US Mineral Exchange Auction Agreement
THIS AGREEMENT (and the USME Buyers Agreement) (together “Terms”) is made and entered into by and between US Mineral Exchange “USME”, a limited liability company organized under the laws of Oklahoma, and you (“you” or “Buyer” or “Bidder”) with respect to process, terms and conditions under which you may bid, offer to purchase or otherwise participate as a potential buyer in USME Auctions.
USME and Buyer agree as follows:
A. General – The Auctions Module of the Site provides a venue and mechanism for Sellers to conduct auctions for oil and gas mineral and/or royalty rights (producing and/or non-producing) (the “Minerals”) and for Buyers to bid for them. Use of the USME Auctions portion of the Site and Services is limited to Buyers approved by USME.
B. Your Information – To be granted access to the Auction Module, you must agree that your Buyers Account is up to date in terms of your purchasing entity, address, phone number, and e-mail address. Bidding on Minerals under a different registration than the final Buying Entity constitutes a breach of this Agreement. If you open a USME account on behalf of a company, organization, or other entity, then (i) “you” includes you and that entity, and (ii) you represent and warrant that you are an authorized representative of the entity with the authority to bind the entity to this Agreement.
C. Use of the Site to Bid and Buy – You may bid on Minerals for sale at Auction on the Site during the term of this Agreement, however you agree that a bid at any price, including any maximum or proxy bid is a binding and legal obligation to purchase the Minerals, subject only to the following exceptions:
- Title failure of more than 10% of any Mineral interest as Auctioned; or
- Sellers breach of the Purchase Agreement.
If you place a bid on a Mineral Interest, and are the highest Bidder, the offer will be deemed accepted. Should you fail to close the transaction for any other reason than those described above, you are obligated to pay USME 6% of your final auction bid as a penalty for bidding on the Minerals and not completing the transaction. Payment of the 6% penalty is due within 5 business days of your termination of the Purchase, via wire transfer.
D. Bid Retractions and Errors – Bids are not retractable except under circumstances deemed appropriate by USME in its sole discretion. Possible examples may include, but are not limited to, bids made in error, the revocation of a listed item, material changes to the description of an item or blatant errors in a listing. You must contact USME immediately after placing a bid in error to request a retraction. Failure to complete the transaction after acceptance of your bid is a breach of this Agreement. All bid retractions require the prior written consent of USME. USME may reject any bid.
E. Auction Rules – You agree not to engage in any of the following prohibited activities in connection with the Auction: (i) You will not interfere with any auction being conducted on the Site, (ii) misrepresent your affiliation with a person or entity, (iii) place bids or cause bids to be placed on any Minerals for the purpose of artificially increasing or otherwise manipulating the bidding process.
F. Buyer Bid Requirements – You agree to the following Due Diligence and closing terms when bidding on Minerals:
- USME will notify the winning Buyer within twenty-four (24) hours following a successful Auction.
- Buyer will have forty-eight (48) hours from notification to provide USME with their pre-approved and executed Purchase and Sale Agreement (“PSA”), as well as an Example Deed.
- The PSA and the Example Deed the Buyer intends to use must have been pre-approved by USME prior to the close of the Auction.
- The Buyer will have up to thirty (30) calendar days for due diligence to close on the purchase of the Property.The Deed shall be a Non-Warranty (Quitclaim) Deed or a Special Warranty Deed or if pre-approved a General Warranty Deed.
G. Title – The winning Buyer will have up to 30 calendar days to complete due diligence and close the transaction per Section “H” below. However, if during the thirty (30) calendar day due diligence period, the Buyer determines the Minerals have a title failure, the terms and conditions of the Fully Executed PSA between the Buyer and the Seller shall govern the curative and closing process.
H. Closing Process – You agree to the following Closing Process when bidding on Minerals:
- Following Buyer’s due diligence period, the Seller will execute the mineral deed provided by Buyer and deliver original copies of the mineral deed to USME.
- USME will provide an electronic copy of the mineral deed to Buyer for approval.
- After Buyer’s approval of the electronic copies of the mineral deed, Buyer will wire the funds due to the Seller and to USME as specified in the Commission Section “I” Below. The commission shall not be paid to the Sellers directly in any case.
- Upon USME’s confirmation that all monies due from the Buyer have been paid to both the Seller and USME, USME will immediately overnight the original fully executed mineral deed to the Buyer.
I. Commission – The winning Bidder acknowledges and agrees that the purchase of any Minerals from Auction is subject to the following: (i) The Commission paid to USME shall be 6% of the total purchase price, (ii) The amount due to the Seller(s) shall be 94% of the total purchase price (iii) the Commission shall be without regard to any post-Closing or Closing adjustments, (iv) and in the event the final purchase price is changed for any reason, including but not limited to an adjustment in the number of acres owned by the Seller, the Commission and amount due the Seller shall be adjusted proportionately based on the percentages specified above. Buyer expressly agrees that the purchase of Minerals without paying the Commission directly to USME constitutes a material breach of this agreement. In the event Buyer fails to pay the Commission due USME within 5 days of closing, Buyer agrees that USME is entitled to: (i) file a lien on the Minerals referenced in this agreement, (ii) and indemnify USME for all losses, including all legal fees, attorney’s fees, costs and expenses in connection with such Breach.
J. No Warranty – You agree that the Auction Service is provided without warranties of any kind, whether expressed or implied and that the service will be available at any particular time or location, uninterrupted or secure.
K. Governing Law; Venue – The terms of this Agreement and/or any dispute between the Parties shall be governed by the substantive law of the State of Oklahoma. Each party irrevocably agrees that any controversy or claim arising out of or relating to this agreement shall be exclusively instituted in any court located in Tulsa County, Oklahoma.
L. Miscellaneous –
- In the performance of any and all obligations hereunder, the Exchange assumes no responsibility nor liability for the validity or legality of instruments received and/or held; for the authenticity of or authority of signatures affixed to any instrument; and for any other matters or obligations other than those specifically assumed herein.
- The term of this agreement shall not expire but may be cancelled by USME at its sole discretion or by the Buyer with 30 days’ advance written notice, however, all terms and conditions remain in full force and effect after the term of agreement with regard to any auctions the buyer viewed or directly participated in
- We may permanently or temporarily terminate or suspend your access to the Service without notice and liability for any reason, including if in our sole determination you violate any provision of this Agreement, or for no reason. Upon termination for any reason or no reason, you continue to be bound by this Agreement.
- You agree to enter into an Agreement with USME and are executing this Agreement electronically. All parties shall be bound by the aforementioned terms and conditions.