EXHIBIT 1(a)
DEALER-MANAGER AGREEMENT
WITH
ANTHEM SECURITIES, INC.
ANTHEM SECURITIES, INC.
DEALER-MANAGER AGREEMENT
TABLE OF CONTENTS
PAGE
1. Description of Units.........................................................................1
2. Representations, Warranties and Agreements of the Managing General Partner...................1
3. Grant of Authority to the Dealer-Manager.....................................................2
4. Compensation and Fees........................................................................2
5. Covenants of the Managing General Partner....................................................3
6. Representations and Warranties of Dealer-Manager.............................................3
7. State Securities Registration................................................................7
8. Expense of Sale..............................................................................7
9. Conditions of Your Duties....................................................................7
10. Conditions of the Managing General Partner's Duties..........................................8
11. Indemnification..............................................................................8
12. Representations and Agreements to Survive Delivery...........................................8
13. Termination..................................................................................9
14. Notices......................................................................................9
15. Format of Checks/Escrow Agent................................................................9
16. Transmittal Procedures.......................................................................9
17. Parties.....................................................................................10
18. Relationship................................................................................10
19. Effective Date..............................................................................10
20. Entire Agreement, Waiver....................................................................10
Exhibit A - Escrow Agreement
Exhibit B - Selling Agent Agreement
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ANTHEM SECURITIES, INC.
DEALER-MANAGER AGREEMENT
(Best Efforts)
RE: ATLAS AMERICA PUBLIC #10 LTD.
Anthem Securities, Inc.
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Gentlemen:
The undersigned, Atlas Resources, Inc. ( the "Managing General Partner"),
on behalf of ATLAS AMERICA PUBLIC #10 LTD., hereby confirms its agreement with
you as Dealer-Manager as follows:
1. DESCRIPTION OF UNITS. The Managing General Partner has formed a limited
partnership known as Atlas America Public #10 Ltd. (the "Partnership"),
which will issue and sell Units in the Partnership (the "Units") at a
price of $10,000 per Unit. Subject to the receipt and acceptance by the
Managing General Partner of the minimum subscription proceeds of
$1,000,000, there will be two closings, which are tentatively set for
November 1, 2001 (the "Initial Closing Date"), and December 31, 2001.
No subscriptions to the Partnership will be accepted after receipt of
the maximum subscription proceeds of $25,000,000 or December 31, 2001,
whichever event occurs first (the "Offering Termination Date").
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 been or will be registered with the Securities
and Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "Act").
(b) The Managing General Partner shall provide to you for delivery
to all offerees and purchasers and their representatives such
information and documents as the Managing General Partner
deems appropriate to comply with the Act and applicable state
securities ("blue sky") laws.
(c) The Units when issued will be duly authorized and validly
issued as set forth in the Amended and Restated Certificate
and Agreement of Limited Partnership of the Partnership
("Partnership Agreement") set forth as Exhibit (A) to the
offering circular (the "Prospectus") and subject only to the
rights and obligations set forth in the Partnership Agreement
or imposed by the laws of the state of formation of the
Partnership or of any jurisdiction to the laws of which the
Partnership is subject.
(d) The Partnership was duly formed pursuant to the laws of the
Commonwealth of
Pennsylvania and is validly existing as a
limited partnership in good standing under the laws of
Pennsylvania with full power and authority to own its
properties and conduct its business as described in the
Prospectus. The Partnership will be qualified to do business
as a limited partnership or similar entity offering limited
liability in those jurisdictions where the Managing General
Partner deems such qualification necessary to assure limited
liability of the limited partners.
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(e) The Prospectus, as heretofore or hereafter 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 therein, in the light of the circumstances
under which they are made, not misleading.
3. GRANT OF AUTHORITY TO THE DEALER-MANAGER. On the basis of the
representations and warranties contained in this Agreement, and subject
to the terms and conditions set forth in this Agreement, the Managing
General Partner hereby appoints you as the Dealer-Manager for the
Partnership and gives you the exclusive right to solicit subscriptions
for the Units on a "best efforts" basis in all states other than:
(a) Minnesota; and
(b) New Hampshire.
In all states, other than Minnesota and New Hampshire, you agree to use
your best efforts to effect such sales and to form and manage a selling
group composed of soliciting broker-dealers ("Selling Agents"), each of
which shall be a member of the National Association of Securities
Dealers, Inc. ("NASD"), pursuant to "Selling Agent Agreements" in
substantially the form attached hereto as Exhibit "B."
The Managing General Partner shall have three business days after the
receipt of an executed Selling Agent Agreement to refuse that Selling
Agent's participation.
4. COMPENSATION AND FEES.
(a) As Dealer-Manager you shall receive from the Partnership the
following fees and other compensation based on each Unit sold
to investors who are situated and/or residents in states other
than Minnesota and New Hampshire and accepted by the Managing
General Partner:
(i) a 2.5% Dealer-Manager fee;
(ii) a 7.0% Sales Commission;
(iii) a .5% reimbursement of marketing expenses; and
(iv) a .5% reimbursement of the Selling Agents' bona fide
accountable due diligence expenses.
(b) The 7.0% Sales Commission, the .5% reimbursement of marketing
expenses and the .5% reimbursement of bona fide accountable
due diligence expenses shall be reallowed to the Selling
Agents. The 2.5% Dealer-Manager fee shall be reallowed to the
wholesalers for subscriptions obtained through the
wholesalers' effort.
(c) Notwithstanding the foregoing, the Managing General Partner,
its officers, directors and Affiliates, and investors who buy
Units through the officers and directors of the Managing
General Partner may subscribe to Units for a subscription
price reduced by the 2.5% Dealer-Manager fee, the 7.0% Sales
Commission, the .5% reimbursement of marketing expenses and
the .5% reimbursement of the Selling Agents' bona fide
accountable due diligence expenses which will not be paid to
you. Also, the following investors may subscribe to Units for
a subscription price reduced by the 7.0% Sales Commission, the
.5% reimbursement of marketing expenses and the .5%
reimbursement of the Selling Agents' bona fide accountable due
diligence expenses, which will not be paid to you, although
their subscription price will not be reduced by the 2.5%
Dealer-Manager fee which will be paid to you:
(i) registered investment advisors and their clients; and
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(ii) Selling Agents and their registered representatives and
principals.
(d) Pending receipt and acceptance by the Managing General Partner
of the minimum subscription proceeds of $1,000,000 excluding:
(i) any optional subscription by the Managing General
Partner and its Affiliates; and
(ii) the subscription discounts set forth in Section 4(c) of
this Agreement;
all proceeds received by you from the sale of Units shall be
held in a separate interest bearing escrow account as provided
in Section 15 of this Agreement.
Unless at least the minimum subscription proceeds of
$1,000,000 as described above are received on or before the
Offering Termination Date as described in Section 1 of this
Agreement, the offering shall be terminated, in which event
none of the fees, Sales Commissions and reimbursements set
forth in Section 4(a) of this Agreement shall be payable to
you and all funds advanced by purchasers shall be returned to
them with interest earned. In addition, you shall deliver a
termination letter in the form provided to you by the Managing
General Partner to each of the subscribers and to each of the
offerees previously solicited by you and the Selling Agents in
connection with the offering of the Units.
(e) Except as otherwise provided above, the fees, Sales
Commissions and reimbursements set forth in Section 4(a) of
this Agreement, shall be paid to you within five business days
after at least the minimum subscription proceeds of $1,000,000
as described above have been received by the Partnership and
accepted by the Managing General Partner and the subscription
proceeds have been released from the escrow account to the
Managing General Partner. You shall reallow to the Selling
Agents and the wholesalers their respective fees, Sales
Commissions and reimbursements as set forth in Section 4(b) of
this Agreement. Thereafter, your fees, Sales Commissions and
reimbursements shall be paid to you and shall be reallowed to
the Selling Agents and wholesalers as described above
approximately every two weeks until the Partnership's Offering
Termination Date and all your remaining fees, Sales
Commissions and reimbursements shall be paid no later than
fourteen business days after the Partnership's Offering
Termination Date.
5. COVENANTS OF THE MANAGING GENERAL PARTNER. The Managing General Partner
covenants and agrees that:
(a) The Managing General Partner shall deliver to you ample copies
of the Prospectus and of all amendments or supplements to the
Prospectus, heretofore or hereafter made, including all
exhibits and other documents included therein.
(b) If any event affecting the Partnership or the Managing General
Partner occurs which in the opinion of the Managing General
Partner should be set forth in a supplement to or an amendment
of the Prospectus, then the Managing General Partner shall
forthwith at its expense prepare and furnish to you a
sufficient number of copies of a supplement or amendment to
the Prospectus so that it, as so supplemented or amended, will
not contain an untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they are made, not misleading.
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6. REPRESENTATIONS AND WARRANTIES OF DEALER-MANAGER. You, as the
Dealer-Manager, represent and warrant to and agree with 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 hereunder.
(b) This Agreement when accepted and approved will be duly
authorized, executed and delivered by you and will be a valid
and binding agreement on your part in accordance with its
terms.
(c) The consummation of the transactions contemplated by this
Agreement and the Prospectus will not result in any breach of
any of the terms or conditions of, or constitute a default
under your Articles of Incorporation, Bylaws, any indenture,
agreement or other instrument to which you are a party, or
violate any order applicable to you of any court or any
federal or state regulatory body or administrative agency
having jurisdiction over you or over your affiliates.
(d) You are duly registered pursuant to the provisions of the
Securities Exchange Act of 1934 (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 in which
you are required to be registered in order to carry out your
obligations as contemplated by this Agreement and the
Prospectus. You agree to maintain all the foregoing
registrations in good standing throughout the term of the
offer and sale of the Units and you agree to comply with all
statutes and other requirements applicable to you as a
broker/dealer pursuant to 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 the provisions of the
Act, insofar as the Act applies to your and their activities
under this Agreement. Further, you and the Selling Agents
shall not engage in any activity which would cause the offer
and/or sale of Units not to comply with the Act, the Act of
1934 and the applicable rules and regulations of the
Commission, the applicable state securities laws and
regulations, this Agreement and the NASD Conduct Rules
including Rules 2420, 2730, 2740, 2750, and Rules 2810(b)(2)
and (b)(3), which provide as follows:
Sec. (b)(2)
SUITABILITY
(A) A member or person associated with a member
shall not underwrite or participate in a
public offering of a direct participation
program unless standards of suitability have
been established by the program for
participants therein and such standards are
fully disclosed in the prospectus and are
consistent with the provisions of
subparagraph (B) of this section.
(B) In recommending to a participant the
purchase, sale or exchange of an interest in
a direct participation program, a member or
person associated with a member shall:
(i) have reasonable grounds to believe,
on the basis of information obtained
from the participant concerning his
investment objectives, other
investments, financial situation and
needs, and any other information
known by the member or associated
person, that:
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(a) the participant is or will
be in a financial position
appropriate to enable him
to realize to a significant
extent the benefits
described in the
prospectus, including the
tax benefits where they are
a significant aspect of the
program;
(b) the participant has a fair
market net worth sufficient
to sustain the risks
inherent in the program,
including loss of
investment and lack of
liquidity; and
(c) the program is otherwise
suitable for the
participant; and
(ii) maintain in the files of the member
documents disclosing the basis upon
which the determination of
suitability was reached as to each
participant.
(C) Notwithstanding the provisions of
subparagraphs (A) and (B) hereof, no member
shall execute any transaction in a direct
participation program in a discretionary
account without prior written approval of
the transaction by the customer.
Sec. (b)(3)
DISCLOSURE
(A) Prior to participating in a public offering
of a direct participation program, a member
or person associated with a member shall
have reasonable grounds to believe, based on
information made available to him by the
sponsor through a prospectus or other
materials, that all material facts are
adequately and accurately disclosed and
provide a basis for evaluating the program.
(B) In determining the adequacy of disclosed
facts pursuant to subparagraph (A) hereof, a
member or person associated with a member
shall obtain information on material facts
relating at a minimum to the following, if
relevant in view of the nature of the
program:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects;
(iv) financial stability and experience
of the sponsor;
(v) the program's conflicts and risk
factors; and
(vi) appraisals and other pertinent
reports.
(C) For purposes of subparagraphs (A) and (B)
hereof, a member or person associated with a
member may rely upon the results of an
inquiry conducted by another member or
members, provided that:
(i) the member or person associated with
a member has reasonable grounds to
believe that such inquiry was
conducted with due care;
(ii) the results of the inquiry were
provided to the member or person
associated with a member with the
consent of the member or members
conducting or directing the inquiry;
and
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(iii) no member that participated in the
inquiry is a sponsor of the program
or an affiliate of such sponsor.
(D) Prior to executing a purchase transaction in
a direct participation program, a member or
person associated with a member shall inform
the prospective participant of all pertinent
facts relating to the liquidity and
marketability of the program during the term
of investment.
(f) You and the Selling Agents have received copies of the
Prospectus relating to the Units and you and the Selling
Agents have relied only on the statements contained in the
Prospectus and not on any other statements whatsoever, either
written or oral, with respect to the details of the offering
of Units.
(g) You and the Selling Agents agree that you and the Selling
Agents shall not place any advertisement or other solicitation
with respect to the Units (including without limitation any
material for use in any newspaper, magazine, radio or
television commercial, telephone recording, motion picture, or
other public media) without the prior written approval of the
Managing General Partner, and without the prior written
approval of the form and content thereof by the Commission,
the NASD and the securities authorities of the states where
such advertisement or solicitation is to be circulated. Any
such advertisements or solicitations shall be at your expense.
(h) If a supplement or amendment to the Prospectus is prepared and
delivered to you by the Managing General Partner, you agree
and shall require any Selling Agent to agree to distribute
each supplement or amendment to the Prospectus to every person
who has previously received a copy of the Prospectus from you
and/or the Selling Agent and you further agree and shall
require any Selling Agent to further agree to include each
supplement or amendment in all future deliveries of any
Prospectus.
(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 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 has been qualified in the
state or is exempt from the qualification requirements imposed
by the state or qualification in the state is otherwise not
required.
(j) In connection with any offer or sale of the Units, you agree
and shall require any Selling Agent to agree to comply in all
respects with statements set forth in the Prospectus and the
Partnership Agreement and you agree and shall require any
Selling Agent to agree not to make any statement inconsistent
with the statements in the Prospectus or the Partnership
Agreement. You further agree and shall require the Selling
Agents to further agree that you shall not provide and shall
require the Selling Agents not to provide any written
information, statements or sales literature other than the
Prospectus, possibly the Managing General Partner's corporate
profile, an "Atlas America Public #10 Ltd." powerpoint
presentation and a brochure entitled "Atlas America Public #10
Ltd." (collectively referred to in this Agreement as the
"Brochure"), and any supplements or amendments to the
Prospectus unless approved in writing by the Managing General
Partner. Further, you agree and shall require any Selling
Agent to agree not to make any untrue or misleading statements
of a material fact in connection with the Units.
(k) You agree to use your best efforts in the solicitation and
sale of the Units and to coordinate and supervise the efforts
of the Selling Agents and you shall require the Selling Agents
to agree to use their best efforts in the solicitation and
sale of the Units, including insuring that the prospective
purchasers meet the suitability requirements set forth in the
Prospectus and the
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Subscription Agreement and properly execute the Subscription
Agreement, which has been provided as Exhibit (I-B) to the
Partnership Agreement, Exhibit (A) of the Prospectus, together
with any additional forms provided in any supplement or
amendment to the Prospectus, or otherwise provided to you by
the Managing General Partner to be completed by prospective
purchasers.
Executed Subscription Agreements shall be delivered or mailed
immediately to the Managing General Partner and must be
received by the Managing General Partner at or before the
Offering Termination Date.
The Managing General Partner shall have the right to reject
any subscription at any time for any reason without liability
to it. Investor funds shall be transmitted as set forth in
Section 16 of this Agreement.
(l) Although not anticipated, if you assist in any transfers of
the Units, you shall comply, and you shall require any Selling
Agent to comply, with the requirements of Rule 2810(b)(2)(B)
and (b)(3)(D) of the NASD Conduct Rules.
(m) Your representations and warranties made in this Agreement are
and will be true and correct at the applicable closing date
and that you will and 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 will either use its best efforts in
taking 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 (i) of this Agreement or use its best efforts in
taking any necessary action and filing any necessary forms deemed
reasonable by it which are required to obtain an exemption from
qualification or registration in the states. Notwithstanding, the
Managing General Partner may elect not to qualify or register Units in
any state in which it deems such qualification or registration is not
warranted for any reason in its sole discretion. The Managing General
Partner and its counsel will inform you as to the jurisdictions in
which the Units have been qualified for sale or are exempt under the
respective securities or blue sky laws of such jurisdictions; but the
Managing General Partner 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 such
jurisdictions.
The Managing General Partner will provide to you and the Selling Agents
for delivery to all offerees and purchasers and their representatives,
any additional information, documents and instruments which 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 will file all post-offering forms,
documents or materials and take all other actions required by the
states in which the offer and sale of Units have been qualified or are
exempt or in which the Units have been registered. However, the
Managing General Partner shall not be required to take any actions,
make any filings or prepare any documents necessary or required in
connection with your status or any Selling Agent's status as a
broker/dealer under the laws of such states.
The Managing General Partner shall provide you with copies of all
applications, filings, correspondence, orders or other documents or
instruments relating to any application for qualification, registration
or other approval under applicable state or Federal securities laws for
the offering.
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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 the Managing General
Partner's attorneys and accountants and all fees and expenses
of registering or qualifying the Units for offer and sale in
the states as set forth in Section 7 of this Agreement, or
obtaining exemptions therefrom, even if this offering is not
successfully completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the formation and
management of the selling group and the fees and expenses of
your own counsel and accountants, even if this offering is not
successfully completed.
9. CONDITIONS OF YOUR 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 as if made at the applicable closing date, of
the representations and warranties of the Managing General Partner made
in this Agreement and to the performance by the Managing General
Partner of its obligations under this Agreement.
10. CONDITIONS OF THE MANAGING GENERAL PARTNER'S DUTIES. The Managing
General Partner's obligations provided in this Agreement, including the
duty to pay compensation as set forth in Section 4 of this Agreement,
shall be subject to 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, and
to the performance by you of your obligations under this Agreement, and
to the additional condition that the Managing General Partner shall
have received, at or before the applicable closing date, a fully
executed Subscription Agreement for each prospective purchaser.
11. INDEMNIFICATION.
(a) You and the Selling Agents shall indemnify and hold harmless
the Managing General Partner, the Partnership and its
attorneys, against any losses, claims, damages or liabilities,
joint or several, to which such parties may become subject,
under the Act, the Act of 1934 or otherwise insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon 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 such parties for any legal or other expenses
reasonably incurred in connection with investigating or
defending any such loss, claim, damage, liability or action.
(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 such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon 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 such loss, claim,
damage, liability or action.
(c) The foregoing indemnity agreements shall extend upon 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.
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(d) Promptly after receipt by an indemnified party of notice of
the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying
party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party. If
any such action shall be brought against such indemnified
party, it shall notify the indemnifying party of the
commencement thereof, and the indemnifying party shall be
entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified and indemnifying parties.
After the indemnified party shall have received notice from
the agreed upon counsel that the defense under this paragraph
has been so assumed, the indemnifying party shall not be
responsible for any legal or other expenses subsequently
incurred by such indemnified party in connection with the
defense thereof other than with respect to the agreed upon
counsel who assumed the defense thereof.
12. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Managing General
Partner and you in this Agreement, and the indemnity agreements
contained in Section 11 of this Agreement, shall survive the delivery,
execution and closing of this Agreement, and shall 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, or 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
shall survive delivery of the Units under this Agreement.
13. TERMINATION. You shall have the right to terminate this agreement other
than the indemnification provisions of Section 11 of this Agreement by
giving notice as hereinafter specified any time at or before a closing
date:
(a) if the Managing General Partner has failed, refused, or been
unable at or before the closing date, to perform any of its
obligations under this Agreement; or
(b) an event has materially and adversely affected the value of
the Units.
If you elect to terminate this Agreement other than the indemnification
provisions of Section 11, then the Managing General Partner shall be
promptly notified by you by telephone, telecopier or telegram,
confirmed by letter.
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,
telecopier or telegram, confirmed by letter as hereinafter specified at
or before a closing date.
14. NOTICES. All notices or communications under this Agreement, except as
otherwise specifically provided, shall be in writing, and if sent to
you shall be mailed, delivered or telegraphed and confirmed to you at
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sent to the Managing General Partner or on behalf of the Partnership,
at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
15. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum
subscription proceeds of $1,000,000 as set forth in Section 4(d) of
this Agreement, the Managing General Partner and you and the Selling
Agents agree that all subscribers shall be instructed to make their
checks, drafts, or money orders payable solely to "Atlas America Public
#10 Ltd., Escrow Agent, National City Bank of PA" as agent for the
Partnership and you agree and shall require the Selling Agents to agree
to comply with Rule 15c2-4 adopted under the Act of 1934.
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If you receive a check, draft, or money order not conforming to the
foregoing instructions, then you shall return the check, draft, or
money order to the Selling Agent not later than the end of the next
business day following its receipt by you. The Selling Agent shall then
return the check, draft, or money order directly to the subscriber not
later than the end of the next business day following its receipt from
you. Checks, drafts, or money orders received by you or a Selling Agent
which conform to the foregoing instructions shall be transmitted by you
pursuant to Section 16 "Transmittal Procedures," below.
You represent that you have executed the Escrow Agreement and agree
that you are bound by the terms of the Escrow Agreement executed by
you, the Partnership and the Managing General Partner, a copy of which
is attached to this Agreement as Exhibit "A".
16. TRANSMITTAL PROCEDURES. You and each Selling Agent shall transmit
received investor funds in accordance with the following procedures.
For purposes of the following, the term Selling Agent shall also
include you as Dealer-Manager when you receive subscriptions from
investors.
(a) Pending receipt of the minimum subscription proceeds of
$1,000,000 as set forth in Section 4(d) of this Agreement, the
Selling Agents shall promptly, on receipt of any and all
checks, drafts, and money orders received from prospective
purchasers of Units, transmit same together with the original
executed Subscription Agreement to you, as Dealer-Manager by
the end of the next business day following receipt of the
check, draft, or money order by the Selling Agent. By the end
of the next business day following receipt of the check,
draft, or money order and original executed Subscription
Agreement by you as Dealer-Manager, you as Dealer-Manager
shall transmit the check, draft or money order and a copy of
the executed Subscription Agreement to the Escrow Agent, and
the original executed Subscription Agreement and a copy of the
check, draft or money order to the Managing General Partner.
(b) On receipt by you as Dealer-Manager of notice from the
Managing General Partner that the minimum subscription
proceeds of $1,000,000, as set forth in Section 4(d) of this
Agreement, have been received, the Managing General Partner,
you and the Selling Agent agree that all subscribers
thereafter may be instructed, in the Managing General
Partner's sole discretion, to make their checks, drafts, or
money orders payable solely to "Atlas America Public #10
Ltd.".
Thereafter, Selling Agents shall promptly, on receipt of any
and all checks, drafts, and money orders received from
prospective purchasers of Units, transmit same together with
the original executed Subscription Agreement to you as
Dealer-Manager by the end of the next business day following
receipt of the check, draft, or money order by the Selling
Agent. By the end of the next business day following receipt
of the check, draft, or money order and original executed
Subscription Agreement by you as Dealer-Manager, you as
Dealer-Manager shall transmit the check, draft or money order
and the original executed Subscription Agreement to the
Managing General Partner.
17. PARTIES. This Agreement shall inure to the benefit of and be binding on
you, the Managing General Partner, and any respective successors and
assigns. This Agreement shall also inure to the benefit of the
indemnified parties, their successors and assigns. This Agreement is
intended to be and is for the sole and exclusive benefit of the parties
to this Agreement, including the Partnership, and their respective
successors and assigns, and the indemnified parties and their
successors and assigns, and for the benefit of no other person, and 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
such purchase
10
18. RELATIONSHIP. This Agreement shall not constitute you a partner of the
Managing General Partner or the Partnership or any general partner
thereof, nor render the Managing General Partner or the Partnership
liable for any of your obligations except as otherwise provided in this
Agreement.
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. This Agreement constitutes the entire
agreement between the parties to this Agreement and shall not be
amended or modified in any way except by subsequent agreement executed
in writing, and no party shall be liable or bound to the other by any
agreement, except as specifically set forth in this Agreement. Any
party to this Agreement may waive, but only in writing, any term,
condition, or requirement under this Agreement which is intended for
its own benefit, and 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, nor shall any failure to enforce any provision of
this Agreement operate as a waiver of such provision or any other
provision of this Agreement.
11
If the foregoing correctly sets forth our understanding please so indicate in
the space provided below for the purpose whereupon this letter shall constitute
a binding agreement between us.
Very truly yours,
ATLAS RESOURCES, INC.,
a
Pennsylvania corporation
, 2001 By:
----------------------- ------------------------------------------
Date ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President - Direct
Participation Programs
PARTNERSHIP
ATLAS AMERICA PUBLIC #10 LTD.
By: Atlas Resources, Inc.,
Managing General Partner
, 2001 By:
----------------------- -------------------------------------------
Date ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President - Direct
Participation Programs
DEALER-MANAGER
ANTHEM SECURITIES, INC.,
a
Pennsylvania corporation
, 2001 By:
----------------------- -------------------------------------------
Date ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
12
EXHIBIT "A"
ATLAS AMERICA PUBLIC #10 LTD.
ESCROW AGREEMENT
THIS AGREEMENT, made to be effective as of the _____ day of _________,
2001, by and among Atlas Resources, Inc., a
Pennsylvania corporation (the
"Managing General Partner"), Anthem Securities, Inc., a
Pennsylvania corporation
("Anthem"), ▇▇▇▇▇ Funding, Inc., a
Pennsylvania corporation ("▇▇▇▇▇ Funding"),
collectively Anthem and ▇▇▇▇▇ Funding are referred to as the "Dealer-Manager,"
Atlas America Public #10 Ltd., a
Pennsylvania limited partnership (the
"Partnership") and National City Bank of
Pennsylvania, Pittsburgh,
Pennsylvania,
as escrow agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Partnership intends to offer publicly for sale to qualified
investors (the "Investors") up to 2,500 limited partnership interests in the
Partnership (the "Units"); and
WHEREAS, each Investor will be required to pay his subscription in full
on subscribing ($10,000 per Unit, however, the Managing General Partner, in its
discretion, may accept one-half Unit ($5,000) subscriptions, with larger
subscriptions permitted in $1,000 increments), by check, draft or money order
except that the Managing General Partner, its officers, directors and
Affiliates, and Investors who buy Units through the officers and directors of
the Managing General Partner may subscribe to Units for a subscription price
reduced by the 2.5% Dealer-Manager fee, the 7.0% Sales Commission, the .5%
reimbursement of marketing expenses and the .5% reimbursement of the Selling
Agents' (as that term is defined below) bona fide accountable due diligence
expenses which will not be paid. Also, registered investment advisors and their
clients and Selling Agents and their registered representatives and principals
may subscribe to Units for a subscription price reduced by the 7.0% Sales
Commission, the .5% reimbursement of marketing expenses and the .5% bona fide
reimbursement of the Selling Agents' accountable due diligence expenses, which
will not be paid, although their subscription price will not be reduced by the
2.5% Dealer-Manager fee which will be paid (the "Subscription Proceeds"); and
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"); and
WHEREAS, the Managing General Partner and ▇▇▇▇▇ Funding have executed an
agreement ("▇▇▇▇▇ Funding
Dealer-Manager Agreement") under which ▇▇▇▇▇ 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 ▇▇▇▇▇ Funding
has been authorized to select certain members in good standing of the NASD to
participate in the offering of the Units ("Selling Agents"); and
1
WHEREAS, the Anthem
Dealer-Manager Agreement and the ▇▇▇▇▇ Funding
Dealer-Manager Agreement, collectively referred to as the "
Dealer-Manager
Agreement," provide for compensation to participate in the offering of the
Units, subject to the exceptions set forth above for certain Investors, which
compensation includes, but is not limited to, for each Unit sold:
(i) a 2.5% Dealer-Manager fee;
(ii) a 7.0% Sales Commission;
(iii) a .5% reimbursement of marketing expenses; and
(iv) a .5% reimbursement of the Selling Agents' bona fide accountable
due diligence expenses;
all or a portion of which will be reallowed to the Selling Agents and
wholesalers; and
WHEREAS, under the terms of the
Dealer-Manager Agreement the Subscription
Proceeds are required to be held in escrow subject to the receipt and acceptance
by the Managing General Partner of the minimum Subscription Proceeds of
$1,000,000, excluding any optional subscription by the Managing General Partner,
its officers, directors and Affiliates and the subscription discounts set forth
above; and
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; and
WHEREAS, no subscriptions to the Partnership will be accepted after
receipt of the maximum Subscription Proceeds of $25,000,000 or December 31,
2001, whichever event occurs first (the "Offering Termination Date"); and
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 desires 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 Escrow Agent as the escrow
agent to receive and to hold the Subscription Proceeds deposited with
Escrow Agent by the Dealer-Manager and the Managing General Partner
under this Agreement and Escrow Agent agrees to serve in such capacity
during the term and based on the provisions of this Agreement.
2. DEPOSIT OF SUBSCRIPTION PROCEEDS. Pending receipt of the minimum
Subscription Proceeds of $1,000,000, the Dealer-Manager and the
Managing General Partner shall deposit the Subscription Proceeds of
each Investor to whom they sell Units with the Escrow Agent and shall
deliver to the Escrow Agent a copy of the Subscription Agreement of
each Investor. Payment for each subscription for Units shall be in the
form of a check made payable to "Atlas America Public #10 Ltd., Escrow
Agent, National City Bank of PA." The Escrow Agent shall deliver a
receipt to either:
2
(a) Anthem and the Managing General Partner for each deposit of
Subscription Proceeds made under this Agreement by Anthem;
(b) ▇▇▇▇▇ Funding and the Managing General Partner for each
deposit of subscription proceeds made under this Agreement by
▇▇▇▇▇ Funding; or
(c) the Managing General Partner for each deposit of Subscription
Proceeds made under this Agreement by the Managing General
Partner.
3. INVESTMENT OF SUBSCRIPTION PROCEEDS. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow Agent
entitled "Armada Government Fund."
Subscription Proceeds may be temporarily invested by the Escrow Agent
only in income producing short-term, highly liquid investments secured
by the United States government where there is appropriate safety of
principal, such as U.S. Treasury Bills. The interest earned shall be
added to the Subscription Proceeds and disbursed in accordance with the
provisions of paragraph 4 or 5 of this Agreement, as the case may be.
4. DISTRIBUTION OF SUBSCRIPTION PROCEEDS. If the Escrow Agent:
(a) receives written notice from an authorized officer of the
Managing General Partner that at least the minimum
Subscription Proceeds of $1,000,000 have been received and
accepted by the Managing General Partner; and
(b) determines that Subscription Proceeds for at least $1,000,000
have cleared the banking system and are good;
then the Escrow Agent shall promptly release and distribute to the
Managing General Partner the escrowed Subscription Proceeds which have
cleared the banking system and are good plus any interest paid and
investment income earned on the Subscription Proceeds while held by the
Escrow Agent in an escrow account.
Any remaining Subscription Proceeds, plus any interest paid and
investment income earned on the Subscription Proceeds while held by the
Escrow Agent in an escrow account shall be promptly released and
distributed to the Managing General Partner by the Escrow Agent as the
Subscription Proceeds clear the banking system and become good.
5. SEPARATE PARTNERSHIP ACCOUNT. During the continuation of the offering
after the Partnership is funded with cleared Subscription Proceeds of
at least $1,000,000 and the Escrow Agent receives the notice described
in Paragraph 4 of this Agreement, and before the Offering Termination
Date, any additional Subscription Proceeds may be deposited by the
Dealer-Manager or the Managing General Partner directly in a separate
Partnership account which shall not be subject to the terms of this
Agreement.
6. DISTRIBUTIONS TO SUBSCRIBERS.
(a) If the Partnership is not funded as contemplated because less
than the minimum Subscription Proceeds of $1,000,000 have been
received and accepted by the Managing General Partner by
twelve p.m. (noon), local time, on December 31, 2001, or for
any other reason, then the Managing General Partner shall so
notify the Escrow Agent, and the Escrow Agent promptly
3
shall distribute to each Investor a refund check made payable
to the Investor in an amount equal to the Subscription Proceeds
of the Investor, plus any interest paid or investment income
earned thereon while held by the Escrow Agent in an 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 the Escrow Agent of the
rejection, and the Escrow Agent shall promptly distribute to
the Investor a refund check made payable to the Investor in an
amount equal to the Subscription Proceeds of the Investor,
plus any interest paid or investment income earned thereon
while held by the Escrow Agent in an escrow account.
7. COMPENSATION AND EXPENSES OF ESCROW AGENT. The Managing General Partner
shall be solely responsible for and shall pay the compensation of the
Escrow Agent for its services under this Agreement, as provided in
Appendix 1 to this Agreement and made a part of this Agreement, and the
charges, expenses (including any reasonable attorneys' fees), and other
out-of-pocket expenses incurred by the Escrow Agent in connection with
the administration of the provisions of this Agreement. The Escrow
Agent shall have no lien on the Subscription Proceeds deposited in an
escrow account unless and until the Partnership is funded with cleared
Subscription Proceeds of at least $1,000,000 and the Escrow Agent
receives the notice described in Paragraph 4 of this Agreement, at
which time the Escrow Agent shall have, and is hereby 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 Escrow Agreement unless the notice or request or demand for
delivery or other action is in writing and given or made by the party
given the right or charged with the obligation under this Escrow
Agreement to give the notice or to make the request or demand. In no
event shall the Escrow Agent be obligated to accept any notice,
request, or demand from anyone other than the Managing General Partner
or the Dealer-Manager.
9. LIABILITY OF ESCROW AGENT. The Escrow Agent shall not be liable for any
damages, or have any obligations other than the duties prescribed in
this Agreement in carrying out or executing the purposes and intent of
this Agreement. However, nothing in this Agreement shall relieve the
Escrow Agent from liability arising out of its own willful misconduct
or gross negligence. Escrow Agent's duties and obligations under this
Agreement shall be entirely administrative and not discretionary.
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
Escrow Agent in good faith. The parties to this Agreement will
indemnify Escrow Agent, hold Escrow Agent harmless, and reimburse
Escrow Agent from, against and for, any and all liabilities, costs,
fees and expenses (including reasonable attorney's fees) Escrow Agent
may suffer or incur by reason of its execution and performance of this
Agreement. If any legal questions arise concerning Escrow Agent's
duties and obligations under this Agreement, 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.
4
If there is any disagreement between any of the parties to this
Agreement, or between them or any of them and any other person,
resulting in adverse claims or demands being made in connection with
this Agreement, or if Escrow Agent, in good faith, is in doubt as to
what action it should take under this Agreement, 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, Escrow
Agent shall not be or become liable in any way or to any person for its
failure or refusal to act and Escrow Agent shall be entitled to
continue to so refrain from acting until the dispute is resolved by the
parties involved.
National City Bank of Pennsylvania is acting solely as 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 following the giving of thirty days' prior written notice to the
other parties to this Agreement. Similarly, the Escrow Agent may be
removed and replaced following the giving of thirty days' prior written
notice to the Escrow Agent by the other parties to this Agreement.
In either event, the duties of the Escrow Agent shall terminate thirty
days after the date of such notice (or as of any 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 an
escrow account) in its possession to a successor escrow agent as shall
be 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 or shall have failed
to appoint a successor before the expiration of thirty days following
the date of the notice of resignation or removal, the then acting
Escrow Agent may petition any court of competent jurisdiction for the
appointment of a successor escrow agent or other appropriate relief.
Any such resulting appointment shall be binding upon 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 an escrow account), the then acting 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 on the
occurrence of the distribution of all Subscription Proceeds (and any
interest paid or investment income earned thereon while held by the
Escrow Agent in an escrow account) as contemplated by this Agreement or
on the written consent of all the parties to this Agreement.
12. NOTICE. Any notices or instructions, or both, to be given under this
Agreement shall be validly given if set forth in writing and mailed by
certified mail, return receipt requested, as follows:
IF TO THE ESCROW AGENT:
National City Bank of Pennsylvania
Corporate Trust Department
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇, Pennsylvania 15222-4802
5
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant Vice President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
6
IF TO THE MANAGING GENERAL PARTNER:
Atlas Resources, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO ANTHEM:
Anthem Securities, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO ▇▇▇▇▇ FUNDING:
▇▇▇▇▇ Funding, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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 is 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.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
NATIONAL CITY BANK OF PENNSYLVANIA
As Escrow Agent
By:
--------------------------------------------
(Authorized Officer)
ATLAS RESOURCES, INC.
A Pennsylvania corporation
By:
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President - Direct
Participation Programs
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By:
-----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇▇▇ FUNDING, INC.
A Pennsylvania corporation
By:
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President
ATLAS AMERICA PUBLIC #10 LTD.
By: ATLAS RESOURCES, INC.
Managing General Partner
By:
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President - Direct
Participation Programs
8
APPENDIX I TO ESCROW AGREEMENT
COMPENSATION FOR SERVICES OF ESCROW AGENT
Escrow Agent annual fee per year or any part thereof $3,000.00
9
EXHIBIT "B"
SELLING AGENT AGREEMENT
WITH ANTHEM SECURITIES, INC.
TO:
-------------------------------------------
RE: ATLAS AMERICA PUBLIC #10 LTD.
Gentlemen:
Atlas Resources, Inc. ("Atlas"), is the Managing General Partner in a
Pennsylvania limited partnership named Atlas America Public #10 Ltd. (the
"Partnership"). The Units in the Partnership (the "Units") and the offering are
described in the enclosed Prospectus dated ____________________, 2001 (the
"Prospectus"). Prospectuses relating to the Units have been furnished to you
with this Agreement.
Our firm, Anthem Securities, Inc. (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
Partnership under which the Dealer-Manager has agreed to form a group of
National Association of Securities Dealers, Inc. (the "NASD") member firms (the
"Selling Agents"), who will obtain subscriptions to the Partnership in all
states other than:
- Minnesota; and
- New Hampshire
on a "best efforts" basis under the Securities Act of 1933, as amended (the
"Act"), and the provisions of the Prospectus.
You are invited to become one of the Selling Agents, on a non-exclusive
basis. By your acceptance below you will have agreed to act in that capacity and
to use your best efforts, in accordance with the following terms and conditions,
to solicit subscriptions to the Partnership in all states other than:
- Minnesota; and
- New Hampshire.
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 Partnership.
1
1. REPRESENTATIONS AND WARRANTIES OF SELLING AGENT. You, as a Selling
Agent, represent and warrant to and agree with 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 will be duly
authorized, executed and delivered by you and will be a valid
and binding agreement on your part in accordance with its
terms.
(c) The consummation of the transactions contemplated by this
Agreement and the Prospectus will not result in any breach of
any of the terms or conditions of, or constitute a default
under your Articles of Incorporation, Bylaws, any indenture,
agreement or other instrument to which you are a party, or
violate any order applicable to you of any court or any
federal or state regulatory body or administrative agency
having jurisdiction over you or over your affiliates.
(d) You are duly registered pursuant to the provisions of the
Securities Exchange Act of 1934 (the "Act of 1934") as a
dealer and you are a member in good standing of the NASD. You
are duly registered as a broker/dealer in the states where you
are required to be registered in order to carry out your
obligations as contemplated by this Agreement and the
Prospectus. You agree to maintain all the foregoing
registrations in good standing throughout the term of the
offer and sale of the Units and you agree to comply with all
statutes and other requirements applicable to you as a
broker/dealer under those registrations.
(e) Pursuant to your appointment as a Selling Agent, you shall
comply with all the provisions of the Act, insofar as the Act
applies to your activities under this Agreement. Further, you
shall not engage in any activity which would cause the offer
and/or sale of Units not to comply with the Act, the Act of
1934 and the applicable rules and regulations of the
Securities and Exchange Commission (the "Commission"), the
applicable state securities laws and regulations, this
Agreement and the NASD Conduct Rules including Rules 2420,
2730, 2740, 2750, and Rules 2810(b)(2) and (b)(3), which
provide as follows:
Sec. (b)(2)
SUITABILITY
(A) A member or person associated with a member
shall not underwrite or participate in a
public offering of a direct participation
program unless standards of suitability have
been established by the program for
participants therein and such standards are
fully disclosed in the prospectus and are
consistent with the provisions of
subparagraph (B) of this section.
(B) In recommending to a participant the
purchase, sale or exchange of an interest in
a direct participation program, a member or
person associated with a member shall:
(i) have reasonable grounds to believe,
on the basis of information obtained
from the participant concerning his
investment objectives, other
investments, financial situation and
needs, and any other information
known by the member or associated
person, that:
2
(a) the participant is or will
be in a financial position
appropriate to enable him
to realize to a significant
extent the benefits
described in the
prospectus, including the
tax benefits where they are
a significant aspect of the
program;
(b) the participant has a fair
market net worth sufficient
to sustain the risks
inherent in the program,
including loss of
investment and lack of
liquidity; and
(c) the program is otherwise
suitable for the
participant; and
(ii) maintain in the files of the member
documents disclosing the basis upon
which the determination of
suitability was reached as to each
participant.
(C) Notwithstanding the provisions of
subparagraphs (A) and (B) hereof, no member
shall execute any transaction in a direct
participation program in a discretionary
account without prior written approval of
the transaction by the customer.
Sec. (b)(3)
DISCLOSURE
(A) Prior to participating in a public offering
of a direct participation program, a member
or person associated with a member shall
have reasonable grounds to believe, based on
information made available to him by the
sponsor through a prospectus or other
materials, that all material facts are
adequately and accurately disclosed and
provide a basis for evaluating the program.
(B) In determining the adequacy of disclosed
facts pursuant to subparagraph (A) hereof, a
member or person associated with a member
shall obtain information on material facts
relating at a minimum to the following, if
relevant in view of the nature of the
program:
(i) items of compensation;
(ii) physical properties;
(iii) tax aspects;
(iv) financial stability and experience
of the sponsor;
(v) the program's conflicts and risk
factors; and
(vi) appraisals and other pertinent
reports.
(C) For purposes of subparagraphs (A) and (B)
hereof, a member or person associated with a
member may rely upon the results of an
inquiry conducted by another member or
members, provided that:
(i) the member or person associated with
a member has reasonable grounds to
believe that such inquiry was
conducted with due care;
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(ii) the results of the inquiry were
provided to the member or person
associated with a member with the
consent of the member or members
conducting or directing the inquiry;
and
(iii) no member that participated in the
inquiry is a sponsor of the program
or an affiliate of such sponsor.
(D) Prior to executing a purchase transaction in
a direct participation program, a member or
person associated with a member shall inform
the prospective participant of all pertinent
facts relating to the liquidity and
marketability of the program during the term
of investment.
(f) You have received copies of the Prospectus relating to the
Units and you have relied only on the statements contained in
the Prospectus and not on any other statements whatsoever,
either written or oral, with respect to the details of the
offering of Units.
(g) You agree that you shall not place any advertisement or other
solicitation with respect to the Units (including without
limitation any material for use in any newspaper, magazine,
radio or television commercial, telephone recording, motion
picture, or other public media) without the prior written
approval of the Managing General Partner, and without the
prior written approval of the form and content thereof by the
Commission, the NASD and the securities authorities of the
states where such advertisement or solicitation is to be
circulated. Any such advertisements or solicitations shall be
at your expense.
(h) If a supplement or amendment to the Prospectus is prepared and
delivered to you by the Managing General Partner or the
Dealer-Manager, you agree to distribute each supplement or
amendment to the Prospectus to every person who has previously
received a copy of the Prospectus from you and you further
agree to include each supplement or amendment in all future
deliveries of any Prospectus.
(i) In connection with any offer or sale of the Units, you agree
to comply in all respects with statements set forth in the
Prospectus and the Partnership Agreement and you agree not to
make any statement inconsistent with the statements in the
Prospectus or the Partnership Agreement and you further agree
that you shall not provide any written information, statements
or sales literature other than the Prospectus, possibly the
Managing General Partner's corporate profile, an "Atlas
America Public #10 Ltd." powerpoint presentation and a
brochure entitled "Atlas America Public #10 Ltd."
(collectively referred to in this Agreement as the
"Brochure"), and any supplements or amendments to the
Prospectus unless approved in writing by the Managing General
Partner. Further, you agree not to make any untrue or
misleading statements of a material fact in connection with
the Units.
(j) You agree to use your best efforts in the solicitation and
sale of the Units, including insuring that the prospective
purchasers meet the suitability requirements set forth in the
Prospectus and the Subscription Agreement and properly execute
the Subscription Agreement, which has been provided as Exhibit
(I-B) to the Partnership Agreement, Exhibit (A) to the
Prospectus, together with any additional forms provided in any
supplement or amendment to the Prospectus, or otherwise
provided to you by the Managing General Partner or the
Dealer-Manager to be completed by prospective purchasers.
The Managing General Partner shall have the right to reject
any subscription at any time for any reason without liability
to it. Investor funds and executed Subscription Agreements
shall be transmitted as set forth in Section 11 of this
Agreement.
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(k) You shall comply with the requirements of Rules 2810(b)(2)(B)
and (b)(3)(D) of the NASD Conduct Rules.
(l) Your representations and warranties made in this Agreement are
and will be true and correct at the applicable closing date
and you will have fulfilled all your obligations under this
Agreement at the applicable closing date.
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2. COMMISSIONS.
(a) Subject to the receipt of the minimum subscription proceeds of
$1,000,000 as described in Section 4(d) of the Dealer-Manager
Agreement, and the exceptions 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 as set forth in Section 4(c)
of the Dealer-Manager Agreement, the Dealer-Manager is
entitled to receive from the Partnership a 7.0% Sales
Commission, a .5% reimbursement of marketing expenses and a
.5% reimbursement of the Selling Agents' bona fide accountable
due diligence expenses per Unit, based on the aggregate amount
of all Unit subscriptions to the Partnership secured by the
Dealer-Manager or the selling group formed by the
Dealer-Manager and accepted by the Managing General Partner.
Subject to the terms and conditions set forth in this
Agreement, including the Dealer-Manager's receipt from you of
the documentation required of you in Section 1 of this
Agreement, the Dealer-Manager agrees to pay you a 7.0% cash
commission, a .5% reimbursement of marketing expenses and a
.5% reimbursement of your bona fide accountable due diligence
expenses, per Unit on Units sold by you and accepted by the
Managing General Partner, within seven business days after the
Dealer-Manager has received the commissions and reimbursements
on the subscriptions.
The Dealer-Manager is entitled to receive its commissions and
reimbursements within five business days after the conditions
described in Section 4(d) of the Dealer-Manager Agreement are
satisfied, and approximately every two weeks thereafter until
the Offering Termination Date, which is December 31, 2001, or
when the maximum subscription proceeds of $25,000,000 are
received, as described in Section 1 of the Dealer-Manager
Agreement, if earlier. The balance will be paid to the
Dealer-Manager within 14 business days after the Offering
Termination Date.
(b) Notwithstanding anything in this Agreement to the contrary,
you agree to waive payment of your Sales Commissions and
reimbursements as set forth above in (a) until the
Dealer-Manager is in receipt of the related amounts owed to it
pursuant to the Dealer-Manager Agreement, and the
Dealer-Manager's liability for such amounts under this
Agreement is limited solely to the proceeds of the related
amounts owed to it under the Dealer-Manager Agreement.
(c) As provided in Section 4(d) of the Dealer-Manager Agreement,
the Partnership will not begin operations unless it receives
subscription proceeds of at least $1,000,000 by December 31,
2001. If this amount is not secured, nothing will be payable
to you and all funds advanced by purchasers will be returned
to them with interest earned, if any.
3. STATE SECURITIES REGISTRATION. The Managing General Partner may elect
not to qualify or register Units in any state in which it deems such
qualification or registration is not warranted for any reason in its
sole discretion. Upon application to the Dealer-Manager you will be
informed as to the jurisdictions in which the Units have been qualified
for sale or are exempt under the respective securities or "Blue Sky"
laws of the jurisdictions.
Notwithstanding the foregoing, the Dealer-Manager, the Partnership and
the Managing General Partner have not assumed and will not assume any
obligation or responsibility as to your right to act as a broker/dealer
with respect to the Units in any jurisdiction.
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4. EXPENSE OF SALE. The expenses in connection with the offer and sale of
the Units shall be payable as set forth below.
(a) The Dealer-Manager shall pay all expenses incident to the
performance of its obligations under this Agreement, including
the fees and expenses of its attorneys and accountants, even
if this offering is not successfully completed.
(b) You shall pay all expenses incident to the performance of your
obligations under this Agreement, including the fees and
expenses of your own counsel and accountants, even if this
offering is not successfully completed.
5. CONDITIONS OF YOUR DUTIES. Your obligations under this Agreement, as of
the date of this Agreement and at the applicable closing date, shall be
subject to the performance by the Dealer-Manager of its obligations
under this Agreement and to 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 as set
forth in Section 2 of this Agreement, shall be subject to 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, and to the performance by you of
your obligations under this Agreement, and to the additional condition
that the Dealer-Manager shall have received, at or before the
applicable closing date a fully executed Subscription Agreement for
each prospective purchaser.
7. INDEMNIFICATION.
(a) You shall indemnify and hold harmless the Dealer-Manager, the
Managing General Partner, the Partnership and its attorneys,
against any losses, claims, damages or liabilities, joint or
several, to which such parties may become subject, under the
Act, the Act of 1934 or otherwise insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon your breach of any of your
duties and obligations, representations, or warranties under
the terms or provisions of this Agreement and you shall
reimburse such parties for any legal or other expenses
reasonably incurred in connection with investigating or
defending any such loss, claim, damage, liability or action.
(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 such 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 such loss, claim, damage, liability or action.
(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, such indemnified party shall,
if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying
party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party. If
any such action shall be
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brought against such indemnified party, it shall notify the
indemnifying party of the commencement thereof, and the
indemnifying party shall be entitled to participate in, and,
to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified and
indemnifying parties. After the indemnified party shall have
received notice from the agreed on counsel that the defense
under this paragraph has been so assumed, the indemnifying
party shall not be responsible for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof other than with respect to the agreed
upon counsel who assumed the defense thereof.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Dealer-Manager and
you in this Agreement, and the indemnity agreements contained in
Section 7 of this Agreement, shall survive the delivery, execution and
closing of this Agreement, and shall 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, or 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 shall survive delivery of the Units under this
Agreement.
9. TERMINATION. You shall have the right to terminate this Agreement,
other than the indemnification provisions of Section 7, by giving
notice as hereinafter specified any time at or before a closing date:
(a) if the Dealer-Manager shall have failed, refused, or been
unable at or before the closing date, to perform any of its
obligations under this Agreement; or
(b) an event has materially and adversely affected the value of
the Units.
If you elect to terminate this Agreement, other than the
indemnification provisions of Section 7 of this Agreement, the
Dealer-Manager shall be promptly notified by you by telephone,
telecopier, facsimile, or telegram, confirmed by letter.
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,
telecopier or telegram, confirmed by letter.
10. FORMAT OF CHECKS/ESCROW AGENT. Pending receipt of the minimum
subscription proceeds of $1,000,000 as set forth in Section 4(d) of the
Dealer-Manager Agreement, the Dealer-Manager and you agree that all
subscribers shall be instructed to make their checks, drafts, or money
orders payable solely to "Atlas America Public #10 Ltd., Escrow Agent,
National City Bank of PA" as agent for the Partnership and you agree to
comply with Rule 15c2-4 adopted under the Act of 1934.
If you receive a check, draft, or money order not conforming to the
foregoing instructions, then you shall return the check, draft, or
money order directly to the subscriber not later than the end of the
next business day following its receipt from the subscriber. If the
Dealer-Manager receives a check, draft, or money order not conforming
to the foregoing instructions, then the Dealer-Manager shall return the
check, draft, or money order to you not later than the end of the next
business day following its receipt by the Dealer-Manager and you shall
then return the check, draft, or money order directly to the subscriber
not later than the end of the next business day following its receipt
from the Dealer-Manager. Checks, drafts, or money orders received by
you which conform to the foregoing instructions shall be transmitted by
you under Section 11 "Transmittal Procedures," below.
You agree that you are bound by the terms of the Escrow Agreement, a
copy of which is attached to the Dealer-Manager Agreement as Exhibit
"A."
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11. TRANSMITTAL PROCEDURES. You shall transmit received investor funds in
accordance with the following procedures.
(a) Pending receipt of the minimum subscription proceeds of
$1,000,000 as set forth in Section 4(d) of the Dealer-Manager
Agreement, you shall promptly, on receipt of any and all
checks, drafts, and money orders received from prospective
purchasers of Units, transmit same together with the original
executed Subscription Agreement to the Dealer-Manager by the
end of the next business day following receipt of the check,
draft, or money order by you. By the end of the next business
day following receipt of the check, draft, or money order and
original executed Subscription Agreement by the
Dealer-Manager, the Dealer-Manager shall transmit the check,
draft, or money order and a copy of the executed Subscription
Agreement to the Escrow Agent, and the original executed
Subscription Agreement and a copy of the check, draft, or
money order to the Managing General Partner.
(b) On receipt by you of notice from the Managing General Partner
or the Dealer-Manager that the minimum subscription proceeds
of $1,000,000 as set forth in Section 4(d) of the
Dealer-Manager Agreement have been received, you agree that
all subscribers thereafter may be instructed, in the Managing
General Partner's sole discretion, to make their checks,
drafts, or money orders payable solely to "Atlas America
Public #10 Ltd.".
Thereafter, you shall promptly, on receipt of any and all
checks, drafts, and money orders received from prospective
purchasers of Units, transmit same together with the original
executed Subscription Agreement to the Dealer-Manager by the
end of the next business day following receipt of the check,
draft, or money order by you. By the end of the next business
day following receipt of the check, draft, or money order and
original executed Subscription Agreement by the
Dealer-Manager, the Dealer-Manager shall transmit the check,
draft, or money order and the original executed Subscription
Agreement to the Managing General Partner.
12. PARTIES. This Agreement shall inure to the benefit of and be binding
upon 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
hereto, and their respective successors and assigns, and the
indemnified parties and their successors and assigns, and for the
benefit of no other person. No other person shall have any legal or
equitable right, remedy or claim under or in respect of this Agreement.
No purchaser of any of the Units from you shall be construed a
successor or assign merely by reason of such purchase.
13. RELATIONSHIP. You are not authorized to hold yourself out as agent of
the Dealer-Manager, the Managing General Partner, the Partnership or of
any other Selling Agent. This Agreement shall not constitute you a
partner of the Managing General Partner, the Dealer-Manager, the
Partnership or of any other Selling Agent, nor render the Managing
General Partner, the Dealer-Manager, the Partnership or any general
partner thereof, 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. This Agreement constitutes the entire
agreement between the parties to this Agreement and shall not be
amended or modified in any way except by subsequent agreement executed
in writing, and no party shall be liable or bound to the other by any
agreement, except as specifically set forth in this Agreement. Any
party to this Agreement may waive, but only in writing,
9
any term, condition, or requirement under this Agreement which is
intended for its own benefit, and 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, nor shall any failure to enforce any
provision of this Agreement operate as a waiver of the provision or any
other provision of this Agreement.
16. NOTICES. Any communications from you shall be in writing addressed to
the Dealer-Manager at ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇. 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. 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,
, 2001 ANTHEM SECURITIES, INC.
---------------------------------
By:
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
ACCEPTANCE:
We accept your invitation to become a Selling Agent under all the terms
and conditions stated in the above Agreement and confirm that all the statements
set forth in the above Agreement are true and correct. We hereby acknowledge
receipt of the Prospectuses and Brochures and a copy of the Dealer-Manager
Agreement referred to above.
, 2001 ,
--------------------------------- ---------------------------------
a(n) corporation,
---------------
ATTEST:
By:
-------------------------------------- -----------------------------
(SEAL) Secretary , President
--------------
---------------------------------
(Address)
---------------------------------
---------------------------------
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