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EXHIBIT 4.39
CONSULTING AGREEMENT
This Agreement is made as of April 9, 1999, by and between Queen Sand Resources,
Inc. (the "Company"), a Delaware corporation with its principal offices at 00000
Xxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000-0000, and Northern Tier Asset
Management, Inc. ("NTA"), a Nevada Corporation, with its principal offices at
0000 - 0xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, X.X. 00000.
WITNESSETH
WHEREAS, the Company requires expertise in the area of investment banking to
support its business and growth; and
WHEREAS, NTA has substantial contacts among the members of the investment
community, investment banking expertise, and desires to act as a consultant to
provide investment banking and advisory services;
NOW, THEREFORE, in consideration of the premises and the mutual promises and
covenants contained herein and subject specifically to the conditions hereof,
and intending to be legally bound thereby, the parties agree as follows:
1. CERTAIN DEFINITIONS. When used in this Agreement, the following terms
shall have the meanings set forth below:
1.1. "Affiliate" - means any persons or entities controlled by a
party.
1.2. "Business Day" -means any day except Saturday, Sunday and day
which is designated in the State of New York as a legal
holiday or a day on which banking institutions are legally
required or authorized to close.
1.3. "Contact Person" - The person who shall be primarily
responsible for carrying out the duties of the parties
hereunder. The Company and NTA shall each appoint a Contact
Person to be responsible for their respective duties. In the
event that one party gives notice to the other party in
writing that, in their reasonable opinion, the other party's
Contact Person is not able to fulfill their duties and
responsibilities hereunder, both parties shall mutually agree
upon a replacement Contact Person within 10 days of the said
notice.
1.4. "Expiration Date" - means the Expiration Date as defined in
the Warrants.
1.5. "Exercise Price"- means the Exercise Price as defined in the
Warrants.
1.6. "Deemed Maximum Market Price" - means the Maximum Deemed
Market Price as defined in the Warrants.
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1.7. "Securities" - means the Warrants and the Warrant Shares as
defined herein.
1.8. "Warrants" - means the common share purchase warrants referred
to in paragraph 4.1.
1.9. "Warrant Shares" - means the shares of Common Stock issuable
upon the exercise of the Warrants.
2. SERVICES TO BE RENDERED BY NTA. NTA shall render the following services:
2.1. Advice and Counsel - NTA will provide advice and counsel
regarding the Company's strategic business and financial
plans, strategy and negotiations with potential
lenders/investors, merger/acquisition candidates, joint
ventures, corporate partners and others involving financial
and financially related transactions.
2.2. Introductions to the Securities Brokerage Community -NTA shall
use its contacts in the brokerage community to assist the
Company in establishing relationships with securities dealers
in North America and Europe and to provide the most recent
corporate information to interested securities dealers on a
regular and continuous basis. NTA understands that this is in
keeping with the Company's business objective to establish an
international network of securities dealers who have an
interest in the Company's securities.
2.3. Market Intelligence - NTA will monitor and react to sensitive
market information on a timely basis and provide advice, and
counsel and proprietary intelligence (including but not
limited to information on price, volume and the identification
of market-makers, buyers and sellers) to the Company in a
timely fashion with respect to securities in which the Company
has an interest. The Company understands that this information
is available from other sources but acknowledges that NTA can
provide it in a more timely fashion and with substantial
value-added interpretation of such information. The foregoing
notwithstanding, no information will be provided to the
Company with respect to the activities of any other NTA
customers or customer accounts without such customer's prior
consent.
2.4. Company and/or Company Client Transaction Due Diligence - NTA
will undertake due diligence on all proposed financial
transactions affecting the Company, of which NTA is notified
in writing in advance, including investigation and advice on
the financial, valuation and stock price implications thereof.
2.5. Additional Duties - the Company and NTA shall mutually agree
upon any additional duties which NTA may provide.
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2.6. Best Efforts - All services to be provided by NTA shall be
provided on a best efforts basis. NTA shall devote such time
and effort to the affairs of the Company as is reasonable and
adequate to render the consulting services contemplated by
this agreement. NTA cannot guarantee results on behalf of the
Company, but shall pursue all reasonable avenues available
through its network of financial contacts. At such time as an
interest is expressed by a third party in the Company's needs,
NTA shall notify the Company and advise it as to the source of
such interest and any terms and conditions of such interest.
The acceptance and consummation of any transaction is subject
to acceptance of the terms and conditions by the Company. It
is understood that a portion of the compensation to be paid
hereunder is being paid hereunder is being paid by the Company
to have NTA remain available to assist it with transactions on
an as-needed basis.
2.7. Services Excluded - The parties may specifically exclude
certain services from the operation of this Agreement by
written addendum hereto and acknowledge and agree that the
following items are not intended to be included among the
services to be provided by NTA:
2.7.1. NTA agrees that neither it or any affiliate or fund with
which it is associated is or shall be a market-maker,
dealer or underwriter of any of the Company's securities
(but may be a placement agent by other "Selling
Agreement" from time to time) in the Company's
securities;
2.7.2. Any payments made herein to NTA are not, and shall not be
construed as, compensation to NTA for the purposes of
making a market, to cover NTA out-of-pocket expenses for
making a market, or for the submission by NTA of an
application to make a market in any of the Company's
securities;
2.7.3. No payment made herein to NTA are for the purpose of
affecting the price of any security or influencing any
market-making functions, including but not limited to
bid/ask quotations, initiation and termination of
quotations, retail securities activities, or for the
submission of any application to make a market.
2.7.4. It is understood and agreed that in performing any of the
services contemplated by this Agreement, NTA shall not be
taken to be rendering any legal opinions or any work that
is in the ordinary purview of a Certified Public
Accountant or of a licensed NASD broker.
3. TERM - NTA agrees to provide the services described herein beginning on
April 1, 1999 and continuing until July 31, 2000 or until this agreement is
terminated by the Company, whichever is earlier.
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4. COMPENSATION TO NTA.
4.1. Fees - As full and complete compensation for the services to
be provided by NTA to the Company, the Company agrees to issue
Warrants to NTA pursuant to the "Addendum" to this agreement.
The Company shall register for resale by NTA the Warrant
Shares into which the Warrants are exercisable pursuant to the
Registration Rights Agreement between the parties set out in
Schedule A.
4.2. Expenses - The Company shall be responsible for all fees and
expenses pertaining to the issuance, listing or registration
of any Securities contemplated by this Agreement, including,
but not limited to, SEC registration fees, transfer agent
fees, escrow fees, NASD registration or exchange listing fees
but not including any legal, accounting and other professional
fees incurred by NTA in connection with such registration.
4.3. Other Expenses: Transfer Taxes, Etc. - Subject to paragraphs
4.1, 4.2 and 11, NTA agrees that all fees and expenses
incurred by NTA in the performance of this agreement
including, without limitation, all fees of its legal counsel
and accountants shall be borne by NTA whether or not the
Company terminates this agreement prior to the expiry of the
period referred to in paragraph 3.
5. NTA'S REPRESENTATIONS AND WARRANTIES.
NTA represents and warrants that:
5.1. NTA Experience NTA has the experience and expertise to perform
the services contemplated by this Agreement and to evaluate an
investment in the Securities.
5.2. Investment Purpose. It is acquiring the Securities to be
issued or issuable to it hereunder for its own account for
investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof,
except pursuant to sales registered or exempted under the
Securities Act of 1933, as amended (the "1933 Act"); provided,
however, that by making the representations herein, NTA does
not agree to hold any of the Securities for any minimum or
other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
5.3. Accredited Investor Status. NTA is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D
promulgated under the 1933 Act.
5.4. Reliance on Exemptions. NTA understands that the Securities
are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States
federal and state securities laws and that the
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Company is relying in part upon the truth and accuracy of,
and NTA's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of NTA set
forth herein in order to determine the availability of such
exemptions and the eligibility of NTA to acquire the
Securities.
5.5. Information. NTA and its advisors, if any, have been furnished
with all public materials relating to the business, finances
and operations of the Company and materials relating to
issuance of the Securities which have been requested by NTA.
NTA has not received, nor will the Company provide, any
non-public information to NTA during the term of this
agreement. NTA acknowledges that it and such of its advisors
as it considers relevant have been afforded full and
sufficient opportunity to ask questions of the Company.
Neither such inquiries nor any other due diligence
investigations conducted by NTA or its advisors or its
representatives shall modify, amend or affect NTA's right to
rely on the completeness and accuracy of the materials
provided to NTA by or on behalf of the Company with respect to
the transactions contemplated hereby or on the Company's
representations and warranties contained in this Agreement.
NTA understands that its investment in the Securities involves
a high degree of risk. NTA has sought such accounting, legal
and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition
of the Securities.
5.6. No Governmental Review. NTA understands that no United States
federal or state agency or any other government or
governmental agency has passed on or made any recommendation
or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering
of the Securities.
5.7. Transfer or Resale. NTA understands that, except as provided
in the Registration Rights Agreement: (i) the Securities have
not been and are not being registered under the 1933 Act or
any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) NTA shall have delivered to the
Company an opinion of counsel, in a generally acceptable form,
to the effect that the Securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to
an exemption from such registration, (C) NTA provides the
Company with reasonable assurance that the Securities can be
sold, assigned or transferred pursuant to Rule 144 promulgated
under the 1933 Act (or a successor rule thereto) ("RULE 144");
(ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance with the terms of Rule 144 and
further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the
person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 0000 Xxx) may
require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and
(iii) neither the Company nor any other person is under any
obligation to register such Securities
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under the 1933 Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder,
or (D) such transferee or assignee is an Affiliate of NTA.
5.8. Legend. The parties agree that the certificates or other
instruments representing the Warrants and, until such time as
the sale of the Warrant Shares have been registered under the
1933 Act as contemplated by the Registration Rights Agreement,
the stock certificates representing the Warrant Shares, except
as set forth below, shall bear a restrictive legend in
substantially the following form (and a stop-transfer order
will be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT.
5.9. The legend set forth above shall be removed and the Company
shall issue a certificate without any legend to the holder of
the Securities upon which it is stamped, if (i) such
Securities are registered for resale under the 1933 Act, (ii)
in connection with a sale transaction, such holder provides
the Company with an opinion of counsel, in form acceptable to
the Company, to the effect that a public sale, assignment or
transfer of such Securities may be made without registration
under the 1933 Act, or (iii) such holder provides the Company
with reasonable assurances that such Securities can be sold
without restriction pursuant to Rule 144(k). Any Warrant
Shares issued at such time as when there is an effective
registration statement covering such shares will not bear any
restrictive legend. NTA acknowledges, covenants and agrees to
sell the Securities represented by a certificate(s) from which
the legend has been removed, only pursuant to (i) a
registration statement effective under the 1933 Act, or (ii)
advice of counsel that such sale is exempt from registration
required by Section 5 of the 1933 Act.
6. CERTAIN AGREEMENTS BY THE COMPANY
6.1. Registration. The Company agrees to use its best efforts to
register the Warrant Shares for resale in accordance with the
terms of the Registration Rights
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Agreement attached hereto provided that the Company may at its
option register the original issuance of the Securities
instead.
6.2. Form D; Blue Sky Filings. The Company agrees to file a Form D
with respect to the Securities as required under Regulation D.
The Company shall take such action and make such filings as
the Company shall reasonably determine is necessary and as
required by applicable law to qualify the Securities under, or
obtain exemption for the Securities from, the applicable
securities or "Blue Sky" laws of the states of the United
States.
6.3. Reservation of Shares. The Company shall take all action
necessary to at all times have authorized, and reserved for
the purpose of issuance, no less than 100% of the number of
shares of Common Stock needed to provide for the issuance of
the Warrant Shares; provided, however, that the above
requirement shall expire on the last exercise date.
6.4. Listing. The Company shall list 2,625,000 shares of Common
Stock in respect of the Warrant Shares within 10 days of
the date of Execution of this Agreement on the Nasdaq SmallCap
Market. The Company shall maintain the Common Stock's
authorization for listing on The Nasdaq SmallCap Market and
any other Subsequent Market on which the Common Stock is then
listed or traded. Neither the Company nor any of its
Subsidiaries shall take any action which may result in the
delisting or suspension of the Common Stock on the Nasdaq
SmallCap Market or on any Subsequent Market on which the
Common Stock is then listed or traded (other than to switch
listings from The Nasdaq SmallCap Market to a Subsequent
Market). The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section.
7. INDEMNIFICATION.
7.1. By the Company - The Company agrees to indemnify and hold
harmless NTA, and its officers, directors, employees and each
person who NTA contracts in connection with this Agreement
(provided such contract person is approved by the Company in
writing) against any and all liability, loss, and costs,
expenses or damages, including but not limited to, any and all
expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever or howsoever caused by
reason of any injury (whether to body, property, personal or
business character or reputation) sustained by any person or
to any person or property by reason of any act, neglect,
default or omission, or any untrue or alleged untrue statement
of a material fact, or any misrepresentation of any material
fact or any breach of any material warranty or covenant as the
Company or any of its agents, employees, or other
representatives arising out of, or in relation to, this
Agreement. Nothing herein is intended to nor shall it relieve
either party from liability for its own act,
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omission or negligence. All remedies provided by law or in
equity shall be cumulative and not in the alternative.
7.2. By NTA - NTA agrees to indemnify and hold harmless the
Company, each of its officers, directors, employees and each
person, if any, who controls the Company against any and all
liability, loss, and costs, expenses or damages, including but
not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever
or howsoever caused by reason of any injury (whether to body,
property, personal or business character or reputation)
sustained by any person or to any person or property by reason
of any act, neglect, default or omission, or any untrue or
alleged untrue statement of a material fact, or any
misrepresentation of any material fact or any breach of any
material warranty or covenant as the NTA or any of its agents,
employees, or other representatives arising out of, or in
relation to, this Agreement. Nothing herein is intended to nor
shall it relieve either party from liability for its own act,
omission or negligence. All remedies provided by law or in
equity shall be cumulative and not in the alternative.
8. COMPANY REPRESENTATIONS. the Company hereby represents, covenants and
warrants to NTA as follows:
8.1. Authorization - the Company and its signatories herein have
full power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby.
8.2. No Violation - Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby will violate any provision of the charter
or by-laws of the Company, or violate any term or provision of
any other Agreement or any statute or law.
8.3. Consents - All consents required or necessary to the
consummation of the transactions contemplated hereby,
including, without limitation, consents from federal, state,
or local governmental agencies and consents provided for under
any credit agreement, material contract, lease or other
agreement to which the Company is a party, have been obtained
or will be obtained prior to the commencement of the term
provided that if the Company is unable or unwilling to obtain
such consents, it may terminate this Agreement without
compensation to NTA.
8.4. Company's Material Representations. All representations and
statements provided about the Company to NTA are true and
complete and accurate to the best of the Company's knowledge.
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8.5. NTA Reliance - NTA has and will rely upon the documents,
instruments and written information furnished to NTA by the
Company its officers or designated employees.
9. CONFIDENTIALITY.
9.1. NTA and the Company each agree to provide reasonable security
measures to keep information confidential where release may be
detrimental to their respective business interests. NTA and
the Company shall each require their employees, agents,
affiliates, sub-Company's, other licensees, and others who
will have access to the information through NTA and the
Company respectively, to first enter into appropriate
non-disclosure Agreements requiring the confidentiality
contemplated by this Agreement in perpetuity.
9.2. NTA will not, either during its engagement by the Company
pursuant to this agreement or at any time thereafter,
disclose, use or make known for its or another's benefit, any
confidential information, knowledge, or data of the Company or
any of its affiliates in any way acquired or used by NTA
during its engagement by the Company. Confidential
information, knowledge or data of the Company and its
affiliates shall not include any information which is or
becomes generally available to the public other than as a
result of a disclosure by NTA or its representatives.
10. MISCELLANEOUS PROVISIONS.
10.1. Amendment and Modification - This Agreement and any part
thereof may be amended, waived, modified or supplemented only
by written Agreement of NTA and the Company.
10.2. Strict Compliance - No waiver or failure to insist upon strict
compliance with any obligation, covenant, agreement or
condition under this Agreement shall operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
10.3. Notices - Any notices, consents, waivers or other
communications required or permitted to be given under the
terms of this Agreement must be in writing and will be deemed
to have been delivered (i) upon receipt, when delivered
personally; (ii) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 5:00 p.m.
(New York time) on a Business Day, (iii) the Business Day
after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:00
p.m. (New York time); or (iv) upon receipt, when delivered by
a reputable overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
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If to the Company:
Queen Sand Resources, Inc.
00000 Xxxx Xx. Xxxxx 0000 (X.X. 00)
Xxxxxx, Xxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxx, Executive Vice-President
and
Queen Sand Resources, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxx, Executive Vice-President
With a copy to:
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Boeing, Esq.
If to NTA:
Northern Tier Asset Management, Inc.
0000 0xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, X.X. 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxx Xxxxxxx, Director
Each party shall provide five days' prior written notice to the other
party of any change in address or facsimile number.
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10.4. Contact Persons. The Contact Person for the Company is Xxxxx
Xxxx, Executive Vice President. The Contact Person for NTA is
Xxx X. Xxxxxxx, Member and Director of Corporate Finance.
10.5. Assignment - This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns,
but neither this Agreement nor any right, interests or
obligations hereunder shall be delegated or assigned by any of
the parties hereto without the prior written consent of the
other party.
10.6. Publicity - Neither NTA nor the Company shall make or issue,
or cause to be made or issued, any announcement or written
statement concerning this Agreement or the transaction
contemplated hereby for dissemination to the general public
without the prior consent of the other party. This provision
shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any
federal or state governmental agency, except that the parties
shall agree concerning the timing and content of such
announcement before such announcement is made.
10.7. Governing Law - This Agreement and the legal relations among
the parties hereto shall be governed by and construed in
accordance with the laws of the State of Delaware, without
regard to its conflict of law doctrine. Notwithstanding the
provisions of paragraph 11 compelling compulsory arbitration,
the Company and NTA agree that if action is instituted to
enforce or interpret any provision of this Agreement the
jurisdiction and venue shall be in the state or federal court
sitting in New York City, New York.
10.8. Counterparts - This Agreement may be executed simultaneously
in two or more counterparts or by telefacsimile, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.9. Headings - The heading of the Sections of this Agreement are
inserted for convenience only and shall not constitute a part
hereto or affect in any way the meaning or interpretation of
this Agreement.
10.10. Entire Agreement - This Agreement, including any Exhibits
hereto, and the other documents and certificates delivered
pursuant to the terms hereto, set forth the entire Agreement
and understanding of the parties hereto in respect of the
subject matter contained herein, and superseded all prior
Agreements, promise, covenants arrangements, communications,
representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto.
10.11. Attorneys' Fees and Costs - If any action is necessary to
enforce and collect upon the terms of this Agreement, the
prevailing party shall be entitled to reasonable
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attorneys' fees and costs, in addition to any other relief to
which that party may be entitled. This provision shall be
construed as applicable to the entire Agreement.
10.12. Survivability - If any part of this Agreement is found to be
invalid or unenforceable, that part shall be severable from
the remainder of this Agreement.
10.13. Further Assurances - Each of the parties agrees that it shall
from the time to time take such actions and execute such
additional instruments as may be reasonably necessary or
convenient to implement and carry out the intent and purpose
of this Agreement.
10.14. Right to Data After Termination - After termination of this
Agreement each party shall be entitled to the return of all
copies of any and all information provided to the other prior
to the date of termination and not previously returned to it.
10.15. Relationship of the Parties - NTA is an independent
contractor. Nothing contained in this Agreement shall be
deemed to cause either party to become the partner, agent or
legal representative of the other, nor create any fiduciary
relationship or joint venture between them, except as
otherwise expressly provided herein. It is not the intention
of the parties to create nor shall this Agreement be construed
to create any commercial relationship or other partnership.
Neither party shall have any authority to act for or to assume
any obligation or responsibility on behalf of the other party,
except as otherwise expressly provided herein.
11. ARBITRATION. The parties hereby agree to waive their right to seek remedy
in court, including their right to jury trial and to submit all disputes,
controversies, or differences between the Company or NTA or anyone claiming
through or under them including any of their respective officers,
directors, agents or employees, arising out of, in connection with or as a
result of this agreement, to final and binding arbitration rather than
through litigation.
11.1. Any disputing party shall submit the dispute for resolution in
New York, New York within five (5) days after receiving a
written request to do so from any of the aforesaid parties.
11.2. If any party to a dispute fails to submit the dispute to
arbitration on request, then the requesting party may itself
commence an arbitration proceeding, but is under no obligation
to do so.
11.3. If any party shall institute any court proceeding in an effort
to resist arbitration and be unsuccessful in resisting
arbitration or shall unsuccessfully contest the jurisdiction
of the arbitration forum, the prevailing party shall be
entitled to recover from the losing party its legal fees and
any out-of-pocket expenses
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incurred in connection with the defense of such legal
proceeding or its efforts to enforce its rights to arbitration
as provided for herein.
11.4. Any arbitration conducted hereunder shall be conducted by an
arbitrator selected by the American Arbitration Association.
Such arbitration shall be conducted pursuant to the commercial
Arbitration Rules of the American Arbitration Association.
11.5. The parties shall accept the decision of any award as being
final and conclusive and agree to abide thereby.
11.6. Any arbitration award shall be submitted to any court as a
basis for judgement and execution for collection.
12. TERMINATION. This Agreement shall terminate on July 31, 2000 or the date
that is 15 days following delivery of a Termination Notice by either party
to the other, whichever is earlier. Upon termination, any Warrants
remaining in possession of the Escrow Agent shall be returned to the
Company in accordance with the terms of the Escrow Agreement and, whether
or not the Agent has delivered such Warrants to the Company, the Company
may at its discretion cancel the Warrants.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
QUEEN SAND RESOURCES, INC.
By:
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Xxxxxx X. Xxxxxx, President & Chief Executive Officer
By:
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Xxxxx Xxxx, Executive Vice President
NTA: NORTHERN TIER ASSET MANAGEMENT, INC.
By:
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Xxx Xxxxxxx, Member
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ADDENDUM
TO THE CONSULTING AGREEMENT
BETWEEN NTA AND QSR DATED APRIL 9, 1999
1. LOCKUP AND RESTRICTED SHARES. No lockup or restrictions shall be placed
upon the Officers', Insiders' and Directors' shares other than those
currently in place. However, the Company shall provide NTA with not less
than 3 days advance notice of any sales of the Company's securities by
officers and directors (other than sales of unrestricted securities or
sales made pursuant to any outstanding option plans) and the offering of
any securities of the Company (including any new Regulation D or Regulation
S offerings but excluding sales under any outstanding warrants, preference
shares or reset shares).
2. DTC REPORTS. The Company shall provide NTA with copies of any weekly DTC
reports as and when received by Company.
3. WARRANTS. The Company shall issue a total of 2,625,000 Warrants to NTA in
11 series as follows:
NUMBER OF DEEMED
WARRANTS IN SERIES MAXIMUM
SERIES DESIGNATION EXPITATION DATE EXERCISE PRICE MARKET PRICE
----------- ----------- ----------------- -------------- ------------
450,000 1 July 31, 1999 $1.50 $2.00
450,000 2 July 31, 1999 $1.50 $2.00
450,000 3 September 30,1999 $1.50 $2.50
187,500 4 March 31, 2000 $1.50 $3.00
187,500 5 March 31, 2000 $1.50 $3.00
150,000 6 June 30, 2000 $1.50 $3.00
150,000 7 June 30, 2000 $1.50 $3.00
150,000 8 June 30, 2000 $1.50 $3.00
150,000 9 June 30, 2000 $1.50 $3.00
150,000 10 June 30, 2000 $1.50 $3.00
150,000 11 June 30, 2000 $1.50 $3.00
4. WARRANT TERMS AND MANNER OF EXERCISE.
4.1. Each Warrant shall be exercisable for one share of common
stock of the Company (par value $0.0015) and, apart from the
Series Designation, Expiration Date, and Deemed Market Price,
all Warrants shall be in identical terms.
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4.2. Pending exercise, all warrants shall be deposited with an
Escrow Agent of the Company's choosing in accordance with the
terms of the Escrow Agreement attached hereto as Schedule B
For greater certainty the parties acknowledge and agree that
upon termination of the Agreement, all unexercised warrants
shall be returned to the written direction of the Company in
accordance with the terms of the Escrow Agreement.
4.3. The Exercise Notice, payment, Warrant and other documentation
required for exercise (including Cashless exercises) shall be
delivered to the Escrow Agent in accordance with the terms of
the Escrow Agreement.
4.4. NTA may pay the Exercise Price either in cash, by delivery of
immediately available funds or, at the election of NTA, by
Cashless Exercise, as defined below, or any combination
thereof.
4.5. The number of warrant shares pursuant to a Cashless Exercise
shall be determined in accordance with the following formula.
X = Y x (A-B)/B
Where:
X is the number of warrant shares to be issued to NTA
Y is the number of warrant shares in respect of which
the Warrant is being exercised.
A is the lesser of (i) the Deemed Maximum Market
Price applicable to the particular block and (ii)
the average of the closing bid prices of the common
stock for 5 trading days immediately prior to but
not including the Exercise Date.
B is the Exercise Price.
4.6. Subject to the terms hereof and the Warrant, NTA may exercise
the Warrants of any series at any time and from time to time
in whole or in part provided that, without the prior written
authorization of the Company, NTA may not exercise the
warrants of any series before May 15, 1999 and then only if
the warrants of all series having a lesser series number that
the warrants of the particular series being exercised have
been exercised in full and 30 days have expired since the last
exercise of any warrant having a lesser series number. For the
purposes of this paragraph, series 1 and 2 shall be considered
as one series.
4.7. Notwithstanding anything herein to the contrary, NTA shall,
upon exercise of any Warrant of series 1, leave blank the
provisions of paragraph 4 of the subscription form to be
completed by the Escrow Agent in accordance with the terms of
the Escrow Agreement and the Company may, at its option, cause
to be delivered to NTA unrestricted certificates of prior
issued shares of common stock in the place and stead
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of the Warrant Shares issuable in connection with the exercise
and, in such event, may deliver the Warrant Shares to such
other persons as it may determine.
4.8. Pending exercise, all warrants shall be deposited with an
Escrow Agent of the Company's choosing. Upon termination of
the Agreement, all unexercised warrants shall be returned to
the written direction of the Company.
4.9. In case of any conflict between the terms of the Warrant and
this addendum, the terms of the Warrant shall govern except
for the provisions of paragraph 4.6.
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