EXHIBIT 1(a)
ATLAS AMERICA PUBLIC #16-2007 PROGRAM
ANTHEM SECURITIES, INC.
DEALER-MANAGER AGREEMENT
ANTHEM SECURITIES, INC.
DEALER-MANAGER AGREEMENT
TABLE OF CONTENTS
PAGE
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1. Description of Program and Units................................... 1
2. Representations, Warranties and Agreements of the Managing General
Partner......................................................... 2
3. Grant of Authority to the Dealer-Manager........................... 3
4. Compensation and Fees.............................................. 3
5. Covenants of the Managing General Partner.......................... 5
6. Representations and Warranties of the Dealer-Manager............... 6
7. State Securities Registration...................................... 10
8. Expense of Sale.................................................... 11
9. Conditions of the Dealer-Manager's Duties.......................... 11
10. Conditions of the Managing General Partner's Duties................ 11
11. Indemnification.................................................... 12
12. Representations and Agreements to Survive Delivery................. 12
13. Termination........................................................ 13
14. Notices............................................................ 13
15. Format of Checks/Escrow Agent...................................... 13
16. Transmittal Procedures............................................. 14
17. Parties............................................................ 14
18. Relationship....................................................... 14
19. Effective Date..................................................... 14
20. Entire Agreement, Waiver........................................... 15
21. Governing Law...................................................... 15
22. Complaints......................................................... 15
23. Privacy............................................................ 15
24. Anti-Money Laundering Provision.................................... 15
25. Acceptance......................................................... 15
Exhibit A - Form of Escrow Agreement
Exhibit B - Selling Agent Agreement
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ANTHEM SECURITIES, INC.
DEALER-MANAGER AGREEMENT
(Best Efforts)
Anthem Securities, Inc.
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000-0000
RE: ATLAS AMERICA PUBLIC #16-2007 PROGRAM
Gentlemen:
The undersigned, Atlas Resources, Inc., which is referred to as the
"Managing General Partner," on behalf of Atlas America Public #16-2007 Program,
which is referred to as the "Program," is a series of up to two limited
partnerships formed under the Delaware Revised Uniform Limited Partnership Act
as described below. These limited partnerships are sometimes referred to in this
Agreement in the singular as a "Partnership" or in the plural as "Partnerships."
The Managing General Partner on behalf of the Partnerships hereby confirms its
agreement with you, as Dealer-Manager, as follows:
1. DESCRIPTION OF PROGRAM AND UNITS.
(a) The Managing General Partner, a Pennsylvania corporation, will be the
sole managing general partner of up to two limited partnerships which
will be named as follows:
(i) Atlas America Public #16-2007(A) L.P.; and
(ii) Atlas America Public #16-2007(B) L.P.
On behalf of the Program and the Partnerships, a Registration
Statement on Form S-1 (Registration No. 333-________) relating to the
offer and sale of the limited partner and investor general partner
interests in the Partnerships, which are referred to as the "Units,"
was filed on October 18, 2006 with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended, which is referred to as the "Act." The Registration Statement
has been declared effective by the Commission and the Partnerships and
the Units are described in the Prospectus that forms a part of the
Registration Statement. As used in this Agreement, the terms
"Prospectus" and "Registration Statement" refer solely to the
Prospectus and Registration Statement, as amended, described above,
except that:
(i) from and after the date on which any post-effective amendment to
the Registration Statement is declared effective by the
Commission, the term "Registration Statement" shall refer to the
Registration Statement as amended by that post-effective
amendment, and the term "Prospectus" shall refer to the
Prospectus then forming a part of the Registration Statement; and
(ii) if the Prospectus filed by the Managing General Partner pursuant
to Rule 424(b) or (c) promulgated by the Commission under the Act
differs from the Prospectus on file with the Commission at the
time the Registration Statement or any post-effective amendment
thereto shall have become effective, the term "Prospectus" shall
refer to the Prospectus filed pursuant thereto from and after the
date on which it was filed.
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Terms defined in the Prospectus and not otherwise defined in this
Agreement shall have the meanings set forth in the Prospectus.
(b) The Units will be sold at a price of $10,000 per Unit subject to the
discounts for certain investors set forth in Section 4(c) of this
Agreement for certain investors. Subject to the receipt and acceptance
by the Managing General Partner of the minimum subscription proceeds
of $2,000,000 in a Partnership by its Offering Termination Date for
each Partnership as described in the Prospectus (the "Offering
Termination Date"), the Managing General Partner may break escrow and
use the subscription proceeds for the Partnership's drilling
activities, which is referred to as the "Initial Closing Date." Also,
the maximum subscription proceeds of all of the Partnerships, in the
aggregate, must not exceed the registered amount of $200 million.
The Managing General Partner will notify you and the "Selling Agents," as
defined below, of the Initial Closing Date and Offering Termination Date
for each Partnership.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE MANAGING GENERAL PARTNER.
The Managing General Partner represents and warrants to and agrees with you
that:
(a) The Partnerships composing the Program have a currently effective
Registration Statement on Form S-1, including a final Prospectus, for
the registration of the Units under the Act as described in Section 1
of this Agreement.
(b) The Managing General Partner shall provide to you for delivery to all
offerees and purchasers and their representatives the information and
documents that the Managing General Partner deems appropriate to
comply with the Act and applicable state securities acts, which are
referred to as the "Blue Sky" laws.
(c) The Units when issued will be duly authorized and validly issued as
set forth in the Agreement of Limited Partnership of each Partnership,
which is referred to as the "Partnership Agreement," the form of which
is included as Exhibit (A) to the Prospectus, and subject only to the
rights and obligations set forth in the Partnership Agreement or
imposed by the laws of the state of formation of each Partnership or
of any jurisdiction to the laws of which each Partnership is subject.
(d) Each Partnership was duly formed under the laws of the State of
Delaware and is validly existing as a limited partnership in good
standing under the laws of Delaware with full power and authority to
own its properties and conduct its business as described in the
Prospectus. Each Partnership will be qualified to do business as a
limited partnership or similar entity offering limited liability in
those jurisdictions where the Managing General Partner deems the
qualification necessary to assure limited liability of the limited
partners.
This Agreement, when executed by you, will be a valid and binding
agreement of each Partnership and the Managing General Partner, duly
authorized, executed and delivered by them and enforceable in
accordance with its terms except as may be limited by the effect of
bankruptcy, insolvency, moratorium, preferential or fraudulent
conveyance or other laws or equitable principles relating to or
affecting the rights of creditors generally, general principles of
equity, and public policy relating to claims for indemnification for
securities laws violations.
(e) The Prospectus, as supplemented or amended, does not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements in
the Prospectus, in the light of the circumstances under which they are
made, not misleading.
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3. GRANT OF AUTHORITY TO THE DEALER-MANAGER.
(a) Based on the representations and warranties contained in this
Agreement, and subject to the terms and conditions set forth in this
Agreement, the Managing General Partner appoints you as the
Dealer-Manager for the Partnerships and gives you the exclusive right
to solicit subscriptions for the Units on a "best efforts" basis in
all states during the offering period for each Partnership as
described in the Prospectus.
(b) You agree to use your best efforts to effect sales of the Units and to
form and manage a selling group composed of soliciting broker/dealers,
which are referred to as the "Selling Agents," each of which shall be
a member of the National Association of Securities Dealers, Inc.,
which is referred to as the "NASD," and shall enter into a "Selling
Agent Agreement" in substantially the form attached to this Agreement
as Exhibit "B."
(c) The Managing General Partner shall have three business days after the
receipt of an executed Selling Agent Agreement to refuse that Selling
Agent's participation.
4. COMPENSATION AND FEES.
(a) As Dealer-Manager you shall receive from the Managing General Partner
the following compensation, based on each Unit sold to investors in a
Partnership whose subscriptions for Units are accepted by the Managing
General Partner:
(i) a 2.5% Dealer-Manager fee;
(ii) a 7% Sales Commission;
(iii) an up to .5% reimbursement of the Selling Agents' bona fide due
diligence expenses.
(b) All of the up to .5% reimbursement of the Selling Agents' bona fide
due diligence expenses shall be reallowed to the Selling Agents, and
all or a portion of the 7% Sales Commission shall be reallowed to the
Selling Agents as described in the Selling Agent Agreement with each
Selling Agent. A portion of the remaining balance of the 2.5% Dealer-
Manager fee may be reallowed to the wholesalers as wholesaling fees
for subscriptions obtained through their efforts. However, you may
reduce the
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wholesaling fees by any reimbursements made by the Managing General
Partner or the Partnership for expenses which are received by the
wholesalers in connection with the Program or expenses which are owed
by the wholesalers to the Managing General Partner or the Partnership
in connection with the Program. Also, you may use a portion of your
Dealer-Manager fee to pay for permissible non-cash compensation. Under
Rule 2810 of the NASD Conduct Rules, non-cash compensation means any
form of compensation received in connection with the sale of the units
that is not cash compensation, including but not limited to
merchandise, gifts and prizes, travel expenses, meals and lodging.
Permissible non-cash compensation includes the following:
(1) an accountable reimbursement for training and education meetings
for associated persons of the selling agents:
(ii) gifts that do not exceed $100 per year and are not
preconditioned on achievement of a sales target;
(iii) an occassional meal, a ticket to a sporting event of the
theater, or comparable entertainment which is neither so
frequent nor so extensive as to raise any question of propriety
and is not preconditioned on achievement of a sales target; and
(iv) contributions to a non-cash compensation arrangement between a
selling agent and its associated persons, provided that neither
the managing general partner nor the dealer-manager directly or
indirectly participates in the selling agent's organization of a
permissible non-cash compensation arrangement.
In no event shall a selling agent receive non-cash compensation and a
marketing fee if it represents more than 5% per unit.
You shall retain any of the 7% Sales Commission and the 2.5% Dealer-
Manager fee not reallowed to the Selling Agents or the wholesalers.
You are responsible for ensuring that all non-cash compensation
arrangements comply with NASD Conduct Rule 2810. For example, payments
or reimbursements by you or the Managing General Partner may be made
in connection with meetings held by you or the Managing General
Partner for the purpose of training or education of registered
representatives of a Selling Agent, only if the following conditions
are met:
(i) the registered representative obtains his Selling Agent's prior
approval to attend the meeting and attendance by the registered
representative is not conditioned by his Selling Agent on the
achievement of a sales target;
(ii) the location of the training and education meeting is
appropriate to the purpose of the meeting as defined in NASD
Conduct Rule 2810;
(iii) the payment or reimbursement is not applied to the expenses of
guests of the registered representative;
(iv) the payment or reimbursement by you or the Managing General
Partner is not conditioned by you or the Managing General
Partner on the achievement of a sales target; and
(v) the recordkeeping requirements are met.
"Non-cash compensation" means any form of compensation received in
connection with the sale of the Units that is not cash compensation,
including but not limited to merchandise, gifts and prizes, travel
expenses, meals and lodging.
(c) Notwithstanding the foregoing:
(i) the Managing General Partner, its officers, directors, and
affiliates, and investors who buy Units through the officers and
directors of the Managing General Partner may subscribe to Units
for a subscription price reduced by the 2.5% Dealer-Manager fee,
the 7% Sales Commission and the .5% reimbursement of the Selling
Agents' bona fide due diligence expenses, which shall not be paid
to you; and
(ii) registered investment advisors and their clients and Selling
Agents and their registered representatives and principals may
subscribe to Units for a subscription price reduced by the 7%
Sales Commission, which shall not be paid to you, although their
subscription price shall not be reduced by the 2.5%
Dealer-Manager fee and the up to .5%
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reimbursement of the Selling Agents' bona fide due diligence
expenses which shall be paid to you.
No more than 5% of the total Units sold in the Partnerships shall be
sold, in the aggregate, with the discounts described above.
(d) Pending receipt and acceptance by the Managing General Partner of the
minimum subscription proceeds of $2,000,000 in each Partnership,
excluding any optional subscription of the Managing General Partner
and its Affiliates and the subscription discounts set forth in Section
4(c) of this Agreement, all proceeds received by you from the sale of
Units in each Partnership shall be held in a separate interest bearing
escrow account as provided in Section 15 of this Agreement.
Unless at least the minimum subscription proceeds of $2,000,000 as
described above are received on or before the Offering Termination
Date of a Partnership as described in Section 1 of this Agreement, the
offering of Units in that Partnership shall be terminated, in which
event:
(i) the 2.5% Dealer-Manager fee, the 7% Sales Commission and the up
to .5% reimbursement of the Selling Agents' bona fide due
diligence expenses set forth in Section 4(a) of this Agreement
shall not be payable to you;
(ii) all funds advanced by subscribers shall be returned to them with
interest earned; and
(iii) you shall deliver a termination letter in the form provided to
you by the Managing General Partner to each of the subscribers
and to each of the offerees previously solicited by you and the
Selling Agents in connection with the offering of the Units.
(e) Except as otherwise provided below, the fees, reimbursements, and
Sales Commissions set forth in Section 4(a) of this Agreement shall be
paid to you within five business days after the following:
(i) at least the minimum subscription proceeds of $2,000,000 as
described above have been received by the respective Partnership
and accepted by the respective Partnership; and
(ii) the subscription proceeds have been released from the escrow
account to the respective Partnership.
You shall reallow to the Selling Agents and the wholesalers their
respective fees, reimbursements, and Sales Commissions as set forth in
Section 4(b) of this Agreement.
Thereafter, your fees, reimbursements and Sales Commissions shall be
paid to you and shall be reallowed to the Selling Agents and
wholesalers as described above approximately every two weeks until the
Offering Termination Date for the respective Partnership. All your
remaining fees, reimbursements, and Sales Commissions shall be paid to
you by the Managing General Partner no later than fourteen business
days after the Offering Termination Date for the respective
Partnership.
5. COVENANTS OF THE MANAGING GENERAL PARTNER. The Managing General Partner
covenants and agrees that:
(a) The Managing General Partner shall deliver to you ample copies of the
Prospectus and all amendments or supplements to the Prospectus.
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(b) If any event affecting a Partnership or the Managing General Partner
occurs that in the opinion of the Managing General Partner should be
set forth in a supplement or amendment to the Prospectus, then the
Managing General Partner shall promptly at its expense prepare and
furnish to you a sufficient number of copies of a supplement or
amendment to the Prospectus so that it, as so supplemented or amended,
will not contain an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements in
the Prospectus, in the light of the circumstances under which they are
made, not misleading.
6. REPRESENTATIONS AND WARRANTIES OF THE DEALER-MANAGER. You, as the
Dealer-Manager, represent and warrant to the Managing General Partner and
the respective Partnership that:
(a) You are a corporation duly organized, validly existing and in good
standing under the laws of the state of your formation or of any
jurisdiction to the laws of which you are subject, with all requisite
power and authority to enter into this Agreement and to carry out your
obligations under this Agreement.
(b) This Agreement when accepted and approved by you shall be duly
authorized, executed, and delivered by you and shall be a valid and
binding agreement on your part in accordance with its terms.
(c) The consummation of the transactions contemplated by this Agreement
and the Prospectus shall not result in the following:
(i) any breach of any of the terms or conditions of, or a default
under your Articles of Incorporation or Bylaws, or any other
indenture, agreement, or instrument to which you are a party or
by which you are bound; or
(ii) any violation of any order applicable to you of any court or
regulatory body or administrative agency having jurisdiction over
you or your affiliates.
(d) You are duly registered under the provisions of the Securities
Exchange Act of 1934, which is referred to as the "Act of 1934," as a
broker or dealer, and you are a member in good standing of the NASD.
You are duly registered as a broker/dealer in the states where you are
required to be registered in order to carry out your obligations as
contemplated by this Agreement and the Prospectus. You agree to
maintain all the foregoing registrations in good standing throughout
the term of the offer and sale of the Units in each Partnership, and
you agree to comply with all statutes and other requirements
applicable to you as a broker/dealer under those registrations.
(e) Pursuant to your appointment as Dealer-Manager, you shall use your
best efforts to exercise the supervision and control that you deem
necessary and appropriate to the activities of you and the Selling
Agents to comply with all the provisions of the Act, insofar as the
Act applies to your and their activities under this Agreement.
Further, you and the Selling Agents shall not engage in any activity
which would cause the offer and/or sale of the Units not to comply
with the Act, the Act of 1934, the applicable rules and regulations of
the Commission, the applicable state securities laws and regulations,
this Agreement, and the NASD Conduct Rules including Rules 2420, 2730,
2740, 2750, and Rule 2810(b)(2) and (b)(3), which provide as follows:
Sec. (b)(2)
SUITABILITY
(A) A member or person associated with a member shall not
underwrite or participate in a public offering of a direct
participation program unless standards of suitability have
been established by the program for participants therein and
such standards are fully disclosed in the
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prospectus and are consistent with the provisions of
subparagraph (B).
(B) In recommending to a participant the purchase, sale or
exchange of an interest in a direct participation program, a
member or person associated with a member shall:
(i) have reasonable grounds to believe, on the basis of
information obtained from the participant concerning
his investment objectives, other investments, financial
situation and needs, and any other information known by
the member or associated person, that:
a. the participant is or will be in a financial
position appropriate to enable him to realize to a
significant extent the benefits described in the
prospectus, including the tax benefits where they
are a significant aspect of the program;
b. the participant has a fair market net worth
sufficient to sustain the risks inherent in the
program, including loss of investment and lack of
liquidity; and
c. the program is otherwise suitable for the
participant; and
(ii) maintain in the files of the member documents
disclosing the basis upon which the determination of
suitability was reached as to each participant.
(C) Notwithstanding the provisions of subparagraphs (A) and (B)
hereof, no member shall execute any transaction in direct
participation program in a discretionary account without
prior written approval of the transaction by the customer.
(D) Subparagraphs (A) and (B), and, only in situations where the
member is not affiliated with the direct participation
program, subparagraph (C) shall not apply to:
(i) a secondary public offering of or a secondary market
transaction in a unit, depositary receipt, or other
interest in a direct participation program that is
listed on a national securities exchange; or
(ii) an initial public offering of a unit, depositary
receipt or other interest in a direct participation
program for which an application for listing on a
national securities exchange has been approved by such
exchange and the applicant makes a good faith
representation that it believes such listing on an
exchange will occur within a reasonable period of time
following the formation of the program.
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Sec. (b)(3)
DISCLOSURE
(A) Prior to participating in a public offering of a direct
participation program, a member or person associated with a
member shall have reasonable grounds to believe, based on
information made available to him by the sponsor through a
prospectus or other materials, that all material facts are
adequately and accurately disclosed and provide a basis for
evaluating the program.
(B) In determining the adequacy of disclosed facts pursuant to
subparagraph (A) hereof, a member or person associated with
a member shall obtain information on material facts relating
at a minimum to the following, if relevant in view of the
nature of the program:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects;
(iv) financial stability and experience of the sponsor;
(v) the program's conflict and risk factors; and
(vi) appraisals and other pertinent reports.
(C) For purposes of subparagraphs (A) or (B) hereof, a member or
person associated with a member may rely upon the results of
an inquiry conducted by another member or members, provided
that:
(i) the member or person 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 the member
or person associated with a member 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 program or an affiliate of such
sponsor.
(D) Prior to executing a purchase transaction in a direct
participation program, a member or person associated with a
member shall inform the prospective participant of all
pertinent facts relating to the liquidity and marketability
of the program during the term of the investment; provided,
however, that paragraph (b) shall not apply to an initial or
secondary public offering of or a secondary market
transaction in a unit, depositary receipt or other interest
in a direct participation program which complies with
subparagraph (2)(D).
You and the Selling Agents shall maintain records on the information
used to determine that the investment in the Units is suitable and
appropriate for each subscriber, and shall maintain these records for
at least six years after the Offering Termination Date for the
respective Partnership.
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(f) You agree to advise the Managing General Partner in writing of each
jurisdiction in which you and the Selling Agents propose to offer or
sell the Units; and you shall not nor shall you permit any Selling
Agent to offer or sell the Units in any jurisdiction until you have
been advised in writing by the Managing General Partner, or the
Managing General Partner's special counsel, that the offer or sale of
the Units:
(i) has been qualified in the jurisdiction;
(ii) is exempt from the qualification requirements imposed by the
jurisdiction; or
(iii) the qualification is otherwise not required.
(g) You and the Selling Agents have received copies of the Prospectus
relating to the Units and you and the Selling Agents have relied only
on the statements contained in the Prospectus and not on any other
statements whatsoever, either written or oral, with respect to the
details of the offering of Units.
You agree and shall require the Selling Agents to agree to deliver a
copy of the Prospectus to each subscriber to whom you sell the Units
at or before the completion of any sale of Units to such subscriber
(which sale shall be deemed, for the purposes of this Agreement to
occur on the date on which that subscriber delivers subscription funds
to the escrow agent), or earlier if required by the Blue Sky or
securities laws of any state. Unless advised otherwise by the Managing
General Partner, you and the Selling Agents may choose to provide each
offeree with the following, which are collectively referred to as the
"Sales Literature":
(i) a flyer entitled "Atlas America Public #16-2007 Program";
(ii) an article entitled "Tax Rewards with Oil and Gas
Partnerships";
(iii) a brochure of tax scenarios entitled "How an Investment in
Atlas America Public #16-2007 Program Can Help Achieve an
Investor's Tax Objectives";
(iv) a booklet entitled "Outline of Tax Consequences of Oil and Gas
Drilling Programs";
(v) a brochure entitled "Investment Insights - Tax Time";
(vi) a brochure entitled "Frequently Asked Questions";
(vii) a brochure entitled "The Drilling Process"; and
(viii) possibly other supplementary materials.
Any such Sales Literature, if distributed, must have been preceded or
must be accompanied by the Prospectus.
(h) You and the Selling Agents agree that you and the Selling Agents shall
not place any advertisement or other solicitation with respect to the
Units (including without limitation any material for use in any
newspaper, magazine, radio or television commercial, telephone
recording, motion picture, or other public media) without:
(i) the prior written approval of the Managing General Partner; and
(ii) the prior written approval of the form and content thereof by the
Commission, the NASD and the securities authorities of the states
where such advertisement or solicitation is to be circulated.
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Any such advertisements or solicitations shall be at your expense.
(i) If a supplement or amendment to the Prospectus is prepared and
delivered to you by the Managing General Partner, you agree and shall
require any Selling Agent to agree as follows:
(i) to distribute each supplement or amendment to the Prospectus to
every person who has previously received a copy of the Prospectus
from you and/or the Selling Agent; and
(ii) to include each supplement or amendment in all future deliveries
of any Prospectus.
(j) In connection with any offer or sale of the Units, you agree and shall
require any Selling Agent to agree to the following:
(i) to comply in all respects with statements set forth in the
Prospectus, the Partnership Agreement, and any supplements or
amendments to the Prospectus;
(ii) not to make any statement inconsistent with the statements in
the Prospectus, the Partnership Agreement, and any supplements
or amendments to the Prospectus;
(iii) not to make any untrue statement of a material fact or omit to
state a material fact necessary in order to make statements
made, in light of the circumstances under which they were made,
not misleading in connection with the Partnerships, the Units or
the offering; and
(iv) not to provide any written information, statements, or sales
materials other than the Prospectus, the Sales Literature, and
any supplements or amendments to the Prospectus unless approved
in writing by the Managing General Partner.
(k) You agree to use your best efforts in the solicitation and sale of the
Units and to coordinate and supervise the efforts of the Selling
Agents, and you shall require any Selling Agent to agree to use its
best efforts in the solicitation and sale of the Units, including
that:
(i) the prospective purchasers meet the suitability requirements set
forth in the Prospectus, the Subscription Agreement, and this
Agreement; and
(ii) the prospective purchasers properly complete and execute the
Subscription Agreement, which has been provided as Exhibit (I-B)
to the Partnership Agreement, Exhibit (A) of the Prospectus,
together with any additional forms provided in any supplement or
amendment to the Prospectus, or otherwise provided to you by the
Managing General Partner to be completed by prospective
purchasers.
The Managing General Partner shall have the right to reject any
subscription at any time for any reason without liability to it.
Subscription funds and executed Subscription Agreements shall be
transmitted as set forth in Section 16 of this Agreement.
(l) You agree and covenant that:
(i) the representations and warranties you make in this Agreement are
and shall be true and correct at the applicable closing date; and
(ii) you shall have fulfilled all your obligations under this
Agreement at the applicable closing date.
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7. STATE SECURITIES REGISTRATION. Incident to the offer and sale of the Units,
the Managing General Partner shall use its best efforts either in taking:
(a) all necessary action and filing all necessary forms and documents
deemed reasonable by it in order to qualify or register Units for sale
under the securities laws of the jurisdictions requested by you
pursuant to Section 6(f) of this Agreement; or
(b) any necessary action and filing any necessary forms deemed reasonable
by it in order to obtain an exemption from qualification or
registration in those jurisdictions.
Notwithstanding, the Managing General Partner may elect not to qualify or
register Units in any state or jurisdiction in which it deems the
qualification or registration is not warranted for any reason in its sole
discretion. The Managing General Partner and its counsel shall inform you
as to the states and jurisdictions in which the Units have been qualified
for sale or are exempt under the respective securities or Blue Sky laws of
those states and jurisdictions. The Managing General Partner, however, has
not assumed and will not assume any obligation or responsibility as to your
right or any Selling Agent's right to act as a broker/dealer with respect
to the Units in any state or jurisdiction.
The Managing General Partner shall provide to you and the Selling Agents
for delivery to all offerees and purchasers and their representatives any
additional information, documents, and instruments that the Managing
General Partner deems necessary to comply with the rules, regulations, and
judicial and administrative interpretations in those states and
jurisdictions for the offer and sale of the Units in those states.
The Managing General Partner shall file all post-offering forms, documents,
or materials and take all other actions required by the states and
jurisdictions in which the offer and sale of Units have been qualified,
registered, or are exempt. However, the Managing General Partner shall not
be required to take any action, make any filing, or prepare any document
necessary or required in connection with your status or any Selling Agent's
status as a broker/dealer under the laws of any state or jurisdiction.
The Managing General Partner shall provide you with copies of all
applications, filings, correspondence, orders, other documents, or
instruments relating to any application for qualification, registration,
exemption, or other approval under applicable state or Federal securities
laws for the offering.
8. EXPENSE OF SALE. The expenses in connection with the offer and sale of the
Units shall be payable as set forth below.
(a) The Managing General Partner shall pay all expenses incident to the
performance of its obligations under this Agreement, including the
fees and expenses of its attorneys and accountants and all fees and
expenses of registering or qualifying the Units for offer and sale in
the states and jurisdictions as set forth in Section 7 of this
Agreement, or obtaining exemptions from qualification or registration,
even if the offering of the Partnerships is not successfully
completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the formation and
management of the selling group and the fees and expenses of your own
counsel and accountants, even if the offering of the Partnerships is
not successfully completed.
9. CONDITIONS OF THE DEALER-MANAGER'S DUTIES. Your obligations under this
Agreement shall be subject to the accuracy, as of the date of this
Agreement and at the applicable closing date of:
(a) the Managing General Partner's representations and warranties made in
this Agreement; and
Anthem Securities, Inc.
Dealer-Manager Agreement
11
(b) to the performance by the Managing General Partner of its obligations
under this Agreement.
10. CONDITIONS OF THE MANAGING GENERAL PARTNER'S DUTIES. The Managing General
Partner's obligations provided under this Agreement, including the duty to
pay compensation to you as set forth in Section 4 of this Agreement, shall
be subject to the following:
(a) the accuracy, as of the date of this Agreement and at the applicable
closing date of each Partnership as if made at the applicable closing
date, of your representations and warranties made in this Agreement;
(b) the performance by you of your obligations under this Agreement; and
(c) the Managing General Partner's receipt, at or before the applicable
closing date of each Partnership, of a fully executed Subscription
Agreement for each prospective purchaser as required by Section 6(k)
of this Agreement.
11. INDEMNIFICATION.
(a) You and the Selling Agents shall indemnify and hold harmless the
Managing General Partner, each Partnership and its attorneys against
any losses, claims, damages or liabilities, joint or several, to which
they may become subject under the Act, the Act of 1934, or otherwise
insofar as the losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based on your agreements with the
Selling Agents or your breach of any of your duties and obligations,
representations, or warranties under the terms or provisions of this
Agreement, and you and the Selling Agents shall reimburse them for any
legal or other expenses reasonably incurred in connection with
investigating or defending the losses, claims, damages, liabilities,
or actions.
(b) The Managing General Partner shall indemnify and hold you and the
Selling Agents harmless against any losses, claims, damages or
liabilities, joint or several, to which you and the Selling Agents may
become subject under the Act, the Act of 1934, or otherwise insofar as
the losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based on the Managing General Partner's
breach of any of its duties and obligations, representations, or
warranties under the terms or provisions of this Agreement, and the
Managing General Partner shall reimburse you and the Selling Agents
for any legal or other expenses reasonably incurred in connection with
investigating or defending the losses, claims, damages, liabilities,
or actions.
(c) The foregoing indemnity agreements shall extend on the same terms and
conditions to, and shall inure to the benefit of, each person, if any,
who controls each indemnified party within the meaning of the Act.
(d) Promptly after receipt by an indemnified party of notice of the
commencement of any action, the indemnified party shall, if a claim in
respect of the action is to be made against an indemnifying party
under this Section, notify the indemnifying party in writing of the
commencement of the action; but the omission to promptly notify the
indemnifying party shall not relieve the indemnifying party from any
liability which it may have to any indemnified party. If any action is
brought against an indemnified party, it shall notify the indemnifying
party of the commencement of the action, and the indemnifying party
shall be entitled to participate in, and, to the extent that it
wishes, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel satisfactory to the
indemnified and indemnifying parties. After the indemnified party has
received notice from the agreed on counsel that the defense of the
action under this paragraph has been assumed, the indemnifying party
shall not be responsible for any legal or other expenses subsequently
incurred by the indemnified party in
Anthem Securities, Inc.
Dealer-Manager Agreement
12
connection with the defense of the action other than with respect to
the agreed on counsel who assumed the defense of the action.
12. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations,
warranties, and agreements of the Managing General Partner and you in this
Agreement, including the indemnity agreements contained in Section 11 of
this Agreement, shall:
(a) survive the delivery, execution and closing of this Agreement;
(b) remain operative and in full force and effect regardless of any
investigation made by or on behalf of you or any person who controls
you within the meaning of the Act, by the Managing General Partner, or
any of its officers, directors, or any person who controls the
Managing General Partner within the meaning of the Act, or any other
indemnified party; and
(c) survive delivery of the Units.
13. TERMINATION.
(a) You shall have the right to terminate this Agreement other than the
indemnification provisions of Section 11 of this Agreement by giving
notice as specified below any time at or before a closing date:
(i) if the Managing General Partner has failed, refused, or been
unable at or before a closing date, to perform any of its
obligations under this Agreement; or
(ii) there has occurred an event materially and adversely affecting
the value of the Units.
If you elect to terminate this Agreement other than the
indemnification provisions of Section 11 of this Agreement, then the
Managing General Partner shall be promptly notified by you by
telephone, e-mail, facsimile, or telegram, confirmed by letter.
(b) The Managing General Partner may terminate this Agreement other than
the indemnification provisions of Section 11 of this Agreement, for
any reason and at any time, by promptly giving notice to you by
telephone, e-mail, facsimile, or telegram, confirmed by letter as
specified below at or before a closing date.
14. NOTICES.
(a) All notices or communications under this Agreement, except as
otherwise specifically provided, shall be in writing.
(b) Any notice or communication sent by the Managing General Partner or a
Partnership to you shall be mailed, delivered, or sent by facsimile,
e-mail or telegraph, and confirmed to you at X.X. Xxx 000, 000 Xxxxxx
Xxxx, Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000-0000.
(c) Any notice or communication sent by you to the Managing General
Partner or a Partnership shall be mailed, delivered, or sent by
facsimile, e-mail or telegraph, and confirmed at 000 Xxxxxx Xxxx, Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000.
15. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum subscription
proceeds of $2,000,000 of each Partnership as set forth in Section 4(d) of
this Agreement, the Managing General Partner and you and the Selling
Agents, including customer carrying broker/dealers, agree that all
subscribers shall be instructed to make their checks or wire transfers
payable solely to the Escrow Agent as agent for the Partnership in which
the Units are then being offered as follows:
Anthem Securities, Inc.
Dealer-Manager Agreement
13
(a) "Atlas America Public #16-2007(A) L.P., Escrow Agent, National City
Bank of PA"; or
(b) "Atlas America Public #16-2007(B) L.P., Escrow Agent, National City
Bank of PA."
You agree and shall require the Selling Agents, including customer carrying
broker/dealers, to agree to comply with Rule 15c2-4 adopted under the Act
of 1934. In addition, for identification purposes, wire transfers should
reference the subscriber's name and the account number of the escrow
account for the Partnership in which the Units are then being offered.
If you receive a check not conforming to the foregoing instructions, then
you shall return the check to the Selling Agent not later than noon of the
next business day following its receipt by you. The Selling Agent shall
then return the check directly to the subscriber not later than noon of the
next business day following its receipt from you. Checks received by you or
a Selling Agent which conform to the foregoing instructions shall be
transmitted by you under Section 16 "Transmittal Procedures," below.
You represent that you have or will execute the Escrow Agreement for each
Partnership and agree that you are bound by the terms of the Escrow
Agreement executed by you, for the respective Partnership, and the Managing
General Partner, the form of which is attached to this Agreement as Exhibit
"A."
16. TRANSMITTAL PROCEDURES. You and each Selling Agent, including customer
carrying broker/dealers, shall transmit received investor funds in
accordance with the following procedures. For purposes of the following,
the term "Selling Agent" shall also include you as Dealer-Manager when you
receive subscriptions from investors.
(a) Pending receipt of a Partnership's minimum subscription proceeds of
$2,000,000 as set forth in Section 4(d) of this Agreement, the Selling
Agents on receipt of any check from a subscriber shall promptly
transmit the check and the original executed Subscription Agreement to
you, as Dealer-Manager, by noon of the next business day following
receipt of the check by the Selling Agent. By noon of the next
business day following your receipt of the check and the original
executed Subscription Agreement, you, as Dealer-Manager, shall
transmit the check and a copy of the executed Subscription Agreement
to the Escrow Agent, and the original executed Subscription Agreement
and a copy of the check to the Managing General Partner.
(b) On receipt by you, as Dealer-Manager, of notice from the Managing
General Partner that a Partnership's minimum subscription proceeds of
$2,000,000 as set forth in Section 4(d) of this Agreement have been
received, the Managing General Partner, you, and the Selling Agents
agree that all subscribers then may be instructed, in the Managing
General Partner's sole discretion, to make their checks or wires
payable solely to the Partnership in which Units are then being
offered.
Thereafter, the Selling Agents shall promptly transmit any and all
checks received from subscribers and the original executed
Subscription Agreement to you, as Dealer-Manager, by noon of the next
business day following receipt of the check by the Selling Agent. By
noon of the next business day following your receipt of the check and
the original executed Subscription Agreement, you, as Dealer-Manager,
shall transmit the check and the original executed Subscription
Agreement to the Managing General Partner.
17. PARTIES. This Agreement shall inure to the benefit of and be binding on
you, the Managing General Partner, and any respective successors and
assigns. This Agreement shall also inure to the benefit of the indemnified
parties, their successors and assigns. This Agreement is intended to be and
is for the sole and exclusive benefit of the parties to this Agreement,
including the Partnerships, and their respective successors and assigns,
and the indemnified parties and their successors and assigns, and for the
benefit of no other person. No other person shall have any legal or
equitable right, remedy or claim under or in
Anthem Securities, Inc.
Dealer-Manager Agreement
14
respect of this Agreement. No purchaser of any of the Units from you or a
Selling Agent shall be construed a successor or assign merely by reason of
the purchase.
18. RELATIONSHIP. This Agreement shall not constitute you a partner of the
Managing General Partner, a Partnership, or any general partner of a
Partnership, nor render the Managing General Partner, the Partnerships, or
any general partner of a Partnership liable for any of your obligations.
19. EFFECTIVE DATE. This Agreement is made effective between the parties as of
the date accepted by you as indicated by your signature to this Agreement.
20. ENTIRE AGREEMENT, WAIVER.
(a) This Agreement constitutes the entire agreement between the Managing
General Partner and you, and shall not be amended or modified in any
way except by subsequent agreement executed in writing. Neither party
to this Agreement shall be liable or bound to the other by any
agreement except as specifically set forth in this Agreement.
(b) The Managing General Partner and you may waive, but only in writing,
any term, condition, or requirement under this Agreement that is
intended for its benefit. However, any written waiver of any term or
condition of this Agreement shall not operate as a waiver of any other
breach of that term or condition of this Agreement. Also, any failure
to enforce any provision of this Agreement shall not operate as a
waiver of that provision or any other provision of this Agreement.
21. GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
22. COMPLAINTS. The Managing General Partner and you, as Dealer-Manager, agree
as follows:
(a) to notify the other if either receives an investor complaint in
connection with the offer or sale of Units by you or a Selling Agent;
(b) to cooperate with the other in resolving the complaint; and
(c) to cooperate in any regulatory examination of the other to the extent
it involves this Agreement or the offer or sale of Units by you or a
Selling Agent.
23. PRIVACY. The Managing General Partner and you each acknowledge that certain
information made available to the other under this Agreement may be deemed
nonpublic personal information under the Xxxxx-Xxxxx-Xxxxxx Act, other
federal or state privacy laws (as amended), and the rules and regulations
promulgated thereunder, which are referred to collectively, as the "Privacy
Laws." The Managing General Partner and you agree as follows:
(a) not to disclose or use the information except as required to carry out
each party's respective duties under this Agreement or as otherwise
permitted by law in the ordinary course of business;
(b) to establish and maintain procedures reasonably designed to assure the
security and privacy of all the information; and
(c) to cooperate with the other and provide reasonable assistance in
ensuring compliance with the Privacy Laws to the extent applicable to
either or both the Managing General Partner and you.
24. ANTI-MONEY LAUNDERING PROVISION. You and each Selling Agent each represent
and warrant to the Managing General Partner that each of you have in place
and will maintain suitable and adequate "know
Anthem Securities, Inc.
Dealer-Manager Agreement
15
your customer" policies and procedures and that each of you shall comply
with all applicable laws and regulations regarding anti-money laundering
activity and will provide such documentation to the Managing General
Partner on written request.
25. ACCEPTANCE. Please confirm your agreement to the terms and conditions set
forth above by signing and returning the enclosed duplicate copy of this
Agreement to us at the address set forth above.
Very truly yours,
MANAGING GENERAL PARTNER
ATLAS RESOURCES, LLC,
a Pennsylvania limited liability company
________________, 2007 By:
Date ------------------------------------
Xxxx X. Xxxxxxxxx,
Senior Vice President - Direct
Participation Programs
PROGRAM
ATLAS AMERICA PUBLIC #16-2007 PROGRAM
By: Atlas Resources, LLC,
Managing General Partner
________________, 2007 By:
Date ------------------------------------
Xxxx X. Xxxxxxxxx,
Senior Vice President - Direct
Participation Programs
DEALER-MANAGER
ANTHEM SECURITIES, INC.,
a Pennsylvania corporation
________________, 2007 By:
Date ------------------------------------
Xxxxxx Xxxxxxxx, President
Anthem Securities, Inc.
Dealer-Manager Agreement
16
EXHIBIT "A"
ATLAS AMERICA PUBLIC #16-2007(A) L.P.
ESCROW AGREEMENT
THIS AGREEMENT is made to be effective as of ________________, 2007, by and
among Atlas Resources, LLC, a Pennsylvania limited liability company (the
"Managing General Partner"), Anthem Securities, Inc., a Pennsylvania corporation
("Anthem"), the "Dealer-Manager," Atlas America Public #16-2007(A) L.P., a
Delaware limited partnership (the "Partnership") and National City Bank of
Pennsylvania, Pittsburgh, Pennsylvania, as escrow agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Managing General Partner intends to offer publicly for sale to
qualified investors (the "Investors") up to 19,900 investor general partner
interests and up to 100 limited partner interests in the Partnership (the
"Units").
WHEREAS, each Investor will be required to pay his subscription in full on
subscribing by check or wire (the "Subscription Proceeds").
WHEREAS, the cost per Unit will be $10,000 subject to certain discounts of
up to 10% ($1,000 per Unit) for sales to the Managing General Partner, its
officers, directors and affiliates, registered investment advisors and their
clients, Selling Agents and their registered representatives and principals, and
investors who buy Units through the officers and directors of the Managing
General Partner. Also, the Managing General Partner, in its discretion, may
accept one-half Unit ($5,000) subscriptions, with larger subscriptions permitted
in $1,000 increments.
WHEREAS, the Managing General Partner and Anthem have executed an agreement
("Anthem Dealer-Manager Agreement") under which Anthem will solicit
subscriptions for Units in all states on a "best efforts" "all or none" basis
for Subscription Proceeds of $2,000,000 and on a "best efforts" basis for the
remaining Units on behalf of the Managing General Partner and the Partnership
and under which Anthem has been authorized to select certain members in good
standing of the National Association of Securities Dealers, Inc. ("NASD") to
participate in the offering of the Units ("Selling Agents").
WHEREAS, the Anthem Dealer-Manager Agreement, the "Dealer-Manager
Agreement," provides for compensation to the Dealer-Manager to participate in
the offering of the Units, subject to the discounts set forth above for certain
Investors, which compensation includes, but is not limited to, for each Unit
sold:
o a 2.5% Dealer-Manager fee;
o a 7% sales commission; and
o an up to .5% reimbursement of the Selling Agents' bona fide due
diligence expenses;
all or a portion of which will be reallowed to the Selling Agents and
wholesalers.
WHEREAS, under the terms of the Dealer-Manager Agreement the Subscription
Proceeds are required to be held in escrow subject to the receipt and acceptance
by the Managing General Partner of the minimum
1
Subscription Proceeds of $2,000,000, excluding any optional subscription by the
Managing General Partner, its officers, directors, and Affiliates.
WHEREAS, the Units may also be offered and sold by the officers and
directors of the Managing General Partner without receiving a sales commission
or other compensation on their sales.
WHEREAS, no subscriptions to the Partnership will be accepted after the
"Offering Termination Date," which is the first to occur of either:
o receipt of the maximum Subscription Proceeds of $200,000,000; or
o December 31, 2007.
WHEREAS, to facilitate compliance with the terms of the Dealer-Manager
Agreement and Rule 15c2-4 adopted under the Securities Exchange Act of 1934, the
Managing General Partner and the Dealer-Manager desire to have the Subscription
Proceeds deposited with the Escrow Agent and the Escrow Agent agrees to hold the
Subscription Proceeds under the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement, the parties to this Agreement, intending to be
legally bound, agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The Managing General Partner, the Partnership,
and the Dealer-Manager appoint the Escrow Agent as the escrow agent to
receive and to hold the Subscription Proceeds deposited with the Escrow
Agent by the Dealer-Manager and the Managing General Partner under this
Agreement, and the Escrow Agent agrees to serve in this capacity during the
term and based on the provisions of this Agreement.
2. DEPOSIT OF SUBSCRIPTION PROCEEDS. Pending receipt of the minimum
Subscription Proceeds of $2,000,000, the Dealer-Manager and the Managing
General Partner shall deposit the Subscription Proceeds of each Investor to
whom they sell Units with the Escrow Agent and shall deliver to the Escrow
Agent a copy of the "Subscription Agreement," which is the execution and
subscription instrument signed by the Investor to evidence his agreement to
purchase Units in the Partnership. Payment for each subscription for Units
shall be in the form of a check or wire made payable to "Atlas America
Public #16-2007(A) L.P., Escrow Agent, National City Bank of Pennsylvania."
3. INVESTMENT OF SUBSCRIPTION PROCEEDS. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow Agent as
directed by the Managing General Partner. This may be a savings account,
bank money market account, short-term certificates of deposit issued by a
bank, or short-term certificates of deposit issued or guaranteed by the
United States government. The interest earned shall be added to the
Subscription Proceeds and disbursed in accordance with the provisions of
Paragraph 4 or 5 of this Agreement, as the case may be.
4. DISTRIBUTION OF SUBSCRIPTION PROCEEDS. If the Escrow Agent:
(a) receives proper written notice from an authorized officer of the
Managing General Partner that at least the minimum Subscription
Proceeds of $2,000,000 have been received and accepted by the Managing
General Partner; and
(b) determines that Subscription Proceeds for at least $2,000,000 are
Distributable Subscription Proceeds;
then the Escrow Agent shall promptly release and distribute to the Managing
General Partner the Distributable Subscription Proceeds plus any interest
paid and investment income earned on the
Escrow Agreement
2
Subscription Proceeds while held by the Escrow Agent in the escrow account.
For purposes of the Agreement, "Distributable Subscription Proceeds" are
Subscription Proceeds which have been deposited in the escrow account (1)
by wire transfer; and (2) by check, but in the case of checks only at the
time that the Escrow Agent believes an amount of time has passed which
would usually be sufficient for Subscription Proceeds paid by check to have
returned unpaid by the bank on which the check was drawn and after a 10 day
period from the date of deposit.
After the occurrence of 4(a) and (b) above, Escrow Agent will provide a
letter to the Managing General Partner confirming receipt of checks and/or
wires representing Subscription Proceeds totaling at least $2,000,000 have
been received and the anticipated date the funds will be considered
Distributable Subscription Proceeds.
After the initial distribution, any remaining Subscription Proceeds, plus
any interest paid and investment income earned on the Subscription Proceeds
while held by the Escrow Agent in the escrow account, shall be promptly
released and distributed to the Managing General Partner by the Escrow
Agent as the Subscription Proceeds become Distributable Subscription
Proceeds after a 10 day period from the date of deposit.
The Managing General Partner shall immediately return to the Escrow Agent
any Subscription Proceeds distributed to the Managing General Partner or
refunded to an Investor to the extent that such Subscription Proceeds were
paid by a check which is returned or otherwise not collected for any reason
prior or subsequent to termination of this Agreement.
5. SEPARATE PARTNERSHIP ACCOUNT. During the continuation of the offering after
the Partnership is funded with cleared Subscription Proceeds of at least
$2,000,000 and the Escrow Agent receives the notice described in Paragraph
4 of this Agreement, and before the Offering Termination Date, any
additional Subscription Proceeds may be deposited by the Dealer-Manager and
the Managing General Partner directly in a separate Partnership account
which shall not be subject to the terms of this Agreement.
6. DISTRIBUTIONS TO SUBSCRIBERS.
(a) If the Partnership is not funded as contemplated because less than the
minimum Subscription Proceeds of $2,000,000 have been received and
accepted by the Managing General Partner by twelve (12:00) p.m.
(noon), local time, EASTERN STANDARD TIME on the Offering Termination
Date, or for any other reason, then the Managing General Partner shall
notify the Escrow Agent, and the Escrow Agent promptly shall
distribute to each Investor, for which Escrow Agent has a copy of the
subscription agreement, a refund check made payable to the Investor in
an amount equal to the Subscription Proceeds of the Investor, plus any
interest paid or investment income earned on the Investor's
Subscription Proceeds while held by the Escrow Agent in the escrow
account.
(b) If a subscription for Units submitted by an Investor is rejected by
the Managing General Partner for any reason after the Subscription
Proceeds relating to the subscription have been deposited with the
Escrow Agent, then the Managing General Partner promptly shall notify
in writing, the Escrow Agent of the rejection, and the Escrow Agent
shall promptly distribute to the Investor for which Escrow Agent has a
copy of a Subscription Agreement, a refund check made payable to the
Investor in an amount equal to the Subscription Proceeds of the
Investor, plus any interest paid or investment income earned on the
Investor's Subscription Proceeds while held by the Escrow Agent in the
escrow account.
7. COMPENSATION AND EXPENSES OF ESCROW AGENT. The Managing General Partner
shall be solely responsible for and shall pay the compensation of the
Escrow Agent for its services under this Agreement, as provided in Appendix
1 to this Agreement and made a part of this Agreement, and the
Escrow Agreement
3
charges, expenses (including any reasonable attorneys' fees), and other
out-of-pocket expenses incurred by the Escrow Agent in connection with the
administration of the provisions of this Agreement. The Escrow Agent shall
have no lien on the Subscription Proceeds deposited in the escrow account
unless and until the Partnership is funded with cleared Subscription
Proceeds of at least $2,000,000 and the Escrow Agent receives the proper
written notice described in Paragraph 4 of this Agreement, at which time
the Escrow Agent shall have, and is granted, a prior lien on any property,
cash, or assets held under this Agreement, with respect to its unpaid
compensation and nonreimbursed expenses, superior to the interests of any
other persons or entities.
8. DUTIES OF ESCROW AGENT. The Escrow Agent shall not be obligated to accept
any notice, make any delivery, or take any other action under this
Agreement unless the notice or request or demand for delivery or other
action is in writing and given or made by the Managing General Partner or
an authorized officer of the Managing General Partner. In no event shall
the Escrow Agent be obligated to accept any notice, request, or demand from
anyone other than the Managing General Partner.
9. LIABILITY OF ESCROW AGENT. The Escrow Agent shall not be liable for any
damages, or have any obligations other than the duties prescribed in this
Agreement in carrying out or executing the purposes and intent of this
Agreement. However, nothing in this Agreement shall relieve the Escrow
Agent from liability arising out of its own willful misconduct or gross
negligence. The Escrow Agent's duties and obligations under this Agreement
shall be entirely administrative and not discretionary. The Escrow Agent
shall not be liable to any party to this Agreement or to any third-party as
a result of any action or omission taken or made by the Escrow Agent in
good faith. The parties to this Agreement will jointly and severally
indemnify the Escrow Agent, hold the Escrow Agent harmless, and reimburse
the Escrow Agent from, against and for, any and all liabilities, costs,
fees and expenses (including reasonable attorney's fees) the Escrow Agent
may suffer or incur by reason of its execution and performance of this
Agreement. If any legal questions arise concerning the Escrow Agent's
duties and obligations under this Agreement, then the Escrow Agent may
consult with its counsel and rely without liability on written opinions
given to it by its counsel.
The Escrow Agent shall be protected in acting on any written notice,
request, waiver, consent, authorization, or other paper or document which
the Escrow Agent, in good faith, believes to be genuine and what it
purports to be.
If there is any disagreement between any of the parties to this Agreement,
or between them or any other person, resulting in adverse claims or demands
being made in connection with this Agreement, or if the Escrow Agent, in
good faith, is in doubt as to what action it should take under this
Agreement, then the Escrow Agent may, at its option, refuse to comply with
any claims or demands on it or refuse to take any other action under this
Agreement, so long as the disagreement continues or the doubt exists. In
any such event, the Escrow Agent shall not be or become liable in any way
or to any person for its failure or refusal to act and the Escrow Agent
shall be entitled to continue to so refrain from acting until the dispute
is resolved by the parties involved.
National City Bank of Pennsylvania is acting solely as the Escrow Agent and
is not a party to, nor has it reviewed or approved any agreement or matter
of background related to this Agreement, other than this Agreement itself,
and has assumed, without investigation, the authority of the individuals
executing this Agreement to be so authorized on behalf of the party or
parties involved.
10. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent may resign as such
after giving thirty days' prior written notice to the other parties to this
Agreement. Similarly, the Escrow Agent may be removed and replaced after
receiving thirty days' prior written notice from the other parties to this
Agreement. In either event, the duties of the Escrow Agent shall terminate
thirty days after the date of the notice (or as of an earlier date as may
be mutually agreeable); and the Escrow Agent shall then deliver the balance
of the Subscription Proceeds (and any interest paid or investment income
earned
Escrow Agreement
4
thereon while held by the Escrow Agent in the escrow account) in its
possession to a successor escrow agent appointed by the other parties to
this Agreement as evidenced by a written notice filed with the Escrow
Agent.
If the other parties to this Agreement are unable to agree on a successor
escrow agent or fail to appoint a successor escrow agent before the
expiration of thirty days following the date of the notice of the Escrow
Agent's resignation or removal, then the Escrow Agent may petition any
court of competent jurisdiction for the appointment of a successor escrow
agent or other appropriate relief. Any resulting appointment shall be
binding on all of the parties to this Agreement.
On acknowledgment by any successor escrow agent of the receipt of the then
remaining balance of the Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in the
escrow account), the Escrow Agent shall be fully released and relieved of
all duties, responsibilities, and obligations under this Agreement.
11. TERMINATION. This Agreement shall terminate and the Escrow Agent shall have
no further obligation with respect to this Agreement after the distribution
of all Subscription Proceeds (and any interest paid or investment income
earned thereon while held by the Escrow Agent in the escrow account) as
contemplated by this Agreement or on the written consent of all the parties
to this Agreement.
12. NOTICE. Any notices or instructions, or both, to be given under this
Agreement shall be validly given if set forth in writing and mailed by
certified mail, return receipt requested, or by facsimile with confirmation
of receipt (originals to be followed in the mail), or by a nationally
recognized overnight courier, as follows:
If to the Escrow Agent:
National City Bank
c/o Allegiant Institutional Services
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx XxXxxxx LOC 00-00XX-00
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Managing General Partner:
Atlas Resources, LLC
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Black
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Escrow Agreement
5
If to Anthem:
Anthem Securities, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may designate any other address to which notices and instructions
shall be sent by notice duly given in accordance with this Agreement.
13. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
(b) This Agreement shall be binding on and shall inure to the benefit of
the undersigned and their respective successors and assigns.
(c) This Agreement may be executed in multiple copies, each executed copy
to serve as an original.
14. The parties hereto and subscribers acknowledge Escrow Agent has not
reviewed and is not making any recommendations with respect to the
securities offered.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
NATIONAL CITY BANK OF PENNSYLVANIA
As Escrow Agent
By:
------------------------------------
Xxxxx Xxxxxxx, Vice President
ATLAS RESOURCES, LLC
A Pennsylvania limited liability company
By:
------------------------------------
Xxxxx X. Black, Vice President -
Partnership Administration
Escrow Agreement
6
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By:
------------------------------------
Xxxxxx X. Xxxxxxxx, President
ATLAS AMERICA PUBLIC #16-2007(A) L.P.
By: ATLAS RESOURCES, LLC
Managing General Partner
By:
------------------------------------
Xxxxx X. Black,
Vice President - Partnership
Administration
Escrow Agreement
7
APPENDIX I TO ESCROW AGREEMENT
COMPENSATION FOR SERVICES OF ESCROW AGENT
REVIEW AND ACCEPTANCE FEE: $ WAIVED
For providing initial review of the Escrow Agreement and all supporting
documents and for initial services associated with establishing the Escrow
Account. This is a one (1) time fee payable upon the opening of the account.
I. Annual Administrative Fee Payable in Advance $3000.00
(or any portion thereof)
II. Remittance of checks returned to subscribers 20.00
(set out in section 6 of the governing agreement)
III. Wire transfers n/a
IV. Purchase or Sale of Securities 100.00
V. Investments (document limits investment to a checking or savings account,
or certificates of deposit) such products offered by any National City Bank
retail branch)- fees are subject to the type of account the Managing
General Partner directs the Escrow Agent to open and to be governed by the
Escrow Agreement.
EXTRAORDINARY SERVICES:
For any services other than those covered by the aforementioned, a special per
hour charge will be made commensurate with the character of the service, time
required and responsibility involved. Such services include but are not limited
to excessive administrative time, attendance at closings, specialized reports,
and record keeping, unusual certifications, etc.
Managing General Partner agrees to report all funds in accordance with
appropriate tax treatment.
FEE SCHEDULE IS SUBJECT TO ANNUAL REVIEW AND/OR ADJUSTMENT UPON AMENDMENT
THERETO.
Escrow Agreement
8
EXHIBIT "B"
SELLING AGENT AGREEMENT
WITH ANTHEM SECURITIES, INC.
TO: _________________________________
RE: ATLAS AMERICA PUBLIC #16-2007 PROGRAM
Gentlemen:
Atlas Resources, LLC will be the Managing General Partner in a series of up
to two limited partnerships organized under the Delaware Revised Uniform Limited
Partnership Act: Atlas America Public #16-2007(A) L.P. and Atlas America Public
#16-2007(B) L.P., which are referred to as the "Partnership" or the
"Partnerships." The Units in the Partnerships, which are referred to as the
"Units," and the offering are described in the Prospectus, copies of which have
been furnished to you with this Agreement.
Our firm, Anthem Securities, Inc., which is referred to as the
"Dealer-Manager," has entered into a Dealer-Manager Agreement for sales in all
states, a copy of which has been furnished to you and is incorporated in this
Agreement by reference, with the Managing General Partner and the Partnerships
under which the Dealer-Manager has agreed to form a group of NASD member firms,
which are referred to as the "Selling Agents." The Selling Agents will obtain
subscriptions for Units in each Partnership in all states on a "best efforts"
basis under the Securities Act of 1933, as amended, which is referred to as the
"Act," and the provisions of the Prospectus.
You are invited to become one of the Selling Agents on a non-exclusive
basis. By your acceptance below you agree to act in that capacity and to use
your best efforts, in accordance with the terms and conditions of this
Agreement, to solicit subscriptions for Units in each Partnership at the time
the Partnership is being offered as provided in Section 1 of the Dealer-Manager
Agreement in all states where you are duly registered or licensed as
broker/dealer.
1. REPRESENTATIONS AND WARRANTIES OF SELLING AGENT. You represent and warrant
to the Dealer-Manager that:
(a) You are a corporation or other entity duly organized, validly
existing, and in good standing under the laws of the state of your
formation or of any jurisdiction to the laws of which you are subject,
with all requisite power and authority to enter into this Agreement
and to carry out your obligations under this Agreement.
(b) This Agreement when accepted and approved by you will be duly
authorized, executed, and delivered by you and will be a valid and
binding agreement on your part in accordance with its terms.
(c) The consummation of the transactions contemplated by this Agreement
and the Prospectus will not result in the following:
(i) any breach of any of the terms or conditions of, or constitute a
default under your organizational documents, bylaws, any
indenture, agreement, or other instrument to which you are a
party or by which you are bound; or
Anthem Securities, Inc.
Selling Agent Agreement
1
(ii) any violation of any order applicable to you of any court,
regulatory body or administrative agency having jurisdiction over
you or over your affiliates.
(d) You are duly registered under the provisions of the Securities
Exchange Act of 1934, which is referred to as the "Act of 1934," as a
broker/dealer, and you are a member in good standing of the NASD. You
are duly registered as a broker/dealer in the jurisdictions where you
are required to be registered in order to carry out your obligations
as contemplated by this Agreement and the Prospectus. You agree to
maintain all the foregoing registrations in good standing throughout
the term of the offer and sale of the Units, and you agree to comply
with all statutes and other requirements applicable to you as a
broker/dealer under those registrations.
(e) Pursuant to your appointment as a Selling Agent, you shall comply with
all the provisions of the Act, insofar as the Act applies to your
activities under this Agreement. Further, you shall not engage in any
activity which would cause the offer and/or sale of the Units not to
comply with the Act, the Act of 1934, the applicable rules and
regulations of the Securities and Exchange Commission, which is
referred to as the "Commission," the applicable state securities laws
and regulations, this Agreement, and the NASD Conduct Rules including
Rules 2420, 2730, 2740, 2750, and 2810(b)(2) and (b)(3), which provide
as follows:
Sec. (b)(2)
SUITABILITY
(A) A member or person associated with a member shall not
underwrite or participate in a public offering of a direct
participation program unless standards of suitability have
been established by the program for participants therein and
such standards are fully disclosed in the prospectus and are
consistent with the provisions of subparagraph (B).
(B) In recommending to a participant the purchase, sale or
exchange of an interest in a direct participation program, a
member or person associated with a member shall:
(i) have reasonable grounds to believe, on the basis of
information obtained from the participant concerning
his investment objectives, other investments, financial
situation and needs, and any other information known by
the member or associated person, that:
a. the participant is or will be in a financial
position appropriate to enable him to realize to a
significant extent the benefits described in the
prospectus, including the tax benefits where they
are a significant aspect of the program;
b. the participant has a fair market net worth
sufficient to sustain the risks inherent in the
program, including loss of investment and lack of
liquidity; and
c. the program is otherwise suitable for the
participant; and
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Selling Agent Agreement
2
(ii) maintain in the files of the member documents
disclosing the basis upon which the determination of
suitability was reached as to each participant.
(C) Notwithstanding the provisions of subparagraphs (A) and (B)
hereof, no member shall execute any transaction in direct
participation program in a discretionary account without
prior written approval of the transaction by the customer.
(D) Subparagraphs (A) and (B), and, only in situations where the
member is not affiliated with the direct participation
program, subparagraph (C) shall not apply to:
(i) a secondary public offering of or a secondary market
transaction in a unit, depositary receipt, or other
interest in a direct participation program that is
listed on a national securities exchange; or
(ii) an initial public offering of a unit, depositary
receipt or other interest in a direct participation
program for which an application for listing on a
national securities exchange has been approved by such
exchange and the applicant makes a good faith
representation that it believes such listing on an
exchange will occur within a reasonable period of time
following the formation of the program.
Sec. (b)(3)
DISCLOSURE
(A) Prior to participating in a public offering of a direct
participation program, a member or person associated with a
member shall have reasonable grounds to believe, based on
information made available to him by the sponsor through a
prospectus or other materials, that all material facts are
adequately and accurately disclosed and provide a basis for
evaluating the program.
(B) In determining the adequacy of disclosed facts pursuant to
subparagraph (A) hereof, a member or person associated with
a member shall obtain information on material facts relating
at a minimum to the following, if relevant in view of the
nature of the program:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects;
(iv) financial stability and experience of the sponsor;
(v) the program's conflict and risk factors; and
(vi) appraisals and other pertinent reports.
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Selling Agent Agreement
3
(C) For purposes of subparagraphs (A) or (B) hereof, a member or
person associated with a member may rely upon the results of
an inquiry conducted by another member or members, provided
that:
(i) the member or person 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 the member
or person associated with a member 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 program or an affiliate of such
sponsor.
(D) Prior to executing a purchase transaction in a direct
participation program, a member or person associated with a
member shall inform the prospective participant of all
pertinent facts relating to the liquidity and marketability
of the program during the term of the investment; provided,
however, that paragraph (b) shall not apply to an initial or
secondary public offering of or a secondary market
transaction in a unit, depositary receipt or other interest
in a direct participation program which complies with
subparagraph (2)(D).
(f) You shall not offer or sell the Units in any jurisdiction until you
have been advised in writing by the Managing General Partner, or the
Managing General Partner's special counsel, that the offer or sale of
the Units:
(i) has been qualified in the jurisdiction;
(ii) is exempt from the qualification requirements imposed by the
jurisdiction; or
(iii) the qualification is otherwise not required.
(g) You agree that you shall not place any advertisement or other
solicitation with respect to the Units (including without limitation
any material for use in any newspaper, magazine, radio or television
commercial, telephone recording, motion picture, or other public
media) without:
(i) the prior written approval of the Managing General Partner; and
(ii) the prior written approval of the form and content thereof by the
Commission, the NASD and the securities authorities of the states
where such advertisement or solicitation is to be circulated.
Any such advertisements or solicitations shall be at your expense.
(h) You have received copies of the Prospectus relating to the Units and
you have relied only on the statements contained in the Prospectus and
not on any other statements whatsoever, either written or oral, with
respect to the details of the offering of Units.
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Selling Agent Agreement
4
You shall deliver a copy of the Prospectus to each subscriber to whom
you sell the Units at or before the completion of any sale of Units to
such subscriber (which sale shall be deemed, for the purposes of this
Agreement to occur on the date on which that subscriber delivers
subscription funds to the escrow agent), or earlier if required by the
blue sky or securities laws of any jurisdiction. Unless advised
otherwise by the Managing General Partner, you may choose to provide
each offeree with the following sales materials which are collectively
referred to as the "Sales Literature":
(i) a flyer entitled "Atlas America Public #16-2007 Program";
(ii) an article entitled "Tax Rewards with Oil and Gas
Partnerships";
(iii) a brochure of tax scenarios entitled "How an Investment in
Atlas America Public #16-2007 Program Can Help Achieve an
Investor's Tax Objectives";
(iv) a booklet entitled "Outline of Tax Consequences of Oil and Gas
Drilling Programs";
(v) a brochure entitled "Investment Insights - Tax Time";
(vi) a brochure entitled "Frequently Asked Questions"; and
(vii) a brochure entitled "The Drilling Process"; and
(viii) possibly other supplementary materials.
Any such Sales Literature, if distributed, must have been preceded or
must be accompanied by the Prospectus.
(i) If a supplement or amendment to the Prospectus is prepared and
delivered to you by the Managing General Partner or the
Dealer-Manager, you agree as follows:
(i) to distribute each supplement or amendment to the Prospectus to
every person who has previously received a copy of the Prospectus
from you; and
(ii) to include each supplement or amendment in all future deliveries
of any Prospectus.
(j) In connection with any offer or sale of the Units, you agree to the
following:
(i) to comply in all respects with statements set forth in the
Prospectus, the Partnership Agreement, and any supplements or
amendments to the Prospectus;
(ii) not to make any statement inconsistent with the statements in
the Prospectus, the Partnership Agreement, and any supplements
or amendments to the Prospectus;
(iii) not to provide any written information, statements, or sales
materials other than the Prospectus, the Sales Literature, and
any supplements or amendments to the Prospectus unless approved
in writing by the Managing General Partner; and
(iv) not to make any untrue statement of a material fact or omit to
state a material fact necessary in order to make statements
made, in light of the circumstances under
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Selling Agent Agreement
5
which they were made, not misleading in connection with the
Partnerships, the Units or the offering.
(k) You agree to use your best efforts in the solicitation and sale of the
Units, including that:
(i) you comply with all the provisions of the Act, the Act of 1934,
the applicable rules and regulations of the Commission, the
applicable state securities laws and regulations, this
Agreement, and the NASD Conduct Rules;
(ii) the prospective purchasers meet the suitability requirements set
forth in the Prospectus, the Subscription Agreement, and this
Agreement; and
(iii) the prospective purchasers properly complete and execute the
Subscription Agreement, which has been provided as Exhibit (I-B)
to the Partnership Agreement, Exhibit (A) of the Prospectus,
together with any additional forms provided in any supplement or
amendment to the Prospectus, or otherwise provided to you by the
Managing General Partner or the Dealer-Manager to be completed
by prospective purchasers.
You acknowledge and agree that the Managing General Partner shall have
the right to reject any subscription at any time for any reason
without liability to it. Subscription funds and executed subscription
packets shall be transmitted as set forth in Section 11 of this
Agreement.
(l) You agree and covenant that:
(i) the representations and warranties you make in this Agreement are
and shall be true and correct as of the date of this Agreement
and at the applicable closing date; and
(ii) you shall and have fulfilled all your obligations under this
Agreement at the applicable closing date.
2. COMMISSIONS.
(a) Subject to the receipt of the minimum required subscription proceeds
of $2,000,000 as described in Section 4(d) of the Dealer-Manager
Agreement, and the discounts set forth in Section 4(c) of the
Dealer-Manager Agreement for sales to the Managing General Partner,
its officers, directors and affiliates, registered investment advisors
and their clients, Selling Agents and their registered representatives
and principals, and investors who buy Units through the officers or
directors of the Managing General Partner, the Dealer-Manager is
entitled to receive from the Managing General Partner a 7% Sales
Commission and a 2.5% Dealer-Manager Fee based on the aggregate amount
of all Unit subscriptions to a Partnership secured by the
Dealer-Manager or the selling group formed by the Dealer-Manager and
accepted by the Managing General Partner.
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6
Additionally, the Dealer-Manager is entitled to receive from the
Managing General Partner an up to .5% reimbursement of the Selling
Agents' bona fide due diligence expenses per Unit.
Subject to the terms and conditions set forth in this Agreement,
including the Dealer-Manager's receipt from you of the documentation
required of you in Section 1 of this Agreement, the Dealer-Manager
agrees to pay you on Units sold by you and accepted by the Managing
General Partner:
(i) a 7% Sales Commission, subject to the performance by you of your
obligations under Appendix I to this Agreement, which is
incorporated in this Agreement by reference; and
(ii) up to a .5% reimbursement of your bona fide due diligence
expenses per Unit. With respect to the up to .5% reimbursement
of your bona fide due diligence expenses, any xxxx presented by
you to the Dealer-Manager for reimbursement of costs associated
with your due diligence activities must be for actual costs and
may not include a profit margin. Although the Dealer-Manager is
not required to obtain an itemized expense statement before
paying out due diligence expenses, any xxxx for due diligence
submitted by you must be based on your actual expenses incurred
in conducting due diligence. If the Dealer-Manager receives a
non-itemized xxxx for due diligence that it has reason to
question, then it has the obligation to ensure your compliance
by requesting an itemized statement to support the xxxx
submitted by you. If such a due diligence xxxx cannot be
justified, any excess over actual due diligence expenses that is
paid is considered by the NASD to be undisclosed underwriting
compensation and is required to be included within the 10%
compensation guideline under NASD Conduct Rule 2810, and
reflected on your books and records. Notwithstanding, if you
provide an itemized xxxx in excess of .5% then the excess over
.5% will not be included within the 10% compensation guideline,
but instead the 4.5% organization and offering cost guideline of
NASD Conduct Rule 2810.
(iii) In addition, the Dealer-Manager or Managing General Partner may
make certain non-cash compensation arrangements of up to .5% per
Unit with you or your registered representatives. The permissible
non-cash compensation will be paid for training and education
meetings, gifts that do not exceed $100 per year and are not
preconditioned on the achievement of a sales target, an
occasional meal, a ticket to a sporting event or the theater, or
comparable entertainment which is neither so frequent nor so
extensive as to raise any question of propriety and is not
preconditioned on achievement of a sales target and contributions
by the Dealer-Manager or Managing General Partner to a non-cash
compensation arrangement between you and your associated persons,
provided that the Dealer-Manager or Managing General Partner do
not directly or indirectly participate in your organization of
the permissible non-cash compensation arrangement. The Dealer-
Manager is responsible for ensuring that all non-cash
compensation arrangements comply with the restrictions on
non-cash compensation in connection with direct participation
programs as set forth in NASD Conduct Rule 2810. For example, if
the Managing General Partner or Dealer-Manager pays or reimburses
you in connection with meetings held by the Managing General
Partner or Dealer-Manager for the purpose of training or
education of your registered representatives, then the following
conditions must be met:
(A) your registered representative must obtain your prior
approval to attend the meeting and attendance by your
registered representatives must not be conditioned by you
on the achievement of a sales target;
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7
(B) the location of the training and education meeting must be
appropriate to the purpose of the meeting, as defined in
NASD Conduct Rule 2810;
(C) the payment or reimbursement must not be applied to the
expenses of guests of the registered representative;
(D) the payment or reimbursement by the Managing General
Partner or Dealer-Manager must not be conditioned by the
Managing General Partner or Dealer-Manager on the
achievement of a sales target; and
(E) the appropriate records must be maintained.
Non-cash compensation means any form of compensation received in
connection with the sale of the Units that is not cash
compensation, including but not limited to merchandise, gifts
and prizes, travel expenses, meals and lodging.
[Also, the Dealer-Manager may pay a marketing fee of up to
_______ if you meet certain sales thresholds and provide
marketing support as set forth in Appendix II, but in no event
shall you receive non-cash compensation and the marketing fee if
it represents more than 5% per unit.]
(iv) Your sales commissions which are owed to you as set forth above
shall be paid to you within seven business days after the
Dealer-Manager has received the related amounts owed to it under
the Dealer-Manager Agreement, which the Dealer-Manager is
entitled to receive within five business days after the
conditions described in Section 4(e) of the Dealer-Manager
Agreement are satisfied and approximately every two weeks
thereafter until the respective Partnership's Offering
Termination Date, which is described in Section 1 of the
Dealer-Manager Agreement. The balance of your sales commissions
and the reimbursements which are owed to you as set forth above
shall be paid to you within seven business days after the
Dealer-Manager has received the related amounts owed to it under
the Dealer-Manager Agreement, which the Dealer-Manager is
entitled to receive within fourteen business days after the
respective Partnership's Offering Termination Date.
(b) Notwithstanding anything in this Agreement to the contrary, you agree
to waive payment of your compensation and reimbursements which are
owed to you as set forth above until the Dealer-Manager is in receipt
of the related amounts owed to it under the Dealer-Manager Agreement,
and the Dealer-Manager's liability to pay your compensation and
reimbursements under this Agreement shall be limited solely to the
proceeds of the related amounts owed to it under the Dealer-Manager
Agreement.
(c) As provided in Section 4(d) of the Dealer-Manager Agreement, a
Partnership shall not begin operations unless it receives subscription
proceeds for at least $2,000,000 by its respective Offering
Termination Date. If this amount is not secured by the respective
Partnership's Offering Termination Date, then nothing shall be payable
to you for the respective Partnership and all funds advanced by
subscribers for Units in the respective Partnership shall be returned
to them with interest earned, if any.
3. BLUE SKY QUALIFICATION. The Managing General Partner may elect not to
qualify or register Units in any state or jurisdiction in which it deems
the qualification or registration is not warranted for any reason in its
sole discretion. On application to the Dealer-Manager you will be informed
as to the states and jurisdictions in which the Units have been qualified
for sale or are exempt under the respective securities or "Blue Sky" laws
of those states and jurisdictions.
Notwithstanding the foregoing, the Dealer-Manager, the Partnerships, and
the Managing General Partner have not assumed and will not assume any
obligation or responsibility as to your right to act as a broker/dealer
with respect to the Units in any state or jurisdiction.
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8
4. EXPENSE OF SALE. The expenses in connection with the offer and sale of the
Units shall be payable as set forth below.
(a) The Dealer-Manager shall pay all expenses incident to the performance
of its obligations under this Agreement, including the fees and
expenses of its attorneys and accountants, even if the offering of any
or all of the Partnerships is not successfully completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the fees and expenses of
your own counsel and accountants, even if the offering of any or all
of the Partnerships is not successfully completed.
5. CONDITIONS OF YOUR DUTIES. Your obligations under this Agreement, as of the
date of this Agreement and at the applicable closing date, shall be subject
to the following:
(a) the performance by the Dealer-Manager of its obligations under this
Agreement; and
(b) the performance by the Managing General Partner of its obligations
under the Dealer-Manager Agreement.
6. CONDITIONS OF DEALER-MANAGER'S DUTIES. The Dealer-Manager's obligations
under this Agreement, including the duty to pay compensation and
reimbursements to you as set forth in Section 2 of this Agreement, shall be
subject to the following:
(a) the accuracy, as of the date of this Agreement and at the applicable
closing date as if made at the applicable closing date, of your
representations and warranties made in this Agreement;
(b) the performance by you of your obligations under this Agreement; and
(c) the Dealer-Manager's receipt, at or before the applicable closing
date, of a fully executed Subscription Agreement for each prospective
purchaser as required by Section 1(k) of this Agreement.
7. INDEMNIFICATION.
(a) You shall indemnify and hold harmless the Dealer-Manager, the Managing
General Partner, each Partnership and its attorneys against any
losses, claims, damages or liabilities, joint or several, to which
they may become subject under the Act, the Act of 1934, or otherwise
insofar as the losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based on your breach of any of
your duties and obligations, representations, or warranties under the
terms or provisions of this Agreement, and you shall reimburse them
for any legal or other expenses reasonably incurred in connection with
investigating or defending the losses, claims, damages, liabilities,
or actions.
(b) The Dealer-Manager shall indemnify and hold you harmless against any
losses, claims, damages, or liabilities, joint or several, to which
you may become subject under the Act, the Act of 1934, or otherwise
insofar as the losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based on the Dealer-Manager's
breach of any of its duties and obligations, representations, or
warranties under the terms or provisions of this Agreement, and the
Dealer-Manager shall reimburse you for any legal or other expenses
reasonably incurred in connection with investigating or defending the
losses, claims, damages, liabilities, or actions.
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(c) The foregoing indemnity agreements shall extend on the same terms and
conditions to, and shall inure to the benefit of, each person, if any,
who controls each indemnified party within the meaning of the Act.
(d) Promptly after receipt by an indemnified party of notice of the
commencement of any action, the indemnified party shall, if a claim in
respect of the action is to be made against the indemnifying party
under this Section, notify the indemnifying party in writing of the
commencement of the action; but the omission to promptly notify the
indemnifying party shall not relieve the indemnifying party from any
liability which it may have to the indemnified party. If any action is
brought against an indemnified party, it shall notify the indemnifying
party of the commencement of the action, and the indemnifying party
shall be entitled to participate in, and, to the extent that it
wishes, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel satisfactory to the
indemnified and indemnifying parties. After the indemnified party has
received notice from the agreed on counsel that the defense of the
action under this paragraph has been assumed, the indemnifying party
shall not be responsible for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense of
the action other than with respect to the agreed on counsel who
assumed the defense of the action.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations,
warranties, and agreements of the Dealer-Manager and you in this Agreement,
including the indemnity agreements contained in Section 7 of this
Agreement, shall:
(a) survive the delivery, execution and closing of this Agreement;
(b) remain operative and in full force and effect regardless of any
investigation made by or on behalf of you or any person who controls
you within the meaning of the Act, by the Dealer-Manager, or any of
its officers, directors or any person who controls the Dealer-Manager
within the meaning of the Act, or any other indemnified party; and
(c) survive delivery of the Units.
9. TERMINATION.
(a) You shall have the right to terminate this Agreement other than the
indemnification provisions of Section 7 of this Agreement by giving
notice as specified in Section 16 of this Agreement any time at or
before a closing date:
(i) if the Dealer-Manager has failed, refused, or been unable at or
before a closing date, to perform any of its obligations under
this Agreement; or
(ii) there has occurred an event materially and adversely affecting
the value of the Units.
If you elect to terminate this Agreement other than the
indemnification provisions of Section 7 of this Agreement, then the
Dealer-Manager shall be promptly notified by you by telephone, e-mail,
facsimile, or telegram, confirmed by letter.
(b) The Dealer-Manager may terminate this Agreement other than the
indemnification provisions of Section 7 of this Agreement, for any
reason and at any time, by promptly giving notice to you by telephone,
e-mail, facsimile or telegram, confirmed by letter.
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10. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum subscription
proceeds of $2,000,000 as set forth in Section 4(d) of the Dealer-Manager
Agreement, the Dealer-Manager and you, including if you are a customer
carrying broker/dealer, agree that all subscribers shall be instructed to
make their checks or wire transfers payable solely to the Escrow Agent as
agent for the Partnership in which the Units are then being offered as
follows:
(a) "Atlas America Public #16-2007(A) L.P., Escrow Agent, National City
Bank of PA"; or
(b) "Atlas America Public #16-2007(B) L.P., Escrow Agent, National City
Bank of PA."
Also, you, including if you are a customer carrying broker/dealer, agree to
comply with Rule 15c2-4 adopted under the Act of 1934. In addition, for
identification purposes, wire transfers should reference the subscriber's
name and the account number of the escrow account for the Partnership in
which the Units are then being offered.
If you receive a check not conforming to the foregoing instructions, then
you shall return the check directly to the subscriber not later than noon
of the next business day following its receipt by you from the subscriber.
If the Dealer-Manager receives a check not conforming to the foregoing
instructions, then the Dealer-Manager shall return the check to you not
later than noon of the next business day following its receipt by the
Dealer-Manager and you shall then return the check directly to the
subscriber not later than noon of the next business day following its
receipt by you from the Dealer-Manager. Checks received by you which
conform to the foregoing instructions shall be transmitted by you under
Section 11 "Transmittal Procedures," below.
You agree that you are bound by the terms of the Escrow Agreement, a copy
of which is attached to the Dealer-Manager Agreement as Exhibit "A."
11. TRANSMITTAL PROCEDURES. You, including if you are a customer carrying
broker/dealer, shall transmit received investor funds in accordance with
the following procedures.
(a) Pending receipt of a Partnership's minimum subscription proceeds of
$2,000,000 as set forth in Section 4(d) of the Dealer-Manager
Agreement, you shall promptly transmit any and all checks received by
you from subscribers and the original executed Subscription Agreement
to the Dealer-Manager by noon of the next business day following
receipt of the check by you. By noon of the next business day
following the Dealer-Manager's receipt of the check and the original
executed subscription documents, the Dealer-Manager shall transmit the
check and a copy of the executed Subscription Agreement to the Escrow
Agent, and the original executed Subscription Agreement and a copy of
the check to the Managing General Partner.
(b) On receipt by you of notice from the Managing General Partner or the
Dealer-Manager that a Partnership's minimum subscription proceeds of
$2,000,000 as set forth in Section 4(d) of the Dealer-Manager
Agreement have been received, you agree that all subscribers then may
be instructed, in the Managing General Partner's sole discretion, to
make their checks or wire transfers payable solely to the Partnership
then being offered.
Thereafter, you shall promptly transmit any and all checks received by
you from subscribers and the original executed Subscription Agreement
to the Dealer-Manager by noon of the next business day following
receipt of the check by you. By noon of the next business day
following the Dealer-Manager's receipt of the check and original
Subscription Agreement, the Dealer-Manager shall transmit the check
and the original executed Subscription Agreement to the Managing
General Partner.
Anthem Securities, Inc.
Selling Agent Agreement
11
12. PARTIES. This Agreement shall inure to the benefit of and be binding on
you, the Dealer-Manager, and any respective successors and assigns. This
Agreement shall also inure to the benefit of the indemnified parties, their
successors and assigns. This Agreement is intended to be and is for the
sole and exclusive benefit of the parties to this Agreement, including
their respective successors and assigns, and the indemnified parties and
their successors and assigns, and for the benefit of no other person. No
other person shall have any legal or equitable right, remedy or claim under
or in respect of this Agreement. No purchaser of any of the Units from you
shall be construed a successor or assign merely by reason of the purchase.
13. RELATIONSHIP. You are not authorized to hold yourself out as agent of the
Dealer-Manager, the Managing General Partner, a Partnership or any other
Selling Agent. This Agreement shall not constitute you a partner of the
Managing General Partner, the Dealer-Manager, a Partnership, any general
partner of a Partnership, or any other Selling Agent, nor render the
Managing General Partner, the Dealer-Manager, the Partnerships, any general
partner of a Partnership, or any other Selling Agent, liable for any of
your obligations.
14. EFFECTIVE DATE. This Agreement is made effective between the parties as of
the date accepted by you as indicated by your signature to this Agreement.
15. ENTIRE AGREEMENT, WAIVER.
(a) This Agreement constitutes the entire agreement between the
Dealer-Manager and you, and shall not be amended or modified in any
way except by subsequent agreement executed in writing. Neither party
to this Agreement shall be liable or bound to the other by any
agreement except as specifically set forth in this Agreement.
(b) The Dealer-Manager and you may waive, but only in writing, any term,
condition, or requirement under this Agreement that is intended for
its benefit. However, any written waiver of any term or condition of
this Agreement shall not operate as a waiver of any other breach of
the term or condition of this Agreement.
(c) Also, any failure to enforce any provision of this Agreement shall not
operate as a waiver of that provision or any other provision of this
Agreement.
16. NOTICES.
(a) Any communications from you shall be in writing addressed to the
Dealer-Manager at X.X. Xxx 000, Xxxx Xxxxxxxx, Xxxxxxxxxxxx
00000-0000.
(b) Any notice from the Dealer-Manager to you shall be deemed to have been
duly given if mailed, faxed or telegraphed to you at your address
shown below.
17. COMPLAINTS. The Dealer-Manager and you agree as follows:
(a) to notify the other if either receives an investor complaint in
connection with the offer or sale of Units by you;
(b) to cooperate with the other in resolving the complaint; and
(c) to cooperate in any regulatory examination of the other to the extent
it involves this Agreement or the offer or sale of Units by you.
Anthem Securities, Inc.
Selling Agent Agreement
12
18. PRIVACY. The Dealer-Manager and you each acknowledge that certain
information made available to the other under this Agreement may be deemed
nonpublic personal information under the Xxxxx-Xxxxx-Xxxxxx Act, other
federal or state privacy laws (as amended), and the rules and regulations
promulgated thereunder, which are referred to collectively as the "Privacy
Laws." The Dealer-Manager and you agree as follows:
(a) not to disclose or use the information except as required to carry out
each party's respective duties under this Agreement or as otherwise
permitted by law in the ordinary course of business;
(b) to establish and maintain procedures reasonably designed to assure the
security and privacy of all the information; and
(c) to cooperate with the other and provide reasonable assistance in
ensuring compliance with the Privacy Laws to the extent applicable to
either or both the Dealer-Manager and you.
19. ANTI-MONEY LAUNDERING PROVISION. You represent and warrant to the Managing
General Partner and the Dealer-Manager that you have in place and will
maintain suitable and adequate "know your customer" policies and procedures
and that you shall comply with all applicable laws and regulations
regarding anti-money laundering activity and will provide such
documentation to the Managing General Partner and the Dealer-Manager on
written request.
20. ACCEPTANCE. Please confirm your agreement to become a Selling Agent under
the terms and conditions set forth above by signing and returning the
enclosed duplicate copy of this Agreement to us at the address set forth
above.
Sincerely,
_______________________________, 2007 ANTHEM SECURITIES, INC.
Date
ATTEST:
By:
_______________________________ ------------------------------------
(SEAL) Secretary Xxxxxx Xxxxxxxx, President
Anthem Securities, Inc.
Selling Agent Agreement
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ACCEPTANCE:
We accept your invitation to become a Selling Agent under all the terms and
conditions stated in the above Agreement and confirm that all the statements set
forth in the above Agreement are true and correct. We hereby acknowledge receipt
of the Prospectuses and Sales Literature and a copy of the Dealer-Manager
Agreement referred to above.
_______________________________, 2007 ____________________________________,
Date a(n) ___________________ corporation,
ATTEST:
By:
_______________________________ ------------------------------------
(SEAL) Secretary ______________________, President
________________________________________
(Address)
________________________________________
________________________________________
________________________________________
(Telephone Number)
Our CRD Number is ______________________
Our Tax ID Number is ___________________
Anthem Securities, Inc.
Selling Agent Agreement
14
APPENDIX I TO SELLING AGENT AGREEMENT
In partial consideration for the payment to you, as Selling Agent, by the
Dealer-Manager of the Sales Commission as set forth in Section 2(a) of the
Selling Agent Agreement, you warrant, represent, covenant, and agree with the
Dealer-Manager that you, as Selling Agent, shall do the following:
o prominently and promptly announce your participation in the offering
as Selling Agent to your registered representatives, whether by
newsletter, e-mail, mail or otherwise, which announcement also shall
advise your registered representatives to contact our Regional
Marketing Director in whose territory the registered representative is
located (the information concerning our Regional Marketing Directors
has been provided to you by separate correspondence) with a copy of
the announcement provided concurrently to the Dealer-Manager; and
o provide the Dealer-Manager with the names, telephone numbers,
addresses and e-mail addresses of your registered representatives,
which information shall be kept confidential by the Dealer-Manager and
the Managing General Partner and shall not be used for any purpose
other than the marketing of the offering as set forth in the
Dealer-Manager Agreement and the Selling Agent Agreement. Further,
you, as Selling Agent, agree that the Dealer-Manager and the Managing
General Partner may directly contact your registered representatives,
in person or otherwise, to:
o inform them of the offering;
o explain the merits and risks of the offering; and
o otherwise assist in your registered representatives' efforts to
solicit and sell Units.
Anthem Securities, Inc.
Selling Agent Agreement
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