Exhibit 4.2


    

      


      


      EXHIBIT
        4.2

      


      


      


      


      


      


      


      


      


      


      AMENDED
        AND RESTATED CERTIFICATE

       

      AND
        AGREEMENT OF LIMITED PARTNERSHIP 

       

      FOR

       

      ATLAS
        AMERICA PUBLIC #15-2006(B) L.P.

       

      Dated
        May 9, 2006

       

      


       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        TABLE
          OF CONTENTS

        


        
          	 	 	 	 	
                  Page
                    #

                
	
                  I.

                	 	
                  FORMATION

                	 	 
	 	 	 	 	 
	 	
                  1.01

                	
                  Formation

                	 	
                  4

                
	 	
                  1.02

                	
                  Certificate
                    of Limited partnership

                	 	
                  4

                
	 	
                  1.03

                	
                  Name,
                    Principal Office and Residence

                	 	
                  4

                
	 	
                  1.04

                	
                  Purpose

                	 	
                  4

                
	 	 	 	 	 
	
                  II.

                	 	
                  DEFINITION
                    OF TERMS

                	 	 
	 	 	 	 	 
	 	
                  2.01

                	
                  Definitions

                	 	
                  5

                
	 	 	 	 	 
	
                  III.

                	 	
                  SUBSCRIPTIONS
                    AND FURTHER CAPITAL CONTRIBUTIONS

                	 	 
	 	 	 	 	 
	 	
                  3.01

                	
                  Designation
                    of Managing General Partner and Participants

                	 	
                  15

                
	 	
                  3.02

                	
                  Participants

                	 	
                  16

                
	 	
                  3.03

                	
                  Subscriptions
                    to the Partnership

                	 	
                  16

                
	 	
                  3.04

                	
                  Capital
                    Contributions of the Managing General Partner

                	 	
                  18

                
	 	
                  3.05

                	
                  Payment
                    of Subscriptions

                	 	
                  19

                
	 	
                  3.06

                	
                  Partnership
                    Funds

                	 	
                  19

                
	 	 	 	 	 
	
                  IV.

                	 	
                  CONDUCT
                    OF OPERATIONS

                	 	 
	 	 	 	 	 
	 	
                  4.01

                	
                  Acquisition
                    of Leases

                	 	
                  20

                
	 	
                  4.02

                	
                  Conduct
                    of Operations

                	 	
                  22

                
	 	
                  4.03

                	
                  General
                    Rights and Obligations of the Participants and Restricted and
                    Prohibited

                	 	 
	 	 	
                  Transactions

                	 	
                  26

                
	 	
                  4.04

                	
                  Designation,
                    Compensation and Removal of Managing General Partner

                	 	 
	 	 	
                  and
                    Removal of Operator

                	 	
                  39

                
	 	
                  4.05

                	
                  Indemnification
                    and Exoneration

                	 	
                  43

                
	 	
                  4.06

                	
                  Other
                    Activities

                	 	
                  45

                
	 	 	 	 	 
	
                  V.

                	 	
                  PARTICIPATION
                    IN COSTS AND REVENUES, CAPITAL ACCOUNTS,

                	 	 
	 	 	
                  ELECTIONS
                    AND DISTRIBUTIONS

                	 	 
	 	 	 	 	 
	 	
                  5.01

                	
                  Participation
                    in Costs and Revenues

                	 	
                  47

                
	 	
                  5.02

                	
                  Capital
                    Accounts and Allocations Thereto

                	 	
                  51

                
	 	
                  5.03

                	
                  Allocation
                    of Income, Deductions and Credits

                	 	
                  52

                
	 	
                  5.04

                	
                  Elections

                	 	
                  54

                
	 	
                  5.05

                	
                  Distributions

                	 	
                  55

                


        


        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        


        


        
          	 	 	 	 	
                  Page
                    #

                
	
                  VI.

                	 	
                  TRANSFER
                    OF INTERESTS

                	 	 
	 	 	 	 	 
	 	
                  6.01

                	
                  Transferability

                	 	
                  56

                
	 	
                  6.02

                	
                  Special
                    Restrictions on Transfers

                	 	
                  57

                
	 	
                  6.03

                	
                  Presentment

                	 	
                  58

                
	 	 	 	 	 
	
                  VII.

                	 	
                  DURATION,
                    DISSOLUTION, AND WINDING UP

                	 	 
	 	 	 	 	 
	 	
                  7.01

                	
                  Duration

                	 	
                  61

                
	 	
                  7.02

                	
                  Dissolution
                    and Winding Up

                	 	
                  61

                
	 	 	 	 	 
	
                  VIII.

                	 	
                  MISCELLANEOUS
                    PROVISIONS

                	 	 
	 	 	 	 	 
	 	
                  8.01

                	
                  Notices

                	 	
                  62

                
	 	
                  8.02

                	
                  Time

                	 	
                  63

                
	 	
                  8.03

                	
                  Applicable
                    Law

                	 	
                  63

                
	 	
                  8.04

                	
                  Agreement
                    in Counterparts

                	 	
                  63

                
	 	
                  8.05

                	
                  Amendment

                	 	
                  63

                
	 	
                  8.06

                	
                  Additional
                    Partners

                	 	
                  64

                
	 	
                  8.07

                	
                  Legal
                    Effect

                	 	
                  64

                
	 	 	 	 	 


        



      
 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      


      AMENDED
        AND RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP FOR ATLAS AMERICA
        PUBLIC #15-2006(B) L.P.

      


      


      THIS
        AMENDED AND RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
        (“AGREEMENT”), amending and restating the original Certificate of Limited
        Partnership, is made and entered into as of the date set forth below, by
        and
        among Atlas Resources, LLC, referred to as “Atlas” or the “Managing General
        Partner,” and the remaining parties from time to time signing a Subscription
        Agreement for Limited Partner Units, these parties sometimes referred to
        as
“Limited Partners,” or for Investor General Partner Units, these parties
        sometimes referred to as “Investor General Partners.” 

      


      


      ARTICLE
        I

      FORMATION

       

      1.01. Formation.
        The
        parties have formed a limited partnership under the Delaware Revised Uniform
        Limited Partnership Act on the terms and conditions set forth in this
        Agreement.

       

      1.02. Certificate
        of Limited Partnership.
        This
        document is not only an agreement among the parties, but also is the Amended
        and
        Restated Certificate and Agreement of Limited Partnership of the Partnership.
        This document shall be filed or recorded in the public offices required under
        applicable law or deemed advisable in the discretion of the Managing General
        Partner. Amendments to the certificate of limited partnership shall be filed
        or
        recorded in the public offices required under applicable law or deemed advisable
        in the discretion of the Managing General Partner.

       

      1.03. Name,
        Principal Office and Residence. 

       

      1.03(a).
        Name.
        The name
        of the Partnership is Atlas America Public #15-2006(B) L.P. 

       

      1.03(b). Residence.
        The
        residence of the Managing General Partner is its principal place of business
        at
        311 Rouser Road, Moon Township, Pennsylvania 15108, which shall also serve
        as
        the principal place of business of the Partnership. 

       

      The
        residence of each Participant shall be as set forth on the Subscription
        Agreement executed by the Participant. 

       

      All
        addresses shall be subject to change on notice to the parties. 

       

      1.03(c).
        Agent
        for Service of Process.
        The name
        and address of the agent for service of process shall be Andrew M. Lubin
        at 110
        S. Poplar Street, Suite 101, Wilmington, Delaware 19801.

       

      1.04.
        Purpose.
        The
        Partnership shall engage in all phases of the natural gas and oil business.
        This
        includes, without limitation, exploration for, development and production
        of
        natural gas and oil on the terms and conditions set forth below and any other
        proper purpose under the Delaware Revised Uniform Limited Partnership Act.
        

       

      The
        Managing General Partner may not, without the affirmative vote of Participants
        whose Units equal a majority of the total Units, do the following:

       

      	(i)
                	
              change
                the investment and business purpose of the Partnership; or
                

            


       

      	(ii)
                	
              cause
                the Partnership to engage in activities outside the stated business
                purposes of the Partnership through joint ventures with other
                entities.

            


       


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


       

      ARTICLE
        II

      DEFINITION
        OF TERMS

       

      2.01.
        Definitions.
        As used
        in this Agreement, the following terms shall have the meanings set forth
        below:

       

      	1.  	
              “Administrative
                Costs” means all customary and routine expenses incurred by the Sponsor
                for the conduct of Partnership administration, including: in-house
                legal,
                finance, in-house accounting, secretarial, travel, office rent, telephone,
                data processing and other items of a similar nature. Administrative
                Costs
                shall be limited as follows:

            


       

      	(i)
                	
              no
                Administrative Costs charged shall be duplicated under any other
                category
                of expense or cost; and

            


       

      	(ii)
                	
              no
                portion of the salaries, benefits, compensation or remuneration of
                controlling persons of the Managing General Partner shall be reimbursed
                by
                the Partnership as Administrative Costs. Controlling persons include
                directors, executive officers and those holding 5% or more equity
                interest
                in the Managing General Partner or a person having power to direct
                or
                cause the direction of the Managing General Partner, whether through
                the
                ownership of voting securities, by contract, or otherwise.
                

            


       

      	2.  	
              “Administrator”
                means the official or agency administering the securities laws of
                a
                state.

            


       

      	3.  	
              “Affiliate”
                means with respect to a specific person:

            


       

      	(i)
                	
              any
                person directly or indirectly owning, controlling, or holding with
                power
                to vote 10% or more of the outstanding voting securities of the specified
                person; 

            


       

      	(ii)
                	
              any
                person 10% or more of whose outstanding voting securities are directly
                or
                indirectly owned, controlled, or held with power to vote, by the
                specified
                person; 

            


       

      	(iii)
                	
              any
                person directly or indirectly controlling, controlled by, or under
                common
                control with the specified person; 

            


       

      	(iv)
                	
              any
                officer, director, trustee or partner of the specified person; and
                

            


       

      	(v)
                	
              if
                the specified person is an officer, director, trustee or partner,
                any
                person for which the person acts in any such
                capacity.

            


       

      	4.  	
              “Agreement”
                means this Amended and Restated Certificate and Agreement of Limited
                Partnership, including all exhibits to this
                Agreement.

            


       

      	5.  	
              “Anthem
                Securities” means Anthem Securities, Inc., whose principal executive
                offices are located at 311 Rouser Road, P.O. Box 926, Moon Township,
                Pennsylvania 15108-0926.

            


       

      	6.  	
              “Assessments”
                means additional amounts of capital which may be mandatorily required
                of
                or paid voluntarily by a Participant beyond his subscription
                commitment.

            


       

      	7.  	
              “Atlas”
                means Atlas Resources, LLC, a Pennsylvania limited liability company,
                whose principal executive offices are located at 311 Rouser Road,
                Moon
                Township, Pennsylvania 15108, and any successor entity to Atlas Resources,
                LLC, whether by merger or any other form of reorganization, or the
                acquisition of all, or substantially all, of Atlas Resources, LLC’s
                assets.

            


       


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      


      


       

      	8.  	
              “Atlas
                America Public #15-2005 Program” means the offering of Units in a series
                of up to three limited partnerships entitled Atlas America Public
                #15-2006(A) L.P., Atlas America Public #15-2006(B) L.P. and Atlas
                America
                Public #15-2006(C) L.P.

            


       

      	9.  	
              “Capital
                Account” or “account” means the account established for each party,
                maintained as provided in §5.02 and its subsections.
                

            


       

      	10.  	
              “Capital
                Contribution” means the amount agreed to be contributed to the Partnership
                by a Partner pursuant to §§3.04 and 3.05 and their
                subsections.

            


       

      	11.  	
              “Carried
                Interest” means an equity interest in the Partnership issued to a Person
                without consideration, in the form of cash or tangible property,
                in an
                amount proportionately equivalent to that received from the
                Participants.

            


       

      	12.  	
              “Code”
                means the Internal Revenue Code of 1986, as
                amended.

            


       

      	13.  	
              “Cost,”
                when used with respect to the sale or transfer of property to the
                Partnership, means:

            


       

      	(i)
                	
              the
                sum of the prices paid by the seller or transferor to an unaffiliated
                person for the property, including bonuses;


            


       

      	(ii)
                	
              title
                insurance or examination costs, brokers’ commissions, filing fees,
                recording costs, transfer taxes, if any, and like charges in connection
                with the acquisition of the property; 

            


       

      	(iii)
                	
              a
                pro rata portion of the seller’s or transferor’s actual necessary and
                reasonable expenses for seismic and geophysical services; and
                

            


       

      	(iv)
                	
              rentals
                and ad valorem taxes paid by the seller or transferor for the property
                to
                the date of its transfer to the buyer, interest and points actually
                incurred on funds used to acquire or maintain the property, and the
                portion of the seller’s or transferor’s reasonable, necessary and actual
                expenses for geological, engineering, drafting, accounting, legal
                and
                other like services allocated to the property cost in conformity
                with
                generally accepted accounting principles and industry standards,
                except
                for expenses in connection with the past drilling of wells which
                are not
                producers of sufficient quantities of oil or gas to make commercially
                reasonable their continued operations, and provided that the expenses
                enumerated in this subsection (iv) shall have been incurred not more
                than
                36 months before the sale or transfer to the Partnership.
                

            


       

      “Cost,”
        when used with respect to services, means the reasonable, necessary and actual
        expense incurred by the seller on behalf of the Partnership in providing
        the
        services, determined in accordance with generally accepted accounting
        principles.

       

      As
        used
        elsewhere, “Cost” means the price paid by the seller in an arm’s-length
        transaction.

       

      	14.  	
              “Dealer-Manager”
                means Anthem Securities, Inc., an Affiliate of the Managing General
                Partner, the broker/dealer which will manage the offering and sale
                of the
                Units.

            


       

      	15.  	
              “Development
                Well” means a well drilled within the proved area of a natural gas or oil
                reservoir to the depth of a stratigraphic Horizon known to be productive.
                

            


       


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      


      


       

      	16.  	
              “Direct
                Costs” means all actual and necessary costs directly incurred for the
                benefit of the Partnership and generally attributable to the goods
                and
                services provided to the Partnership by parties other than the Sponsor
                or
                its Affiliates. Direct Costs may not include any cost otherwise classified
                as Organization and Offering Costs, Administrative Costs, Intangible
                Drilling Costs, Tangible Costs, Operating Costs or costs related
                to the
                Leases, but may include the cost of services provided by the Sponsor
                or
                its Affiliates if the services are provided pursuant to written contracts
                and in compliance with §4.03(d)(7) or pursuant to the Managing General
                Partner’s role as Tax Matters Partner.

            


       

      	17.  	
              “Distribution
                Interest” means an undivided interest in the Partnership’s assets after
                payments to the Partnership’s creditors or the creation of a reasonable
                reserve therefore, in the ratio the positive balance of a party’s Capital
                Account bears to the aggregate positive balance of the Capital Accounts
                of
                all of the parties determined after taking into account all Capital
                Account adjustments for the taxable year during which liquidation
                occurs
                (other than those made pursuant to liquidating distributions or
                restoration of deficit Capital Account balances). Provided, however,
                after
                the Capital Accounts of all of the parties have been reduced to zero,
                the
                interest in the remaining Partnership assets shall equal a party’s
                interest in the related Partnership revenues as set forth in §5.01 and its
                subsections.

            


       

      	18.  	
              “Drilling
                and Operating Agreement” means the proposed Drilling and Operating
                Agreement between the Managing General Partner or an Affiliate as
                Operator, and the Partnership as Developer, a copy of the proposed
                form of
                which is attached to this Agreement as Exhibit (II).
                

            


       

      	19.  	
              “Exploratory
                Well” means a well drilled to: 

            


       

      	(i)
                	
              find
                commercially productive hydrocarbons in an unproved area;
                

            


       

      	(ii)
                	
              find
                a new commercially productive Horizon in a field previously found
                to be
                productive of hydrocarbons at another Horizon; or
                

            


       

      	(iii)
                	
              significantly
                extend a known prospect.

            


       

      	20.  	
              “Farmout”
                means an agreement by the owner of the leasehold or Working Interest
                to
                assign his interest in certain acreage or well to the assignees,
                retaining
                some interest such as an Overriding Royalty Interest, an oil and
                gas
                payment, offset acreage or other type of interest, subject to the
                drilling
                of one or more specific wells or other performance as a condition
                of the
                assignment.

            


       

      	21.  	
              “Final
                Terminating Event” means any one of the following:
                

            


       

      	(i)
                	
              the
                expiration of the Partnership’s fixed term;


            


       

      	(ii)
                	
              notice
                to the Participants by the Managing General Partner of its election
                to
                terminate the Partnership’s affairs; 

            


       

      	(iii)
                	
              notice
                by the Participants to the Managing General Partner of their similar
                election through the affirmative vote of Participants whose Units
                equal a
                majority of the total Units; or 

            


       

      	(iv)
                	
              the
                termination of the Partnership under §708(b)(1)(A) of the Code or the
                Partnership ceases to be a going concern.

            


       

      	22.  	
              “Horizon”
                means a zone of a particular formation; that part of a formation
                of
                sufficient porosity and permeability to form a petroleum
                reservoir.

            


       


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      


       

      	23.  	
              “Independent
                Expert” means a person with no material relationship to the Sponsor or its
                Affiliates who is qualified and in the business of rendering opinions
                regarding the value of natural gas and oil properties based on the
                evaluation of all pertinent economic, financial, geologic and engineering
                information available to the Sponsor or its
                Affiliates.

            


       

      	24.  	
              “Initial
                Closing Date” means the date after the minimum amount of subscription
                proceeds has been received when subscription proceeds are first withdrawn
                from the escrow account.

            


       

      	25.  	
              “Intangible
                Drilling Costs” or “Non-Capital Expenditures” means those expenditures
                associated with property acquisition and the drilling and completion
                of
                natural gas and oil wells that under present law are generally accepted
                as
                fully deductible currently for federal income tax purposes. This
                includes:
                

            


       

      	(i)
                	
              all
                expenditures made for any well before production in commercial quantities
                for wages, fuel, repairs, hauling, supplies and other costs and expenses
                incident to and necessary for drilling the well and preparing the
                well for
                production of natural gas or oil, that are currently deductible pursuant
                to Section 263(c) of the Code and Treasury Reg. Section 1.612-4,
                and are
                generally termed "intangible drilling and development costs,";
                

            


       

      	(ii)
                	
              the
                expense of plugging and abandoning any well before a completion attempt;
                and

            


       

      	(iii)
                	
              the
                costs (other than Tangible Costs and Lease costs) to re-enter and
                deepen
                an existing well, complete the well to deeper reservoirs, or plug
                and
                abandon the well if it is nonproductive from the targeted deeper
                reservoirs.

            


       

      	26.  	
              “Interim
                Closing Date” means those date(s) after the Initial Closing Date, but
                before the Offering Termination Date, that the Managing General Partner,
                in its sole discretion, applies additional subscription proceeds
                to
                additional Partnership activities, including drilling
                activities.

            


       

      	27.  	
              “Investor
                General Partners” means:

            


       

      	(i)  	
              the
                Persons signing the Subscription Agreement as Investor General Partners;
                and 

            


       

      	(ii)  	
              the
                Managing General Partner to the extent of any optional subscription
                as an
                Investor General Partner under §3.03(b)(2).


            


       

      All
        Investor General Partners shall be of the same class and have the same
        rights.

       

      	28.  	
              “Landowner’s
                Royalty Interest” means an interest in production, or its proceeds, to be
                received free and clear of all costs of development, operation, or
                maintenance, reserved by a landowner on the creation of a
                Lease.

            


       

      	29.  	
              “Leases”
                means full or partial interests in natural gas and oil leases, oil
                and
                natural gas mineral rights, fee rights, licenses, concessions, or
                other
                rights under which the holder is entitled to explore for and produce
                oil
                and/or natural gas, and includes any contractual rights to acquire
                any
                such interest.

            


       


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


      


       

      	30.  	
              “Limited
                Partners” means:

            


       

      	(i)
                	
              the
                Persons signing the Subscription Agreement as Limited Partners;
                

            


       

      	(ii)
                	
              the
                Managing General Partner to the extent of any optional subscription
                as a
                Limited Partner under §3.03(b)(2); 

            


       

      	(iii)
                	
              the
                Investor General Partners on the conversion of their Investor General
                Partner Units to Limited Partner Units pursuant to §6.01(b); and
                

            


       

      	(iv)
                	
              any
                other Persons who are admitted to the Partnership as additional or
                substituted Limited Partners. 

            


       

      Except
        as
        provided in §3.05(b), with respect to the required additional Capital
        Contributions of Investor General Partners, all Limited Partners shall be
        of the
        same class and have the same rights.

       

      	31.  	
              “Managing
                General Partner” means:

            


       

      	(i)
                	
              Atlas;
                or 

            


       

      	(ii)
                	
              any
                Person admitted to the Partnership as a general partner, other than
                as an
                Investor General Partner, who is designated to exclusively supervise
                and
                manage the operations of the Partnership.

            


       

      	32.  	
              “Managing
                General Partner Signature Page” means an execution and subscription
                instrument in the form attached as Exhibit (I-A) to this Agreement,
                which
                is incorporated in this Agreement by
                reference.

            


       

      	33.  	
              “Offering
                Termination Date” means the date after the minimum amount of subscription
                proceeds has been received on which the Managing General Partner
                determines, in its sole discretion, that the Partnership’s subscription
                period is closed and the acceptance of subscriptions ceases, which
                may be
                any date up to and including December 31, 2006.


            


       

      Notwithstanding
        the above, the Offering Termination Date may not extend beyond the time that
        subscriptions for the maximum number of Units set forth in §3.03(c)(1) have been
        received and accepted by the Managing General Partner.

       

      	34.  	
              “Operating
                Costs” means expenditures made and costs incurred in producing and
                marketing natural gas or oil from completed wells. These costs include,
                but are not limited to: 

            


       

      	(i)
                	
              labor,
                fuel, repairs, hauling, materials, supplies, utility charges and
                other
                costs incident to or related to producing and marketing natural gas
                and
                oil;

            


       

      	(ii)
                	
              ad
                valorem and severance taxes; 

            


       

      	(iii)
                	
              insurance
                and casualty loss expense; and 

            


       

      	(iv)
                	
              compensation
                to well operators or others for services rendered in conducting these
                operations. 

            


       


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      


      


       

      Operating
        Costs also include reworking, workover, subsequent equipping, and similar
        expenses relating to any well, the Managing General Partner’s gathering fees set
        forth in §4.04(a)(2)(d) and the reimbursement of the Managing General Partner’s
        Administrative Costs set forth in §4.04(a)(2)(c); but do not include the costs
        to re-enter and deepen an existing well, complete the well to deeper formations
        or reservoirs, or plug and abandon the well if it is nonproductive from the
        targeted deeper formations or reservoirs.

       

      	35.  	
              “Operator”
                means the Managing General Partner, as operator of Partnership Wells
                in
                Pennsylvania, and the Managing General Partner or an Affiliate as
                Operator
                of Partnership Wells in other areas of the United
                States.

            


       

      	36.  	
              “Organization
                and Offering Costs” means all costs of organizing and selling the offering
                including, but not limited to:

            


       

      	(i)
                	
              total
                underwriting and brokerage discounts and commissions (including fees
                of
                the underwriters’ attorneys); 

            


       

      	(ii)
                	
              expenses
                for printing, engraving, mailing, salaries of employees while engaged
                in
                sales activities, charges of transfer agents, registrars, trustees,
                escrow
                holders, depositaries, engineers and other experts;
                

            


       

      	(iii)
                	
              expenses
                of qualification of the sale of the securities under federal and
                state
                law, including taxes and fees, accountants’ and attorneys’ fees; and
                

            


       

      	(iv)
                	
              other
                front-end fees.

            


       

      	37.  	
              “Organization
                Costs” means all costs of organizing the offering including, but not
                limited to:

            


       

      	(i)  	
              expenses
                for printing, engraving, mailing, salaries of employees while engaged
                in
                sales activities, charges of transfer agents, registrars, trustees,
                escrow
                holders, depositaries, engineers and other experts;
                

            


       

      	(ii)  	
              expenses
                of qualification of the sale of the securities under federal and
                state
                law, including taxes and fees, accountants’ and attorneys’ fees; and
                

            


       

      	(iii)  	
              other
                front-end fees.

            


       

      	38.  	
              “Overriding
                Royalty Interest” means an interest in the natural gas and oil produced
                under a Lease, or the proceeds from the sale thereof, carved out
                of the
                Working Interest, to be received free and clear of all costs of
                development, operation, or maintenance.

            


       

      	39.  	
              “Participants”
                means:

            


       

      	(i)
                	
              the
                Managing General Partner to the extent of its optional subscription
                under
                §3.03(b)(2); 

            


       

      	(ii)
                	
              the
                Limited Partners; and 

            


       

      	(iii)
                	
              the
                Investor General Partners.

            


       


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      


      


       

      	40.  	
              “Partners”
                means:

            


       

      	(i)
                	
              the
                Managing General Partner;

            


       

      	(ii)
                	
              the
                Investor General Partners; and 

            


       

      	(iii)
                	
              the
                Limited Partners.

            


       

      	41.  	
              “Partnership”
                means Atlas America Public #15-2006(B)
                L.P.

            


       

      	42.  	
              “Partnership
                Net Production Revenues” means gross revenues after deduction of the
                related Operating Costs, Direct Costs, Administrative Costs and all
                other
                Partnership costs not specifically
                allocated.

            


       

      	43.  	
              “Partnership
                Well” means a well, some portion of the revenues from which is received
                by
                the Partnership.

            


       

      	44.  	
              “Person”
                means a natural person, partnership, corporation, association, trust
                or
                other legal entity.

            


       

      	45.  	
              “Production
                Purchase” or “Income” Program means any program whose investment objective
                is to directly acquire, hold, operate, and/or dispose of producing
                oil and
                gas properties. Such a program may acquire any type of ownership
                interest
                in a producing property, including, but not limited to, working interests,
                royalties, or production payments. A program which spends at least
                90% of
                capital contributions and funds borrowed (excluding offering and
                organizational expenses) in the above described activities is presumed
                to
                be a production purchase or income
                program.

            


       

      	46.  	
              “Program”
                means one or more limited or general partnerships or other investment
                vehicles formed, or to be formed, for the primary purpose
                of:

            


       

      	(i)
                	
              exploring
                for natural gas, oil and other hydrocarbon substances; or
                

            


       

      	(ii)
                	
              investing
                in or holding any property interests which permit the exploration
                for or
                production of hydrocarbons or the receipt of such production or its
                proceeds.

            


       

      	47.  	
              “Prospect”
                means an area covering lands which are believed by the Managing General
                Partner to contain subsurface structural or stratigraphic conditions
                making it susceptible to the accumulations of hydrocarbons in commercially
                productive quantities at one or more Horizons. The area, which may
                be
                different for different Horizons, shall
                be:

            


       

      	(i)
                	
              designated
                by the Managing General Partner in writing before the conduct of
                Partnership operations; and 

            


       

      	(ii)
                	
              enlarged
                or contracted from time to time on the basis of subsequently acquired
                information to define the anticipated limits of the associated hydrocarbon
                reserves and to include all acreage encompassed therein.
                

            


       


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      


      


       

      If
        the
        well to be drilled by the Partnership is to a Horizon containing Proved
        Reserves, then a “Prospect” for a particular Horizon may be limited to the
        minimum area permitted by state law or local practice, whichever is applicable,
        to protect against drainage from adjacent wells. Subject to the foregoing
        sentence, “Prospect” shall be deemed the drilling or spacing unit for the
        Clinton/Medina geological formation and the Mississippian and/or Upper Devonian
        Sandstone reservoirs in Ohio, Pennsylvania, and New York and the Mississippian
        Carbonate or the Devonian Shale reservoirs in Anderson, Campbell, Morgan,
        Roane
        and Scott Counties, Tennessee. 

       

      	48.  	
              “Prospectus”
                means the Prospectus included in the Registration Statement on Form
                S-1
                relating to the offer and sale of the Units which has been filed
                with the
                Securities and Exchange Commission (the “Commission”) under the Securities
                Act of 1933, as amended (the “Act”). As used in this Agreement, the terms
                “Prospectus” and “Registration Statement” refer solely to the Prospectus
                and Registration Statement, as amended, described above, except
                that:

            


       

      	(i)  	
              from
                and after the date on which any post-effective amendment to the
                Registration Statement is declared effective by the Commission, the
                term
                “Registration Statement” shall refer to the Registration Statement as
                amended by that post-effective amendment, and the term “Prospectus” shall
                refer to the Prospectus then forming a part of the Registration Statement;
                and

            


       

      	(ii)  	
              if
                the Prospectus filed pursuant to Rule 424(b) or (c) promulgated by
                the
                Commission under the Act differs from the Prospectus on file with
                the
                Commission at the time the Registration Statement or any post-effective
                amendment thereto shall have become effective, the term “Prospectus” shall
                refer to the Prospectus filed pursuant thereto from and after the
                date on
                which it was filed. 

            


       

      	49.  	
              “Proved
                Developed Oil and Gas Reserves” means reserves that can be expected to be
                recovered through existing wells with existing equipment and operating
                methods. Additional oil and gas expected to be obtained through the
                application of fluid injection or other improved recovery techniques
                for
                supplementing the natural forces and mechanisms of primary recovery
                should
                be included as “proved developed reserves” only after testing by a pilot
                project or after the operation of an installed program has confirmed
                through production response that increased recovery will be
                achieved.

            


       

      	50.  	
              “Proved
                Reserves” means the estimated quantities of crude oil, natural gas, and
                natural gas liquids which geological and engineering data demonstrate
                with
                reasonable certainty to be recoverable in future years from known
                reservoirs under existing economic and operating conditions, i.e.,
                prices and costs as of the date the estimate is made. Prices include
                consideration of changes in existing prices provided only by contractual
                arrangements, but not on escalations based upon future
                conditions.

            


       

      	(i)
                	
              Reservoirs
                are considered proved if economic producibility is supported by either
                actual production or conclusive formation test. The area of a reservoir
                considered proved includes: 

            


       

      	(a)
                	
              that
                portion delineated by drilling and defined by gas-oil and/or oil-water
                contacts, if any; and 

            


       


      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      


      


       

      	(b)
                	
              the
                immediately adjoining portions not yet drilled, but which can be
                reasonably judged as economically productive on the basis of available
                geological and engineering data. 

            


       

      In
        the
        absence of information on fluid contacts, the lowest known structural occurrence
        of hydrocarbons controls the lower proved limit of the reservoir.

       

      	(ii)
                	
              Reserves
                which can be produced economically through application of improved
                recovery techniques (such as fluid injection) are included in the
“proved”
                classification when successful testing by a pilot project, or the
                operation of an installed program in the reservoir, provides support
                for
                the engineering analysis on which the project or program was
                based.

            


       

      	(iii)
                	
              Estimates
                of proved reserves do not include the following:
                

            


       

      	(a)
                	
              oil
                that may become available from known reservoirs but is classified
                separately as “indicated additional reserves”;


            


       

      	(b)
                	
              crude
                oil, natural gas, and natural gas liquids, the recovery of which
                is
                subject to reasonable doubt because of uncertainty as to geology,
                reservoir characteristics, or economic factors;


            


       

      	(c)
                	
              crude
                oil, natural gas, and natural gas liquids, that may occur in undrilled
                prospects; and 

            


       

      	(d)
                	
              crude
                oil, natural gas, and natural gas liquids, that may be recovered
                from oil
                shales, coal, gilsonite and other such
                sources.

            


       

      	51.  	
              “Proved
                Undeveloped Reserves” means reserves that are expected to be recovered
                from either:

            


       

      	(i)
                	
              new
                wells on undrilled acreage; or 

            


       

      	(ii)
                	
              from
                existing wells where a relatively major expenditure is required for
                recompletion. 

            


       

      Reserves
        on undrilled acreage shall be limited to those drilling units offsetting
        productive units that are reasonably certain of production when drilled.
        Proved
        reserves for other undrilled units can be claimed only where it can be
        demonstrated with certainty that there is continuity of production from the
        existing productive formation. Under no circumstances should estimates for
        proved undeveloped reserves be attributable to any acreage for which an
        application of fluid injection or other improved recovery technique is
        contemplated, unless such techniques have been proved effective by actual
        tests
        in the area and in the same reservoir.

       

      	52.  	
              “Reimbursement
                for Permissible Non-Cash Compensation” means a .5% accountable
                reimbursement for permissible non-cash compensation, which
                includes:

            


       

      	(i)
                	
              an
                accountable reimbursement for training and education meetings for
                associated persons of the Selling Agents;


            


       


      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      


      


       

      	(ii)
                	
              gifts
                that do not exceed $100 per year and are not preconditioned on achievement
                of a sales target; 

            


       

      	(iii)
                	
              an
                occasional meal, a ticket to a sporting event or the theater, or
                comparable entertainment which is neither so frequent nor so extensive
                as
                to raise any question of propriety and is not preconditioned on
                achievement of a sales target; and 

            


       

      	(iv)
                	
              contributions
                to a non-cash compensation arrangement between a Selling Agent and
                its
                associated persons, provided that neither the Managing General Partner
                nor
                the Dealer-Manager directly or indirectly participates in the Selling
                Agent’s organization of a permissible non-cash compensation
                arrangement.

            


       

      	53.  	
              “Roll-Up”
                means a transaction involving the acquisition, merger, conversion
                or
                consolidation, either directly or
                indirectly, of the Partnership and the issuance of securities of
                a Roll-Up
                Entity. The term does not include: 

            


       

      	(i)
                	
              a
                transaction involving securities of the Partnership that have been
                listed
                for at least 12 months on a national exchange or traded through the
                National Association of Securities Dealers Automated Quotation National
                Market System; or

            


       

      	(ii)
                	
              a
                transaction involving the conversion to corporate, trust or association
                form of only the Partnership if, as a consequence of the transaction,
                there will be no significant adverse change in any of the following:
                

            


       

      	(a)
                	
              voting
                rights; 

            


       

      	(b)
                	
              the
                Partnership’s term of existence; 

            


       

      	(c)
                	
              the
                Managing General Partner’s compensation; and


            


       

      	(d)
                	
              the
                Partnership’s investment objectives.

            


       

      	54.  	
              “Roll-Up
                Entity” means a partnership, trust, corporation or other entity that would
                be created or survive after the successful completion of a proposed
                roll-up transaction.

            


       

      	55.  	
              “Sales
                Commissions” means all underwriting and brokerage discounts and
                commissions incurred in the sale of Units payable to registered
                broker/dealers, but excluding the
                following:

            


       

      	(i)  	
              the
                2.5% Dealer-Manager fee; 

            


       

      	(ii)  	
              the
                .5% accountable Reimbursement for Permissible Non-Cash Compensation;
                and
                

            


       

      	(iii)  	
              the
                up to .5% reimbursement for bona fide due diligence
                expenses.

            


       

      	56.  	
              “Selling
                Agents” means the broker/dealers which are selected by the Dealer-Manager
                to participate in the offer and sale of the
                Units.

            


       

      	57.  	
              “Sponsor”
                means any person directly or indirectly instrumental in organizing,
                wholly
                or in part, a program or any person who will manage or is entitled
                to
                manage or participate in the management or control of a
                program.
                The definition includes:

            


       


      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              the
                managing and controlling general partner(s) and any other person
                who
                actually controls or selects the person who controls 25% or more
                of the
                exploratory, development or producing activities of the program,
                or any
                segment thereof, even if that person has not entered into a contract
                at
                the time of formation of the program; and

            


       

      	(ii)
                	
              whenever
                the context so requires, the term “sponsor” shall be deemed to include its
                affiliates.

            


       

      “Sponsor”
        does not include wholly independent third-parties such as attorneys,
        accountants, and underwriters whose only compensation is for professional
        services rendered in connection with the offering of units. 

       

      	58.  	
              “Subscription
                Agreement” means an execution and subscription instrument in the form
                attached as Exhibit (I-B) to this Agreement,
                which is incorporated in this Agreement by
                reference.

            


       

      	59.  	
              “Tangible
                Costs” or “Capital Expenditures” means those costs associated with
                property acquisition and drilling and completing natural gas and
                oil wells
                which are generally accepted as capital expenditures under the Code.
                This
                includes all of the following: 

            


       

      	(i)  	
              costs
                of equipment, parts and items of hardware used in drilling and completing
                a well; 

            


       

      	(ii)  	
              the
                costs (other than Intangible Drilling Costs and Lease costs) to re-enter
                and deepen an existing well, complete the well to deeper reservoirs,
                or
                plug and abandon the well if it is nonproductive from the targeted
                deeper
                reservoirs; and 

            


       

      	(iii)  	
              those
                items necessary to deliver acceptable natural gas and oil production
                to
                purchasers to the extent installed downstream
                from the wellhead of any well and which are required to be capitalized
                under the Code and its regulations.

            


       

      	60.  	
              “Tax
                Matters Partner” means
                the Managing General Partner.

            


       

      	61.  	
              “Units”
                or “Units of Participation” means up to 507.1 Limited Partner interests in
                the Partnership and up to 14,265.5 Investor General Partner interests
                in
                the Partnership, which will be converted to up to 14,265.5 Limited
                Partner
                Units as set forth in §6.01(b), purchased by Participants in the
                Partnership under the provisions of §3.03 and its subsections,
                including any rights to profits, losses, income, gain, credits,
                deductions, cash distributions or returns of capital or other attributes
                of the Units.

            


       

      	62.  	
              “Working
                Interest” means an interest in a Lease which is subject to some portion of
                the cost of development, operation,
                or
                maintenance of the Lease.

            


       

      ARTICLE
        III

      SUBSCRIPTIONS
        AND FURTHER CAPITAL CONTRIBUTIONS

       

      3.01.
        Designation
        of Managing General Partner and Participants.
        Atlas
        shall serve as Managing General Partner of the Partnership. Atlas shall further
        serve as a Participant to the extent of any subscription made by it pursuant
        to
§3.03(b)(2). 

       


      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      


      


       

      Limited
        Partners and Investor General Partners, including the Managing General Partner
        and its Affiliates to the extent, if any, they purchase Units, shall serve
        as
        Participants. 

       

      3.02.
        Participants.

       

      3.02(a).
        Limited
        Partner at Formation.
        Atlas
        America, Inc., as Original Limited Partner, has acquired one Unit and has
        made
        a
        Capital Contribution of $100. On the admission of one or more Limited
        Partners,
        the
        Partnership shall return to the Original Limited Partner its Capital
        Contribution and shall reacquire its Unit. The Original Limited Partner shall
        then cease to be a Limited Partner in the Partnership with respect to the
        Unit.

       

      3.02(b).
        Offering
        of Interests.
        The
        Partnership is authorized to admit to the Partnership at the Initial Closing
        Date, any Interim Closing Date(s), and the Offering Termination Date additional
        Participants whose Subscription Agreements are accepted by the Managing General
        Partner if, after the admission of the additional Participants, the total
        Units
        sold do not exceed the maximum number of Units set forth in §3.03(c)(1).


       

      3.02(c).
        Admission
        of Participants.
        No
        action or consent by the Participants shall be required for the admission
        of
        additional Participants pursuant to this Agreement. 

       

      All
        subscribers’ funds shall be held in an interest bearing account or accounts by
        an independent escrow holder and shall not be released to the Partnership
        until
        the receipt and acceptance of the minimum amount of subscription proceeds
        set
        forth in §3.03(c)(2). Thereafter, subscriptions may be paid directly to the
        Partnership account.

       

      3.03.
        Subscriptions
        to the Partnership.

       

      3.03(a).
        Subscriptions
        by Participants.

       

      3.03(a)(1).
        Subscription
        Price and Minimum Subscription.
        The
        subscription price of a Unit in the Partnership shall be $10,000, except
        as set
        forth below, and shall be designated on each Participant’s Subscription
        Agreement and payable as set forth in §3.05(b)(1). The minimum subscription per
        Participant shall be one Unit ($10,000). Larger subscriptions shall be accepted
        in $1,000 increments, beginning with $11,000, $12,000, etc.

       

      Notwithstanding
        the foregoing, the subscription price for: 

       

      	(i)
                	
              the
                Managing General Partner, its officers, directors, and Affiliates,
                and
                Participants who buy Units through the officers and directors of
                the
                Managing General Partner, shall be reduced by an amount equal to
                the 2.5%
                Dealer-Manager fee, the 7% Sales Commission, the .5% accountable
                Reimbursement for Permissible Non-Cash Compensation, and the .5%
                reimbursement of the Selling Agents’ bona fide due diligence expenses,
                which shall not be paid with respect to these sales; and
                

            


       

      	(ii)
                	
              Registered
                Investment Advisors and their clients, and Selling Agents and their
                registered representatives and principals, shall be reduced by an
                amount
                equal to the 7% Sales Commission, which shall not be paid with respect
                to
                these sales.

            


       

      No
        more
        than 5% of the total Units in the Partnership shall be sold with the discounts
        described above.

       

      3.03(a)(2).
        Effect
        of Subscription.
        Execution of a Subscription Agreement shall serve as an agreement by the
        Participant to be bound by each and every term of this Agreement.

       

      3.03(b).
        Optional
        Subscriptions for Units by Managing General Partner.

       


      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      


      


       

      3.03(b)(1).
        Managing
        General Partner’s Optional Subscriptions for Units.
        In
        addition to the Managing General Partner’s required Capital Contributions under
§3.04(a), the Managing General Partner may subscribe for up to 5% of the total
        Units in the Partnership under the provisions of §3.03(a) and its subsections,
        and, subject to the limitations on voting rights set forth in §4.03(c)(3), to
        that extent shall be deemed to be a Participant in the Partnership for all
        purposes under this Agreement. 

       

      3.03(b)(2).
        Effect
        of and Evidencing Subscription.
        The
        Managing General Partner has executed a Managing General Partner Signature
        Page
        which:

       

      	(i)
                	
              evidences
                the Managing General Partner’s required Capital Contributions under
                §3.04(a); and

            


       

      	(ii)
                	
              may
                be amended, from time-to-time, to reflect the amount of any optional
                subscriptions for Units as a Participant under §3.03(b)(1).
                

            


       

      Execution
        of the Managing General Partner Signature Page serves as an agreement by
        the
        Managing General Partner to be bound by each and every term of this
        Agreement.

       

      3.03(c).
        Maximum
        and Minimum Number of Units.

       

      3.03(c)(1).
        Maximum
        Number of Units.
        The
        maximum number of Units may not exceed 14,772.6 Units, which is up to
        $147,726,000 of cash subscription proceeds, excluding the subscription discounts
        permitted under §3.03(a)(1). Notwithstanding the foregoing, the maximum number
        of Units in all of the partnerships in the Atlas America Public #15-2005
        Program, in the aggregate, shall not exceed 20,000 Units which is up to
        $200,000,000 of cash subscription proceeds excluding the subscription discounts
        permitted under §3.03(a)(1).

       

      3.03(c)(2).
        Minimum
        Number of Units.
        The
        minimum number of Units shall equal at least 200 Units, but in any event
        not
        less than that number of Units which provides the Partnership with cash
        subscription proceeds of $2,000,000, excluding the subscription discounts
        permitted under §3.03(a)(1). 

       

      If
        subscriptions for the minimum number of Units have not been received and
        accepted at the Offering Termination Date, then all monies deposited by
        subscribers shall be promptly returned to them. They shall receive interest
        earned on their subscription proceeds from the date the monies were deposited
        in
        escrow through the date of refund, without deduction for any fees.

       

      The
        partnership may break escrow and begin its drilling activities in the Managing
        General Partner’s sole discretion on receipt and acceptance of the minimum
        subscription proceeds.

       

      3.03(d).
        Acceptance
        of Subscriptions.
        

       

      3.03(d)(1).
        Discretion by the Managing General Partner.
        Acceptance of subscriptions is discretionary with the Managing General Partner.
        The Managing General Partner may reject any subscription for any reason it
        deems
        appropriate. 

       

      3.03(d)(2).
        Time Period in Which to Accept Subscriptions.
        Subscriptions shall be accepted or rejected by the Partnership within 30
        days of
        their receipt. If a subscription is rejected, then all of the subscriber’s funds
        shall be returned to the subscriber promptly. 

       

      3.03(d)(3).
        Admission to the Partnership.
        The
        Participants shall be admitted to the Partnership as follows:

       


      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              not
                later than 15 days after the release from escrow of Participants’ funds to
                the Partnership; and

            


       

      	(ii)
                	
              after
                the close of the escrow account not later than the last day of the
                calendar month in which their Subscription Agreements were accepted
                by the
                Partnership.

            


       

      3.04.
        Capital
        Contributions of the Managing General Partner.

       

      3.04(a).
        Managing
        General Partner’s Required Capital Contributions.
        The
        Managing General Partner, as a general partner and not as a Participant,
        is
        required to pay the costs or make the other required Capital Contributions
        charged to it under this Agreement, including contributing to the Partnership
        the Leases which will be drilled by the Partnership on the terms set forth
        in
§4.01(a)(4), in an amount equal to not less than 25%, in the aggregate, of
        all
        Capital Contributions to the Partnership, at the time the costs are required
        to
        be paid by the Partnership, but no later than December 31, 2007.

       

      3.04(b).
        On
        Liquidation the Managing General Partner Must Contribute Deficit Balance
        in Its
        Capital Account.
        The
        Managing General Partner shall contribute to the Partnership any deficit
        balance
        in its Capital Account on the occurrence of either of the following
        events:

       

      	(i)
                	
              the
                liquidation of the Partnership; or

            


       

      	(ii)
                	
              the
                liquidation of the Managing General Partner’s interest in the
                Partnership.

            


       

      This
        shall be determined after taking into account all adjustments for the
        Partnership’s taxable year during which the liquidation occurs, other than
        adjustments made pursuant to this requirement, by the end of the taxable
        year in
        which its interest in the Partnership is liquidated or, if later, within
        90 days
        after the date of the liquidation. 

       

      3.04(c).
        Managing
        General Partner’s Partnership Interest for Capital
        Contributions.
        The
        interest of the Managing General Partner, as Managing General Partner and
        not as
        a Participant, in the capital and profits of the Partnership is fully vested
        and
        nonforfeitable as of the date of the formation of the Partnership and is
        in
        consideration for, and is the only consideration for, it’s required Capital
        Contributions to the Partnership. 

       

      3.04(d).
        Managing
        General Partner’s Right to Assign Its Partnership Interest.
        Subject
        to §5.01(b)(4)(a) regarding the Managing General Partner’s subordination
        obligation, the Managing General Partner has the right at any time, in its
        discretion, without the consent of the Participants, and without affecting
        the
        allocation of costs and revenues to the Participants or the Managing General
        Partner’s voting rights under this Agreement, to sell, contribute, exchange or
        otherwise transfer all or any portion of its interest as Managing General
        Partner or as a Participant (if it purchases Units) in the Partnership, or
        any
        interest therein. In that event, except as otherwise may be permitted under
        this
        Agreement, if the Affiliated transferee of the Managing General Partner’s
        transferred interest in the Partnership does not become a substituted Managing
        General Partner in the Partnership, the Affiliated transferee, as a partner
        in
        the Partnership for tax purposes only, shall have the right to receive the
        share
        of the Partnership’s profits, losses, income, gains, deductions, credits and
        depletion allowances, or items thereof, and cash distributions and returns
        of
        capital (including, but not limited to, cash distributions and returns of
        capital on dissolution and liquidation of the Partnership) to which the Managing
        General Partner would otherwise be entitled under this Agreement with respect
        to
        its transferred interest in the Partnership. Subject to the foregoing, the
        transfer of the Managing General Partner’s transferred interest in the
        Partnership to any of its Affiliates may be made on any terms and conditions
        as
        the Managing General Partner determines, in its discretion, and the Partnership
        and the Participants shall have no right to receive or otherwise share in
        any
        consideration received by the Managing General Partner from its Affiliates
        for
        the transfer of the Managing General Partner’s transferred interest in the
        Partnership. No transfer of the Managing General Partner’s transferred interest
        in the Partnership to its Affiliates under this §3.04(d) shall require an
        accounting by the Managing General Partner or the Partnership to the
        Participants.

       


      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      


      


       

      3.05.
        Payment
        of Subscriptions.

       

      3.05(a).
        Managing
        General Partner’s Subscriptions.
        The
        Managing General Partner shall pay any optional subscription under §3.03(b)(2)
        as set forth in §3.05(b)(1).

       

      3.05(b).
        Participant
        Subscriptions and Additional Capital Contributions of the Investor General
        Partners. 

       

      3.05(b)(1).
        Payment
        of Subscription Agreements.
        A
        Participant shall pay the amount designated as the subscription price on
        the
        Subscription Agreement executed by the Participant 100% in cash at the time
        of
        subscribing. A Participant shall receive interest on the amount he pays from
        the
        time his subscription proceeds are deposited in the escrow account, or the
        Partnership account after the minimum number of Units have been received
        as
        provided in §3.06(b), until the Offering Termination Date. 

       

      3.05(b)(2).
        Additional
        Required Capital Contributions of the Investor General
        Partners.
        Investor
        General Partners must make Capital Contributions to the Partnership when
        called
        by the Managing General Partner, in addition to their subscriptions, for
        their
        pro rata share of any Partnership obligations and liabilities which are recourse
        to the Investor General Partners and are represented by their ownership of
        Units
        before the conversion of Investor General Units to Limited Partner Units
        under
§6.01(b). 

       

      3.05(b)(3).
        Default
        Provisions.
        The
        failure of an Investor General Partner to timely make a required additional
        Capital Contribution under this section results in his personal liability
        to the
        other Investor General Partners for the amount in default. The remaining
        Investor General Partners, in proportion to their respective number of Units,
        must pay the defaulting Investor General Partner’s share of Partnership
        liabilities and obligations called for by the Managing General Partner. In
        that
        event, the remaining Investor General Partners:

       

      	(i)
                	
              shall
                have a first and preferred lien on the defaulting Investor General
                Partner’s interest in the Partnership to secure payment of the amount in
                default plus interest at the legal rate; 

            


       

      	(ii)
                	
              shall
                be entitled to receive 100% of the defaulting Investor General Partner’s
                cash distributions, in proportion to their respective number of Units,
                until the amount in default is recovered in full plus interest at
                the
                legal rate; and 

            


       

      	(iii)
                	
              may
                commence legal action to collect the amount due plus interest at
                the legal
                rate.

            


       

      3.06.
        Partnership
        Funds.

       

      3.06(a).
        Fiduciary
        Duty.
        The
        Managing General Partner has a fiduciary responsibility for the safekeeping
        and
        use of all funds and assets of the Partnership, whether or not in the Managing
        General Partner’s possession or control. The Managing General Partner shall not
        employ, or permit another to employ, the funds and assets in any manner except
        for the exclusive benefit of the Partnership. Neither this Agreement nor
        any
        other agreement between the Managing General Partner and the Partnership
        shall
        contractually limit any fiduciary duty owed to the Participants by the Managing
        General Partner under applicable law, except as provided in §§4.01, 4.02, 4.03,
        4.04, 4.05 and 4.06 of this Agreement.

       

      3.06(b).
        Special
        Account After the Receipt of the Minimum Partnership
        Subscriptions.
        Following the receipt of the minimum number of Units and breaking escrow,
        the
        funds of the Partnership shall be held in a separate interest-bearing account
        maintained for the Partnership and shall not be commingled with funds of
        any
        other entity.

       

      3.06(c).
        Investment. 

       


      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      


      


       

      3.06(c)(1).
        Investments
        in Other Entities.
        Partnership funds shall not be invested in the securities of another person
        except in the following instances: 

       

      	(i)
                	
              investments
                in Working Interests or undivided Lease interests made in the ordinary
                course of the Partnership’s business; 

            


       

      	(ii)
                	
              temporary
                investments made as set forth in §3.06(c)(2);


            


       

      	(iii)
                	
              multi-tier
                arrangements meeting the requirements of §4.03(d)(15);
                

            


       

      	(iv)
                	
              investments
                involving less than 5% of the Partnership’s subscription proceeds which
                are a necessary and incidental part of a property acquisition transaction;
                and 

            


       

      	(v)
                	
              investments
                in entities established solely to limit the Partnership’s liabilities
                associated with the ownership or operation of property or equipment,
                provided that duplicative fees and expenses shall be prohibited.
                

            


       

      3.06(c)(2).
        Permissible Investments Before Investment in Partnership
        Activities.
        After
        the Initial Closing Date and until proceeds from the offering are invested
        in
        the Partnership’s operations, the proceeds may be temporarily invested in income
        producing short-term, highly liquid investments, in which there is appropriate
        safety of principal, such as U.S. Treasury Bills.

       

      ARTICLE
        IV

      CONDUCT
        OF OPERATIONS

       

      4.01.
        Acquisition
        of Leases.

       

      4.01(a).
        Assignment
        to Partnership.

       

      4.01(a)(1).
        In General.
        The
        Managing General Partner shall select, acquire and assign or cause to have
        assigned to the Partnership full or partial interests in Leases, by any method
        customary in the natural gas and oil industry, subject to the terms and
        conditions set forth below. 

       

      The
        Partnership and the other partnerships in the Atlas America Public #15-2005
        Program may acquire and develop interests in Leases covering one or more
        of the
        same Prospects, in the Managing General Partner’s discretion.

       

      The
        Partnership shall acquire only Leases reasonably expected to meet the stated
        purposes of the Partnership. No Leases shall be acquired for the purpose
        of a
        subsequent sale, Farmout, or other disposition unless the acquisition is
        made
        after a well has been drilled to a depth sufficient to indicate that the
        acquisition would be in the Partnership’s best interest.

       

      4.01(a)(2).
        Federal
        and State Leases.
        The
        Partnership is authorized to acquire Leases on federal and state lands.


       

      4.01(a)(3).
        Managing
        General Partner’s Discretion as to Terms and Burdens of
        Acquisition.
        Subject
        to the provisions of §4.03(d) and its subsections, the acquisitions of Leases or
        other property may be made under any terms and obligations,
        including:

       

      	(i)
                	
              any
                limitations as to the Horizons to be assigned to the Partnership;
                and
                

            


       

      	(ii)
                	
              subject
                to any burdens as the Managing General Partner deems necessary in
                its sole
                discretion. 

            


       


      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      


      


       

      4.01(a)(4).
        Cost
        of Leases.
        All
        Leases shall be:

       

      	(i)
                	
              contributed
                to the Partnership by the Managing General Partner or its Affiliates;
                and

            


       

      	(ii)
                	
              credited
                towards the Managing General Partner's required Capital Contribution
                set
                forth in §3.04(a) at the Cost of the Lease, unless the Managing General
                Partner has cause to believe that Cost is materially more than the
                fair
                market value of the property, in which case the credit for the
                contribution must be made at a price not in excess of the fair market
                value.

            


       

      A
        determination of fair market value must be:

       

      	(i)  	
              supported
                by an appraisal from an Independent Expert;
                and

            


       

      	(ii)  	
              maintained
                in the Partnership’s records for six years along with associated
                supporting information.

            


       

      4.01(a)(5).
        The
        Managing General Partner, Operator or Their Affiliates’ Rights in the Remainder
        Interests.
        Subject
        to the provisions of §4.03(d) and its subsections, to the extent the Partnership
        does not acquire a full interest in a Lease from the Managing General Partner
        or
        its Affiliates, the remainder of the interest in the Lease may be held by
        the
        Managing General Partner or its Affiliates. They may either:

       

      	(i)
                	
              retain
                and exploit the remaining interest for their own account; or
                

            


       

      	(ii)
                	
              sell
                or otherwise dispose of all or a part of the remaining interest.
                

            


       

      Profits
        from the
        exploitation and/or disposition of their retained interests in the Leases
        shall
        be for the benefit of the Managing General Partner
        or its
Affiliates
        to the
        exclusion of the Partnership.

       

      4.01(a)(6).
        No
        Breach of Duty.
        Subject
        to the provisions of §4.03 and its subsections, acquisition of Leases from the
        Managing General Partner, the Operator or their Affiliates shall not be
        considered a breach of any obligation owed by them to the Partnership or
        the
        Participants.

       

      4.01(b).
        No
        Overriding Royalty Interests.
        Neither
        the Managing General Partner, the Operator nor any Affiliate shall retain
        any
        Overriding Royalty Interest on the Leases acquired by the
        Partnership.

       

      4.01(c).
        Title
        and Nominee Arrangements.

       

      4.01(c)(1).
        Legal
        Title.
        Legal
        title to all Leases acquired by the Partnership shall be held on a permanent
        basis in the name of the Partnership. However, Partnership properties may
        be
        held temporarily in the name of:

       

      	(i)
                	
              the
                Managing General Partner;

            


       

      	(ii)
                	
              the
                Operator; 

            


       

      	(iii)
                	
              their
                Affiliates; or 

            


       

      	(iv)
                	
              in
                the name of any nominee designated by the Managing General Partner
                to
                facilitate the acquisition of the
                properties.

            


       

      4.01(c)(2).
        Managing
        General Partner’s Discretion.
        The
        Managing General Partner shall take the steps which are necessary in its
        best
        judgment to render title to the Leases to be acquired by the Partnership
        acceptable for the purposes of the Partnership. The Managing General Partner
        shall be free, however, to use its own best judgment in waiving title
        requirements. 

       


      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      


      


       

      The
        Managing General Partner shall not be liable to the Partnership or to the
        other
        parties for any mistakes of judgment; nor shall the Managing
        General Partner be deemed to be making any warranties or representations,
        express or implied, as to the validity or
        merchantability of the title to the Leases assigned to the Partnership or
        the
        extent of the interest covered thereby except as otherwise provided in the
        Drilling and Operating Agreement.

       

      4.01(c)(3).
        Commencement
        of Operations.
        The
        Partnership shall not begin operations on the Leases acquired by the Partnership
        unless the Managing General Partner is satisfied that necessary title
        requirements have been satisfied.

       

      4.02.
        Conduct
        of Operations.

       

      4.02(a).
        In
        General.
        The
        Managing General Partner shall establish a program of operations for the
        Partnership. Subject to the limitations contained in Article III of this
        Agreement concerning the maximum Capital Contribution which can be required
        of a
        Limited Partner, the Managing General Partner, the Limited Partners, and
        the
        Investor General Partners agree to participate in the program so established
        by
        the Managing General Partner.

       

      4.02(b).
        Management.
        Subject
        to any restrictions contained in this Agreement, the Managing General Partner
        shall exercise full control over all operations of the Partnership.

       

      4.02(c).
        General
        Powers of the Managing General Partner.

       

      4.02(c)(1).
        In
        General.
        Subject
        to the provisions of §4.03 and its subsections, and to any authority which may
        be granted the Operator under §4.02(c)(3)(b), the Managing General Partner shall
        have full authority to do all things deemed necessary or desirable by it
        in the
        conduct of the business of the Partnership. Without limiting the generality
        of
        the foregoing, the Managing General Partner is expressly authorized to engage
        in:

       

      	(i)
                	
              the
                making of all determinations of which Leases, wells and operations
                will be
                participated in by the Partnership, which
                includes:

            


       

      	(a)
                	
              which
                Leases are developed;

            


       

      	(b)
                	
              which
                Leases are abandoned; or 

            


       

      	(c)
                	
              which
                Leases are sold or assigned to other parties, including other investor
                ventures organized by the Managing General Partner, the Operator,
                or any
                of their Affiliates;

            


       

      	(ii)
                	
              the
                negotiation and execution on any terms deemed desirable in its sole
                discretion of any contracts, conveyances, or other instruments, considered
                useful to the conduct of the operations or the implementation of
                the
                powers granted it under this Agreement, including, without
                limitation:

            


       

      	(a)  	
              the
                making of agreements for the conduct of operations, including agreements
                and financial instruments relating to hedging the Partnership’s natural
                gas and oil;

            


       

      	(b)  	
              the
                exercise of any options, elections, or decisions under any such
                agreements; and

            


       

      	(c)  	
              the
                furnishing of equipment, facilities, supplies and material, services,
                and
                personnel; 

            


       

      	(iii)
                	
              the
                exercise, on behalf of the Partnership or the parties, as the Managing
                General Partner in its sole judgment deems best, of all rights, elections
                and options granted or imposed by any agreement, statute, rule,
                regulation, or order;

            


       


      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      


      


       

      	(iv)
                	
              the
                making of all decisions concerning the desirability of payment, and
                the
                payment or supervision of the payment, of all delay rentals and shut-in
                and minimum or advance royalty payments;

            


       

      	(v)
                	
              the
                selection of full or part-time employees and outside consultants
                and
                contractors and the determination of their compensation and other
                terms of
                employment or hiring;

            


       

      	(vi)
                	
              the
                maintenance of insurance for the benefit of the Partnership and the
                parties as it deems necessary, but in no event less in amount or
                type than
                the following: 

            


       

      	(a)
                	
              worker’s
                compensation insurance in full compliance with the laws of the
                Commonwealth of Pennsylvania and any other applicable state laws;
                

            


       

      	(b)
                	
              liability
                insurance, including automobile, which has a $1,000,000 combined
                single
                limit for bodily injury and property damage in any one accident or
                occurrence and in the aggregate; and 

            


       

      	(c)
                	
              liability
                and excess liability insurance as to bodily injury and property damage
                with combined limits of $50,000,000 during drilling operations and
                thereafter, per occurrence or accident and in the aggregate, which
                includes $1,000,000 of seepage, pollution and contamination insurance
                which protects and defends the insured against property damage or
                bodily
                injury claims from third-parties, other than a co-owner of the Working
                Interest, alleging seepage, pollution or contamination damage resulting
                from a pollution incident. The excess liability insurance shall be
                in
                place and effective no later than the date drilling operations begin
                and,
                for purposes of satisfying this requirement, the Partnership shall
                have
                the benefit of the Managing General Partner’s $50,000,000 liability
                insurance on the same basis as the Managing General Partner and its
                Affiliates, including the Managing General Partner’s other
                Programs;

            


       

      	(vii)  	
              the
                use of the funds and revenues of the Partnership, and the borrowing
                on
                behalf of, and the loan of money to, the Partnership, on any terms
                it sees
                fit, for any purpose, including without
                limitation:

            


       

      	(a)
                	
              the
                conduct or financing, in whole or in part, of the drilling and other
                activities of the Partnership;

            


       

      	(b)
                	
              the
                conduct of additional operations; and 

            


       

      	(c)
                	
              the
                repayment of any borrowings or loans used initially to finance these
                operations or activities;

            


       

      	(viii)  	
              the
                disposition, hypothecation, sale, exchange, release, surrender,
                reassignment or abandonment of any or all assets of the Partnership,
                including without limitation, the Leases, wells, equipment and production
                therefrom, provided that the sale of all or substantially all of
                the
                assets of the Partnership shall only be made as provided in
                §4.03(d)(6);

            


       

      	(ix)  	
              the
                formation of any further limited or general partnership, tax partnership,
                joint venture, or other relationship which it deems desirable with
                any
                parties who it, in its sole and absolute discretion, selects, including
                any of its Affiliates;

            


       


      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      


      


       

      	(x)  	
              the
                control of any matters affecting the rights and obligations of the
                Partnership, including:

            


       

      	(a)
                	
              the
                employment of attorneys to advise and otherwise represent the
                Partnership;

            


       

      	(b)
                	
              the
                conduct of litigation and other incurring of legal expense; and
                

            


       

      	(c)
                	
              the
                settlement of claims and litigation;

            


       

      	(xi)
                	
              the
                operation of producing wells drilled on the Leases or on a Prospect
                which
                includes any part of the Leases;

            


       

      	(xii)
                	
              the
                exercise of the rights granted to it under the power of attorney
                created
                under this Agreement; and

            


       

      	(xiii)
                	
              the
                incurring of all costs and the making of all expenditures in any
                way
                related to any of the foregoing. 

            


       

      4.02(c)(2).
        Scope
        of Powers.
        The
        Managing General Partner’s powers shall extend to any operation participated in
        by the Partnership or affecting its Leases, or other property or assets,
        irrespective of whether or not the Managing General Partner is designated
        operator of the operation by any outside persons participating
        therein.

       

      4.02(c)(3).
        Delegation
        of Authority.

       

      4.02(c)(3)(a).
        In
        General.
        The
        Managing General Partner may subcontract and delegate all or any part of
        its
        duties under this Agreement to any entity chosen by it, including an entity
        related to it. The party shall have the same powers in the conduct of the
        duties
        as would the Managing General Partner. The delegation, however, shall not
        relieve the Managing General Partner of its responsibilities under this
        Agreement.

       

      4.02(c)(3)(b).
        Delegation
        to Operator.
        The
        Managing General Partner is specifically authorized to delegate any or all
        of
        its duties to the Operator by executing the Drilling and Operating Agreement.
        This delegation shall not relieve the Managing General Partner of its
        responsibilities under this Agreement. 

       

      In
        no
        event shall any consideration received for operator services be in excess
        of
        competitive rates or duplicative of any consideration or reimbursements received
        under this Agreement. The Managing General Partner may not benefit by
        interpositioning itself between the Partnership and the actual provider of
        operator services.

       

      4.02(c)(4).
        Related
        Party Transactions.
        Subject
        to the provisions of §4.03 and its subsections, any transaction which the
        Managing General Partner is authorized to enter into on behalf of the
        Partnership under the authority granted in this section and its subsections,
        may
        be entered into by the Managing General Partner with itself or with any other
        general partner, the Operator, or any of their Affiliates.

       

      4.02(d).
        Additional
        Powers.
        In
        addition to the powers granted the Managing General Partner under §4.02(c) and
        its subsections or elsewhere in this Agreement, the Managing General Partner,
        when specified, shall have the following additional express powers.

       

      4.02(d)(1).
        Drilling
        Contracts.
        All
        Partnership Wells shall be drilled
        under the Drilling and Operating Agreement at Cost plus a
        nonaccountable, fixed payment reimbursement to the Managing General Partner
        of
        $15,000 per well for the Participants’ share of the Managing General Partner’s
        general and administrative overhead
        plus 15%
        of Cost and the nonaccountable,
        fixed payment reimbursement to the Managing General Partner of $15,000 per
        well.
        The Managing General Partner or its Affiliates, as drilling contractor, may
        not
        do the following:

       


      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      


      


       

      	(i)  	
              receive
                a rate that is not competitive with the rates charged by unaffiliated
                contractors in the same geographic
                region;

            


       

      	(ii)  	
              enter
                into a turnkey drilling contract with the Partnership;
                

            


       

      	(iii)  	
              profit
                by drilling in contravention of its fiduciary obligations to the
                Partnership; or

            


       

      	(iv)  	
              benefit
                by interpositioning itself between the Partnership and the actual
                provider
                of drilling contractor services.

            


       

      4.02(d)(2).
        Power
        of Attorney.

       

      4.02(d)(2)(a).
        In
        General.
        Each
        Participant appoints the Managing General Partner his true and lawful
        attorney-in-fact for him and in his name, place, and stead and for his use
        and
        benefit, from time to time:

       

      	(i)
                	
              to
                create, prepare, complete, execute, file, swear to, deliver, endorse,
                and
                record any and all documents, certificates, government reports, or
                other
                instruments as may be required by law, or are necessary to amend
                this
                Agreement as authorized under the terms of this Agreement, or to
                qualify
                the Partnership as a limited partnership or partnership in commendam
                and
                to conduct business under the laws of any jurisdiction in which the
                Managing General Partner elects to qualify the Partnership or conduct
                business; and

            


       

      	(ii)
                	
              to
                create, prepare, complete, execute, file, swear to, deliver, endorse
                and
                record any and all instruments, assignments, security agreements,
                financing statements, certificates, and other documents as may be
                necessary from time to time to implement the borrowing powers granted
                under this Agreement.

            


       

      4.02(d)(2)(b).
        Further
        Action.
        Each
        Participant authorizes the attorney-in-fact to take any further action which
        the
        attorney-in-fact considers necessary or advisable in connection with any
        of the
        foregoing powers and rights granted the Managing General Partner under this
        section and its subsections. Each party acknowledges that the power of attorney
        granted under subsection 4.02(d)(2)(a):

       

      	(i)
                	
              is
                a special power of attorney coupled with an interest and is irrevocable;
                and 

            


       

      	(ii)
                	
              shall
                survive the assignment by the Participant of the whole or a portion
                of his
                Units; except when the assignment is of all of the Participant’s Units and
                the purchaser, transferee, or assignee of the Units is admitted as
                a
                successor Participant, the power of attorney shall survive the delivery
                of
                the assignment for the sole purpose of enabling the attorney-in-fact
                to
                execute, acknowledge, and file any agreement, certificate, instrument
                or
                document necessary to effect the
                substitution.

            


       

      4.02(d)(2)(c).
        Power
        of Attorney to Operator.
        The
        Managing General Partner is hereby authorized to grant a Power of Attorney
        to
        the Operator on behalf of the Partnership.

       

      4.02(e).
        Borrowings
        and Use of Partnership Revenues.

       

      4.02(e)(1).
        Power
        to Borrow or Use Partnership Revenues. 

       


      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      


      


       

      4.02(e)(1)(a).
        In
        General.
        If
        additional funds over the Participants’ Capital Contributions are needed for
        Partnership operations, then the Managing General Partner may: 

       

      	(i)
                	
              use
                Partnership revenues for such purposes; or


            


       

      	(ii)
                	
              the
                Managing General Partner and its Affiliates may advance to the Partnership
                the funds necessary under §4.03(d)(8)(b), although they are not obligated
                to advance the funds to the Partnership.

            


       

      4.02(e)(1)(b).
        Limitation
        on Borrowing. The
        borrowings, other than credit transactions on open account customary in the
        industry to obtain goods and services, shall be subject to the following
        limitations:

       

      	(i)
                	
              the
                borrowings must be without recourse to the Investor General Partners
                and
                the Limited Partners except as otherwise provided in this Agreement;
                and
                

            


       

      	(ii)
                	
              the
                amount that may be borrowed at any one time may not exceed an amount
                equal
                to 5% of the Partnership’s subscription proceeds.
                

            


       

      4.02(f).
        Tax
        Matters Partner. 

       

      4.02(f)(1).
        Designation
        of Tax Matters Partner.
        The
        Managing General Partner is hereby designated the Tax Matters Partner of
        the
        Partnership under Section 6231(a)(7) of the Code. The Managing General Partner
        is authorized to act in this capacity on behalf of the Partnership and the
        Participants and to take any action, including settlement or litigation,
        which
        it in its sole discretion deems to be in the best interest of the Partnership.
        

       

      4.02(f)(2).
        Costs
        Incurred by Tax Matters Partner.
        Costs
        incurred by the Tax Matters Partner shall be considered a Direct Cost of
        the
        Partnership. 

       

      4.02(f)(3).
        Notice
        to Participants of IRS Proceedings.
        The Tax
        Matters Partner shall notify all Participants of any partnership administrative
        or other legal proceedings involving the IRS, and thereafter shall furnish
        all
        Participants periodic reports at least quarterly on the status of the
        proceedings. 

       

      4.02(f)(4).
        Participant
        Restrictions.
        Each
        Participant agrees as follows: 

       

      	(i)
                	
              he
                will not file the statement described in Section 6224(c)(3)(B) of
                the Code
                prohibiting the Managing General Partner as the Tax Matters Partner
                for
                the Partnership from entering into a settlement on his behalf with
                respect
                to partnership items, as that term is defined in Section 6231(a)(3)
                of
                Code, of the Partnership; 

            


       

      	(ii)
                	
              he
                will not form or become and exercise any rights as a member of a
                group of
                Partners having a 5% or greater interest in the profits of the Partnership
                under Section 6223(b)(2) of the Code; and


            


       

      	(iii)
                	
              the
                Managing General Partner is authorized to file a copy of this Agreement,
                or pertinent portions of this Agreement, with the IRS under Section
                6224(b) of the Code if necessary to perfect the waiver of rights
                under
                this subsection.

            


       

      4.03.
        General
        Rights and Obligations of the Participants and Restricted and Prohibited
        Transactions.

       


      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      


      


       

      4.03(a)(1).
        Limited
        Liability of Limited Partners.
        Limited
        Partners shall not be bound by the obligations of the Partnership other than
        as
        provided under the Delaware Revised Uniform Limited Partnership Act. Limited
        Partners shall not be personally liable for any debts of the Partnership
        or any
        of the obligations or losses of the Partnership beyond the amount of the
        subscription price designated on the Subscription Agreement executed by each
        respective Limited Partner unless:

       

      	(i)
                	
              they
                also subscribe to the Partnership as Investor General Partners;
                or

            


       

      	(ii)
                	
              in
                the case of the Managing General Partner, it purchases Limited Partner
                Units.

            


       

      4.03(a)(2).
        No
        Management Authority of Participants.
        Participants, other than the Managing General Partner if it buys Units, shall
        have no power over the conduct of the affairs of the Partnership. No
        Participant, other than the Managing General Partner if it buys Units, shall
        take part in the management of the business of the Partnership, or have the
        power to sign for or to bind the Partnership.

       

      4.03(b).
        Reports
        and Disclosures.

       

      4.03(b)(1).
        Annual
        Reports and Financial Statements.
        Beginning with the calendar year in which the Partnership had its Offering
        Termination Date, the Partnership shall provide each Participant an annual
        report within 120 days after the close of that calendar year, and beginning
        with
        the following calendar year, a report within 75 days after the end of the
        first
        six months of its calendar year, containing except as otherwise indicated,
        at
        least the information set forth below:

       

      	(i)
                	
              Audited
                financial statements of the Partnership, including a balance sheet
                and
                statements of income, cash flow, and Partners’ equity, which shall be
                prepared on an accrual basis in accordance with generally accepted
                accounting principles with a reconciliation with respect to information
                furnished for income tax purposes and accompanied by an auditor’s report
                containing an opinion of an independent public accountant selected
                by the
                Managing General Partner stating that his audit was made in accordance
                with generally accepted auditing standards and that in his opinion
                the
                financial statements present fairly the financial position, results
                of
                operations, partners’ equity, and cash flows in accordance with generally
                accepted accounting principles. Semiannual reports are not required
                to be
                audited.

            


       

      	(ii)
                	
              A
                summary itemization, by type and/or classification of the total fees
                and
                compensation, including any nonaccountable, fixed payment reimbursements
                for Administrative Costs and Operating Costs, paid by, or on behalf
                of,
                the Partnership to the Managing General Partner, the Operator, and
                their
                Affiliates. In addition, Participants shall be provided the percentage
                that the annual nonaccountable, fixed fee reimbursement for Administrative
                Costs bears to annual Partnership revenues. Also, the independent
                certified public accountant shall provide written attestation annually,
                which will be included in the annual report, that the method used
                to make
                allocations of the Partnership’s Administrative Costs was consistent with
                the method described in §4.04(a)(2)(c) of this Agreement and that the
                total amount of Administrative Costs allocated did not materially
                exceed
                the amounts actually incurred by the Managing General Partner in
                providing
                administrative services to, or on behalf of, the Partnership as described
                in §4.04(a)(2)(c), including administrative services provided to the
                Partnership by the Managing General Partner’s Affiliates or independent
                third-parties at the sole expense of the Managing General Partner.
                If the
                Managing General Partner subsequently decides to allocate Administrative
                Costs in a manner different from that described in §4.04(a)(2)(c) of this
                Agreement, then the change must be reported to the Participants together
                with an explanation of the reason for the change and the basis used
                for
                determining the reasonableness of the new allocation
                method.

            


       


      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      


      


       

      	(iii)
                	
              A
                description of each Prospect in which the Partnership owns an interest,
                including:

            


       

      	(a)
                	
              the
                cost, location, and number of acres under Lease; and
                

            


       

      	(b)
                	
              the
                Working Interest owned in the Prospect by the Partnership.
                

            


       

      Succeeding
        reports, however, must only contain material changes, if any, regarding the
        Prospects. 

       

      	(iv)
                	
              A
                list of the wells drilled or abandoned by the Partnership during
                the
                period of the report, indicating: 

            


       

      	(a)
                	
              whether
                each of the wells has or has not been completed;
                

            


       

      	(b)
                	
              a
                statement of the cost of each well completed or abandoned; and
                

            


       

      	(c)
                	
              justification
                for wells abandoned after production has
                begun.

            


       

      	(v)
                	
              A
                description of all Farmouts, farmins, and joint ventures, made during
                the
                period of the report, including:

            


       

      	(a)
                	
              the
                Managing General Partner’s justification for the arrangement; and
                

            


       

      	(b)
                	
              a
                description of the material terms. 

            


       

      	(vi)
                	
              A
                schedule reflecting:

            


       

      	(a)
                	
              the
                total Partnership costs;

            


       

      	(b)
                	
              the
                costs paid by the Managing General Partner and the costs paid by
                the
                Participants; 

            


       

      	(c)
                	
              the
                total Partnership revenues;

            


       

      	(d)
                	
              the
                revenues received or credited to the Managing General Partner and
                the
                revenues received and credited to the Participants;
                and

            


       

      	(e)
                	
              a
                reconciliation of the expenses and revenues in accordance with the
                provisions of Article V.

            


       

      Additionally,
        on request the Managing General Partner will provide the information specified
        by Form 10-Q (if such report is required to be filed with the SEC) within
        45
        days after the close of each quarterly fiscal period.

       

      4.03(b)(2).
        Tax
        Information.
        The
        Partnership shall, by March 15 of each year, prepare, or supervise the
        preparation of, and transmit to each Participant the information needed for
        the
        Participant to file the following:

       

      	(i)
                	
              his
                federal income tax return;

            


       

      	(ii)
                	
              any
                required state income tax return; and 

            


       

      	(iii)
                	
              any
                other reporting or filing requirements imposed by any governmental
                agency
                or authority.

            


       


      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      


      


       

      4.03(b)(3).
        Reserve
        Report.
        Beginning with the second calendar year after the Offering Termination Date
        and
        every year thereafter, the Partnership shall provide to each Participant
        the
        following:

       

      	(i)
                	
              a
                summary of the computation of the Partnership’s total natural gas and oil
                Proved Reserves; 

            


       

      	(ii)
                	
              a
                summary of the computation of the present worth of the reserves determined
                using: 

            


       

      	(a)  	
              a
                discount rate of 10%; 

            


       

      	(b)  	
              a
                constant price for the oil; and 

            


       

      	(c)  	
              basing
                the price of natural gas on the existing natural gas
                contracts;

            


       

      	(iii)
                	
              a
                statement of each Participant’s interest in the reserves;
                and

            


       

      	(iv)
                	
              an
                estimate of the time required for the extraction of the reserves
                with a
                statement that because of the time period required to extract the
                reserves
                the present value of revenues to be obtained in the future is less
                than if
                immediately receivable.

            


       

      The
        reserve computations shall be based on engineering reports prepared by the
        Managing General Partner and reviewed by an Independent Expert. 

       

      Also,
        if
        any event reduces the Partnership’s Proved Reserves by 10% or more, excluding a
        reduction of reserves as a result of normal production, sales of reserves,
        or
        natural gas or oil price changes, then a computation and estimate of the
        amount
        of the reduction in reserves must be sent to each Participant within 90 days
        after the Managing General Partner determines that such a reduction in reserves
        has occurred.

       

      4.03(b)(4).
        Cost
        of Reports.
        The cost
        of all reports described in this §4.03(b) shall be paid by the Partnership as
        Direct Costs.

       

      4.03(b)(5).
        Participant
        Access to Records.
        The
        Participants and/or their representatives shall be permitted access to all
        Partnership records, provided that access to the list of Participants shall
        be
        subject to §4.03(b)(7) below. The Participant may inspect and copy any of the
        records after giving adequate notice to the Managing General Partner at any
        reasonable time. 

       

      Notwithstanding
        the foregoing, the Managing General Partner may keep logs, well reports,
        and
        other drilling and operating data confidential for reasonable periods of
        time.
        The Managing General Partner may release information concerning the operations
        of the Partnership to the sources that are customary in the industry or required
        by rule, regulation, or order of any regulatory body.

       

      4.03(b)(6).
        Required
        Length of Time to Hold Records.
        The
        Managing General Partner must maintain and preserve during the term of the
        Partnership and for six years thereafter all accounts, books and other relevant
        documents which include:

       

      	(i)
                	
              a
                record that a Participant meets the suitability standards established
                in
                connection with an investment in the Partnership; and
                

            


       

      	(ii)
                	
              any
                appraisal of the fair market value of the Leases as set forth in
                §4.01(a)(4) or fair market value of any producing property as set
                forth in
                §4.03(d)(3).

            


       


      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      


      


       

      4.03(b)(7).
        Participant
        Lists.
        The
        following provisions apply regarding access to the list of Participants:
        

       

      	(i)
                	
              an
                alphabetical list of the names, addresses, and business telephone
                numbers
                of the Participants along with the number of Units held by each of
                them
                (the “Participant List”) must be maintained as a part of the Partnership’s
                books and records and be available for inspection by any Participant
                or
                his designated agent at the home office of the Partnership on the
                Participant’s request; 

            


       

      	(ii)
                	
              the
                Participant List must be updated at least quarterly to reflect changes
                in
                the information contained in the Participant List;
                

            


       

      	(iii)
                	
              a
                copy of the Participant List must be mailed to any Participant requesting
                the Participant List within 10 days of the written request, printed
                in
                alphabetical order on white paper, and in a readily readable type
                size in
                no event smaller than 10-point type and a reasonable charge for copy
                work
                will be charged by the Partnership; 

            


       

      	(iv)
                	
              the
                purposes for which a Participant may request a copy of the Participant
                List include, without limitation, matters relating to Participant’s voting
                rights under this Agreement and the exercise of Participant’s rights under
                the federal proxy laws; and

            


       

      	(v)
                	
              if
                the Managing General Partner neglects or refuses to exhibit, produce,
                or
                mail a copy of the Participant List as requested, the Managing General
                Partner shall be liable to any Participant requesting the list for
                the
                costs, including attorneys fees, incurred by that Participant for
                compelling the production of the Participant List, and for actual
                damages
                suffered by any Participant by reason of the refusal or neglect.
                It shall
                be a defense that the actual purpose and reason for the request for
                inspection or for a copy of the Participant List is to secure the
                list of
                Participants or other information for the purpose of selling the
                list or
                information or copies of the list, or of using the same for a commercial
                purpose other than in the interest of the applicant as a Participant
                relative to the affairs of the Partnership. The Managing General
                Partner
                will require the Participant requesting the Participant List to represent
                in writing that the list was not requested for a commercial purpose
                unrelated to the Participant’s interest in the Partnership. The remedies
                provided under this subsection to Participants requesting copies
                of the
                Participant List are in addition to, and shall not in any way limit,
                other
                remedies available to Participants under federal law or the laws
                of any
                state.

            


       

      4.03(b)(8).
        State
        Filings.
        Concurrently with their transmittal to Participants, and as required, the
        Managing General Partner shall file a copy of each report provided for in
        this
§4.03(b) with:

       

      	(i)
                	
              the
                California Commissioner of Corporations; 

            


       

      	(ii)
                	
              the
                Arizona Corporation Commission; 

            


       

      	(iii)
                	
              the
                Alabama Securities Commission; and 

            


       

      	(iv)
                	
              the
                securities commissions of other states which request the
                report.

            


       

      4.03(c).
        Meetings
        of Participants. 

       

      4.03(c)(1).
        Procedure
        for a Participant Meeting. 

       


      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      


      


       

      4.03(c)(1)(a).
        Meetings
        May Be Called by Managing General Partner or Participants.
        Meetings
        of the Participants may be called as follows:

       

      	(i)
                	
              by
                the Managing General Partner; or

            


       

      	(ii)
                	
              by
                Participants who’s Units equal 10% or more of the total Units for any
                matters for which Participants may vote. 

            


       

      The
        call
        for a meeting by Participants shall be deemed to have been made on receipt
        by
        the Managing General Partner of a written request from holders of the requisite
        percentage of Units stating the purpose(s) of the meeting. 

       

      4.03(c)(1)(b).
        Notice
        Requirement. The
        Managing General Partner shall deposit in the United States mail within 15
        days
        after the receipt of the request, written notice to all Participants of the
        meeting and the purpose of the meeting. The meeting shall be held on a date
        not
        less than 30 days or more than 60 days after the date of the mailing of the
        notice, at a reasonable time and place. 

       

      Notwithstanding
        the foregoing, the date for notice of the meeting may be extended for a period
        of up to 60 days if, in the opinion of the Managing General Partner, the
        additional time is necessary to permit preparation of proxy or information
        statements or other documents required to be delivered in connection with
        the
        meeting by the SEC or other regulatory authorities. 

       

      4.03(c)(1)(c).
        May
        Vote by Proxy.
        Participants shall have the right to vote at any Participant meeting
        either:

       

      	(i)
                	
              in
                person; or 

            


       

      	(ii)
                	
              by
                proxy.

            


       

      4.03(c)(2).
        Special
        Voting Rights.
        At the
        request of Participants who’s Units equal 10% or more of the total Units, the
        Managing General Partner shall call for a vote by Participants. Each Unit
        is
        entitled to one vote on all matters, and each fractional Unit is entitled
        to
        that fraction of one vote equal to the fractional interest in the Unit.
        Participants whose Units equal a majority of the total Units may, without
        the
        concurrence of the Managing General Partner or its Affiliates, vote
        to:

       

      	(i)  	
              dissolve
                the Partnership;

            


       

      	(ii)  	
              remove
                the Managing General Partner and elect a new Managing General
                Partner;

            


       

      	(iii)  	
              elect
                a new Managing General Partner if the Managing General Partner elects
                to
                withdraw from the Partnership;

            


       

      	(iv)  	
              remove
                the Operator and elect a new Operator;

            


       

      	(v)  	
              approve
                or disapprove the sale of all or substantially all of the assets
                of the
                Partnership; 

            


       

      	(vi)  	
              cancel
                any contract for services with the Managing General Partner, the
                Operator,
                or their Affiliates without penalty on 60 days notice;
                and

            


       

      	(vii)  	
              amend
                this Agreement; provided however:

            


       


      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      


      


       

      	(a)  	
              any
                amendment may not increase the duties or liabilities of any Participant
                or
                the Managing General Partner or increase or decrease the profit or
                loss
                sharing or required Capital Contribution of any Participant or the
                Managing General Partner without the approval of the Participant
                or the
                Managing General Partner; and

            


       

      	(b)  	
              any
                amendment may not affect the classification of Partnership income
                and loss
                for federal income tax purposes without the unanimous approval of
                all
                Participants.

            


       

      4.03(c)(3).
        Restrictions on Managing General Partner’s Voting Rights.
        With
        respect to Units owned by the Managing General Partner or its Affiliates,
        the
        Managing General Partner and its Affiliates may vote or consent on all matters
        other than the following:

       

      	(i)  	
              the
                matters set forth in §4.03(c)(2)(ii) and (iv) above; or
                

            


       

      	(ii)  	
              any
                transaction between the Partnership and the Managing General Partner
                or
                its Affiliates. 

            


       

      In
        determining the requisite percentage in interest of Units necessary to approve
        any Partnership matter on which the Managing General Partner and its Affiliates
        may not vote or consent, any Units owned by the Managing General Partner
        and its
        Affiliates shall not be included.

       

      4.03(c)(4).
        Restrictions
        on Limited Partner Voting Rights.
        The
        exercise by the Limited Partners of the rights granted Participants
        under §4.03(c), except for the special voting rights granted Participants under
        §4.03(c)(2), shall be subject to the
        prior
        legal determination that the grant or exercise of the powers will not adversely
        affect the limited liability of Limited Partners. Notwithstanding the foregoing,
        if in the opinion of counsel to the Partnership the legal determination is
        not
        necessary under Delaware law to maintain the limited liability of the Limited
        Partners, then it shall not be required. A legal determination under this
        paragraph may be made either pursuant to:

       

      	(i)  	
              an
                opinion of counsel, the counsel being independent of the Partnership
                and
                selected on the vote of Limited Partners whose Units equal a majority
                of
                the total Units held by Limited Partners; or


            


       

      	(ii)  	
              a
                declaratory judgment issued by a court of competent jurisdiction.
                

            


       

      The
        Investor General Partners may exercise the rights granted to the Participants
        whether or not the Limited Partners can participate in the vote if the Investor
        General Partners represent the requisite percentage of Units necessary to
        take
        the action.

       

      4.03(d).
        Transactions
        with the Managing General Partner.

       

      4.03(d)(1).
        Transfer
        of Equal
        Proportionate Interest.
        When the
        Managing General Partner or an Affiliate (excluding another Program in which
        the
        interest of the Managing General Partner or its Affiliates is substantially
        similar to or less than their interest in the Partnership) sells, transfers
        or
        conveys any natural gas, oil or other mineral interests or property to the
        Partnership, it must, at the same time, sell, transfer or convey to the
        Partnership an equal proportionate interest in all its other property in
        the
        same Prospect. Notwithstanding, a Prospect shall be deemed to consist of
        the
        drilling or spacing unit on which the well will be drilled by the Partnership,
        which is the minimum area permitted by state law or local practice on which
        one
        well may be drilled, if the following two conditions are met: 

       


      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              the
                geological feature to which the well will be drilled contains Proved
                Reserves; and 

            


       

      	(ii)
                	
              the
                drilling or spacing unit protects against drainage.
                

            


       

      With
        respect to a Prospect located in Ohio, Pennsylvania and New York on which
        a well
        will be drilled by the Partnership to test the Clinton/Medina geological
        formation or the Mississippian and/or Upper Devonian Sandstone reservoirs,
        and
        with respect to a Prospect located in Anderson, Campbell, Morgan, Roane and
        Scott Counties, Tennessee on which a well will be drilled to test the
        Mississippian carbonate or Devonian Shale reservoirs, a Prospect shall be
        deemed
        to consist of the drilling and spacing unit if it meets the test in the
        preceding sentence. Additionally, for a period of five years after the drilling
        of the Partnership Well neither the Managing General Partner nor its Affiliates
        may drill any well: 

       

      	(i)
                	
              in
                the Clinton/Medina geological formation within 1,650 feet of an existing
                Partnership Well in Pennsylvania or within 1,000 feet of an existing
                Partnership Well in Ohio; or 

            


       

      	(ii)
                	
              in
                the Mississippian and/or Upper Devonian Sandstone reservoirs in Fayette,
                Greene and Westmoreland Counties, Pennsylvania, within 1,000 feet
                from a
                producing Partnership Well, although the Partnership may drill a
                new well
                or re-enter an existing well which is closer than 1,000 feet to a
                plugged
                and abandoned well. 

            


       

      If
        the
        Partnership abandons its interest in a well, then this restriction will continue
        for one year following the abandonment.

       

      If
        the
        area constituting the Partnership’s Prospect is subsequently enlarged to
        encompass any area in which the Managing General Partner or an Affiliate
        (excluding another Program in which the interest of the Managing General
        Partner
        or its Affiliates is substantially similar to or less than their interest
        in the
        Partnership) owns a separate property interest and the activities of the
        Partnership were material in establishing the existence of Proved Undeveloped
        Reserves that are attributable to the separate property interest, then the
        separate property interest or a portion thereof must be sold, transferred,
        or
        conveyed to the Partnership as set forth in this section and §§4.01(a)(4) and
        4.03(d)(2). 

       

      Notwithstanding
        the foregoing, Prospects in the Clinton/Medina geological formation, the
        Mississippian and/or Upper Devonian Sandstone reservoirs, the Mississippian
        carbonate or Devonian Shale reservoirs, or any other formation or reservoir
        shall not be enlarged or contracted if the Prospect was limited to the drilling
        or spacing unit because the well was being drilled to Proved Reserves in
        the
        geological formation and the drilling or spacing unit protected against
        drainage.

       

      4.03(d)(2).
        Transfer
        of Less than the Managing General Partner’s and it’s Affiliates’ Entire
        Interest.
        A sale,
        transfer or a conveyance
        to the Partnership of less than all of the ownership of the Managing General
        Partner or an Affiliate (excluding another
        Program
        in which the interest of the Managing General Partner or its Affiliates is
        substantially similar to or less than their interest in the Partnership)
        in any
        Prospect shall not be made unless:

       

      	(i)
                	
              the
                interest retained by the Managing General Partner or the Affiliate
                is a
                proportionate Working Interest;

            


       

      	(ii)
                	
              the
                respective obligations of the Managing General Partner or its Affiliates
                and the Partnership are substantially the same after the sale of
                the
                interest by the Managing General Partner or its Affiliates; and
                

            


       


      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      


      


       

      	(iii)
                	
              the
                Managing General Partner's interest in revenues does not exceed the
                amount
                proportionate to its retained Working Interest.


            


       

      This
        section does not prevent the Managing General Partner or its Affiliates from
        subsequently dealing with their retained interest as they may choose with
        unaffiliated parties or Affiliated partnerships.

       

      4.03(d)(3).
        Limitations
        on Sale of Undeveloped and Developed Leases to the Managing General Partner.
        Other
        than another Program managed by the Managing General Partner and its Affiliates
        as set forth in §§4.03(d)(5) and 4.03(d)(9), the Managing General Partner and
        its Affiliates shall not receive a Farmout or purchase any undeveloped Leases
        from the Partnership other than at the higher of Cost or fair market
        value.

       

      The
        Managing General Partner and its Affiliates, other than an Affiliated Income
        Program, shall not purchase any producing natural gas or oil property from
        the
        Partnership unless:

       

      	(i)  	
              the
                sale is in connection with the liquidation of the Partnership;
                or

            


       

      	(ii)  	
              the
                Managing General Partner’s well supervision fees under the Drilling and
                Operating Agreement for the well have exceeded the net revenues of
                the
                well, determined without regard to the Managing General Partner’s well
                supervision fees for the well, for a period of at least three consecutive
                months.

            


       

      In
        both
        (i) and (ii), the sale must be at fair market value supported by an appraisal
        of
        an Independent Expert selected by the Managing General Partner. 

       

      4.03(d)(4).
        Limitations
        on Activities of the Managing General Partner and its Affiliates on Leases
        Acquired by the Partnership.
        During a
        period of five years after the Offering Termination Date of the Partnership,
        if
        the Managing General Partner or any of its Affiliates (excluding another
        Program
        in which the interest of the Managing General Partner or its Affiliates is
        substantially similar to or less than their interest in the Partnership)
        proposes to acquire an interest from an unaffiliated person in a Prospect
        in
        which the Partnership possesses an interest or in a Prospect in which the
        Partnership’s interest has been terminated without compensation within one year
        preceding the proposed acquisition, then the following conditions shall
        apply:

       

      	(i)
                	
              if
                the Managing General Partner or the Affiliate (excluding another
                Program
                in which the interest of the Managing General Partner or its Affiliates
                is
                substantially similar to or less than their interest in the Partnership)
                does not currently own property in the Prospect separately from the
                Partnership, then neither the Managing General Partner nor the Affiliate
                shall be permitted to purchase an interest in the Prospect;
                and

            


       

      	(ii)
                	
              if
                the Managing General Partner or the Affiliate (excluding another
                Program
                in which the interest of the Managing General Partner or its Affiliates
                is
                substantially similar to or less than their interest in the Partnership)
                currently owns a proportionate interest in the Prospect separately
                from
                the Partnership, then the interest to be acquired shall be divided
                between
                the Partnership and the Managing General Partner or the Affiliate
                in the
                same proportion as is the other property in the Prospect. Provided,
                however, if cash or financing is not available to the Partnership
                to
                enable it to complete a purchase of the additional interest to which
                it is
                entitled, then neither the Managing General Partner nor the Affiliate
                shall be permitted to purchase any additional interest in the
                Prospect.

            


       


      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      


      


       

      4.03(d)(5).
        Transfer
        of Leases Between Affiliated Limited Partnerships. The
        transfer of an undeveloped Lease from the Partnership to another drilling
        Program sponsored or managed by the Managing General Partner or its Affiliates
        must be made at fair market value if the undeveloped Lease has been held
        for
        more than two years. Otherwise, if the Managing General Partner deems it
        to be
        in the best interest of the Partnership, the transfer may be made at
        Cost.

       

      An
        Affiliated Income Program may purchase a producing natural gas and oil property
        from the Partnership at any time at: 

       

      	(i)  	
              fair
                market value as supported by an appraisal from an Independent Expert
                if
                the property has been held by the Partnership for more than six months
                or
                significant expenditures have been made in connection with the property;
                or 

            


       

      	(ii)  	
              Cost
                as adjusted for intervening operations if the Managing General Partner
                deems it to be in the best interest of the
                Partnership.

            


       

      However,
        these prohibitions shall not apply to joint ventures or Farmouts among
        Affiliated partnerships, provided that:

       

      	(i)  	
              the
                respective obligations and revenue sharing of all parties to the
                transaction are substantially the same; and


            


       

      	(ii)  	
              the
                compensation arrangement or any other interest or right of either
                the
                Managing General Partner or its Affiliates is the same in each Affiliated
                partnership or if different, the aggregate compensation of the Managing
                General Partner or the Affiliate is reduced to reflect the lower
                compensation arrangement.

            


       

      4.03(d)(6).
        Sale
        of All Assets. The
        sale
        of all or substantially all of the assets of the Partnership, including without
        limitation, Leases, wells, equipment and production therefrom, shall be made
        only with the consent of Participants whose Units equal a majority of the
        total
        Units.

       

      4.03(d)(7).
        Services. 

       

      4.03(d)(7)(a).
        Competitive
        Rates.
        The
        Managing General Partner and any Affiliate shall not render to the Partnership
        any oil field, equipage, or other services nor sell or lease to the Partnership
        any equipment or related supplies unless: 

       

      	(i)
                	
              the
                person is engaged, independently of the Partnership and as an ordinary
                and
                ongoing business, in the business of rendering the services or selling
                or
                leasing the equipment and supplies to a substantial extent to other
                persons in the natural gas and oil industry in addition to the
                partnerships in which the Managing General Partner or an Affiliate
                has an
                interest; and 

            


       

      	(ii)
                	
              the
                compensation, price, or rental therefore is competitive with the
                compensation, price, or rental of other persons in the area engaged
                in the
                business of rendering comparable services or selling or leasing comparable
                equipment and supplies which could reasonably be made available to
                the
                Partnership. 

            


       

      If
        the
        person is not engaged in such a business, then the compensation, price or
        rental
        shall be the Cost of the services, equipment or supplies to the person or
        the
        competitive rate which could be obtained in the area, whichever is less.
        

       


      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      


      


       

      4.03(d)(7)(b).
        If
        Not Disclosed in the Prospectus or This Agreement Then Services by the Managing
        General Partner Must be Described in a Separate Contract and
        Cancelable.
        Any
        services for which the Managing General Partner or an Affiliate is to receive
        compensation other than those described in this Agreement or the Prospectus
        shall be set forth in a written contract which precisely describes the services
        to be rendered and all compensation to be paid. These contracts shall be
        cancelable without penalty on 60 days written notice by Participants whose
        Units
        equal a majority of the total Units.

       

      4.03(d)(8).
        Loans.

       

      4.03(d)(8)(a).
        No
        Loans from the Partnership.
        No loans
        or advances shall be made by the Partnership to the Managing General Partner
        or
        any Affiliate.

       

      4.03(d)(8)(b).
        Loans
        to the Partnership.
        Neither
        the Managing General Partner nor any Affiliate shall loan money to the
        Partnership if the interest to be charged exceeds either:

       

      	(i)
                	
              the
                Managing General Partner’s or the Affiliate’s interest cost; or
                

            


       

      	(ii)
                	
              that
                which would be charged to the Partnership, without reference to the
                Managing General Partner’s or the Affiliate’s financial abilities or
                guarantees, by unrelated lenders, on comparable loans for the same
                purpose. 

            


       

      Neither
        the Managing General Partner nor any Affiliate shall receive points or other
        financing charges or fees, regardless of the amount, although the actual
        amount
        of the charges incurred from third-party lenders may be reimbursed to the
        Managing General Partner or the Affiliate.

       

      4.03(d)(9).
        Farmouts.
        The
        Managing General Partner shall not enter into a Farmout to avoid its paying
        its
        share of costs related to drilling an undeveloped Lease. The Partnership
        shall
        not Farmout an undeveloped Lease or well activity to the Managing General
        Partner or its Affiliates except as set forth in §4.03(d)(3). Notwithstanding,
        this restriction shall not apply to Farmouts between the Partnership and
        another
        partnership managed by the Managing General Partner or its Affiliates, either
        separately or jointly, provided that the respective obligations and revenue
        sharing of all parties to the transactions are substantially the same and
        the
        compensation arrangement or any other interest or right of the Managing General
        Partner or its Affiliates is the same in each partnership, or, if different,
        the
        aggregate compensation of the Managing General Partner and its Affiliates
        is
        reduced to reflect the lower compensation agreement. 

       

      The
        Partnership may Farmout an undeveloped lease or well activity only if the
        Managing General Partner, exercising the standard of a prudent operator,
        determines that:

       

      	(i)
                	
              the
                Partnership lacks the funds to complete the oil and gas operations
                on the
                Lease or well and cannot obtain suitable
                financing;

            


       

      	(ii)
                	
              drilling
                on the Lease or the intended well activity would concentrate excessive
                funds in one location, creating undue risks to the
                Partnership;

            


       

      	(iii)
                	
              the
                Leases or well activity have been downgraded by events occurring
                after
                assignment to the Partnership so that development of the Leases or
                well
                activity would not be desirable; or 

            


       

      	(iv)
                	
              the
                best interests of the Partnership would be
                served.

            


       


      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      


      


       

      If
        the
        Partnership Farmouts a Lease or well activity, the Managing General Partner
        must
        retain on behalf of the Partnership the economic interests and concessions
        as a
        reasonably prudent oil and gas operator would or could retain under the
        circumstances prevailing at the time, consistent with industry practices.
        

       

      4.03(d)(10).
        No
        Compensating Balances.
        Neither
        the Managing General Partner nor any Affiliate shall use the Partnership’s funds
        as compensating balances for its own benefit.

       

      4.03(d)(11).
        Future
        Production.
        Neither
        the Managing General Partner nor any Affiliate shall commit the future
        production of a well developed by the Partnership exclusively for its own
        benefit.

       

      4.03(d)(12).
        Marketing
        Arrangements.
        Subject
        to §4.06(c), all benefits from marketing arrangements or other relationships
        affecting the property of the Managing General Partner or its Affiliates
        and the
        Partnership shall be fairly and equitably apportioned according to the
        respective interests of each in the property. The Managing General Partner
        shall
        treat all wells in a geographic area equally concerning to whom and at what
        price the Partnership’s natural gas and oil will be sold and to whom and at what
        price the natural gas and oil of other natural gas and oil Programs which
        the
        Managing General Partner has sponsored or will sponsor will be sold. For
        example, each seller of natural gas and oil in a given area will be paid
        a
        weighted average selling price for all natural gas and oil sold in that
        geographic area. The Managing General Partner, in its sole discretion, shall
        determine what constitutes a geographic area.

       

      4.03(d)(13).
        Advance
        Payments.
        Advance
        payments by the Partnership to the Managing General Partner and its Affiliates
        are prohibited except when advance payments are required to secure the tax
        benefits of prepaid Intangible Drilling Costs for a business purpose as set
        forth in the Drilling and Operating Agreement. 

       

      4.03(d)(14).
        No
        Rebates. No
        rebates or give-ups may be received by the Managing General Partner or any
        Affiliate nor may the Managing General Partner or any Affiliate participate
        in
        any reciprocal business arrangements which would circumvent these
        guidelines.

       

      4.03(d)(15).
        Participation
        in Other Partnerships.
        If the
        Partnership participates in other partnerships or joint ventures (multi-tier
        arrangements), then the terms of any of these arrangements shall not result
        in
        the circumvention of any of the requirements or prohibitions contained in
        this
        Agreement, including the following: 

       

      	(i)
                	
              there
                shall be no duplication or increase in Organization and Offering
                Costs,
                the Managing General Partner’s compensation, Partnership expenses or other
                fees and costs; 

            


       

      	(ii)
                	
              there
                shall be no substantive alteration in the fiduciary and contractual
                relationship between the Managing General Partner and the Participants;
                and 

            


       

      	(iii)
                	
              there
                shall be no diminishment in the voting rights of the
                Participants.

            


       

      4.03(d)(16).
        Roll-Up
        Limitations. 

       

      4.03(d)(16)(a). Requirement
        for Appraisal and Its Assumptions.
        In
        connection with a proposed Roll-Up, an appraisal of all Partnership
        assets shall be obtained from a competent Independent Expert. If the appraisal
        will be included in a prospectus used
        to offer
        securities of a Roll-Up Entity, then the appraisal shall be filed with the
        SEC
        and the Administrator as an exhibit to the registration statement for the
        offering. Thus, an issuer using the appraisal shall be subject to liability
        for
        violation of Section 11 of the Securities Act of 1933 and comparable provisions
        under state law for any material misrepresentations or material omissions
        in the
        appraisal. 

       


      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      


      


       

      Partnership
        assets shall be appraised on a consistent basis. The appraisal shall be based
        on
        all relevant information, including current reserve estimates prepared as
        set
        forth in §4.03(b)(3), and shall indicate the value of the Partnership’s assets
        as of a date immediately before the announcement of the proposed Roll-Up
        transaction. The appraisal shall assume an orderly liquidation of the
        Partnership’s assets over a 12-month period. 

       

      The
        terms
        of the engagement of the Independent Expert shall clearly state that the
        engagement is for the benefit of the Partnership and the Participants. A
        summary
        of the independent appraisal, indicating all material assumptions underlying
        the
        appraisal, shall be included in a report to the Participants in connection
        with
        a proposed Roll-Up.

       

      4.03(d)(16)(b).
        Rights
        of Participants Who Vote Against Proposal.
        In
        connection with a proposed Roll-Up, Participants who vote “no” on the proposal
        shall be offered the choice of:

       

      	(i)  	
              accepting
                the securities of the Roll-Up Entity offered in the proposed Roll-Up;
                or

            


       

      	(ii)  	
              one
                of the following:

            


       

      	(a)  	
              remaining
                as Participants in the Partnership and preserving their Units in
                the
                Partnership on the same terms and conditions as existed previously;
                or

            


       

      	(b)  	
              receiving
                cash in an amount equal to the Participants’ pro rata share of the
                appraised value of the net assets of the Partnership based on their
                respective number of Units.

            


       

      4.03(d)(16)(c).
        No
        Roll-Up If Diminishment of Voting Rights.
        The
        Partnership shall not participate in any proposed Roll-Up which, if approved,
        would result in the diminishment of any Participant’s voting rights under the
        Roll-Up Entity’s chartering agreement.
        In no event shall the democracy rights of Participants in the Roll-Up Entity
        be
        less than those provided for under§§4.03(c)(1)
        and 4.03(c)(2) of this Agreement. If the Roll-Up Entity is a corporation,
        then
        the democracy rights of Participants shall correspond to the democracy rights
        provided for in this Agreement to the greatest extent possible.

       

      4.03(d)(16)(d).
        No
        Roll-Up If Accumulation of Shares Would be Impeded.
        The
        Partnership shall not participate in any proposed Roll-Up transaction which
        includes provisions that would operate to materially impede or frustrate
        the
        accumulation of shares by any purchaser of the securities of the Roll-Up
        Entity,
        except to the minimum extent necessary to preserve the tax status of the
        Roll-Up
        Entity. The Partnership shall not participate in any proposed Roll-Up
        transaction which would limit the ability of a Participant to exercise the
        voting rights of its securities of the Roll-Up Entity on the basis of the
        number
        of Units held by that Participant.

       

      4.03(d)(16)(e).
        No
        Roll-Up If Access to Records Would Be Limited. The
        Partnership shall not participate in a Roll-Up in which Participants’ rights of
        access to the records of the Roll-Up Entity will be less than those provided
        for
        under §§4.03(b)(5), 4.03(b)(6) and 4.03(b)(7) of this Agreement.

       

      4.03(d)(16)(f).
        Cost
        of Roll-Up.
        The
        Partnership shall not participate in any proposed Roll-Up transaction in
        which
        any of the costs of the transaction would be borne by the Partnership if
        Participants whose Units equal 66% of the total Units do not vote to approve
        the
        proposed Roll-Up.

       

      4.03(d)(16)(g).
        Roll-Up
        Approval.
        The
        Partnership shall not participate in a Roll-Up transaction unless the Roll-Up
        transaction is approved by Participants whose Units equal 66% of the total
        Units.

       

      4.03(d)(17).
        Disclosure
        of Binding Agreements. Any
        agreement or arrangement which binds the Partnership must be disclosed in
        the
        Prospectus.

       


      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      


      


       

      4.03(d)(18).
        Transactions
        Must Be Fair
        and Reasonable.
        Neither
        the Managing General Partner nor any Affiliate shall sell, transfer, or convey
        any property to or purchase any property from the Partnership, directly or
        indirectly, except under transactions that are fair and reasonable, nor take
        any
        action with respect to the assets or property of the Partnership which does
        not
        primarily benefit the Partnership.

       

      4.04.
        Designation,
        Compensation and Removal of Managing General Partner and Removal of
        Operator.

       

      4.04(a).
        Managing
        General Partner.

       

      4.04(a)(1).
        Term
        of Service.
        Atlas
        shall serve as the Managing General Partner of the Partnership until either
        it:

       

      	(i)
                	
              is
                removed pursuant to §4.04(a)(3); or 

            


       

      	(ii)
                	
              withdraws
                pursuant to §4.04(a)(3)(f).

            


       

      4.04(a)(2).
        Compensation
        of Managing General Partner.
        In
        addition to the compensation set forth in §§4.01(a)(4) and 4.02(d)(1), the
        Managing General Partner shall receive the compensation set forth in
§§4.04(a)(2)(b) through 4.04(a)(2)(g).

       

      4.04(a)(2)(a).
        Charges
        Must Be Necessary and Reasonable.
        Charges
        by the Managing General Partner for goods and services must be fully supportable
        as to:

       

      	(i)
                	
              the
                necessity of the goods and services; and 

            


       

      	(ii)
                	
              the
                reasonableness of the amount charged. 

            


       

      All
        actual and necessary expenses incurred by the Partnership may be paid out
        of the
        Partnership’s subscription proceeds and revenues. 

       

      4.04(a)(2)(b).
        Direct
        Costs.
        The
        Managing General Partner and its Affiliates shall be reimbursed for all Direct
        Costs. Direct Costs, however, shall be billed directly to and paid by the
        Partnership to the extent practicable.

       

      4.04(a)(2)(c).
        Administrative
        Costs.
        The
        Managing General Partner shall receive a nonaccountable, fixed payment
        reimbursement for its Administrative Costs of $75 per well per month. The
        nonaccountable, fixed payment reimbursement of $75 per well per month shall
        be
        subject to the following:

       

      	(i)
                	
              it
                shall not be increased in amount during the term of the
                Partnership;

            


       

      	(ii)
                	
              it
                shall be proportionately reduced to the extent the Partnership acquires
                less than 100% of the Working Interest in the well;
                

            


       

      	(iii)
                	
              it
                shall be the entire payment to reimburse the Managing General Partner
                for
                the Partnership’s Administrative Costs;
                and

            


       

      	(iv)
                	
              it
                shall not be received for plugged or abandoned
                wells.

            


       

      4.04(a)(2)(d).
        Gas
        Gathering.
        The
        Managing General Partner, not acting as a Partner, shall be responsible for
        gathering and transporting the natural gas produced by the Partnership to
        interstate pipeline systems, local distribution companies, and/or end-users
        in
        the area (the “gathering services”). In providing the gathering services, the
        Managing General Partner may use the gathering system owned by Atlas Pipeline
        Partners as required in the Prospectus, and gathering systems owned by
        independent third-parties and/or Affiliates of Atlas America other than Atlas
        Pipeline Partners.

       


      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      


      


       

      The
        Partnership shall pay a gathering fee directly to the Managing General Partner
        at competitive rates for the gathering services. The gathering fee paid by
        the
        Partnership to the Managing General Partner may be increased from time-to-time
        by the Managing General Partner, in its sole discretion, but may not increase
        beyond competitive rates as determined by the Managing General Partner.
        Currently, the Managing General Partner has determined that the competitive
        rate
        is an amount equal to 10% of the gross sales price received by the Partnership
        for its natural gas in each of its primary or secondary areas as described
        in
        the Prospectus. Gross sales price means the price that is actually received,
        adjusted to take into account proceeds received or payments made pursuant
        to
        hedging arrangements. The payment of a competitive fee to the Managing General
        Partner for its gathering services shall be subject to the following
        conditions:

       

      	(i)  	
              If
                the Partnership’s natural gas production is gathered and transported
                through the gathering system owned by Atlas Pipeline Partners, then
                the
                Managing General Partner shall apply its gathering fee towards the
                related
                gathering fee obligation of Atlas America, Inc., Resource Energy,
                Inc.,
                and Viking Resources Corporation (the “Atlas Entities”) under their
                agreement with Atlas Pipeline Partners as described in the Prospectus.
                

            


       

      	(ii)  	
              If
                a third-party gathering system is used by the Partnership, then the
                Managing General Partner will pay a portion or all of the gathering
                fee it
                receives from the Partnership to the third-party gathering the natural
                gas. The Managing General Partner may retain the excess of any gathering
                fees it receives from the Partnership over the payments it makes
                to
                third-party gas gatherers. If the third-party’s gathering system charges
                more than an amount equal to 10% of the gross sales price, then the
                Managing General Partner’s gathering fee charged to the Partnership shall
                be the actual transportation and compression fees charged by the
                third-party gathering system with respect to the Partnership’s natural gas
                in the area. 

            


       

      	(iii)  	
              If
                both a third-party gathering system and the Atlas Pipeline Partners
                gathering system (or a gas gathering system owned by an affiliate
                of Atlas
                America other than Atlas Pipeline Partners) are used by the Partnership,
                then the Managing General Partner shall receive an amount equal to
                10% of
                the gross sales price plus the amount charged by the third-party
                gathering
                system. For purposes of illustration, but not limitation, the Partnership
                will deliver natural gas produced from certain wells drilled by the
                Partnership in the Upper Devonian Sandstone Reservoirs in the McKean
                County, Pennsylvania area into a gathering system, a segment of which
                will
                be provided by Atlas Pipeline Partners and a segment of which will
                be
                provided by a third-party. The third-party shall receive fees of
                $.35 per
                mcf for transportation and compression which may be increased from
                time-to-time, and the Managing General Partner shall receive a gathering
                fee equal to 10% of the gross sales
                price.

            


       

      With
        respect to the Knox project and natural gas produced from the Mississippian
        and
        Devonian Shale Reservoirs in Anderson, Campbell, Morgan, Roane and Scott
        Counties, Tennessee as described in the Prospectus, if the Coalfield Pipeline
        does not have sufficient capacity to compress and transport the natural gas
        produced from the Partnership’s wells as determined by Atlas America, then Atlas
        America or an Affiliate other than Atlas Pipeline Partners may construct
        an
        additional gathering system and/or enhancements to the Coalfield Pipeline.
        On
        completion of the construction, Atlas America will transfer its ownership
        in the
        additional gathering system and/or enhancements to the owners of Coalfield
        Pipeline, which will then pay Atlas America an amount equal to $.12 per mcf
        of
        natural gas transported through the newly constructed and/or enhanced gathering
        system. Coalfield Pipeline will pay this amount of $.12 per mcf to Atlas
        America
        from its gathering and compression fees charged to the Partnership.

       


      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      


      


       

      4.04(a)(2)(e).
        Dealer-Manager
        Fee.
        Subject
        to §3.03(a)(1), the Dealer-Manager shall receive on each Unit sold to investors:
        

       

      	(i)
                	
              a
                2.5% Dealer-Manager fee; 

            


       

      	(ii)
                	
              a
                7% Sales Commission; 

            


       

      	(iii)
                	
              a
                .5% accountable Reimbursement for Permissible Non-Cash Compensation;
                and

            


       

      	(iv)
                	
              an
                up to .5% reimbursement of the Selling Agents’ bona fide due diligence
                expenses. 

            


       

      4.04(a)(2)(f).
        Drilling
        and Operating Agreement. The
        Managing General Partner and its Affiliates shall receive compensation as
        set
        forth in the Drilling and Operating Agreement.

       

      4.04(a)(2)(g).
        Other
        Transactions.
        The
        Managing General Partner and its Affiliates may enter into transactions pursuant
        to §4.03(d)(7) with the Partnership and shall be entitled to compensation under
        that section.

       

      4.04(a)(3).
        Removal
        of Managing General Partner. 

       

      4.04(a)(3)(a).
        Majority
        Vote Required to Remove the Managing General Partner.
        The
        Managing General Partner may be removed at any time on 60 days’ advance written
        notice to the outgoing Managing General Partner by the affirmative vote of
        Participants whose Units equal a majority of the total Units. 

       

      If
        the
        Participants vote to remove the Managing General Partner from the Partnership,
        then Participants must elect by an affirmative vote of Participants who’s Units
        equal a majority of the total Units either to:

       

      	(i)
                	
              terminate,
                dissolve, and wind up the Partnership; or


            


       

      	(ii)
                	
              continue
                as a successor limited partnership under all the terms of this Partnership
                Agreement as provided in §7.01(c). 

            


       

      If
        the
        Participants elect to continue as a successor limited partnership, then the
        Managing General Partner shall not be removed until a substituted Managing
        General Partner has been selected by an affirmative vote of Participants
        who’s
        Units equal a majority of the total Units and installed as such.

       

      4.04(a)(3)(b).
        Valuation
        of Managing General Partner’s Interest in the Partnership.
        If the
        Managing General Partner is removed, then its interest in the Partnership
        shall
        be determined by appraisal by a qualified Independent Expert. The Independent
        Expert shall be selected by mutual agreement between the removed Managing
        General Partner and the incoming Managing General Partner. The appraisal
        shall
        take into account an appropriate discount, to reflect the risk of recovery
        of
        natural gas and oil reserves, but not less than that used to calculate the
        presentment price in the most recent presentment offer under §6.03, if any.


       

      The
        cost
        of the appraisal shall be borne equally by the removed Managing General Partner
        and the Partnership. 

       

      4.04(a)(3)(c).
        Incoming
        Managing General Partner’s Option to Purchase. The
        incoming Managing General Partner shall have the option to purchase 20% of
        the
        removed Managing General Partner’s interest in the Partnership as Managing
        General Partner, and not as a Participant, for the value determined by the
        Independent Expert.

       

      4.04(a)(3)(d).
        Method
        of Payment.
        The
        method of payment for the removed Managing General Partner’s interest must be
        fair and protect the solvency and liquidity of the Partnership. The method
        of
        payment shall be as follows: 

       


      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              when
                the termination is voluntary, the method of payment shall be a
                non-interest bearing unsecured promissory note with principal payable,
                if
                at all, from distributions which the Managing General Partner otherwise
                would have received under the Partnership Agreement had the Managing
                General Partner not been terminated; and

            


       

      	(ii)
                	
              when
                the termination is involuntary, the method of payment shall be an
                interest
                bearing promissory note coming due in no less than five years with
                equal
                installments each year. The interest rate shall be that charged on
                comparable loans. 

            


       

      4.04(a)(3)(e).
        Termination
        of Contracts.
        At the
        time of its removal, the removed Managing General Partner shall cause, to
        the
        extent it is legally possible, its successor to be transferred or assigned
        all
        its rights, obligations and interests as Managing General Partner of the
        Partnership in contracts entered into by it on behalf of the Partnership.
        In any
        event, the removed Managing General Partner shall cause its rights, obligations
        and interests as Managing General Partner of the Partnership in any such
        contract to terminate at the time of its removal. 

       

      Notwithstanding
        any other provision in this Agreement, the Partnership or the successor Managing
        General Partner shall not:

       

      	(i)
                	
              be
                a party to any natural gas supply agreement that the Managing General
                Partner or its Affiliates enters into with a third-party;
                

            


       

      	(ii)
                	
              have
                any rights pursuant to such natural gas supply agreement; or
                

            


       

      	(iii)
                	
              receive
                any interest in the Managing General Partner’s and its Affiliates’
                pipeline or gathering system or compression facilities.
                

            


       

      4.04(a)(3)(f).
        The
        Managing General Partner’s Right to Voluntarily Withdraw.
        At any
        time beginning 10 years after the Offering Termination Date and the
        Partnership’s primary drilling activities, the Managing General Partner may
        voluntarily withdraw as Managing General Partner on giving 120 days’ written
        notice of withdrawal to the Participants. If the Managing General Partner
        withdraws, then the following conditions shall apply:

       

      	(i)
                	
              the
                Managing General Partner’s interest in the Partnership shall be determined
                as described in §4.04(a)(3)(b) above with respect to removal;
                and

            


       

      	(ii)
                	
              the
                interest shall be distributed to the Managing General Partner as
                described
                in §4.04(a)(3)(d)(i) above.

            


       

      Any
        successor Managing General Partner shall have the option to purchase 20%
        of the
        withdrawing Managing General Partner’s interest in the Partnership at the value
        determined as described above with respect to removal.

       

      4.04(a)(3)(g).
        Right
        of Managing General Partner to Hypothecate Its Interests.
        The
        Managing General Partner shall have the authority without the consent of
        the
        Participants and without affecting the allocation of costs and revenues received
        or incurred under this Agreement, to hypothecate, pledge, or otherwise encumber,
        on any terms it chooses for its own general purposes, either:

       

      	(i)  	
              its
                Partnership interest; or 

            


       

      	(ii)  	
              an
                undivided interest in the assets of the Partnership equal to or less
                than
                its respective interest as Managing General Partner in the revenues
                of the
                Partnership. 

            


       


      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      


      


       

      All
        repayments of these borrowings and costs, interest or other charges related
        to
        the borrowings shall be borne and paid separately by the Managing General
        Partner. In no event shall the repayments, costs, interest, or other charges
        related to the borrowing be charged to the account of the Participants.


       

      4.04(a)(3)(h).
        The
        Managing General Partner’s Right to Withdraw Property
        Interest.
        Subject
        to a required participation of not less than 1% in the Partnership as Managing
        General Partner, the Managing General Partner has the right to withdraw a
        property interest held by the Partnership in the form of a Working Interest
        in
        the Partnership’s Wells equal to or less than its respective interest as
        Managing General Partner in the revenues of the Partnership if: 

       

      	(i)  	
              the
                withdrawal is necessary to satisfy the bona fide request of its creditors;
                or 

            


       

      	(ii)  	
              the
                withdrawal is approved by Participants whose Units equal a majority
                of the
                total Units.

            


       

      If
        the
        Managing General Partner withdraws a property interest from the Partnership
        as
        described above, then the Managing General Partner shall:

       

      	(i)  	
              pay
                the expenses of withdrawing; and

            


       

      	(ii)  	
              fully
                indemnify the Partnership against any additional expenses which may
                result
                from a partial withdrawal of its interests, including insuring that
                a
                greater amount of Direct Costs or Administrative Costs is not allocated
                to
                the Participants. 

            


       

      4.04(a)(4).
        Removal
        of Operator.
        The
        Operator may be removed and a new Operator may be substituted at any time
        on 60
        days advance written notice to the outgoing Operator by the Managing General
        Partner acting on behalf of the Partnership on the affirmative vote of
        Participants whose Units equal a majority of the total Units. 

       

      The
        Operator shall not be removed until a substituted Operator has been selected
        by
        an affirmative vote of Participants whose Units equal a majority of the total
        Units and installed as such.

       

      4.05.
        Indemnification
        and Exoneration.

       

      4.05(a)(1).
        Standards
        for the Managing General Partner Not Incurring Liability to the Partnership
        or
        Participants.
        The
        Managing General Partner, the Operator, and their Affiliates shall not have
        any
        liability whatsoever to the Partnership, or to any Participant for any loss
        suffered by the Partnership or Participants which arises out of any action
        or
        inaction of the Managing General Partner, the Operator, or their Affiliates
        if:

       

      	(i)
                	
              the
                Managing General Partner, the Operator, and their Affiliates determined
                in
                good faith that the course of conduct was in the best interest of
                the
                Partnership;

            


       

      	(ii)
                	
              the
                Managing General Partner, the Operator, and their Affiliates were
                acting
                on behalf of, or performing services for, the Partnership; and
                

            


       

      	(iii)
                	
              the
                course of conduct did not constitute negligence or misconduct of
                the
                Managing General Partner, the Operator, or their
                Affiliates.

            


       

      4.05(a)(2).
        Standards
        for Managing General Partner Indemnification.
        The
        Managing General Partner, the Operator, and their Affiliates shall be
        indemnified by the Partnership against any losses, judgments, liabilities,
        expenses, and amounts paid in settlement of any claims sustained by them
        in
        connection with the Partnership, provided that: 

       


      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              the
                Managing General Partner, the Operator, and their Affiliates determined
                in
                good faith that the course of conduct which caused the loss or liability
                was in the best interest of the
                Partnership;

            


       

      	(ii)
                	
              the
                Managing General Partner, the Operator, and their Affiliates were
                acting
                on behalf of, or performing services for, the Partnership; and
                

            


       

      	(iii)
                	
              the
                course of conduct was not the result of negligence or misconduct
                of the
                Managing General Partner, the Operator, or their
                Affiliates.

            


       

      Provided,
        however, payments arising from such indemnification or agreement to hold
        harmless are recoverable only out of the following:

       

      	(i)
                	
              the
                Partnership’s tangible net assets, which include its revenues;
                and

            


       

      	(ii)
                	
              any
                insurance proceeds from the types of insurance for which the Managing
                General Partner, the Operator and their Affiliates may be indemnified
                under this Agreement.

            


       

      4.05(a)(3).
        Standards
        for Securities Law Indemnification.
        Notwithstanding anything to the contrary contained in the above, the Managing
        General Partner, the Operator, and their Affiliates and any person acting
        as a
        broker/dealer shall not be indemnified for any losses, liabilities or expenses
        arising from or out of an alleged violation of federal or state securities
        laws
        by such party unless:

       

      	(i)
                	
              there
                has been a successful adjudication on the merits of each count involving
                alleged securities law violations as to the particular indemnity;
                

            


       

      	(ii)
                	
              the
                claims have been dismissed with prejudice on the merits by a court
                of
                competent jurisdiction as to the particular indemnity; or
                

            


       

      	(iii)
                	
              a
                court of competent jurisdiction approves a settlement of the claims
                against a particular indemnity and finds that indemnification of
                the
                settlement and the related costs should be made, and the court considering
                the request for indemnification has been advised of the position
                of the
                SEC, the Massachusetts Securities Division, and any state securities
                regulatory authority in which plaintiffs claim they were offered
                or sold
                Units with respect to the issue of indemnification for violation
                of
                securities laws.

            


       

      4.05(a)(4).
        Standards
        for Advancement of Funds to the Managing General Partner and
        Insurance.
        The
        advancement of Partnership funds to the Managing General Partner, the Operator,
        or their Affiliates for legal expenses and other costs incurred as a result
        of
        any legal action for which indemnification is being sought is permissible
        only
        if the Partnership has adequate funds available and the following conditions
        are
        satisfied: 

       

      	(i)
                	
              the
                legal action relates to acts or omissions with respect to the performance
                of duties or services on behalf of the Partnership;
                

            


       

      	(ii)
                	
              the
                legal action is initiated by a third-party who is not a Participant,
                or
                the legal action is initiated by a Participant and a court of competent
                jurisdiction specifically approves the advancement; and
                

            


       

      	(iii)
                	
              the
                Managing General Partner or its Affiliates undertake to repay the
                advanced
                funds to the Partnership, together with the applicable legal rate
                of
                interest thereon, in cases in which such party is found not to be
                entitled
                to indemnification.

            


       


      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      


      


       

      The
        Partnership shall not bear the cost of that portion of insurance which insures
        the Managing General Partner, the Operator, or their Affiliates for any
        liability for which they could not be indemnified pursuant to §§4.05(a)(1) and
        4.05(a)(2).

       

      4.05(b).
        Liability
        of Partners.
        Under
        the Delaware Revised Uniform Limited Partnership Act, the Investor General
        Partners are liable jointly and severally for all liabilities and obligations
        of
        the Partnership. Notwithstanding the foregoing, as among themselves, the
        Investor General Partners agree that each shall be solely and individually
        responsible only for his pro rata share of the liabilities and obligations
        of
        the Partnership based on his respective number of Units. 

       

      In
        addition, the Managing General Partner agrees to use its corporate assets
        to
        indemnify each of the Investor General Partners against all Partnership related
        liabilities which exceed the Investor General Partner’s interest in the
        undistributed net assets of the Partnership and insurance proceeds, if any.
        Further, the Managing General Partner agrees to indemnify each Investor General
        Partner against any personal liability as a result of the unauthorized acts
        of
        another Investor General Partner. 

       

      If
        the
        Managing General Partner provides indemnification, then each Investor General
        Partner who has been indemnified shall transfer and
        subrogate his rights for contribution from or against any other Investor
        General
        Partner to the Managing General Partner.

       

      4.05(c).
        Order
        of Payment of Claims. Claims
        shall be paid as follows:

       

      	(i)
                	
              first,
                out of any insurance proceeds;

            


       

      	(ii)
                	
              second,
                out of Partnership assets and revenues; and


            


       

      	(iii)
                	
              last,
                by the Managing General Partner as provided in §§3.05(b)(2) and (3) and
                4.05(b). 

            


       

      No
        Limited Partner shall be required to reimburse the Managing General Partner,
        the
        Operator, their Affiliates, or the Investor General Partners for any liability
        in excess of his agreed Capital Contribution, except:

       

      	(i)
                	
              for
                a liability resulting from the Limited Partner’s unauthorized
                participation in Partnership management; or


            


       

      	(ii)
                	
              from
                some other breach by the Limited Partner of this
                Agreement.

            


       

      4.05(d).
        Authorized
        Transactions Are Not Deemed to Be a Breach.
        No
        transaction entered into or action taken by the Partnership, or the Managing
        General Partner, the Operator, or their Affiliates, which is authorized by
        this
        Agreement shall be deemed a breach of any obligation owed by the Managing
        General Partner, the Operator, or their Affiliates to the Partnership or
        the
        Participants.

       

      4.06.
        Other
        Activities. 

       

      4.06(a).
        The
        Managing General Partner May Pursue Other Natural Gas and Oil Activities
        for Its
        Own Account.
        The
        Managing General Partner, the Operator, and their Affiliates are now engaged,
        and will engage in the future, for their own account and for the account
        of
        others, including other investors, in all aspects of the natural gas and
        oil
        business. This includes without limitation, the evaluation,
        acquisition, and sale of producing and nonproducing Leases, and the exploration
        for and production of natural gas, oil and
        other
        minerals. 

       


      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      


      


       

      The
        Managing General Partner is required to devote only so much of its time as
        is
        necessary to manage the affairs of the Partnership. Except as expressly provided
        to the contrary in this Agreement, and subject to fiduciary duties, the Managing
        General Partner, the Operator, and their Affiliates may do the following:
        

       

      	(i)
                	
              continue
                their activities, or initiate further such activities, individually,
                jointly with others, or as a part of any other limited or general
                partnership, tax partnership, joint venture, or other entity or activity
                to which they are or may become a party, in any locale and in the
                same
                fields, areas of operation or prospects in which the Partnership
                may
                likewise be active; 

            


       

      	(ii)
                	
              reserve
                partial interests in Leases being assigned to the Partnership or
                any other
                interests not expressly prohibited by this Agreement;
                

            


       

      	(iii)
                	
              deal
                with the Partnership as independent parties or through any other
                entity in
                which they may be interested; 

            


       

      	(iv)
                	
              conduct
                business with the Partnership as set forth in this Agreement;
                and

            


       

      	(v)
                	
              participate
                in such other investor operations, as investors or
                otherwise.

            


       

      The
        Managing General Partner and its Affiliates shall not be required to permit
        the
        Partnership or the Participants to participate in
        any of
        the operations in which the Managing General Partner and its Affiliates may
        be
        interested or share in any profits or other benefits from the operations.
        However, except as
        otherwise provided in this Agreement, the Managing General Partner and its
        Affiliates may pursue business opportunities that are consistent with the
        Partnership’s investment objectives for their own account only after they have
        determined that the opportunity either: 

       

      	(i)
                	
              cannot
                be pursued by the Partnership because of insufficient funds; or
                

            


       

      	(ii)
                	
              it
                is not appropriate for the Partnership under the existing
                circumstances.

            


       

      4.06(b).
        Managing
        General Partner May Manage Multiple Partnerships.
        The
        Managing General Partner or its Affiliates may manage multiple Programs
        simultaneously. 

       

      4.06(c).
        Partnership
        Has No Interest in Natural Gas Contracts or Pipelines and Gathering
        Systems.
        Notwithstanding any other provision in this Agreement, the Partnership shall
        not:

       

      	(i)
                	
              be
                a party to any natural gas supply agreement that the Managing General
                Partner, the Operator, or their Affiliates enter into with a third-party
                or have any rights pursuant to such natural gas supply agreement;
                or

            


       

      	(ii)
                	
              receive
                any interest in the Managing General Partner’s, the Operator’s, and their
                Affiliates’ pipeline or gathering system or compression
                facilities.

            


       


      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      


      


      ARTICLE
        V

      PARTICIPATION
        IN COSTS AND REVENUES,

      CAPITAL
        ACCOUNTS, ELECTIONS AND DISTRIBUTIONS

       

      5.01.
        Participation
        in Costs and Revenues.
        Except
        as otherwise provided in this Agreement, costs and revenues shall be charged
        and
        credited to the Managing General Partner and the Participants as set forth
        in
        this section and its subsections.

       

      5.01(a).
        Costs.
        Costs
        shall be charged as set forth below.

       

      5.01(a)(1).
        Organization
        and Offering Costs.
        Organization and Offering Costs shall be charged 100% to the Managing General
        Partner. For purposes of sharing in revenues under §5.01(b)(4), the Managing
        General Partner shall be credited with Organization and Offering Costs paid
        by
        it and for services provided by it as Organization Costs up to and including
        15%
        of the Partnership’s subscription proceeds. Any Organization and Offering Costs
        paid and/or provided in services by the Managing General Partner in excess
        of
        this amount shall not be credited towards the Managing General Partner’s
        required Capital Contribution or revenue share set forth in §5.01(b)(4). The
        Managing General Partner’s credit for services provided to the Partnership as
        Organization Costs shall be determined based on generally accepted accounting
        principles.

       

      5.01(a)(2).
        Intangible
        Drilling Costs.
        Ninety
        percent (90%) of the Partnership’s subscription proceeds received from the
        Participants shall be used to pay 100% of the Intangible Drilling
        Costs.

       

      5.01(a)(3).
        Tangible
        Costs.
        Ten
        percent (10%) of the Partnership’s subscription proceeds received from the
        Participants shall be used by the Partnership to pay Tangible Costs. All
        remaining Tangible Costs in excess of an amount equal to 10% of the
        Partnership’s subscription proceeds shall be charged 100% to the Managing
        General Partner.

       

      5.01(a)(4).
        Operating
        Costs, Direct Costs, Administrative Costs and All Other
        Costs.
        Operating Costs, Direct Costs, Administrative Costs, and all other Partnership
        costs not specifically allocated shall be charged to the parties in the same
        ratio as the related production revenues are being credited.

       

      5.01(a)(5).
        Allocation of Intangible Drilling Costs and Tangible Costs at Partnership
        Closings.
        Intangible Drilling Costs and the Participants’ share of Tangible Costs of a
        well or wells to be drilled and completed with the proceeds of a Partnership
        closing shall be charged 100% to the Participants who are admitted to the
        Partnership in that closing and shall not be reallocated to take into account
        other Partnership closings. 

       

      Although
        the proceeds of each Partnership closing will be used to pay the costs of
        drilling different wells, 90% of each Participant’s subscription proceeds shall
        be applied to Intangible Drilling Costs and 10% of each Participant’s
        subscription proceeds shall be applied to Tangible Costs regardless of when
        he
        subscribes.

       

      5.01(a)(6).
        Lease
        Costs.
        The
        Leases shall be contributed to the Partnership by the Managing General Partner
        as set forth in §4.01(a)(4).

       

      5.01(b).
        Revenues.
        Revenues shall be credited as set forth below.

       


      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      


      


       

      5.01(b)(1).
        Allocation
        of Revenues on Disposition of Property.
        If the
        parties’ Capital Accounts are adjusted to reflect the simulated depletion of a
        natural gas or oil property of the Partnership, then the portion of the total
        amount realized by the Partnership on the taxable disposition of the property
        that represents recovery of its simulated tax basis in the property shall
        be
        allocated to the parties in the same proportion as the aggregate adjusted
        tax
        basis of the property was allocated to the parties or their predecessors
        in
        interest. If the parties’ Capital Accounts are adjusted to reflect the actual
        depletion of a natural gas or oil property of the Partnership, then the portion
        of the total amount realized by the Partnership on the taxable disposition
        of
        the property that equals the parties’ aggregate remaining adjusted tax basis in
        the property shall be allocated to the parties in proportion to their respective
        remaining adjusted tax bases in the property. Thereafter, any excess shall
        be
        allocated to the Managing General Partner in an amount equal to the difference
        between the fair market value of the Lease at the time it was contributed
        to the
        Partnership and its simulated or actual adjusted tax basis at that time.
        Finally, any excess shall be credited as provided in §5.01(b)(4), below.


       

      In
        the
        event of a sale of developed natural gas and oil properties with equipment
        on
        the properties, the Managing General Partner may make any reasonable allocation
        of proceeds between the equipment and the Leases.

       

      5.01(b)(2).
        Interest.
        Interest
        earned on each Participant’s subscription proceeds before the Offering
        Termination Date under §3.05(b)(1) shall be credited to the accounts of the
        respective subscribers who paid the subscription proceeds to the Partnership.
        The interest shall be paid to the Participant not later than the Partnership’s
        first cash distribution from operations.

       

      After
        the
        Offering Termination Date and until proceeds from the offering are invested
        in
        the Partnership’s natural gas and oil operations, any interest income from
        temporary investments shall be allocated pro rata to the Participants providing
        the subscription proceeds. 

       

      All
        other
        interest income, including interest earned on the deposit of production
        revenues, shall be credited as provided in §5.01(b)(4), below.

       

      5.01(b)(3).
        Sale
        or Disposition of Equipment.
        Proceeds
        from the sale or disposition of equipment shall be credited to the parties
        charged with the costs of the equipment in the ratio in which the costs were
        charged.

       

      5.01(b)(4).
        Other
        Revenues.
        Subject
        to §5.01(b)(4)(a), the Managing General Partner and the Participants shall share
        in all other Partnership revenues in the same percentage as their respective
        Capital Contribution bears to the total Partnership Capital Contributions,
        except that the Managing General Partner shall receive an additional 7% of
        Partnership revenues. However, the Managing General Partner’s total revenue
        share may not exceed 40% of Partnership revenues. For example, if the Managing
        General Partner contributes 25% of the total Partnership Capital Contributions
        and the Participants contribute 75% of the total Partnership Capital
        Contributions, then the Managing General Partner shall receive 32% of the
        Partnership revenues and the Participants shall receive 68% of the Partnership
        revenues. On the other hand, if the Managing General Partner contributes
        35% of
        the total Partnership Capital Contributions and the Participants contribute
        65%
        of the total Partnership Capital Contributions, then the Managing General
        Partner shall receive 40% of the Partnership revenues, not 42%, because its
        revenue share cannot exceed 40% of Partnership revenues, and the Participants
        shall receive 60% of Partnership revenues.

       


      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      


      


       

      5.01(b)(4)(a).
        Subordination.
        The
        Managing General Partner shall subordinate up to 50% of its share of Partnership
        Net Production Revenues to the receipt by Participants of cash distributions
        from the Partnership equal to $1,000 per Unit (which is 10% per Unit) regardless
        of their actual subscription price of the Units, in each of the first five
        12-month periods. In this regard: 

       

      	(i)  	
              the
                60-month subordination period shall begin with the first cash distribution
                from operations to the Participants;

            


       

      	(ii)  	
              subsequent
                subordination distributions, if any, shall be determined and made
                at the
                time of each subsequent distribution of revenues to the Participants;
                and

            


       

      	(iii)  	
              the
                Managing General Partner shall not subordinate more than 50% of its
                share
                of Partnership Net Production Revenues in any subordination period.
                

            


       

      The
        subordination shall be determined by:

       

      	(i)
                	
              carrying
                forward to subsequent 12-month periods the amount, if any, by which
                cumulative cash distributions to Participants, including any subordination
                payments, are less than: 

            


       

      	(a)
                	
              $1,000
                per Unit (10% per Unit) in the first 12-month
                period;

            


       

      	(b)
                	
              $2,000
                per Unit (20% per Unit) in the second 12-month
                period;

            


       

      	(c)
                	
              $3,000
                per Unit (30% per Unit) in the third 12-month period; or
                

            


       

      	(d)
                	
              $4,000
                per Unit (40% per Unit) in the fourth 12-month period (no carry forward
                is
                required if such distributions are less than $5,000 per Unit (50%
                per
                Unit) in the fifth 12-month period because the Managing General Partner’s
                subordination obligation terminates on the expiration of the fifth
                12-month period); and 

            


       

      	(ii)
                	
              reimbursing
                the Managing General Partner for any previous subordination payments
                to
                the extent cumulative cash distributions to Participants, including
                any
                subordination payments, would exceed: 

            


       

      	(a)
                	
              $1,000
                per Unit (10% per Unit) in the first 12-month
                period;

            


       

      	(b)
                	
              $2,000
                per Unit (20% per Unit) in the second 12-month
                period;

            


       

      	(c)
                	
              $3,000
                per Unit (30% per Unit) in the third 12-month
                period;

            


       

      	(d)
                	
              $4,000
                per Unit (40% per Unit) in the fourth 12-month period; or
                

            


       

      	(e)
                	
              $5,000
                per Unit (50% per Unit) in the fifth 12-month period.
                

            


       

      The
        Managing General Partner’s subordination obligation shall be further subject to
        the following conditions:

       

      	(i)
                	
              the
                subordination obligation may be prorated in the Managing General
                Partner’s
                discretion (e.g. in the case of a monthly distribution, the Managing
                General Partner will not have any subordination obligation if the
                distributions to Participants equal $83.33 per Unit (8.333% of $1,000
                per
                Unit per year) or more assuming there is no subordination owed for
                any
                preceding period);

            


       


      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      


      


       

      	(ii)
                	
              the
                Managing General Partner shall not be required to return Partnership
                distributions previously received by it, even though a subordination
                obligation arises after the
                distributions;

            


       

      	(iii)
                	
              subject
                to the foregoing provisions of this section, only Partnership revenues
                in
                the current distribution period shall be debited or credited to the
                Managing General Partner as may be necessary to provide, to the extent
                possible, subordination distributions to the Participants and
                reimbursements to the Managing General Partner;


            


       

      	(iv)
                	
              no
                subordination payments to the Participants or reimbursements to the
                Managing General Partner shall be made after the expiration of the
                fifth
                12-month subordination period; and

            


       

      	(v)
                	
              subordination
                payments to the Participants shall be subject to any lien or priority
                required by the Managing General Partner’s lenders pursuant to agreements
                previously entered into or subsequently entered into or renewed by
                the
                Managing General Partner.

            


       

      5.01(b)(5).
        Commingling
        of Revenues From All Partnership Wells.
        The
        revenues from all Partnership wells will be commingled, so regardless of
        when a
        Participant subscribes he will share in the revenues from all wells on the
        same
        basis as the other Participants.

       

      5.01(c).
        Allocations.

       

      5.01(c)(1).
        Allocations
        among Participants.
        Except
        as provided otherwise in this Agreement, costs (other than Intangible Drilling
        Costs and Tangible Costs) and revenues charged or credited to the Participants
        as a group, which includes all revenue credited to the Participants under
        §5.01(b)(4), shall be allocated among the Participants, including the Managing
        General Partner to the extent of any optional subscription under §3.03(b)(2), in
        the ratio of their respective Units based on $10,000 per Unit regardless
        of the
        actual subscription price for a Participant’s Units. 

       

      Intangible
        Drilling Costs and Tangible Costs charged to the Participants as a group
        shall
        be allocated among the Participants, including the Managing General Partner
        to
        the extent of any optional subscription under §3.03(b)(2), in the ratio of the
        subscription price designated on their respective Subscription Agreements
        rather
        than the number of their respective Units.

       

      5.01(c)(2).
        Costs
        and Revenues Not Directly Allocable to a Partnership Well.
        Costs
        and revenues not directly allocable to a particular Partnership Well or
        additional operation shall be allocated among the Partnership Wells or
        additional operations in any manner the Managing General Partner in its
        reasonable discretion, shall select, and shall then be charged or credited
        in
        the same manner as costs or revenues directly applicable to the Partnership
        Well
        or additional operation are being charged or credited.

       

      5.01(c)(3).
        Managing
        General Partner’s Discretion
        in Making Allocations For Federal Income Tax Purposes.
        In
        determining the proper method of allocating charges or credits among the
        parties, allocating any item of income, gain, loss, deduction or credit which
        is
        the result of new laws or new IRS or judicial interpretations of existing
        law,
        or which is not otherwise specifically allocated in this Agreement or is
        clearly
        inconsistent with a party’s economic interest in the Partnership, or making any
        other allocations under this Agreement, the Managing General Partner may
        adopt
        any method of allocation which it, in its reasonable discretion, selects
        in its
        sole discretion, after consultation with the Partnership’s legal counsel or
        accountants. Any new allocation provisions shall be made in a manner that
        is
        consistent with the parties’ economic interests in the Partnership and which
        would result in the most favorable aggregate consequences to the Participants
        as
        nearly as possible consistent with the original allocations described in
        this
        Agreement.

       


      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      


      


       

      5.02.
        Capital
        Accounts and Allocations Thereto.

       

      5.02(a).
        Capital
        Accounts for Each Party to this Agreement.
        A
        single, separate Capital Account shall be established for each party, regardless
        of the number of interests owned by the party, the class of the interests
        and
        the time or manner in which the interests were acquired.

       

      5.02(b).
        Charges
        and Credits.

       

      5.02(b)(1).
        General
        Standard.
        Except
        as otherwise provided in this Agreement, the Capital Account of each party
        shall
        be determined and maintained in accordance with Treas. Reg. §1.704-l(b)(2)(iv)
        and shall be increased by: 

       

      	(i)
                	
              the
                amount of money contributed by him to the Partnership;
                

            


       

      	(ii)
                	
              the
                fair market value of property contributed by him, without regard
                to
                §7701(g) of the Code, to the Partnership, net of liabilities secured
                by
                the contributed property that the Partnership is considered to assume
                or
                take subject to under §752 of the Code; and


            


       

      	(iii)
                	
              allocations
                to him of Partnership income and gain, or items thereof, including
                income
                and gain exempt from tax and income and gain described in Treas.
                Reg.
                §1.704-l(b)(2)(iv)(g), but excluding income and gain described in
                Treas.
                Reg. §1.704-l(b)(4)(i); 

            


       

      and
        shall
        be decreased by:

       

      	(iv)
                	
              the
                amount of money distributed to him by the Partnership;
                

            


       

      	(v)
                	
              the
                fair market value of property distributed to him, without regard
                to
                §7701(g) of the Code, by the Partnership, net of liabilities secured
                by
                the distributed property that he is considered to assume or take
                subject
                to under §752 of the Code; 

            


       

      	(vi)
                	
              allocations
                to him of Partnership expenditures described in §705(a)(2)(B) of the Code;
                and 

            


       

      	(vii)
                	
              allocations
                to him of Partnership loss and deduction, or items thereof, including
                loss
                and deduction described in Treas. Reg. §1.704-l(b)(2)(iv)(g), but
                excluding items described in (vi) above, and loss or deduction described
                in Treas. Reg. §1.704-l(b)(4)(i) or (iii).


            


       

      5.02(b)(2).
        Exception.
        If
        Treas. Reg. §1.704-l(b)(2)(iv) fails to provide guidance, Capital Account
        adjustments shall be made in
        a manner
        that: 

       

      	(i)
                	
              maintains
                equality between the aggregate governing Capital Accounts of the
                parties
                and the amount of Partnership capital reflected on the Partnership’s
                balance sheet, as computed for book purposes;


            


       

      	(ii)
                	
              is
                consistent with the underlying economic arrangement of the parties;
                and
                

            


       

      	(iii)
                	
              is
                based, wherever practicable, on federal tax accounting
                principles.

            


       

      5.02(c).
        Payments
        to the Managing General Partner.
        The
        Capital Account of the Managing General Partner shall be reduced by payments
        to
        it pursuant to §4.04(a)(2) only to the extent of the Managing General Partner’s
        distributive share of any Partnership deduction, loss, or other downward
        Capital
        Account adjustment resulting from the payments. Also, in the event, and to
        the
        extent, that the Managing General Partner is treated under the Code as having
        been transferred an interest in the Partnership in connection with the
        performance of services for the Partnership (whether before or after the
        formation of the Partnership):

       


      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

      


      


       

      	(i)  	
              any
                resulting compensation income shall be allocated 100% to the Managing
                General Partner;

            


       

      	(ii)  	
              any
                associated increase in Capital Accounts shall be credited 100% to
                the
                Managing General Partner; and

            


       

      	(iii)  	
              any
                associated deduction to which the Partnership is entitled shall be
                allocated 100% to the Managing General
                Partner.

            


       

      5.02(d).
        Discretion
        of Managing General Partner in the Method of Maintaining Capital
        Accounts.
        Notwithstanding any other provisions of this Agreement, the method of
        maintaining Capital Accounts may be changed from time to time, in the discretion
        of the Managing General Partner, to take into consideration §704 and other
        provisions of the Code and the related rules, regulations and interpretations
        as
        may exist from time to time.

       

      5.02(e).
        Revaluations
        of Property. In
        the
        discretion of the Managing General Partner the Capital Accounts of the parties
        may be increased or decreased to reflect a revaluation of Partnership property,
        including intangible assets such as goodwill, on a property-by-property basis
        except as otherwise permitted under §704(c) of the Code and the regulations
        thereunder, on the Partnership’s books, in accordance with Treas. Reg.
§1.704-l(b)(2)(iv)(f).

       

      5.02(f).
        Amount
        of Book Items.
        In cases
        where §704(c) of the Code or §5.02(e) applies, Capital Accounts shall be
        adjusted in accordance with Treas. Reg. §1.704-l(b)(2)(iv)(g) for allocations of
        depreciation, depletion, amortization and gain and loss, as computed for
        book
        purposes, with respect to the property.

       

      5.03.
        Allocation
        of Income, Deductions and Credits.

       

      5.03(a).
        In
        General. 

       

      5.03(a)(1).
        Deductions Are Allocated to Party Charged with Expenditure.
To
        the
        extent permitted by law and except as otherwise provided in this Agreement,
        all
        deductions and credits, including, but not limited to, intangible drilling
        and
        development costs and depreciation, shall be allocated to the party who has
        been
        charged with the expenditure giving rise to the deductions and credits; and
        to
        the extent permitted by law, these parties shall be entitled to the deductions
        and credits in computing taxable income or tax liabilities to the exclusion
        of
        any other party. Also, any Partnership deductions that would be nonrecourse
        deductions if they were not attributable to a loan made or guaranteed by
        the
        Managing General Partner or its Affiliates shall be allocated to the Managing
        General Partner to the extent required by law.

       

      5.03(a)(2).
        Income
        and Gain Allocated in Accordance With Revenues.
        Except
        as otherwise provided in this Agreement, all items of income and gain, including
        gain on disposition of assets, shall be allocated in accordance with the
        related
        revenue allocations set forth in §5.01(b) and its subsections.

       

      5.03(b).
        Tax
        Basis of Each Property.
        Subject
        to §704(c) of the Code, the tax basis of each oil and gas property for
        computation of cost depletion and gain or loss on disposition shall be allocated
        and reallocated when necessary based on the capital interest in the Partnership
        as to the property and the capital interest in the Partnership for this purpose
        as to each property shall be considered to be owned by the parties in the
        ratio
        in which the expenditure giving rise to the tax basis of the property has
        been
        charged as of the end of the year.

       

      5.03(c).
        Gain
        or Loss on Oil and Gas Properties.
        Each
        party shall separately compute its gain or loss on the disposition of each
        natural gas and oil property in accordance with the provisions of §613A(c)(7)(D)
        of the Code, and the calculation of the gain or loss shall consider the party’s
        adjusted basis in his property interest computed as provided in §5.03(b) and the
        party’s allocable share of the amount realized from the disposition of the
        property.

       


      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      


      


       

      5.03(d).
        Gain
        on Depreciable Property.
        Gain
        from each sale or other disposition of depreciable property shall be allocated
        to each party whose share of the proceeds from the sale or other disposition
        exceeds its contribution to the adjusted basis of the property in the ratio
        that
        the excess bears to the sum of the excesses of all parties having an
        excess.

       

      5.03(e).
        Loss
        on Depreciable Property.
        Loss
        from each sale, abandonment or other disposition of depreciable property
        shall
        be allocated to each party whose contribution to the adjusted basis of the
        property exceeds its share of the proceeds from the sale, abandonment or
        other
        disposition in the proportion that the excess bears to the sum of the excesses
        of all parties having an excess.

       

      5.03(f).
        Allocation
        If Recapture
        Treated As Ordinary Income.
        Any
        recapture treated as an increase in ordinary income by reason of §§1245, 1250,
        or 1254 of the Code shall be allocated to the parties in the amounts in which
        the recaptured items were previously allocated to them; provided that to
        the
        extent recapture allocated to any party is in excess of the party’s gain from
        the disposition of the property, the excess shall be allocated to the other
        parties but only to the extent of the other parties’ gain from the disposition
        of the property.

       

      5.03(g).
        Tax
        Credits.
        If a
        Partnership expenditure, whether or not deductible, that gives rise to a
        tax
        credit in a Partnership taxable year also gives rise to valid allocations
        of
        Partnership loss or deduction, or other downward Capital Account adjustments,
        for the year, then the parties’ interests in the Partnership with respect to the
        credit, or the cost giving rise thereto, shall be in the same proportion
        as the
        parties’ respective distributive shares of the loss or deduction, and
        adjustments. If Partnership receipts, whether or not taxable, that give rise
        to
        a tax credit, including a marginal well production credit under §45I of the
        Code, in a Partnership taxable year also give rise to valid allocations of
        Partnership income or gain, or other upward Capital Account adjustments,
        for the
        year, then the parties’ interests in the Partnership with respect to the credit,
        or the Partnership’s receipts or production of natural gas and oil production
        giving rise thereto, shall be in the same proportion as the parties’ respective
        shares of the Partnership’s production revenues from the sales of its natural
        gas and oil production as provided in §5.01(b)(4).

       

      5.03(h).
        Deficit
        Capital Accounts and Qualified Income Offset.
        Notwithstanding any provisions of this Agreement to the contrary, an allocation
        of loss or deduction which would result in a party having a deficit Capital
        Account balance as of the end of the taxable year to which the allocation
        relates, if charged to the party, to the extent the Participant is not required
        to restore the deficit to the Partnership, taking into account: 

       

      	(i)
                	
              adjustments
                that, as of the end of the year, reasonably are expected to be made
                to the
                party’s Capital Account for depletion allowances with respect to the
                Partnership’s natural gas and oil properties;


            


       

      	(ii)
                	
              allocations
                of loss and deduction that, as of the end of the year, reasonably
                are
                expected to be made to the party under §§704(e)(2) and 706(d) of the Code
                and Treas. Reg. §1.751-1(b)(2)(ii); and 

            


       

      	(iii)
                	
              distributions
                that, as of the end of the year, reasonably are expected to be made
                to the
                party to the extent they exceed offsetting increases to the party’s
                Capital Account, assuming for this purpose that the fair market value
                of
                Partnership property equals its adjusted tax basis, that reasonably
                are
                expected to occur during or prior to the Partnership taxable years
                in
                which the distributions reasonably are expected to be made;
                

            


       

      shall
        be
        charged to the Managing General Partner. Further, the Managing General Partner
        shall be credited with an additional amount of Partnership income or gain
        equal
        to the amount of the loss or deduction as quickly as possible to the extent
        such
        chargeback does not cause or increase deficit balances in the parties’ Capital
        Accounts which are not required to be restored to the Partnership. 

       


      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

      


      


       

      Notwithstanding
        any provisions of this Agreement to the contrary, if a party unexpectedly
        receives an adjustment, allocation, or distribution described in (i), (ii),
        or
        (iii) above, or any other distribution, which causes or increases a deficit
        balance in the party’s Capital Account which is not required to be restored to
        the Partnership, the party shall be allocated items of income and gain,
        consisting of a pro rata portion of each item of Partnership income, including
        gross income, and gain for the year, in an amount and manner sufficient to
        eliminate the deficit balance as quickly as possible.

       

      5.03(i).
        Minimum
        Gain Chargeback.
        To the
        extent there is a net decrease during a Partnership taxable year in the minimum
        gain attributable to a Partner nonrecourse debt, then any Partner with a
        share
        of the minimum gain attributable to the debt at the beginning of the year
        shall
        be allocated items of Partnership income and gain in accordance with Treas.
        Reg.
§1.704-2(i).

       

      5.03(j).
        Partners’
        Allocable Shares.
        Except
        as otherwise provided in this Agreement, each party’s allocable share of
        Partnership income, gain, loss, deductions and credits shall be determined
        by
        the use of any method prescribed or permitted by the Secretary of the Treasury
        by regulations or other guidelines and selected by the Managing General Partner
        which takes into account the varying interests of the parties in the Partnership
        during the taxable year. In the absence of such regulations or guidelines,
        except as otherwise provided in this Agreement, the allocable share shall
        be
        based on actual income, gain, loss, deductions and credits economically accrued
        each day during the taxable year in proportion to each party’s varying interest
        in the Partnership on each day during the taxable year.

       

      5.03(k).
        Contingent
        Income.
        Subject
        to §5.04(d), if it is determined that any taxable income results to any party
        by
        reason of its entitlement to a share of capital of the Partnership, or a
        share
        of profits or revenues of the Partnership before the profit or revenue has
        been
        realized by the Partnership, the resulting deduction as well as any resulting
        gain, shall not enter into Partnership net income or loss, but shall be
        separately allocated to that party.

       

      5.04.
        Elections.

       

      5.04(a).
        Election
        to Deduct Intangible
        Costs.
        The
        Partnership’s federal income tax return shall be made in accordance with an
        election under the option granted by the Code to deduct intangible drilling
        and
        development costs.

       

      5.04(b).
        No
        Election Out of Subchapter K.
        No
        election shall be made by the Partnership, any Partner, or the Operator for
        the
        Partnership to be excluded from the application of the partnership provisions
        of
        the Code, including Subchapter K of Chapter 1 of Subtitle A of the
        Code.

       

      5.04(c).
        §754
        Election.
        In the
        event of the transfer of an interest in the Partnership, or on the death
        of an
        individual party hereto, or in the event of the distribution of property
        to any
        party, the Managing General Partner may choose for the Partnership to file
        an
        election in accordance with the applicable Treasury Regulations to cause
        the
        basis of the Partnership’s assets to be adjusted for federal income tax purposes
        as provided by §§734 and 743 of the Code.

       

      5.04(d).
        §83
        Election.
        The
        Partnership, the Managing General Partner and each Participant hereby agree
        to
        be legally bound by the provisions of this §5.04(d) and further agree that, in
        the Managing General Partner’s sole discretion, the Partnership and all of its
        Partners may elect a safe harbor under which the fair market value of a
        Partnership interest that is transferred in connection with the performance
        of
        services is treated as being equal to the liquidation value of that interest
        for
        transfers on or after the date final regulations providing the safe harbor
        are
        published in the Federal Register. If the Managing General Partner determines
        that the Partnership and all of its Partners will elect the safe harbor,
        which
        determination may be made solely in the best interests of the Managing General
        Partner, the Partnership, the Managing General Partner and each Participant
        further agree that:

       


      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              the
                Partnership shall be authorized and directed to elect the safe
                harbor;

            


       

      	(ii)
                	
              the
                Partnership and each of its Partners (including any Person to whom
                a
                Partnership interest is transferred in connection with the performance
                of
                services) shall comply with all requirements of the safe harbor with
                respect to all Partnership interests transferred in connection with
                the
                performance of services while the election remains effective;
                and

            


       

      	(iii)
                	
              the
                Managing General Partner, in its sole discretion, may cause the
                Partnership to terminate the safe harbor election, which determination
                may
                be made in the sole interests of the Managing General
                Partner.

            


       

      5.05.
        Distributions.

       

      5.05(a).
        In
        General. 

       

      5.05(a)(1).
        Monthly
        Review of Accounts. The
        Managing General Partner shall review the accounts of the Partnership at
        least
        monthly to determine whether cash distributions are appropriate and the amount
        to be distributed, if any. 

       

      5.05(a)(2).
        Distributions.
        The
        Partnership shall distribute funds to the Managing General Partner and the
        Participants allocated to their accounts which the Managing General Partner
        deems unnecessary to retain by the Partnership. 

       

      5.05(a)(3).
        No
        Borrowings.
        In no
        event, however, shall funds be advanced or borrowed for distributions if
        the
        amount of the distributions would exceed the Partnership’s accrued and received
        revenues for the previous four quarters, less paid and accrued Operating
        Costs
        with respect to the revenues. The determination of revenues and costs shall
        be
        made in accordance with generally accepted accounting principles, consistently
        applied. 

       

      5.05(a)(4).
        Distributions
        to the Managing General Partner.
        Cash
        distributions from the Partnership to the Managing General Partner shall
        only be
        made as follows: 

       

      	(i)
                	
              in
                conjunction with distributions to Participants; and
                

            


       

      	(ii)
                	
              out
                of funds properly allocated to the Managing General Partner’s
                account.

            


       

      5.05(a)(5).
        Reserve.
        At any
        time after one year from the date each Partnership Well is placed into
        production, the Managing General Partner shall have the right to deduct each
        month from the Partnership’s proceeds of the sale of the production from the
        well up to $200 for the purpose of establishing a fund to cover the estimated
        costs of plugging and abandoning the well. All of these funds shall be deposited
        in a separate interest bearing account for the benefit of the Partnership,
        and
        the total amount so retained and deposited shall not exceed the Managing
        General
        Partner’s reasonable estimate of the costs.

       

      5.05(b).
        Distribution
        of Uncommitted Subscription Proceeds.
        Any net
        subscription proceeds not expended or committed for expenditure, as evidenced
        by
        a written agreement, by the Partnership within 12 months of the Offering
        Termination Date, except necessary operating capital, shall be distributed
        to
        the Participants in the ratio that the subscription price designated on each
        Participant’s Subscription Agreement bears to the total subscription prices
        designated on all of the Participants’ Subscription Agreements, as a return of
        capital. The Managing General Partner shall reimburse the Participants for
        the
selling
        or other offering expenses, if any, allocable to the return of capital.


       


      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      


      


       

      For
        purposes of this subsection, “committed for expenditure”
        shall
        mean contracted for, actually earmarked for or allocated by the Managing
        General
        Partner to the Partnership’s drilling operations, and “necessary operating
        capital” shall mean those funds which, in the opinion of the Managing General
        Partner, should remain on hand to assure continuing operation of the
        Partnership.

       

      5.05(c).
        Distributions
        on Winding Up.
        On the
        winding up of the Partnership distributions shall be made as provided in
        §7.02.

       

      5.05(d).
        Interest
        and Return of Capital.
        No
        party shall under any circumstances be entitled to any interest on amounts
        retained by the Partnership. Each Participant shall look only to his share
        of
        distributions, if any, from the Partnership for a return of his Capital
        Contribution.

       

      ARTICLE
        VI

      TRANSFER
        OF UNITS

       

      6.01.
        Transferability
        of Units.
        A
        Participant’s transfer of a portion or all his Units, or any interest in his
        Units, is subject to all provisions of this Article VI. For purposes of this
        Article VI, the term “transfer” shall include any sale, exchange, gift,
        assignment, pledge, mortgage, hypothecation, redemption or other form of
        transfer of a Unit, or any interest in a Unit, by a Participant (which may
        include the Managing General Partner or its Affiliates, if they purchase
        Units)
        or by operation of law, including any transfers of Units which a Participant
        presents to the Managing General Partner for purchase under §6.03.

       

      6.01(a).
        Rights
        of Assignee.
        Unless a
        transferee of a Participant’s Unit becomes a substitute Participant with respect
        to that Unit in accordance with the provisions of §6.02(a)(3)(a), he shall not
        be entitled to any of the rights granted to a Participant under this Agreement,
        other than the right to receive all or part of the share of the profits,
        losses,
        income, gains, deductions, credits and depletion allowances, or items thereof,
        and cash distributions or returns of capital to which his transferor would
        otherwise be entitled under this Agreement.

       

      6.01(b).
        Conversion
        of Investor General Partner Units to Limited Partner Units. 

       

      6.01(b)(1).
        Automatic
        Conversion.
        After
        all of the Partnership Wells have been drilled and completed, as determined
        by
        the Managing General Partner, the Managing General Partner shall file an
        amended
        certificate of limited partnership with the Secretary of State of the State
        of
        Delaware for the purpose of converting the Investor General Partner Units
        to
        Limited Partner Units. 

       

      6.01(b)(2).
        Investor
        General Partners Shall Have Contingent Liability.
        On
        conversion the Investor General Partners shall be Limited Partners entitled
        to
        limited liability; however, they shall remain liable to the Partnership for
        any
        additional Capital Contribution required for their proportionate share of
        any
        Partnership obligation or liability arising before the conversion of their
        Units
        as provided in §3.05(b)(2). 

       

      6.01(b)(3).
        Conversion
        Shall Not Affect Allocations.
        The
        conversion shall not affect the allocation to any Participant of any item
        of
        Partnership income, gain, loss, deduction or credit or other item of special
        tax
        significance other than Partnership liabilities, if any. Further, the conversion
        shall not affect any Participant’s interest in the Partnership’s natural gas and
        oil properties and unrealized receivables.

       

      6.01(b)(4).
        Right
        to Convert if Reduction of Insurance.
        Notwithstanding the foregoing, the Managing General Partner shall notify
        all
        Participants at least 30 days before the effective date of any adverse material
        change in the Partnership’s insurance coverage. If the insurance coverage is to
        be materially reduced, then the Investor General Partners shall have the
        right
        to convert their Units into Limited Partner Units before the reduction by
        giving
        written notice to the Managing General Partner.

       


      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      


      


       

      6.02.
        Special
        Restrictions on Transfers of Units by Participants.

       

      6.02(a).
        In
        General.
        Transfers of Units by Participants are subject to the following general
        conditions:

       

      	(i)
                	
              except
                as provided by operation of law: 

            


       

      	(a)
                	
              only
                whole Units may be transferred unless the Participant owns less than
                a
                whole Unit, in which case his entire fractional interest must be
                transferred; and

            


       

      	(b)
                	
              Units
                may not be transferred to a person who is under the age of 18 or
                incompetent (unless an attorney-in-fact, guardian, custodian or
                conservator has been appointed to handle the affairs of that person)
                without the Managing General Partner’s consent;


            


       

      	(ii)
                	
              the
                costs and expenses associated with the transfer must be paid by the
                assignor Participant;

            


       

      	(iii)
                	
              the
                transfer documents must be in a form satisfactory to the Managing
                General
                Partner; and

            


       

      	(iv)
                	
              the
                terms of the transfer must not contravene those of this Agreement.
                

            


       

      Transfers
        of Units by Participants are subject to the following additional restrictions
        set forth in §§6.02(a)(1) and 6.02(a)(2).

       

      6.02(a)(1).
        Tax
        Law Restrictions.
        Subject
        to transfers permitted by §6.03 and transfers by operation of law, no transfer
        of a Unit by a Participant shall be made which, in the opinion of counsel
        to the
        Partnership, would result in the Partnership being either:

       

      	(i)  	
              terminated
                for tax purposes under §708 of the Code;
                or

            


       

      	(ii)  	
              treated
                as a “publicly-traded” partnership for purposes of §469(k) of the
                Code.

            


       

      6.02(a)(2).
        Securities
        Laws Restriction.
        Subject
        to transfers permitted by §6.03 and transfers by operation of law, no Unit shall
        be transferred by a Participant unless there is either:

       

      	(i)  	
              an
                effective registration of the Unit under the Securities Act of 1933,
                as
                amended, and qualification under applicable state securities laws;
                or
                

            


       

      	(ii)  	
              an
                opinion of counsel acceptable to the Managing General Partner that
                the
                registration and qualification of the Unit is not required.
                

            


       

      Transfers
        of Units by Participants are also subject to any conditions contained in
        the
        Subscription Agreement and Exhibit (B) to the Prospectus.

       

      6.02(a)(3).
        Substitute
        Participant. 

       

      6.02(a)(3)(a).
        Procedure
        to Become Substitute Participant.
        Subject
        to §§6.02(a)(1) and 6.02(a)(2), a transferee of a Participant’s Unit shall
        become a substitute Participant entitled to all the rights of a Participant
        if,
        and only if: 

       

      	(i)
                	
              the
                transferor gives the transferee the right;


            


       


      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      


      


       

      	(ii)
                	
              the
                transferee pays to the Partnership all costs and expenses incurred
                in
                connection with the substitution; and 

            


       

      	(iii)
                	
              the
                transferee executes and delivers the instruments necessary to establish
                that a legal transfer has taken place and to confirm the agreement
                of the
                transferee to be bound by all of the terms of this Agreement, in
                a form
                acceptable to the Managing General Partner.


            


       

      6.02(a)(3)(b).
        Rights
        of Substitute Participant.
        A
        substitute Participant is entitled to all of the rights attributable to full
        ownership of the assigned Units including the right to vote.

       

      6.02(b).
        Effect
        of Transfer. 

       

      6.02(b)(1).
        Amendment
        of Records.
        The
        Partnership shall amend its records at least once each calendar quarter to
        effect the substitution of substitute Participants. 

       

      Any
        transfer of a Unit by a Participant which is permitted under this Article
        VI,
        when the transferee does not become a substitute Participant, shall be effective
        as follows:

       

      	(i)  	
              midnight
                of the last day of the calendar month in which it is made;
                or

            


       

      	(ii)  	
              at
                the Managing General Partner’s election, 7:00 A.M. of the following day.
                

            


       

      6.02(b)(2).
        A
        Transfer of Units Does Not Relieve the Transferor of Certain
        Costs.
        No
        transfer of a Unit by a Participant, including a transfer of less than all
        of a
        Participant’s Units or the transfer of a Participant’s Units to more than one
        party, shall relieve the transferor of its responsibility for its proportionate
        part of any expenses, obligations and liabilities under this Agreement related
        to the Units so transferred, whether arising before or after the transfer.
        

       

      6.02(b)(3).
        A
        Transfer of Units Does Not Require A Partnership
        Accounting.
        No
        transfer of a Unit by a Participant shall require an accounting by the Managing
        General Partner. Also, no transfer of a Unit shall grant rights under this
        Agreement, including the exercise of any elections, as between the transferring
        Participant and the Partnership, the Managing General Partner and the remaining
        Participants to more than one Person unanimously designated by the transferee(s)
        of the Unit, and, if he has retained an interest in the transferred Unit,
        the
        transferor of the Unit.

       

      6.02(b)(4).
        Required
        Notice to Managing General Partner of Transfer of Units.
        Until
        the Managing General Partner receives from the transferring Participant a
        written notice in a form acceptable to the Managing General Partner which
        designates the transferee(s) of a Unit, the Managing General Partner shall
        continue to account only to the Person to whom it was furnishing notices
        pursuant to §8.01 and its subsections before the purported transfer of the Unit.
        This party shall continue to exercise all rights applicable to the Units
        previously owned by the transferor.

       

      6.03.
        Presentment.

       

      6.03(a).
        In
        General.
        Participants shall have the right to present their Units to the Managing
        General
        Partner for purchase subject to the conditions and limitations set forth
        in this
§6.03. A Participant, however, is not obligated to present his Units for
        purchase. 

       

      The
        Managing General Partner shall not be obligated to purchase more than 5%
        of the
        Units in any calendar year and this 5% limit may not be waived. The Managing
        General Partner shall not purchase less than one Unit unless the lesser amount
        represents the Participant’s entire interest in the Partnership, however, the
        Managing General Partner may waive this limitation. 

       


      
        
          
          

        

        
          58

          
            

          

        

        
          
          

        

      


      


       

      A
        Participant may present his Units in writing to the Managing General Partner
        every year beginning with the fifth calendar year after the Offering Termination
        Date subject to the following conditions:

       

      	(i)
                	
              the
                presentment must be made within 120 days of the reserve report set
                forth
                in §4.03(b)(3);

            


       

      	(ii)
                	
              in
                accordance with Treas. Reg. §1.7704-1(f), the purchase may not be made
                until at least 60 calendar days after the Participant notifies the
                Partnership in writing of the Participant’s intention to exercise the
                presentment right; and

            


       

      	(iii)
                	
              the
                purchase shall not be considered effective until the presentment
                price has
                been paid in cash to the Participant.

            


       

      6.03(b).
        Requirement
        for Independent
        Petroleum Consultant.
        The
        amount of the presentment price attributable to Partnership reserves shall
        be
        determined based on the last reserve report of the Partnership prepared by
        the
        Managing General Partner and reviewed by an Independent Expert. The Managing
        General Partner shall estimate the present worth of future net revenues
        attributable to the Partnership’s interest in the Proved Reserves as described
        in §4.03(b)(3)(ii). The calculation of the presentment price shall be as set
        forth in §6.03(c).

       

      6.03(c).
        Calculation
        of Presentment Price.
        The
        presentment price shall be based on the Participant’s share of the net assets
        and liabilities of the Partnership and allocated pro rata to each Participant
        in
        the ratio that his number of Units bears to the total number of Units. The
        presentment price shall include the sum of the following Partnership
        items:

       

      	(i)
                	
              an
                amount based on 70% of the present worth of future net revenues from
                the
                Proved Reserves determined as described in
                §6.03(b);

            


       

      	(ii)
                	
              cash
                on hand;

            


       

      	(iii)
                	
              prepaid
                expenses and accounts receivable less a reasonable amount for doubtful
                accounts; and

            


       

      	(iv)
                	
              the
                estimated market value of all assets, not separately specified above,
                determined in accordance with standard industry valuation
                procedures.

            


       

      There
        shall be deducted from the foregoing sum the following items:

       

      	(i)  	
              an
                amount equal to all debts, obligations, and other liabilities, including
                accrued expenses; and

            


       

      	(ii)  	
              any
                distributions made to the Participants between the date of the request
                and
                the actual payment. However, if any cash distributed was derived
                from the
                sale after the presentment request of natural gas, oil or other mineral
                production, or of a producing property owned by the Partnership,
                for
                purposes of determining the reduction of the presentment price, the
                distributions shall be discounted at the same rate used to take into
                account the risk factors employed to determine the present worth
                of the
                Partnership’s Proved Reserves.

            


       

      6.03(d).
        Further
        Adjustment May Be Allowed.
        The
        presentment price may be further adjusted by the Managing General Partner
        for
        estimated changes therein from the date of the report to the date of payment
        of
        the presentment price to the Participants because of the following:


       


      
        
          
          

        

        
          59

          
            

          

        

        
          
          

        

      


      


       

      	(i)  	
              the
                production or sales of, or additions to, reserves and lease and well
                equipment, sale or abandonment of Leases, and similar matters occurring
                before the request for purchase; and 

            


       

      	(ii)  	
              any
                of the following occurring before payment of the presentment price
                to the
                selling Participants: 

            


       

      	(a)
                	
              changes
                in well performance; 

            


       

      	(b)
                	
              increases
                or decreases in the market price of natural gas, oil or other
                minerals;

            


       

      	(c)
                	
              revision
                of regulations relating to the importing of
                hydrocarbons;

            


       

      	(d)
                	
              changes
                in income, ad valorem, and other tax laws such as material variations
                in
                the provisions for depletion; and

            


       

      	(e)
                	
              similar
                matters.

            


       

      6.03(e).
        Selection
        by Lot.
        If less
        than all Units presented at any time are to be purchased, then the Participants
        who’s Units are to be purchased will be selected by lot. 

       

      The
        Managing General Partner’s obligation to purchase Units presented may be
        discharged for its benefit by a third-party or an Affiliate. The Units of
        the
        selling Participant will be transferred to the party who pays for it. A selling
        Participant will be required to deliver an executed assignment of his Units,
        in
        a form satisfactory to the Managing General Partner, together with any other
        documentation as the Managing General Partner may reasonably
        request.

       

      6.03(f).
        No
        Obligation of the Managing General Partner to Establish a
        Reserve.
        The
        Managing General Partner shall have no obligation to establish any reserve
        to
        satisfy the presentment obligations under this section.

       

      6.03(g).
        Suspension
        of Presentment Feature.
        The
        Managing General Partner may suspend this presentment feature by so notifying
        Participants at any time if it:

       

      	(i)
                	
              does
                not have sufficient cash flow; or 

            


       

      	(ii)
                	
              is
                unable to borrow funds for this purpose on terms it deems reasonable.
                

            


       

      In
        addition, the presentment feature may be conditioned, in the Managing General
        Partner’s sole discretion, on the Managing General Partner’s receipt of an
        opinion of counsel that the transfers will not cause the Partnership to be
        treated as a “publicly traded partnership” under the Code. 

       

      The
        Managing General Partner shall hold the purchased Units for its own account
        and
        not for resale.

       


      
        
          
          

        

        
          60

          
            

          

        

        
          
          

        

      


      


       

      ARTICLE
        VII

      DURATION,
        DISSOLUTION, AND WINDING UP

       

      7.01.
        Duration.

       

      7.01(a).
        Fifty
        Year Term. The
        Partnership shall continue in existence for a term of 50 years from the
        effective date of this Agreement unless sooner terminated as set forth
        below.

       

      7.01(b).
        Termination.
        The
        Partnership shall terminate following the occurrence of:

       

      	(i)  	
              a
                Final Terminating Event; or 

            


       

      	(ii)  	
              any
                event which under the Delaware Revised Uniform Limited Partnership
                Act
                causes the dissolution of a limited
                partnership.

            


       

      7.01(c).
        Continuance
        of Partnership Except on Final Terminating Event.
        Other
        than the occurrence of a Final Terminating
        Event, the Partnership or any successor limited partnership shall not be
        wound
        up, but shall be continued by the parties and their respective successors
        as a
        successor limited partnership under all the terms of this Agreement. The
        successor
        limited
        partnership shall succeed to all of the assets of the Partnership. As used
        throughout this Agreement, the term “Partnership” shall include the successor
        limited partnership and the parties to the successor limited
        partnership.

       

      7.02.
        Dissolution
        and Winding Up.

       

      7.02(a).
        Final Terminating Event. On
        the
        occurrence of a Final Terminating Event the affairs of the Partnership shall
        be
        wound up and there shall be distributed to each of the parties it’s Distribution
        Interest in the remaining Partnership assets. 

       

      7.02(b).
        Time
        of Liquidating Distribution.
        To the
        extent practicable and in accordance with sound business practices in the
        judgment of the Managing General Partner, liquidating distributions shall
        be
        made by:

       

      	(i)
                	
              the
                end of the taxable year in which liquidation occurs, determined without
                regard to §706(c)(2)(A) of the Code; or

            


       

      	(ii)
                	
              if
                later, within 90 days after the date of the liquidation.
                

            


       

      Notwithstanding,
        the following amounts are not required to be distributed within the foregoing
        time periods so long as the withheld amounts are distributed as soon as
        practical:

       

      	(i)  	
              amounts
                withheld for reserves reasonably required for liabilities of the
                Partnership; and

            


       

      	(ii)  	
              installment
                obligations owed to the Partnership.

            


       

      7.02(c).
        In-Kind
        Distributions.
        The
        Managing General Partner shall not be obligated to offer in-kind property
        distributions to the Participants, but may do so, in its discretion. Any
        in-kind
        property distributions to the Participants shall be made to a liquidating
        trust
        or similar entity for the benefit of the Participants, unless at the time
        of the
        distribution:

       


      
        
          
          

        

        
          61

          
            

          

        

        
          
          

        

      


      


       

      	(i)
                	
              the
                Managing General Partner offers the individual Participants the election
                of receiving in-kind property distributions and the Participants
                accept
                the offer after being advised of the risks associated with direct
                ownership; or

            


       

      	(ii)
                	
              there
                are alternative arrangements in place which assure the Participants
                that
                they will not, at any time, be responsible for the operation or
                disposition of Partnership properties.

            


       

      If
        the
        Managing General Partner has not received a Participant’s consent within 30 days
        after the Managing General Partner mailed the request for consent, then it
        shall
        be presumed that the Participant has refused his consent.

       

      7.02(d).
        Sale
        If No Consent.
        Any
        Partnership asset which would otherwise be distributed in-kind to a Participant,
        except for the failure or refusal of the Participant to give his written
        consent
        to the distribution, may instead be sold by the Managing General Partner
        at the
        best price reasonably obtainable from an independent third-party, who is
        not an
        Affiliate of the Managing General Partner or to itself or its Affiliates,
        including an Affiliated Income Program, at fair market value as determined
        by an
        Independent Expert selected by the Managing General Partner.

       

      ARTICLE
        VIII

      MISCELLANEOUS
        PROVISIONS

       

      8.01.
        Notices.

       

      8.01(a).
        Method.
        Any
        notice required under this Agreement shall be:

       

      	(i)
                	
              in
                writing; and 

            


       

      	(ii)
                	
              given
                by mail or overnight courier (although one-day delivery is not required)
                addressed to the party to receive the notice at the address designated
                in
                §1.03. 

            


       

      If
        there
        is a transfer of Units under this Agreement, no notice to the transferee
        shall
        be required, nor shall the transferee have any rights under this Agreement,
        until notice of the transfer has been given to the Managing General
        Partner.

       

      Any
        transfer of Units under this Agreement shall not increase the duty to give
        notice. If there is a transfer of Units under this Agreement to more than
        one
        party, then notice to any owner of any interest in the Units shall be notice
        to
        all owners of the Units.

       

      8.01(b).
        Change
        in Address.
        The
        address of any party to this Agreement may be changed by written notice as
        follows:

       

      	(i)  	
              to
                the Participants if there is a change of address by the Managing
                General
                Partner; or

            


       

      	(ii)  	
              to
                the Managing General Partner if there is a change of address by a
                Participant.

            


       

      8.01(c).
        Time
        Notice Deemed Given. If
        the
        notice is given by the Managing General Partner, then the notice shall be
        considered given, and any applicable time shall run, from the date the notice
        is
        placed in the mail or delivered to the overnight delivery company.

       

      If
        the
        notice is given by any Participant, then the notice shall be considered given
        and any applicable time shall run from the date the notice is
        received.

       


      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

      


      


       

      8.01(d).
        Effectiveness
        of Notice.
        Any
        notice to a party other than the Managing General Partner, including a notice
        requiring concurrence or non concurrence, shall be effective, and any failure
        to
        respond binding, irrespective of the following:

       

      	(i)
                	
              whether
                or not the notice is
                actually received; or

            


       

      	(ii)
                	
              any
                disability or death on the part of the noticee, even if the disability
                or
                death is known to the party giving the
                notice.

            


       

      8.01(e).
        Failure
        to Respond.
        Except
        pursuant to §7.02(c) or when this Agreement expressly requires affirmative
        approval of a Participant, any Participant who fails to respond in writing
        within the time specified to a request by the Managing General Partner as
        set
        forth below, for approval of, or concurrence, in a proposed action shall
        be
        conclusively deemed to have approved the action. Except pursuant to §7.02(c),
        when this Agreement expressly requires affirmative approval of a Participant,
        the Managing General Partner shall send the first request and the time period
        shall be not less than 15 business days from the date of mailing of the request.
        If the Participant does not respond to the first request, then the Managing
        General Partner shall send a second request. If the Participant does not
        respond
        within seven calendar days from the date of the mailing of the second request,
        then the Participant shall be conclusively deemed to have approved the
        action.

       

      8.02.
        Time.
        Time is
        of the essence of each part of this Agreement.

       

      8.03.
        Applicable
        Law.
        The
        terms and provisions of this Agreement shall be construed under the laws
        of the
        State of Delaware, provided, however, this section shall not be deemed to
        limit
        causes of action for violations of federal or state securities law to the
        laws
        of the State of Delaware. Neither this Agreement nor the Subscription Agreement
        shall require mandatory venue or mandatory arbitration of any or all claims
        by
        Participants against the Sponsor.

       

      8.04.
        Agreement
        in Counterparts.
        This
        Agreement may be executed in counterpart and shall be binding on all parties
        executing this or similar agreements from and after the date of execution
        by
        each party.

       

      8.05.
        Amendment. 

       

      8.05(a).
        Procedure
        for Amendment. No
        changes in this Agreement shall be binding unless: 

       

      	(i)  	
              proposed
                in writing by the Managing General Partner, and adopted with the
                consent
                of Participants whose Units equal a majority of the total Units;
                or
                

            


       

      	(ii)  	
              proposed
                in writing by Participants who’s Units equal 10% or more of the total
                Units and approved by an affirmative vote of Participants whose Units
                equal a majority of the total Units. 

            


       

      8.05(b).
        Circumstances
        Under Which the Managing General Partner Alone May Amend.
        The
        Managing General Partner is authorized to amend this Agreement and its exhibits
        without the consent of Participants in any way deemed necessary or desirable
        by
        it to do any or all of the following: 

       

      	(i)
                	
              add,
                or substitute in the case of an assigning party, additional Participants;
                

            


       

      	(ii)
                	
              enhance
                the tax benefits of the Partnership to the parties and amend the
                allocation provisions of this Agreement as provided in §5.01(c)(3);
                

            


       


      
        
          
          

        

        
          63

          
            

          

        

        
          
          

        

      


      


       

      	(iii)
                	
              satisfy
                any requirements, conditions, guidelines, options, or elections contained
                in any opinion, directive, order, ruling, or regulation of the SEC,
                the
                IRS, or any other federal or state agency, or in any federal or state
                statute, compliance with which it deems to be in the best interest
                of the
                Partnership; or

            


       

      	(iv)
                	
              cure
                any ambiguity, correct or supplement any provision that may be
                inconsistent in this Agreement with any other provision in this Agreement,
                or add any other provision to this Agreement with respect to matters,
                events or issues arising under this Agreement that is not inconsistent
                with the provisions of this Agreement.

            


       

      Notwithstanding
        the foregoing, no amendment materially and adversely affecting the interests
        or
        rights of Participants shall be made without the consent of the Participants
        whose interests will be so affected.

       

      8.06.
        Additional
        Partners. Each
        Participant hereby consents to the admission to the Partnership of additional
        Participants as the Managing General Partner, in its discretion, chooses
        to
        admit.

       

      8.07.
        Legal
        Effect.
        This
        Agreement shall be binding on and inure to the benefit of the parties, their
        heirs, devisees, personal representatives, successors and assigns, and shall
        run
        with the interests subject to this Agreement. The terms “Partnership,” “Limited
        Partner,” “Investor General Partner,” “Participant,” “Partner,” “Managing
        General Partner,” “Operator,” or “parties” shall equally apply to any successor
        limited partnership, and any heir, devisee, personal representative, successor
        or assign of a party.

       

      IN
        WITNESS WHEREOF, the parties hereto set their hands as of the 9th.
        day of
        May 2006.

       

      ATLAS: ATLAS
        RESOURCES, LLC

      Managing
        General Partner

       

      By:
        /s/
        Frank P. Carolas

      Frank
        P.
        Carolas, Executive Vice President

      
        
          
          

        

        
          64