otherwise disposing of all or any
part of such securities for any particular event or
circumstance, except selling, transferring, or disposing of
them upon full compliance with all applicable provisions of
the Securities Act, the Securities and Exchange Act of 1934 as
amended, the Rules and Regulations promulgated by the United
States Securities and Exchange Commission thereunder, and any
applicable state securities laws. The Seller further
understands and agrees that (i) the securities may be sold
only if they are subsequently registered under the Securities
Act and qualified under any applicable state securities laws
or, in the opinion of counsel acceptable to Buyer, an
exemption from such registration and qualification is
available; (ii) except as otherwise provided for herein, the
Buyer will be under no obligation to register or qualify the
Shares or effect compliance with any exemption from such
registration or qualification; and (iii) any routine sales of
securities made in reliance upon Rule 144 promulgated by the
Commission can be made only in the amounts set forth in and
pursuant to the other terms and conditions of that Rule.
(iii) Share Legend. The Seller agrees that each
certificate representing the Shares will bear on its face a
legend in substantially the following form:
These securities have not been registered under the
Securities Act of 1933 or qualified under any state
securities laws. They may not be sold or transferred
in the absence of an effective registration statement
under that Act or qualification under applicable
state securities laws without an opinion of counsel
satisfactory to the Company that such registration
and qualification are not required.
(iv) Registration Rights. If Queen Sand Resources,
Inc., a Delaware corporation, shall at any time after Closing
determine in its discretion to proceed with the actual
preparation and filing of a registration statement under the
Securities and Exchange Act of 1933 as amended in connection
with the proposed offer and sale for cash of any of its
securities by it or any of its security holders (other than a
future Form S-8 or similar registration statement), the Buyer
will give written notice of its determination to Seller. Upon
the written request of the Seller given within thirty (30)
days after Seller's receipt of any such notice from the Buyer,
the Buyer will, except as herein provided, cause all of the
Shares issued to Seller (or Seller's assignee as herein
provided) pursuant hereto, or to the extent requested by
Seller, to be included in such registration statement, and to
be so registered, all to the extent requisite to permit the
sale or other disposition by Seller; provide, however, that
nothing herein shall prevent Buyer from, at any time, in its
discretion, abandoning or delaying any registration. If any
registration pursuant to this paragraph shall be underwritten
in whole or in part, the
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Buyer may require that the Shares requested for inclusion
pursuant to this paragraph be included in the underwriting on
the same terms and conditions as the securities otherwise
being sold through the underwriters. In the event that, in the
good faith judgment of the managing underwriter of such public
offering, the inclusion of all of the Shares originally
covered by a request for registration would materially
adversely interfere with the distribution of the shares of
stock offered by the Buyer, the number of shares issued
pursuant hereto and otherwise to be included in the
underwritten public offering may be reduced. In connection
with, and as a condition to, any such registration, Seller
shall enter into an indemnification agreement, in form and
substance satisfactory to the Buyer relating to such
registration. All federal and state registration fees and fees
of the National Association of Securities Dealers, Inc.,
relating to any such registration of such shares shall be
borne by the Seller. All other expenses relating to such
registration will be borne by the Buyer.
2.03 Closing Adjustments to Purchase Price. The cash portion of the
Purchase Price due at Closing shall be adjusted as follows:
(a) Downward Adjustments. The initial installment of the
Purchase Price shall be decreased by an amount equal to the sum of the
following:
(i) Accrued and unpaid operating expenses advanced by
Buyer to QSS for its operations of the Properties for periods
prior to the Effective Date, as substantiated through
outstanding invoices received by Seller from QSS for periods
prior to the Effective Date.
(ii) An amount equal to the sum of all royalties and
revenues received by the Seller for periods subsequent to the
Effective Date.
(iii) An amount equal to the sum of all adjustments
to the Purchase Price due to Title Defects asserted and agreed
to pursuant to Article V hereof.
(iv) An amount equal to the sum of all other expenses
pertaining to the operation and maintenance of the Properties
incurred on or before the Effective Date and remaining unpaid
at Closing.
(v) Any other amount proposed by Buyer which is
authorized by the terms of this Agreement.
(b) Upward Adjustments. The initial Purchase Price installment
due at Closing shall be increased by an amount equal to the sum of the
following:
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(i) An amount equal to all proceeds of production
from the Properties accrued with respect to periods of
production prior to the Effective Date but not yet received by
Seller as of Closing.
(ii) An amount equal to the sum of all expenses
pertaining to operation or maintenance of the Properties
incurred on or after the Effective Date, to the extent such
expenses have been paid by or on behalf of Seller on or before
Closing.
(iii) An amount equal to the value of all oil in
storage facilities on, or utilized in connection with, the
Properties, together with an amount equal to the value of gas
pipeline fill as of the Effective Date. The production in such
storage facilities or through such meters on the gas pipelines
as of the Effective Date shall be gauged, strapped or metered
by Seller as of the Effective Date and shall belong to Seller.
Production placed in such storage facilities after the
Effective Date and production upstream of any and all meters
on the pipeline shall belong to Buyer. For purposes of
determining value, oil in storage shall be deemed sold at the
last actual price received by Seller for oil produced from
each Property during the calendar month within which the
Effective Date occurred.
(iv) Any other amount proposed by Seller which is
authorized by the terms of this Agreement.
ARTICLE III
THE CLOSING
3.01 Time and Place of Closing. Closing shall occur at a place mutually
agreed to by the parties. The Closing will be held at 10:00 a.m., C.D.S.T., on a
date as soon as practicable, which date shall be not later than the 5th business
day after satisfaction or waiver of the conditions set forth in Sections 3.03
and 3.04, but in any case not later than December 16, 1996 (the "Closing Date").
3.02 Deliveries at Closing. At Closing, the following shall occur:
(a) Seller and Buyer shall execute, acknowledge and deliver
the (i) Assignment in the form of Exhibit "C" hereto.
(b) Seller shall deliver duly executed and acknowledged
releases of all liens and burdens on the Properties or on production
therefrom or attributable thereto, except the Permitted Encumbrances.
(c) Seller shall deliver executed transfer orders (or letters
in lieu thereof) addressed to all purchasers of production from the
Property.
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(d) Seller, Northland and QSS shall execute the Termination
Agreement contemplated in Recital C hereof.
(e) Xxxxxx Investors, L.L.C. ("Xxxxxx") and Omnicor Energy,
Inc. ("Omnicor"), co-venturers of Seller, shall execute a closing
acknowledgment in the form attached as Exhibit "E" hereto (the "Closing
Acknowledgment"), whereby such parties stipulate that the entirety of
the Purchase Price can be distributed by Seller to Xxxxxx pursuant to
that Joint Venture Agreement dated August 23, 1994, and effective
August 1, 1994, pursuant to which Seller was legally formed.
(f) Seller and Issuer shall deliver duly executed and
acknowledged counterpart copy of the Subscription Agreement covering
the Shares, along with the instruction letter to the transfer agent,
Continental Stock Transfer & Trust Co., authorizing and directing the
delivery of the Shares to Seller's designee.
(g) Buyer shall deliver to Seller the cash portion of the
Purchase Price, subject to any adjustments as provided herein, by wire
transfer or in immediately available funds.
(h) Seller and Buyer shall execute any and all forms required
by any governmental agency in connection with the transfer of ownership
of the Properties, which forms shall be prepared by Seller, and Seller
shall file the same promptly following Closing.
(i) Seller shall, subject to the terms of any applicable
agreements and to the other provisions hereof, deliver to Buyer
exclusive possession of the Properties, effective as of the Effective
Date.
(j) Seller's designee to receive the Shares (the "Designee")
shall have executed and delivered to the Issuer a Subscription
Agreement, Investor Questionnaire or other appropriate documents or
instrument, wherein he or she warrants and represents that he or she
is:
(i) A natural person whose individual net worth, or
joint net worth with his or her spouse, at the time of his
acquisition of such shares exceeds $1,000,000.00; or
(ii) A natural person who had an individual income in
excess of $200,000.00 in each of the two most recent years or
joint income with his or her spouse in excess of $300,000.00
in each of those years and has a reasonable expectation of
reaching the same income level in the current year; and,
(iii) That the Designee, himself or herself, or
through his or her advisers, is sophisticated and experienced
in financial business and investment
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matters, and as a result, the Designee is in a position to
evaluate the merits and risks of an investment in Queen Sand
Resources, Inc., a Delaware corporation;
(iv) That the acquisition of the Shares will not be
made with a view toward the "distribution" of such Shares, as
defined in the securities Act of 1933, as amended (the "1933
Act");
(v) That such Shares may not be transferred or
hypothecated unless, in the opinion of counsel to the Issuer,
such transfer or hypothecation would be in compliance with the
registration provisions of the 1933 Act or pursuant to an
exemption therefrom;
(vi) That the Designee agrees to sign an agreement to
such effect at the time of Closing and agrees that the
certificate for the Shares so acquirecd may be inscribed with
a legend to ensure compliance with the 1933 Act; and,
(vii) That the Designee understands that the Shares
will not, subject to the further provisions of Secton
2.02(b)(iv) supra, be registered under the 1933 Act, or under
the laws of any jurisdiction.
3.03 Conditions to the Obligations of Buyer to Close. The obligations
of Buyer to proceed with the Closing are subject to the fulfillment (or waiver
in writing by Buyer), at the time of Closing, of each of the following
conditions:
(a) Representations and Warranties True. The representations
and warranties of Seller contained in Article IV shall be true on and
as of the Closing Date.
(b) Compliance with Obligations and Covenants. Seller shall
have substantially performed, in all material respects, all of its
obligations under this Agreement and substantially complied with its
material covenants hereunder.
(c) Absence of Litigation. There shall be no action, suit or
governmental proceeding (excluding any such matter initiated by Buyer)
pending, or threatened in writing to be instituted, before any court or
governmental agency seeking to restrain, prohibit or obtain damages or
other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby.
(d) Closing Deliveries. All papers, documents, agreements and
other items required to be delivered at Closing pursuant to Section
3.02 shall have been delivered at the Closing.
(e) Title Defect Adjustments. The aggregate of all reductions
to the Purchase Price for Title Defects asserted by Buyer in good
faith, and agreed to by Seller, pursuant to Article V shall not exceed
ten percent (10%) of the Purchase Price.
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3.04 Conditions to the Obligation of Seller to Close. The obligations
of Seller to proceed with the Closing are subject to the fulfillment (or waiver
in writing by Seller), at the time of Closing, of each of the following
conditions:
(a) Representations and Warranties True. The representations
and warranties of Buyer contained in Article VI shall be true on and as
of the Closing Date.
(b) Compliance with Obligations and Covenants. Buyer shall
have substantially performed, in all materials respects, all of its
obligations under this Agreement and substantially complied with its
material covenants hereunder.
(c) Absence of Litigation. There shall be no suit, action or
other proceeding (excluding any such matter initiated by Seller)
pending, or threatened in writing to be instituted, before any court or
governmental agency seeking to restrain, prohibit or obtain damages or
other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby.
(d) Closing Deliveries. All papers, documents, agreements and
other items required to be delivered at Closing pursuant to Section
3.02 shall have been delivered at the Closing.
(e) Title Defect Adjustments. The aggregate of all reductions
to the Purchase Price for Title Defects asserted by Buyer in good
faith, and agreed to by Seller, pursuant to Article V shall not exceed
ten percent (10%) of the Purchase Price.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as set forth below.
4.01 Existence. Seller is, and until Closing shall continue to be, a
joint venture (a) duly organized, validly existing and in good standing under
the laws of the State of Georgia, (b) with full legal power and right to carry
on its business as such is now being conducted, and (c) duly qualified to do
business and in good standing in each jurisdiction in which the Properties are
located, to the extent qualification to do business is required for ownership of
the Properties.
4.02 Legal Power. Seller has the legal power and right to enter into
and perform this Agreement and the transactions contemplated herein. The
consummation of the transactions contemplated by this Agreement will not
violate, nor be in conflict with: (a) any provision of the joint venture
agreement of Seller; (b) any agreement or instrument to which Seller is a party
or by which Seller or any of the Properties is bound; or (c) any judgment,
order, ruling or decree applicable to Seller as a party in interest or any law,
rule or regulation applicable to Seller's ownership of the Properties.
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4.03 Execution. The execution, delivery and performance by Seller of
this Agreement and the transactions contemplated by this Agreement are within
the power and authority of Seller, have been duly and validly authorized by all
requisite action on the part of Seller and will not result in any breach of the
terms and conditions of, or constitute a default or require the further consent
of any person under, any provision of the joint venture agreement or
incorporation documents (as applicable and as amended) or under applicable law
or regulation. This Agreement has been (and all documents and instruments
required under this Agreement to be executed and delivered by Seller at Closing
shall have been) duly executed and delivered on behalf of Seller. This Agreement
does, and such documents and instruments shall, constitute legal, valid and
binding obligations of Seller generally enforceable in accordance with their
terms; subject, however, to the effects of bankruptcy, insolvency and similar
laws from time to time in effect relating to the rights and remedies of
creditors generally, and by equitable principles which may limit the
availability of certain remedies under certain circumstances.
4.04 Bankruptcy or Insolvency Actions. There are no bankruptcy,
reorganization or similar proceedings pending, being contemplated by, or to the
best knowledge of Seller without investigation, threatened against Seller.
4.05 Conveyance of Properties. The Properties are free and clear of all
liens, charges, defects and encumbrances, by, through and under Seller, but not
otherwise.
4.06 Litigation. To the best of Seller's knowledge without
investigation, there are no actions, suits or governmental proceedings pending
against Seller, or against any portion of the Properties (a) seeking to prevent
the consummation of the transactions contemplated hereby, (b) which would,
singly or in the aggregate, if decided adversely to Seller, result in an
impairment or loss of Seller's title to any part of the Properties or the value
thereof, or (c) which might, if decided adversely to Seller, hinder or impede
the development or operation of the Properties.
4.07 No Survival. Except as may be separately set forth in the
Assignment, Buyer acknowledges that Seller's representations and warranties
under this Article IV shall not survive Closing. Buyer's sole remedies for
Seller's breach of Article IV representations and warranties shall be to xxx for
specific performance or to terminate this Agreement pursuant to Sections
3.03(a), 12.01(d) and 12.02 hereof.
4.08 Governmental and Third-Party Approvals. All government and third
party approvals and consents necessary to Seller's performance of its
obligations hereunder will have been obtained on or before Closing.
4.09 Compliance. Seller has operated the Properties in accordance with
all applicable rules and regulations and the leases, assignments or contracts
under which Seller acquired their interests.
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4.10 Leases, Assignments and Contracts. All leases, assignments or
contracts with respect to any of the Properties to which Seller is a party and
are necessary to the acquisition of Seller's interest in the Properties by Buyer
remain in full force and effect.
4.11 No Undisclosed Interests. Seller is aware of no royalties,
overriding royalties, working interests, liens, reversionary interests,
production contracts, assignments or other burdens on or pertaining to the
Properties except as listed in Exhibit "A".
4.12 Seller's Receipt of Revenues. Seller is receiving the Working
Interests and Net Revenue Interests set out in Exhibit "A" in respect of all
oil, gas and associated hydrocarbons produced, saved or marketed from the
Properties.
4.13 Seller Payments. All rentals, royalties, overriding royalties, ad
valorem or other taxes and assessments or other payments due by Seller with
respect to the Properties have been paid, subject to the adjustments to the
Purchase Price provided for in Section 2.03 hereof and through to the Effective
Date.
4.14 Expenses Prior to Effective Date. Seller will pay or cause to be
paid all costs and expenses incurred in connection with the Properties, subject
to the adjustments to the Purchase Price provided for in Section 2.03 hereof
through to the Effective Date, and will comply with all contracts or other
agreements relating to the Properties incurred while owned by Seller.
4.15 No Options, etc. There are no first rights or refusal, consents,
authorizations, preferential rights, options or claims of a similar nature
affecting the Properties, except any rights of QS&S Explorations and Omnicor
Energy, Inc.
4.16 "NORM". To the best of Seller's knowledge, Seller is not aware of
the presence of any Naturally Occurring Radioactive Materials ("NORM") or other
environmental condition on the Properties which may materially affect or
interfere with the operation, use, ownership or value of such Properties.
ARTICLE V
TITLE REVIEW; ADJUSTMENTS FOR TITLE DEFECTS
5.01 Title Review.
(a) Review Period. Immediately upon execution by the parties
hereto of this Agreement, Buyer shall, at Buyer's sole cost and
expense, commence and pursue such examination of title to the
Properties as it deems necessary or proper. Buyer shall conduct such
review during Seller's normal business hours, employing such persons or
entities as it may choose. Subject to the other provisions of this
Agreement, including, without limitation, Section 7.05 hereof, Buyer
shall have access to or copies of all documents and materials in
Seller's possession in order to assist Buyer in determining
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the validity of Seller's title in and to the Properties. Buyer will
conclude its title review and give written notice to Seller of any
asserted Title Defects not later than 7 business days prior to Closing
(the period from the date hereof until 7 business days prior to Closing
being herein called the "Title Review Period"). Without in any manner
affecting or diminishing Seller's special warranty of title granted in
the Assignment, all Title Defects with respect to which notice to
Seller has not been given on or before the expiration of the Title
Review Period shall be deemed conclusively waived by Buyer. All notices
of Title Defects given by Buyer to Seller on or before the expiration
of the Title Review Period shall be governed by Section 5.02 below.
(b) Notices. To be effective, Buyer's written notice of a
Title Defect must include (i) a brief description of the matter
constituting the asserted Title Defect, including Buyer's proposed
adjustment to the Purchase Price, and (ii) supporting documents
reasonably necessary for Seller (or a title attorney or examiner
retained by Seller) to verify the existence of such asserted Title
Defect. Should the title opinions or other information obtained by
Buyer indicate that a Seller has a higher net revenue interest with
respect to a Property than 90%, Buyer shall inform Seller of the same
as promptly as possible, and in any event prior to the expiration of
the Title Review Period.
5.02 Closing Title Adjustment Provisions. Upon receipt of a notice set
forth in Section 5.01 above on or before the expiration date of the Title Review
Period, Seller shall have the right, prior to Closing, to cure all or any
portion of the undisputed asserted Title Defects at its cost and expense. In the
event Seller is unable or unwilling to cure any undisputed Title Defect prior to
Closing, the following remedies shall be available to Buyer:
(a) If a Title Defect is based upon a determination that
Seller's net revenue interest in the Properties is more than 90% or
less than 78%, the Purchase Price shall be adjusted (upward or
downward) in the same proportion that the actual net revenue interest
bears to Seller's represented minimum net revenue interest of 78% and
maximum net revenue interest of 90%.
(b) If a Title Defect involves a claim or question as to
Seller's title to the Properties, or involves a lien, encumbrance or
other charge upon the Properties, which cannot be cured or released
prior to Closing, the parties shall endeavor to negotiate a mutually
acceptable reduction in the Purchase Price for such defect(s), and in
the event of such an agreed reduction in the Purchase Price, the
Properties shall be conveyed to Buyer subject to such defect(s). If the
parties are unable to agree upon an adjustment and Buyer elects not to
waive the Title Defect, either party may terminate this Agreement and
neither party shall thereafter have any remedies or claims with respect
to the other.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as set forth below:
6.01 Existence. Buyer is, and until Closing shall continue to be, a
corporation (a) duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (b) with full legal power and
right to carry on its business as such is now being conducted, and (c) duly
qualified to do business and in good standing in each jurisdiction in which the
Properties are located, to the extent qualification to do business is required
for ownership of the Properties.
6.02 Legal Power. Buyer has the legal power and right to enter into and
perform this Agreement and the transactions contemplated by this Agreement. The
consummation of the transactions contemplated by this Agreement will not
violate, nor be in conflict with (a) any provision of the certificate of
incorporation or bylaws of Buyer, or (b) any judgment, order, rule and/or decree
applicable to Buyer as a party in interest or any law, rule or regulation which
would have an adverse effect on Buyer's ability to own or operate the Properties
after Closing.
6.03 Execution. The execution, delivery and performance by Buyer of
this Agreement and the transactions contemplated herein are within the corporate
power and authority of Buyer, have been duly and validly authorized by all
requisite corporate action on the part of Buyer (including, without limitation,
all requisite actions of the shareholders and directors of Buyer), and will not
result in any breach of the terms and conditions of, or constitute a default or
require the further consent of any person under, any provision of applicable law
or regulation. This Agreement has been (and all documents and instruments
required under this Agreement to be executed and delivered by Buyer at Closing
shall have been) duly executed and delivered on behalf of Buyer. This Agreement
does, and such documents and instruments shall, constitute legal, valid and
binding obligations of Buyer generally enforceable in accordance with their
terms; subject, however, to the effects of bankruptcy, insolvency and similar
laws from time to time in effect relating to the rights and remedies of
creditors generally, and by equitable principles which may limit the
availability of certain equitable remedies under certain circumstances.
6.04 Bankruptcy or Insolvency Actions. There are no bankruptcy,
reorganization or similar proceedings pending, being contemplated by, or to the
best knowledge of Buyer without investigation, threatened against Buyer.
6.05 Qualification to Hold Leases on Public Lands. Buyer is now, or
prior to Closing will be, qualified to own all Federal and State Leases
constituting a portion of the Properties, and the consummation of the
transactions contemplated hereby will not cause Buyer to be disqualified to own
Federal or State Leases in the jurisdiction in which any portion of the
Properties is located or to exceed any acreage limitation imposed by any law,
statute, rule or
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regulation. As used herein, the term "Federal and State Leases" shall refer to
all oil and gas leases secured (a) from the United States government or agencies
thereof, (b) from or on behalf of any Indian tribes, and (c) from any state
governmental authority or agency or any county, municipal or local governmental
authority.
6.06 Litigation. To the best of Buyer's knowledge without
investigation, there are no actions, suits or governmental proceedings pending
or threatened against Buyer or any of its Affiliates or their respective
properties, assets, operations or businesses seeking to prevent the consummation
of the transactions contemplated hereby.
6.07 Independent Investigation. Buyer is an experienced and
knowledgeable investor in the oil and gas business. Prior to entering into this
Agreement, Buyer was advised by and has relied solely on its own legal, tax and
other professional counsel concerning this Agreement, the Properties and the
value thereof.
6.08 No Survival. Seller acknowledges that Buyer's representations and
warranties under this Article VI shall not survive Closing. Seller's sole
remedies for Buyer's breach of Article VI representations and warranties shall
be to xxx for specific performance or to terminate this Agreement pursuant to
Sections 3.04(a), 12.01(d) and 12.02 hereof.
ARTICLE VII
ADDITIONAL AGREEMENTS AND COVENANTS OF SELLER
From and after the date of execution of this Agreement and until
Closing, except as otherwise consented to by Buyer, and subject further to the
constraints of any applicable operating or other agreements, Seller covenants
and agrees that:
7.01 Insurance Coverage. Seller will maintain in full force and effect
all policies of insurance covering the Properties now maintained by Seller (or
policies with substantially similar coverage), but shall not be obligated to
secure any additional insurance, regardless of the extent or nature of insurance
now maintained by Seller.
7.02 Other Filings and Authorizations. Seller, as promptly as
practicable, shall make all such filings and submissions under such laws, rules
and regulations applicable to Seller as may be required for the consummation of
the transactions contemplated hereby.
7.03 Sale or Encumbrance of Properties. Seller will not surrender,
abandon, release, mortgage, encumber, sell, transfer, assign or otherwise
dispose of or place (or permit to be placed) any security interest, mortgage,
lien or other encumbrance upon the Properties, or any tangible or intangible
assets which constitute oil and gas assets.
7.04 Limitations on Covenants of Seller. Notwithstanding any other
provisions of this Article VII, (a) Seller may take any of the foregoing actions
otherwise prohibited by the
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provisions of any relevant section if reasonably necessary under emergency
circumstances, provided Buyer is notified as soon as practicable thereafter; (b)
except to the extent provided in Article V relating to any Title Defect
resulting therefrom, Seller shall have no liability to Buyer (but shall remain
liable to the obligee) for any incorrect payment of delay rentals, royalties,
shut- in royalties or similar payments or for any failure to make any such
payments through mistake or oversight including, without limitation, Seller's
negligence; and (c) Buyer's sole remedy for Seller's breach or failure to comply
with the requirements of this Article 7 shall be terminate this Agreement and
such remedy shall be available to Buyer only if Seller's breaches or instances
of noncompliance are, in the aggregate, material.
7.05 Information and Access.
(a) Immediately upon execution by the parties to this
Agreement, Seller shall make a good faith effort to give Buyer and
Buyer's authorized representatives, upon reasonable notice and at any
reasonable time before Closing, access to (i) the Properties, at
Buyer's sole risk, cost and expense, for the purpose of inspecting the
same, and (ii) all production, engineering and other technical data and
records, and to all contract, land and lease records in Seller's
possession which relate to the Properties; provided, however, that
Seller shall have no obligation to provide Buyer such access to any
data or information to which access cannot be legally provided to Buyer
because of third party restrictions on Seller. Buyer assumes all risk
of any change in the condition of the Properties from and after the
Effective Date until Closing, except to the extent such change may be
attributed, in whole or in part, to the gross negligence (but not
ordinary negligence) or willful misconduct of Seller. Buyer shall
repair any damage to the Properties resulting from any inspection by
Buyer thereof and Buyer does hereby agree to defend, indemnify and hold
Seller harmless from and against any and all losses, costs, damages,
obligations, claims, liabilities, expenses or causes of action arising
from Buyer's inspection of the Properties; including, without
limitation, claims for personal injuries, property damage and
attorneys' fees relating thereto, regardless of whether the same may
result from the negligence of Seller, unless the same is the direct
result of Seller's gross negligence or willful misconduct.
(b) Seller will exercise reasonable diligence in safeguarding
all engineering, geological and geophysical data, reports and maps and
all other confidential data in its possession relating to the
Properties.
(c) Except as otherwise provided in Section 4.04 hereof,
Seller makes no representation or warranty, express or implied, with
respect to the accuracy or completeness of (i) any information
furnished or otherwise made available to Buyer, whether oral or
written, (ii) any records or data, whether oral or written, now,
heretofore or hereafter furnished or otherwise made available to Buyer,
or (iii) any other material furnished (or otherwise made available) to
Buyer by Seller or by Seller's agents or representatives in connection
with the transactions contemplated hereby, including, without
limitation, any description of the Properties, any title opinions, data
or information pertaining thereto,
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or any pricing assumptions or potential for production of hydrocarbons
from the Properties.
7.06 Reasonable Efforts. Seller will use all reasonable efforts to
obtain the satisfaction of the conditions to Closing set forth in Section 3.03
hereof.
ARTICLE VIII
ADDITIONAL AGREEMENTS AND COVENANTS OF BUYER
8.01 Other Filings and Authorizations. Buyer, as promptly as
practicable, shall make or cause to be made, all such filings and submissions
under such laws, rules and regulations applicable to it as may be required for
the consummation of the transactions contemplated hereby.
8.02 Reasonable Efforts. Buyer will use all reasonable efforts to
obtain the satisfaction of the conditions to Closing set forth in Section 3.04.
ARTICLE IX
ADDITIONAL COVENANTS OF THE PARTIES
9.01 Further Assurances. Seller and Buyer will use all reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable to carry out their respective
obligations under this Agreement and to consummate and make effective the
purchase and sale of the Properties pursuant hereto. The parties agree that
should the Assignments delivered at Closing fail to transfer and convey to Buyer
the entirety of the Properties, the parties will, as promptly as practicable on
learning of the existence of portions of the Properties not conveyed to Buyer,
execute such additional Assignments as may be necessary to accomplish the
transfer of the Properties as contemplated herein. At Closing and thereafter,
Seller shall execute and deliver to Buyer all documents necessary or appropriate
to effect a change in ownership, such as letters in lieu of division orders,
transfer orders or the like, or cause the same to be delivered to each purchaser
of production from the Properties, instructing the purchaser to make all future
payments directly to Buyer from and after the Effective Date.
9.02 Post-Closing Matters. The provisions of this Section 9.03 shall
apply after Closing:
(a) Seller's responsibility for conducting the accounting for
the Properties shall cease with production attributable to the calendar
month during which Closing occurs, and Buyer shall thereafter be
responsible for conducting such accounting; provided, however, that if
Closing occurs on the first day of a month, it shall be deemed, for
purposes of this subparagraph, that Closing occurred on the last day of
the preceding
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month. Seller shall provide Buyer with a statement of accounting
covering the period from the Closing Date through the end of the
calendar month in which Closing occurs.
(b) Should Buyer receive any proceeds of production or any
invoices for any expenses attributable to production from the
Properties prior to the Effective Date, Buyer shall promptly remit the
same to Seller.
(c) Should Seller receive any proceeds of production or any
invoices for any expenses attributable to production from the
Properties after the Effective Date, Seller shall promptly forward the
same to Buyer.
9.03 Seller's Right to Records. Seller shall be entitled to retain the
following Records respecting the Properties and shall be permitted access, as
hereinbelow set forth, to the Records delivered by Seller hereunder with respect
to the Properties:
(a) Buyer recognizes that certain Records of Seller may
contain only incidental information relating to the Properties and that
Seller may, after review by Buyer, retain such Records;
(b) Seller may retain (i) one copy of all Records, and (ii)
all originals and copies of all documents prepared or received by
Seller in connection with the transaction and sale of the Properties
contemplated herein;
(c) Seller may retain all financial information, tax records
and all other accounting data prepared or used in connection with the
financial statements prepared by Seller and made available to Buyer
hereunder;
(d) Seller shall be permitted reasonable access, for a period
of 5 years after Closing, to Records relating to the Properties for tax
and financial accounting purposes. For this purpose, Buyer agrees to
retain and preserve the Records for such 5-year period following
Closing.
ARTICLE X
ASSUMPTION BY BUYER
Buyer shall, from and after the Closing Date, accept and assume the
Properties "AS IS, WHERE IS and with all faults." In this regard, Buyer
expressly acknowledges and agrees that Seller's representations under Article IV
and Seller's covenants under Article VII will expire at Closing; and, that
Seller's representations and covenants under Articles IV and VII, respectively,
entitle Buyer only to xxx for specific performance or terminate this Agreement
under Sections 3.03(a) and (b), 12.01(d) and 12.02 in the event of Seller's
material breach of one or more of such representations and/or covenants.
Similarly, Seller acknowledges and agrees that Buyer's representations under
Article VI above shall expire at Closing and that Seller's sole remedies
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in the event of Buyer's material breach of any such Article VI representation(s)
are to xxx for specific performance or to terminate this Agreement pursuant to
Sections 3.04(a), 12.01(d) and 12.02 hereof.
ARTICLE XI
TAX MATTERS
11.01 Allocation of Tax Liability. The obligations of the parties with
respect to ad valorem and property taxes relating to the Properties shall be
allocated based upon the Effective Date. Seller is responsible for payment of
all ad valorem and property taxes allocable to periods prior to the Effective
Date. Buyer is responsible for payment of all ad valorem and property taxes
allocable to the Properties for periods from and after the Effective Date.
11.02 Sales and Transfer Tax Liability. The Purchase Price provided for
hereunder excludes any sales taxes or other taxes in connection with the sale of
the Properties pursuant to the Agreement. If a determination is ever made that a
sales tax or other transfer tax applies, Buyer shall be solely liable for all of
such taxes, as well as for any applicable conveyance, transfer and recording
fees, real estate transfer stamps or taxes imposed on the transfer of property
to Buyer pursuant to this Agreement. Buyer shall defend, indemnify and hold
Seller harmless with respect to payment of all such taxes, if any, including any
interest or penalties assessed thereon.
ARTICLE XII
TERMINATION
12.01 Grounds for Termination. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by the mutual written agreement of Seller and Buyer;
(b) by Seller or by Buyer if the Closing shall not have occurred
by December 16, 1996 (or such other date, if any, as Seller and Buyer
shall have agreed in writing) provided the failure to close on or
before such date is not caused by any breach of this Agreement by the
party electing to terminate pursuant to this Section 12.01(b);
(c) by Seller or by Buyer if the purchase and sale of the
Properties would violate any nonappealable final order, decree or
judgment of any court or governmental body having competent
jurisdiction; or
(d) by Seller or Buyer in the event of a material breach hereunder
(as contemplated in Sections 3.03(a) and (b) and 13.04(a) and (b))
which remains uncured after 20 days written notice from the
non-breaching party.
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12.02 Effect of Termination. If this Agreement is terminated by Seller
and Buyer, or by either of them, as permitted under Section 12.01(a)-(c) hereof,
such termination shall be without liability of either party to the other party,
or to any of their respective partners, shareholders, directors, officers,
employees, agents, consultants, beneficiaries or representatives. If such
termination shall result from the willful failure of a party to fulfill a
condition to the performance of the other party or from a willful breach by a
party pursuant to Section 12.01(d) hereof (a "default"), the non-breaching party
shall make written demand upon the breaching party pursuant to Section 12.01(d)
above and, if such default remains uncured 20 days thereafter, the non-
breaching party's sole remedies shall be either to (i) initiate legal
proceedings to specifically enforce the provisions of this Agreement, or (ii)
terminate this Agreement.
12.03 Cooperation by Parties on Termination of Agreement. In the event
of a termination of this Agreement (other than as a result of Seller's failure
or refusal to close the transactions contemplated hereby under circumstances in
which all conditions precedent to Seller's obligation as set forth in Section
3.04 have been performed or satisfied, or as a result of Buyer's failure or
refusal to close the transactions contemplated hereby under circumstances in
which all conditions precedent to Buyer's obligation as set forth in Section
3.03 have been performed or satisfied), Seller shall be free to sell the
Properties to any third party without any limitation under or by reason of this
Agreement. Buyer shall cooperate with Seller in effectuating any such sale and
shall promptly execute any instrument evidencing the termination of Buyer's
right to acquire the Properties as may be reasonably requested by Seller. And,
in such instance, Seller shall cooperate with Northland in facilitating
Northland's resignation as operator with the Seller, or Seller's designated
operator, assuming the operator's liabilities with respect to the Properties.
ARTICLE XIII
EXTENT OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS
13.01 Scope of Representations of Seller. Except as and to the extent
set forth in Articles IV, VII and IX hereof, Seller makes no representations or
warranties whatsoever and disclaims all liability and responsibility for any
other representation, warranty, statement or information made or communicated
(orally or in writing) to Buyer including, but not limited to, any information
or advice which may have been provided to Buyer by any employee, agent,
consultant or representative of Seller, their corporate parent, or any of their
Affiliates, or by any engineer or engineering firm, or any other agent,
consultant or representative. Without limiting the generality of the foregoing,
Seller makes no representation or warranty as to (i) title to the Properties, or
any part thereof, except as provided in Section 4.04 or in the Assignment, (ii)
the validity of any concessions, licenses, production sharing contracts, leases
or other similar interests of Seller relative to the Properties, (iii) the
amounts, quality or deliverability of petroleum, natural gas or other reserves
attributable to the Properties, or (iv) any geological or other interpretations
or economic evaluations.
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13.02 Scope of Representations of Buyer. Except as and to the extent
set forth in Articles VI and VIII hereof, Buyer makes no representations or
warranties whatsoever and disclaims all liability and responsibility for any
other representation, warranty, statement or information made or communicated
(orally or in writing) to Seller including, but not limited to, any information
or advice which may have been provided to Seller by any employee, agent,
consultant or representative of Buyer or any of their Affiliates, or by any
engineer or engineering firm, or any other agent, consultant or representative.
13.03 Buyer's Acknowledgment of Access. Buyer acknowledges and affirms
that, by Closing the transactions contemplated hereunder, it has had, or shall
have had, full access to Seller's files, records and other data as provided in
Section 7.05 above. Buyer further acknowledges that its exercise of its access
rights included all reasonable opportunity to inspect, and to call for further
information, to make on site field inspections, if requested, and to question
appropriate personnel of Seller where it felt such information and inquiries to
be necessary or appropriate to its evaluation of the Properties. In this regard,
Buyer represents that it has received all additional information so requested.
Notwithstanding Buyer's access to and use of information obtained from Seller
(or information otherwise communicated by Seller's personnel to Buyer), Buyer
represents that it has made its own independent investigation, analysis,
evaluation and verification of the Properties (including Buyer's own estimate
and appraisal of the extent and value of the petroleum, natural gas and other
reserves allocable to the Seller's interest in the Properties) and that, by
Closing the transactions contemplated hereunder, Buyer shall have accepted and
assumed the Properties "AS IS, WHERE IS and with all faults."
ARTICLE XIV
BROKERS AND EXPENSES
All fees or commissions arising in favor of third parties in connection
with the transactions contemplated by this Agreement (including, without
limitation, broker's or attorney's fees) shall be borne solely by the party
hereunder who engages the services of such third parties.
ARTICLE XV
NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed given (i) when received if delivered personally, (ii) when sent
if by facsimile transmission and a confirmation is received, (iii) when sent if
by telex and an answer back is received, (iv) two business days after deposit
with an express courier if carried on an internationally recognized express
courier, or (v) three business days after deposit with the United States mail
service if mailed by registered or certified mail (return receipt requested),
postage prepaid. All notices to the parties shall be at the following addresses
(or at such other address for a party as shall
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be specified by like notice, provided that notices of a change of address shall
be effective only upon receipt thereof):
(i) To Seller as follows:
Xxxxxxxx Xx. 0 Xxxxx Xxxxxxx
Xxxx Xxxxxx Xxx 0000
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, Xxxxxxx 00000-0000
Attn: Mr. R. Xxxxx Xxxx
Fax: (000) 000-0000
With Copy to:
H. Xxxxx Xxxxx, Esq.
Post Office Drawer 8269
000 Xxxxxxx Xxxxx - Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxx 00000-0000
Fax: (000) 000-0000
(ii) To Buyer as follows:
Queen Sand Resources, Inc.
0000 Xxx Xxxx
Xxxxx 000 X.X. #00
Xxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
ARTICLE XVI
MISCELLANEOUS
16.01 Casualty Loss and Condemnation. If, after the Effective Date and
prior to Closing, any part of the Properties shall be destroyed by fire or other
casualty or if any part of the Properties shall be taken in condemnation or
under the right of eminent domain or if proceedings for such purposes shall be
pending or threatened, this Agreement shall remain in full force and effect
notwithstanding any such destruction, taking or proceeding or the threat
thereof. To the extent the insurance proceeds, condemnation awards or other
payments are not committed, used or applied by Seller prior to the Closing Date
to repair, restore or replace such damaged or taken Properties, Seller shall pay
to Buyer at Closing all sums paid to Seller (if any) by reason of such
destruction or taking, less any costs and expenses incurred by Seller in
collecting same. In addition and to the extent such proceeds, awards or payments
have not been committed, used or applied by Seller in repair, restoration or
replacement as aforesaid, Seller
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shall assign, transfer and set over unto Buyer, without recourse against Seller,
all of the right, title and interest of Seller in and to any claims against
third parties with respect to (a) the event or circumstance causing such loss,
and (b) any unpaid insurance proceeds, condemnation awards or other payments
arising out of such destruction or taking, less any costs and expenses incurred
by Seller in collecting same. Any such funds which have been committed by Seller
for repair, restoration or replacement as aforesaid shall be paid by Seller for
such purposes or, at Seller's option, delivered to Buyer upon Seller's receipt
from Buyer of adequate assurance and indemnity from Buyer that Seller shall
incur no liability or expense as a result of such commitment.
16.02 Reservations and Exceptions. The sale and purchase of the
Properties is made subject to all reservations, exceptions, limitations,
contracts and other burdens or instruments which are of record or of which Buyer
has actual or constructive notice, including any matter included or referenced
in the materials made available by Seller to Buyer.
16.03 Disclaimer of Warranties.
(a) By Seller. Except as provided in the Assignment, the
express representations of Seller contained in Article IV of this
Agreement are exclusive and are in lieu of all of the representations
and warranties, express, implied or statutory. Without limitation of
the foregoing, FROM AND AFTER CLOSING, THIS AGREEMENT OR ANY OTHER
INSTRUMENT EXECUTED BY SELLER IN CONNECTION HEREWITH ARE (AND SHALL BE)
EXECUTED WITHOUT ANY EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION AS
TO THE MERCHANTABILITY OF ANY OF THE EQUIPMENT OR ITS FITNESS FOR ANY
PURPOSE, AND WITHOUT ANY OTHER EXPRESS OR IMPLIED WARRANTY OR
REPRESENTATION WHATSOEVER.
(b) By Buyer. Except as provided in the Assignment, the
express representations of Seller contained in Article VI of this
Agreement are exclusive and are in lieu of all of the representations
and warranties, express, implied or statutory.
16.04 Entire Agreement. This Agreement, together with its exhibits,
supersedes all prior agreements between the parties (written or oral), and is
intended as a complete and exclusive statement of the terms of the agreement
between the parties. This Agreement may be amended only by a written instrument
duly executed by the parties.
16.05 Governing Law. This Agreement shall be governed by and construed
in accordance with laws of the State of New Mexico.
16.06 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16.07 Assignability. No party hereto shall assign this Agreement or any
part hereof without the prior written consent of the other party; provided,
however, that Buyer agrees that
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Seller may assign its rights hereunder to Xxxxxx contemporaneous with Closing.
Except as otherwise provided herein, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
16.08 No Third Party Beneficiaries. Except as expressly provided
herein, nothing in this Agreement shall entitle any person other than Seller or
Buyer or their respective successors and permitted assigns, to any claim, cause
of action, remedy or right of any kind.
16.09 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable in such jurisdiction the remaining terms and
provisions of this Agreement and without rendering invalid or unenforceable any
terms and provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, such provision
shall be interpreted to be only so broad as is enforceable.
16.10 Counterparts. This Agreement may be executed in any number of
counterparts, no one of which needs to be executed by both parties, and, when so
executed, this Agreement shall be binding upon both parties with the same force
and effect as if both parties had signed the same document, and each such signed
counterpart shall constitute an original of this Agreement.
16.11 Attorney Fees. In any litigation arising under or resulting from
this Agreement, the prevailing party shall be entitled to receive reasonable
attorney's fees and costs.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
"SELLER"
XXXXXXXX XX. 0 XXXXX XXXXXXX
By: XXXXXX INVESTORS, LLC, a Georgia
limited liability company, as its
Managing Venturer
By: /s/ R. XXXXX XXXX
-----------------------------------
R. XXXXX XXXX, Manager
[BUYER'S SIGNATURES CONTINUED TO NEXT PAGE]
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"BUYER"
QUEEN SAND RESOURCES, INC.,
a Nevada corporation
By: /s/ XXXXXX X. XXXXXX
-------------------------------------
XXXXXX X. XXXXXX
President & Chief Executive Officer
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