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"), Bryan
Funding, Inc., a Pennsylvania corporation ("Bryan Funding"), collectively Anthem
and Bryan Funding are referred to as the "Dealer-Manager," Atlas America Public
#12-2003 Limited Partnership, a Delaware limited partnership (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 or wire (the "Subscription Proceeds").
WHEREAS, the cost per Unit will be $10,000 subject to certain discounts
of up to10.5% ($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 Bryan Funding have executed an
agreement ("Bryan Funding Dealer-Manager Agreement") under which Bryan 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 Bryan 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 Bryan 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:
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," which is the
execution and subscription instrument signed by the Investor to evidence
his agreement to purchase Units in the Partnership. Payment for each
subscription for Units shall be in the form of a check or wire made
payable to "Atlas America Public #12-2003 Limited Partnership, Escrow
Agent, National City Bank of Pennsylvania."
3. Investment of Subscription Proceeds. The Subscription Proceeds shall be
deposited in an interest bearing account maintained by the Escrow Agent
as directed by the Managing General Partner. 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
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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 proper 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
been deposited, accepted and 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.
After the initial distribution, 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 after
a 10 day period from the date of deposit.
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 (12:00)
p.m. (noon), local time, EASTERN STANDARD 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, for which Escrow
Agent has a copy of a Subscription Agreement, 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.
(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 in writing, the Escrow Agent of the
rejection, and the Escrow Agent shall promptly distribute to the
Investor a refund check made payable to the Investor, for which
Escrow Agent has a copy of a Subscription Agreement, 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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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 proper written 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 Managing General Partner or
an authorized officer of the Managing General Partner. In no event shall
the Escrow Agent be obligated to accept any notice, request, or demand
from anyone other than the Managing General Partner.
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 jointly
and severally 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 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.
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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 receiving thirty days' prior written notice from 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, or by facsimile with
confirmation of receipt (originals to be followed in the mail), or by a
nationally recognized overnight courier, as follows:
If to the Escrow Agent:
National City Bank
1900 East 9th Street
Cleveland, Ohio 44114
Attention: Dawn DeWerth LOC 2111
Phone: (216) 222-9225
Facsimile: (216) 222-7044
Escrow Agreement 5
If to the Managing General Partner:
Atlas Resources, Inc.
311 Rouser Road
P.O. Box 611
Moon Township, Pennsylvania 15108
Attention: Karen A. Black
Phone: (412) 262-2830
Facsimile: (412) 262-2820
If to Anthem:
Anthem Securities, Inc.
311 Rouser Road
P.O. Box 926
Moon Township, Pennsylvania 15108
Attention: Justin T. Atkinson
Phone: (412) 262-1680
Facsimile: (412) 262-7430
If to Bryan Funding:
Bryan Funding, Inc.
393 Vanadium Road
Pittsburgh, Pennsylvania 15243
Attention: Richard G. Bryan, Jr.
Phone: (412) 276-9393
Facsimile: (412) 276-9396
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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14. The parties hereto and subscribers acknowledge Escrow Agent has not
reviewed and is not making any recommendations with respect to the
securities offered.
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:
-----------------------------------------
Karen A. Black, Vice President -
Partnership Administration
ANTHEM SECURITIES, INC.
A Pennsylvania corporation
By:
-----------------------------------------
Justin T. Atkinson, Vice President
BRYAN FUNDING, INC.
A Pennsylvania corporation
By:
-----------------------------------------
Richard G. Bryan, Jr., President
ATLAS AMERICA PUBLIC #12-2003 LIMITED
PARTNERSHIP
By: ATLAS RESOURCES, INC.
Managing General Partner
By:
-----------------------------------------
Jack L. Hollander, Senior Vice
President - Direct Participation Programs
Escrow Agreement 7
APPENDIX I TO ESCROW AGREEMENT
Compensation for Services of Escrow Agent
REVIEW AND ACCEPTANCE FEE: $ waived
For providing initial review of the Escrow Agreement and all supporting
documents and for initial services associated with establishing the Escrow
Account. This is a one (1) time fee payable upon the opening of the account.
I. Annual Administrative Fee Payable in Advance $3000.00
(or any portion thereof)
II. Remittance of checks returned to subscribers 20.00
(set out in section 6 of the governing agreement)
III. Wire transfers n/a
IV. Purchase or Sale of Securities 100.00
V. Investments (document limits investment to a checking or
savings account, or certificates of deposit) such products
offered by any National City Bank retail branch)- fees are
subject to the type of account the Managing General Partner
directs the Escrow Agent to open and to be governed by the
Escrow Agreement.
EXTRAORDINARY SERVICES:
For any services other than those covered by the aforementioned, a special per
hour charge will be made commensurate with the character of the service, time
required and responsibility involved. Such services include but are not limited
to excessive administrative time, attendance at closings, specialized reports,
and record keeping, unusual certifications, etc.
Managing General Partner agrees to report all funds in accordance with
appropriate tax treatment.
FEE SCHEDULE IS SUBJECT TO ANNUAL REVIEW AND/or ADJUSTMENT UPON AMENDMENT
THERETO.
Escrow Agreement 8