EXHIBIT 1(a)
COTTON VALLEY RESOURCES CORPORATION
300,000 Units
Consisting of
Six Shares of Common Stock, Without Par Value, and
Six Redeemable Common Stock Purchase Warrants
_________, 1997
SELLING AGREEMENT
-----------------
The one or more securities broker dealers whose names and signatures
appear in counterpart in the space provided below (the "Placement Agents"), have
severally agreed with COTTON VALLEY RESOURCES CORPORATION, a corporation
organized under the laws of the Province of Ontario, Canada (the "Company") to
offer and sell on a "Best Efforts" basis up to a maximum amount of 300,000
units, each unit (the "Unit") consisting of six shares of common stock, without
par value, of the Company ("Common Stock"), and six redeemable Common Stock
purchase warrants (individually, a "Warrant"), each of which entitles the holder
thereof to purchase one share of Common Stock at a price of $2.08 (such Units,
together with (A) the shares of Common Stock and Warrants comprising the Units
and (B) the shares of Common Stock issuable upon exercise of such Warrants, are
collectively referred to herein as the "Securities" and the Units included
therein are referred to as the "Registered Units"), all as set forth in the
Preliminary Prospectus dated May ___, 1997, as amended and supplemented from
time to time, and subject to the terms of this Selling Agreement. The Units and
the terms upon which they are to be offered for sale by the several Placement
Agents are more particularly described in the Preliminary Prospectus, additional
copies of which will be supplied in reasonable quantities upon request by any
Placement Agent.
1. Offering. The Registered Units are to be offered to the public by
the several Placement Agents on a Best Efforts basis at the price per Unit set
forth on the cover page of the Preliminary Prospectus (the "Public Offering
Price"). The several Placement Agents, subject to the terms and conditions
hereof, are severally offering a portion of the Registered Units at the Public
Offering Price of $10.00 per Unit. Each Placement Agent must be actually engaged
in the investment banking or securities business and be either (i) a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD") who agrees that in making sales of the Registered Units it will comply
with the Rules of Fair Practice, including Sections 8, 24 and 36 of Article m,
and the Interpretation of the Board of Governors of the NASD with respect to
Free-Riding and Withholding, or (ii) dealers with their principal place of
business located outside the United States, its territories and possessions and
not registered as brokers or dealers under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), who have agreed not to make any sales within
the United States, its territories or its possessions or to persons who are
nationals thereof or residents therein, and who agree that in making sales of
the Registered Units outside the United States, they will comply with the
requirements of the Rules of Fair Practice of the NASD, including Sections 8, 24
and 36 of Article m of such Rules, and Section 25 of such Article as that
Section applies to non-member foreign dealers, and the Interpretation of the
Board of Governors of the NASD with respect to Free-Riding and Withholding.
Under this Agreement, the Company shall have full authority to take
such action as it may deem advisable in respect to all matters pertaining to the
public offering of the Registered Units.
Cotton Valley Resources Corporation Selling Agreement......... Page 1
Each Placement Agent who desires to place any of the Registered Units,
should sign this agreement and fill out the non-binding indication of interest
as set forth below. A copy of this Selling Agreement should reach the Company
promptly by mail or facsimile transmission at its office at 0000 Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxx X0000, Xxxxxx, Xxxxx 00000, facsimile number (000) 000-0000.
The Company reserves the right to reject subscriptions in whole or in part, to
make allotments and to close the subscription books at any time without notice.
The Registered Units allotted to each Placement Agent will be confirmed as soon
as reasonably feasible following the effective date of the final Prospectus.
Any Registered Units placed by Placement Agents under the terms of this
Agreement may be immediately offered to the public in conformity with the terms
of the offering set forth herein and in the Preliminary Prospectus, subject to
the effective date of the final Prospectus and the securities or blue sky laws
of the various states or other jurisdictions.
Neither the Placement Agents nor any other person is, or has been,
authorized by the Company to give any information or make any representation in
connection with the sale of the Registered Units other than those contained in
the Preliminary Prospectus. It is assumed that the Registered Units will be
effectively placed for investment.
2. Payment and Delivery. Payment for the Registered Units that
customers of the Placement Agents purchase hereunder shall be made by the
Placement Agents directly to the Company or through the Depository Trust Company
("DTC"), payable in same-day funds to the order of COTTON VALLEY RESOURCES
CORPORATION, at such time and on such date as the Company may designate, against
delivery of such Registered Units to such Placement Agents through the
facilities of the DTC. Payment shall be preceded or accompanied by a copy of the
attached order form ("Placement Agents' Order Form"), a copy of which shall be
sent to Cotton Valley by facsimile transmission. Within ten business days of
receipt of good funds and Placement Agents' Order Form, Cotton Valley shall
accept or reject the order in whole, or in part. If rejected, the funds will be
immediately returned. If accepted, Cotton Valley shall issue a Treasury
Direction to its transfer agent to issue and send the certificates as directed
in the Placement Agents' Order Form.
3. Compensation. Based on a purchase price of $10.00 per Registered
Unit, the Placement Agents will receive a selling commission (the "Commission")
of $1.00 per Registered Unit and a non-accountable expense allowance (the
"Expense Allowance") of $0.18 per Registered Unit. Placement Agents may deduct
their commissions and non-accountable expense allowance when sending in clients'
orders. Any commissions and non-accountable expense allowances payable not
deducted from payments made for Units will be remitted by Cotton Valley to
Placements within five business days after acceptance of the order.
4. Blue Sky Matters. Upon request, each Placement Agent will be
informed as to the states and other jurisdictions in which the Company has been
advised that the Registered Units are qualified for sale under the respective
securities or blue sky laws of such states or jurisdictions. However, the
Company shall not have any obligation or responsibility with respect to the
right of any Placement Agent to sell the Registered Units in any jurisdiction
and each Placement Agent shall indemnify and hold harmless the Company, its
directors and officers, and any person controlling the Company from and against
any and all losses, claims, damages, expenses or liabilities to which any of
them may become subject as a result of such Placement Agents failure to comply
with the laws of any jurisdiction in connection with the offer and the sale of
Registered Units. In compliance with the General Business law of the State of
New York, it may be necessary for each Placement Agent to file a Further State
Notice respecting the Registered Units, in the form required by said Law, prior
to offering any of the Registered Units in such state.
Cotton Valley Resources Corporation Selling Agreement......... Page 2
5. Termination. This Agreement shall terminate when the Company shall
have determined that the public offering of the Registered Units has been
completed and upon facsimile notice to the Placement Agents of such termination,
or, if not theretofore terminated, it shall terminate 60 days after the initial
public offering of the Registered Units; provided, however, that the Company
shall have the right to extend this Agreement for a period or periods not to
exceed an additional 60 days in the aggregate upon facsimile notice to the
Placement Agents. The Company may terminate this Agreement at any time without
prior notice to the Placement Agents.
6. Obligations and Positions of Placement Agents. Notwithstanding any
provision herein, each Placement Agents submittal of a client's order (as set
forth in the Placement Agents' Order Form attached hereto) will constitute a
binding obligation on the part of such Placement Agent to purchase on behalf of
the client, upon the terms and conditions hereof, the aggregate amount of the
Registered Units confirmed in such order and to perform and observe all the
terms and conditions hereof. The several Placement Agents are not authorized to
act as agent of the Company or the other Placement Agents in offering the
Registered Units to the public or otherwise. Nothing contained herein shall
constitute the Placement Agents an association or other separate entity, or
partners with the Company or the other Placement Agents, but each Placement
Agent will be responsible for such Placement Agent's share of any liability or
expense based on any claim to the contrary. Neither the Company nor the other
Placement Agents shall be under any liability to such Placement Agent for or in
respect of the value, validity or form of the Registered Units, or the delivery
of the Registered Units, or the performance by anyone of any agreement on its
part, or the qualification of the Registered Units for sale under the laws of
any jurisdiction, or for or in respect of any other matter relating to this
Agreement, except for lack of good faith and matters expressly assumed by the
Company and the other Placement Agents in this Agreement, and no obligation on
the part of the Company or the other Placement Agents shall be implied
therefrom. The foregoing provisions shall not be deemed a waiver of any
liability imposed under the Securities Act of 1933, as amended (the "Act"), or
the Exchange Act.
The Company shall have full authority to take such actions as they may
deem advisable in respect of all matters pertaining to the offering of the
Registered Units or arising hereunder. No obligation not expressly assumed by
the Company in this Agreement shall be implied hereby or inferred herefrom.
7. Compliance with Securities Laws. On becoming a Placement Agent, and
in offering and selling the Registered Units, the several Placement Agents agree
to comply with all of the applicable requirements of the Act and the Exchange
Act. Each Placement Agent confirms that it is familiar with Rule 15c2-8 under
the Exchange Act relating to the distribution of preliminary and final
prospectuses for securities of an issuer and confirm that it has complied and
will comply therewith with respect to the offering of the Registered Units.
8. Stabilization. Each Placement Agent has agreed that, during the term
of this Agreement or such shorter period as the Company may determine, it will
not buy or sell any Securities of the Company except as a broker pursuant to
unsolicited orders and as otherwise provided in this Agreement
The Placement Agents' attention is directed to Rule 10b-6 of the
General Rules and Regulations under the 1934 Act, which contains certain
prohibitions against trading by a person interested in a distribution until such
person has completed its participation in such distribution.
9. Notices. Any notice from a Placement Agent to the Company should be
mailed or sent by facsimile transmission to the Company at the addresses and
facsimile numbers set forth in Section 1 hereof. Any notice from the Company to
a Placement Agent shall be mailed or sent by facsimile transmission to the
Placement Agent at the address and facsimile number set forth on the signature
page hereof. Mailed notices shall be sent by registered mail, return receipt
requested. Notices shall be effective upon receipt.
Cotton Valley Resources Corporation Selling Agreement......... Page 3
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
choice of law or conflicts of law or principles thereof.
If you desire to offer on a "Best Efforts" basis any Registered Units,
please confirm your agreement by signing and returning to the Company by mail or
facsimile transmission a copy of this Selling Agreement and your indication of
interest as indicated below, even though you may have previously advised the
Company thereof.
Very truly yours,
COTTON VALLEY RESOURCES CORPORATION
BY: __________________________________
XXXXXX X. XXXXXXX
CHAIRMAN OF THE BOARD
ACCEPTED AND AGREED:
PLACEMENT AGENT
Name:________________________________
Address:_____________________________
-------------------------------------
Phone: ______________________________
Fax:_________________________________
BY: _________________________________
Printed Name: __________________
Title: _________________________
Date: __________________________
Non-binding indication of interest: _____________ Registered Units.
Cotton Valley Resources Corporation Selling Agreement......... Page 4
EXHIBIT 1
PLACEMENT AGENTS' ORDER FORM
COTTON VALLEY RESOURCES CORPORATION
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx X 0000
Xxxxxx, Xxxxx 00000
Facsimile Number (000)000-0000
Dear Sirs:
The undersigned hereby confirms its agreement to purchase for its own
account, or for the account of one or more customers, _____________________
Units (the "Registered Units"), of COTTON VALLEY RESOURCES CORPORATION, a
corporation organized under the laws of the Province of Ontario, Canada each
Registered Unit consisting of six shares of Common Stock, without par value, and
six Redeemable Common Stock Purchase Warrants, each of which entitles the holder
thereof to purchase one share of Common Stock at a price of $2.08. The purchase
price shall be $10.00 per Registered Unit, less a selling commission of $1.00
per Registered Unit and expense allowance of $0.18 per Registered Unit, subject
to the terms and conditions of the Selling Agreement, and the undersigned agrees
to take up and pay for such Registered Units on the terms and conditions set
forth in such Agreement. The undersigned hereby acknowledges receipt of the
Preliminary Prospectus relating to the Securities (as defined in the Selling
Agreement) and confirms that in agreeing to purchase the Registered Units it has
relied on said Preliminary Prospectus and on no other statement whatsoever,
written or oral. The undersigned represents that it has complied and will comply
with the requirements of Rule 15c2-8 under the Securities Exchange Act of 1934,
as amended, with respect to the offering of the Registered Units.
The undersigned confirms that it is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") and represents
that in making sales of the Registered Units it will comply with the Rules of
Fair Practice (including Sections 8, 24 and 36 of Article m) and the
Interpretation of the Board of Governors of the NASD with respect to Free-Riding
and Withholding; alternatively, the undersigned represents that it is a foreign
dealer that is not eligible for membership in the NASD and agrees not to offer
or sell the Registered Units in the United States, its territories or its
possessions or to persons it has reason to believe are nationals thereof or
residents therein, and further agrees that in making sales of the Registered
Units outside the United States, it will comply with the requirements of the
Rules of Fair Practice (including Sections 8, 24 and 36 of Article m, and
Section 25 of such Article as that Section applies to non-member foreign
dealers) and the Interpretation of the Board of Governors of the NASD with
respect to Free-Riding and Withholding.
----------------------------------------
By ______________________________________
Name: ___________________________________
Title: _________________________________
Address: ________________________________
_________________________________________
_________________________________________
Facsimile
Number:__________________________________
Dated _____________________, 1997
Cotton Valley Resources Corporation Selling Agreement......... Page 5
EXHIBIT 1(b)
DIRECT PURCHASE ORDER FORM
COTTON VALLEY RESOURCES CORPORATION
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx X 0000
Xxxxxx, Xxxxx 00000
Facsimile Number (000)000-0000
Dear Sirs:
The undersigned hereby confirms its agreement to purchase for its own
account, _____________________ Units (the "Registered Units"), of COTTON VALLEY
RESOURCES CORPORATION, a corporation organized under the laws of the Province of
Ontario, Canada each Registered Unit consisting of six shares of Common Stock,
without par value, and six Redeemable Common Stock Purchase Warrants, each of
which entitles the holder thereof to purchase one share of Common Stock at a
price of $2.08. The purchase price shall be $10.00 per Registered Unit. The
undersigned hereby acknowledges receipt of the Final Prospectus relating to the
Registered Units and confirms that in agreeing to purchase the Registered Units
it has relied on said Final Prospectus and on no other statement whatsoever,
written or oral.
-------------------------------------------------------
By ____________________________________________________
Name: ________________________________________
Title: ______________________________________
Address: _____________________________________
======================================
Facsimile
Number: ______________________________________
Dated _____________________, 1997
