<PAGE>   1
                                                                    EXHIBIT 10.5

                          SECOND AMENDED AND RESTATED
                               GUARANTY AGREEMENT


                          Dated as of October 22, 1999


                                       By


                            CORRIDA RESOURCES, INC.,
                                as the Guarantor


                                  in favor of


                              ABLECO FINANCE LLC,
                              as Collateral Agent,
                      for the benefit of the Lender Group





<PAGE>   2

                               TABLE OF CONTENTS

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<S>                                                                         <C>
ARTICLE I Definitions and Accounting Matters..................................2

         Section 1.01   Terms Defined in Recitals.............................2

         Section 1.02   Certain Definitions...................................2

         Section 1.03   Credit Agreement Definitions..........................3

ARTICLE II The Guaranty.......................................................3

         Section 2.01   Obligations Guaranteed................................3

         Section 2.02   Nature of Guaranty....................................3

         Section 2.03   Lender Group's Rights.................................3

         Section 2.04   Guarantor's Waivers...................................4

         Section 2.05   Maturity of Obligations; Payment......................4

         Section 2.06   Lender Group's Expenses...............................4

         Section 2.07   Obligation............................................4

         Section 2.08   Events and Circumstances Not Reducing or
                        Discharging the Guarantor's Obligations...............4

         Section 2.09   Limitations on Obligation of the Guarantor
                        Hereunder.............................................6

         Section 2.10   Subrogation...........................................6

ARTICLE III Representations and Warranties....................................7

         Section 3.01   Representations and Warranties........................7

ARTICLE IV Subordination of Indebtedness......................................8

         Section 4.01   Subordination of All Guarantor Claims.................8

         Section 4.02   Claims in Bankruptcy..................................8

         Section 4.03   Payments Held in Trust................................9

         Section 4.04   Liens Subordinate.....................................9
</TABLE>


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<TABLE>
<S>                                                                         <C>
         Section 4.05   Notation of Records...................................9

ARTICLE V Miscellaneous.......................................................9

         Section 5.01   Successors and Assigns................................9

         Section 5.02   Notices...............................................9

         Section 5.03   Authority of Collateral Agent........................10

         Section 5.04   Governing Law; Submission to Jurisdiction............10

         Section 5.05   Entire Agreement.....................................11

         Section 5.06   Survival of Obligations..............................11

         Section 5.07   Designated Senior Indebtedness.......................12

         Section 5.08   Prior Guaranty.......................................12
</TABLE>


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<PAGE>   4

                          SECOND AMENDED AND RESTATED
                               GUARANTY AGREEMENT

         This SECOND AMENDED AND RESTATED GUARANTY AGREEMENT, dated as of
October 22, 1999 is by CORRIDA RESOURCES, INC., a corporation duly organized
and validly existing under the laws of the state of Nevada ("Guarantor"), in
favor of ABLECO FINANCE LLC, as Collateral Agent for the Lender Group (together
with any successor collateral agent, "Collateral Agent").

                                    RECITALS

         A. QUEEN SAND RESOURCES, INC., a corporation duly organized and
validly existing under the laws of the state of Delaware ("QSRD"), as
"Guarantor", QUEEN SAND RESOURCES, INC., a corporation duly organized and
validly existing under the laws of the state of Nevada ("Borrower"), certain
lenders (the "Prior Lenders") and the Bank of Montreal, as agent (the "Prior
Agent"), are parties to that certain Amended and Restated Credit Agreement
dated as of April 17, 1998, as amended by that certain First Amendment to
Amended and Restated Credit Agreement dated as of July 1, 1998, as further
amended by that certain Second Amendment to Amended and Restated Credit
Agreement dated as of November 10, 1998, as further amended by that certain
Third Amendment to Amended and Restated Credit Agreement dated as of November
13, 1998, and as further amended by that certain Fourth Amendment to Amended
and Restated Credit Agreement dated as of May 14, 1999 (such credit agreement,
as amended, restated, supplemented, or otherwise modified from time to time
prior to the date hereof, the "Prior Credit Agreement").

         B. Pursuant to the terms and conditions of the Prior Credit Agreement,
Guarantor entered into that certain Amended and Restated Guaranty Agreement,
dated as of April 17, 1998 (such guaranty agreement, as amended, restated,
supplemented, or otherwise modified from time to time prior to the date hereof,
the "Prior Guaranty Agreement"), in favor of the Prior Agent and the Prior
Lenders, pursuant to which Guarantor guaranties the obligations therein
described.

         C. Concurrently herewith: (i) pursuant to that certain Assignment and
Acceptance, dated as of the Closing Date, among each of the Prior Lenders and
each of the Lender Group (the "Purchase Agreement"), the Prior Lenders are
assigning and delegating to the Lender Group, and the Lender Group are
accepting and assuming, the rights and duties of the Prior Lenders under the
Prior Credit Agreement and the other "Loan Documents" (as such term is defined
in the Prior Credit Agreement, the "Prior Loan Documents"); (ii) pursuant to
the Purchase Agreement and the Resignation and Appointment Letter, the Prior
Agent is resigning as "Agent" under the Prior Credit Agreement and the other
Prior Loan Documents and Administrative Agent and Collateral Agent are being
appointed as successor "Agents" for the Lender Group under the Prior Credit
Agreement and the other Prior Loan Documents; and (iii) the Prior Credit
Agreement is being amended and restated in its entirety by that certain Amended
and Restated Credit Agreement, dated as of the date hereof (as it may be
amended, restated, supplemented, or otherwise modified from time to time, the
"Credit Agreement"), among Borrower, QSRD, the financial institutions
identified therein as the "Lenders," Foothill Capital Corporation, a California
corporation, as administrative agent thereunder (in such capacity, together
with its successors, if any, in such capacity, "Administrative Agent"), and
Ableco Finance LLC, as collateral agent thereunder (in

<PAGE>   5

such capacity, together with its successors, if any, in such capacity,
"Collateral Agent"), it being understood that no repayment of the obligations
under the Prior Credit Agreement is being effected thereby, but merely an
amendment and restatement in accordance with the terms thereof.

         D. Pursuant to the Credit Agreement and as one of the conditions
thereof, Guarantor and the Lender Group have agreed to amend and restate the
Prior Guarantor Agreement in its entirety as provided in this Guaranty
Agreement, it being understood that no satisfaction of the "Obligations" (as
such term is defined in the Prior Guaranty Agreement) under the Prior Guaranty
Agreement is being effected hereby, but merely an amendment and restatement in
accordance with the terms hereof.

         E. NOW, THEREFORE, (i) in order to comply with the terms and
conditions of the Credit Agreement, (ii) to induce the Lender Group to enter
into the terms of the Credit Agreement, and (iii) for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Guarantor hereby agrees as follows:

                                   ARTICLE I
                       DEFINITIONS AND ACCOUNTING MATTERS

         SECTION 1.01 TERMS DEFINED IN RECITALS. As used in this Guaranty
Agreement, the terms defined in the Recitals shall have the meanings indicated
in the Recitals.

         SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement,
the following terms shall have the following meanings, unless the context
otherwise requires:

         "Guarantor Claims" shall have the meaning indicated in Section 4.01.

         "Guaranty Agreement" shall mean this Second Amended and Restated
Guaranty Agreement, as the same may from time to time be amended or
supplemented.

         "Lender Group" means, individually and collectively, each of the
Lenders, Administrative Agent, and Collateral Agent.

         "Obligations" shall mean (a) the payment and performance of all
present and future Indebtedness, obligations and liabilities of QSRD, the
Borrower and/or the Guarantor to Collateral Agent and the Lender Group under
the Credit Agreement and the other Loan Documents; (b) all obligations of the
Guarantor under this Guaranty Agreement and the other Loan Documents; and (c)
all interest (whether pre or post petition), charges, expenses, reasonable
attorneys' or other fees and any other sums payable to or incurred by the
Lender Group in connection with the execution or enforcement of any of their
rights and remedies hereunder or any other Loan Document.


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<PAGE>   6

         SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.

                                   ARTICLE II
                                  THE GUARANTY

         SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably
and unconditionally guarantees to Collateral Agent, as and for its own debt,
until final and indefeasible payment thereof has been made, (a) the prompt
payment of the Obligations, in each case when and as the same shall become due
and payable, whether at maturity, pursuant to a mandatory prepayment
requirement, by acceleration, or otherwise; it being the intent of the
Guarantor that the guaranty set forth herein shall be a guaranty of payment and
not a guaranty of collection.

         SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Borrower need be given to the
Guarantor. The guaranty evidenced hereby is joint and several with all other
guarantees of the Obligations. This guaranty may not be revoked by the
Guarantor and shall continue to be effective with respect to debt under the
Obligations arising or created after any attempted revocation by the Guarantor
and shall remain in full force and effect until the Obligations are paid in
full and the Aggregate Commitments are terminated, notwithstanding that from
time to time prior thereto no Obligations may be outstanding. The Borrower and
the Lender Group may modify, alter, rearrange, extend for any period and/or
renew from time to time, the Obligations and the Lender Group may waive any
Default or Events of Default without notice to the Guarantor and in such event
the Guarantor will remain fully bound hereunder on the Obligations. This
Guaranty Agreement may be enforced by Collateral Agent, on behalf of the Lender
Group and any subsequent holder of the Obligations, and shall not be discharged
by the assignment or negotiation of all or part of the Obligations. The
Guarantor hereby expressly waives presentment, demand, notice of non-payment,
protest and notice of protest and dishonor, notice of Event of Default, notice
of intent to accelerate the maturity and notice of acceleration of the maturity
and any other notice in connection with the Obligations, and also notice of
acceptance of this Guaranty Agreement, acceptance on the part of Collateral
Agent for the benefit of the Lender Group being conclusively presumed by their
request for this Guaranty Agreement and delivery of the same to Collateral
Agent.

         SECTION 2.03 LENDER GROUP'S RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lender Group (or Collateral Agent on
behalf of the Lender Group), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold security for the payment of
the Obligations, and exchange, enforce, waive and release any such security;
and to apply such security and direct the order or manner of sale thereof as
Collateral Agent and the Lender Group in their discretion may determine; and to
obtain a guaranty of the Obligations from any one or more Persons and at any
time or times to enforce, waive, rearrange, modify, limit or release any of
such other Persons from their obligations under such guaranties.


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<PAGE>   7

         SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require Collateral Agent and the Lender Group to (a) proceed against the
Borrower or any other Person liable on the Obligations, (b) enforce their
rights against any other guarantor of the Obligations, (c) proceed or enforce
their rights against or exhaust any security given to secure the Obligations,
(d) have the Borrower or any other guarantor or other Person joined with the
Guarantor in any suit arising out of this Guaranty Agreement and/or the
Obligations, or (e) pursue any other remedy whatsoever. Neither Collateral
Agent nor the Lender Group shall be required to mitigate damages or take any
action to reduce, collect or enforce the Obligations. The Guarantor waives any
defense arising by reason of any disability, lack of corporate authority or
power, or other defense of the Borrower, any other guarantor of the
Obligations, or any other Person liable on the Obligations, and shall remain
liable hereon regardless of whether the Borrower or any other guarantor or any
such other Person be found not liable thereon for any reason.

         SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees
that if the maturity of the Obligations is accelerated by bankruptcy or
otherwise, such maturity shall also be deemed accelerated for the purpose of
this Guaranty Agreement without demand or notice to the Guarantor. The
Guarantor will, forthwith upon notice from Collateral Agent on behalf of the
Lender Group of the Borrower's failure to pay the Obligations at maturity, pay
to Administrative Agent for the benefit of the Lender Group the amount due and
unpaid by the Borrower and guaranteed hereby. The failure of Collateral Agent
or the Lender Group to give this notice shall not in any way release the
Guarantor hereunder.

         SECTION 2.06 LENDER GROUP'S EXPENSES. If the Guarantor fails to pay
the Obligations after notice from Collateral Agent of the Borrower's failure to
pay any Obligations at maturity (whether by acceleration or otherwise), and if
thereafter Collateral Agent or the Lender Group obtains the services of an
attorney for collection of amounts owing by the Guarantor hereunder or if suit
is filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, receivership or other judicial proceedings for the establishment or
collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to Administrative Agent the reasonable attorneys' fees
and expenses of Collateral Agent and the Lender Group.

         SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.

         SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees its obligations
under this Guaranty Agreement shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
(including without limitation rights to notice) which it might otherwise have
as a result of or in connection with any of the following:

         (a) Modifications, etc. Any renewal, extension, modification, or
increase in the amount of the Aggregate Commitments as in effect on the
Effective Date, decrease, alteration or rearrangement of all or any part of the
Obligations, any Loan Document or any instrument executed in connection
therewith, or any contract or understanding between or among any one or


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<PAGE>   8
more of the Borrower, Collateral Agent or the Lender Group or any member
thereof, or any other Person, pertaining to the Obligations;

         (b) Adjustment, etc. Any adjustment, indulgence, forbearance or
compromise that might be granted or given by the Lender Group to the Borrower
or the Guarantor or any Person liable on the Obligations;

         (c) Condition of the Borrower or the Guarantor. The insolvency,
bankruptcy arrangement, reorganization, adjustment, composition, liquidation,
disability, dissolution or lack of power of the Borrower or the Guarantor or
any other Person at any time liable for the payment of all or part of the
Obligations; or any sale, lease or transfer of any or all of the assets of the
Borrower or the Guarantor, or any changes in the shareholders of the Borrower
or the Guarantor;

         (d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Loan Document for
any reason whatsoever, including without limitation the fact that the
Obligations, or any part thereof, exceed the amount permitted by law, the act
of creating the Obligations or any part thereof is ultra vires, the officers or
representatives executing any Loan Document acted in excess of their authority,
the Obligations violate applicable usury laws, the Borrower has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Obligations wholly or partially uncollectible from the Borrower, the creation,
performance or repayment of the Obligations (or the execution, delivery and
performance of any Loan Document) is illegal, uncollectible, legally impossible
or unenforceable, or the Credit Agreement or other Loan Documents have been
forged or otherwise are irregular or not genuine or authentic;

         (e) Release of Obligors. Any full or partial release of the obligation
of the Borrower on the Obligations or any part thereof, of any co-guarantors,
or any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Borrower will be liable to perform the Obligations, or
that the Lender Group will look to other parties to perform the Obligations;

         (f) Other Security. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Obligations;

         (g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;

         (h) Care and Diligence. The failure of any of Collateral Agent or the
Lender Group or any other Person to exercise diligence or reasonable care in
the preservation, protection,


                                       5
<PAGE>   9
enforcement, sale or other handling or treatment of all or any part of such
collateral, Property or security;

         (i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;

         (j) Payments Rescinded. Any payment by the Borrower to the Lender
Group is held to constitute a preference under the bankruptcy laws, or for any
reason the Lender Group is required to refund such payment or pay such amount
to the Borrower or someone else; or

         (k) Other Actions Taken or Omitted. Any other action taken or omitted
to be taken with respect to the Credit Agreement or the other Loan Documents,
the Obligations, or the security and collateral therefor, whether or not such
action or omission prejudices the Guarantor or increases the likelihood that
the Guarantor will be required to pay the Obligations pursuant to the terms
hereof, it being the unambiguous and unequivocal intention of the Guarantor
that the Guarantor shall be obligated to pay the Obligations when due,
notwithstanding any occurrence, circumstance, event, action, or omission
whatsoever, whether contemplated or uncontemplated, and whether or not
otherwise or particularly described herein, except for the full and final
payment and satisfaction of the Obligations.

         SECTION 2.09 LIMITATIONS ON OBLIGATION OF THE GUARANTOR HEREUNDER. The
parties hereto (i) intend that the obligation of the Guarantor hereunder be
limited to the maximum amount that would not result in the obligation created
hereby being avoidable under Section 548 of the Federal Bankruptcy Code (11
U.S.C. ss. 548; hereinafter "Section 548") or other applicable state fraudulent
conveyance or transfer law and (ii) agree that this Guaranty Agreement shall be
so construed. Accordingly, the obligation of the Guarantor hereunder is limited
to an amount that is the greater of (x) the "reasonably equivalent value" or
"fair consideration" received by the Guarantor in exchange for the obligation
incurred hereunder, within the meaning of Section 548, as amended, or any
applicable state fraudulent conveyance or transfer law, as amended; or (y) the
lesser of (1) the maximum amount that will not render the Guarantor insolvent
or (2) the maximum amount that will not leave the Guarantor with any Property
deemed an unreasonably small capital. Clauses (1) and (2) are and shall be
determined pursuant to Section 548, as amended, or other applicable state
fraudulent conveyance or transfer law, as amended.

         SECTION 2.10 SUBROGATION. The Guarantor shall not exercise any rights
which it may acquire by way of subrogation, reimbursement, exoneration,
indemnification or participation, by any payment made under this Guaranty
Agreement, under any other Loan Document or otherwise until the Obligations
have been paid in full and the Aggregate Commitments are terminated; provided
that, notwithstanding the foregoing, the Guarantor reserves its rights of
contribution and reimbursement, if any, from its co-guarantors and other
Persons liable on the Obligations or otherwise. Except as described in this
Section 2.10, the Guarantor further waives any benefit of any right to
participate in any security now or hereafter held by Collateral Agent or the
Lender Group.


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<PAGE>   10

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         SECTION 3.01 REPRESENTATIONS AND WARRANTIES. In order to induce
Collateral Agent for the benefit of the Lender Group to accept this Guaranty
Agreement, the Guarantor represents and warrants to Collateral Agent and the
Lender Group (which representations and warranties will survive the creation of
the Obligations and any extension of credit thereunder) that:

         (a) Benefit to the Guarantor. The Guarantor is a wholly-owned
Subsidiary of the Borrower and the Guarantor's guaranty pursuant to this
Guaranty Agreement reasonably may be expected to benefit, directly or
indirectly, the Guarantor; and the Guarantor has determined that this Guaranty
Agreement is necessary and convenient to the conduct, promotion and attainment
of the business of the Guarantor and the Borrower.

         (b) Corporate Existence. The Guarantor: (i) is duly organized and
validly existing under the laws of the jurisdiction of its formation; (ii) has
all requisite power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being conducted; and (iii) is qualified to do business in
all jurisdictions in which the nature of the business conducted by it makes
such qualification necessary and where failure so to qualify would have a
Material Adverse Effect.

         (c) No Breach. The execution and delivery by the Guarantor of this
Guaranty Agreement and the other Loan Documents to which it is a party, the
consummation of the transactions herein or therein contemplated, and the
compliance with the terms and provisions hereof will not (i) conflict with or
result in a breach of, or require any consent which has not been obtained as of
the Closing Date or which, if not obtained, would have a Material Adverse
Effect under (A) the respective charter or by-laws of the Guarantor, or (B) any
applicable law or regulation, or any order, writ, injunction or decree of any
court or other Governmental Authority, or any material agreement or instrument
to which the Guarantor is a party or by which it is bound or to which it is
subject in each case in such manner as could reasonably be expected to have a
Material Adverse Effect; or (ii) constitute a default under any such agreement
or instrument, or result in the creation or imposition of any Lien upon any of
the revenues or Property of the Guarantor in each case in such manner as could
reasonably be expected to have a Material Adverse Effect.

         (d) Corporate Action. The Guarantor has all necessary corporate power
and authority to execute, deliver and perform its obligations under this
Guaranty Agreement and the other Loan Documents to which it is a party; and the
execution, delivery and performance by the Guarantor of this Guaranty Agreement
and the other Loan Documents to which such Person is a party have been duly
authorized by all necessary corporate action on its part. This Guaranty
Agreement and the other Loan Documents to which the Guarantor is a party
constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights and general principles of equity.

         (e) Approvals. Other than consents heretofore obtained or described in
the Credit Agreement, no authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority are necessary for the
execution, delivery or performance by the


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<PAGE>   11
Guarantor of this Guaranty Agreement or the other Loan Documents to which it is
a party or for the validity or enforceability thereof. It is understood that
continued performance by the Guarantor of this Guaranty Agreement and the other
Loan Documents to which it is a party will require various filings, such as
filings related to environmental matters, ERISA matters, Taxes and intellectual
property, filings required to maintain corporate and similar standing and
existence, filings pursuant to the Uniform Commercial Code and other security
filings and recordings and filings required by the SEC, routine filings in the
ordinary course of business, and filings required in connection with the
exercise by Collateral Agent on behalf of the Lender Group of remedies in
connection with the Loan Documents.

         (f) Solvency. The Guarantor (i) is not insolvent as of the date hereof
and will not be rendered insolvent as a result of this Guaranty Agreement, (ii)
is not engaged in business or a transaction, or about to engage in a business
or a transaction, for which any Property or assets remaining with the Guarantor
constitute unreasonably small capital, and (iii) does not intend to incur, or
believe it will incur, debts that will be beyond its ability to pay as such
debts mature.

         (g) No Representation by Collateral Agent or the Lender Group. Neither
any of Collateral Agent, the Lender Group, or any member thereof nor any other
Person has made any representation, warranty or statement to the Guarantor in
order to induce the Guarantor to execute this Guaranty Agreement.

                                  ARTICLE IV
                         SUBORDINATION OF INDEBTEDNESS

         SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein,
the term "Guarantor Claims" shall mean all debts and obligations of the
Borrower to the Guarantor, whether such debts and obligations now exist or are
hereafter incurred or arise, or whether the obligation of the Borrower thereon
be direct, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such debts or obligations be evidenced
by note, contract, open account, or otherwise, and irrespective of the Person
or Persons in whose favor such debts or obligations may, at their inception,
have been, or may hereafter be created, or the manner in which they have been
or may hereafter be acquired by. Except for payments permitted by the Credit
Agreement, until the Obligations shall be paid and satisfied in full, the
Aggregate Commitments are terminated and the Guarantor shall have performed all
of its obligations hereunder and under the other Loan Documents to which it is
a party, the Guarantor shall not receive or collect, directly or indirectly,
from the Borrower any amount upon the Guarantor Claims.

         SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Borrower, Collateral Agent on behalf of the Lender
Group shall have the right to prove their claim in any proceeding, so as to
establish their rights hereunder and receive directly from the receiver,
trustee or other court custodian, dividends and payments which would otherwise
be payable upon Guarantor Claims. The Guarantor hereby assigns such dividends
and payments to Collateral Agent for the benefit of the Lender Group. Should
the Lender Group receive, for application upon the Obligations, any such
dividend or payment which is otherwise payable to the Guarantor, and which, as
between the Borrower and the Guarantor, shall constitute a credit


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<PAGE>   12
upon the Guarantor Claims, then upon payment in full of the Obligations, the
Guarantor shall become subrogated to the rights of the Lender Group to the
extent that such payments to the Lender Group on the Guarantor Claims have
contributed toward the liquidation of the Obligations, and such subrogation
shall be with respect to that proportion of the Obligations which would have
been unpaid if the Lender Group had not received dividends or payments upon the
Guarantor Claims.

         SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments,
claims or distributions which is prohibited by such Sections, the Guarantor
agrees: (a) to hold in trust for the Lender Group an amount equal to the amount
of all funds, payments, claims or distributions so received, and (b) that it
shall have absolutely no dominion over the amount of such funds, payments,
claims or distributions except to pay them promptly to Administrative Agent for
the benefit of the Lender Group; and the Guarantor covenants promptly to pay
the same to Administrative Agent for the benefit of the Lender Group.

         SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any
Liens upon the Borrower's assets securing payment of the Guarantor Claims shall
be and remain inferior and subordinate to any Liens upon the Borrower's assets
securing payment of the Obligations, regardless of whether such encumbrances in
favor of the Guarantor, Collateral Agent, or the Lender Group presently exist
or are hereafter created or attach. Without the prior written consent of the
Lender Group, the Guarantor, during the period in which any of the Obligations
are outstanding or the Aggregate Commitments are in effect, shall not (a)
exercise or enforce any creditor's right it may have against the Borrower, or
(b) foreclose, repossess, sequester or otherwise take steps or institute any
action or proceeding (judicial or otherwise, including without limitation the
commencement of or joinder in any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any Lien on assets of the
Borrower held by the Guarantor.

         SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of Collateral Agent on behalf of the Lender Group, all accounts
receivable ledgers or other evidence of the Guarantor Claims accepted by or
held by the Guarantor shall contain a specific written notice thereon that the
indebtedness evidenced thereby is subordinated under the terms of this Guaranty
Agreement.

                                   ARTICLE V
                                 MISCELLANEOUS

         SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and
shall be in every particular available to the successors and assigns of
Collateral Agent and the Lender Group and is and shall always be fully binding
upon the legal representatives, successors and assigns of the Guarantor,
notwithstanding that some or all of the monies, the repayment of which this
Guaranty Agreement applies, may be actually advanced after any bankruptcy,
receivership, reorganization or other event affecting either the Borrower or
the Guarantor.

         SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or
in connection with this Guaranty Agreement may be given and shall conclusively
be deemed and considered to


                                       9
<PAGE>   13
have been given and received in the manner and to the address of the Guarantor
set forth on the signature page hereto as provided for in Section 12.02 of the
Credit Agreement.

         SECTION 5.03 AUTHORITY OF COLLATERAL AGENT. The Guarantor acknowledges
that the rights and responsibilities of Collateral Agent under this Guaranty
Agreement with respect to any action taken by Collateral Agent or the exercise
or non-exercise by Collateral Agent of any option, right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Guaranty Agreement shall, as between Collateral Agent and the other members of
the Lender Group, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between Collateral Agent and the Guarantor, Collateral Agent shall be
conclusively presumed to be acting as agent for the Lender Group with full and
valid authority so to act or refrain from acting; and the Guarantor shall not
be under any obligation, or entitlement, to make any inquiry respecting such
authority.

         SECTION 5.04 GOVERNING LAW; SUBMISSION TO JURISDICTION

         (a) THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
AGREEMENT OR THE OTHER LOAN DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY
OF THIS GUARANTY AGREEMENT, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND (TO THE
EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS
NONEXCLUSIVE AND DOES NOT PRECLUDE COLLATERAL AGENT OR THE LENDER GROUP FROM
OBTAINING JURISDICTION OVER THE GUARANTOR IN ANY COURT OTHERWISE HAVING
JURISDICTION.

         (c) THE GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
IT, AS THE CASE MAY BE, AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE
UPON THE EARLIER OF VERIFICATION OF THE GUARANTOR'S RECEIPT THEREOF OR 30 DAYS
AFTER SUCH MAILING.


                                       10
<PAGE>   14

         (d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF COLLATERAL AGENT OR THE
LENDER GROUP TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY
OTHER JURISDICTION.

         (e) THE GUARANTOR AND THE LENDER GROUP HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AGREEMENT OR ANY LOAN
DOCUMENTS TO WHICH IT IS A PARTY OR RECEIVES THE BENEFIT OF AND FOR ANY
COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO OR ACCEPT THIS GUARANTY
AGREEMENT, THE LOAN DOCUMENTS TO WHICH IT IS A PARTY AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 5.04.

         (f) THE GUARANTOR AGREES THAT, IN ADDITION TO (AND WITHOUT LIMITATION
OF) ANY RIGHT OF SET-OFF, BANKERS' LIEN OR COUNTERCLAIM COLLATERAL AGENT OR THE
LENDER GROUP OR ANY MEMBER THEREOF MAY OTHERWISE HAVE, AFTER THE OCCURRENCE AND
DURING THE CONTINUATION OF AN EVENT OF DEFAULT, EACH LENDER (TO THE EXTENT
PERMITTED OR REQUIRED BY THE CREDIT AGREEMENT) SHALL HAVE THE RIGHT AND BE
ENTITLED, AT ITS OPTION, TO OFFSET BALANCES HELD BY IT OR BY ANY OF ITS
AFFILIATES FOR ACCOUNT OF THE GUARANTOR AT ANY OF ITS OFFICES, IN DOLLARS OR IN
ANY OTHER CURRENCY, AGAINST ANY PRINCIPAL OF OR INTEREST ON ANY OF SUCH
LENDER'S LOANS, OR ANY OTHER AMOUNT PAYABLE TO SUCH LENDER HEREUNDER, WHICH IS
NOT PAID WHEN DUE (REGARDLESS OF WHETHER SUCH BALANCES ARE THEN DUE TO THE
GUARANTOR), IN WHICH CASE IT SHALL PROMPTLY NOTIFY THE GUARANTOR AND
ADMINISTRATIVE AGENT AND COLLATERAL AGENT THEREOF, PROVIDED THAT SUCH LENDER'S
FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE VALIDITY THEREOF.

         SECTION 5.05 ENTIRE AGREEMENT. This Guaranty Agreement and the other
Loan Documents embody the entire agreement and understanding between the Lender
Group and the Guarantor and supersede all prior agreements and understandings
between such parties relating to the subject matter hereof and thereof. There
are no unwritten oral agreements between the parties.

         SECTION 5.06 SURVIVAL OF OBLIGATIONS. To the extent that any payments
on the Obligations or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
to a trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law or equitable cause, then to such extent, the
Obligations so satisfied shall be revived and continue as if such payment or
proceeds had not been received and the Collateral Agent's and the Lender
Group's Liens, rights, powers and


                                       11
<PAGE>   15
remedies under this Guaranty Agreement and each Loan Document to which the
Guarantor is a party shall continue in full force and effect. In such event,
each Loan Document shall be automatically reinstated and the Guarantor shall
take such action as may be reasonably requested by Collateral Agent and the
Lender Group to effect such reinstatement.

         SECTION 5.07 DESIGNATED SENIOR INDEBTEDNESS. The obligations of the
Guarantor under this Guaranty Agreement are, and are intended to be, "guarantor
senior indebtedness", "designated guarantor senior indebtedness" or any other
similar or equivalent classification for all purposes in any other debt
instrument or agreement to which QSRD, the Borrower, or the Guarantor is now or
hereafter a party.

         SECTION 5.08 PRIOR GUARANTY. This Guaranty Agreement supersedes and
replaces the Prior Guaranty Agreement.

                  [remainder of page intentionally left blank]


                                       12
<PAGE>   16

         WITNESS THE EXECUTION HEREOF, effective as of the date first written
above.

                                     CORRIDA RESOURCES, INC.,
                                     a Nevada corporation


                                     By:
                                         --------------------------------
                                         Robert P. Lindsay
                                         Vice President


                                     By:
                                         --------------------------------
                                         Ronald I. Benn
                                         Vice President


                                     Address for Notices:

                                     Corrida Resources, Inc.
                                     c/o Queen Sand Resources, Inc.
                                     13760 Noel Road, Suite 1030
                                     Dallas, TX 75240
                                     Attention: Robert P. Lindsay
                                     Telephone: (972) 233-9906
                                     Facsimile: (972) 233-9575

                                     with a copy to:

                                     Queen Sand Resources, Inc.
                                     60 Queen Street, Suite 1400
                                     Ottawa, Canada KIP 5Y7
                                     Attention: Mr. Ronald Benn
                                     Telephone: (613) 230-7211
                                     Facsimile: (613) 230-6055

                                     and

                                     Haynes & Boone LLP
                                     901 Main Street, Suite 3100
                                     Dallas, Texas 75202-3789
                                     Attention: Mr. William L. Boeing
                                     Telephone: (214) 651-5553
                                     Facsimile: (214) 651-5940


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