EXHIBIT 1(B)
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XXXXX XXXXXXX XXXXXX #00-0000 PROGRAM
DEALER-MANAGER AGREEMENT
WITH
XXXXX FUNDING, INC.
XXXXX FUNDING, INC.
DEALER-MANAGER AGREEMENT
TABLE OF CONTENTS
PAGE
1. Description of Program and Units 1
2. Representations, Warranties and Agreements of the
Managing General Partner 2
3. Grant of Authority to the Dealer-Manager 3
4. Compensation and Fees 3
5. Covenants of the Managing General Partner 6
6. Representations and Warranties of the Dealer-Manager 6
7. State Securities Registration 11
8. Expense of Sale 12
9. Conditions of the Dealer-Manager's Duties 12
10. Conditions of the Managing General Partner's Duties 12
11. Indemnification 12
12. Representations and Agreements to Survive Delivery 13
13. Termination 13
14. Notices 14
15. Format of Checks/Escrow Agent 14
16. Transmittal Procedures 14
17. Parties 15
18. Relationship 15
19. Effective Date 15
20. Entire Agreement, Waiver 15
21. Governing Law 16
22. Complaints 16
23. Privacy 16
24. Anti-Money Laundering Provision 16
25. Acceptance 16
Exhibit A - Form of Escrow Agreement
Exhibit B - Selling Agent Agreement
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XXXXX FUNDING, INC.
DEALER-MANAGER AGREEMENT
(Best Efforts)
Xxxxx Funding, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
RE: ATLAS AMERICA PUBLIC #14-2004 PROGRAM
Gentlemen:
The undersigned, Atlas Resources, Inc., which is referred to as the
"Managing General Partner," on behalf of Atlas America Public #14-2004
Program, which is referred to as the "Program," is a series of up to three
limited partnerships organized or to be organized under the laws of Delaware
as described below. These limited partnerships are sometimes referred to in
this Agreement in the singular as a "Partnership" or in the plural as
"Partnerships." The Managing General Partner on behalf of the Partnerships
hereby confirms its agreement with you, as Dealer-Manager, as follows:
1. DESCRIPTION OF PROGRAM AND UNITS.
(a) The Managing General Partner, a Pennsylvania corporation, proposes
to be the sole managing general partner of up to three limited
partnerships formed or to be formed under the Delaware Revised
Uniform Limited Partnership Act. The Partnerships will be named as
follows:
(i) Atlas America Public #14-2004 L.P.;
(ii) Atlas America Public #14-2005(A) L.P.; and
(iii)Atlas America Public #14-2005(B) L.P.
On behalf of the Program and the Partnerships, a Registration
Statement on Form S-1 (Registration No. 333-117035) relating to the
offer and sale of the limited partner and investor general partner
interests in the Partnerships, which are referred to as the "Units,"
was filed on June 30, 2004 with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933,
which is referred to as the "Act." The Registration Statement has
been declared effective by the Commission and the Partnerships and
the Units are described in the Prospectus (the "Prospectus") that
forms a part of the Registration Statement. As used in this
Agreement, the terms "Prospectus" and "Registration Statement" refer
solely to the Prospectus and Registration Statement, as amended,
described above, except that:
(i) from and after the date on which any post-effective amendment
to the Registration Statement is declared effective by the
Commission, the term "Registration Statement" shall refer to
the Registration Statement as amended by that post-effective
amendment, and the term "Prospectus" shall refer to the
Prospectus then forming a part of the Registration Statement;
and
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(ii) if the Prospectus filed by the Managing General Partner
pursuant to Rule 424(b) or (c) promulgated by the Commission
under the Act differs from the Prospectus on file with the
Commission at the time the Registration Statement or any post-
effective amendment thereto shall have become effective, the
term "Prospectus" shall refer to the Prospectus filed pursuant
thereto from and after the date on which it was filed.
Terms defined in the Prospectus and not otherwise defined in this
Agreement shall have the meanings set forth in the Prospectus.
(b) The Units will be sold at a price of $10,000 per Unit subject to the
discounts set forth in Section 4(c) of this Agreement for certain
investors. Subject to the receipt and acceptance by the Managing
General Partner of the minimum subscription proceeds of $2,000,000
in a Partnership by its Offering Termination Date for each
Partnership as described in the Prospectus (the "Offering
Termination Date"), the Managing General Partner may break escrow
and use the subscription proceeds for the Partnership's drilling
activities, which is referred to as the "Initial Closing Date." The
subscription period for each Partnership will be as described in the
Prospectus. However, the offering of Atlas America Public #14-2004
L.P. may not extend beyond December 31, 2004, the offering of Atlas
America Public #14-2005(A) L.P. may not extend beyond May 31, 2004,
and the offering of Atlas America Public #14-2005(B) L.P. may not
extend beyond December 31, 2005. Also, the maximum subscription
proceeds of all the Partnerships, in the aggregate, must not exceed
the registered amount of $125 million.
The Managing General Partner will notify you and the "Selling Agents," as
defined below, of the Initial Closing Date and Offering Termination Date
for each Partnership.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE MANAGING GENERAL
PARTNER. The Managing General Partner represents and warrants to and
agrees with you that:
(a) The Partnerships composing the Program have a currently effective
Registration Statement on Form S-1, including a final Prospectus,
for the registration of the Units under the Act as described in
Section 1 of this Agreement.
(b) The Managing General Partner shall provide to you for delivery to
all offerees and purchasers and their representatives the
information and documents that the Managing General Partner deems
appropriate to comply with the Act and applicable state securities
acts, which are referred to as the "Blue Sky" laws.
(c) The Units when issued will be duly authorized and validly issued as
set forth in the Agreement of Limited Partnership of each
Partnership, which is referred to as the "Partnership Agreement,"
the form of which is included as Exhibit (A) to the Prospectus, and
subject only to the rights and obligations set forth in the
Partnership Agreement or imposed by the laws of the state of
formation of each Partnership or of any jurisdiction to the laws of
which each Partnership is subject.
(d) Each Partnership was or will be duly formed under the laws of the
State of Delaware and once formed will be validly existing as a
limited partnership in good standing under the laws of Delaware with
full power and authority to own its properties and conduct its
business as described in the Prospectus. Each Partnership will be
qualified to do business as a limited partnership or similar entity
offering limited liability in those jurisdictions where the Managing
General Partner deems the qualification necessary to assure limited
liability of the limited partners.
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This Agreement, when executed by you, will be a valid and binding
agreement of each Partnership and the Managing General Partner, duly
authorized, executed and delivered by them and enforceable in
accordance with its terms except as may be limited by the effect of
bankruptcy, insolvency, moratorium, preferential or fraudulent
conveyance or other laws or equitable principles relating to or
affecting the rights of creditors generally, general principles of
equity, and by public policy relating to claims for indemnification
for securities laws violations.
(e) The Prospectus, as supplemented or amended, does not contain an
untrue statement of a material fact or omit to state 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.
(a) Based on the representations and warranties contained in this
Agreement, and subject to the terms and conditions set forth in this
Agreement, the Managing General Partner appoints you as the Dealer-
Manager for the Partnerships and gives you the exclusive right to
solicit subscriptions for the Units on a "best efforts" basis in the
states of:
(i) Minnesota; and
(ii) New Hampshire
during the offering period as described in the Prospectus.
(b) 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 to as the "NASD," and shall enter into a "Selling Agent
Agreement" in substantially the form attached to this Agreement as
Exhibit "B."
(c) The Managing General Partner shall have three business days after
the receipt of an executed Selling Agent Agreement to refuse that
Selling Agent's participation.
4. COMPENSATION AND FEES.
(a) As Dealer-Manager you shall receive from the Managing General
Partner the following compensation, based on each Unit sold to
investors in a Partnership 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% accountable Reimbursement for Permissible Non-Cash
Compensation which, under Rule 2810 of the NASD Conduct Rules,
is composed of the following:
(A) training and education meetings for associated persons of
the Selling Agents meeting the requirements set forth in
Section 4(b), below;
(B) gifts that do not exceed $100 per year and is not
preconditioned on the achievement of a sales target;
(C) an occasional meal, a ticket to a sporting event or the
theater, or comparable entertainment which is neither so
frequent nor so extensive as to raise any
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question of propriety and is not preconditioned on
achievement of a sales target; and
(D) contributions to a non-cash compensation arrangement
between a Selling Agent and its associated persons,
provided that neither we nor you directly or indirectly
participate in the Selling Agent's organization of a the
permissible non-cash compensation arrangement; and
(iv) an up to .5% reimbursement of the Selling Agents' bona fide
accountable due diligence expenses.
(b) All of the up to .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 7% Sales Commission and the .5%
Reimbursement for Permissible Non-Cash Compensation shall be
reallowed to the Selling Agents as described in the Selling Agent
Agreement with each Selling Agent. Most, if not all, of the
remaining balance of the 2.5% Dealer-Manager fee shall be reallowed
to the wholesalers as wholesaling fees for subscriptions obtained
through their efforts less any reimbursements made by the Managing
General Partner or the Partnership for expenses which are received
by the wholesalers in connection with the Program or expenses which
are owed by the wholesalers to the Managing General Partner or the
Partnership in connection with the Program and any salaries for the
wholesalers in connection with the Program. You, as Dealer-Manager,
shall retain any Dealer-Manager fee not reallowed to the
wholesalers, which may be used for such items as legal fees
associated with the underwriting and salaries of dual employees of
you and the Managing General Partner which are required to be
included in underwriting compensation under NASD Conduct Rule 2810
as determined jointly by the Managing General Partner and you.
You shall retain:
(i) any of the 7% Sales Commission not reallowed to the Selling
Agents;
(ii) any of the .5% accountable Reimbursement for Permissible Non-
Cash Compensation not paid or reimbursed to the Selling Agents
by you or the Managing General Partner; and
(iii)any of the remaining balance of the 2.5% Dealer-Manager fee not
reallowed to the wholesalers pursuant to the first paragraph of
this Section 4(b).
You are responsible for ensuring that all non-cash compensation
arrangements comply with NASD Conduct Rule 2810. For example,
payments or reimbursements by you or the Managing General Partner
may be made in connection with meetings held by you or the Managing
General Partner for the purpose of training or education of
registered representatives of a Selling Agent, only if the following
conditions are met:
(i) the registered representative obtains his Selling Agent's prior
approval to attend the meeting and attendance by the registered
representative is not conditioned by his Selling Agent on the
achievement of a sales target;
(ii) the location of the training and education meeting is
appropriate to the purpose of the meeting as defined in NASD
Conduct Rule 2810;
(iii)the payment or reimbursement is not applied to the expenses of
guests of the registered representative;
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(iv) the payment or reimbursement by you or the Managing General
Partner is not conditioned by you or the Managing General
Partner on the achievement of a sales target; and
(v) the recordkeeping requirements are met.
Non-cash compensation means any form of compensation received in
connection with the sale of the Units that is not cash compensation,
including but not limited to merchandise, gifts and prizes, travel
expenses, meals and lodging.
(c) Notwithstanding the foregoing:
(i) the Managing General Partner, its officers, directors, and
affiliates, and investors who buy Units through the officers
and directors of the Managing General Partner may subscribe to
Units for a subscription price reduced by the 2.5% Dealer-
Manager fee, the 7% Sales Commission, the .5% accountable
Reimbursement for Permissible Non-Cash Compensation, 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% accountable Reimbursement for
Permissible Non-Cash Compensation, and the up to .5%
reimbursement of the Selling Agents' bona fide accountable due
diligence expenses which shall be paid to you.
No more than 5% of the total Units sold in the Partnerships shall be
sold, in the aggregate, with the discounts described above.
(d) Pending receipt and acceptance by the Managing General Partner of
the minimum subscription proceeds of $2,000,000 in each Partnership,
excluding:
(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 in each
Partnership shall be held in a separate interest bearing escrow
account as provided in Section 15 of this Agreement.
Unless at least the minimum subscription proceeds of $2,000,000 as
described above are received on or before the Offering Termination
Date of a Partnership as described in Section 1 of this Agreement,
the offering of Units in that Partnership shall be terminated, in
which event:
(i) the 2.5% Dealer-Manager fee, the 7% Sales Commission, the .5%
accountable Reimbursement for Permissible Non-Cash
Compensation, and the up to .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 $2,000,000 as
described above have been received by the respective
Partnership and accepted by the respective Partnership; and
(ii) the subscription proceeds have been released from the escrow
account to the Partnership.
You shall reallow to the Selling Agents and the wholesalers their
respective fees, reimbursements, and Sales Commissions as set forth
in Section 4(b) of this Agreement.
Thereafter, your fees and Sales Commissions shall be paid to you and
shall be reallowed to the Selling Agents and wholesalers as
described above approximately every two weeks until the Offering
Termination Date for the respective Partnership. All your remaining
fees and Sales Commissions and your reimbursements shall be paid to
you by the Managing General Partner no later than fourteen business
days after the Offering Termination Date for the respective
Partnership.
5. COVENANTS OF THE MANAGING GENERAL PARTNER. The Managing General Partner
covenants and agrees that:
(a) The Managing General Partner shall deliver to you ample copies of
the Prospectus and all amendments or supplements to the Prospectus.
(b) If any event affecting a Partnership or the Managing General Partner
occurs that in the opinion of the Managing General Partner should be
set forth in a supplement or amendment to the Prospectus, then the
Managing General Partner shall promptly at its expense prepare and
furnish to you a sufficient number of copies of a supplement or
amendment to the Prospectus so that it, as so supplemented or
amended, will not contain an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements in the Prospectus, in the light of the circumstances
under which they are made, not misleading.
6. REPRESENTATIONS AND WARRANTIES OF THE DEALER-MANAGER. You, as the Dealer-
Manager, represent and warrant to the Managing General Partner and the
respective Partnership that:
(a) You are a corporation duly organized, validly existing and in good
standing under the laws of the state of your formation or of any
jurisdiction to the laws of which you are subject, with all
requisite power and authority to enter into this Agreement and to
carry out your obligations under this Agreement.
(b) This Agreement when accepted and approved 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:
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(i) any breach of any of the terms or conditions of, or a default
under your Articles of Incorporation or Bylaws, or any other
indenture, agreement, or instrument to which you are a party or
by which you are bound; or
(ii) any violation of any order applicable to you of any court or
regulatory body or administrative agency having jurisdiction
over you or your affiliates.
(d) You are duly registered under the provisions of the Securities
Exchange Act of 1934, which is referred to as the "Act of 1934," as
a broker or dealer, and you are a member in good standing of the
NASD. You are duly registered as a broker/dealer in the states where
you are required to be registered in order to carry out your
obligations as contemplated by this Agreement and the Prospectus.
You agree to maintain all the foregoing registrations in good
standing throughout the term of the offer and sale of the Units in
each Partnership, and you agree to comply with all statutes and
other requirements applicable to you as a broker/dealer under those
registrations.
(e) Pursuant to your appointment as Dealer-Manager, you shall use your
best efforts to exercise the supervision and control that you deem
necessary and appropriate to the activities of you and the Selling
Agents to comply with all the provisions of the Act, insofar as the
Act applies to your and their activities under this Agreement.
Further, you and the Selling Agents shall not engage in any activity
which would cause the offer and/or sale of the Units not to comply
with the Act, the Act of 1934, the applicable rules and regulations
of the Commission, the applicable state securities laws and
regulations, this Agreement, and the NASD Conduct Rules including
Rules 2420, 2730, 2740, 2750, and Rule 2810(b)(2) and (b)(3), which
provide as follows:
Sec. (b)(2)
SUITABILITY
(A) A member or person associated with a member shall not
underwrite or participate in a public offering of a direct
participation program unless standards of suitability have
been established by the program for participants therein
and such standards are fully disclosed in the 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:
(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
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(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
(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.
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(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.
You and the Selling Agents shall maintain records on the information
used to determine that the investment in the Units is suitable and
appropriate for each subscriber, and shall maintain these records
for at least six years after the Offering Termination Date for the
respective Partnership.
(f) You shall not nor shall you permit any Selling Agent to offer or
sell the Units in Minnesota or New Hampshire until you have been
advised in writing by the Managing General Partner, or the Managing
General Partner's special counsel, that the offer or sale of the
Units:
(i) has been qualified in the jurisdiction;
(ii) is exempt from the qualification requirements imposed by the
jurisdiction; or
(iii)the qualification is otherwise not required.
(g) You and the Selling Agents have received copies of the Prospectus
relating to the Units and you and the Selling Agents have relied
only on the statements contained in the Prospectus and not on any
other statements whatsoever, either written or oral, with respect to
the details of the offering of Units.
You agree and shall require the Selling Agents to agree to deliver a
copy of the Prospectus to each subscriber to whom you sell the Units
at or before the completion of any sale of Units to such subscriber
(which sale shall be deemed, for the purposes of this Agreement to
occur on the date on which that subscriber delivers subscription
funds to the escrow agent), or earlier if required by the Blue Sky
or securities laws of any state. Unless advised otherwise by the
Managing General Partner, you and the Selling Agents may choose to
provide each offeree with the following, which are collectively
referred to as the "Sales Literature":
(i) a flyer entitled "Atlas America Public #14-2004 Program";
(ii) a brochure entitled "Investing in Atlas America Public
#14-2004 Program";
(iii) an article entitled "Tax Rewards with Oil and Gas
Partnerships";
(iv) a brochure of tax scenarios entitled "How an Investment in
Atlas America Public #14-2004 Program Can Help Achieve an
Investor's Tax Objectives";
(v) a brochure entitled "The Appalachian Basin: A Prime Drilling
Location Which Commands a Premium";
(vi) a brochure entitled "Investment Insights - Tax Time";
(vii) a booklet entitled "Outline of Tax Consequences of Oil and Gas
Drilling Programs";
(viii) a brochure entitled "Frequently Asked Questions";
(ix) a brochure entitled "AMT - A Little History";
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(x) a brochure entitled "Reducing AMT through Natural Gas
Partnerships"; and
(xi) possibly other supplementary materials.
Any such Sales Literature, if distributed, must have been preceded
or must be accompanied by the Prospectus.
(h) You and the Selling Agents agree that you and the Selling Agents
shall not place any advertisement or other solicitation with respect
to the Units (including without limitation any material for use in
any newspaper, magazine, radio or television commercial, telephone
recording, motion picture, or other public media) without:
(i) the prior written approval of the Managing General Partner; and
(ii) the prior written approval of the form and content thereof by
the Commission, the NASD and the securities authorities of the
states where such advertisement or solicitation is to be
circulated.
Any such advertisements or solicitations shall be at your expense.
(i) If a supplement or amendment to the Prospectus is prepared and
delivered to you by the Managing General Partner, you agree and
shall require any Selling Agent to agree as follows:
(i) to distribute each supplement or amendment to the Prospectus
to every person who has previously received a copy of the
Prospectus from you and/or the Selling Agent; and
(ii) to include each supplement or amendment in all future
deliveries of any Prospectus.
(j) In connection with any offer or sale of the Units, you agree and
shall require any Selling Agent to agree to the following:
(i) to comply in all respects with statements set forth in the
Prospectus, the Partnership Agreement, and any supplements or
amendments to the Prospectus;
(ii) not to make any statement inconsistent with the statements in
the Prospectus, the Partnership Agreement, and any supplements
or amendments to the Prospectus;
(iii) not to make any untrue statement of a material fact or omit to
state a material fact necessary in order to make statements
made, in light of the circumstances under which they were
made, not misleading in connection with the Partnerships, the
Units or the offering; and
(iv) not to provide any written information, statements, or sales
materials other than the Prospectus, the Sales Literature, and
any supplements or amendments to the Prospectus unless
approved in writing by the Managing General Partner.
(k) You agree to use your best efforts in the solicitation and sale of
the Units and to coordinate and supervise the efforts of the Selling
Agents, and you shall require any Selling Agent to agree to use its
best efforts in the solicitation and sale of the Units, including
that:
(i) the prospective purchasers meet the suitability requirements
set forth in the Prospectus, the Subscription Agreement, and
this Agreement; and
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(ii) the prospective purchasers properly complete and execute the
Subscription Agreement, which has been provided as Exhibit
(I-B) to the Partnership Agreement, Exhibit (A) of the
Prospectus, together with any additional forms provided in any
supplement or amendment to the Prospectus, or otherwise provided
to you by the Managing General Partner to be completed by
prospective purchasers.
The Managing General Partner shall have the right to reject any
subscription at any time for any reason without liability to it.
Subscription funds and executed Subscription Agreements shall be
transmitted as set forth in Section 16 of this Agreement.
(l) 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:
(i) the representations and warranties you make in this Agreement
are and shall be true and correct at the applicable closing
date; and
(ii) you shall have fulfilled all your obligations under this
Agreement at the applicable closing date.
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 Minnesota or New Hampshire; 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.
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Dealer-Manager Agreement
The Managing General Partner shall provide you with copies of all
applications, filings, correspondence, orders, other documents, or
instruments relating to any application for qualification, registration,
exemption, or other approval under applicable state or Federal securities
laws for the offering.
8. EXPENSE OF SALE. The expenses in connection with the offer and sale of
the Units shall be payable as set forth below.
(a) The Managing General Partner shall pay all expenses incident to the
performance of its obligations under this Agreement, including the
fees and expenses of its attorneys and accountants and all fees and
expenses of registering or qualifying the Units for offer and sale
in the states and jurisdictions as set forth in Section 7 of this
Agreement, or obtaining exemptions from qualification or
registration, even if the offering of the Partnerships is not
successfully completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the formation and
management of the selling group and the fees and expenses of your
own counsel and accountants, even if the offering of the
Partnerships is not successfully completed.
9. CONDITIONS OF THE DEALER-MANAGER'S DUTIES. Your obligations under this
Agreement shall be subject to the accuracy, as of the date of this
Agreement and at the applicable closing date of:
(a) the Managing General Partner's representations and warranties made
in this Agreement; and
(b) to the performance by the Managing General Partner of its
obligations under this Agreement.
10. CONDITIONS OF THE MANAGING GENERAL PARTNER'S DUTIES. The Managing General
Partner's obligations provided under this Agreement, including the duty
to pay compensation to you as set forth in Section 4 of this Agreement,
shall be subject to the following:
(a) the accuracy, as of the date of this Agreement and at the applicable
closing date of each Partnership as if made at the applicable
closing date, of your representations and warranties made in this
Agreement;
(b) the performance by you of your obligations under this Agreement; and
(c) the Managing General Partner's receipt, at or before the applicable
closing date of each Partnership, of a fully executed Subscription
Agreement for each prospective purchaser as required by Section 6(k)
of this Agreement.
11. INDEMNIFICATION.
(a) You and the Selling Agents shall indemnify and hold harmless the
Managing General Partner, each Partnership and its attorneys against
any losses, claims, damages or liabilities, joint or several, to
which they may become subject under the Act, the Act of 1934, or
otherwise insofar as the losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based on your
agreements with the Selling Agents or your breach of any of your
duties and obligations, representations, or warranties under the
terms or provisions of this Agreement, and you and the Selling
Agents shall reimburse them for any legal or other expenses
reasonably incurred in connection with investigating or defending
the losses, claims, damages, liabilities, or actions.
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Xxxxx Funding, Inc.
Dealer-Manager Agreement
(b) The Managing General Partner shall indemnify and hold you and the
Selling Agents harmless against any losses, claims, damages or
liabilities, joint or several, to which you and the Selling Agents
may become subject under the Act, the Act of 1934, or otherwise
insofar as the losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based on the Managing
General Partner's breach of any of its duties and obligations,
representations, or warranties under the terms or provisions of this
Agreement, and the Managing General Partner shall reimburse you and
the Selling Agents for any legal or other expenses reasonably
incurred in connection with investigating or defending the losses,
claims, damages, liabilities, or actions.
(c) The foregoing indemnity agreements shall extend on the same terms
and conditions to, and shall inure to the benefit of, each person,
if any, who controls each indemnified party within the meaning of
the Act.
(d) Promptly after receipt by an indemnified party of notice of the
commencement of any action, the indemnified party shall, if a claim
in respect of the action is to be made against an indemnifying party
under this Section, notify the indemnifying party in writing of the
commencement of the action; but the omission to promptly notify the
indemnifying party shall not relieve the indemnifying party from any
liability which it may have to any indemnified party. If any action
is brought against an indemnified party, it shall notify the
indemnifying party of the commencement of the action, and the
indemnifying party shall be entitled to participate in, and, to the
extent that it wishes, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with
counsel satisfactory to the indemnified and indemnifying parties.
After the indemnified party has received notice from the agreed on
counsel that the defense of the action under this paragraph has been
assumed, the indemnifying party shall not be responsible for any
legal or other expenses subsequently incurred by the indemnified
party in 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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Xxxxx Funding, Inc.
Dealer-Manager Agreement
(b) The Managing General Partner may terminate this Agreement other than
the indemnification provisions of Section 11 of this Agreement, for
any reason and at any time, by promptly giving notice to you by
telephone, e-mail, facsimile, or telegram, confirmed by letter as
specified below at or before a closing date.
14. NOTICES.
(a) All notices or communications under this Agreement, except as
otherwise specifically provided, shall be in writing.
(b) Any notice or communication sent by the Managing General Partner or
a Partnership to you shall be mailed, delivered, or sent by
facsimile, e-mail or telegraph, and confirmed to you at 000 Xxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
(c) Any notice or communication sent by you to the Managing General
Partner or a Partnership shall be mailed, delivered, or sent by
facsimile, e-mail or telegraph, and confirmed at 000 Xxxxxx Xxxx,
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000.
15. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum
subscription proceeds of $2,000,000 of each Partnership as set forth in
Section 4(d) of this Agreement, the Managing General Partner and you and
the Selling Agents, including customer carrying broker/dealers, agree
that all subscribers shall be instructed to make their checks or wires
payable solely to the Escrow Agent for the Partnership in which the Units
are then being offered as follows:
(a) "Atlas Public #14-2004 L.P., Escrow Agent, National City Bank of
PA";
(b) "Atlas Public #14-2005(A) L.P., Escrow Agent, National City Bank of
PA"; or
(c) "Atlas Public #14-2005(B) L.P., Escrow Agent, National City Bank of
PA";
as agent for the respective Partnership then being offered. You agree and
shall require the Selling Agents, including customer carrying broker/
dealers, to agree to comply with Rule 15c2-4 adopted under the Act of
1934. In addition, for identification purposes, wire transfers should
reference the subscriber's name and the account number of the escrow
account for the Partnership in which the Units are then being offered.
If you receive a check not conforming to the foregoing instructions, then
you shall return the check to the Selling Agent not later than the end of
the next business day following its receipt by you. The Selling Agent
shall then return the check directly to the subscriber not later than the
end of the next business day following its receipt from you. Checks
received by you or a Selling Agent which conform to the foregoing
instructions shall be transmitted by you under Section 16 "Transmittal
Procedures," below.
You represent that you have or will execute the Escrow Agreement for each
Partnership and agree that you are bound by the terms of the Escrow
Agreement executed by you, for the respective Partnership, and the
Managing General Partner, the form of which is attached to this Agreement
as Exhibit "A."
16. TRANSMITTAL PROCEDURES. You and each Selling Agent, including customer
carrying broker/dealers, shall transmit received investor funds in
accordance with the following procedures. For purposes of the following,
the term "Selling Agent" shall also include you as Dealer-Manager when
you receive subscriptions from investors.
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Xxxxx Funding, Inc.
Dealer-Manager Agreement
(a) Pending receipt of a Partnership's minimum subscription proceeds of
$2,000,000 as set forth in Section 4(d) of this Agreement, the
Selling Agents on receipt of any check from a subscriber shall
promptly transmit the check and the original executed Subscription
Agreement to you, as Dealer-Manager, by the end of the next business
day following receipt of the check by the Selling Agent. By the end
of the next business day following your receipt of the check and the
original executed Subscription Agreement, you, as Dealer-Manager,
shall transmit the check and a copy of the executed Subscription
Agreement to the Escrow Agent, and the original executed
Subscription Agreement and a copy of the check to the Managing
General Partner.
(b) On receipt by you, as Dealer-Manager, of notice from the Managing
General Partner that a Partnership's minimum subscription proceeds
of $2,000,000 as set forth in Section 4(d) of this Agreement have
been received, the Managing General Partner, you, and the Selling
Agents agree that all subscribers then may be instructed, in the
Managing General Partner's sole discretion, to make their checks or
wires payable solely to the Partnership in which Units are then
being offered.
Thereafter, the Selling Agents shall promptly transmit any and all
checks received from subscribers and the original executed
Subscription Agreement to you, as Dealer-Manager, by the end of the
next business day following receipt of the check by the Selling
Agent. By the end of the next business day following your receipt of
the check and the original executed Subscription Agreement, you, as
Dealer-Manager, shall transmit the check and the original executed
Subscription Agreement to the Managing General Partner.
17. PARTIES. This Agreement shall inure to the benefit of and be binding on
you, the Managing General Partner, and any respective successors and
assigns. This Agreement shall also inure to the benefit of the
indemnified parties, their successors and assigns. This Agreement is
intended to be and is for the sole and exclusive benefit of the parties
to this Agreement, including the Partnerships, and their respective
successors and assigns, and the indemnified parties and their successors
and assigns, and for the benefit of no other person. No other person
shall have any legal or equitable right, remedy or claim under or in
respect of this Agreement. No purchaser of any of the Units from you or a
Selling Agent shall be construed a successor or assign merely by reason
of the purchase.
18. RELATIONSHIP. This Agreement shall not constitute you a partner of the
Managing General Partner, a Partnership, or any general partner of a
Partnership, nor render the Managing General Partner, the Partnerships,
or any general partner of a Partnership liable for any of your
obligations.
19. EFFECTIVE DATE. This Agreement is made effective between the parties as
of the date accepted by you as indicated by your signature to this
Agreement.
20. ENTIRE AGREEMENT, WAIVER.
(a) This Agreement constitutes the entire agreement between the Managing
General Partner and you, and shall not be amended or modified in any
way except by subsequent agreement executed in writing. Neither
party to this Agreement shall be liable or bound to the other by any
agreement except as specifically set forth in this Agreement.
(b) The Managing General Partner and you may waive, but only in writing,
any term, condition, or requirement under this Agreement that is
intended for its benefit. However, any written waiver of any term or
condition of this Agreement shall not operate as a waiver of any
other breach of that term or condition of this Agreement. Also, any
failure to enforce any provision of this Agreement shall not operate
as a waiver of that provision or any other provision of this
Agreement.
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Xxxxx Funding, Inc.
Dealer-Manager Agreement
21. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
22. COMPLAINTS. The Managing General Partner and you, as Dealer-Manager,
agree as follows:
(a) to notify the other if either receives an investor complaint in
connection with the offer or sale of Units by you or a Selling
Agent;
(b) to cooperate with the other in resolving the complaint; and
(c) to cooperate in any regulatory examination of the other to the
extent it involves this Agreement or the offer or sale of Units by
you or a Selling Agent.
23. PRIVACY. The Managing General Partner and you each acknowledge that
certain information made available to the other under this Agreement may
be deemed nonpublic personal information under the Xxxxx-Xxxxx-Xxxxxx
Act, other federal or state privacy laws (as amended), and the rules and
regulations promulgated thereunder, which are referred to collectively,
as the "Privacy Laws." The Managing General Partner and you agree as
follows:
(a) not to disclose or use the information except as required to carry
out each party's respective duties under this Agreement or as
otherwise permitted by law in the ordinary course of business;
(b) to establish and maintain procedures reasonably 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.
24. ANTI-MONEY LAUNDERING PROVISION. You and each Selling Agent each
represent and warrant to the Managing General Partner that each of you
have in place and will maintain suitable and adequate "know your
customer" policies and procedures and that each of you shall comply with
all applicable laws and regulations regarding anti-money laundering
activity and will provide such documentation to the Managing General
Partner on written request.
25. ACCEPTANCE. Please confirm your agreement to the terms and conditions set
forth above by signing and returning the enclosed duplicate copy of this
Agreement to us at the address set forth above.
Very truly yours,
MANAGING GENERAL PARTNER
ATLAS RESOURCES, INC.,
a Pennsylvania corporation
______________________, 2004 By: ____________________________________________,
Date Xxxx X. Xxxxxxxxx, Senior Vice President -
Direct Participation Programs
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Dealer-Manager Agreement
PROGRAM
ATLAS AMERICA PUBLIC #14-2004 PROGRAM
By: Atlas Resources, Inc.,
Managing General Partner
______________________, 2004 By: ____________________________________________,
Date Xxxx X. Xxxxxxxxx, Senior Vice President -
Direct Participation Programs
DEALER-MANAGER
XXXXX FUNDING, INC.,
a Pennsylvania corporation
______________________, 2004 By: ____________________________________________,
Date Xxxxxxx X. Xxxxx, Xx., President
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Xxxxx Funding, Inc.
Dealer-Manager Agreement
EXHIBIT "A"
ATLAS AMERICA PUBLIC #14-____________ L.P.
ESCROW AGREEMENT
THIS AGREEMENT is made to be effective as of ________________, 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 #14-_________ L.P., a Delaware limited partnership (the
"Partnership") and National City Bank of Pennsylvania, Pittsburgh,
Pennsylvania, as escrow agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Managing General Partner intends to offer publicly for sale to
qualified investors (the "Investors") up to 12,500 limited and investor
general partner interests in the Partnership (the "Units").
WHEREAS, each Investor will be required to pay his subscription in full on
subscribing by check or wire (the "Subscription Proceeds").
WHEREAS, the cost per Unit will be $10,000 subject to certain discounts of
up to 10.5% ($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
$2,000,000 and on a "best efforts" basis for the remaining Units on behalf of
the Managing General Partner and the Partnership and under which Anthem has
been authorized to select certain members in good standing of the National
Association of Securities Dealers, Inc. ("NASD") to participate in the
offering of the Units ("Selling Agents").
WHEREAS, the 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
$2,000,000 and on a "best efforts" basis for the remaining Units on behalf of
the Managing General Partner and the Partnership and under which 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:
o a 2.5% Dealer-Manager fee;
o a 7% sales commission;
1
o a .5% accountable Reimbursement for Permissible Non-Cash
Compensation; and
o an up to .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 $2,000,000, excluding any optional subscription by the Managing
General Partner, its officers, directors, and Affiliates.
WHEREAS, the Units may also be offered and sold by the officers and
directors of the Managing General Partner without receiving a sales commission
or other compensation on their sales.
WHEREAS, no subscriptions to the Partnership will be accepted after the
"Offering Termination Date," which is the first to occur of either:
o receipt of the maximum Subscription Proceeds of $125,000,000; or
o _____________________.
WHEREAS, to facilitate compliance with the terms of the Dealer-Manager
Agreement and Rule 15c2-4 adopted under the Securities Exchange Act of 1934,
the Managing General Partner and the Dealer-Manager desire to have the
Subscription Proceeds deposited with the Escrow Agent and the Escrow Agent
agrees to hold the Subscription Proceeds under the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement, the parties to this Agreement, intending to be
legally bound, agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The Managing General Partner, the
Partnership, and the Dealer-Manager appoint the Escrow Agent as the
escrow agent to receive and to hold the Subscription Proceeds deposited
with the Escrow Agent by the Dealer-Manager and the Managing General
Partner under this Agreement, and the Escrow Agent agrees to serve in
this capacity during the term and based on the provisions of this
Agreement.
2. DEPOSIT OF SUBSCRIPTION PROCEEDS. Pending receipt of the minimum
Subscription Proceeds of $2,000,000, the Dealer-Manager and the Managing
General Partner shall deposit the Subscription Proceeds of each Investor
to whom they sell Units with the Escrow Agent and shall deliver to the
Escrow Agent a copy of the "Subscription Agreement," which is the
execution and subscription instrument signed by the Investor to evidence
his agreement to purchase Units in the Partnership. Payment for each
subscription for Units shall be in the form of a check or wire made
payable to "Atlas America Public #14-______ L.P., Escrow Agent, National
City Bank of Pennsylvania."
3. INVESTMENT OF SUBSCRIPTION PROCEEDS. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow Agent
as directed by the Managing General Partner. This may be a savings
account, bank money market account, short-term certificates of deposit
issued by a bank, or short-term certificates issued or guaranteed by the
United States government. The interest earned shall be added to the
Subscription Proceeds and disbursed in accordance with the provisions of
Paragraph 4 or 5 of this Agreement, as the case may be.
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Escrow Agreement
4. DISTRIBUTION OF SUBSCRIPTION PROCEEDS. If the Escrow Agent:
(a) receives proper written notice from an authorized officer of the
Managing General Partner that at least the minimum Subscription
Proceeds of $2,000,000 have been received and accepted by the
Managing General Partner; and
(b) determines that Subscription Proceeds for at least $2,000,000 are
Distributable Subscription Proceeds;
then the Escrow Agent shall promptly release and distribute to the
Managing General Partner the Distributable Subscription Proceeds plus any
interest paid and investment income earned on the Subscription Proceeds
while held by the Escrow Agent in the escrow account. For purposes of the
Agreement, "Distributable Subscription Proceeds" are Subscription
Proceeds which have been deposited in the escrow account (1) by check,
but only to the extent the Escrow Agent believes an amount of time has
passed which would usually be sufficient for Subscription Proceeds paid
by check to have returned unpaid by the bank on which the check was drawn
and become Distributable Subscription Proceeds after a 10 day period from
the date of deposit and (2) by wire transfer.
After the occurrence of 4(a) and (b) above, Escrow Agent will provide a
letter to the Managing General Partner confirming receipt of checks and/
or wires representing Subscription Proceeds totaling at least $2,000,000
have been received and the anticipated date the funds will be considered
Distributable Subscription Proceeds.
After the initial distribution, any remaining Subscription Proceeds, plus
any interest paid and investment income earned on the Subscription
Proceeds while held by the Escrow Agent in the escrow account, shall be
promptly released and distributed to the Managing General Partner by the
Escrow Agent as the Subscription Proceeds become Distributable
Subscription Proceeds after a 10 day period from the date of deposit.
The Managing General Partner shall immediately return to the Escrow Agent
any Subscription Proceeds distributed to the Managing General Partner or
refunded to an Investor to the extent that such Subscription Proceeds
were paid by a check which is returned or otherwise not collected for any
reason prior or subsequent to termination of this Agreement.
5. SEPARATE PARTNERSHIP ACCOUNT. During the continuation of the offering
after the Partnership is funded with cleared Subscription Proceeds of at
least $2,000,000 and the Escrow Agent provides notice described in
Paragraph 4 of this Agreement, and before the Offering Termination Date,
any additional Subscription Proceeds may be deposited by the Dealer-
Manager and the Managing General Partner directly in a separate
Partnership account which shall not be subject to the terms of this
Agreement.
6. DISTRIBUTIONS TO SUBSCRIBERS.
(a) If the Partnership is not funded as contemplated because less than
the minimum Subscription Proceeds of $2,000,000 have been received
and accepted by the Managing General Partner by twelve (12:00) p.m.
(noon), local time, EASTERN STANDARD TIME on the Offering
Termination Date, or for any other reason, then the Managing General
Partner shall notify the Escrow Agent, and the Escrow Agent promptly
shall distribute to each Investor, for which Escrow Agent has a copy
of a Subscription Agreement, a refund check made payable to the
Investor in an amount equal to the Subscription Proceeds of the
Investor, plus any interest paid or investment income earned on the
Investor's Subscription Proceeds while held by the Escrow Agent in
the escrow account.
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Escrow Agreement
(b) If a subscription for Units submitted by an Investor is rejected by
the Managing General Partner for any reason after the Subscription
Proceeds relating to the subscription have been deposited with the
Escrow Agent, then the Managing General Partner promptly shall
notify in writing, the Escrow Agent of the rejection, and the Escrow
Agent shall promptly distribute to the Investor a refund check made
payable to the Investor, for which Escrow Agent has a copy of a
Subscription Agreement, 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 $2,000,000 and the Escrow Agent
receives the proper written notice described in Paragraph 4 of this
Agreement, at which time the Escrow Agent shall have, and is granted, a
prior lien on any property, cash, or assets held under this Agreement,
with respect to its unpaid compensation and nonreimbursed expenses,
superior to the interests of any other persons or entities.
8. DUTIES OF ESCROW AGENT. The Escrow Agent shall not be obligated to accept
any notice, make any delivery, or take any other action under this
Agreement unless the notice or request or demand for delivery or other
action is in writing and given or made by the Managing General Partner or
an authorized officer of the Managing General Partner. In no event shall
the Escrow Agent be obligated to accept any notice, request, or demand
from anyone other than the Managing General Partner.
9. LIABILITY OF ESCROW AGENT. The Escrow Agent shall not be liable for any
damages, or have any obligations other than the duties prescribed in this
Agreement in carrying out or executing the purposes and intent of this
Agreement. However, nothing in this Agreement shall relieve the Escrow
Agent from liability arising out of its own willful misconduct or gross
negligence. The Escrow Agent's duties and obligations under this
Agreement shall be entirely administrative and not discretionary. The
Escrow Agent shall not be liable to any party to this Agreement or to any
third-party as a result of any action or omission taken or made by the
Escrow Agent in good faith. The parties to this Agreement will jointly
and severally indemnify the Escrow Agent, hold the Escrow Agent harmless,
and reimburse the Escrow Agent from, against and for, any and all
liabilities, costs, fees and expenses (including reasonable attorney's
fees) the Escrow Agent may suffer or incur by reason of its execution and
performance of this Agreement. If any legal questions arise concerning
the Escrow Agent's duties and obligations under this Agreement, then the
Escrow Agent may consult with its counsel and rely without liability on
written opinions given to it by its counsel.
The Escrow Agent shall be protected in acting on any written notice,
request, waiver, consent, authorization, or other paper or document which
the Escrow Agent, in good faith, believes to be genuine and what it
purports to be.
If there is any disagreement between any of the parties to this
Agreement, or between them or any other person, resulting in adverse
claims or demands being made in connection with this Agreement, or if the
Escrow Agent, in good faith, is in doubt as to what action it should take
under this Agreement, then the Escrow Agent may, at its option, refuse to
comply with any claims or demands on it or refuse to take any other
action under this Agreement, so long as the disagreement continues or the
doubt exists. In any such event, the Escrow Agent shall not be or become
liable in any way or to any person for its
4
Escrow Agreement
failure or refusal to act and the Escrow Agent shall be entitled to
continue to so refrain from acting until the dispute is resolved by the
parties involved.
National City Bank of Pennsylvania is acting solely as the Escrow Agent
and is not a party to, nor has it reviewed or approved any agreement or
matter of background related to this Agreement, other than this Agreement
itself, and has assumed, without investigation, the authority of the
individuals executing this Agreement to be so authorized on behalf of the
party or parties involved.
10. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent may resign as
such after giving thirty days' prior written notice to the other parties
to this Agreement. Similarly, the Escrow Agent may be removed and
replaced after receiving thirty days' prior written notice from the other
parties to this Agreement. In either event, the duties of the Escrow
Agent shall terminate thirty days after the date of the notice (or as of
an earlier date as may be mutually agreeable); and the Escrow Agent shall
then deliver the balance of the Subscription Proceeds (and any interest
paid or investment income earned thereon while held by the Escrow Agent
in the escrow account) in its possession to a successor escrow agent
appointed by the other parties to this Agreement as evidenced by a
written notice filed with the Escrow Agent.
If the other parties to this Agreement are unable to agree on a successor
escrow agent or fail to appoint a successor escrow agent before the
expiration of thirty days following the date of the notice of the Escrow
Agent's resignation or removal, then the Escrow Agent may petition any
court of competent jurisdiction for the appointment of a successor escrow
agent or other appropriate relief. Any resulting appointment shall be
binding on all of the parties to this Agreement.
On acknowledgment by any successor escrow agent of the receipt of the
then remaining balance of the Subscription Proceeds (and any interest
paid or investment income earned thereon while held by the Escrow Agent
in the escrow account), the Escrow Agent shall be fully released and
relieved of all duties, responsibilities, and obligations under this
Agreement.
11. TERMINATION. This Agreement shall terminate and the Escrow Agent shall
have no further obligation with respect to this Agreement after the
distribution of all Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in the
escrow account) as contemplated by this Agreement or on the written
consent of all the parties to this Agreement.
12. NOTICE. Any notices or instructions, or both, to be given under this
Agreement shall be validly given if set forth in writing and mailed by
certified mail, return receipt requested, or by facsimile with
confirmation of receipt (originals to be followed in the mail), or by a
nationally recognized overnight courier, as follows:
If to the Escrow Agent:
National City Bank
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx XxXxxxx LOC 2111
Phone: (000) 000-0000
Facsimile: (000) 000-0000
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Escrow Agreement
If to the Managing General Partner:
Atlas Resources, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Black
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Anthem:
Anthem Securities, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
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.
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Escrow Agreement
14. The parties hereto and subscribers acknowledge Escrow Agent has not
reviewed and is not making any recommendations with respect to the
securities offered.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
NATIONAL CITY BANK OF PENNSYLVANIA
As Escrow Agent
By: __________________________________________________________________
(Authorized Officer)
ATLAS RESOURCES, INC.
A Pennsylvania corporation
By: __________________________________________________________________
Xxxxx X. Black, Vice President - Partnership Administration
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By: __________________________________________________________________
Xxxxxx X. Xxxxxxxx, President
XXXXX FUNDING, INC.
A Pennsylvania corporation
By: __________________________________________________________________
Xxxxxxx X. Xxxxx, Xx., President
ATLAS AMERICA PUBLIC #14-______ L.P.
By: ATLAS RESOURCES, INC.
Managing General Partner
By: __________________________________________________________________
Xxxxx X. Black, Vice President - Partnership Administration
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Escrow Agreement
APPENDIX I TO ESCROW AGREEMENT
COMPENSATION FOR SERVICES OF ESCROW AGENT
REVIEW AND ACCEPTANCE FEE: $ WAIVED
For providing initial review of the Escrow Agreement and all supporting
documents and for initial services associated with establishing the Escrow
Account. This is a one (1) time fee payable upon the opening of the account.
I. Annual Administrative Fee Payable in Advance $3000.00
(or any portion thereof)
II. Remittance of checks returned to subscribers 20.00
(set out in section 6 of the governing agreement)
III. Wire transfers n/a
IV. Purchase or Sale of Securities 100.00
V. Investments (document limits investment to a checking or savings account, or
certificates of deposit) such products offered by any National City Bank
retail branch)- fees are subject to the type of account the Managing General
Partner directs the Escrow Agent to open and to be governed by the Escrow
Agreement.
EXTRAORDINARY SERVICES:
For any services other than those covered by the aforementioned, a special per
hour charge will be made commensurate with the character of the service, time
required and responsibility involved. Such services include but are not
limited to excessive administrative time, attendance at closings, specialized
reports, and record keeping, unusual certifications, etc.
Managing General Partner agrees to report all funds in accordance with
appropriate tax treatment.
FEE SCHEDULE IS SUBJECT TO ANNUAL REVIEW AND/OR ADJUSTMENT UPON AMENDMENT
THERETO.
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Escrow Agreement
EXHIBIT "B"
SELLING AGENT AGREEMENT
WITH XXXXX FUNDING, INC.
TO: ______________________________________
RE: ATLAS AMERICA PUBLIC #14-2004 PROGRAM
-------------------------------------
Gentlemen:
Atlas Resources, Inc. will be the Managing General Partner in a series of up
to three limited partnerships to be organized under the Delaware Revised
Uniform Limited Partnership Act:
o Atlas America Public #14-2004 L.P.;
o Atlas America Public #14-2005(A) L.P.; and
o Atlas America Public #14-2005(B) L.P.
which are referred to as the "Partnership" or the "Partnerships." The Units in
the Partnerships, which are referred to as the "Units," and the offering are
described in the Prospectus, copies of which have been furnished to you with
this Agreement.
Our firm, 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 Partnerships under which the Dealer-Manager has agreed to form a group
of NASD member firms, which are referred to as the "Selling Agents." The
Selling Agents will obtain subscriptions for Units in each Partnership in 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 for Units in each Partnership at the time
the Partnership is being offered as provided in Section 1 of the Dealer-
Manager Agreement in the states of:
o Minnesota; and
o New Hampshire.
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Selling Agent Agreement
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 Partnerships.
1. REPRESENTATIONS AND WARRANTIES OF SELLING AGENT. You represent and
warrant to the Dealer-Manager that:
(a) You are a corporation or other entity duly organized, validly
existing, and in good standing under the laws of the state of your
formation or of any jurisdiction to the laws of which you are
subject, with all requisite power and authority to enter into this
Agreement and to carry out your obligations under this Agreement.
(b) This Agreement when accepted and approved by you will be duly
authorized, executed, and delivered by you and will be a valid and
binding agreement on your part in accordance with its terms.
(c) The consummation of the transactions contemplated by this Agreement
and the Prospectus will not result in the following:
(i) any breach of any of the terms or conditions of, or constitute
a default under your organizational documents, bylaws, any
indenture, agreement, or other instrument to which you are a
party or by which you are bound; or
(ii) any violation of any order applicable to you of any court,
regulatory body or administrative agency having jurisdiction
over you or over your affiliates.
(d) You are duly registered under the provisions of the Securities
Exchange Act of 1934, which is referred to as the "Act of 1934," as
a broker/dealer, and you are a member in good standing of the NASD.
You are duly registered as a broker/dealer in the jurisdictions
where you are required to be registered in order to carry out your
obligations as contemplated by this Agreement and the Prospectus.
You agree to maintain all the foregoing registrations in good
standing throughout the term of the offer and sale of the Units, and
you agree to comply with all statutes and other requirements
applicable to you as a broker/dealer under those registrations.
(e) Pursuant to your appointment as a Selling Agent, you shall comply
with all the provisions of the Act, insofar as the Act applies to
your activities under this Agreement. Further, you shall not engage
in any activity which would cause the offer and/or sale of the Units
not to comply with the Act, the Act of 1934, the applicable rules
and regulations of the Securities and Exchange Commission, which is
referred to as the "Commission," the applicable state securities
laws and regulations, this Agreement, and the NASD Conduct Rules
including Rules 2420, 2730, 2740, 2750, and 2810(b)(2) and (b)(3),
which provide as follows:
Sec. (b)(2)
SUITABILITY
(A) A member or person associated with a member shall not underwrite
or participate in a public offering of a direct participation
program unless standards of suitability have been established by
the program for participants therein and such standards are fully
disclosed in the prospectus and are consistent with the
provisions of subparagraph (B) of this section.
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Selling Agent Agreement
(B) In recommending to a participant the purchase, sale or exchange
of an interest in a direct participation program, a member or
person associated with a member shall:
(i) have reasonable grounds to believe, on the basis of
information obtained from the participant concerning his
investment objectives, other investments, financial
situation and needs, and any other information known by the
member or associated person, that:
(a) the participant is or will be in a financial position
appropriate to enable him to realize to a significant
extent the benefits described in the prospectus, including
the tax benefits where they are a significant aspect of
the program;
(b) the participant has a fair market net worth
sufficient to sustain the risks inherent in the program,
including loss of investment and lack of liquidity; and
(c) the program is otherwise suitable for the
participant; and
(ii) maintain in the files of the member documents disclosing the
basis upon which the determination of suitability was
reached as to each participant.
(C) Notwithstanding the provisions of subparagraphs (A) and (B)
hereof, no member shall execute any transaction in 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;
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Xxxxx Funding, Inc.
Selling Agent Agreement
(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 shall not offer or sell the Units in the states of Minnesota and
New Hampshire until you have been advised in writing by the Managing
General Partner, or the Managing General Partner's special counsel,
that the offer or sale of the Units:
(i) has been qualified in the jurisdiction;
(ii) is exempt from the qualification requirements imposed by the
jurisdiction; or
(iii)the qualification is otherwise not required.
(g) You 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.
You shall deliver a copy of the Prospectus to each subscriber to
whom you sell the Units at or before the completion of any sale of
Units to such subscriber (which sale shall be deemed, for the
purposes of this Agreement to occur on the date on which that
subscriber delivers subscription funds to the escrow agent), or
earlier if required by the blue sky or securities laws of any
jurisdiction. Unless advised otherwise by the Managing General
Partner, you may choose to provide each offeree with the following
sales materials which are collectively referred to as the "Sales
Literature":
(i) a flyer entitled "Atlas America Public #14-2004 Program";
(ii) a brochure entitled "Investing in Atlas America Public #14-2004
Program";
(iii)an article entitled "Tax Rewards with Oil and Gas
Partnerships";
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Selling Agent Agreement
(iv) a brochure of tax scenarios entitled "How an Investment in
Atlas America Public #14-2004 Program Can Help Achieve an
Investor's Tax Objectives";
(v) a brochure entitled "The Appalachian Basin: A Prime Drilling
Location Which Commands a Premium";
(vi) a brochure entitled "Investment Insights - Tax Time";
(vii) a booklet entitled "Outline of Tax Consequences of Oil and Gas
Drilling Programs";
(viii)a brochure entitled "Frequently Asked Questions"; and
(ix) a brochure entitled "AMT - A Little History";
(x) a brochure entitled "Reducing AMT through Natural Gas
Partnerships"; and
(xi) possibly other supplementary materials.
Any such Sales Literature, if distributed, must have been preceded
or must be accompanied by the Prospectus.
(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:
(i) the prior written approval of the Managing General Partner; and
(ii) the prior written approval of the form and content thereof by
the Commission, the NASD and the securities authorities of the
states where such advertisement or solicitation is to be
circulated.
Any such advertisements or solicitations shall be at your expense.
(i) If a supplement or amendment to the Prospectus is prepared and
delivered to you by the Managing General Partner or the Dealer-
Manager, you agree as follows:
(i) to distribute each supplement or amendment to the Prospectus to
every person who has previously received a copy of the
Prospectus from you; and
(ii) to include each supplement or amendment in all future
deliveries of any Prospectus.
(j) In connection with any offer or sale of the Units, you agree to the
following:
(i) to comply in all respects with statements set forth in the
Prospectus, the Partnership Agreement, and any supplements or
amendments to the Prospectus;
(ii) not to make any statement inconsistent with the statements in
the Prospectus, the Partnership Agreement, and any supplements
or amendments to the Prospectus;
(iii)not to provide any written information, statements, or sales
materials other than the Prospectus, the Sales Literature, and
any supplements or amendments to the Prospectus unless approved
in writing by the Managing General Partner; and
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Xxxxx Funding, Inc.
Selling Agent Agreement
(iv) not to make any untrue statement of a material fact or omit to
state a material fact necessary in order to make statements
made, in light of the circumstances under which they were made,
not misleading in connection with the Partnerships, the Units
or the offering.
(k) You agree to use your best efforts in the solicitation and sale of
the Units, including that:
(i) you comply with all the provisions of the Act, the Act of 1934,
the applicable rules and regulations of the Commission, the
applicable state securities laws and regulations, this
Agreement, and the NASD Conduct Rules;
(ii) the prospective purchasers meet the suitability requirements
set forth in the Prospectus, the Subscription Agreement, and
this Agreement; and
(iii)the prospective purchasers properly complete and execute the
Subscription Agreement, which has been provided as Exhibit (I-
B) to the Partnership Agreement, Exhibit (A) of the Prospectus,
together with any additional forms provided in any supplement
or amendment to the Prospectus, or otherwise provided to you by
the Managing General Partner or the Dealer-Manager to be
completed by prospective purchasers.
You acknowledge and agree that the Managing General Partner shall
have the right to reject any subscription at any time for any reason
without liability to it. Subscription funds and executed
subscription packets shall be transmitted as set forth in Section 11
of this Agreement.
(l) Although not anticipated, if you assist in any transfers of the
Units, then 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:
(i) the representations and warranties you make in this Agreement
are and shall be true and correct as of the date of this
Agreement and at the applicable closing date; and
(ii) you shall and have fulfilled all your obligations under this
Agreement at the applicable closing date.
2. COMMISSIONS.
(a) Subject to the receipt of the minimum required subscription proceeds
of $2,000,000 as described in Section 4(d) of the Dealer-Manager
Agreement, and the discounts set forth in Section 4(c) of the
Dealer-Manager Agreement for sales to the Managing General Partner,
its officers, directors and affiliates, registered investment
advisors and their clients, Selling Agents and their registered
representatives and principals, and investors who buy Units through
the officers or directors of the Managing General Partner, the
Dealer-Manager is entitled to receive from the Managing General
Partner a 7% Sales Commission and a .5% accountable Reimbursement
for Permissible Non-Cash Compensation, based on the aggregate amount
of all Unit subscriptions to a Partnership secured by the Dealer-
Manager or the selling group formed by the Dealer-Manager and
accepted by the Managing General Partner.
The Permissible Non-Cash Compensation will be paid for training and
education meetings, gifts that do not exceed $100 per year and are
not preconditioned on the achievement of a sales target, an
occasional meal, a ticket to a sporting event or the theater, or
comparable
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Selling Agent Agreement
entertainment which is neither so frequent nor so extensive as to
raise any question of propriety and is not preconditioned on
achievement of a sales target and contributions by the Dealer-
Manager or Managing General Partner to a non-cash compensation
arrangement between you and your associated persons, provided that
the Dealer-Manager or Managing General Partner do not directly or
indirectly participate in your organization of the permissible non-
cash compensation arrangement.
Additionally, the Dealer-Manager is entitled to receive from the
Managing General Partner an up to .5% reimbursement of the Selling
Agents' bona fide accountable due diligence expenses per Unit.
Subject to the terms and conditions set forth in this Agreement,
including the Dealer-Manager's receipt from you of the documentation
required of you in Section 1 of this Agreement, the Dealer-Manager
agrees to pay you on Units sold by you and accepted by the Managing
General Partner:
(i) a 7% Sales Commission, subject to the performance by you of
your obligations under Appendix I to this Agreement, which is
incorporated in this Agreement by reference; and
(ii) up to a .5% reimbursement of your bona fide accountable due
diligence expenses per Unit. With respect to the up to .5%
reimbursement of your bona fide accountable due diligence
expenses, any xxxx presented by you to the Dealer-Manager for
reimbursement of costs associated with your due diligence
activities must be for actual costs and may not include a
profit margin. Although the Dealer-Manager is not required to
obtain an itemized expense statement before paying out due
diligence expenses, any xxxx for due diligence submitted by you
must be based on your actual expenses incurred in conducting
due diligence. If the Dealer-Manager receives a non-itemized
xxxx for due diligence that it has reason to question, then it
has the obligation to ensure your compliance by requesting an
itemized statement to support the xxxx submitted by you. If
such a due diligence xxxx cannot be justified, any excess over
actual due diligence expenses that is paid is considered by the
NASD to be undisclosed underwriting compensation and is
required to be included within the 10% compensation guideline
under NASD Conduct Rule 2810, and reflected on your books and
records. Notwithstanding, if you provide an itemized xxxx in
excess of .5% then the excess over .5% will not be included
within the 10% compensation guideline, but instead the 4.5%
organization and offering cost guideline of NASD Conduct Rule
2810.
(iii)In addition, the Dealer-Manager or Managing General Partner may
make certain non-cash compensation arrangements of up to .5%
per Unit with you or your registered representatives, which
will be included in the accountable Reimbursement for
Permissible Non-Cash Compensation of up to .5% per Unit. The
Dealer-Manager is responsible for ensuring that all non-cash
compensation arrangements comply with the restrictions on non-
cash compensation in connection with direct participation
programs as set forth in NASD Conduct Rule 2810. For example,
if the Managing General Partner or Dealer-Manager pays or
reimburses you in connection with meetings held by the Managing
General Partner or Dealer-Manager for the purpose of training
or education of your registered representatives, then the
following conditions must be met:
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Selling Agent Agreement
(A) your registered representative must obtain your prior
approval to attend the meeting and attendance by your
registered representatives must not be conditioned by you
on the achievement of a sales target;
(B) the location of the training and education meeting must be
appropriate to the purpose of the meeting, as defined in
NASD Conduct Rule 2810;
(C) the payment or reimbursement must not be applied to the
expenses of guests of the registered representative;
(D) the payment or reimbursement by the Managing General
Partner or Dealer-Manager must not be conditioned by the
Managing General Partner or Dealer-Manager on the
achievement of a sales target; and
(E) the appropriate records must be maintained.
Non-cash compensation means any form of compensation received
in connection with the sale of the Units that is not cash
compensation, including but not limited to merchandise, gifts
and prizes, travel expenses, meals and lodging.
(iv) Your sales commissions which are owed to you as set forth above
shall be paid to you within seven business days after the
Dealer-Manager has received the related amounts owed to it
under the Dealer-Manager Agreement, which the Dealer-Manager is
entitled to receive within five business days after the
conditions described in Section 4(e) of the Dealer-Manager
Agreement are satisfied and approximately every two weeks
thereafter until the respective Partnership's Offering
Termination Date, which is described in Section 1 of the
Dealer-Manager Agreement. The balance of your sales commissions
and the reimbursements which are owed to you as set forth above
shall be paid to you within seven business days after the
Dealer-Manager has received the related amounts owed to it
under the Dealer-Manager Agreement, which the Dealer-Manager is
entitled to receive within fourteen business days after the
respective Partnership's Offering Termination Date.
(b) Notwithstanding anything in this Agreement to the contrary, you
agree to waive payment of your compensation and reimbursements which
are owed to you as set forth above until the Dealer-Manager is in
receipt of the related amounts owed to it under the Dealer-Manager
Agreement, and the Dealer-Manager's liability to pay your
compensation and reimbursements under this Agreement shall be
limited solely to the proceeds of the related amounts owed to it
under the Dealer-Manager Agreement.
(c) As provided in Section 4(d) of the Dealer-Manager Agreement, a
Partnership shall not begin operations unless it receives
subscription proceeds for at least $2,000,000 by its respective
Offering Termination Date. If this amount is not secured by the
respective Partnership's Offering Termination Date, then nothing
shall be payable to you for the respective Partnership and all funds
advanced by subscribers for Units in the respective Partnership
shall be returned to them with interest earned, if any.
3. BLUE SKY QUALIFICATION. The Managing General Partner may elect not to
qualify or register Units in any state or jurisdiction in which it deems the
qualification or registration is not warranted for any reason in its sole
discretion. On application to the Dealer-Manager you will be informed as to
the states and jurisdictions in which the Units have been qualified for sale
or are exempt under the respective securities or "Blue Sky" laws of those
states and jurisdictions.
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Selling Agent Agreement
Notwithstanding the foregoing, the Dealer-Manager, the Partnerships, and
the Managing General Partner have not assumed and will not assume any
obligation or responsibility as to your right to act as a broker/dealer
with respect to the Units in Minnesota or New Hampshire.
4. EXPENSE OF SALE. The expenses in connection with the offer and sale of the
Units shall be payable as set forth below.
(a) The Dealer-Manager shall pay all expenses incident to the
performance of its obligations under this Agreement, including the
fees and expenses of its attorneys and accountants, even if the
offering of any or all of the Partnerships is not successfully
completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the fees and expenses of
your own counsel and accountants, even if the offering of any or all
of the Partnerships is not successfully completed.
5. CONDITIONS OF YOUR DUTIES. Your obligations under this Agreement, as of the
date of this Agreement and at the applicable closing date, shall be subject
to the following:
(a) the performance by the Dealer-Manager of its obligations under this
Agreement; and
(b) the performance by the Managing General Partner of its obligations
under the Dealer-Manager Agreement.
6. CONDITIONS OF DEALER-MANAGER'S DUTIES. The Dealer-Manager's obligations
under this Agreement, including the duty to pay compensation and
reimbursements to you as set forth in Section 2 of this Agreement, shall be
subject to the following:
(a) the accuracy, as of the date of this Agreement and at the applicable
closing date as if made at the applicable closing date, of your
representations and warranties made in this Agreement;
(b) the performance by you of your obligations under this Agreement; and
(c) the Dealer-Manager's receipt, at or before the applicable closing
date, of a fully executed Subscription Agreement for each
prospective purchaser as required by Section 1(k) of this Agreement.
7. INDEMNIFICATION.
(a) You shall indemnify and hold harmless the Dealer-Manager, the
Managing General Partner, each Partnership and its attorneys against
any losses, claims, damages or liabilities, joint or several, to
which they may become subject under the Act, the Act of 1934, or
otherwise insofar as the losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based on your breach
of any of your duties and obligations, representations, or
warranties under the terms or provisions of this Agreement, and you
shall reimburse them for any legal or other expenses reasonably
incurred in connection with investigating or defending the losses,
claims, damages, liabilities, or actions.
(b) The Dealer-Manager shall indemnify and hold you harmless against any
losses, claims, damages, or liabilities, joint or several, to which
you may become subject under the Act, the Act of 1934, or otherwise
insofar as the losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based on the Dealer-
Manager's breach of any of its duties and obligations,
representations, or warranties under the terms or provisions of this
Agreement,
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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.
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.
(b) The Dealer-Manager may terminate this Agreement other than the
indemnification provisions of Section 7 of this Agreement, for any
reason and at any time, by promptly giving notice to you by
telephone, e-mail, facsimile or telegram, confirmed by letter.
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10. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum
subscription proceeds of $2,000,000 as set forth in Section 4(d) of the
Dealer-Manager Agreement, the Dealer-Manager and you, including if you
are a customer carrying broker/dealer, agree that all subscribers shall
be instructed to make their checks or wires payable solely to the Escrow
Agent for the Partnership in which the Units are then being offered as
follows:
(a) "Atlas Public #14-2004 L.P., Escrow Agent, National City Bank of
PA";
(b) "Atlas Public #14-2005(A) L.P., Escrow Agent, National City Bank of
PA"; or
(c) "Atlas Public #14-2005(B) L.P., Escrow Agent, National City Bank of
PA";
as agent for the respective Partnership then being offered. You,
including if you are a customer carrying broker/dealer, agree to comply
with Rule 15c2-4 adopted under the Act of 1934. In addition, for
identification purposes, wire transfers should reference the subscriber's
name and the account number of the escrow account for the Partnership in
which the Units are then being offered.
If you receive a check not conforming to the foregoing instructions, then
you shall return the check directly to the subscriber not later than the
end of the next business day following its receipt by you from the
subscriber. If the Dealer-Manager receives a check not conforming to the
foregoing instructions, then the Dealer-Manager shall return the check to
you not later than the end of the next business day following its receipt
by the Dealer-Manager and you shall then return the check directly to the
subscriber not later than the end of the next business day following its
receipt by you from the Dealer-Manager. Checks received by you which
conform to the foregoing instructions shall be transmitted by you under
Section 11 "Transmittal Procedures," below.
You agree that you are bound by the terms of the Escrow Agreement, a copy
of which is attached to the Dealer-Manager Agreement as Exhibit "A."
11. TRANSMITTAL PROCEDURES. You, including if you are a customer carrying
broker/dealer, shall transmit received investor funds in accordance with
the following procedures.
(a) Pending receipt of a Partnership's minimum subscription proceeds of
$2,000,000 as set forth in Section 4(d) of the Dealer-Manager
Agreement, you shall promptly transmit any and all checks received
by you from subscribers and the original executed Subscription
Agreement to the Dealer-Manager by the end of the next business day
following receipt of the check by you. By the end of the next
business day following its receipt of the check and the original
executed subscription documents, the Dealer-Manager shall transmit
the check and a copy of the executed Subscription Agreement to the
Escrow Agent, and the original executed Subscription Agreement and a
copy of the check to the Managing General Partner.
(b) On receipt by you of notice from the Managing General Partner or the
Dealer-Manager that a Partnership's minimum subscription proceeds of
$2,000,000 as set forth in Section 4(d) of the Dealer-Manager
Agreement have been received, you agree that all subscribers then
may be instructed, in the Managing General Partner's sole
discretion, to make their checks or wires payable solely to the
Partnership then being offered.
Thereafter, you shall promptly transmit any and all checks received
by you from subscribers and the original executed Subscription
Agreement to the Dealer-Manager by the end of the next business day
following receipt of the check by you. By the end of the next
business day following its receipt of the check and original
Subscription Agreement, the Dealer-Manager
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shall transmit the check 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,
including their respective successors and assigns, and the indemnified
parties and their successors and assigns, and for the benefit of no other
person. No other person shall have any legal or equitable right, remedy
or claim under or in respect of this Agreement. No purchaser of any of
the Units from you shall be construed a successor or assign merely by
reason of the purchase.
13. RELATIONSHIP. You are not authorized to hold yourself out as agent of the
Dealer-Manager, the Managing General Partner, a Partnership or any other
Selling Agent. This Agreement shall not constitute you a partner of the
Managing General Partner, the Dealer-Manager, a Partnership, any general
partner of a Partnership, or any other Selling Agent, nor render the
Managing General Partner, the Dealer-Manager, the Partnerships, any
general partner of a Partnership, or any other Selling Agent, liable for
any of your obligations.
14. EFFECTIVE DATE. This Agreement is made effective between the parties as
of the date accepted by you as indicated by your signature to this
Agreement.
15. ENTIRE AGREEMENT, WAIVER.
(a) This Agreement constitutes the entire agreement between the Dealer-
Manager and you, and shall not be amended or modified in any way
except by subsequent agreement executed in writing. Neither party to
this Agreement shall be liable or bound to the other by any
agreement except as specifically set forth in this Agreement.
(b) The Dealer-Manager and you may waive, but only in writing, any term,
condition, or requirement under this Agreement that is intended for
its benefit. However, any written waiver of any term or condition of
this Agreement shall not operate as a waiver of any other breach of
the term or condition of this Agreement. Also, any failure to
enforce any provision of this Agreement shall not operate as a
waiver of that provision or any other provision of this Agreement.
16. NOTICES.
(a) Any communications from you shall be in writing addressed to the
Dealer-Manager at 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
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Selling Agent Agreement
(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 designed to assure
the security and privacy of all the information; and
(c) to cooperate with the other and provide reasonable assistance in
ensuring compliance with the Privacy Laws to the extent applicable
to either or both the Dealer-Manager and you.
19. ANTI-MONEY LAUNDERING PROVISION. You represent and warrant to the
Managing General Partner and the Dealer-Manager that you have in place
and will maintain suitable and adequate "know your customer" policies and
procedures and that you shall comply with all applicable laws and
regulations regarding anti-money laundering activity and will provide
such documentation to the Managing General Partner and the Dealer-Manager
on written request.
20. ACCEPTANCE. Please confirm your agreement to become a Selling Agent under
the terms and conditions set forth above by signing and returning the
enclosed duplicate copy of this Agreement to us at the address set forth
above.
Sincerely,
______________________, 2004 XXXXX FUNDING, INC.
Date
ATTEST:
____________________________ By: ____________________________________________
(SEAL) Xxxxxxx X. Xxxxx, Xx., President
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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.
Date a(n) _______________________________ corporation,
ATTEST:
____________________________ By: ____________________________________________
(SEAL) Secretary __________________________________, President
________________________________________________
(Address)
________________________________________________
________________________________________________
________________________________________________
(Telephone Number)
Your CRD Number is _____________________________
Your Tax ID Number is __________________________
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Selling Agent Agreement
APPENDIX I TO SELLING AGENT AGREEMENT
In partial consideration for the payment to you, as Selling Agent, by the
Dealer-Manager of the Sales Commission as set forth in Section 2(a) of the
Selling Agent Agreement, you warrant, represent, covenant, and agree with the
Dealer-Manager that you, as Selling Agent, shall do the following:
o prominently and promptly announce your participation in the offering
as Selling Agent to your registered representatives, whether by
newsletter, e-mail, mail or otherwise with a copy of the
announcement provided concurrently to the Dealer-Manager; and
o provide the Dealer-Manager with the names, telephone numbers,
addresses and e-mail addresses of your registered representatives,
which information shall be kept confidential by the Dealer-Manager
and the Managing General Partner and shall not be used for any
purpose other than the marketing of the offering as set forth in the
Dealer-Manager Agreement and the Selling Agent Agreement. Further,
you, as Selling Agent, agree that the Dealer-Manager and the
Managing General Partner may directly contact your registered
representatives, in person or otherwise, to:
o inform them of the offering;
o explain the merits and risks of the offering; and
o otherwise assist in your registered representatives' efforts to
solicit and sell Units.
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