Exhibit 10(a)
ESCROW AGREEMENT
ATLAS AMERICA PUBLIC #12-2003 LIMITED PARTNERSHIP
Exhibit 10(a)
ATLAS AMERICA PUBLIC #12-2003 LIMITED PARTNERSHIP
ESCROW AGREEMENT
THIS AGREEMENT is made to be effective as of ________________, by and among
Atlas Resources, Inc., a Pennsylvania corporation (the "Managing General
Partner"), Anthem Securities, Inc., a Pennsylvania corporation ("Anthem"), Xxxxx
Funding, Inc., a Pennsylvania corporation ("Xxxxx Funding"), collectively Anthem
and Xxxxx Funding are referred to as the "Dealer-Manager," Atlas America Public
#12-2003 Limited Partnership, a Delaware limited partnership to be formed (the
"Partnership") and National City Bank of Pennsylvania, Pittsburgh, Pennsylvania,
as escrow agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Managing General Partner intends to offer publicly for sale to
qualified investors (the "Investors") up to 7,500 limited and investor general
partner interests in the Partnership (the "Units").
WHEREAS, each Investor will be required to pay his subscription in full on
subscribing by check, draft, or money order (the "Subscription Proceeds").
WHEREAS, the cost per Unit will be $10,000 subject to certain discounts of
up to 10.5% ($1,050 per Unit) for sales to the Managing General Partner, its
officers, directors and affiliates, registered investment advisors and their
clients, Selling Agents and their registered representatives and principals, and
investors who buy Units through the officers and directors of the Managing
General Partner. Also, the Managing General Partner, in its discretion, may
accept one-half Unit ($5,000) subscriptions, with larger subscriptions permitted
in $1,000 increments.
WHEREAS, the Managing General Partner and Anthem have executed an agreement
("Anthem Dealer-Manager Agreement") under which Anthem will solicit
subscriptions for Units in all states other than Minnesota and New Hampshire on
a "best efforts" "all or none" basis for Subscription Proceeds of $1,000,000 and
on a "best efforts" basis for the remaining Units on behalf of the Managing
General Partner and the Partnership and under which Anthem has been authorized
to select certain members in good standing of the National Association of
Securities Dealers, Inc. ("NASD") to participate in the offering of the Units
("Selling Agents").
WHEREAS, the Managing General Partner and Xxxxx Funding have executed an
agreement ("Xxxxx Funding Dealer-Manager Agreement") under which Xxxxx Funding
will solicit subscriptions for Units in the states of Minnesota and New
Hampshire on a "best efforts" "all or none" basis for Subscription Proceeds of
$1,000,000 and on a "best efforts" basis for the remaining Units on behalf of
the Managing General Partner and the Partnership and under which Xxxxx Funding
has been authorized to select certain members in good standing of the NASD to
participate in the offering of the Units ("Selling Agents").
WHEREAS, the Anthem Dealer-Manager Agreement and the Xxxxx Funding Dealer-
Manager Agreement, collectively referred to as the "Dealer-Manager Agreement,"
provide for compensation to the Dealer-Manager to participate in the offering of
the Units, subject to the discounts set forth above for certain Investors, which
compensation includes, but is not limited to, for each Unit sold:
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o a 2.5% Dealer-Manager fee;
o a 7% sales commission;
o a .5% accountable marketing expenses fee; and
o a .5% reimbursement of the Selling Agents' bona fide
accountable due diligence expenses;
all or a portion of which will be reallowed to the Selling Agents and
wholesalers.
WHEREAS, under the terms of the Dealer-Manager Agreement the Subscription
Proceeds are required to be held in escrow subject to the receipt and acceptance
by the Managing General Partner of the minimum Subscription Proceeds of
$1,000,000, excluding any optional subscription by the Managing General Partner,
its officers, directors, and Affiliates.
WHEREAS, the Units may also be offered and sold by the officers and
directors of the Managing General Partner without receiving a sales commission
or other compensation on their sales.
WHEREAS, no subscriptions to the Partnership will be accepted after the
"Offering Termination Date," which is the first to occur of either:
o receipt of the maximum Subscription Proceeds of $75,000,000; or
o December 31, 2003.
WHEREAS, to facilitate compliance with the terms of the Dealer-Manager
Agreement and Rule 15c2-4 adopted under the Securities Exchange Act of 1934, the
Managing General Partner and the Dealer-Manager desire to have the Subscription
Proceeds deposited with the Escrow Agent and the Escrow Agent agrees to hold the
Subscription Proceeds under the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement, the parties to this Agreement, intending to be
legally bound, agree as follows:
1. Appointment of Escrow Agent. The Managing General Partner, the
Partnership, and the Dealer-Manager appoint the Escrow Agent as the
escrow agent to receive and to hold the Subscription Proceeds deposited
with the Escrow Agent by the Dealer-Manager and the Managing General
Partner under this Agreement, and the Escrow Agent agrees to serve in
this capacity during the term and based on the provisions of this
Agreement.
2. Deposit of Subscription Proceeds. Pending receipt of the minimum
Subscription Proceeds of $1,000,000, the Dealer-Manager and the
Managing General Partner shall deposit the Subscription Proceeds of
each Investor to whom they sell Units with the Escrow Agent and shall
deliver to the Escrow Agent a copy of the Subscription Agreement of the
Investor. Payment for each subscription for Units shall be in the form
of a check made payable to "Atlas America Public #12-2003 Limited
Partnership, Escrow Agent, National City Bank of Pennsylvania." The
Escrow Agent shall deliver a receipt to either:
(a) Anthem and the Managing General Partner for each deposit of
Subscription Proceeds made under this Agreement by Anthem;
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(b) Xxxxx Funding and the Managing General Partner for each deposit
of Subscription Proceeds made under this Agreement by Xxxxx
Funding; or
(c) the Managing General Partner for each deposit of Subscription
Proceeds made under this Agreement by the Managing General
Partner.
3. Investment of Subscription Proceeds. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow
Agent. This may be a savings account, bank money market account, short-
term certificates of deposit issued by a bank, or short-term
certificates issued or guaranteed by the United States government. The
interest earned shall be added to the Subscription Proceeds and
disbursed in accordance with the provisions of Paragraph 4 or 5 of this
Agreement, as the case may be.
4. Distribution of Subscription Proceeds. If the Escrow Agent:
(a) receives written notice from an authorized officer of the
Managing General Partner that at least the minimum Subscription
Proceeds of $1,000,000 have been received and accepted by the
Managing General Partner; and
(b) determines that Subscription Proceeds for at least $1,000,000
have cleared the banking system and are good;
then the Escrow Agent shall promptly release and distribute to the
Managing General Partner the escrowed Subscription Proceeds which have
cleared the banking system and are good plus any interest paid and
investment income earned on the Subscription Proceeds while held by the
Escrow Agent in the escrow account.
Any remaining Subscription Proceeds, plus any interest paid and
investment income earned on the Subscription Proceeds while held by the
Escrow Agent in the escrow account, shall be promptly released and
distributed to the Managing General Partner by the Escrow Agent as the
Subscription Proceeds clear the banking system and become good.
5. Separate Partnership Account. During the continuation of the offering
after the Partnership is funded with cleared Subscription Proceeds of
at least $1,000,000 and the Escrow Agent receives the notice described
in Paragraph 4 of this Agreement, and before the Offering Termination
Date, any additional Subscription Proceeds may be deposited by the
Dealer-Manager and the Managing General Partner directly in a separate
Partnership account which shall not be subject to the terms of this
Agreement.
6. Distributions to Subscribers.
(a) If the Partnership is not funded as contemplated because less
than the minimum Subscription Proceeds of $1,000,000 have been
received and accepted by the Managing General Partner by twelve
p.m. (noon), local time, on the Offering Termination Date, or
for any other reason, then the Managing General Partner shall
notify the Escrow Agent, and the Escrow Agent promptly shall
distribute to each Investor a refund check made payable to the
Investor in an amount equal to the Subscription Proceeds of the
Investor, plus any interest paid or investment income earned on
the Investor's Subscription Proceeds while held by the Escrow
Agent in the escrow account.
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(b) If a subscription for Units submitted by an Investor is
rejected by the Managing General Partner for any reason after
the Subscription Proceeds relating to the subscription have
been deposited with the Escrow Agent, then the Managing General
Partner promptly shall notify the Escrow Agent of the
rejection, and the Escrow Agent shall promptly distribute to
the Investor a refund check made payable to the Investor in an
amount equal to the Subscription Proceeds of the Investor, plus
any interest paid or investment income earned on the Investor's
Subscription Proceeds while held by the Escrow Agent in the
escrow account.
7. Compensation and Expenses of Escrow Agent. The Managing General Partner
shall be solely responsible for and shall pay the compensation of the
Escrow Agent for its services under this Agreement, as provided in
Appendix 1 to this Agreement and made a part of this Agreement, and the
charges, expenses (including any reasonable attorneys' fees), and other
out-of-pocket expenses incurred by the Escrow Agent in connection with
the administration of the provisions of this Agreement. The Escrow
Agent shall have no lien on the Subscription Proceeds deposited in the
escrow account unless and until the Partnership is funded with cleared
Subscription Proceeds of at least $1,000,000 and the Escrow Agent
receives the notice described in Paragraph 4 of this Agreement, at
which time the Escrow Agent shall have, and is granted, a prior lien on
any property, cash, or assets held under this Agreement, with respect
to its unpaid compensation and nonreimbursed expenses, superior to the
interests of any other persons or entities.
8. Duties of Escrow Agent. The Escrow Agent shall not be obligated to
accept any notice, make any delivery, or take any other action under
this Agreement unless the notice or request or demand for delivery or
other action is in writing and given or made by the party given the
right or charged with the obligation under this Agreement to give the
notice or to make the request or demand. In no event shall the Escrow
Agent be obligated to accept any notice, request, or demand from anyone
other than the Managing General Partner or the Dealer-Manager.
9. Liability of Escrow Agent. The Escrow Agent shall not be liable for any
damages, or have any obligations other than the duties prescribed in
this Agreement in carrying out or executing the purposes and intent of
this Agreement. However, nothing in this Agreement shall relieve the
Escrow Agent from liability arising out of its own willful misconduct
or gross negligence. The Escrow Agent's duties and obligations under
this Agreement shall be entirely administrative and not discretionary.
The Escrow Agent shall not be liable to any party to this Agreement or
to any third-party as a result of any action or omission taken or made
by the Escrow Agent in good faith. The parties to this Agreement will
indemnify the Escrow Agent, hold the Escrow Agent harmless, and
reimburse the Escrow Agent from, against and for, any and all
liabilities, costs, fees and expenses (including reasonable attorney's
fees) the Escrow Agent may suffer or incur by reason of its execution
and performance of this Agreement. If any legal questions arise
concerning the Escrow Agent's duties and obligations under this
Agreement, then the Escrow Agent may consult with its counsel and rely
without liability on written opinions given to it by its counsel.
The Escrow Agent shall be protected in acting on any written notice,
request, waiver, consent, authorization, or other paper or document
which the Escrow Agent, in good faith, believes to be genuine and what
it purports to be.
If there is any disagreement between any of the parties to this
Agreement, or between them or any other person, resulting in adverse
claims or demands being made in connection with this Agreement, or if
the Escrow Agent, in good faith, is in doubt as to what action it should
take under this Agreement, then the Escrow Agent may, at its option,
refuse to comply with any claims or demands on it or refuse to take any
other action under this Agreement, so long as the disagreement continues
or the doubt exists. In any such event, the Escrow Agent shall not be or
become liable in any way or
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to any person for its failure or refusal to act and the Escrow Agent
shall be entitled to continue to so refrain from acting until the
dispute is resolved by the parties involved.
National City Bank of Pennsylvania is acting solely as the Escrow Agent
and is not a party to, nor has it reviewed or approved any agreement or
matter of background related to this Agreement, other than this
Agreement itself, and has assumed, without investigation, the authority
of the individuals executing this Agreement to be so authorized on
behalf of the party or parties involved.
10. Resignation or Removal of Escrow Agent. The Escrow Agent may resign as
such after giving thirty days' prior written notice to the other
parties to this Agreement. Similarly, the Escrow Agent may be removed
and replaced after giving thirty days' prior written notice to the
Escrow Agent by the other parties to this Agreement. In either event,
the duties of the Escrow Agent shall terminate thirty days after the
date of the notice (or as of an earlier date as may be mutually
agreeable); and the Escrow Agent shall then deliver the balance of the
Subscription Proceeds (and any interest paid or investment income
earned thereon while held by the Escrow Agent in the escrow account) in
its possession to a successor escrow agent appointed by the other
parties to this Agreement as evidenced by a written notice filed with
the Escrow Agent.
If the other parties to this Agreement are unable to agree on a
successor escrow agent or fail to appoint a successor escrow agent
before the expiration of thirty days following the date of the notice of
the Escrow Agent's resignation or removal, then the Escrow Agent may
petition any court of competent jurisdiction for the appointment of a
successor escrow agent or other appropriate relief. Any resulting
appointment shall be binding on all of the parties to this Agreement.
On acknowledgment by any successor escrow agent of the receipt of the
then remaining balance of the Subscription Proceeds (and any interest
paid or investment income earned thereon while held by the Escrow Agent
in the escrow account), the Escrow Agent shall be fully released and
relieved of all duties, responsibilities, and obligations under this
Agreement.
11. Termination. This Agreement shall terminate and the Escrow Agent shall
have no further obligation with respect to this Agreement after the
distribution of all Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in the
escrow account) as contemplated by this Agreement or on the written
consent of all the parties to this Agreement.
12. Notice. Any notices or instructions, or both, to be given under this
Agreement shall be validly given if set forth in writing and mailed by
certified mail, return receipt requested, as follows:
If to the Escrow Agent:
National City Bank of Pennsylvania
One National City Center
Corporate Trust, Xxxxx 000 X
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
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If to the Managing General Partner:
Atlas Resources, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Anthem:
Anthem Securities, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxx Funding:
Xxxxx Funding, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may designate any other address to which notices and instructions
shall be sent by notice duly given in accordance with this Agreement.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(b) This Agreement shall be binding on and shall inure to the benefit
of the undersigned and their respective successors and assigns.
(c) This Agreement may be executed in multiple copies, each executed
copy to serve as an original.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
NATIONAL CITY BANK OF
PENNSYLVANIA
As Escrow Agent
By: __________________________________________
(Authorized Officer)
ATLAS RESOURCES, INC.
A Pennsylvania corporation
By: __________________________________________
Xxxx X. Xxxxxxxxx, Senior Vice President -
Direct Participation Programs
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By: __________________________________________
Xxxx X. Xxxxxx, President
XXXXX FUNDING, INC.
A Pennsylvania corporation
By: __________________________________________
Xxxxxxx X. Xxxxx, Xx., President
ATLAS AMERICA PUBLIC #12-2003 LIMITED
PARTNERSHIP
By: ATLAS RESOURCES, INC.
Managing General Partner
By: __________________________________________
Xxxx X. Xxxxxxxxx, Senior Vice President -
Direct Participation Programs
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APPENDIX I TO ESCROW AGREEMENT
Compensation for Services of Escrow Agent
Escrow Agent annual fee per year or any part thereof $1,500.00
Returning funds to subscribers pursuant to 6.(a) herein $20.00 each
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