EXHIBIT 10(a)
ESCROW AGREEMENT
Exhibit 10(a)
ATLAS AMERICA PUBLIC #9 LTD.
ESCROW AGREEMENT
THIS AGREEMENT, made to be effective as of the 18th day of August,
2000, by and between 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 #9 Ltd., a Pennsylvania limited
partnership (the "Partnership") and National City Bank of Pennsylvania,
Pittsburgh, Pennsylvania, as escrow agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Partnership intends to offer publicly for sale to
qualified investors (the "Investors") up to 1,500 limited partnership
interests in the Partnership (the "Units"); and
WHEREAS, each Investor will be required to pay his subscription in full
upon subscribing ($10,000 per Unit, however, the Managing General Partner, in
its discretion, may accept one-half Unit [$5,000] subscriptions, with larger
subscriptions permitted in $1,000 increments), by check, draft or money order
except that the broker-dealers and the Managing General Partner, its officers
and directors and Affiliates, may purchase Units net of the Dealer-Manager
fee, the commissions and reimbursement of marketing expenses and bona fide
accountable due diligence expenses set forth below, and registered investment
advisors and their clients may purchase Units subject to the Dealer-Manager
fee but net of the commissions and reimbursement of marketing expenses and
bona fide accountable due diligence expenses set forth below (the
"Subscription Proceeds"); and
WHEREAS, the Managing General Partner and Anthem have executed an
agreement ("Anthem Dealer-Manager Agreement") pursuant to 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 $1,000,000 and on a
"best efforts" basis for the remaining Units on behalf of the Managing General
Partner and the Partnership and pursuant to which Anthem has been authorized
to select certain members in good standing of the National Association of
Securities Dealers, Inc. ("NASD") to participate in the offering of the Units
("Selling Agents"); and
WHEREAS, the Managing General Partner and Xxxxx Funding have executed
an agreement ("Xxxxx Funding Dealer-Manager Agreement") pursuant to 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 $1,000,000 and
on a "best efforts" basis for the remaining Units on behalf of the Managing
General Partner and the Partnership and pursuant to 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"); and
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 which includes, but
is not limited to:
(i) a 2.5% Dealer-Manager fee;
(ii) a 7.0% sales commission;
(iii) a .5% reimbursement of marketing expenses; and
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(iv) reimbursement of the Selling Agents' bona fide accountable
due diligence expenses of .5%
per Unit to participate in the offering of the Units, all or a portion of
which compensation will be reallowed to the Selling Agents and wholesalers; and
WHEREAS, under the terms of the Dealer-Manager Agreement the
Subscription Proceeds are required to be held in escrow subject to the receipt
and acceptance by the Managing General Partner of the minimum Subscription
Proceeds of $1,000,000, excluding any optional subscription by the Managing
General Partner, its officers, directors and Affiliates; and
WHEREAS, no subscriptions to the Partnership will be accepted after
receipt of the maximum Subscription Proceeds of $15,000,000 or December 31,
2000, whichever event occurs first (the "Offering Termination Date"); and
WHEREAS, to facilitate compliance with the terms of the Dealer-Manager
Agreement, the Managing General Partner and the Dealer-Manager desire to have
the Subscription Proceeds deposited with the Escrow Agent and the Escrow Agent
desires to hold the Subscription Proceeds pursuant to the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The Managing General Partner, the
Partnership and the Dealer-Manager hereby appoint Escrow Agent as the
escrow agent to receive and to hold the Subscription Proceeds deposited
with Escrow Agent by the Dealer-Manager and the Selling Agents pursuant
hereto and Escrow Agent hereby agrees to serve in such capacity during
the term and based upon the provisions hereof.
2. DEPOSIT OF SUBSCRIPTION PROCEEDS. Pending receipt of the minimum
Subscription Proceeds of $1,000,000, the Dealer-Manager shall deposit
the Subscription Proceeds of each Investor with the Escrow Agent and
shall deliver to the Escrow Agent a copy of the Subscription Agreement
of such Investor. Payment for each subscription for Units shall be in
the form of a check made payable to "Atlas America Public #9 Ltd.,
Escrow Agent, National City Bank of PA". The Escrow Agent shall deliver
a receipt to either:
(a) Anthem and the Managing General Partner for each deposit of
Subscription Proceeds made pursuant hereto by Anthem; or
(b) Xxxxx Funding and the Managing General Partner for each
deposit of subscription proceeds made pursuant hereto by Xxxxx
Funding.
3. INVESTMENT OF SUBSCRIPTION PROCEEDS. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow Agent
entitled "Armada Government Fund." Subscription Proceeds may be
temporarily invested by the Escrow Agent only in income producing
short-term, highly liquid investments secured by the United States
government where there is appropriate safety of principal, such as U.S.
Treasury Bills. The interest earned shall be added to the Subscription
Proceeds and disbursed in accordance with the provisions of paragraph 4
or 5, as the case may be.
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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 aggregate
subscriptions 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
as determined by the Managing General Partner have cleared the
banking system and are good;
then, the Escrow Agent shall promptly release and distribute to the
Managing General Partner such escrowed Subscription Proceeds which have
cleared the banking system and are good plus any interest paid and
investment income earned on such Subscription Proceeds while held by
the Escrow Agent in an escrow account.
Any remaining Subscription Proceeds, plus any interest paid and
investment income earned on such Subscription Proceeds while held by
the Escrow Agent in an escrow account shall be promptly released and
distributed to the Managing General Partner by the Escrow Agent as such
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 prior to the Offering Termination
Date, any additional Subscription Proceeds may be deposited by the
Dealer-Manager directly in a separate Partnership account which shall
not be subject to the terms of this Agreement.
6. DISTRIBUTIONS TO SUBSCRIBERS.
(a) In the event that the Partnership will not be funded as
contemplated because less than the minimum aggregate
subscriptions of $1,000,000 have been received and accepted by
the Managing General Partner by twelve p.m. (noon), local
time, on December 31, 2000, or for any other reason, the
Managing General Partner shall so notify the Escrow Agent,
whereupon the Escrow Agent promptly shall distribute to each
Investor a refund check made payable to such Investor in an
amount equal to the Subscription Proceeds of such Investor,
plus any interest paid or investment income earned thereon
while held by the Escrow Agent in an escrow account as
calculated by the Managing General Partner.
(b) In the event that a subscription for Units submitted by an
Investor is rejected by the Managing General Partner for any
reason after the Subscription Proceeds relating to such
subscription have been deposited with the Escrow Agent, then
the Managing General Partner promptly shall notify the Escrow
Agent of such rejection, and the Escrow Agent shall promptly
distribute to such Investor a refund check made payable to
such Investor in an amount equal to the Subscription Proceeds
of such Investor, plus any interest paid or investment income
earned thereon while held by the Escrow Agent in an escrow
account as calculated by the Managing General Partner.
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 hereunder, as provided in Appendix 1 to
this Agreement and made a part hereof, and the charges, expenses
(including any reasonable attorneys' fees), and other out-of-pocket
expenses incurred by the Escrow Agent in connection with the
administration of the provisions of this Agreement. The Escrow Agent
shall have no lien on the Subscription Proceeds deposited in an escrow
account unless and until the Partnership is funded with cleared
Subscription Proceeds of at least $1,000,000 and the Escrow Agent
receives the
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notice described in Paragraph 4 of this Agreement, at which time the
Escrow Agent shall have, and is hereby granted, a prior lien upon any
property, cash, or assets held hereunder, with respect to its unpaid
compensation and nonreimbursed expenses, superior to the interests of
any other persons or entities.
8. DUTIES OF ESCROW AGENT. The Escrow Agent shall not be obligated to
accept any notice, make any delivery, or take any other action under
this Escrow Agreement unless the notice or request or demand for
delivery or other action is in writing and given or made by the party
given the right or charged with the obligation under this Escrow
Agreement to give the notice or to make the request or demand. In no
event shall the Escrow Agent be obligated to accept any notice,
request, or demand from anyone other than the Managing General Partner
or the Dealer-Manager.
9. LIABILITY OF ESCROW AGENT. The Escrow Agent shall not be liable for any
damages, or have any obligations other than the duties prescribed
herein in carrying out or executing the purposes and intent of this
Escrow Agreement; provided, however, that nothing herein contained
shall relieve the Escrow Agent from liability arising out of its own
willful misconduct or gross negligence. Escrow Agent's duties and
obligations under this Agreement shall be entirely administrative and
not discretionary. Escrow Agent shall not be liable to any party hereto
or to any third party as a result of any action or omission taken or
made by Escrow Agent in good faith. The parties to this Agreement will
indemnify Escrow Agent, hold Escrow Agent harmless, and reimburse
Escrow Agent from, against and for, any and all liabilities, costs,
fees and expenses (including reasonable attorney's fees) Escrow Agent
may suffer or incur by reason of its execution and performance of this
Agreement. In the event any legal questions arise concerning Escrow
Agent's duties and obligations hereunder, Escrow Agent may consult with
its counsel and rely without liability upon written opinions given to
it by such counsel.
The Escrow Agent shall be protected in acting upon 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.
In the event that there shall be any disagreement between any of the
parties to this Agreement, or between them or any of them and any other
person, resulting in adverse claims or demands being made in connection
with this Agreement, or in the event that Escrow Agent, in good faith,
shall be in doubt as to what action it should take hereunder, Escrow
Agent may, at its option, refuse to comply with any claims or demands
on it or refuse to take any other action hereunder, so long as such
disagreement continues or such doubt exists. In any such event, Escrow
Agent shall not be or become liable in any way or to any person for its
failure or refusal to act and Escrow Agent shall be entitled to
continue to so refrain from acting until the dispute is resolved by the
parties involved.
National City Bank of Pennsylvania is acting solely as Escrow Agent and
is not a party to, nor has it reviewed or approved any agreement or
matter of background related to this Agreement, other than this
Agreement itself, and has assumed, without investigation, the authority
of the individuals executing this Agreement to be so authorized on
behalf of the party or parties involved.
10. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent may resign as
such following the giving of thirty days' prior written notice to the
other parties hereto. Similarly, the Escrow Agent may be removed and
replaced following the giving of thirty days' prior written notice to
the Escrow Agent by the other parties hereto.
In either event, the duties of the Escrow Agent shall terminate thirty
days after the date of such notice (or as of such earlier date as may
be mutually agreeable); and the Escrow Agent shall then deliver the
balance of the Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in an
escrow account) in its possession to a successor escrow agent as shall
be appointed by the other parties hereto as evidenced by a written
notice filed with the Escrow Agent. If the other parties hereto are
unable to agree upon a successor or shall have failed to appoint a
successor prior to the expiration of thirty days following the date of
the notice of resignation or removal, the then
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acting Escrow Agent may petition any court of competent jurisdiction
for the appointment of a successor escrow agent or other appropriate
relief; and any such resulting appointment shall be binding upon all of
the parties hereto.
Upon acknowledgment by any successor escrow agent of the receipt of the
then remaining balance of the Subscription Proceeds (and any interest
paid or investment income earned thereon while held by the Escrow Agent
in an escrow account), the then acting Escrow Agent shall be fully
released and relieved of all duties, responsibilities, and obligations
under this Agreement.
11. TERMINATION. This Agreement shall terminate and the Escrow Agent shall
have no further obligation with respect hereto upon the occurrence of
the distribution of all Subscription Proceeds (and any interest paid or
investment income earned thereon while held by the Escrow Agent in an
escrow account) as contemplated hereby or upon the written consent of
all the parties hereto.
12. NOTICE. Any notices or instructions, or both, to be given hereunder
shall be validly given if set forth in writing and mailed by certified
mail, return receipt requested, as follows:
If to the Escrow Agent:
National City Bank of Pennsylvania
Corporate Trust Department
Xxxxxxxx Xxxx Xxxxxx XXX 00-000
Xxxxxxxxxx, Pennsylvania 15222-4802
Attention: Xx. Xxxx X. Xxxxxxx, Asst. Vice President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Managing General Partner:
Atlas Resources, Inc.
000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
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
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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 herewith.
13. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
(b) This Agreement is binding upon and shall inure to the benefit
of the undersigned and their respective heirs, successors and
assigns.
(c) This Agreement may be executed in multiple copies, each
executed copy to serve as an original.
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
ATTEST: As Escrow Agent
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxx
--------------------------------- ------------------------------------
(Authorized Officer) (Authorized Officer)
ATLAS RESOURCES, INC.
ATTEST: A Pennsylvania corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxx
--------------------------------- ------------------------------------
Secretary Xxxx X. Xxxxx, Senior Vice President
and Chief Financial Officer
ANTHEM SECURITIES, INC.
ATTEST: A Pennsylvania corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx
--------------------------------- ------------------------------------
Secretary Xxxx X. Xxxxxx, Director
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XXXXX FUNDING, INC.
ATTEST: A Pennsylvania corporation
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx, Xx.
--------------------------------- ------------------------------------
Secretary Xxxxxxx X. Xxxxx, Xx., President
ATLAS AMERICA PUBLIC #9 LTD.
By: ATLAS RESOURCES, INC.
ATTEST: Managing General Partner
By: By: /s/ Xxxx X. Xxxxx
--------------------------------- ------------------------------------
Secretary Xxxx X. Xxxxx, Senior Vice President
and Chief Financial Officer
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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 $3,000.00
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