Exhibit 1.1
ATLAS AMERICA SERIES 25-2004 PROGRAM
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..............................................................11
9. Conditions of the Dealer-Manager's Duties....................................11
10. Conditions of the Managing General Partner's Duties..........................11
11. Indemnification..............................................................12
12. Representations and Agreements to Survive Delivery...........................12
13. Termination..................................................................13
14. Notices......................................................................13
15. Format of Checks/Escrow Agent................................................13
16. Transmittal Procedures.......................................................14
17. Parties......................................................................14
18. Relationship.................................................................15
19. Effective Date...............................................................15
20. Entire Agreement, Waiver.....................................................15
21. Complaints...................................................................15
22. Privacy......................................................................15
23. Anti-Money Laundering Provision..............................................15
Exhibit A-1 - Escrow Agreement for Atlas America Series 25-2004(A) L.P.
Exhibit A-2 - Escrow Agreement for Atlas America Series 25-2004(B) L.P.
Exhibit B - Selling Agent Agreement
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ANTHEM SECURITIES, INC.
DEALER-MANAGER AGREEMENT
(Best Efforts)
RE: ATLAS AMERICA SERIES 25-2004 PROGRAM
Anthem Securities, Inc.
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Gentlemen:
The undersigned, Atlas Resources, Inc., which is referred to as the
"Managing General Partner," on behalf of Atlas America Series 25-2004 Program,
which is referred to as the "Program," is an offering of up to 2,400 investor
general partner interests and limited partner interests, which are referred to
as units, in up to two limited partnerships organized under the laws of Delaware
as described below. These limited partnerships are sometimes referred to in this
Agreement in the singular as a "Partnership" or in the plural as "Partnerships."
The Managing General Partner on behalf of the Partnerships hereby confirms its
agreement with you, as Dealer-Manager, as follows:
1. DESCRIPTION OF PROGRAM AND UNITS.
(a) The Managing General Partner, a Pennsylvania corporation, is the
sole managing general partner of up to two limited partnerships
formed under the Delaware Revised Uniform Limited Partnership
Act. The Partnerships will be named as follows:
(i) Atlas America Series 25-2004(A) L.P.; and
(ii) Atlas America Series 25-2004(B) L.P.
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.
(b) The Partnerships 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 $1,000,000 in a Partnership by
its Offering Termination Date for each Partnership 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 each Partnership will be as described in
the Private Placement Memorandum, which includes any supplement.
Also, the maximum subscriptions of all the Partnerships, in the
aggregate, must not exceed $60 million.
The Managing General Partner will notify you and the "Selling Agents," as
defined below, of the Initial Closing Date for each 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 $1,000,000 required for a 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 each 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 each Partnership or of any jurisdiction to the laws
of which each Partnership is subject.
(d) Each Partnership was duly formed under the laws of the State of
Delaware and is validly existing as a limited partnership in good
standing under the laws of Delaware with full power and authority
to own its properties and conduct its business as described in
the Private Placement Memorandum.
Each Partnership will be qualified to do business as a limited
partnership or similar entity offering limited liability in those
jurisdictions where the Managing General Partner deems the
qualification necessary to assure limited liability of the
limited partners.
(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 Partnerships 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 other than:
(i) Minnesota; and
(ii) New Hampshire.
(b) In all states other than Minnesota and New Hampshire you agree to
use your best efforts to effect sales of the Units and to form
and manage a selling group composed of soliciting broker/dealers,
which are referred to as the "Selling Agents," each of which
shall be a member of the National Association of Securities
Dealers, Inc., which is referred to as the "NASD," and shall
enter into a "Selling Agent Agreement" in substantially the form
attached to this Agreement as Exhibit "B."
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The Managing General Partner shall have three business days after the
receipt of an executed Selling Agent Agreement to refuse that Selling
Agent's participation.
4. COMPENSATION AND FEES.
(a) As Dealer-Manager you shall receive from the Managing General
Partner the following compensation, based on each Unit sold to
investors in a Partnership who are situated and/or residents in
states other than Minnesota and New Hampshire and whose
subscriptions for Units are accepted by the Managing General
Partner:
(i) a 3.5% Dealer-Manager fee;
(ii) an 8% 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. Of the 3.5% Dealer-Manager fee, up to 3.0% may be
reallowed to the wholesalers for subscriptions obtained through
their efforts. You shall retain any of the 3.5% 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 3.5% Dealer-Manager fee, the 8% 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 8% Sales Commission, which shall not
be paid to you, although their subscription price shall
not be reduced by the 3.5% 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 (i.e. 240 Units) shall be
sold, in the Partnerships combined, 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
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more registered representatives and/or principals who sell
subscriptions of at least six Units each in either Partnership or
in both Partnerships combined shall share in payments from the
Managing General Partner equal to 1% of both Partnerships'
production revenues less the related operating costs,
administrative costs, direct costs, and other costs not
specifically allocated.
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 subscriptions of at least six Units each in either
Partnership or in both Partnerships combined bears to the total
amount of subscriptions sold by all registered representatives
and/or principals (including registered representatives and
principals of the Dealer-Manager) in all of the states (including
Minnesota and New Hampshire) who sell subscriptions of at least
six Units each in either Partnership or in both Partnerships
combined. 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 $1,000,000 in each
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 each Partnership shall be held in a separate
interest bearing escrow account as provided in Section 15 of this
Agreement.
In this regard, a supplement to the Private Placement Memorandum
describing the specified prospects for each respective
Partnership will be distributed to the investors and offerees in
that particular Partnership. If an investor in a Partnership
subscribed before he received that Partnership's supplement, he
will have a right to reaffirm or withdraw his subscription as
described in the supplement. If the investor withdraws his
subscription or the Managing General Partner does not receive the
investor's reaffirmation of his subscription within the time
period described in the supplement, then his subscription will be
promptly returned to him. If an investor in a Partnership has a
right to withdraw his subscription as described above, then the
investor's subscription proceeds will not be included in the
minimum subscription proceeds of $1,000,000 required by the
Partnership to close and break escrow until and unless the
Managing General Partner timely receives the investor's
reaffirmation of his subscription.
Unless at least the minimum subscription proceeds of $1,000,000
as described above are received on or before the Offering
Termination Date of a Partnership, as described in Section 1 of
this Agreement, the offering of Units in that Partnership, shall
be terminated, in which event:
(i) the 3.5% Dealer-Manager fee, the 8% 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.
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(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 $1,000,000
as described above have been received by the respective
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 respective 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 respective Partnership.
5. COVENANTS OF THE MANAGING GENERAL PARTNER. The Managing General Partner
covenants and agrees that:
(a) The Managing General Partner shall deliver to you ample copies of
the Private Placement Memorandum and all amendments or
supplements to the Private Placement Memorandum.
(b) If any event affecting a Partnership or the Managing General
Partner occurs that in the opinion of the Managing General
Partner should be set forth in a supplement or amendment to the
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:
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(i) any breach of any of the terms or conditions of, or a
default under your Articles of Incorporation or Bylaws;
or any other indenture, agreement, or 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.
(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
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(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 and numbered copy of the Private
Placement Memorandum and all exhibits
incorporated in the Private Placement Memorandum;
and
(2) any numbered supplement or amendment to the
Private Placement Memorandum as set forth in (iv)
below.
Also, unless advised otherwise by the Managing General
Partner, you and the Selling Agents may choose to provide
each offeree with the following:
(1) a flyer entitled "Atlas America Series 25-2004
Program";
(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 25-2004
Program can Help Achieve an Investor's Tax
Objectives";
(4) a brochure entitled "Investing in Atlas America
Series 25-2004 Program";
(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";
and
(9) possibly other supplementary materials;
which are referred to as the "Sales Literature."
Further, you and the Selling Agents shall keep file
memoranda indicating by number to whom each Private
Placement Memorandum, Sales Literature, and supplement or
amendment to the Private Placement Memorandum was
delivered.
(iv) When a 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 copy of the Private Placement
Memorandum from you and/or the Selling Agent, see
Section 4(e) of this Agreement;
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(2) to include each supplement or amendment in all
future deliveries of any Private Placement
Memorandum; 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;
(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 a 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 and his
purchaser representative(s), if any, 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:
(1) each subscriber is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation
D; or
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(2) each subscriber and his duly appointed purchaser
representative, if any, meet the standards of
Rule 506(b)(2)(ii) of Regulation D.
Further, if the subscriber uses a purchaser
representative, then you and the Selling Agents shall do
the following:
(1) make reasonable inquiry to determine if the
purchaser representative(s) satisfies all of the
conditions of Rule 501(h) of Regulation D;
(2) obtain a written acknowledgment by the subscriber
concerning his purchaser representative(s); and
(3) before obtaining the foregoing acknowledgment,
disclose to the subscriber, in writing, any
material relationship between his purchaser
representative(s) or its affiliates and the
Managing General Partner or its affiliates, which
then exists or mutually is understood to be
contemplated or which has existed at any time
during the previous two years, and any
compensation received or to be received as a
result of that relationship.
(ix) Units shall not be sold by you or the Selling Agents to
more than a total of 35 non-accredited investors in the
Partnerships combined as indicated to you from time to
time by the Managing General Partner.
(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;
(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 each
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)];
(B) the Execution Page and Purchaser
Questionnaire [Exhibit (C)];
(C) the Purchaser Representative
Acknowledgment Form, if applicable,
[Annex A-1 to Exhibit (C)]; and
(D) the Acknowledgment of the Investor, if
applicable, [Annex A-1 to Exhibit (C)];
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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. In this regard, see Section 4(e) of this
Agreement.
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.
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.
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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 either or
both Partnerships is not successfully completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the formation and
management of the selling group and the fees and expenses of your
own counsel and accountants, even if the offering of either or
both Partnerships is not successfully completed.
9. CONDITIONS OF THE DEALER-MANAGER'S DUTIES. Your obligations under this
Agreement shall be subject to the accuracy, as of the date of this
Agreement and at the applicable closing date of:
(a) the Managing General Partner's representations and warranties
made in this Agreement; and
(b) to the performance by the Managing General Partner of its
obligations under this Agreement.
10. CONDITIONS OF THE MANAGING GENERAL PARTNER'S DUTIES. The Managing General
Partner's obligations provided under this Agreement, including the duty
to pay compensation to you as set forth in Section 4 of this Agreement,
shall be subject to the following:
(a) the accuracy, as of the date of this Agreement and at the
applicable closing date of each Partnership as if made at the
applicable closing date, of your representations and warranties
made in this Agreement;
(b) the performance by you of your obligations under this Agreement;
and
(c) the Managing General Partner's receipt, at or before the
applicable closing date, of 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.
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11. INDEMNIFICATION.
(a) You and the Selling Agents shall indemnify and hold harmless the
Managing General Partner, each Partnership and its attorneys
against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Act, the Act
of 1934, or otherwise insofar as the losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are
based on your agreements with the Selling Agents or your breach
of any of your duties and obligations, representations, or
warranties under the terms or provisions of this Agreement, and
you and the Selling Agents shall reimburse them for any legal or
other expenses reasonably incurred in connection with
investigating or defending the losses, claims, damages,
liabilities, or actions.
(b) The Managing General Partner shall indemnify and hold you and the
Selling Agents harmless against any losses, claims, damages or
liabilities, joint or several, to which you and the Selling
Agents may become subject under the Act, the Act of 1934, or
otherwise insofar as the losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based on the
Managing General Partner's breach of any of its duties and
obligations, representations, or warranties under the terms or
provisions of this Agreement, and the Managing General Partner
shall reimburse you and the Selling Agents for any legal or other
expenses reasonably incurred in connection with investigating or
defending the losses, claims, damages, liabilities, or actions.
(c) The foregoing indemnity agreements shall extend on the same terms
and conditions to, and shall inure to the benefit of, each
person, if any, who controls each indemnified party within the
meaning of the Act.
(d) Promptly after receipt by an indemnified party of notice of the
commencement of any action, the indemnified party shall, if a
claim in respect of the action is to be made against an
indemnifying party under this Section, notify the indemnifying
party in writing of the commencement of the action; but the
omission to promptly notify the indemnifying party shall not
relieve the indemnifying party from any liability which it may
have to any indemnified party. If any action is brought against
an indemnified party, it shall notify the indemnifying party of
the commencement of the action, and the indemnifying party shall
be entitled to participate in, and, to the extent that it wishes,
jointly with any other indemnifying party similarly notified, to
assume the defense of the action, with counsel satisfactory to
the indemnified and indemnifying parties. After the indemnified
party has received notice from the agreed on counsel that the
defense of the action under this paragraph has been assumed, the
indemnifying party shall not be responsible for any legal or
other expenses subsequently incurred by the indemnified party in
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
12
(c) survive delivery of the Units.
13. TERMINATION.
(a) You shall have the right to terminate this Agreement other than
the indemnification provisions of Section 11 of this Agreement by
giving notice as specified below any time at or before a closing
date:
(i) if the Managing General Partner has failed, refused, or
been unable at or before a closing date, to perform any
of its obligations under this Agreement; or
(ii) there has occurred an event materially and adversely
affecting the value of the Units.
If you elect to terminate this Agreement other than the
indemnification provisions of Section 11 of this Agreement, then
the Managing General Partner shall be promptly notified by you by
telephone, e-mail, facsimile, or telegram, confirmed by letter.
(b) The Managing General Partner may terminate this Agreement other
than the indemnification provisions of Section 11 of this
Agreement, for any reason and at any time, by promptly giving
notice to you by telephone, e-mail, facsimile, or telegram,
confirmed by letter as specified below at or before a closing
date.
14. NOTICES.
(a) All notices or communications under this Agreement, except as
otherwise specifically provided, shall be in writing.
(b) Any notice or communication sent by the Managing General Partner
to you shall be mailed, delivered, or sent by facsimile, e-mail
or telegraph, and confirmed to you at X.X. Xxx 000, 000 Xxxxxx
Xxxx, Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000-0000.
(c) Any notice or communication sent by you to the Managing General
Partner or a Partnership shall be mailed, delivered, or sent by
facsimile, e-mail or telegraph, and confirmed at 000 Xxxxxx Xxxx,
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000.
15. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum
subscription proceeds of $1,000,000 of each 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 respective
Partnership in which Units are then being offered as follows: "Atlas
Series 25-2004(A) L.P., Escrow Agent, National City Bank of PA" or "Atlas
Series 25-2004(B) 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 in
which the Units are then being offered.
13
If you receive a check not conforming to the foregoing instructions, then
you shall return the check to the Selling Agent not later than the end of
the next business day following its receipt by you. The Selling Agent
shall then return the check directly to the subscriber not later than the
end of the next business day following its receipt from you. Checks
received by you or a Selling Agent which conform to the foregoing
instructions shall be transmitted by you under Section 16 "Transmittal
Procedures," below.
You represent that you have or will execute the Escrow Agreement for each
Partnership and agree that you are bound by the terms of the Escrow
Agreements executed by you, for the respective Partnership, and the
Managing General Partner, copies of which are attached to this Agreement
as Exhibit "A-1" and "A-2."
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 a Partnership's minimum subscription proceeds
of $1,000,000 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 the end of
the next business day following receipt of the check by the
Selling Agent. By the end of the next business day following your
receipt of the check and the original executed subscription
agreement, you, as Dealer-Manager, shall transmit the check and a
copy of the executed subscription agreement to the Escrow Agent,
and the original executed subscription documents and a copy of
the check to the Managing General Partner.
(b) On receipt by you, as Dealer-Manager, of notice from the Managing
General Partner that a Partnership's minimum subscription
proceeds of $1,000,000 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 in which Units are then being offered.
Thereafter, the Selling Agents shall promptly transmit any and
all checks received from subscribers and the original executed
subscription documents to you as Dealer-Manager by the end of the
next business day following receipt of the check by the Selling
Agent. By the end of the next business day following your receipt
of the check and the original executed subscription 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 Partnerships, and their respective
successors and assigns, and the indemnified parties and their successors
and assigns, and for the benefit of no other person. No other person
shall have any legal or equitable right, remedy or claim under or in
respect of this Agreement. No purchaser of any of the Units from you or a
Selling Agent shall be construed a successor or assign merely by reason
of the purchase.
14
18. RELATIONSHIP. This Agreement shall not constitute you a partner of the
Managing General Partner, a Partnership, or any general partner of a
Partnership, nor render the Managing General Partner, the Partnerships,
or any general partner of a Partnership liable for any of your
obligations.
19. EFFECTIVE DATE. This Agreement is made effective between the parties as
of the date accepted by you as indicated by your signature to this
Agreement.
20. ENTIRE AGREEMENT, WAIVER.
(a) This Agreement constitutes the entire agreement between the
Managing General Partner and you, and shall not be amended or
modified in any way except by subsequent agreement executed in
writing. Neither party to this Agreement shall be liable or bound
to the other by any agreement except as specifically set forth in
this Agreement.
(b) The Managing General Partner and you may waive, but only in
writing, any term, condition, or requirement under this Agreement
that is intended for its benefit. However, any written waiver of
any term or condition of this Agreement shall not operate as a
waiver of any other breach of that term or condition of this
Agreement. Also, any failure to enforce any provision of this
Agreement shall not operate as a waiver of that provision or any
other provision of this Agreement.
21. COMPLAINTS. The Managing General Partner and you, as Dealer-Manager,
agree as follows:
(a) to notify the other if either receives an investor complaint in
connection with the offer or sale of Units by you or a Selling
Agent;
(b) to cooperate with the other in resolving the complaint; and
(c) to cooperate in any regulatory examination of the other to the
extent it involves this Agreement or the offer or sale of Units
by you or a Selling Agent.
22. PRIVACY. The Managing General Partner and you each acknowledge that
certain information made available to the other under this Agreement may
be deemed nonpublic personal information under the Xxxxx-Xxxxx-Xxxxxx
Act, other federal or state privacy laws (as amended), and the rules and
regulations promulgated thereunder, which are referred to collectively,
as the "Privacy Laws." The Managing General Partner and you agree as
follows:
(a) not to disclose or use the information except as required to
carry out each party's respective duties under this Agreement or
as otherwise permitted by law in the ordinary course of business;
(b) to establish and maintain procedures reasonably 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.
23. 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.
15
Very truly yours,
MANAGING GENERAL PARTNER
ATLAS RESOURCES, INC.,
a Pennsylvania corporation
March 2, 2004 By: /s/ Xxxx X. Xxxxxxxxx
------------- ---------------------------------------------------------
Date Xxxx X. Xxxxxxxxx, Senior Vice President - Direct
Participation Programs
ATLAS AMERICA SERIES 25-2004(A) L.P.
By: Atlas Resources, Inc.,
Managing General Partner
March 2, 2004 By: /s/ Xxxx X. Xxxxxxxxx
------------- ---------------------------------------------------------
Date Xxxx X. Xxxxxxxxx, Senior Vice President - Direct
Participation Programs
ATLAS AMERICA SERIES 25-2004(B) L.P.
By: Atlas Resources, Inc.,
Managing General Partner
March 2, 2004 By: /s/ Xxxx X. Xxxxxxxxx
------------- ---------------------------------------------------------
Date Xxxx X. Xxxxxxxxx, Senior Vice President - Direct
Participation Programs
DEALER-MANAGER
ANTHEM SECURITIES, INC.,
a Pennsylvania corporation
March 2, 2004 By: /s/ Xxxxxx Xxxxxxxx
------------- ---------------------------------------------------------
Date Xxxxxx Xxxxxxxx, President
16
EXHIBIT "A-1"
ATLAS AMERICA SERIES 25-2004(A) L.P.
ESCROW AGREEMENT
THIS AGREEMENT is made to be effective as of March 1, 2004, by and among
Atlas Resources, Inc., a Pennsylvania corporation (the "Managing General
Partner"), Anthem Securities, Inc., a Pennsylvania corporation ("Anthem"), Xxxxx
Funding, Inc., a Pennsylvania corporation ("Xxxxx Funding"), collectively Anthem
and Xxxxx Funding are referred to as the "Dealer-Manager," Atlas America Series
25-2004(A) L.P., a Delaware limited partnership (the "Partnership") and National
City Bank of Pennsylvania, Pittsburgh, Pennsylvania, as escrow agent (the
"Escrow Agent").
WITNESSETH:
WHEREAS, the Managing General Partner intends to offer for sale to
qualified investors (the "Investors") up to 2,400 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 13.5% ($3,375 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 from Accredited Investors with
larger subscriptions permitted in $1,000 increments.
WHEREAS, the Managing General Partner and Anthem have executed an agreement
("Anthem Dealer-Manager Agreement") under which Anthem will solicit
subscriptions for Units in all states other than Minnesota and New Hampshire on
a "best efforts" "all or none" basis for Subscription Proceeds of $1,000,000 and
on a "best efforts" basis for the remaining Units on behalf of the Managing
General Partner and the Partnership and under which Anthem has been authorized
to select certain members in good standing of the National Association of
Securities Dealers, Inc. ("NASD") to participate in the offering of the Units
("Selling Agents").
WHEREAS, the Managing General Partner and Xxxxx Funding have executed an
agreement ("Xxxxx Funding Dealer-Manager Agreement") under which Xxxxx Funding
will solicit subscriptions for Units in the states of Minnesota and New
Hampshire on a "best efforts" "all or none" basis for Subscription Proceeds of
$1,000,000 and on a "best efforts" basis for the remaining Units on behalf of
the Managing General Partner and the Partnership and under which Xxxxx Funding
has been authorized to select certain members in good standing of the NASD to
participate in the offering of the Units ("Selling Agents").
WHEREAS, the Anthem Dealer-Manager Agreement and the Xxxxx Funding
Dealer-Manager Agreement, collectively referred to as the "Dealer-Manager
Agreement," provide for compensation to the Dealer-Manager to participate in the
offering of the Units, subject to the discounts set forth above for certain
Investors, which compensation includes, but is not limited to, for each Unit
sold:
o a 3.5% Dealer-Manager fee;
o an 8% sales commission;
1
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
$1,000,000, including any optional subscription by the Managing General Partner,
its officers, directors, and Affiliates.
WHEREAS, the Units may also be offered and sold by the officers and
directors of the Managing General Partner without receiving a sales commission
or other compensation on their sales.
WHEREAS, no subscriptions to the Partnership will be accepted after the
"Offering Termination Date," which is the first to occur of either:
o receipt of the maximum Subscription Proceeds of $60,000,000; or
o May 31, 2004.
WHEREAS, to facilitate compliance with the terms of the Dealer-Manager
Agreement and Rule 15c2-4 adopted under the Securities Exchange Act of 1934, the
Managing General Partner and the Dealer-Manager desire to have the Subscription
Proceeds deposited with the Escrow Agent and the Escrow Agent agrees to hold the
Subscription Proceeds under the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement, the parties to this Agreement, intending to be
legally bound, agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The Managing General Partner, the Partnership,
and the Dealer-Manager appoint the Escrow Agent as the escrow agent to
receive and to hold the Subscription Proceeds deposited with the Escrow
Agent by the Dealer-Manager and the Managing General Partner under this
Agreement, and the Escrow Agent agrees to serve in this capacity during the
term and based on the provisions of this Agreement.
2. DEPOSIT OF SUBSCRIPTION PROCEEDS. Pending receipt of the minimum
Subscription Proceeds of $1,000,000, the Dealer-Manager and the Managing
General Partner shall deposit the Subscription Proceeds of each Investor to
whom they sell Units with the Escrow Agent and shall deliver to the Escrow
Agent a copy of the Subscription Agreement, 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 25-2004(A) L.P., Escrow Agent, National City Bank of Pennsylvania."
3. INVESTMENT OF SUBSCRIPTION PROCEEDS. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow Agent as
directed by the Managing General Partner. This may be a savings account,
bank money market account, short-term certificates 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.
2
4. DISTRIBUTION OF SUBSCRIPTION PROCEEDS. If the Escrow Agent:
(a) receives proper written notice from an authorized officer of the
Managing General Partner that at least the minimum Subscription
Proceeds of $1,000,000 have been received and accepted by the
Managing General Partner; and
(b) determines that Subscription Proceeds for at least $1,000,000 are
Distributable Subscription Proceeds;
then the Escrow Agent shall promptly release and distribute to the Managing
General Partner the Distributable Subscription Proceeds plus any interest
paid and investment income earned on the Subscription Proceeds while held
by the Escrow Agent in the escrow account. For purposes of the Agreement,
"Distributable Subscription Proceeds" are Subscription Proceeds which have
been deposited in the escrow account (1) by check, but only to the extent
the Escrow Agent believes an amount of time has passed which would usually
be sufficient for Subscription Proceeds paid by check to have returned
unpaid by the bank on which the check was drawn and (2) by wire transfer.
After the initial distribution, any remaining Subscription Proceeds, plus
any interest paid and investment income earned on the Subscription Proceeds
while held by the Escrow Agent in the escrow account, shall be promptly
released and distributed to the Managing General Partner by the Escrow
Agent as the Subscription Proceeds become Distributable Subscription
Proceeds after a 10 day period from the date of deposit.
The Managing General Partner shall immediately return to the Escrow Agent
any Subscription Proceeds distributed to the Managing General Partner or
refunded to an Investor to the extent that such Subscription Proceeds were
paid by a check which is returned or otherwise not collected for any reason
prior or subsequent to termination of this Agreement.
5. SEPARATE PARTNERSHIP ACCOUNT. During the continuation of the offering after
the Partnership is funded with cleared Subscription Proceeds of at least
$1,000,000 and the Escrow Agent receives the notice described in Paragraph
4 of this Agreement, and before the Offering Termination Date, any
additional Subscription Proceeds may be deposited by the Dealer-Manager and
the Managing General Partner directly in a separate Partnership account
which shall not be subject to the terms of this Agreement.
6. DISTRIBUTIONS TO SUBSCRIBERS.
(a) If the Partnership is not funded as contemplated because less than the
minimum Subscription Proceeds of $1,000,000 have been received and
accepted by the Managing General Partner by twelve (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 $1,000,000 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.
4
National City Bank of Pennsylvania is acting solely as the Escrow Agent and
is not a party to, nor has it reviewed or approved any agreement or matter
of background related to this Agreement, other than this Agreement itself,
and has assumed, without investigation, the authority of the individuals
executing this Agreement to be so authorized on behalf of the party or
parties involved.
10. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent may resign as such
after giving thirty days' prior written notice to the other parties to this
Agreement. Similarly, the Escrow Agent may be removed and replaced after
receiving thirty days' prior written notice from the other parties to this
Agreement. In either event, the duties of the Escrow Agent shall terminate
thirty days after the date of the notice (or as of an earlier date as may
be mutually agreeable); and the Escrow Agent shall then deliver the balance
of the Subscription Proceeds (and any interest paid or investment income
earned thereon while held by the Escrow Agent in the escrow account) in its
possession to a successor escrow agent appointed by the other parties to
this Agreement as evidenced by a written notice filed with the Escrow
Agent.
If the other parties to this Agreement are unable to agree on a successor
escrow agent or fail to appoint a successor escrow agent before the
expiration of thirty days following the date of the notice of the Escrow
Agent's resignation or removal, then the Escrow Agent may petition any
court of competent jurisdiction for the appointment of a successor escrow
agent or other appropriate relief. Any resulting appointment shall be
binding on all of the parties to this Agreement.
On acknowledgment by any successor escrow agent of the receipt of the then
remaining balance of the Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in the
escrow account), the Escrow Agent shall be fully released and relieved of
all duties, responsibilities, and obligations under this Agreement.
11. TERMINATION. This Agreement shall terminate and the Escrow Agent shall
have no further obligation with respect to this Agreement after the
distribution of all Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in the
escrow account) as contemplated by this Agreement or on the written consent
of all the parties to this Agreement.
12. NOTICE. Any notices or instructions, or both, to be given under this
Agreement shall be validly given if set forth in writing and mailed by
certified mail, return receipt requested, or by facsimile with confirmation
of receipt (originals to be followed in the mail), or by a nationally
recognized overnight courier, as follows:
If to the Escrow Agent:
National City Bank
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx XxXxxxx LOC 2111
Phone: (000) 000-0000
Facsimile: (000) 000-0000
5
If to the Managing General Partner:
Atlas Resources, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Black
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Anthem:
Anthem Securities, Inc.
000 Xxxxxx Xxxx
P.O. Box 926
Moon Township, Pennsylvania 15108
Attention: Xxxxxx Xxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxx Funding:
Xxxxx Funding, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may designate any other address to which notices and instructions
shall be sent by notice duly given in accordance with this Agreement.
13. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
(b) This Agreement shall be binding on and shall inure to the benefit of
the undersigned and their respective successors and assigns.
(c) This Agreement may be executed in multiple copies, each executed copy
to serve as an original.
6
14. The parties hereto and subscribers acknowledge Escrow Agent has not
reviewed and is not making any recommendations with respect to the
securities offered.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
NATIONAL CITY BANK OF PENNSYLVANIA
As Escrow Agent
By: /s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx, Vice President
ATLAS RESOURCES, INC.
A Pennsylvania corporation
By: /s/ Xxxxx X. Black
--------------------------------
Xxxxx X. Black, Vice President -
Partnership Administration
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx, President
XXXXX FUNDING, INC.
A Pennsylvania corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx.
--------------------------------
Xxxxxxx X. Xxxxx, Xx., President
ATLAS AMERICA SERIES 25-2004(A) L.P.
By: ATLAS RESOURCES, INC. Managing
General Partner
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxxx, Senior Vice
President - Direct Participation
Programs
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 "A-2"
ATLAS AMERICA SERIES 25-2004(B) L.P.
ESCROW AGREEMENT
THIS AGREEMENT is made to be effective as of June 1, 2004, by and among
Atlas Resources, Inc., a Pennsylvania corporation (the "Managing General
Partner"), Anthem Securities, Inc., a Pennsylvania corporation ("Anthem"), Xxxxx
Funding, Inc., a Pennsylvania corporation ("Xxxxx Funding"), collectively Anthem
and Xxxxx Funding are referred to as the "Dealer-Manager," Atlas America Series
25-2004(B) 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 1,200 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 13.5% ($3,375 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 from Accredited Investors with
larger subscriptions permitted in $1,000 increments.
WHEREAS, the Managing General Partner and Anthem have executed an agreement
("Anthem Dealer-Manager Agreement") under which Anthem will solicit
subscriptions for Units in all states other than Minnesota and New Hampshire on
a "best efforts" "all or none" basis for Subscription Proceeds of $1,000,000 and
on a "best efforts" basis for the remaining Units on behalf of the Managing
General Partner and the Partnership and under which Anthem has been authorized
to select certain members in good standing of the National Association of
Securities Dealers, Inc. ("NASD") to participate in the offering of the Units
("Selling Agents").
WHEREAS, the Managing General Partner and Xxxxx Funding have executed an
agreement ("Xxxxx Funding Dealer-Manager Agreement") under which Xxxxx Funding
will solicit subscriptions for Units in the states of Minnesota and New
Hampshire on a "best efforts" "all or none" basis for Subscription Proceeds of
$1,000,000 and on a "best efforts" basis for the remaining Units on behalf of
the Managing General Partner and the Partnership and under which Xxxxx Funding
has been authorized to select certain members in good standing of the NASD to
participate in the offering of the Units ("Selling Agents").
WHEREAS, the Anthem Dealer-Manager Agreement and the Xxxxx Funding
Dealer-Manager Agreement, collectively referred to as the "Dealer-Manager
Agreement," provide for compensation to the Dealer-Manager to participate in the
offering of the Units, subject to the discounts set forth above for certain
Investors, which compensation includes, but is not limited to, for each Unit
sold:
o a 3.5% Dealer-Manager fee;
o an 8% sales commission;
1
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
$1,000,000, including any optional subscription by the Managing General Partner,
its officers, directors, and Affiliates.
WHEREAS, the Units may also be offered and sold by the officers and
directors of the Managing General Partner without receiving a sales commission
or other compensation on their sales.
WHEREAS, no subscriptions to the Partnership will be accepted after the
"Offering Termination Date," which is the first to occur of either:
o receipt of the maximum Subscription Proceeds of $60,000,000 reduced by
what was received in Atlas America Series 25-2004(A) L.P.; or
o August 31, 2004 extendible up to October 15, 2004.
WHEREAS, to facilitate compliance with the terms of the Dealer-Manager
Agreement and Rule 15c2-4 adopted under the Securities Exchange Act of 1934, the
Managing General Partner and the Dealer-Manager desire to have the Subscription
Proceeds deposited with the Escrow Agent and the Escrow Agent agrees to hold the
Subscription Proceeds under the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement, the parties to this Agreement, intending to be
legally bound, agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The Managing General Partner, the Partnership,
and the Dealer-Manager appoint the Escrow Agent as the escrow agent to
receive and to hold the Subscription Proceeds deposited with the Escrow
Agent by the Dealer-Manager and the Managing General Partner under this
Agreement, and the Escrow Agent agrees to serve in this capacity during the
term and based on the provisions of this Agreement.
2. DEPOSIT OF SUBSCRIPTION PROCEEDS. Pending receipt of the minimum
Subscription Proceeds of $1,000,000, the Dealer-Manager and the Managing
General Partner shall deposit the Subscription Proceeds of each Investor to
whom they sell Units with the Escrow Agent and shall deliver to the Escrow
Agent a copy of the Subscription Agreement, 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 25-2004(B) 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 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.
2
4. DISTRIBUTION OF SUBSCRIPTION PROCEEDS. If the Escrow Agent:
(a) receives proper written notice from an authorized officer of the
Managing General Partner that at least the minimum Subscription
Proceeds of $1,000,000 have been received and accepted by the
Managing General Partner; and
(b) determines that Subscription Proceeds for at least $1,000,000 are
Distributable Subscription Proceeds;
then the Escrow Agent shall promptly release and distribute to the Managing
General Partner the Distributable Subscription Proceeds plus any interest
paid and investment income earned on the Subscription Proceeds while held
by the Escrow Agent in the escrow account. For purposes of the Agreement,
"Distributable Subscription Proceeds" are Subscription Proceeds which have
been deposited in the escrow account (1) by check, but only to the extent
the Escrow Agent believes an amount of time has passed which would usually
be sufficient for Subscription Proceeds paid by check to have returned
unpaid by the bank on which the check was drawn and (2) by wire transfer.
After the initial distribution, any remaining Subscription Proceeds, plus
any interest paid and investment income earned on the Subscription Proceeds
while held by the Escrow Agent in the escrow account, shall be promptly
released and distributed to the Managing General Partner by the Escrow
Agent as the Subscription Proceeds become Distributable Subscription
Proceeds after a 10 day period from the date of deposit.
The Managing General Partner shall immediately return to the Escrow Agent
any Subscription Proceeds distributed to the Managing General Partner or
refunded to an Investor to the extent that such Subscription Proceeds were
paid by a check which is returned or otherwise not collected for any reason
prior or subsequent to termination of this Agreement.
5. SEPARATE PARTNERSHIP ACCOUNT. During the continuation of the offering after
the Partnership is funded with cleared Subscription Proceeds of at least
$1,000,000 and the Escrow Agent receives the notice described in Paragraph
4 of this Agreement, and before the Offering Termination Date, any
additional Subscription Proceeds may be deposited by the Dealer-Manager and
the Managing General Partner directly in a separate Partnership account
which shall not be subject to the terms of this Agreement.
6. DISTRIBUTIONS TO SUBSCRIBERS.
(a) If the Partnership is not funded as contemplated because less than
the minimum Subscription Proceeds of $1,000,000 have been received
and accepted by the Managing General Partner by twelve (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 $1,000,000 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.
4
National City Bank of Pennsylvania is acting solely as the Escrow Agent and
is not a party to, nor has it reviewed or approved any agreement or matter
of background related to this Agreement, other than this Agreement itself,
and has assumed, without investigation, the authority of the individuals
executing this Agreement to be so authorized on behalf of the party or
parties involved.
10. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent may resign as such
after giving thirty days' prior written notice to the other parties to this
Agreement. Similarly, the Escrow Agent may be removed and replaced after
receiving thirty days' prior written notice from the other parties to this
Agreement. In either event, the duties of the Escrow Agent shall terminate
thirty days after the date of the notice (or as of an earlier date as may
be mutually agreeable); and the Escrow Agent shall then deliver the balance
of the Subscription Proceeds (and any interest paid or investment income
earned thereon while held by the Escrow Agent in the escrow account) in its
possession to a successor escrow agent appointed by the other parties to
this Agreement as evidenced by a written notice filed with the Escrow
Agent.
If the other parties to this Agreement are unable to agree on a successor
escrow agent or fail to appoint a successor escrow agent before the
expiration of thirty days following the date of the notice of the Escrow
Agent's resignation or removal, then the Escrow Agent may petition any
court of competent jurisdiction for the appointment of a successor escrow
agent or other appropriate relief. Any resulting appointment shall be
binding on all of the parties to this Agreement.
On acknowledgment by any successor escrow agent of the receipt of the then
remaining balance of the Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in the
escrow account), the Escrow Agent shall be fully released and relieved of
all duties, responsibilities, and obligations under this Agreement.
11. TERMINATION. This Agreement shall terminate and the Escrow Agent shall have
no further obligation with respect to this Agreement after the distribution
of all Subscription Proceeds (and any interest paid or investment income
earned thereon while held by the Escrow Agent in the escrow account) as
contemplated by this Agreement or on the written consent of all the parties
to this Agreement.
12. NOTICE. Any notices or instructions, or both, to be given under this
Agreement shall be validly given if set forth in writing and mailed by
certified mail, return receipt requested, or by facsimile with confirmation
of receipt (originals to be followed in the mail), or by a nationally
recognized overnight courier, as follows:
If to the Escrow Agent:
National City Bank
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx XxXxxxx LOC 2111
Phone: (000) 000-0000
Facsimile: (000) 000-0000
5
If to the Managing General Partner:
Atlas Resources, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Black
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Anthem:
Anthem Securities, Inc.
000 Xxxxxx Xxxx
P.O. Box 926
Moon Township, Pennsylvania 15108
Attention: Xxxxxx Xxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxx Funding:
Xxxxx Funding, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may designate any other address to which notices and instructions
shall be sent by notice duly given in accordance with this Agreement.
13. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
(b) This Agreement shall be binding on and shall inure to the benefit of
the undersigned and their respective successors and assigns.
(c) This Agreement may be executed in multiple copies, each executed copy
to serve as an original.
6
14. The parties hereto and subscribers acknowledge Escrow Agent has not
reviewed and is not making any recommendations with respect to the
securities offered.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
NATIONAL CITY BANK OF PENNSYLVANIA
As Escrow Agent
By: /s/ Xxxxx Xxxxx
-------------------------------------
(Authorized Officer)
ATLAS RESOURCES, INC.
A Pennsylvania corporation
By: /s/ Xxxxx X. Black
-------------------------------------
Xxxxx X. Black, Vice President -
Partnership Administration
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxx, President
XXXXX FUNDING, INC.
A Pennsylvania corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------------------
Xxxxxxx X. Xxxxx, Xx., President
ATLAS AMERICA SERIES 25-2004(B) L.P.
By: ATLAS RESOURCES, INC.
Managing General Partner
By: /s/ Xxxxx X. Black
-------------------------------------
Xxxxx X. 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 25-2004 PROGRAM
Gentlemen:
Atlas Resources, Inc. is the Managing General Partner in up to two
limited partnerships organized under the Delaware Revised Uniform Limited
Partnership Act:
o Atlas America Series 25-2004(A) L.P.; and
o Atlas America Series 25-2004(B) L.P.
which are referred to as the "Partnership" or the "Partnerships." The units in
the Partnerships, which are referred to as the "Units," and the offering are
described in the enclosed Private Placement Memorandum dated March 8, 2004,
which is referred to as the "Private Placement Memorandum." Numbered Private
Placement Memoranda relating to the Units have been furnished to you with this
Agreement.
Our firm, Anthem Securities, Inc., which is referred to as the
"Dealer-Manager," has entered into a Dealer-Manager Agreement for sales in all
states other than Minnesota and New Hampshire, a copy of which has been
furnished to you and is incorporated in this Agreement by reference, with the
Managing General Partner and the Partnerships under which the Dealer-Manager has
agreed to form a group of NASD member firms, which are referred to as the
"Selling Agents." The Selling Agents will obtain subscriptions for Units in each
Partnership in all states other than:
o Minnesota; and
o New Hampshire
on a "best efforts" basis so as to qualify for the exemption contained in
Regulation D, which is referred to as "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 each Partnership at the time
the Partnership is being offered as provided in Section 1 of the Dealer-Manager
Agreement in all states other than:
o Minnesota; and
o New Hampshire.
1
This Agreement, however, shall not be construed to prohibit your participation
as a selling agent in Minnesota and New Hampshire under a duly executed selling
agent agreement entered into by you and any other authorized "Dealer-Manager"
for the Partnerships.
1. REPRESENTATIONS AND WARRANTIES OF SELLING AGENT. You represent and
warrant to the Dealer-Manager that:
(a) You are a corporation duly organized, validly existing, and in
good standing under the laws of the state of your formation or
of any jurisdiction to the laws of which you are subject, with
all requisite power and authority to enter into this Agreement
and to carry out your obligations under this Agreement.
(b) This Agreement when accepted and approved by you will be duly
authorized, executed, and delivered by you and will be a valid
and binding agreement on your part in accordance with its
terms.
(c) The consummation of the transactions contemplated by this
Agreement and the 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:
2
(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
(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 relating to the Units and you have relied
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 and numbered copy of the Private
Placement Memorandum and all exhibits
incorporated in the Private Placement
Memorandum; and
(2) any numbered supplement or amendment to the
Private Placement Memorandum for the
Partnership in which the Units are then being
offered as set forth in (iv) below.
Also, unless advised otherwise by the Managing
General Partner, you may choose to provide each offeree
with the following sales materials which are
collectively referred to as the "Sales Literature":
(1) a flyer entitled "Atlas America Series 25-2004
Program";
(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 25-2004
Program can Help Achieve an Investor's Tax
Objectives";
(4) a brochure entitled "Investing in Atlas America
Series 25-2004 Program";
(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";
3
(7) a brochure entitled "Investment Insights - Tax
Time";
(8) a brochure entitled "Frequently Asked
Questions"; and
(9) possibly other supplementary materials.
Further, you shall keep file memoranda indicating by
number to whom each Private Placement Memorandum,
Sales Literature, and supplement or amendment to the
Private Placement Memorandum was delivered.
(iv) When a 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 copy of the Private Placement
Memorandum from you, see Section 4(e) of the
Dealer-Manager Agreement;
(2) to include each supplement or amendment in all
future deliveries of any Private Placement
Memorandum; 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 a 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 and his purchaser
representative(s), if any, 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.
4
(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.
(viii) Before the sale of any of the Units you shall have
reasonable grounds to believe that:
(1) each subscriber is an "accredited investor" as
that term is defined in Rule 501(a) of
Regulation D; or
(2) each subscriber and his duly appointed
purchaser representative, if any, meet the
standards of Rule 506(b)(2)(ii) of Regulation
D.
Further, if the subscriber uses a purchaser
representative, then you shall do the following:
(1) make reasonable inquiry to determine if the
purchaser representative(s) satisfies all of
the conditions of Rule 501(h) of Regulation D;
(2) obtain a written acknowledgment by the
subscriber concerning his purchaser
representative(s); and
(3) before obtaining the foregoing acknowledgment,
disclose to the subscriber, in writing, any
material relationship between his purchaser
representative(s) or its affiliates and the
Managing General Partner or its affiliates,
which then exists or mutually is understood to
be contemplated or which has existed at any
time during the previous two years, and any
compensation received or to be received as a
result of that relationship.
(ix) Units shall not be sold by you to more than a total of
35 non-accredited investors in the Partnerships
combined as indicated to you from time to time by the
Managing General Partner or the Dealer-Manager.
(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;
5
(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
each 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)];
(B) the Execution Page and Purchaser
Questionnaire [Exhibit (C)];
(C) the Purchaser Representative
Acknowledgment Form, if applicable,
[Annex A-1 to Exhibit (C)]; and
(D) the Acknowledgment of the Investor, if
applicable, [Annex A-1 to 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. In this regard,
see Section 4(e) of the Dealer-Manager Agreement.
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
(ii) you shall and have fulfilled all your obligations under
this Agreement at the applicable closing date.
2. COMMISSIONS AND FEES.
(a) Subject to the receipt of the minimum required subscription
proceeds of $1,000,000 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 an 8%
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 a Partnership
secured by the Dealer-Manager or the selling group formed by
the Dealer-Manager and accepted by the Managing General
Partner.
6
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) an 8% Sales Commission;
(ii) a .5% nonaccountable due diligence fee per Unit;
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 your national
sales conferences, costs associated with being
a preferred sponsor, and regional and/or local
meetings that are coordinated by your home
office and/or marketing department for
registered representatives.
(b) Your compensation which is owed to you as set forth
above, other than 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 are
satisfied and approximately every two weeks thereafter
until the respective Partnership's Offering Termination
Date, which is described in Section 1 of the
Dealer-Manager Agreement. The balance shall be paid to
the Dealer-Manager within fourteen business days after
the respective Partnership's Offering Termination Date.
The amount of 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
respective 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 subscriptions of at least six Units each in
either Partnership or in both Partnerships combined you
shall share in payments from the Managing General
Partner equal to 1% of both Partnerships' 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 subscriptions of at least six Units each in
either Partnership or both Partnerships combined bears
to the total amount of subscriptions sold by all
registered representatives and/or principals
(including registered representatives and principals
of the Dealer-Manager) in all of the states (including
Minnesota and New Hampshire) who sell subscriptions
of at least six Units each in either Partnership or
in both Partnerships combined. These payments shall be
made quarterly.
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(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, a Partnership shall not begin operations
unless it receives subscription proceeds for at least
$1,000,000 by its respective Offering Termination Date.
If this amount is not secured by the respective
Partnership's Offering Termination Date, then nothing
shall be payable to you for the respective Partnership
and all funds advanced by subscribers for Units in the
respective Partnership shall be returned to them with
interest earned, if any.
3. BLUE SKY QUALIFICATION. The Managing General Partner may elect not to
qualify or register Units in any state or jurisdiction in which it
deems the qualification or registration is not warranted for any reason
in its sole discretion. On application to the Dealer-Manager you will
be informed as to the states and jurisdictions in which the Units have
been qualified for sale or are exempt under the respective securities
or "Blue Sky" laws of those states and jurisdictions.
Notwithstanding the foregoing, the Dealer-Manager, the Partnerships,
and the Managing General Partner have not assumed and will not assume
any obligation or responsibility as to your right to act as a
broker/dealer with respect to the Units in any state or jurisdiction.
4. EXPENSE OF SALE. The expenses in connection with the offer and sale of
the Units shall be payable as set forth below.
(a) The Dealer-Manager shall pay all expenses incident to the
performance of its obligations under this Agreement, including
the fees and expenses of its attorneys and accountants, even if
the offering of any or all of the Partnerships is not
successfully completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the fees and
expenses of your own counsel and accountants, even if the
offering of any or all of the Partnerships is not successfully
completed.
5. CONDITIONS OF YOUR DUTIES. Your obligations under this Agreement, as of
the date of this Agreement and at the applicable closing date, shall be
subject to the following:
(a) the performance by the Dealer-Manager of its obligations under
this Agreement; and
(b) the performance by the Managing General Partner of its
obligations under the Dealer-Manager Agreement.
6. CONDITIONS OF DEALER-MANAGER'S DUTIES. The Dealer-Manager's obligations
under this Agreement, including the duty to pay compensation and
reimbursements to you as set forth in Section 2 of this Agreement, shall
be subject to the following:
8
(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.
7. INDEMNIFICATION.
(a) You shall indemnify and hold harmless the Dealer-Manager, the
Managing General Partner, each Partnership and its attorneys
against any losses, claims, damages or liabilities, joint or
several, to which they may become subject under the Act, the Act
of 1934, or otherwise insofar as the losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are
based on your breach of any of your duties and obligations,
representations, or warranties under the terms or provisions of
this Agreement, and you shall reimburse them for any legal or
other expenses reasonably incurred in connection with
investigating or defending the losses, claims, damages,
liabilities, or actions.
(b) The Dealer-Manager shall indemnify and hold you harmless against
any losses, claims, damages, or liabilities, joint or several, to
which you may become subject under the Act, the Act of 1934, or
otherwise insofar as the losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based on the
Dealer-Manager's breach of any of its duties and obligations,
representations, or warranties under the terms or provisions of
this Agreement, and the Dealer-Manager shall reimburse you for
any legal or other expenses reasonably incurred in connection
with investigating or defending the losses, claims, damages,
liabilities, or actions.
(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.
9
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations,
warranties, and agreements of the Dealer-Manager and you in this
Agreement, including the indemnity agreements contained in Section 7 of
this Agreement, shall:
(a) survive the delivery, execution and closing of this Agreement;
(b) remain operative and in full force and effect regardless of any
investigation made by or on behalf of you or any person who
controls you within the meaning of the Act, by the
Dealer-Manager, or any of its officers, directors or any person
who controls the Dealer-Manager within the meaning of the Act, or
any other indemnified party; and
(c) survive delivery of the Units.
9. TERMINATION.
(a) You shall have the right to terminate this Agreement other than
the indemnification provisions of Section 7 of this Agreement by
giving notice as specified in Section 16 of this Agreement any
time at or before a closing date:
(i) if the Dealer-Manager has failed, refused, or been
unable at or before a closing date, to perform any of
its obligations under this Agreement; or
(ii) there has occurred an event materially and adversely
affecting the value of the Units.
If you elect to terminate this Agreement other than the
indemnification provisions of Section 7 of this Agreement,
then the Dealer-Manager shall be promptly notified by you by
telephone, e-mail, facsimile, or telegram, confirmed by
letter.
(b) The Dealer-Manager may terminate this Agreement other than the
indemnification provisions of Section 7 of this Agreement, for
any reason and at any time, by promptly giving notice to you by
telephone, e-mail, facsimile or telegram, confirmed by letter.
10. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum
subscription proceeds of $1,000,000 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 respective Partnership in which the
Units are then being offered as follows:
(a) "Atlas Series 25-2004(A) L.P., Escrow Agent, National City Bank
of PA"; or
(b) "Atlas Series 25-2004(B) L.P., Escrow Agent, National City Bank
of PA."
10
Also, you, including if you are a customer carrying broker/dealer,
agree to comply with Rule 15c2-4 adopted under the Act of 1934. In
addition, for identification purposes, wire transfers should reference
the subscriber's name and the account number of the escrow account for
the Partnership in which the Units are then being offered.
If you receive a check not conforming to the foregoing instructions,
then you shall return the check directly to the subscriber not later
than the end of the next business day following its receipt by you from
the subscriber. If the Dealer-Manager receives a check not conforming
to the foregoing instructions, then the Dealer-Manager shall return the
check to you not later than the end of the next business day following
its receipt by the Dealer-Manager and you shall then return the check
directly to the subscriber not later than the end of the next business
day following its receipt by you from the Dealer-Manager. Checks
received by you which conform to the foregoing instructions shall be
transmitted by you under Section 11 "Transmittal Procedures," below.
You agree that you are bound by the terms of the Escrow Agreement, a
copy of which is attached to the Dealer-Manager Agreement as Exhibit
"A-1" and "A-2."
11. TRANSMITTAL PROCEDURES. You, including if you are a customer carrying
broker/dealer, shall transmit received investor funds in accordance
with the following procedures.
(a) Pending receipt of a Partnership's minimum subscription proceeds
of $1,000,000 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 the end of the
next business day following receipt of the check by you. By the
end of the next business day following its receipt of the check
and the original executed subscription documents, the
Dealer-Manager shall transmit the check and a copy of the
executed subscription agreement to the Escrow Agent, and the
original executed subscription documents and a copy of the check
to the Managing General Partner.
(b) On receipt by you of notice from the Managing General Partner or
the Dealer-Manager that a Partnership's minimum subscription
proceeds of $1,000,000 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 then being offered.
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 the end of the
next business day following receipt of the check by you. By the
end of the next business day following its receipt of the check
and original subscription 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.
11
13. RELATIONSHIP. You are not authorized to hold yourself out as agent of
the Dealer-Manager, the Managing General Partner, a Partnership or any
other Selling Agent. This Agreement shall not constitute you a partner
of the Managing General Partner, the Dealer-Manager, a Partnership, any
general partner of a Partnership, or any other Selling Agent, nor
render the Managing General Partner, the Dealer-Manager, the
Partnerships, any general partner of a Partnership, or any other
Selling Agent, liable for any of your obligations.
14. EFFECTIVE DATE. This Agreement is made effective between the parties as
of the date accepted by you as indicated by your signature to this
Agreement.
15. ENTIRE AGREEMENT, WAIVER.
(a) This Agreement constitutes the entire agreement between the
Dealer-Manager and you, and shall not be amended or modified in
any way except by subsequent agreement executed in writing.
Neither party to this Agreement shall be liable or bound to the
other by any agreement except as specifically set forth in this
Agreement.
(b) The Dealer-Manager and you may waive, but only in writing, any
term, condition, or requirement under this Agreement that is
intended for its benefit. However, any written waiver of any term
or condition of this Agreement shall not operate as a waiver of
any other breach of the term or condition of this Agreement.
(c) Also, any failure to enforce any provision of this Agreement
shall not operate as a waiver of that provision or any other
provision of this Agreement.
16. NOTICES.
(a) Any communications from you shall be in writing addressed to the
Dealer-Manager at X.X. Xxx 000, Xxxx Xxxxxxxx, Xxxxxxxxxxxx
00000-0000.
(b) Any notice from the Dealer-Manager to you shall be deemed to have
been duly given if mailed, faxed or telegraphed to you at your
address shown below.
17. COMPLAINTS. The Dealer-Manager and you agree as follows:
(a) to notify the other if either receives an investor complaint in
connection with the offer or sale of Units by you;
(b) to cooperate with the other in resolving the complaint; and
(c) to cooperate in any regulatory examination of the other to the
extent it involves this Agreement or the offer or sale of Units
by you.
18. PRIVACY. The Dealer-Manager and you each acknowledge that certain
information made available to the other under this Agreement may be
deemed nonpublic personal information under the Xxxxx-Xxxxx-Xxxxxx Act,
other federal or state privacy laws (as amended), and the rules and
regulations promulgated thereunder, which are referred to collectively
as the "Privacy Laws." The Dealer-Manager and you agree as follows:
12
(a) not to disclose or use the information except as required to
carry out each party's respective duties under this Agreement or
as otherwise permitted by law in the ordinary course of business;
(b) to establish and maintain procedures reasonably designed to
assure the security and privacy of all the information; and
(c) to cooperate with the other and provide reasonable assistance in
ensuring compliance with the Privacy Laws to the extent
applicable to either or both the Dealer-Manager and you.
19. ANTI-MONEY LAUNDERING PROVISION. You represent and warrant to the
Managing General Partner and the Dealer-Manager that you have in place
and will maintain suitable and adequate "know your customer" policies
and procedures and that you shall comply with all applicable laws and
regulations regarding anti-money laundering activity and will provide
such documentation to the Managing General Partner and the
Dealer-Manager on written request.
20. ACCEPTANCE. Please confirm your agreement to become a Selling Agent
under the terms and conditions set forth above by signing and returning
the enclosed duplicate copy of this Agreement to us at the address set
forth above.
Sincerely,
, 2004 ANTHEM SECURITIES, INC.
-----------------------------
Date
ATTEST:
By:
----------------------------- -----------------------------
(SEAL) Secretary Xxxxxx Xxxxxxxx, President
13
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 numbered Private Placement Memoranda and Sales Literature and a
copy of the Dealer-Manager Agreement referred to above.
, 2004 ,
----------------------------- -----------------------------------
Date a(n) _________________ corporation,
ATTEST:
By:
----------------------------- ------------------------------
(SEAL) Secretary ___________________, President
-----------------------------------
(Address)
-----------------------------------
-----------------------------------
-----------------------------------
(Telephone Number)
Our CRD Number is
---------------
Our Tax ID Number is
---------------
14
APPENDIX I TO SELLING AGENT AGREEMENT
In consideration for the payment to you, as Selling Agent, by the Dealer-Manager
of an 8% sales commission, a 1.5% nonaccountable marketing expense fee subject
to the reductions set forth in Section 2(a)(iii) and a .5% nonaccountable due
diligence fee as set forth in Section 2(a) of the Selling Agent Agreement, you
warrant, represent, covenant, and agree with the Dealer-Manager that you, as
Selling Agent, shall do the following:
o prominently and promptly announce your participation in the
offering as Selling Agent to your registered representatives,
whether by newsletter, e-mail, mail or otherwise, which
announcement also shall advise your registered representatives to
contact our Regional Marketing Director in whose territory the
registered representative is located (the information concerning
our Regional Marketing Directors has been provided to you by
separate correspondence) with a copy of the announcement provided
concurrently to the Dealer-Manager; and
o provide the Dealer-Manager with the names, telephone numbers,
addresses and e-mail addresses of your registered
representatives, which information shall be kept confidential by
the Dealer-Manager and the Managing General Partner and shall not
be used for any purpose other than the marketing of the offering
as set forth in the Dealer-Manager Agreement and the Selling
Agent Agreement. Further, you, as Selling Agent, agree that the
Dealer-Manager and the Managing General Partner may directly
contact your registered representatives, in person or otherwise,
to:
o inform them of the offering;
o explain the merits and risks of the offering; and
o otherwise assist in your registered representatives' efforts to
solicit and sell Units.
15