Exhibit 1(b)
XXXXX XXXXXXX XXXXXX #00-0000 LTD.
DEALER-MANAGER AGREEMENT
WITH
XXXXX FUNDING, INC.
XXXXX FUNDING, INC.
DEALER-MANAGER AGREEMENT
TABLE OF CONTENTS
Page
1. Description of Units.......................................................1
2. Representations, Warranties and Agreements of the Managing
General Partner............................................................1
3. Grant of Authority to the Dealer-Manager...................................2
4. Compensation and Fees......................................................2
5. Covenants of the Managing General Partner..................................4
6. Representations and Warranties of the Dealer-Manager.......................4
7. State Securities Registration..............................................8
8. Expense of Sale............................................................9
9. Conditions of the Dealer-Manager's Duties..................................9
10. Conditions of the Managing General Partner's Duties.......................10
11. Indemnification...........................................................10
12. Representations and Agreements to Survive Delivery........................11
13. Termination...............................................................11
14. Notices...................................................................11
15. Format of Checks/Escrow Agent.............................................12
16. Transmittal Procedures....................................................12
17. Parties...................................................................13
18. Relationship..............................................................13
19. Effective Date............................................................13
20. Entire Agreement, Waiver..................................................13
21. Complaints................................................................13
22. Privacy...................................................................14
Exhibit A - Escrow Agreement for Atlas America Public #11-2002 Ltd.
Exhibit B - Selling Agent Agreement
Xxxxx Funding, Inc. i
Dealer-Manager Agreement
XXXXX FUNDING, INC.
DEALER-MANAGER AGREEMENT
(Best Efforts)
RE: ATLAS AMERICA PUBLIC #11-2002 LTD.
Xxxxx Funding, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Gentlemen:
The undersigned, Atlas Resources, Inc., which is referred to as the
"Managing General Partner," on behalf of Atlas America Public #11-2002 Ltd.,
confirms its agreement with you, as Dealer-Manager, as follows:
1. Description of Units. The Managing General Partner has formed a limited
partnership known as Atlas America Public #11-2002 Ltd., which is
referred to as "the "Partnership," which will issue and sell the Units
in the Partnership, which are referred to as the "Units," at a price of
$10,000 per Unit subject to the discounts 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 $1,000,000, 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."
No subscriptions to the Partnership will be accepted after whichever of
the following events occurs first, which is referred to as the
"Offering Termination Date":
o receipt of the maximum subscriptions of $40,000,000; or
o December 31, 2002.
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 Partnership has a currently effective registration statement
on Form S-1, including a final prospectus, for the registration
of the Units under the Securities Act of 1933, as amended, which
is referred to as the "Act." Such registration statement, as it
may be amended, and the prospectus and exhibits on file with the
SEC, as well as any post-effective amendments or supplements to
such registration statement or prospectus after the effective
date of registration, which are respectively referred to as the
"Registration Statement" and the "Prospectus."
(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.
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Dealer-Manager Agreement
(c) The Units when issued will be duly authorized and validly issued
as set forth in the Amended and Restated Certificate and
Agreement of Limited Partnership of the Partnership, which is
referred to as the "Partnership Agreement," 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 the Partnership's formation or of any
jurisdiction to the laws of which the Partnership is subject.
(d) The 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. The 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.
(e) The Prospectus, as supplemented or amended, does 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.
3. Grant of Authority to the Dealer-Manager. 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 Partnership and
gives you the exclusive right to solicit subscriptions for the Units on
a "best efforts" basis in the states of:
(a) Minnesota; and
(b) New Hampshire.
In the states of Minnesota and New Hampshire 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 as the
"NASD," and shall enter into a "Selling Agent Agreement" in
substantially the form attached to this Agreement as Exhibit "B."
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 who are situated and/or residents in the states of
Minnesota and New Hampshire and whose subscriptions for Units
are accepted by the Managing General Partner:
(i) a 2.5% Dealer-Manager fee;
(ii) a 7% Sales Commission;
(iii) a .5% nonaccountable reimbursement of marketing
expenses; and
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(iv) a .5% reimbursement of the Selling Agents' bona fide
accountable due diligence expenses.
(b) All of the Sales Commissions and the .5% reimbursement of the
Selling Agents' bona fide accountable due diligence expenses
shall be reallowed to the Selling Agents, and all or a portion
of the .5% nonaccountable marketing expense reimbursement shall
be reallowed to the Selling Agents. The 2.5% Dealer-Manager fee
shall be reallowed to the wholesalers for subscriptions obtained
through their efforts. You shall retain any of the .5%
nonaccountable marketing expense reimbursement not reallowed to
the Selling Agents.
(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, the .5% nonaccountable marketing expense
reimbursement, and the .5% reimbursement of the Selling
Agents' bona fide accountable 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,
the .5% nonaccountable marketing expense reimbursement,
and the .5% reimbursement of the Selling Agents' bona
fide accountable due diligence expenses which shall be
paid to you.
(d) Pending receipt and acceptance by the Managing General Partner
of the minimum subscription proceeds of $1,000,000, excluding:
(i) any optional subscription of the Managing General
Partner and its Affiliates; and
(ii) the subscription discounts set forth in Section 4(c) of
this Agreement;
all proceeds received by you from the sale of Units 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 $1,000,000
as described above are received on or before the Offering
Termination Date as described in Section 1 of this Agreement,
the offering of Units shall be terminated, in which event:
(i) the 2.5% Dealer-Manager fee, the 7% Sales Commission,
the .5% nonaccountable marketing expense reimbursement,
and the .5% reimbursement of the Selling Agents' bona
fide accountable 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
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(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
$1,000,000 as described above have been received by the
Partnership and accepted by the Managing General
Partner; and
(ii) the subscription proceeds have been released from the
escrow account to the Managing General Partner.
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, and all your
remaining fees, reimbursements, and Sales Commissions shall be
paid by the Managing General Partner no later than fourteen
business days after the Offering Termination Date.
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.
(b) If any event affecting the 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
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.
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(b) This Agreement when accepted and approved 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 other instrument
to which you are a party; or
(ii) any violation of any order applicable to you of any
court or any federal or state 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 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, 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 prospectus and are consistent with the
provisions of subparagraph (B) of this section.
(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:
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(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 a direct participation program in
a discretionary account without prior written
approval of the transaction by the customer.
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;
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(iv) financial stability and experience of the
sponsor;
(v) the program's conflicts and risk factors;
and
(vi) appraisals and other pertinent reports.
(C) For purposes of subparagraphs (A) and (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 investment.
(f) You agree to advise the Managing General Partner in writing of
each state 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 state 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 state;
(ii) is exempt from the qualification requirements imposed
by the state; 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.
Also, unless advised otherwise by the Managing General Partner,
you and the Selling Agents may choose to provide each offeree
with a brochure entitled "Atlas America Public #11-2002 Ltd."
which is referred to as the "Sales Literature."
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(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 the prior written approval of the Managing
General Partner, and without 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.
(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:
(1) 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
(2) 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:
(1) to comply in all respects with statements set forth in
the Prospectus, the Partnership Agreement, and any
supplements or amendments to the Prospectus;
(2) not to make any statement inconsistent with the
statements in the Prospectus, the Partnership
Agreement, and any supplements or amendments to the
Prospectus;
(3) not to make any untrue or misleading statements of a
material fact in connection with the Units; and
(4) 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 the prospective purchasers meet the
suitability requirements set forth in the Prospectus and the
Subscription Agreement and 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.
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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) Although not anticipated, if you assist in any transfers of the
Units, then you shall comply, and you shall require any Selling
Agent to comply, with the requirements of Rule 2810(b)(2)(B) and
(b)(3)(D) of the NASD Conduct Rules.
(m) You agree and covenant that the representations and warranties
you make in this Agreement are and shall be true and correct at
the applicable closing date, and you shall have fulfilled all
your obligations under this Agreement at the applicable closing
date.
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 states
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 states.
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
these 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.
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Dealer-Manager Agreement
(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 this offering 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 this offering 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 the Managing General
Partner's representations and warranties made in this Agreement, and 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 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 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, the 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.
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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 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 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;
and
(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.
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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
to you shall be mailed, delivered, or sent by facsimile, e-mail
or telegraph, and confirmed to you at 000 Xxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
(c) Any notice or communication sent by you to the Managing General
Partner or the 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 $1,000,000 as set forth in Section 4(d) of
this Agreement, the Managing General Partner and you and the Selling
Agents agree that all subscribers shall be instructed to make their
checks, drafts, or money orders payable solely to "Atlas Public
#11-2002 Ltd., Escrow Agent, PNC Bank," as agent for the Partnership,
and you agree and shall require the Selling Agents to agree to comply
with Rule 15c2-4 adopted under the Act of 1934.
If you receive a check, draft, or money order not conforming to the
foregoing instructions, then you shall return the check, draft, or
money order to the Selling Agent not later than the end of the next
business day following its receipt by you. The Selling Agent shall then
return the check, draft, or money order directly to the subscriber not
later than the end of the next business day following its receipt from
you. Checks, drafts, or money orders 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 executed the Escrow Agreement for the
Partnership and agree that you are bound by the terms of the Escrow
Agreement executed by you, the Partnership, and the Managing General
Partner, a copy of which is attached to this Agreement as Exhibit "A."
16. Transmittal Procedures. You and each Selling Agent 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 the minimum subscription proceeds of
$1,000,000 as set forth in Section 4(d) of this Agreement, the
Selling Agents on receipt of any check, draft, and money order
from a subscriber shall promptly transmit the check, draft, and
money order and the original executed Subscription Agreement to
you, as Dealer-Manager, by the end of the next business day
following receipt of the check, draft, or money order by the
Selling Agent. By the end of the next business day following
your receipt of the check, draft, or money order and the
original executed Subscription Agreement, you, as
Dealer-Manager, shall transmit the check, draft, or money order
and a copy of the executed Subscription Agreement to the Escrow
Agent, and the original executed Subscription Agreement and a
copy of the check, draft, or money order to the Managing General
Partner.
Xxxxx Funding, Inc. 12
Dealer-Manager Agreement
(b) On receipt by you, as Dealer-Manager, of notice from the
Managing General Partner that the minimum subscription proceeds
of $1,000,000 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, drafts, or money orders payable solely to
"Atlas Public #11-2002 Ltd."
Thereafter, the Selling Agents shall promptly transmit any and
all checks, drafts, and money orders received from subscribers
and the original executed Subscription Agreement to you, as
Dealer-Manager, by the end of the next business day following
receipt of the check, draft, or money order by the Selling
Agent. By the end of the next business day following your
receipt of the check, draft, or money order and the original
executed Subscription Agreement, you, as Dealer-Manager, shall
transmit the check, draft or money order 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 Partnership, 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 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, the Partnership, or any general partner of
the Partnership, nor render the Managing General Partner, the
Partnership, or any general partner of the 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.
Xxxxx Funding, Inc. 13
Dealer-Manager Agreement
21. 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.
22. 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 designated 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.
Very truly yours,
MANAGING GENERAL PARTNER
ATLAS RESOURCES, INC.,
a Pennsylvania corporation
, 2002 By:
----------------- -------------------------------------------------
Date Xxxx X. Xxxxxxxxx, Senior Vice President - Direct
Participation Programs
PARTNERSHIP
ATLAS AMERICA PUBLIC #11-2002 LTD.
By: Atlas Resources, Inc.,
Managing General Partner
, 2002 By:
----------------- -------------------------------------------------
Date Xxxx X. Xxxxxxxxx, Senior Vice President - Direct
Participation Programs
Xxxxx Funding, Inc. 14
Dealer-Manager Agreement
DEALER-MANAGER
XXXXX FUNDING, INC.,
a Pennsylvania corporation
, 2002 By:
----------------- ------------------------------------------------
Date Xxxxxxx X. Xxxxx, Xx., President
Xxxxx Funding, Inc. 15
Dealer-Manager Agreement
EXHIBIT "A"
ATLAS AMERICA PUBLIC #11-2002 LTD.
ESCROW AGREEMENT
THIS AGREEMENT is made to be effective as of June ______, 2002, by and
among Atlas Resources, Inc., a Pennsylvania corporation (the "Managing General
Partner"), Anthem Securities, Inc., a Pennsylvania corporation ("Anthem"), Xxxxx
Funding, Inc., a Pennsylvania corporation ("Xxxxx Funding"), collectively Anthem
and Xxxxx Funding are referred to as the "Dealer-Manager," Atlas America Public
#11-2002 Ltd., a Delaware limited partnership (the "Partnership") and PNC Bank,
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 4,000 limited partnership
interests in the Partnership (the "Units").
WHEREAS, each Investor will be required to pay his subscription in full
on subscribing by check, draft, or money order (the "Subscription Proceeds").
WHEREAS, the cost per Unit will be $10,000 subject to certain discounts
of up to10.5% ($1,050 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 other than Minnesota and New Hampshire on
a "best efforts" "all or none" basis for Subscription Proceeds of $1,000,000 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 Managing General Partner and Xxxxx Funding have executed
an agreement ("Xxxxx Funding Dealer-Manager Agreement") under which Xxxxx
Funding will solicit subscriptions for Units in the states of Minnesota and New
Hampshire on a "best efforts" "all or none" basis for Subscription Proceeds of
$1,000,000 and on a "best efforts" basis for the remaining Units on behalf of
the Managing General Partner and the Partnership and under which Xxxxx Funding
has been authorized to select certain members in good standing of the NASD to
participate in the offering of the Units ("Selling Agents").
WHEREAS, the Anthem Dealer-Manager Agreement and the Xxxxx Funding
Dealer-Manager Agreement, collectively referred to as the "Dealer-Manager
Agreement," provide 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:
1
o a 2.5% Dealer-Manager fee;
o a 7% sales commission;
o a .5% nonaccountable reimbursement of marketing expenses; and
o a .5% reimbursement of the Selling Agents' bona fide accountable
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 Subscription
Proceeds of $1,000,000, 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 $40,000,000; or
o December 31, 2002.
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 $1,000,000, 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 of the
Investor. Payment for each subscription for Units shall be in the form
of a check made payable to "Atlas America Public #11-2002 Ltd., Escrow
Agent, PNC Bank." The Escrow Agent shall deliver a receipt to either:
(a) Anthem and the Managing General Partner for each deposit of
Subscription Proceeds made under this Agreement by Anthem;
ESCROW AGREEMENT 2
(b) Xxxxx Funding and the Managing General Partner for each deposit
of Subscription Proceeds made under this Agreement by Xxxxx
Funding; or
(c) the Managing General Partner for each deposit of Subscription
Proceeds made under this Agreement by the Managing General
Partner.
3. Investment of Subscription Proceeds. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow
Agent. Subscription Proceeds may be temporarily invested by the Escrow
Agent only in income producing short-term, highly liquid investments
secured by the United States government where there is appropriate
safety of principal, such as U.S. Treasury Bills. 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 written notice from an authorized officer of the
Managing General Partner that at least the minimum Subscription
Proceeds of $1,000,000 have been received and accepted by the
Managing General Partner; and
(b) determines that Subscription Proceeds for at least $1,000,000
have cleared the banking system and are good;
then the Escrow Agent shall promptly release and distribute to the
Managing General Partner the escrowed Subscription Proceeds which have
cleared the banking system and are good plus any interest paid and
investment income earned on the Subscription Proceeds while held by the
Escrow Agent in the escrow account.
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 clear the banking system and become good.
5. Separate Partnership Account. During the continuation of the offering
after the Partnership is funded with cleared Subscription Proceeds of
at least $1,000,000 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 $1,000,000 have been
received and accepted by the Managing General Partner by twelve
p.m. (noon), local 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 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.
ESCROW AGREEMENT 3
(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 the Escrow Agent of the rejection,
and the Escrow Agent shall promptly distribute to the Investor 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
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 $1,000,000 and the Escrow Agent
receives the 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 party given the
right or charged with the obligation under this Agreement to give the
notice or to make the request or demand. In no event shall the Escrow
Agent be obligated to accept any notice, request, or demand from anyone
other than the Managing General Partner or the Dealer-Manager.
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
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.
ESCROW AGREEMENT 4
PNC Bank 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 giving thirty days' prior written notice to the
Escrow Agent by 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 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, as follows:
If to the Escrow Agent:
PNC Bank
__________________________________
__________________________________
Attention: _______________________
Phone: ___________________________
Facsimile: _______________________
ESCROW AGREEMENT 5
ESCROW AGREEMENT 6
If to the Managing General Partner:
Atlas Resources, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Anthem:
Anthem Securities, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxx Funding:
Xxxxx Funding, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
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.
ESCROW AGREEMENT 7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the day and year first above written.
PNC BANK
As Escrow Agent
By:
-------------------------------------------------
(Authorized Officer)
ATLAS RESOURCES, INC.
A Pennsylvania corporation
By:
-------------------------------------------------
Xxxx X. Xxxxxxxxx, Senior Vice President - Direct
Participation Programs
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By: _______________________________________
Xxxx X. Xxxxxx, President
XXXXX FUNDING, INC.
A Pennsylvania corporation
By:
-----------------------------------------------
Xxxxxxx X. Xxxxx, Xx., President
ATLAS AMERICA PUBLIC #11-2002 LTD.
By: ATLAS RESOURCES, INC.
Managing General Partner
By:
-----------------------------------------------
Xxxx X. Xxxxxxxxx, Senior Vice President - Direct
Participation Programs
ESCROW AGREEMENT 8
APPENDIX I TO ESCROW AGREEMENT
Compensation for Services of Escrow Agent
Escrow Agent annual fee per year or any part thereof $____________
ESCROW AGREEMENT 9
EXHIBIT "B"
SELLING AGENT AGREEMENT
WITH XXXXX FUNDING, INC.
TO:
-------------------------------------------------------
RE: ATLAS AMERICA PUBLIC #11-2002 LTD.
Gentlemen:
Atlas Resources, Inc. is the Managing General Partner in a Delaware
limited partnership named Atlas America Public #11-2002 Ltd., which is referred
to as the "Partnership." The Units in the Partnership, which are referred to as
the "Units," and the offering are described in the enclosed Prospectus dated
__________________, 2002, which is referred to as the "Prospectus." Prospectuses
relating to the Units have been furnished to you with this Agreement.
Our firm, Xxxxx Funding, Inc., which is referred to as the
"Dealer-Manager," has entered into a Dealer-Manager Agreement for sales in the
states of Minnesota and New Hampshire, a copy of which has been furnished to you
and is incorporated in this Agreement by reference, with the Managing General
Partner and the Partnership 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 the states of:
o Minnesota; and
o New Hampshire
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 in the states of:
o Minnesota; and
o New Hampshire.
This Agreement, however, shall not be construed to prohibit your participation
as a selling agent in states other than Minnesota and New Hampshire under a duly
executed selling agent agreement entered into by you and any other authorized
"Dealer-Manager" for the Partnership.
1. Representations and Warranties of Selling Agent. You represent and
warrant to the Dealer-Manager 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.
Xxxxx Funding, Inc. 1
Selling Agent Agreement
(b) This Agreement 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 Articles of
Incorporation or Bylaws, or any other indenture,
agreement, or other instrument to which you are a
party; or
(ii) any violation of any order applicable to you of any
court or any federal or state 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 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, 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) of this section.
(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:
Xxxxx Funding, Inc. 2
Selling Agent Agreement
(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 a direct participation program in
a discretionary account without prior written
approval of the transaction by the customer.
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 conflicts and risk factors;
and
Xxxxx Funding, Inc. 3
Selling Agent Agreement
(vi) appraisals and other pertinent reports.
(C) For purposes of subparagraphs (A) and (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 investment.
(f) You shall not offer or sell the Units in any state 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:
(1) has been qualified in the state;
(2) is exempt from the qualification requirements imposed
by the state; or
(3) the qualification is otherwise not required.
(g) 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.
(h) 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 the prior written
approval of the Managing General Partner, and without 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.
(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
Xxxxx Funding, Inc. 4
Selling Agent Agreement
(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 make any untrue or misleading statements of a
material fact in connection with the Units; 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, including that the prospective purchasers meet the
suitability requirements set forth in the Prospectus and the
Subscription Agreement and 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.
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 shall comply with the requirements of Rules 2810(b)(2)(B)
and (b)(3)(D) of the NASD Conduct Rules.
(m) You agree and covenant that the representations and warranties
you make in this Agreement are and shall be true and correct at
the applicable closing date, and 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 $1,000,000 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 following:
(i) the Managing General Partner, its officers, directors
and affiliates;
(ii) registered investment advisors and their clients;
Xxxxx Funding, Inc. 5
Selling Agent Agreement
(iii) Selling Agents and their registered representatives and
principals; and
(iv) 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, a .5% nonaccountable
marketing expense reimbursement, and a .5% reimbursement of the
Selling Agents' bona fide accountable due diligence expenses per
Unit, based on the aggregate amount of all Unit subscriptions to
the Partnership secured by the Dealer-Manager or the selling
group formed by the Dealer-Manager and accepted by the Managing
General Partner.
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 a 7% Sales Commission, a
.5% reimbursement of your bona fide accountable due diligence
expenses and, subject to the performance by you of your
obligations under Appendix I to this Agreement, which is
incorporated in this Agreement by reference, a .5%
nonaccountable marketing expense reimbursement per Unit on Units
sold by you and accepted by the Managing General Partner.
Your Sales Commissions, the .5% reimbursement of your bona fide
accountable due diligence expenses, and the .5% nonaccountable
marketing expense reimbursement, shall be paid to you within
seven business days after the Dealer-Manager has received the
Sales Commissions, the .5% reimbursement of your bona fide
accountable due diligence expenses, and the .5% nonaccountable
marketing expense reimbursement on the subscriptions.
The Dealer-Manager is entitled to receive its Sales Commissions,
the .5% reimbursement of your bona fide accountable due
diligence expenses, and the .5% nonaccountable marketing expense
reimbursement 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
Offering Termination Date, which is the earlier of:
(i) receipt of the maximum subscriptions of $40,000,000; or
(ii) December 31, 2002;
as described in Section 1 of the Dealer-Manager Agreement. The
balance shall be paid to the Dealer-Manager within fourteen
business days after the Offering Termination Date.
(b) Notwithstanding anything in this Agreement to the contrary, you
agree to waive payment of your Sales Commissions, the .5%
nonaccountable marketing expense reimbursement, and the .5%
reimbursement of your bona fide accountable due diligence
expenses as set forth above in (a) 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 under this Agreement shall be
limited solely to the proceeds of the related amounts owed to it
under the Dealer-Manager Agreement.
Xxxxx Funding, Inc. 6
Selling Agent Agreement
(c) As provided in Section 4(d) of the Dealer-Manager Agreement, the
Partnership shall not begin operations unless it receives
subscription proceeds for at least $1,000,000 by December 31,
2002. If this amount is not secured by this date, then nothing
shall be payable to you and all funds advanced by subscribers
for Units 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 Partnership, 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.
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
this offering 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 this
offering 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 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.
Xxxxx Funding, Inc. 7
Selling Agent Agreement
7. Indemnification.
(a) You shall indemnify and hold harmless the Dealer-Manager, the
Managing General Partner, the 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.
(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.
Xxxxx Funding, Inc. 8
Selling Agent Agreement
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.
10. Format of Checks/Escrow Agent. Pending receipt of the minimum
subscription proceeds of $1,000,000 as set forth in Section 4(d) of the
Dealer-Manager Agreement, the Dealer-Manager and you agree that all
subscribers shall be instructed to make their checks, drafts, or money
orders payable solely "Atlas Public #11-2002 Ltd., Escrow Agent, PNC
Bank," as agent for the Partnership, and you agree to comply with Rule
15c2-4 adopted under the Act of 1934.
If you receive a check, draft, or money order not conforming to the
foregoing instructions, then you shall return the check, draft, or
money order directly to the subscriber not later than the end of the
next business day following its receipt by you from the subscriber. If
the Dealer-Manager receives a check, draft, or money order not
conforming to the foregoing instructions, then the Dealer-Manager shall
return the check, draft, or money order to you not later than the end
of the next business day following its receipt by the Dealer-Manager
and you shall then return the check, draft, or money order directly to
the subscriber not later than the end of the next business day
following its receipt by you from the Dealer-Manager. Checks, drafts,
or money orders 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 shall transmit received investor funds in
accordance with the following procedures.
(a) Pending receipt of the minimum subscription proceeds of
$1,000,000 as set forth in Section 4(d) of the Dealer-Manager
Agreement, you shall promptly transmit, any and all checks,
drafts, and money orders received by you from subscribers and
the original executed Subscription Agreement to the
Dealer-Manager by the end of the next business day following
receipt of the check, draft, or money order by you. By the end
of the next business day following its receipt of the check,
draft, or money order and the original executed subscription
documents, the Dealer-Manager shall transmit the check, draft,
or money order and a copy of the executed Subscription Agreement
to the Escrow Agent, and the original executed Subscription
Agreement and a copy of the check, draft, or money order to the
Managing General Partner.
Xxxxx Funding, Inc. 9
Selling Agent Agreement
(b) On receipt by you of notice from the Managing General Partner or
the Dealer-Manager that the minimum subscription proceeds of
$1,000,000 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, drafts, or money orders
payable solely "Atlas Public #11-2002 Ltd."
Thereafter, you shall promptly transmit any and all checks,
drafts, and money orders received by you from subscribers and
the original executed Subscription Agreement to the
Dealer-Manager by the end of the next business day following
receipt of the check, draft, or money order by you. By the end
of the next business day following its receipt of the check,
draft, or money order and original Subscription Agreement, the
Dealer-Manager shall transmit the check, draft, or money order
and the original executed Subscription Agreement to the Managing
General Partner.
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, 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 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, the Partnership or
any other Selling Agent. This Agreement shall not constitute you a
partner of the Managing General Partner, the Dealer-Manager, the
Partnership, any general partner of the Partnership, or any other
Selling Agent, nor render the Managing General Partner, the
Dealer-Manager, the Partnership, any general partner of the
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. 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.
Xxxxx Funding, Inc. 10
Selling Agent Agreement
16. Notices.
(a) Any communications from you shall be in writing addressed to the
Dealer-Manager at 000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000.
(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.
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 designated 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. 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,
, 2002 XXXXX FUNDING, INC.
-------------------
Date
ATTEST:
By:
------------------------- ---------------------------------------------
(SEAL) Secretary Xxxxxxx X. Xxxxx, Xx., President
Xxxxx Funding, Inc. 11
Selling Agent Agreement
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.
, 2002 ,
------------------- -----------------------------------------------
Date a(n) ___________________________ corporation,
ATTEST:
By:
------------------------- ---------------------------------------------
(SEAL) Secretary _____________________________, President
------------------------------------------------
(Address)
------------------------------------------------
------------------------------------------------
Your CRD Number is
-----------------------------
Your Tax ID Number is
--------------------------
Xxxxx Funding, Inc. 12
Selling Agent Agreement
APPENDIX I TO SELLING AGENT AGREEMENT
In consideration for the payment to you, as Selling Agent, by the Dealer-Manager
of a .5% nonaccountable marketing expense reimbursement 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 inform them of the offering, explain the merits
and risks of the offering, and otherwise assist in your
registered representatives' efforts to solicit and sell Units.
Xxxxx Funding, Inc. 13
Selling Agent Agreement
