EXHIBIT 10(a)
PROPOSED FORM OF
ESCROW AGREEMENT
EXHIBIT 10(a)
ATLAS AMERICA PUBLIC #10 LTD.
ESCROW AGREEMENT
THIS AGREEMENT, made to be effective as of the _____ day of _________,
2001, by and among Atlas Resources, Inc., a Pennsylvania corporation (the
"Managing General Partner"), Anthem Securities, Inc., a Pennsylvania corporation
("Anthem"), Xxxxx Funding, Inc., a Pennsylvania corporation ("Xxxxx Funding"),
collectively Anthem and Xxxxx Funding are referred to as the "Dealer-Manager,"
Atlas America Public #10 Ltd., a Pennsylvania limited partnership (the
"Partnership") and National City Bank of Pennsylvania, Pittsburgh, Pennsylvania,
as escrow agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Partnership intends to offer publicly for sale to qualified
investors (the "Investors") up to 2,500 limited partnership interests in the
Partnership (the "Units"); and
WHEREAS, each Investor will be required to pay his subscription in full
on subscribing ($10,000 per Unit, however, the Managing General Partner, in its
discretion, may accept one-half Unit ($5,000) subscriptions, with larger
subscriptions permitted in $1,000 increments), by check, draft or money order
except that the Managing General Partner, its officers, directors and
Affiliates, and Investors who buy Units through the officers and directors of
the Managing General Partner may subscribe to Units for a subscription price
reduced by the 2.5% Dealer-Manager fee, the 7.0% Sales Commission, the .5%
reimbursement of marketing expenses and the .5% reimbursement of the Selling
Agents' (as that term is defined below) bona fide accountable due diligence
expenses which will not be paid. Also, registered investment advisors and their
clients and Selling Agents and their registered representatives and principals
may subscribe to Units for a subscription price reduced by the 7.0% Sales
Commission, the .5% reimbursement of marketing expenses and the .5% bona fide
reimbursement of the Selling Agents' accountable due diligence expenses, which
will not be paid, although their subscription price will not be reduced by the
2.5% Dealer-Manager fee which will be paid (the "Subscription Proceeds"); and
WHEREAS, the Managing General Partner and Anthem have executed an
agreement ("Anthem Dealer-Manager Agreement") under which Anthem will solicit
subscriptions for Units in all states other than Minnesota and New Hampshire on
a "best efforts" "all or none" basis for Subscription Proceeds of $1,000,000 and
on a "best efforts" basis for the remaining Units on behalf of the Managing
General Partner and the Partnership and under which Anthem has been authorized
to select certain members in good standing of the National Association of
Securities Dealers, Inc. ("NASD") to participate in the offering of the Units
("Selling Agents"); and
WHEREAS, the Managing General Partner and 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"); 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 participate in the offering
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of the Units, subject to the exceptions set forth above for certain Investors,
which compensation includes, but is not limited to, for each Unit sold:
(i) a 2.5% Dealer-Manager fee;
(ii) a 7.0% Sales Commission;
(iii) a .5% reimbursement of marketing expenses; and
(iv) a .5% reimbursement of the Selling Agents' bona fide accountable
due diligence expenses;
all or a portion of which will be reallowed to the Selling Agents and
wholesalers; and
WHEREAS, under the terms of the Dealer-Manager Agreement the Subscription
Proceeds are required to be held in escrow subject to the receipt and acceptance
by the Managing General Partner of the minimum Subscription Proceeds of
$1,000,000, excluding any optional subscription by the Managing General Partner,
its officers, directors and Affiliates and the subscription discounts set forth
above; and
WHEREAS, the Units may also be offered and sold by the officers and
directors of the Managing General Partner without receiving a Sales Commission
or other compensation on their sales; and
WHEREAS, no subscriptions to the Partnership will be accepted after
receipt of the maximum Subscription Proceeds of $25,000,000 or December 31,
2001, whichever event occurs first (the "Offering Termination Date"); and
WHEREAS, to facilitate compliance with the terms of the Dealer-Manager
Agreement and Rule 15c2-4 adopted under the Securities Exchange Act of 1934 the
Managing General Partner and the Dealer-Manager desire to have the Subscription
Proceeds deposited with the Escrow Agent and the Escrow Agent desires to hold
the Subscription Proceeds under the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement, the parties to this Agreement, intending to be
legally bound, agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The Managing General Partner, the
Partnership and the Dealer-Manager appoint Escrow Agent as the escrow
agent to receive and to hold the Subscription Proceeds deposited with
Escrow Agent by the Dealer-Manager and the Managing General Partner under
this Agreement and Escrow Agent agrees to serve in such capacity during
the term and based on the provisions of this Agreement.
2. DEPOSIT OF SUBSCRIPTION PROCEEDS. Pending receipt of the minimum
Subscription Proceeds of $1,000,000, the Dealer-Manager and the Managing
General Partner shall deposit the Subscription Proceeds of each Investor
to whom they sell Units with the Escrow Agent and shall deliver to the
Escrow Agent a copy of the Subscription Agreement of each Investor.
Payment for each subscription for Units shall be in the form of a check
made payable to "Atlas America Public #10 Ltd., Escrow Agent, National
City Bank of PA." The Escrow Agent shall deliver a receipt to either:
(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.
Subscription Proceeds may be temporarily invested by the Escrow Agent
only in income producing short-term, highly liquid investments secured by
the United States government where there is appropriate safety of
principal, such as U.S. Treasury Bills. The interest earned shall be
added to the Subscription Proceeds and disbursed in accordance with the
provisions of paragraph 4 or 5 of this Agreement, as the case may be.
4. DISTRIBUTION OF SUBSCRIPTION PROCEEDS. If the Escrow Agent:
(a) receives written notice from an authorized officer of the Managing
General Partner that at least the minimum Subscription Proceeds of
$1,000,000 have been received and accepted by the Managing General
Partner; and
(b) determines that Subscription Proceeds for at least $1,000,000 have
cleared the banking system and are good;
then the Escrow Agent shall promptly release and distribute to the
Managing General Partner the escrowed Subscription Proceeds which have
cleared the banking system and are good plus any interest paid and
investment income earned on the Subscription Proceeds while held by the
Escrow Agent in an escrow account.
Any remaining Subscription Proceeds, plus any interest paid and
investment income earned on the Subscription Proceeds while held by the
Escrow Agent in an escrow account shall be promptly released and
distributed to the Managing General Partner by the Escrow Agent as the
Subscription Proceeds clear the banking system and become good.
5. SEPARATE PARTNERSHIP ACCOUNT. During the continuation of the offering
after the Partnership is funded with cleared Subscription Proceeds of at
least $1,000,000 and the Escrow Agent receives the notice described in
Paragraph 4 of this Agreement, and before the Offering Termination Date,
any additional Subscription Proceeds may be deposited by the
Dealer-Manager or the Managing General Partner directly in a separate
Partnership account which shall not be subject to the terms of this
Agreement.
6. DISTRIBUTIONS TO SUBSCRIBERS.
(a) If the Partnership is not funded as contemplated because less than
the minimum Subscription Proceeds of $1,000,000 have been received
and accepted by the Managing General Partner by twelve p.m. (noon),
local time, on December 31, 2001, or for any other reason, then the
Managing General Partner shall so notify the Escrow Agent, and the
Escrow Agent promptly shall distribute to each Investor a refund
check made payable to the Investor in an amount equal to the
Subscription Proceeds of the Investor, plus any interest paid or
investment income earned thereon while held by the Escrow Agent in
an escrow account.
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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 thereon while held by the Escrow Agent in an escrow
account.
7. COMPENSATION AND EXPENSES OF ESCROW AGENT. The Managing General Partner
shall be solely responsible for and shall pay the compensation of the
Escrow Agent for its services under this Agreement, as provided in
Appendix 1 to this Agreement and made a part of this Agreement, and the
charges, expenses (including any reasonable attorneys' fees), and other
out-of-pocket expenses incurred by the Escrow Agent in connection with
the administration of the provisions of this Agreement. The Escrow Agent
shall have no lien on the Subscription Proceeds deposited in an escrow
account unless and until the Partnership is funded with cleared
Subscription Proceeds of at least $1,000,000 and the Escrow Agent
receives the notice described in Paragraph 4 of this Agreement, at which
time the Escrow Agent shall have, and is hereby granted, a prior lien on
any property, cash, or assets held under this Agreement, with respect to
its unpaid compensation and nonreimbursed expenses, superior to the
interests of any other persons or entities.
8. DUTIES OF ESCROW AGENT. The Escrow Agent shall not be obligated to accept
any notice, make any delivery, or take any other action under this Escrow
Agreement unless the notice or request or demand for delivery or other
action is in writing and given or made by the party given the right or
charged with the obligation under this Escrow Agreement to give the
notice or to make the request or demand. In no event shall the Escrow
Agent be obligated to accept any notice, request, or demand from anyone
other than the Managing General Partner or the Dealer-Manager.
9. LIABILITY OF ESCROW AGENT. The Escrow Agent shall not be liable for any
damages, or have any obligations other than the duties prescribed in this
Agreement in carrying out or executing the purposes and intent of this
Agreement. However, nothing in this Agreement shall relieve the Escrow
Agent from liability arising out of its own willful misconduct or gross
negligence. Escrow Agent's duties and obligations under this Agreement
shall be entirely administrative and not discretionary. Escrow Agent
shall not be liable to any party to this Agreement or to any third party
as a result of any action or omission taken or made by Escrow Agent in
good faith. The parties to this Agreement will indemnify Escrow Agent,
hold Escrow Agent harmless, and reimburse Escrow Agent from, against and
for, any and all liabilities, costs, fees and expenses (including
reasonable attorney's fees) Escrow Agent may suffer or incur by reason of
its execution and performance of this Agreement. If any legal questions
arise concerning Escrow Agent's duties and obligations under this
Agreement, Escrow Agent may consult with its counsel and rely without
liability on written opinions given to it by its counsel.
The Escrow Agent shall be protected in acting on any written notice,
request, waiver, consent, authorization, or other paper or document which
the Escrow Agent, in good faith, believes to be genuine and what it
purports to be.
If there is any disagreement between any of the parties to this
Agreement, or between them or any of them and any other person, resulting
in adverse claims or demands being made in connection with this
Agreement, or if Escrow Agent, in good faith, is in doubt as to what
action it should take under this Agreement, Escrow Agent may, at its
option, refuse to comply with any claims or demands on it or refuse to
take any other action under this Agreement, so long as the disagreement
continues or the doubt exists. In
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any such event, Escrow Agent shall not be or become liable in any way or
to any person for its failure or refusal to act and Escrow Agent shall be
entitled to continue to so refrain from acting until the dispute is
resolved by the parties involved.
National City Bank of Pennsylvania is acting solely as Escrow Agent and
is not a party to, nor has it reviewed or approved any agreement or
matter of background related to this Agreement, other than this Agreement
itself, and has assumed, without investigation, the authority of the
individuals executing this Agreement to be so authorized on behalf of the
party or parties involved.
10. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent may resign as
such following the giving of thirty days' prior written notice to the
other parties to this Agreement. Similarly, the Escrow Agent may be
removed and replaced following the giving of thirty days' prior written
notice to the Escrow Agent by the other parties to this Agreement.
In either event, the duties of the Escrow Agent shall terminate thirty
days after the date of such notice (or as of any earlier date as may be
mutually agreeable); and the Escrow Agent shall then deliver the balance
of the Subscription Proceeds (and any interest paid or investment income
earned thereon while held by the Escrow Agent in an escrow account) in
its possession to a successor escrow agent as shall be appointed by the
other parties to this Agreement as evidenced by a written notice filed
with the Escrow Agent. If the other parties to this Agreement are unable
to agree on a successor or shall have failed to appoint a successor
before the expiration of thirty days following the date of the notice of
resignation or removal, the then acting Escrow Agent may petition any
court of competent jurisdiction for the appointment of a successor escrow
agent or other appropriate relief. Any such resulting appointment shall
be binding upon all of the parties to this Agreement.
On acknowledgment by any successor escrow agent of the receipt of the
then remaining balance of the Subscription Proceeds (and any interest
paid or investment income earned thereon while held by the Escrow Agent
in an escrow account), the then acting Escrow Agent shall be fully
released and relieved of all duties, responsibilities, and obligations
under this Agreement.
11. TERMINATION. This Agreement shall terminate and the Escrow Agent shall
have no further obligation with respect to this Agreement on the
occurrence of the distribution of all Subscription Proceeds (and any
interest paid or investment income earned thereon while held by the
Escrow Agent in an escrow account) as contemplated by this Agreement or
on the written consent of all the parties to this Agreement.
12. NOTICE. Any notices or instructions, or both, to be given under this
Agreement shall be validly given if set forth in writing and mailed by
certified mail, return receipt requested, as follows:
IF TO THE ESCROW AGENT:
National City Bank of Pennsylvania
Corporate Trust Department
Xxxxxxxx Xxxx Xxxxxx XXX 00-000
Xxxxxxxxxx, Pennsylvania 15222-4802
Attention: Xx. Xxxx X. Xxxxxxx, Assistant Vice President
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 is binding on and shall inure to the benefit of the
undersigned and their respective successors and assigns.
(c) This Agreement may be executed in multiple copies, each executed
copy to serve as an original.
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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, Vice President -
Direct Participation Programs
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By: /s/
-------------------------------------------
Xxxx X. Xxxxxx, President
XXXXX FUNDING, INC.
A Pennsylvania corporation
By:
-------------------------------------------
Xxxxxxx X. Xxxxx, Xx., President
ATLAS AMERICA PUBLIC #10 LTD.
By: ATLAS RESOURCES, INC.
Managing General Partner
By:
--------------------------------------
Xxxx X. Xxxxxxxxx, 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 $3,000.00
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