FORM OF BROKER DEALER AGREEMENT CROWN EXPLORATION PARTNERS, LTD. Carrollton, Texas 75010
FORM
OF
CROWN
EXPLORATION PARTNERS, LTD.
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_____,
20__
Re: CROWN
ENERGY FUND I, L.P.
Ladies
and Gentlemen:
Crown
Exploration Partners, Ltd. is a Texas limited partnership (“Crown,” “we,” or
“us”) that intends to serve as the managing general partner of Crown Energy Fund
I, L.P. (the “Partnership”), to be formed under the laws of
Texas. The Partnership will be formed to develop and own interests in
oil and natural gas properties located in the state of Texas. The
objective of the Partnership will be to generate revenue from the interests,
distribute cash to the partners and provide tax benefits.
We are
authorized to engage Texas Securities, Inc. (“you”) as a broker dealer for the
offer and sale of preformation units of limited and additional general partner
interests (the “Units”) to be placed with qualified investors, and to pay you
commissions and fees for Units sold by you, all as is more fully set forth
herein. In further consideration of your participation in the offering and sale
of the Units, and as an inducement to you to become a broker dealer, Crown, by
its execution of this Agreement, agrees to extend to you certain benefits, and
to indemnify you against certain civil liabilities under the Securities Act of
1933, as amended (the “Securities Act”). Unless the context otherwise requires,
all of the capitalized terms used herein shall have the meaning given to such
terms in the in the Prospectus (as defined below). You are hereby invited to
become a broker dealer and, as such, to use your best efforts to procure
purchasers of Units in accordance with the terms and provisions of this Broker
Dealer Agreement (this “Agreement”).
1. REPRESENTATIONS
AND WARRANTIES OF CROWN.
Crown
represents and warrants that:
(a) Representations and Warranties.
Crown and the Partnership are offering up to $8,400,000 of Units
consisting of 84 Units of limited partnership and 252 Units of additional
general partnership interests at a price of $25,000 per Unit (the “Offering”)
with fractional Units available as described in the Partnership’s Prospectus, as
supplemented from time to time (the “Prospectus”), a copy of which has been
furnished to you. The Prospectus will not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that Crown does not make and will not make any
representations or warranties with respect to statements or omissions made in
reliance upon and in conformity with written information furnished to Crown with
respect to you, by you or on your behalf expressly for use in the Prospectus or
any amendments or supplements thereof.
(b) The Partnership. Upon its
formation, the Partnership will be duly organized and validly existing and in
good standing under the laws of the State of Texas with full power and authority
to conduct the business in which it will be engaged as described in the
Prospectus.
(c) The Units. The Units, when
issued, will be duly and validly issued and will conform to the description
thereof contained in the Prospectus; such Units are not subject to the
preemptive rights of any Unit holder of the Partnership; and all action required
to be taken for the authorization, issue and sale of such Units has been validly
and sufficiently taken.
(d) Investment Company Act. The
Partnership does not intend to conduct its business so as to be an "investment
company" as that term is defined in the Investment Company Act of 1940, as
amended, and the rules and regulation thereunder, and it will exercise
reasonable diligence to ensure that it does not become an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
(e) Authorization of Agreement.
The execution and delivery of this Agreement, the consummation of the
transactions herein and the compliance with the terms hereof by Crown and the
Partnership do not and will not conflict with or constitute a default
under the organizational documents of such entities, or any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which Crown or the
Partnership are a party as of this date, or any law, order, rule or regulation,
writ, injunction or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over Crown and the Partnership,
or any of our respective property; and no consent, approval, authorization or
order of any court or other governmental agency or body has been or is required
for the performance of this Agreement by Crown or the Partnership, or for the
consummation of the transactions contemplated hereby and thereby.
(f) Materials Provided. To the
knowledge of Crown, all materials provided by Crown or any of its affiliates to
you, including materials provided to you in connection with your due diligence
investigation relating to the Offering, were materially accurate as of the date
provided.
(g) Supplemental Sales Materials.
Any and all supplemental sales materials prepared by Crown, any of its
affiliates for use with potential investors in connection with the Offering,
when used in conjunction with the Prospectus, will not at the time provided for
use, include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. If at any time any event occurs as a result of which such
supplemental sales materials when used in conjunction with the Prospectus would
include an untrue statement of a material fact or, in view of the circumstances
under which they were made, omit to state any material fact necessary to make
the statements therein not misleading, Crown will promptly notify you thereof.
You agree to terminate any use of such supplemental sales materials after being
informed as provided in the previous sentence.
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(h) Compliance with the Securities
Act. The registration statement has been prepared and filed by Crown (the
"Registration Statement") in conformity with the Securities Act and the
applicable instructions and regulations thereto ("Regulations"). The Commission
has not issued any order preventing or suspending the use of any prospectus or
preliminary prospectus filed with the Registration Statement or any amendments
thereto. At the time the Registration Statement becomes or became effective (the
"Effective Date") and at the time that any post-effective amendment thereto
becomes effective and at all times subsequent thereto up to the final
termination of the Offering, the Registration Statement and Prospectus (as
amended or as supplemented) will contain all statements which are required to be
stated therein in accordance with the Securities Act and the Regulations and
will in all respects conform to the requirements of the Securities Act and the
Regulations, and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
2. OFFERING
AND SALE OF UNITS.
(a) On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, we hereby appoint you
as a broker dealer during the Offering Periods to offer to potential investors
in the Partnership, in accordance with the terms of the Prospectus, up to 84
Units of limited partnership and 252 Units of additional general partnership
interests at a price of $25,000 per Unit, and you agree to use your best efforts
as broker dealer to offer and sell such number of Units to potential investors
at the price and in accordance with the terms stated in the
Prospectus.
(b) All
sales of Units will be conditioned upon acceptance by Crown of the subscription
agreement of each subscriber for Units duly executed by each such subscriber and
accompanied by payment of the purchase price for the Units subscribed for by
each such subscriber. Crown shall have the right, in its sole discretion, to
reject the subscription of any potential purchaser of Units.
(c) The
offering of Units by you will be made to potential investors solely in the
states in which you are registered to sell.
(d) The
Units will be offered and sold by you only to persons who warrant or represent
that they or their beneficiaries meet the financial suitability requirements set
forth in the Prospectus and such other conditions as may be required by the
states in which the Units are offered or sold.
(e) Subject
to the terms and conditions herein set forth, we agree that we shall pay to you,
in cash, commissions and reimbursement of selling expenses equal to an aggregate
8% (which amount shall in no event exceed 8%) of the Partnership
subscriptions of subscribers whose subscriptions were obtained by you in your
capacity as broker dealer pursuant to this Agreement, such commissions and
selling expenses to be paid within three (3) business days after the closing
date for the Offering (the "Closing Date"). Prior to the time the Partnership
has been formed and funded, Crown may advance funds for payment of sales
commissions and selling expenses for Units that have been accepted and cleared
from its own funds.
(f) Pursuant
to the terms of the Prospectus, you may, in your sole discretion, waive any or
all of the commissions payable to you by us with respect to sales of Units in
the Offering made to any of your respective officers, directors, employees or
registered representatives. Any Units so purchased will be held for investment
and not for resale.
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(g) Notwithstanding
the provisions of Section 2(e) of this Agreement, you understand and agree
that no commissions, fees or other compensation shall be payable to us or to you
if Crown has not received and accepted subscriptions aggregating at least
$1,000,000 (the "Minimum Offering") for the Partnership by the termination date
for the Offering set forth in the Prospectus (the "Termination
Date").
3. SUBSCRIPTION
PAYMENTS.
(a) Payments
received by us or you for subscriptions shall be made payable to "Crown Energy
Fund I, L.P. Escrow Account"
(b) You
shall transfer all such funds to us by noon of the next business day after their
receipt by you so that we may transfer them to the escrow agent by noon of the
next business day after their receipt by us for deposit in escrow in accordance
with the Prospectus. In the event that the Minimum Offering is not achieved on
or before the Termination Date, all funds held in the escrow account shall,
within 10 days after the Termination Date for the Offering, be returned
directly to the respective subscribers, together with a pro rata share of any
interest earned thereon. In the event the Minimum Offering is achieved on or
before the Termination Date, all funds held in the escrow account attributable
to subscribers whose subscriptions for the Partnership are rejected by Crown,
together with any interest earned thereon, shall, within 10 days after the
filing of the Certificate of Limited Partnership, be returned to such
subscribers.
4. SUITABILITY.
(a) As
a broker dealer, you are aware of the suitability standards, set forth in the
Prospectus, that an offeree must meet and represent. As such, you will make
reasonable inquiry to assure that there is compliance with such standards. You
will maintain records demonstrating such compliance for at least six years from
the date of sale of the Units.
(b) In
recommending the purchase of Units in the Partnership, you shall:
(i) Have
reasonable grounds to believe, on the basis of information obtained from the
offeree concerning his investment objectives, other investments, financial
situation and needs, and any other information known by you or any associated
person, that:
(A) the
offeree is or will be in a financial position appropriate to enable him to
realize to a significant extent the benefits described in the
Prospectus;
(B) the
offeree has a fair market net worth sufficient to sustain the risks inherent in
the Partnership, including loss of investment and lack of
liquidity;
(C) the
Partnership is otherwise suitable for the offeree; and
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(ii) Maintain
in your file documents disclosing the basis upon which the determination of
suitability was reached as to each offeree.
(c) Notwithstanding
the provisions of subsection (b) above, you shall not execute any sale of
Units of in the Partnership in any discretionary account without prior written
approval of the transaction by the offeree.
(d) Prior
to executing a purchase transaction of Units of the Partnership, you shall
inform the offeree of all the pertinent facts relating to the liquidity and
marketability of the Units during the term of the Partnership.
5. DISCLOSURE.
(a) Prior
to participating in the offering, you shall have reasonable grounds to believe,
based on information made available to you by Crown through the Prospectus or
other materials, that all material facts are adequately and accurately disclosed
and provide a basis for evaluating the Partnership.
(b) In
determining the adequacy of disclosed facts pursuant to subsection
(a) hereof, you may obtain information on material facts relating at a
minimum to the following, if relevant in view of the nature of the
Partnership:
(i) items
of compensation;
(ii) physical
properties;
(iii) tax
aspects;
(iv) financial
stability and experience of Crown;
(v) the
Partnership's conflicts and risk factors; and
(vi) appraisals
and other pertinent reports.
(c) For
the purpose of subsections (a) or (b) hereof, you may rely upon the
results of an inquiry conducted by another Financial Industry Regulatory
Authority, Inc. ("FINRA") member or members, provided that:
(i) the
member or persons associated with a member has reasonable grounds to believe
that such inquiry was conducted with due care;
(ii) the
results of the inquiry were provided to you with the consent of the member or
members conducting or directing the inquiry; and
(iii) no
member that participated in the inquiry is a sponsor of the Partnership or an
affiliate of such sponsor.
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6. COVENANTS
AND UNDERTAKINGS OF TEXAS SECURITIES, INC.
You hereby agree:
(a) To
undertake reasonable efforts to see that each prospective investor:
(i) meets
any minimum income or net worth standard required in any state as set forth in
the Prospectus and can reasonably benefit from his, her or its investment in the
Units, based on such prospective investor's investment objective and portfolio
structure;
(ii) is
able to bear the economic risk of an investment in the Units based upon such
prospective investor's overall financial situation; and
(iii) has
an apparent understanding of:
(A) the
fundamental risks of an investment in Units;
(B) the
risk of loss of his, her or its entire investment;
(C) the
lack of liquidity of the Units;
(D) the
restrictions on transfer of the Units;
(E) our
background and qualifications;
(F) the
tax consequences associated with an investment in limited partner interests or
additional general partner interests; and
(G) the
unlimited liability associated with an investment in additional general partner
interests.
(b) To
offer the Units for sale and to sell the Units solely on the basis of the
information furnished to prospective investors in the Prospectus or additional
information authorized in writing by Crown. If you prepare any materials or
presentations supplementary to the Prospectus, you assume complete
responsibility for such materials and presentations and agree to deliver no
written information other than the Prospectus to any potential subscriber unless
authorized to do so in writing by Crown;
(c) To
obtain written evidence sufficient to permit you and Crown to reasonably
determine that a subscriber purporting to qualify is, in fact, so
qualified;
(d) Prior
to obtaining a subscription from any potential subscriber, to obtain evidence
satisfactory to you and Crown that each subscriber meets the financial
suitability requirements established in the Prospectus;
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(e) Not
to commence the offer or sale of Units in any State until you have received
advice from Crown or its counsel that the Units may be offered and/or sold in
such state; and
(f) To
furnish to Crown or its designee at Crown’s request during the Offering Period,
and in any event within five (5) days after the Termination Date, the
subscription agreement (or a true copy thereof) of subscribers solicited by you
to permit Crown or its designee to review such subscription agreement and to
evaluate the qualifications of such subscribers as potential
Partners.
(g) You
expressly represent and undertake that you will fully comply with the Rules of
Fair Practice of the FINRA.
7. CLOSING
CONDITIONS.
Your obligation to deliver subscription
agreements to Crown for acceptance by it is subject to the satisfaction on or
before the Closing Date of the following conditions:
(a) On
the Effective Date and during the Offering Period, no order suspending the
offering or sale of the Units shall have been issued, and on the Effective Date
and during the Offering Period, no proceedings for that purpose shall have been
instituted, or to your knowledge or that of Crown, shall be
contemplated.
(b) You
shall have received a sworn certificate, dated the Closing Date, signed by an
officer of Crown, to the effect that he has carefully read the Prospectus and
that:
(i) as
of its date, the Prospectus did not contain an untrue statement of a material
fact and, to the best of his knowledge after reasonable inquiry, did not omit to
state a material fact necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading;
(ii) since
the date of the Prospectus, no event has occurred which should have been set
forth in an amendment or supplement to the Prospectus which has not been so set
forth;
(iii) since
the date of the Prospectus, there has not been any adverse change in the
business or proposed business, interests, oil and gas properties or proposed oil
and gas properties or condition, financial or otherwise, of Crown, whether or
not arising from transactions in the ordinary course of business, which might
materially and adversely affect the properties or operations or proposed
properties and operations of Crown or the ability of Crown to perform the
services proposed to be performed by it as described in the Prospectus;
and
(iv) to
the best of his knowledge, based upon reasonable investigation, the
representations and warranties of Crown in Section 1 of this Agreement are
true and correct as if made at and as of the Closing Date.
If any condition to your obligations
hereunder shall not have been fulfilled when and as required by this Agreement
to be fulfilled, you may waive any such condition that has not been fulfilled,
extend the time for its fulfillment or terminate this Agreement. In the event
that you elect to terminate this Agreement, the subscription agreement, checks
and other documents and instruments delivered to you for the purchase of the
Units shall be returned to the subscribers solicited by you, accompanied by a
notice from you of the cancellation and termination of the offering of the
Units.
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8. INDEMNIFICATION.
(a) Subject
to the conditions set forth below, we agree to indemnify and hold harmless you,
each of your officers, directors and employees and each person, if any, who
controls you within the meaning of Section 15 of the Securities Act,
against any and all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all expenses whatsoever reasonably
incurred in investigating, preparing for, defending against or settling an
litigation, commenced or threatened, or any claim whatsoever) arising out of or
based upon:
(i) any
alleged untrue statement of a material fact contained in the Prospectus as from
time to time amended or supplemented or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance
upon and in conformity with written information furnished to Crown with respect
to you, by you or on your behalf expressly for use in the Prospectus or any
amendment or supplement thereof; and
(ii) the
failure or alleged failure of Crown to comply with requirements of federal and
state securities law.
If any action is brought against you or
any such officer, director, employee or controlling person in respect of which
indemnity may be sought against Crown pursuant to the foregoing paragraph, you
or such officer, director, employee or controlling person shall promptly notify
the Crown in writing of the institution of such action and Crown shall assume
the defense of such action, including the employment of counsel (reasonably
satisfactory to you or such officer, director, employee or controlling person)
and payment of expenses. You or any such officer, director, employee or
controlling person shall have the right to employ personal counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of you
or such officer, director, employee or controlling person unless the employment
of such counsel shall have been authorized in writing on behalf of Crown in
connection with the defense of such action or Crown shall not have employed such
counsel to have charge of the defense of such action or such indemnified party
or parties shall have reasonably concluded that there may be defenses available
to it or them which are different from or additional to those available to Crown
(in which case Crown shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
the reasonable fees and expenses of not more than one additional counsel for you
and such officers, directors, employees and controlling person (which firm shall
be designated in writing by you) shall be borne by Crown. Anything in this
paragraph to the contrary notwithstanding, Crown shall not be liable for any
settlement of any such claim or action effected without their written consent,
which shall not be withheld unreasonably. The indemnity agreement contained in
this Section 8(a) and the warranties and representations contained in this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of you or any such officer, director, employee or
controlling person, and shall survive any termination of this Agreement. You
agree promptly to notify Crown of the assertion of any claim or of the
commencement of any litigation or proceedings against you or Crown or the
Partnership in connection with the issuance and sale of the Units or in
connection with the Prospectus.
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(b) You
agree to indemnify and hold harmless Crown, the Partnership and each of the
officers and directors of Crown and each other person, if any, who controls
Crown or the Partnership within the meaning of Section 15 of the Securities
Act to the same extent as the foregoing indemnity from Crown to you but only
with respect to:
(i) the
statements or omissions, if any, made in the Prospectus or any amendment or
supplement thereof in reliance upon, and in conformity with, written information
furnished with respect to you, by you or on your behalf expressly for use in the
Prospectus or any amendment or supplement thereof; and
(ii) the
failure or alleged failure of you to comply with the requirements of federal or
state securities law. In case any action shall be commenced based on the
Prospectus or amendment or supplement thereof and in respect of which indemnity
may be sought against you, you shall have the rights and duties given to Crown
and each other person so indemnified shall have the rights and duties given to
you by the provisions of the second paragraph of Section 8(a) above. The
indemnity agreements contained in this Section 8(b) shall remain in full
force and effect regardless of any investigation made by or on behalf of any
person indemnified herein, and shall survive any termination of this Agreement.
Crown agrees promptly to notify you of the assertion of any claim, or of the
commencement of any litigation or proceeding against Crown or the Partnership or
any officer or director of Crown or any person who controls the Partnership
within the meaning of Section 15 of the Securities Act, in connection with
the issuance and sale of the Units or in connection with the
Prospectus.
9. PRIVACY.
(a) Customer Information. "Customer Information" means
any information contained on a customer's application or other form and all
nonpublic personal information about a customer that a party receives from the
other party. "Customer Information" includes, by way of example and not
limitation, name, address, telephone number, social security number, health
information and personal financial information (which may include consumer
account number).
(b) Usage. Both you and we
understand and acknowledge that each of us may be considered a financial
institution subject to applicable federal and state customer and consumer
privacy laws and regulations, including Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
(15 U.S.C. 6801, et seq.) and regulations promulgated thereunder (collectively,
the "Privacy Laws") and
any Customer Information that one party receives from the other party is
received with limitations on its use and disclosure. Both you and we agree that
we are both prohibited from using the Customer Information received from the
other party other than 1) as required by law, regulation or rule or
2) to carry out the purposes for which one party discloses Customer
Information to the other party under the subscription agreement, including use
under an exception permitted by Privacy Laws in the ordinary course of business
to carry out the purposes of such subscription agreement.
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(c) Nondisclosure. Subject to the
provisions of Section 9(b) above, neither you, we nor Crown will disclose
the Customer Information to any other person without prior permission from the
other party.
(d) Safeguarding Customer
Information. The parties shall establish and maintain safeguards against
the unauthorized access, destruction, loss or alteration of Customer Information
in their control that are no less rigorous than those maintained by a party for
its own information of a similar nature. In the event of any improper disclosure
of any Customer Information, the party responsible for the disclosure will
immediately notify the other party.
10. ANTI-MONEY
LAUNDERING COMPLIANCE PROGRAMS.
Your acceptance of this Agreement
constitutes a representation to Crown that you have established and implemented
an anti-money laundering compliance program in accordance with FINRA
Rule 3011 and Section 352 of the Money Laundering Abatement Act
reasonably expected to detect and cause reporting of suspicious transactions in
connection with the sale of this security.
11. INFORMATION
AND REPORTS.
Subject to privacy laws and the
applicable privacy policies of the Partnership and us, you shall be provided
access to information and the books and records of the Partnership as if you
were a holder of Units, and the Partnership shall provide you with copies of all
the forms of all communications provided to holders of Units on or before the
date such communication is provided to such holders.
12. CONFIDENTIALITY
AND NON-SOLICITATION.
To the extent you provide us, the
Partnership, or any of our affiliates any confidential information relating to
you, including information marked "Confidential," and any lists of your
registered representatives, the recipient of such information shall, subject to
the use of such information for the purposes provided, use all precautions
necessary to preserve the confidentiality of such information, including, but
not limited to (a) limiting access to such information to persons who have
a need to know such information and (b) informing its personnel of this
confidentiality obligation. Notwithstanding the foregoing, there shall be no
confidentiality obligations with regards to any information which was
(1) previously known to the recipient, other than through its relationship
with you, without a confidentiality restriction on the use of such information,
(2) independently developed by the recipient as established by written
evidence, (3) rightfully acquired by the recipient from a third party with
full legal right to disclose such information, (4) approved for disclosure
by you, (5) part of the public domain through no breach of this Agreement
or (6) required by law to be disclosed. Neither the Partnership nor we nor
any of our respective affiliates shall provide any information or the identity
of any of such investors to any persons except in accordance with our privacy
policies or those of the Partnership or as required by law or the terms of the
organizational documents of the Partnership.
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13. REPRESENTATIONS
AND AGREEMENT TO SURVIVE.
Except as the context otherwise
requires, all representations, warranties and agreements contained in this
Agreement shall remain operative and in full force and effect and shall survive
the Closing Date.
14. EFFECTIVE
DATE, TERM AND TERMINATION OF THIS AGREEMENT.
(a) This
Agreement shall become effective on the Effective Date. We, or you may elect to
prevent this Agreement from becoming effective without liability of any party to
any other party, except as provided in subsection (c) of this
Section 14, by giving notice of such election to the other parties hereto
before the time this Agreement otherwise would become effective.
(b) You
shall have the right to terminate this Agreement at any time during the Offering
Period if any representations or warranties hereunder shall be found to have
been incorrect or misleading or if Crown shall fail, refuse or be unable to
perform any of its agreements hereunder or to fulfill any condition of your
obligations hereunder of if the Prospectus shall have been amended or
supplemented despite your objection to such amendment or supplement;
or
(i) if
all trading on the New York Stock Exchange or the American Stock Exchange (in
this Section collectively called "Exchange") shall have been
suspended, or minimum or maximum prices for trading generally shall have been
required on the Exchange by Exchange or by order of the Securities and Exchange
Commission or any other governmental authority having jurisdiction;
(ii) if
a banking moratorium has been declared by a state or federal authority;
or
(iii) if
Crown or its properties shall have sustained a material or substantial loss by
fire, flood, accident, earthquake or other calamity or malicious act which,
whether or not said loss shall have been insured, will in your opinion make it
inadvisable to proceed with the offering and sale of the Units; or if there
shall have been such change in the condition or prospects of the Partnership or
Crown or in the levels of the prime interest rate or long-term mortgage rate or
in the condition of securities markets generally as in your judgment would make
it inadvisable to proceed with the offering and sale of the Units.
(c) If
for any reason this Agreement shall not become effective or the offering
hereunder is terminated, Crown shall not have any liability to you except for
such liabilities, if any, as may exist or thereafter arise under Section 8
hereof.
15. NOTICES.
(a) All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and if sent to you shall be mailed, delivered or telegraphed
and confirmed to you at the address on the signature page of this Agreement; if
sent to us or Crown and/or the Partnership shall be mailed, delivered,
telegraphed and confirmed to us or Crown and/or the Partnership at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
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(b) Notice
shall be deemed to be given by you to Crown or the Partnership or by us or the
Partnership to you as of the third business day after the same is mailed or
telegraphed as provided in Section 15(a) above.
16. PARTIES.
This Agreement shall inure solely to
the benefit of and shall be binding upon you, us and, to the extent provided
herein, Crown and the respective successors and assigns of such parties. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person or corporation, other than the parties hereto and their
respective successors and assigns and the controlling persons, officers,
directors and employees, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained; this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of the parties hereto and their respective successors
and assigns and said controlling persons and said officers, and directors and
employees, and for the benefit of no other person or corporation. No purchaser
of any of the Units from you or us shall be construed a successor or assign by
reason merely of such purchase.
17. CONSTRUCTION.
This Agreement shall be construed in
accordance with the laws of the State of Texas.
18. ARBITRATION.
Any dispute or controversy arising out
of or relating to this Agreement, the breach of this Agreement, the
interpretation of this Agreement, or the sale of the Units shall be settled by
arbitration in accordance with the rules of the FINRA. In the event that
arbitration is not possible before the FINRA, arbitration shall be conducted in
accordance with the Securities Arbitration Rules of the American Arbitration
Association. Any judgment upon an award rendered in arbitration may be entered
in any court having jurisdiction thereof.
19. DELAY
NOT A WAIVER.
Neither any failure nor any delay on
the part of you in insisting upon strict performance of any term, condition,
covenant or agreement, or exercising any right, power, remedy or privilege
hereunder shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege.
20. SEVERABILITY.
Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
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21. HEADINGS.
The Article and/or Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
(signature
page follows)
13
If the
foregoing correctly sets forth our understanding, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement.
|
Very
truly yours,
CROWN
EXPLORATION PARTNERS, LTD.
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| By: | Petro-Share Management, LLC, | ||
| its general partner | |||
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By:
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| Name | |||
| Title | |||
| ACCEPTED AS OF THE DATE FIRST | |||
| ABOVE WRITTEN. | |||
| Texas Securities Inc. | |||
| By: | |||
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Name:
Title:
Address:
Attention:
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Tel:
Fax:
Federal Tax LD.
#
E-Mail:
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Exhibit
A
Commissions
8% of the
total initial capitalization; such amount includes the diligence
fee.
A-1