EXHIBIT 10.14
ATLAS AMERICA SERIES 26-2005 L.P.
DEALER-MANAGER AGREEMENT
FOR
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..............................................................2
4. Compensation and Fees.................................................................................3
5. Covenants of the Managing General Partner.............................................................5
6. Representations and Warranties of the Dealer-Manager..................................................5
7. State Securities Registration........................................................................10
8. Expense of Sale......................................................................................10
9. Conditions of the Dealer-Manager's Duties............................................................11
10. Conditions of the Managing General Partner's Duties..................................................11
11. Indemnification......................................................................................11
12. Representations and Agreements to Survive Delivery...................................................12
13. Termination..........................................................................................12
14. Notices..............................................................................................13
15. Format of Checks/Escrow Agent........................................................................13
16. Transmittal Procedures...............................................................................13
17. Parties..............................................................................................14
18. Relationship.........................................................................................14
19. Effective Date.......................................................................................14
20. Entire Agreement, Waiver.............................................................................14
21. Governing Law........................................................................................14
22. Complaints...........................................................................................14
23. Privacy..............................................................................................15
24. Anti-Money Laundering Provision......................................................................15
25. Acceptance...........................................................................................15
Exhibit A - Escrow Agreement
Exhibit B - Selling Agent Agreement
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ANTHEM SECURITIES, INC.
DEALER-MANAGER AGREEMENT
(Best Efforts)
RE: ATLAS AMERICA SERIES 26-2005 L.P.
---------------------------------
Anthem Securities, Inc.
P.O. Box 926
Coraopolis, Pennsylvania 15108-0926
Gentlemen:
The undersigned, Atlas Resources, Inc., which is referred to as the
"Managing General Partner," on behalf of Atlas America Series 26-2005 L.P.,
which is referred to as the "Partnership," is an offering of up to 1,400
investor general partner interests and limited partner interests, which are
referred to as "Units," in the Partnership. The Managing General Partner on
behalf of the Partnership hereby confirms its agreement with you, as
Dealer-Manager, as follows:
1. DESCRIPTION OF PROGRAM AND UNITS.
(a) Atlas Resources, Inc., a Pennsylvania corporation, is the sole
Managing General Partner of the Partnership, which was formed as a
limited partnership under the Delaware Revised Uniform Limited
Partnership Act.
(b) The Units being offered and the offering are described in the
Private Placement Memorandum dated July 15, 2005, which is
referred to as the "Private Placement Memorandum." The Managing
General Partner has packaged each numbered Private Placement
Memorandum, together with a copy of each item of sales materials
that it has approved for use with potential investors in the
Partnership, which are collectively referred to as the "Sales
Literature," in kits, which are referred to as the "Private
Placement Memorandum Kits." Terms defined in the Private Placement
Memorandum and not otherwise defined in this Agreement shall have
the meanings set forth in the Private Placement Memorandum.
(c) The Partnership will issue and sell the Units at a price of
$25,000 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 the Partnership by
its Offering Termination Date as described in the Private
Placement Memorandum (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 the Partnership will be as described in the Private Placement
Memorandum. Also, the maximum subscription proceeds must not
exceed $35 million.
The Managing General Partner will notify you and the "Selling Agents," as
defined below, of the Initial Closing Date for the Partnership.
The Managing General Partner, its officers, directors, and affiliates may
buy, for investment purposes only, the number of Units equal to the
minimum subscription proceeds of $2,000,000 required for the Partnership
to begin operations.
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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 Units have not been and will not be registered with the
Securities and Exchange Commission, which is referred to as the
"Commission." So far as is under the control of the Managing
General Partner the Units will be offered and sold in reliance on
the exemption provided by Regulation D, which is referred to as
"Regulation D," promulgated under Section 4(2) of the Securities
Act of 1933, as amended, which is referred to as the "Act."
(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 Regulation D and any exemptions under
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 Amended and Restated Certificate and Agreement
of Limited Partnership of the Partnership, which is referred to as
the "Partnership Agreement," the form of which is included as
Exhibit (A) to the Private Placement Memorandum, 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 the
Partnership or of any jurisdiction to the laws of which the
Partnership is subject.
(d) The Partnership was duly formed under the laws of the State of
Delaware and is validly existing as a limited partnership in good
standing under the laws of Delaware with full power and authority
to own its properties and conduct its business as described in the
Private Placement Memorandum.
The Partnership will be qualified to do business as a limited
partnership or similar entity offering limited liability in those
jurisdictions where the Managing General Partner deems the
qualification necessary to assure limited liability of the limited
partners.
(e) The Private Placement Memorandum, 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 Private Placement Memorandum, 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 Partnership and gives you the exclusive
right during the offering period as described in the Private
Placement Memorandum to solicit subscriptions for the Units on a
"best efforts" basis in all states.
(b) You agree to use your best efforts to effect sales of the Units
and to form and manage a selling group composed of soliciting
broker/dealers, which are referred to as the "Selling Agents,"
each of which shall be a member of the National Association of
Securities Dealers, Inc., which is referred to as the "NASD," and
shall enter into a "Selling Agent Agreement" in substantially the
form attached to this Agreement as Exhibit "B."
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.
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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 the Partnership 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 1.5% nonaccountable marketing expense fee; and
(iv) a .5% nonaccountable due diligence fee.
(b) All or a portion of the Sales Commissions, the nonaccountable due
diligence fee and the nonaccountable marketing expense fee may be
reallowed to the Selling Agents. Additionally, you may reduce the
1.5% nonaccountable marketing expense fee payable to the Selling
Agents as set forth in Section 2(a)(iii) of the Selling Agent
Agreement and you may reduce the .5% nonaccountable due diligence
fee payable to the Selling Agents as set forth in Section 2(a)(ii)
of the Selling Agent Agreement. Of the 2.5% Dealer-Manager fee,
some or all may be reallowed to the wholesalers for subscriptions
obtained through their efforts. You shall retain any of the 2.5%
Dealer-Manager fee, the Sales Commissions, the 1.5% nonaccountable
marketing expense fee and the .5% nonaccountable due diligence fee
not reallowed to the Selling Agents or the wholesalers.
(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 1.5%
nonaccountable marketing expense fee, and the .5%
nonaccountable due diligence fee 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 1.5%
nonaccountable marketing expense fee, and the .5%
nonaccountable due diligence fee which shall be paid to
you.
No more than 10% of the total Units offered shall be sold in the
Partnership with the discounts described above.
(d) As an additional incentive, to the extent permitted by applicable
law and subject to the receipt of the minimum subscription
proceeds as described in Section 4(e) of this Agreement, each
broker/dealer, including you and the Selling Agents, which has one
or more registered representatives and/or principals who sell at
least six Units each in the Partnership , including Units with
discounted prices, shall share in payments from the Managing
General Partner equal to 1% of the Partnership's production
revenues less the related operating costs, administrative costs,
direct costs, and other costs not specifically allocated.
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A broker/dealer's participation in these payments shall be in the
ratio which the total amount of Units sold by all of the
broker/dealer's registered representatives and/or principals who
sell at least six Units each in the Partnership bears to the total
number of Units sold by all registered representatives and/or
principals (including registered representatives and principals of
the Dealer-Manager) who sell at least six Units each in the
Partnership. The portion of these payments attributable to Units
sold by the Selling Agents shall be reallowed by you to the
qualifying Selling Agents. These payments shall be made quarterly.
(e) Pending receipt and acceptance by the Managing General Partner of
the minimum subscription proceeds of $2,000,000 in the
Partnership, excluding the subscription discounts set forth in
Section 4(c) of this Agreement, all proceeds received by you from
the sale of Units in the 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 the Partnership, as described in Section 1 of this
Agreement, the offering of Units in the Partnership shall be
terminated, in which event:
(i) the 2.5% Dealer-Manager fee, the 7% Sales Commission, the
1.5% nonaccountable marketing expense fee, and the .5%
nonaccountable due diligence fee set forth in Section 4(a)
of this Agreement shall not be payable to you;
(ii) all funds advanced by subscribers shall be returned to them
with interest earned; and
(iii) you shall deliver a termination letter in the form provided
to you by the Managing General Partner to each of the
subscribers and to each of the offerees previously
solicited by you and the Selling Agents in connection with
the offering of the Units.
(f) Except as otherwise provided below, the fees 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 Partnership and
accepted by the Managing General Partner; and
(ii) the Partnership's subscription proceeds have been released
from the escrow account to the Managing General Partner.
You shall reallow to the Selling Agents and the wholesalers their
respective fees and Sales Commissions as set forth in Section 4(b)
of this Agreement.
Thereafter, your fees and Sales Commissions shall be paid to you
approximately every two weeks until the Offering Termination Date
for the Partnership. All your remaining fees and Sales Commissions
shall be paid by the Managing General Partner no later than
fourteen business days after the Offering Termination Date for the
Partnership.
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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 Private Placement Memorandum Kit and all amendments or
supplements to the Private Placement Memorandum.
(b) If any event affecting the Partnership or the Managing General
Partner occurs that in the opinion of the Managing General Partner
should be set forth in a supplement or amendment to the Private
Placement Memorandum, 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 Private
Placement Memorandum 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 Private Placement Memorandum, in the light of the
circumstances under which they are made, not misleading.
6. REPRESENTATIONS AND WARRANTIES OF THE DEALER-MANAGER. You, as the
Dealer-Manager, represent and warrant to the Managing General Partner
that:
(a) You are a corporation duly organized, validly existing and in good
standing under the laws of the state of your formation or of any
jurisdiction to the laws of which you are subject, with all
requisite power and authority to enter into this Agreement and to
carry out your obligations under this Agreement.
(b) This Agreement when accepted and approved by you shall be duly
authorized, executed, and delivered by you and shall be a valid
and binding agreement on your part in accordance with its terms.
(c) The consummation of the transactions contemplated by this
Agreement and the Private Placement Memorandum shall not result in
the following:
(i) any breach of any of the terms or conditions of, or a
default under your Articles of Incorporation or Bylaws; or
any other indenture, agreement, or other instrument to
which you are a party; or
(ii) any violation of any order applicable to you of any court
or any federal or state regulatory body or administrative
agency having jurisdiction over you or your affiliates.
(d) You are not subject to any disqualification described in Rule
505(b)(2)(iii) of Regulation D.
You are duly registered under the provisions of the Securities
Exchange Act of 1934, which is referred to as the "Act of 1934,"
as a dealer, and you are a member in good standing of the NASD.
You are duly registered as a broker/dealer in the states where you
are required to be registered in order to carry out your
obligations as contemplated by this Agreement and the Private
Placement Memorandum. 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.
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(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 Regulation D, insofar
as Regulation D 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 Regulation D, 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, and 2750, and
specifically you agree as set forth below.
(i) You agree to advise the Managing General Partner in writing
of each state in which you and the Selling Agents propose
to offer or sell the Units; and you shall not, nor shall
you permit any Selling Agent, to offer or sell the Units in
any state until you have been advised in writing by the
Managing General Partner, or the Managing General Partner's
special counsel, that the offer or sale of the Units:
(1) has been qualified in the state;
(2) is exempt from the qualification requirements
imposed by the state; or
(3) the qualification is otherwise not required.
(ii) Units shall not be offered and/or sold by you or the
Selling Agents by means of any form of general solicitation
or general advertising, including, but not limited to, the
following:
(1) any advertisement, article, notice, or other
communication published in any newspaper, magazine,
or similar media or broadcast over television or
radio;
(2) any seminar or meeting whose attendees have been
invited by any general solicitation or general
advertising; or
(3) any letter, circular, notice or other written
communication constituting a form of general
solicitation or general advertising.
(iii) You agree and shall require any Selling Agent to agree to
provide each offeree with the following:
(1) a complete Private Placement Memorandum Kit, which
includes a numbered copy of the Private Placement
Memorandum, all exhibits incorporated in the Private
Placement Memorandum and, without exception, all of
the Sales Literature; and
(2) any numbered supplement or amendment to the Private
Placement Memorandum as set forth in (iv) below.
Also, each Private Placement Memorandum Kit includes a copy
of the following Sales Literature:
(1) a flyer entitled "Atlas America Series 26-2005
L.P.";
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(2) an article entitled "Tax Rewards with Oil and Gas
Partnerships";
(3) a brochure of tax scenarios entitled "How an
Investment in Atlas America Series 26-2005 L.P. can
Help Achieve an Investor's Tax Objectives";
(4) a brochure entitled "Investing in Atlas America
Series 26-2005";
(5) a booklet entitled "Outline of Tax Consequences of
Oil and Gas Drilling Programs";
(6) a brochure entitled "The Appalachian Basin: A Prime
Drilling Location Which Commands a Premium";
(7) a brochure entitled "Investment Insights - Tax
Time";
(8) a brochure entitled "Frequently Asked Questions";
(9) a brochure entitled "AMT - A Little History and
Reducing AMT through Natural Gas Partnerships";
(10) a brochure entitled "The Drilling Process"; and
(11) possibly other supplementary materials.
Further, you and the Selling Agents shall keep file
memoranda indicating by number to whom each Private
Placement Memorandum Kit, including without exception, the
Sales Literature, and supplement or amendment to the
Private Placement Memorandum was delivered.
(iv) When any supplement or amendment to the Private Placement
Memorandum is prepared and delivered to you by the Managing
General Partner, you agree and shall require any Selling
Agent to agree as follows:
(1) to distribute each supplement or amendment to the
Private Placement Memorandum, identified by number,
to every person who has previously received a
Private Placement Memorandum Kit from you and/or the
Selling Agent;
(2) to include each supplement or amendment in all
future deliveries of any Private Placement
Memorandum Kit; and
(3) to keep file memoranda indicating to whom each
supplement or amendment was delivered.
(v) In connection with any offer or sale of the Units, you
agree and shall require any Selling Agent to agree, to the
following:
(1) to comply in all respects with statements set forth
in the Private Placement Memorandum, the Partnership
Agreement, and any supplements or amendments to the
Private Placement Memorandum;
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(2) not to make any statement inconsistent with the
statements in the Private Placement Memorandum, the
Partnership Agreement, and any supplements or
amendments to the Private Placement Memorandum;
(3) not to make any untrue or misleading statements of a
material fact in connection with the Units; and
(4) not to provide any written information, statements,
or sales materials other than the Private Placement
Memorandum, the Sales Literature, and any
supplements or amendments to the Private Placement
Memorandum unless approved in writing by the
Managing General Partner.
(vi) You and the Selling Agents shall advise each offeree of
Units in the Partnership at the time of the initial
offering to him that the Partnership and the Managing
General Partner shall during the course of the offering and
a reasonable time before sale accord him the opportunity to
ask questions and receive answers concerning the terms and
conditions of the offering and to obtain any additional
information, to the extent possessed by the Partnership or
the Managing General Partner or obtainable by either of
them without unreasonable effort or expense, that is
necessary to verify the accuracy of the information
contained in the Private Placement Memorandum.
(vii) Before the sale of any of the Units, you and the Selling
Agents shall make reasonable inquiry to determine if the
offeree is acquiring the Units for his own account or on
behalf of other persons, and that the offeree understands
the limitations on the offeree's disposition of the Units
set forth in Rule 502(d) of Regulation D. This includes a
determination by you and the Selling Agents that the
offeree understands that he must bear the economic risk of
the investment for an indefinite period of time because the
Units have not been registered under the Act and, thus,
cannot be sold unless the Units are subsequently registered
under the Act or an exemption from registration under the
Act is available.
(viii) Before the sale of any of the Units you and the Selling
Agents shall have reasonable grounds to believe that each
subscriber is an "accredited investor" as that term is
defined in Rule 501(a) of Regulation D.
(ix) Units shall not be sold by you or the Selling Agents to
anyone whom you or the Selling Agent reasonably believes is
not an accredited investor.
(x) 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:
(1) the Selling Agents comply with all the provisions of
Regulation D, 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;
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(2) the prospective purchasers meet the suitability
requirements set forth in the Private Placement
Memorandum, the Subscription Agreement, and this
Agreement; and
(3) the prospective purchasers properly complete the
following forms, which will be included in the
Partnership's subscription packet as exhibits to the
Private Placement Memorandum:
(A) the Subscription Agreement and Annex A
attached to the Subscription Agreement
[Exhibit (I-B)]; and
(B) the Execution Page and Purchaser
Questionnaire [Exhibit (C)];
together with any additional forms provided in any
supplement or amendment to the Private Placement
Memorandum, 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 packets shall be transmitted as set forth in
Section 16 of this Agreement.
(xi) 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.
(xii) You agree and covenant that:
(1) the representations and warranties you make in this
Agreement are and shall be true and correct at the
applicable closing date; and
(2) you shall have fulfilled all your obligations under
this Agreement at the applicable closing date.
(xiii) You agree and covenant that you will not distribute a
Private Placement Memorandum Kit to any offeree with whom
you do not have a pre-existing substantive relationship as
defined from time to time by the Commission, and you shall
require each Selling Agent to agree to the same. As of the
date of this Agreement, the term "pre-existing substantive
relationship" with a potential offeree means the following:
(1) your relationship with the offeree was established
before the beginning of the offering of Units in the
Partnership, which is July 15, 2005; and
(2) you have sufficient information concerning the
offeree to determine the offeree's current
sophistication and financial circumstances,
including that the offeree has such knowledge and
experience in financial and business matters that
the offeree is capable of evaluating the merits and
risks of an investment in the Partnership.
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7. STATE SECURITIES REGISTRATION. Incident to the offer and sale of the
Units, the Managing General Partner shall use its best efforts either in
taking:
(a) all necessary action and filing all necessary forms and documents
deemed reasonable by it in order to qualify or register Units for
sale under the securities laws of the states requested by you
pursuant to Section 6(e)(i) of this Agreement; or
(b) any necessary action and filing any necessary forms deemed
reasonable by it in order to obtain an exemption from
qualification or registration in those states.
Notwithstanding, the Managing General Partner may elect not to qualify or
register Units in any state or jurisdiction in which it deems the
qualification or registration is not warranted for any reason in its sole
discretion. The Managing General Partner and its counsel shall inform you
as to the states and jurisdictions in which the Units have been qualified
for sale or are exempt under the respective securities or Blue Sky laws
of those states and jurisdictions. The Managing General Partner, however,
has not assumed and will not assume any obligation or responsibility as
to your right or any Selling Agent's right to act as a broker/dealer with
respect to the Units in any state or jurisdiction.
The Managing General Partner shall provide to you and the Selling Agents
for delivery to all offerees and purchasers and their representatives any
additional information, documents, and instruments that the Managing
General Partner deems necessary to comply with the rules, regulations,
and judicial and administrative interpretations in those states and
jurisdictions for the offer and sale of the Units in those states.
The Managing General Partner shall file all post-offering forms,
documents, or materials and take all other actions required by the states
and jurisdictions in which the offer and sale of Units have been
qualified, registered, or are exempt. However, the Managing General
Partner shall not be required to take any action, make any filing, or
prepare any document necessary or required in connection with your status
or any Selling Agent's status as a broker/dealer under the laws of any
state or jurisdiction.
The Managing General Partner shall provide you with copies of all
applications, filings, correspondence, orders, other documents, or
instruments relating to any application for qualification, registration,
exemption or other approval under applicable state or Federal securities
laws for the offering.
8. EXPENSE OF SALE. The expenses in connection with the offer and sale of
the Units shall be payable as set forth below.
(a) The Managing General Partner shall pay all expenses incident to
the performance of its obligations under this Agreement, including
the fees and expenses of its attorneys and accountants and all
fees and expenses of registering or qualifying the Units for offer
and sale in the states and jurisdictions as set forth in Section 7
of this Agreement, or obtaining exemptions from qualification or
registration, even if the offering of the Partnership 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
Partnership is not successfully completed.
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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 the 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 the following documents:
(i) the file memoranda required under Sections 6(e)(iii) and
(iv) of this Agreement; and
(ii) fully executed subscription documents for each prospective
purchaser as required by Section 6(e)(x) of this Agreement.
11. INDEMNIFICATION.
(a) You and the Selling Agents shall indemnify and hold harmless the
Managing General Partner, the Partnership and its attorneys
against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Act, the Act
of 1934, or otherwise insofar as the losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are
based on your agreements with the Selling Agents or your breach of
any of your duties and obligations, representations, or warranties
under the terms or provisions of this Agreement, and you and the
Selling Agents shall reimburse them for any legal or other
expenses reasonably incurred in connection with investigating or
defending the losses, claims, damages, liabilities, or actions.
(b) The Managing General Partner shall indemnify and hold you and the
Selling Agents harmless against any losses, claims, damages or
liabilities, joint or several, to which you and the Selling Agents
may become subject under the Act, the Act of 1934, or otherwise
insofar as the losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based on the Managing
General Partner's breach of any of its duties and obligations,
representations, or warranties under the terms or provisions of
this Agreement, and the Managing General Partner shall reimburse
you and the Selling Agents for any legal or other expenses
reasonably incurred in connection with investigating or defending
the losses, claims, damages, liabilities, or actions.
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(c) The foregoing indemnity agreements shall extend on the same terms
and conditions to, and shall inure to the benefit of, each person,
if any, who controls each indemnified party within the meaning of
the Act.
(d) Promptly after receipt by an indemnified party of notice of the
commencement of any action, the indemnified party shall, if a
claim in respect of the action is to be made against an
indemnifying party under this Section, notify the indemnifying
party in writing of the commencement of the action; but the
omission to promptly notify the indemnifying party shall not
relieve the indemnifying party from any liability which it may
have to any indemnified party. If any action is brought against an
indemnified party, it shall notify the indemnifying party of the
commencement of the action, and the indemnifying party shall be
entitled to participate in, and, to the extent that it wishes,
jointly with any other indemnifying party similarly notified, to
assume the defense of the action, with counsel satisfactory to the
indemnified and indemnifying parties. After the indemnified party
has received notice from the agreed on counsel that the defense of
the action under this paragraph has been assumed, the indemnifying
party shall not be responsible for any legal or other expenses
subsequently incurred by the indemnified party in connection with
the defense of the action other than with respect to the agreed on
counsel who assumed the defense of the action.
12. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations,
warranties, and agreements of the Managing General Partner and you in
this Agreement, including the indemnity agreements contained in Section
11 of this Agreement, shall:
(a) survive the delivery, execution and closing of this Agreement;
(b) remain operative and in full force and effect regardless of any
investigation made by or on behalf of you or any person who
controls you within the meaning of the Act, by the Managing
General Partner, or any of its officers, directors or any person
who controls the Managing General Partner within the meaning of
the Act; or any other indemnified party; and
(c) survive delivery of the Units.
13. TERMINATION.
(a) You shall have the right to terminate this Agreement other than
the indemnification provisions of Section 11 of this Agreement by
giving notice as specified below any time at or before a closing
date:
(i) if the Managing General Partner has failed, refused, or
been unable at or before a closing date, to perform any of
its obligations under this Agreement; or
(ii) there has occurred an event materially and adversely
affecting the value of the Units.
If you elect to terminate this Agreement other than the
indemnification provisions of Section 11 of this Agreement, then
the Managing General Partner shall be promptly notified by you by
telephone, e-mail, facsimile, or telegram, confirmed by letter.
12
(b) The Managing General Partner may terminate this Agreement other
than the indemnification provisions of Section 11 of this
Agreement, for any reason and at any time, by promptly giving
notice to you by telephone, e-mail, facsimile, or telegram,
confirmed by letter as specified below at or before a closing
date.
14. NOTICES.
(a) All notices or communications under this Agreement, except as
otherwise specifically provided, shall be in writing.
(b) Any notice or communication sent by the Managing General Partner
to you shall be mailed, delivered, or sent by facsimile, e-mail or
telegraph, and confirmed to you at 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 the 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 the Partnership as set forth in
Section 4(e) 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
transfers payable solely to the Escrow Agent as agent for the Partnership
as follows: "Atlas Series 26-2005 L.P., Escrow Agent, National City Bank
of PA."
You agree and shall require the Selling Agents 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.
If you receive a check not conforming to the foregoing instructions, then
you shall return the check to the Selling Agent not later than noon of
the next business day following its receipt by you. The Selling Agent
shall then return the check directly to the subscriber not later than
noon of the next business day following its receipt from you. Checks
received by you or a Selling Agent which conform to the foregoing
instructions shall be transmitted by you under Section 16 "Transmittal
Procedures," below.
You represent that you have or will execute the Escrow Agreement for the
Partnership and agree that you are bound by the terms of the Escrow
Agreement executed by you, the Partnership, and the Managing General
Partner, a copy of which is attached to this Agreement as Exhibit "A."
16. TRANSMITTAL PROCEDURES. You and each Selling Agent shall transmit
received investor funds in accordance with the following procedures. For
purposes of the following, the term "Selling Agent" shall also include
you as Dealer-Manager when you receive subscriptions from investors.
(a) Pending receipt of the Partnership's minimum subscription proceeds
of $2,000,000 as set forth in Section 4(e) of this Agreement, the
Selling Agents on receipt of any check from a subscriber shall
promptly transmit the check and the original executed subscription
documents to you, as Dealer-Manager, by noon of the next business
day following receipt of the check by the Selling Agent. By noon
of the next business day following your receipt of the check and
the original executed subscription agreement, you, as
Dealer-Manager, shall transmit the check and a copy of the
executed subscription agreement to the Escrow Agent, and the
original executed subscription documents and a copy of the check
to the Managing General Partner.
13
(b) On receipt by you, as Dealer-Manager, of notice from the Managing
General Partner that the Partnership's minimum subscription
proceeds of $2,000,000 as set forth in Section 4(e) of this
Agreement have been received, the Managing General Partner, you,
and the Selling Agents agree that all subscribers then may be
instructed, in the Managing General Partner's sole discretion, to
make their checks, drafts, or money orders payable solely to the
Partnership.
Thereafter, the Selling Agents shall promptly transmit any and all
checks received from subscribers and the original executed
subscription documents to you as Dealer-Manager by noon of the
next business day following receipt of the check by the Selling
Agent. By noon of the next business day following your receipt of
the check and the original executed subscription documents, you as
Dealer-Manager shall transmit the check and the original executed
subscription documents to the Managing General Partner.
17. PARTIES. This Agreement shall inure to the benefit of and be binding on
you, the Managing General Partner, and any respective successors and
assigns. This Agreement shall also inure to the benefit of the
indemnified parties, their successors and assigns. This Agreement is
intended to be and is for the sole and exclusive benefit of the parties
to this Agreement, including the Partnership, and their respective
successors and assigns, and the indemnified parties and their successors
and assigns, and for the benefit of no other person. No other person
shall have any legal or equitable right, remedy or claim under or in
respect of this Agreement. No purchaser of any of the Units from you or a
Selling Agent shall be construed a successor or assign merely by reason
of the purchase.
18. RELATIONSHIP. This Agreement shall not constitute you a partner of the
Managing General Partner, the Partnership, or any general partner of the
Partnership, nor render the Managing General Partner, the Partnership, or
any general partner of the Partnership liable for any of your
obligations.
19. EFFECTIVE DATE. This Agreement is made effective between the parties as
of the date accepted by you as indicated by your signature to this
Agreement.
20. ENTIRE AGREEMENT, WAIVER.
(a) This Agreement constitutes the entire agreement between the
Managing General Partner and you, and shall not be amended or
modified in any way except by subsequent agreement executed in
writing. Neither party to this Agreement shall be liable or bound
to the other by any agreement except as specifically set forth in
this Agreement.
(b) The Managing General Partner and you may waive, but only in
writing, any term, condition, or requirement under this Agreement
that is intended for its benefit. However, any written waiver of
any term or condition of this Agreement shall not operate as a
waiver of any other breach of that term or condition of this
Agreement. Also, any failure to enforce any provision of this
Agreement shall not operate as a waiver of that provision or any
other provision of this Agreement.
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:
14
(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 designed to assure
the security and privacy of all the information; and
(c) to cooperate with the other and provide reasonable assistance in
ensuring compliance with the Privacy Laws to the extent applicable
to either or both the Managing General Partner and you.
24. ANTI-MONEY LAUNDERING PROVISION. You and each Selling Agent each
represent and warrant to the Managing General Partner that each of you
have in place and will maintain suitable and adequate "know 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
October 5, 2005 By: /s/ Jack L. Hollander
- --------------- ------------------------------------------
Date Jack L. Hollander, Senior Vice President -
Direct Participation Programs
15
ATLAS AMERICA SERIES 26-2005 L.P.
By: Atlas Resources, Inc.,
Managing General Partner
October 5, 2005 By: /s/ Jack L. Hollander
- --------------- ------------------------------------------
Date Jack L. Hollander, Senior Vice President -
Direct Participation Programs
DEALER-MANAGER
ANTHEM SECURITIES, INC.,
a Pennsylvania corporation
October 5, 2005 By: /s/ Justin Atkinson
- --------------- ------------------------------------------
Date Justin Atkinson, President
16
EXHIBIT "A"
ATLAS AMERICA SERIES 26-2005 L.P.
ESCROW AGREEMENT
THIS AGREEMENT is made to be effective as of July 15, 2005, by and among
Atlas Resources, Inc., a Pennsylvania corporation (the "Managing General
Partner"), Anthem Securities, Inc., a Pennsylvania corporation ("Anthem"), Atlas
America Series 26-2005 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 for sale to
qualified investors (the "Investors") up to 1,400 limited partnership interests
in the Partnership (the "Units").
WHEREAS, each Investor will be required to pay his subscription in full
on subscribing by check or wire transfer (the "Subscription Proceeds").
WHEREAS, the cost per Unit will be $25,000 subject to certain discounts
of up to 11.5% ($2,875 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 ($12,500) subscriptions, with larger subscriptions
permitted in $1,000 increments.
WHEREAS, the Managing General Partner and Anthem have executed an
agreement (" Dealer-Manager Agreement") under which Anthem will solicit
subscriptions for Units in all states on a "best efforts" "all or none" basis
for Subscription Proceeds of $2,000,000 and on a "best efforts" basis for the
remaining Units on behalf of the Managing General Partner and the Partnership
and under which Anthem (the "Dealer-Manager") 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 Dealer-Manager Agreement provides for compensation to the
Dealer-Manager to participate in the offering of the Units, subject to the
discounts set forth above for certain Investors, which compensation includes,
but is not limited to, for each Unit sold:
o a 2.5% Dealer-Manager fee;
o a 7% sales commission;
o a 1.5% nonaccountable marketing expense fee; and
o a .5% nonaccountable due diligence fee;
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, including any optional subscription by the Managing General Partner,
its officers, directors, and Affiliates.
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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 $35,000,000; or
o September 30, 2005, which may not be extended.
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 transfer
made payable to "Atlas Series 26-2005 L.P., Escrow Agent, National City
Bank of Pennsylvania."
3. INVESTMENT OF SUBSCRIPTION PROCEEDS. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow Agent
as directed by the Managing General Partner. This may be a savings
account, bank money market account, short-term certificates of deposit
issued by a bank, or short-term certificates of deposit issued or
guaranteed by the United States government. The interest earned shall be
added to the Subscription Proceeds and disbursed in accordance with the
provisions of Paragraph 4 or 5 of this Agreement, as the case may be.
4. DISTRIBUTION OF SUBSCRIPTION PROCEEDS. If the Escrow Agent:
(a) receives proper written notice from an authorized officer of the
Managing General Partner that at least the minimum Subscription
Proceeds of $2,000,000 have been received and accepted by the
Managing General Partner; and
(b) determines that Subscription Proceeds for at least $2,000,000 are
"Distributable Subscription Proceeds" (as defined below);
2
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 Distributable
Subscription Proceeds while held by the Escrow Agent in the escrow
account. For purposes of this Agreement, "Distributable Subscription
Proceeds" are Subscription Proceeds which have been deposited in the
escrow account: (1) by wire transfer; or (2) by check, but in the case of
checks only at the time that the Escrow Agent believes an amount of time
has passed which would usually be sufficient for Subscription Proceeds
paid by check to have been returned unpaid by the bank on which the check
was drawn and after a 10 day period from the date of deposit.
After the occurrence of 4(a) and (b) above, Escrow Agent will provide a
letter to the Managing General Partner confirming receipt of checks
and/or wires representing Subscription Proceeds totaling at least
$2,000,000 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 remaining
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
which are to be refunded to an Investor or which were paid by a check
which is returned or otherwise not collected for any reason prior or
subsequent to termination of this Agreement.
5. SEPARATE PARTNERSHIP ACCOUNT. During the continuation of the offering
after the Partnership is funded with cleared Subscription Proceeds of at
least $2,000,000 and the Escrow Agent receives the notice described in
Paragraph 4 of this Agreement, and before the Offering Termination Date,
any additional Subscription Proceeds may be deposited by the
Dealer-Manager and the Managing General Partner directly in a separate
Partnership account which shall not be subject to the terms of this
Agreement.
6. DISTRIBUTIONS TO SUBSCRIBERS.
(a) If the Partnership is not funded as contemplated because less than
the minimum Subscription Proceeds of $2,000,000 have been received
and accepted by the Managing General Partner by twelve (12:00)
p.m. (noon), local time, EASTERN STANDARD TIME, on the Offering
Termination Date, or for any other reason, then the Managing
General Partner shall notify the Escrow Agent, and the Escrow
Agent promptly shall distribute to each Investor, for which Escrow
Agent has a copy of the subscription agreement, a refund check
made payable to the Investor in an amount equal to the
Subscription Proceeds of the Investor, plus any interest paid or
investment income earned on the Investor's Subscription Proceeds
while held by the Escrow Agent in the escrow account.
(b) If a subscription for Units submitted by an Investor is rejected
by the Managing General Partner for any reason after the
Subscription Proceeds relating to the subscription have been
deposited with the Escrow Agent, then the Managing General Partner
promptly shall notify in writing, the Escrow Agent of the
rejection, and the Escrow Agent shall promptly distribute to the
Investor, for which Escrow Agent has a copy of a Subscription
Agreement, a refund check made payable to the Investor in an
amount equal to the Subscription Proceeds of the Investor, plus
any interest paid or investment income earned on the Investor's
Subscription Proceeds while held by the Escrow Agent in the escrow
account.
3
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.
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.
4
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
c/o Allegiant Institutional Services
200 Public Square, 5th Floor
Cleveland, Ohio 44114
Attention: Dawn DeWerth LOC 01-86PS-01
Phone: (216) 222-9225
Facsimile: (216) 222-7044
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 Atkinson
Phone: (412) 262-1680
Facsimile: (412) 262-7430
Any party may designate any other address to which notices and
instructions shall be sent by notice duly given in accordance with this
Agreement.
13. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(b) This Agreement shall be binding on and shall inure to the benefit
of the undersigned and their respective successors and assigns.
(c) This Agreement may be executed in multiple copies, each executed
copy to serve as an original.
14. The parties hereto and subscribers acknowledge Escrow Agent has not
reviewed and is not making any recommendations with respect to the
securities offered.
6
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: /s/ James Schultz
---------------------------------------------
James Schultz, Vice President
ATLAS RESOURCES, INC.
A Pennsylvania corporation
By: /s/ Karen A. Black
---------------------------------------------
Karen A. Black, Vice President - Partnership
Administration
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By: /s/ Justin T. Atkinson
---------------------------------------------
Justin T. Atkinson, President
ATLAS AMERICA SERIES 26-2005 L.P.
By: ATLAS RESOURCES, INC.
Managing General Partner
By: /s/ Karen A. Black
---------------------------------------------
Karen A. Black - Vice President - Partnership
Administration
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.
8
EXHIBIT "B"
SELLING AGENT AGREEMENT
WITH ANTHEM SECURITIES, INC.
TO: _____________________________________________
RE: ATLAS AMERICA SERIES 26-2005 L.P.
---------------------------------
Gentlemen:
Atlas Resources, Inc. is the Managing General Partner of Atlas America
Series 26-2005 L.P., a limited partnership organized under the Delaware Revised
Uniform Limited Partnership Act, which is referred to as the "Partnership." The
limited partnership interests being offered in the Partnership, which are
referred to as the "Units," and the offering are described in the enclosed
Private Placement Memorandum dated July 15, 2005, which is referred to as the
"Private Placement Memorandum." The Managing General Partner has packaged each
numbered Private Placement Memorandum, together with a copy of each item of the
sales materials that it has approved for use with potential investors in the
Partnership, which are collectively referred to as the "Sales Literature," in
kits which are referred to as the "Private Placement Memorandum Kits." Numbered
Private Placement Memoranda relating to the Units have been furnished to you in
the Private Placement Memorandum Kits, along 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 of the
Units in all states, a copy of which has been furnished to you and is
incorporated in this Agreement by reference, with the Managing General Partner
and the Partnership under which the Dealer-Manager has agreed to form a group of
NASD member firms, which are referred to as the "Selling Agents." The Selling
Agents will obtain subscriptions for Units in the Partnership in all states on a
"best efforts" basis so as to qualify for the exemption contained in Regulation
D promulgated under the Securities Act of 1933, as amended, which is referred to
as the "Act," and the provisions of the Private Placement Memorandum.
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 the Partnership pursuant to the
provisions of this Agreement in all states in which you are duly registered or
licensed as a broker/dealer.
1. REPRESENTATIONS AND WARRANTIES OF SELLING AGENT. You represent and
warrant to the Dealer-Manager that:
(a) You are a corporation duly organized, validly existing, and in
good standing under the laws of the state of your formation or of
any jurisdiction to the laws of which you are subject, with all
requisite power and authority to enter into this Agreement and to
carry out your obligations under this Agreement.
(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.
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(c) The consummation of the transactions contemplated by this
Agreement and the Private Placement Memorandum will not result in
the following:
(i) any breach of any of the terms or conditions of, or
constitute a default under your Articles of Incorporation
or Bylaws, or any other indenture, agreement, or other
instrument to which you are a party; or
(ii) any violation of any order applicable to you of any court
or any federal or state regulatory body or administrative
agency having jurisdiction over you or over your
affiliates.
(d) You are not subject to any disqualification described in Rule
505(b)(2)(iii) of Regulation D.
You are duly registered under the provisions of the Securities
Exchange Act of 1934, which is referred to as the "Act of 1934,"
as a dealer, and you are a member in good standing of the NASD.
You are duly registered as a broker/dealer in the states where you
are required to be registered in order to carry out your
obligations as contemplated by this Agreement and the Private
Placement Memorandum. 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 Regulation D, insofar as Regulation D
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 Regulation D, 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, and 2750, and specifically you agree as
set forth below.
(i) You shall not offer or sell the Units in any state until
you have been advised in writing by the Managing General
Partner, or the Managing General Partner's special counsel,
that the offer or sale of the Units:
(1) has been qualified in the state;
(2) is exempt from the qualification requirements
imposed by the state; or
(3) the qualification is otherwise not required.
(ii) Units shall not be offered and/or sold by you by means of
any form of general solicitation or general advertising,
including, but not limited to, the following:
(1) any advertisement, article, notice, or other
communication published in any newspaper, magazine,
or similar media or broadcast over television or
radio;
(2) any seminar or meeting whose attendees have been
invited by any general solicitation or general
advertising; or
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(3) any letter, circular, notice, or other written
communication constituting a form of general
solicitation or general advertising.
(iii) You have received copies of the Private Placement
Memorandum Kit relating to the Units and in offering and
selling the Units you will rely only on the statements
contained in the Private Placement Memorandum and not on
any other statements whatsoever, either written or oral,
with respect to the details of the offering of Units. You
shall provide each offeree with the following:
(1) a complete Private Placement Memorandum Kit, which
includes a numbered copy of the Private Placement
Memorandum, all exhibits incorporated in the Private
Placement Memorandum and, without exception, all of
the Sales Literature described below; and
(2) any numbered supplement or amendment to the Private
Placement Memorandum as set forth in (iv) below.
Also, each Private Placement Memorandum Kit includes a copy
of the following Sales Literature:
(1) a flyer entitled "Atlas America Series 26-2005
L.P.";
(2) an article entitled "Tax Rewards with Oil and Gas
Partnerships";
(3) a brochure of tax scenarios entitled "How an
Investment in Atlas America Series 26-2005 L.P. can
Help Achieve an Investor's Tax Objectives";
(4) a brochure entitled "Investing in Atlas America
Series 26-2005 L.P.";
(5) a booklet entitled "Outline of Tax Consequences of
Oil and Gas Drilling Programs";
(6) a brochure entitled "The Appalachian Basin: A Prime
Drilling Location Which Commands a Premium";
(7) a brochure entitled "Investment Insights - Tax
Time";
(8) a brochure entitled "Frequently Asked Questions";
(9) a brochure entitled "AMT - A Little History and
Reducing AMT through Natural Gas Partnerships";
(10) a brochure entitled "The Drilling Process"; and
(11) possibly other supplementary materials.
You agree that, without exception, you will not remove any
of the Sales Literature described above from any Private
Placement Memorandum Kit before its delivery to an offeree.
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Further, you shall keep file memoranda, indicating by the
number of the Private Placement Memorandum enclosed in the
Private Placement Memorandum Kit, to whom each Private
Placement Memorandum Kit, which must contain, without
exception, all of the Sales Literature, was delivered.
(iv) When any supplement or amendment to the Private Placement
Memorandum is prepared and delivered to you by the Managing
General Partner or the Dealer-Manager, you agree as
follows:
(1) to distribute each supplement or amendment to the
Private Placement Memorandum, identified by number,
to every person who has previously received a
Private Placement Memorandum Kit from you;
(2) to include each supplement or amendment in all
future deliveries of any Private Placement
Memorandum Kit; and
(3) to keep file memoranda indicating to whom each
supplement or amendment was delivered.
(v) In connection with any offer or sale of the Units, you
agree to the following:
(1) to comply in all respects with statements set forth
in the Private Placement Memorandum, the Partnership
Agreement, and any supplements or amendments to the
Private Placement Memorandum;
(2) not to make any statement inconsistent with the
statements in the Private Placement Memorandum, the
Partnership Agreement, and any supplements or
amendments to the Private Placement Memorandum;
(3) not to make any untrue or misleading statements of a
material fact in connection with the Units; and
(4) not to provide any written information, statements,
or sales materials other than the Private Placement
Memorandum, the Sales Literature, and any
supplements or amendments to the Private Placement
Memorandum unless approved in writing by the
Managing General Partner.
(vi) You shall advise each offeree of Units in the Partnership
at the time of the initial offering to him that the
Partnership and the Managing General Partner shall during
the course of the offering and a reasonable time before
sale accord him the opportunity to ask questions and
receive answers concerning the terms and conditions of the
offering and to obtain any additional information, to the
extent possessed by the Partnership or the Managing General
Partner or obtainable by either of them without
unreasonable effort or expense, that is necessary to verify
the accuracy of the information contained in the Private
Placement Memorandum.
(vii) Before the sale of any of the Units, you shall make
reasonable inquiry to determine if the offeree is acquiring
the Units for his own account or on behalf of other
persons, and that the offeree understands the limitations
on the offeree's disposition of the Units set forth in Rule
502(d) of Regulation D. This includes a determination by
you that the offeree understands that he must bear the
economic risk of the investment for an indefinite period of
time because the Units have not been registered under the
Act and, thus, cannot be sold unless the Units are
subsequently registered under the Act or an exemption from
registration under the Act is available.
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(viii) Before the sale of any of the Units you shall have
reasonable grounds to believe that each subscriber is an
"accredited investor" as that term is defined in Rule
501(a) of Regulation D.
(ix) Units shall not be sold by you to anyone whom you
reasonably believe is not an accredited investor.
(x) You agree to use your best efforts in the solicitation and
sale of the Units, including that:
(1) you comply with all the provisions of Regulation D,
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;
(2) the prospective purchasers meet the suitability
requirements set forth in the Private Placement
Memorandum, the Subscription Agreement, this
Agreement and the NASD Conduct Rules; and
(3) the prospective purchasers properly complete the
following forms, which will be included in the
Partnership's subscription packet as exhibits to the
Private Placement Memorandum:
(A) the Subscription Agreement and Annex A
attached to the Subscription Agreement
[Exhibit (I-B)]; and
(B) the Execution Page and Purchaser
Questionnaire [Exhibit (C)];
together with any additional forms provided in any
supplement or amendment to the Private Placement
Memorandum, or otherwise provided to you by the Managing
General Partner or the Dealer-Manager to be completed by
prospective purchasers.
The Managing General Partner shall have the right to reject
any subscription at any time for any reason without
liability to it. Subscription funds and executed
subscription packets shall be transmitted as set forth in
Section 11 of this Agreement.
(f) 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
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(ii) you shall and have fulfilled all your obligations
under this Agreement at the applicable closing date.
(g) You agree and covenant that you will not distribute a
Private Placement Memorandum Kit to any offeree with whom
you do not have a pre-existing substantive relationship as
defined from time to time by the Commission. As of the date
of this Agreement, you agree that the term "pre-existing
substantive relationship" with a potential offeree means
the following:
(i) your relationship with the offereee was established
before the beginning of the offering of Units in the
Partnership, which is July 15, 2005; and
(ii) you have sufficient information concerning the
offeree to determine the offeree's current
sophistication and financial circumstances,
including that the offeree (or the offeree and its
purchaser representative) has such knowledge and
experience in financial and business matters that
the offeree is capable of evaluating the merits and
risks of an investment in the Partnership.
2. COMMISSIONS AND FEES.
(a) Subject to the receipt of the minimum required subscription
proceeds of $2,000,000 as described in Section 4(e) 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, a 1.5%
nonaccountable marketing expense fee, and a .5% nonaccountable due
diligence fee per Unit, based on the aggregate amount of all Unit
subscriptions to the Partnership secured by the Dealer-Manager or
the selling group formed by the Dealer-Manager and accepted by the
Managing General Partner.
Subject to the performance by you of your obligations under
Appendix I to this Agreement, which is incorporated in this
Agreement by reference, and subject to the terms and conditions
set forth in this Agreement, including the Dealer-Manager's
receipt from you of the file memoranda and other 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;
(ii) a .5% nonaccountable due diligence fee per Unit, which
shall be reduced by the due diligence fees and expenses of
any third-party, including, but not limited to, consultants
engaged by you that are paid directly to the third-party or
are reimbursed to you by the Managing General Partner or
the Dealer-Manager; and
(iii) a 1.5% nonaccountable marketing expense fee, which shall be
reduced for the payment or the reimbursement by the
Managing General Partner or the Dealer-Manager to you for
costs associated with your national sales conferences,
costs associated with regional and/or local meetings that
are coordinated by your home office and/or marketing
department for registered representatives, and other costs
associated with being a sponsor.
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(b) Your compensation which is owed to you as set forth above, other
than the .5% nonaccountable due diligence fee and the 1.5%
nonaccountable marketing expense fee, 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(f) of
the Dealer-Manager Agreement for breaking escrow for the first
closing are satisfied, and approximately every two weeks
thereafter until the Partnership's Offering Termination Date,
which is described in Section 1 of the Dealer-Manager Agreement.
The balance shall be paid to the Dealer-Manager within fourteen
business days after the Partnership's Offering Termination Date.
The amount of the nonaccountable due diligence fee and the
nonaccountable marketing expense fee which is owed to you as set
forth above, shall be paid to you within twenty-one business days
after the Partnership's Offering Termination Date.
(c) As an additional incentive, to the extent permitted by applicable
law and subject to the receipt of the minimum subscription
proceeds as described in Section 4(e) of the Dealer-Manager
Agreement, if you have one or more registered representatives
and/or principals who sell at least six Units each in the
Partnership, including Units with discounted prices, you shall
share in payments from the Managing General Partner equal to 1% of
the Partnership's production revenues less the related operating
costs, administrative costs, direct costs, and other costs not
specifically allocated.
Your participation in these payments shall be in the ratio which
the total amount of Units sold by all of your registered
representatives and/or principals who sell at least six Units each
in the Partnership bears to the total number of Units sold by all
registered representatives and/or principals (including registered
representatives and principals of the Dealer-Manager) who sell at
least six Units each in the Partnership. These payments shall be
made quarterly.
(d) 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 in (a) and (b) above, and your
incentive payments as set forth in (c) above, until the
Dealer-Manager is in receipt of the related amounts owed to it
under the Dealer-Manager Agreement, and the Dealer-Manager's
liability to pay your compensation under this Agreement shall be
limited solely to the proceeds of the related amounts owed to it
under the Dealer-Manager Agreement.
(e) As provided in Section 4(e) of the Dealer-Manager Agreement, the
Partnership shall not begin operations unless it receives
subscription proceeds for at least $2,000,000 by its Offering
Termination Date. If this amount is not secured by the
Partnership's Offering Termination Date, then nothing shall be
payable to you for the Partnership and all funds advanced by
subscribers for Units in the Partnership shall be returned to them
with interest earned, if any.
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3. BLUE SKY QUALIFICATION. The Managing General Partner may elect not to
qualify or register Units in any state or jurisdiction in which it deems
the qualification or registration is not warranted for any reason in its
sole discretion. On application to the Dealer-Manager you will be
informed as to the states and jurisdictions in which the Units have been
qualified for sale or are exempt under the respective securities or "Blue
Sky" laws of those states and jurisdictions.
Notwithstanding the foregoing, the Dealer-Manager, the Partnership, and
the Managing General Partner have not assumed and will not assume any
obligation or responsibility as to your right to act as a broker/dealer
with respect to the Units in any state or jurisdiction.
4. EXPENSE OF SALE. The expenses in connection with the offer and sale of
the Units shall be payable as set forth below.
(a) The Dealer-Manager shall pay all expenses incident to the
performance of its obligations under this Agreement, including the
fees and expenses of its attorneys and accountants, even if the
offering of the Partnership 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 the
Partnership 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 the following documents:
(i) the file memoranda required pursuant to Section 1(e)(iii)
and (iv) of this Agreement; and
(ii) fully executed subscription documents for each prospective
purchaser as required by Section 1(e)(x) of this Agreement.
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7. INDEMNIFICATION.
(a) You shall indemnify and hold harmless the Dealer-Manager, the
Managing General Partner, the Partnership and its attorneys
against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Act, the Act
of 1934, or otherwise insofar as the losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are
based on your breach of any of your duties and obligations,
representations, or warranties under the terms or provisions of
this Agreement, and you shall reimburse them for any legal or
other expenses reasonably incurred in connection with
investigating or defending the losses, claims, damages,
liabilities, or actions.
(b) The Dealer-Manager shall indemnify and hold you harmless against
any losses, claims, damages, or liabilities, joint or several, to
which you may become subject under the Act, the Act of 1934, or
otherwise insofar as the losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based on the
Dealer-Manager's breach of any of its duties and obligations,
representations, or warranties under the terms or provisions of
this Agreement, and the Dealer-Manager shall reimburse you for any
legal or other expenses reasonably incurred in connection with
investigating or defending the losses, claims, damages,
liabilities, or actions.
(c) The foregoing indemnity agreements shall extend on the same terms
and conditions to, and shall inure to the benefit of, each person,
if any, who controls each indemnified party within the meaning of
the Act.
(d) Promptly after receipt by an indemnified party of notice of the
commencement of any action, the indemnified party shall, if a
claim in respect of the action is to be made against the
indemnifying party under this Section, notify the indemnifying
party in writing of the commencement of the action; but the
omission to promptly notify the indemnifying party shall not
relieve the indemnifying party from any liability which it may
have to the indemnified party. If any action is brought against an
indemnified party, it shall notify the indemnifying party of the
commencement of the action, and the indemnifying party shall be
entitled to participate in, and, to the extent that it wishes,
jointly with any other indemnifying party similarly notified, to
assume the defense of the action, with counsel satisfactory to the
indemnified and indemnifying parties. After the indemnified party
has received notice from the agreed on counsel that the defense of
the action under this paragraph has been assumed, the indemnifying
party shall not be responsible for any legal or other expenses
subsequently incurred by the indemnified party in connection with
the defense of the action other than with respect to the agreed on
counsel who assumed the defense of the action.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations,
warranties, and agreements of the Dealer-Manager and you in this
Agreement, including the indemnity agreements contained in Section 7 of
this Agreement, shall:
(a) survive the delivery, execution and closing of this Agreement;
(b) remain operative and in full force and effect regardless of any
investigation made by or on behalf of you or any person who
controls you within the meaning of the Act, by the Dealer-Manager,
or any of its officers, directors or any person who controls the
Dealer-Manager within the meaning of the Act, or any other
indemnified party; and
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(c) survive delivery of the Units.
9. TERMINATION.
(a) You shall have the right to terminate this Agreement other than
the indemnification provisions of Section 7 of this Agreement by
giving notice as specified in Section 16 of this Agreement any
time at or before a closing date:
(i) if the Dealer-Manager has failed, refused, or been unable
at or before a closing date, to perform any of its
obligations under this Agreement; or
(ii) there has occurred an event materially and adversely
affecting the value of the Units.
If you elect to terminate this Agreement other than the
indemnification provisions of Section 7 of this Agreement, then
the Dealer-Manager shall be promptly notified by you by telephone,
e-mail, facsimile, or telegram, confirmed by letter.
(b) The Dealer-Manager may terminate this Agreement other than the
indemnification provisions of Section 7 of this Agreement, for any
reason and at any time, by promptly giving notice to you by
telephone, e-mail, facsimile or telegram, confirmed by letter.
10. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum
subscription proceeds of $2,000,000 as set forth in Section 4(e) of the
Dealer-Manager Agreement, the Dealer-Manager and you, including if you
are a customer carrying broker/dealer, agree that all subscribers shall
be instructed to make their checks or wire transfers payable solely to
the Escrow Agent as agent for the Partnership as follows: "Atlas Series
26-2005 L.P., Escrow Agent, National City Bank of PA."
Also, you, including if you are a customer carrying broker/dealer, agree
to comply with Rule 15c2-4 adopted under the Act of 1934. In addition,
for identification purposes, wire transfers should reference the
subscriber's name and the account number of the escrow account for the
Partnership.
If you receive a check not conforming to the foregoing instructions, then
you shall return the check directly to the subscriber not later than noon
of the next business day following its receipt by you from the
subscriber. If the Dealer-Manager receives a check not conforming to the
foregoing instructions, then the Dealer-Manager shall return the check to
you not later than noon of the next business day following its receipt by
the Dealer-Manager and you shall then return the check directly to the
subscriber not later than noon of the next business day following its
receipt by you from the Dealer-Manager. Checks received by you which
conform to the foregoing instructions shall be transmitted by you under
Section 11 "Transmittal Procedures," below.
You agree that you are bound by the terms of the Escrow Agreement, a copy
of which is attached to the Dealer-Manager Agreement as Exhibit "A."
11. TRANSMITTAL PROCEDURES. You, including if you are a customer carrying
broker/dealer, shall transmit received investor funds in accordance with
the following procedures.
(a) Pending receipt of the Partnership's minimum subscription proceeds
of $2,000,000 as set forth in Section 4(e) of the Dealer-Manager
Agreement, you shall promptly transmit, any and all checks
received by you from subscribers and the original executed
subscription documents to the Dealer-Manager by noon of the next
business day following receipt of the check by you. By noon of the
next business day following 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 documents and a copy of the check to the Managing
General Partner.
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(b) On receipt by you of notice from the Managing General Partner or
the Dealer-Manager that the Partnership's minimum subscription
proceeds of $2,000,000 as set forth in Section 4(e) 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 payable solely to
the Partnership.
Thereafter, you shall promptly transmit any and all checks
received by you from subscribers and the original executed
subscription documents to the Dealer-Manager by noon of the next
business day following receipt of the check by you. By noon of the
next business day following its receipt of the check and original
subscription documents, the Dealer-Manager shall transmit the
check and the original executed subscription documents to the
Managing General Partner.
12. PARTIES. This Agreement shall inure to the benefit of and be binding on
you, the Dealer-Manager, and any respective successors and assigns. This
Agreement shall also inure to the benefit of the indemnified parties,
their successors and assigns. This Agreement is intended to be and is for
the sole and exclusive benefit of the parties to this Agreement,
including their respective successors and assigns, and the indemnified
parties and their successors and assigns, and for the benefit of no other
person. No other person shall have any legal or equitable right, remedy
or claim under or in respect of this Agreement. No purchaser of any of
the Units from you shall be construed a successor or assign merely by
reason of the purchase.
13. RELATIONSHIP. This Agreement shall not constitute you a partner of the
Managing General Partner, the Dealer-Manager, the Partnership, any
general partner of the Partnership, or any other Selling Agent, nor
render the Managing General Partner, the Dealer-Manager, the Partnership,
any general partner of the Partnership, or any other Selling Agent,
liable for any of your obligations.
14. EFFECTIVE DATE. This Agreement is made effective between the parties as
of the date accepted by you as indicated by your signature to this
Agreement.
15. ENTIRE AGREEMENT, WAIVER.
(a) This Agreement constitutes the entire agreement between the
Dealer-Manager and you, and shall not be amended or modified in
any way except by subsequent agreement executed in writing.
Neither party to this Agreement shall be liable or bound to the
other by any agreement except as specifically set forth in this
Agreement.
(b) The Dealer-Manager and you may waive, but only in writing, any
term, condition, or requirement under this Agreement that is
intended for its benefit. However, any written waiver of any term
or condition of this Agreement shall not operate as a waiver of
any other breach of the term or condition of this Agreement.
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(c) Also, any failure to enforce any provision of this Agreement shall
not operate as a waiver of that provision or any other provision
of this Agreement.
16. NOTICES.
(a) Any communications from you shall be in writing addressed to the
Dealer-Manager at 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:
(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.
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Sincerely,
_____________________, 2005 ANTHEM SECURITIES, INC.
Date
ATTEST:
___________________________ By:_____________________________
(SEAL) Secretary Justin Atkinson, President
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 Private Placement Memorandum Kits which include numbered Private
Placement Memoranda and the Sales Literature, and a copy of the Dealer-Manager
Agreement referred to above.
_____________________, 2005 ____________________________________________,
Date a(n) _________________________ corporation,
ATTEST:
___________________________ By:__________________________________________
(SEAL) Secretary _____________________________, President
_____________________________________________
(Address)
_____________________________________________
_____________________________________________
_____________________________________________
(Telephone Number)
Our CRD Number is ___________________________
Our Tax ID Number is ________________________
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APPENDIX I TO SELLING AGENT AGREEMENT
In consideration for the payment to you, as Selling Agent, by the Dealer-Manager
of a 7% sales commission, a 1.5% nonaccountable marketing expense fee subject to
the reductions set forth in Section 2(a)(iii) of the Selling Agent Agreement,
and a .5% nonaccountable due diligence fee subject to the reductions set forth
in Section 2(a)(ii) 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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