ATLAS AMERICA PUBLIC #14-2004 PROGRAM
DEALER-MANAGER AGREEMENT
WITH
ANTHEM SECURITIES, INC.
ANTHEM SECURITIES, 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
i
Anthem Securities, Inc.
Dealer-Manager Agreement
ANTHEM SECURITIES, INC.
DEALER-MANAGER AGREEMENT
(Best Efforts)
Anthem Securities, Inc.
P.O. Box 926
Moon Township, Pennsylvania 15108-0926
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. ____________) 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 ______________, 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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Dealer-Manager Agreement
(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 all states other than:
(i) Minnesota; and
(ii) New Hampshire
during the offering period as described in the Prospectus.
(b) In all states other than 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
states other than 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;
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Dealer-Manager Agreement
(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 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;
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Dealer-Manager Agreement
(iii) the payment or reimbursement is not applied to the expenses
of guests of the registered representative;
(iv) the payment or reimbursement by you or the Managing General
Partner is not conditioned by you or the Managing General
Partner on the achievement of a sales target; and
(v) the recordkeeping requirements are met.
Non-cash compensation means any form of compensation received in
connection with the sale of the Units that is not cash
compensation, including but not limited to merchandise, gifts and
prizes, travel expenses, meals and lodging.
(c) Notwithstanding the foregoing:
(i) the Managing General Partner, its officers, directors, and
affiliates, and investors who buy Units through the
officers and directors of the Managing General Partner may
subscribe to Units for a subscription price reduced by the
2.5% Dealer-Manager fee, the 7% Sales Commission, 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 agree to advise the Managing General Partner in writing of each
jurisdiction in which you and the Selling Agents propose to offer
or sell the Units; and you shall not nor shall you permit any
Selling Agent to offer or sell the Units in any jurisdiction until
you have been advised in writing by the Managing General Partner,
or the Managing General Partner's special counsel, that the offer
or sale of the Units:
(i) has been qualified in the jurisdiction;
(ii) is exempt from the qualification requirements imposed by
the jurisdiction; or
(iii) the qualification is otherwise not required.
(g) You and the Selling Agents have received copies of the Prospectus
relating to the Units and you and the Selling Agents have relied
only on the statements contained in the Prospectus and not on any
other statements whatsoever, either written or oral, with respect
to the details of the offering of Units.
You agree and shall require the Selling Agents to agree to deliver
a copy of the Prospectus to each subscriber to whom you sell the
Units at or before the completion of any sale of Units to such
subscriber (which sale shall be deemed, for the purposes of this
Agreement to occur on the date on which that subscriber delivers
subscription funds to the escrow agent), or earlier if required by
the Blue Sky or securities laws of any state. Unless advised
otherwise by the Managing General Partner, you and the Selling
Agents may choose to provide each offeree with the following, which
are collectively referred to as the "Sales Literature":
(i) a flyer entitled "Atlas America Public #14-2004 Program";
(ii) an article entitled "Tax Rewards with Oil and Gas
Partnerships";
(iii) a brochure of tax scenarios entitled "How an Investment in
Atlas America Public #14-2004 Program Can Help Achieve an
Investor's Tax Objectives";
(iv) a brochure entitled "Investing in Atlas America Public
#14-2004 Program";
(v) a booklet entitled "Outline of Tax Consequences of Oil and
Gas Drilling Programs";
(vi) a brochure entitled "The Appalachian Basin: A Prime
Drilling Location Which Commands a Premium";
(vii) a brochure entitled "Investment Insights - Tax Time";
(viii) a brochure entitled "Frequently Asked Questions"; and
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(ix) 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 the jurisdictions requested by
you pursuant to Section 6(f) of this Agreement; or
(b) any necessary action and filing any necessary forms deemed
reasonable by it in order to obtain an exemption from qualification
or registration in those jurisdictions.
Notwithstanding, the Managing General Partner may elect not to qualify or
register Units in any state or jurisdiction in which it deems the
qualification or registration is not warranted for any reason in its sole
discretion. The Managing General Partner and its counsel shall inform you
as to the states and jurisdictions in which the Units have been qualified
for sale or are exempt under the respective securities or Blue Sky laws of
those states and jurisdictions. The Managing General Partner, however, has
not assumed and will not assume any obligation or responsibility as to
your right or any Selling Agent's right to act as a broker/dealer with
respect to the Units in any state or jurisdiction.
The Managing General Partner shall provide to you and the Selling Agents
for delivery to all offerees and purchasers and their representatives any
additional information, documents, and instruments that the Managing
General Partner deems necessary to comply with the rules, regulations, and
judicial and administrative interpretations in those states and
jurisdictions for the offer and sale of the Units in these states.
The Managing General Partner shall file all post-offering forms,
documents, or materials and take all other actions required by the states
and jurisdictions in which the offer and sale of Units have been
qualified, registered, or are exempt. However, the Managing General
Partner shall not be required to take any action, make any filing, or
prepare any document necessary or required in connection with your status
or any Selling Agent's status as a broker/dealer under the laws of any
state or jurisdiction.
The Managing General Partner shall provide you with copies of all
applications, filings, correspondence, orders, other documents, or
instruments relating to any application for qualification, registration,
exemption, or other approval under applicable state or Federal securities
laws for the offering.
Anthem Securities, Inc. 11
Dealer-Manager Agreement
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.
Anthem Securities, Inc. 12
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.
Anthem Securities, Inc. 13
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 P.O. Box
926, 311 Rouser Road, Moon Township, Pennsylvania 15108-0926.
(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 311 Rouser Road,
Moon Township, Pennsylvania 15108.
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.
Anthem Securities, Inc. 14
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.
Anthem Securities, Inc. 15
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 Gramm-Leach-Bliley 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 Jack L. Hollander, Senior
Vice President - Direct
Participation Programs
Anthem Securities, Inc. 16
Dealer-Manager Agreement
PROGRAM
ATLAS AMERICA PUBLIC #14-2004 PROGRAM
By: Atlas Resources, Inc.,
Managing General Partner
, 2004 By:
- ----------------------- -------------------------------
Date Jack L. Hollander, Senior Vice
President - Direct
Participation Programs
DEALER-MANAGER
ANTHEM SECURITIES, INC.,
a Pennsylvania corporation
, 2004 By:
- ----------------------- -------------------------------
Date Justin Atkinson, President
Anthem Securities, Inc. 17
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"), Bryan
Funding, Inc., a Pennsylvania corporation ("Bryan Funding"), collectively Anthem
and Bryan 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 to10.5% ($1,050 per Unit) for sales to the Managing General Partner, its
officers, directors and affiliates, registered investment advisors and their
clients, Selling Agents and their registered representatives and principals, and
investors who buy Units through the officers and directors of the Managing
General Partner. Also, the Managing General Partner, in its discretion, may
accept one-half Unit ($5,000) subscriptions, with larger subscriptions permitted
in $1,000 increments.
WHEREAS, the Managing General Partner and Anthem have executed an
agreement ("Anthem Dealer-Manager Agreement") under which Anthem will solicit
subscriptions for Units in all states other than Minnesota and New Hampshire on
a "best efforts" "all or none" basis for Subscription Proceeds of $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 Bryan Funding have executed an
agreement ("Bryan Funding Dealer-Manager Agreement") under which Bryan 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 Bryan 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 Bryan 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;
Escrow Agreement 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.
Escrow Agreement 2
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.
Escrow Agreement 3
(b) If a subscription for Units submitted by an Investor is rejected by
the Managing General Partner for any reason after the Subscription
Proceeds relating to the subscription have been deposited with the
Escrow Agent, then the Managing General Partner promptly shall
notify 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 failure or refusal to act and the Escrow
Agent shall be entitled to continue to so refrain from acting until the
dispute is resolved by the parties involved.
Escrow Agreement 4
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
1900 East 9th Street
Cleveland, Ohio 44114
Attention: Dawn DeWerth LOC 2111
Phone: (216) 222-9225
Facsimile: (216) 222-7044
Escrow Agreement 5
If to the Managing General Partner:
Atlas Resources, Inc.
311 Rouser Road
P.O. Box 611
Moon Township, Pennsylvania 15108
Attention: Karen A. Black
Phone: (412) 262-2830
Facsimile: (412) 262-2820
If to Anthem:
Anthem Securities, Inc.
311 Rouser Road
P.O. Box 926
Moon Township, Pennsylvania 15108
Attention: Justin T. Atkinson
Phone: (412) 262-1680
Facsimile: (412) 262-7430
If to Bryan Funding:
Bryan Funding, Inc.
393 Vanadium Road
Pittsburgh, Pennsylvania 15243
Attention: Richard G. Bryan, Jr.
Phone: (412) 276-9393
Facsimile: (412) 276-9396
Any party may designate any other address to which notices and
instructions shall be sent by notice duly given in accordance with this
Agreement.
13. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(b) This Agreement shall be binding on and shall inure to the benefit
of the undersigned and their respective successors and assigns.
(c) This Agreement may be executed in multiple copies, each executed
copy to serve as an original.
Escrow Agreement 6
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:
--------------------------------------------
Karen A. Black, Vice President - Partnership
Administration
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By:
--------------------------------------------
Justin T. Atkinson, President
BRYAN FUNDING, INC.
A Pennsylvania corporation
By:
--------------------------------------------
Richard G. Bryan, Jr., President
ATLAS AMERICA PUBLIC #14-______ L.P.
By: ATLAS RESOURCES, INC.
Managing General Partner
By:
--------------------------------------------
Karen A. Black, Vice President - Partnership
Administration
Escrow Agreement 7
APPENDIX I TO ESCROW AGREEMENT
COMPENSATION FOR SERVICES OF ESCROW AGENT
REVIEW AND ACCEPTANCE FEE: $ WAIVED
For providing initial review of the Escrow Agreement and all supporting
documents and for initial services associated with establishing the Escrow
Account. This is a one (1) time fee payable upon the opening of the account.
I. Annual Administrative Fee Payable in Advance $3000.00
(or any portion thereof)
II. Remittance of checks returned to subscribers 20.00
(set out in section 6 of the governing agreement)
III. Wire transfers n/a
IV. Purchase or Sale of Securities 100.00
V. Investments (document limits investment to a checking or savings
account, or certificates of deposit) such products offered by any National City
Bank retail branch)- fees are subject to the type of account the Managing
General Partner directs the Escrow Agent to open and to be governed by the
Escrow Agreement.
EXTRAORDINARY SERVICES:
For any services other than those covered by the aforementioned, a special per
hour charge will be made commensurate with the character of the service, time
required and responsibility involved. Such services include but are not limited
to excessive administrative time, attendance at closings, specialized reports,
and record keeping, unusual certifications, etc.
Managing General Partner agrees to report all funds in accordance with
appropriate tax treatment.
FEE SCHEDULE IS SUBJECT TO ANNUAL REVIEW AND/or ADJUSTMENT UPON AMENDMENT
THERETO.
Escrow Agreement 8
EXHIBIT "B"
SELLING AGENT AGREEMENT
WITH ANTHEM SECURITIES, INC.
TO: _________________________________________________
RE: ATLAS AMERICA PUBLIC #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, Anthem Securities, Inc., which is referred to as the
"Dealer-Manager," has entered into a Dealer-Manager Agreement for sales in all
states other than 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 all states other than:
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 all states other than:
o Minnesota; and
o New Hampshire.
Anthem Securities, Inc. 1
Selling Agent Agreement
This Agreement, however, shall not be construed to prohibit your participation
as a selling agent in 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.
Anthem Securities, Inc. 2
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;
Anthem Securities, Inc. 3
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 any jurisdiction until you
have been advised in writing by the Managing General Partner, or
the Managing General Partner's special counsel, that the offer or
sale of the Units:
(i) has been qualified in the jurisdiction;
(ii) is exempt from the qualification requirements imposed by
the jurisdiction; or
(iii) the qualification is otherwise not required.
(g) You 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) an article entitled "Tax Rewards with Oil and Gas
Partnerships";
(iii) a brochure of tax scenarios entitled "How an Investment in
Atlas America Public #14-2004 Program Can Help Achieve an
Investor's Tax Objectives";
Anthem Securities, Inc. 4
Selling Agent Agreement
(iv) a brochure entitled "Investing in Atlas America Public
#14-2004 Program";
(v) a booklet entitled "Outline of Tax Consequences of Oil and
Gas Drilling Programs";
(vi) a brochure entitled "The Appalachian Basin: A Prime
Drilling Location Which Commands a Premium";
(vii) a brochure entitled "Investment Insights - Tax Time";
(viii) a brochure entitled "Frequently Asked Questions"; and
(ix) 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
(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.
Anthem Securities, Inc. 5
Selling Agent Agreement
(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 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.
Anthem Securities, Inc. 6
Selling Agent Agreement
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 bill 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 bill 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 bill 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 bill submitted by you. If
such a due diligence bill 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 bill 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:
(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;
Anthem Securities, Inc. 7
Selling Agent Agreement
(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.
Notwithstanding the foregoing, the Dealer-Manager, the Partnerships, and
the Managing General Partner have not assumed and will not assume any
obligation or responsibility as to your right to act as a broker/dealer
with respect to the Units in any state or jurisdiction.
4. EXPENSE OF SALE. The expenses in connection with the offer and sale of the
Units shall be payable as set forth below.
Anthem Securities, Inc. 8
Selling Agent Agreement
(a) The Dealer-Manager shall pay all expenses incident to the
performance of its obligations under this Agreement, including the
fees and expenses of its attorneys and accountants, even if the
offering of any or all of the Partnerships is not successfully
completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the fees and expenses
of your own counsel and accountants, even if the offering of any or
all of the Partnerships is not successfully completed.
5. CONDITIONS OF YOUR DUTIES. Your obligations under this Agreement, as of
the date of this Agreement and at the applicable closing date, shall be
subject to the following:
(a) the performance by the Dealer-Manager of its obligations under this
Agreement; and
(b) the performance by the Managing General Partner of its obligations
under the Dealer-Manager Agreement.
6. CONDITIONS OF DEALER-MANAGER'S DUTIES. The Dealer-Manager's obligations
under this Agreement, including the duty to pay compensation and
reimbursements to you as set forth in Section 2 of this Agreement, shall
be subject to the following:
(a) the accuracy, as of the date of this Agreement and at the
applicable closing date as if made at the applicable closing date,
of your representations and warranties made in this Agreement;
(b) the performance by you of your obligations under this Agreement;
and
(c) the Dealer-Manager's receipt, at or before the applicable closing
date, of a fully executed Subscription Agreement for each
prospective purchaser as required by Section 1(k) of this
Agreement.
7. INDEMNIFICATION.
(a) You shall indemnify and hold harmless the Dealer-Manager, the
Managing General Partner, each Partnership and its attorneys
against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Act, the Act of
1934, or otherwise insofar as the losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are
based on your breach of any of your duties and obligations,
representations, or warranties under the terms or provisions of
this Agreement, and you shall reimburse them for any legal or other
expenses reasonably incurred in connection with investigating or
defending the losses, claims, damages, liabilities, or actions.
(b) The Dealer-Manager shall indemnify and hold you harmless against
any losses, claims, damages, or liabilities, joint or several, to
which you may become subject under the Act, the Act of 1934, or
otherwise insofar as the losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based on the
Dealer-Manager's breach of any of its duties and obligations,
representations, or warranties under the terms or provisions of
this Agreement, and the Dealer-Manager shall reimburse you for any
legal or other expenses reasonably incurred in connection with
investigating or defending the losses, claims, damages,
liabilities, or actions.
Anthem Securities, Inc. 9
Selling Agent Agreement
(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.
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:
Anthem Securities, Inc. 10
Selling Agent Agreement
(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 shall transmit the check
and the original executed Subscription Agreement to the Managing
General Partner.
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Selling Agent Agreement
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 P.O. Box 926, Moon Township, Pennsylvania
15108-0926.
(b) Any notice from the Dealer-Manager to you shall be deemed to have
been duly given if mailed, faxed or telegraphed to you at your
address shown below.
17. COMPLAINTS. The Dealer-Manager and you agree as follows:
(a) to notify the other if either receives an investor complaint in
connection with the offer or sale of Units by you;
(b) to cooperate with the other in resolving the complaint; and
(c) to cooperate in any regulatory examination of the other to the
extent it involves this Agreement or the offer or sale of Units by
you.
18. PRIVACY. The Dealer-Manager and you each acknowledge that certain
information made available to the other under this Agreement may be deemed
nonpublic personal information under the Gramm-Leach-Bliley 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:
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Selling Agent Agreement
(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 ANTHEM SECURITIES, INC.
- ---------------------
Date
ATTEST:
By:
- -------------------------- ------------------------------
(SEAL) Secretary Justin Atkinson, 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.
, 2004 ,
- --------------------------- -----------------------------------------
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, which
announcement also shall advise your registered representatives
to contact our Regional Marketing Director in whose territory
the registered representative is located (the information
concerning our Regional Marketing Directors has been provided
to you by separate correspondence) with a copy of the
announcement provided concurrently to the Dealer-Manager; and
o provide the Dealer-Manager with the names, telephone numbers,
addresses and e-mail addresses of your registered
representatives, which information shall be kept confidential
by the Dealer-Manager and the Managing General Partner and
shall not be used for any purpose other than the marketing of
the offering as set forth in the Dealer-Manager Agreement and
the Selling Agent Agreement. Further, you, as Selling Agent,
agree that the Dealer-Manager and the Managing General Partner
may directly contact your registered representatives, in
person or otherwise, to:
o inform them of the offering;
o explain the merits and risks of the offering; and
o otherwise assist in your registered representatives'
efforts to solicit and sell Units.
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Selling Agent Agreement