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ESCROW AGREEMENT
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ATLAS-ENERGY FOR THE NINETIES-PUBLIC #5 LTD.
ESCROW AGREEMENT
THIS AGREEMENT, made to be effective as of the ______ day of
___________________, 1996, by and between Atlas Resources, Inc., a
Pennsylvania corporation (hereinafter referred to as "Atlas"), National
City Bank of Pennsylvania, Pittsburgh, Pennsylvania, as escrow agent
(hereinafter referred to as the "Escrow Agent"), and the Soliciting
Dealers (hereinafter defined).
WITNESSETH:
WHEREAS, Atlas intends to offer publicly for sale to qualified
investors (the "Investors") up to 800 limited partnership interests in a
Pennsylvania limited 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 Atlas
and its officers and directors may purchase Units net of the commissions
and wholesaling fees set forth below (the "Subscription Proceeds"); and
WHEREAS, Atlas intends to sell the Units on a "best efforts" all or
none basis for 100 Units and on a best efforts basis for the remaining
Units; and
WHEREAS, Atlas will enter into a Soliciting Dealer Agreement with
registered broker-dealers which are members in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") at a 7.5%
sales commission, plus reimbursement of their bona fide accountable due
diligence expenses of .5%, to participate in the offering of the Units
(hereinafter referred to as the "Soliciting Dealers") and will utilize
the services of wholesalers at a wholesaling fee of 2.5%; and
WHEREAS, under the terms of the Soliciting Dealer Agreements the
Subscription Proceeds are required to be held in escrow subject to the
receipt and acceptance by Atlas of the minimum Subscription Proceeds of
100 Units, excluding any optional subscription by the Managing General
Partner; and
WHEREAS, no subscriptions to the Partnership will be accepted after
receipt of the maximum Subscription Proceeds of $7,000,000 (which may be
increased to $8,000,000 in Atlas' discretion) or December 31, 1996,
whichever event occurs first (the "Offering Termination Date"); and
WHEREAS, to facilitate compliance with the terms of the Soliciting
Dealer Agreements, Atlas desires 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. Atlas hereby appoints Escrow Agent as
the escrow agent to receive and to hold the Subscription Proceeds
deposited with Escrow Agent by the Soliciting Dealers 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 100 Units, Atlas agrees that all monies received
from subscribers for the payment of the Units will be forwarded by the
Soliciting Dealers to the Escrow Agent by noon of the second business day
after Atlas received the subscription documents for purposes of a
suitability determination, which documents were forwarded to Atlas by
noon of the next business day following receipt of the monies by the
Soliciting Dealer, for deposit in the Escrow Account. Payment for each
subscription for Units shall be in the form of a check made payable to
"National City Bank, Escrow Agent, Atlas Public #5 Ltd." The Escrow Agent
shall deliver a receipt to Atlas for each deposit of Subscription
Proceeds made pursuant hereto.
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.
4. Distribution of Subscription Proceeds. If the Escrow Agent (a)
receives written notice from an authorized officer of Atlas that at least
the minimum aggregate subscriptions of 100 Units have been received and
accepted by Atlas, and (b) determines that Subscription Proceeds for at
least 100 Units as determined by Atlas have cleared the banking system
and are good, the Escrow Agent shall promptly release and distribute to
Atlas 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 Atlas by the Escrow Agent as such Subscription Proceeds
clear the banking system and become good.
5. Distributions to Subscribers.
(a) In the event that the Partnership will not be funded as
contemplated because less than the minimum aggregate subscriptions of 100
Units have been received and accepted by Atlas by twelve p.m. (noon),
local time, on December 31, 1996, or for any other reason, Atlas 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 Atlas.
(b) In the event that a subscription for Units submitted by an
Investor is rejected by Atlas for any reason after the Subscription
Proceeds relating to such subscription have been deposited with the
Escrow Agent, then Atlas 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 Atlas.
6. Compensation and Expenses of Escrow Agent. Atlas 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 100 Units 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 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.
7. 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 Atlas.
8. 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 either of 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; and 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.
9. Resignation or Removal of Escrow Agent. The Escrow Agent may resign
as such following the giving of thirty days' prior written notice to
Atlas. Similarly, the Escrow Agent may be removed and replaced following
the giving of thirty days' prior written notice to the Escrow Agent by
Atlas. 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 Atlas as evidenced by a written notice filed with the Escrow
Agent. If Atlas 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 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 acknowledgement 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.
10. 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.
11. 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
Attention: Mr. Robert Mialki, Vice President
Corporate Trust Department
300 Fourth Avenue
Pittsburgh, Pennsylvania 15278-2331
Phone: (412) 644-8401
Facsimile: (412) 644-7971
If to Atlas:
Atlas Resources, Inc.
311 Rouser Road
P.O. Box 611
Moon Township, Pennsylvania 15108
Attention: J. R. O'Mara
Phone: (412) 262-2830
Facsimile: (412) 262-2820
Any party may designate any other address to which notices and
instructions shall be sent by notice duly given in accordance herewith.
12. 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: Mr. Robert Mialki By:
/s/ Mr. Robert Mialki
(Authorized Officer) (Authorized Officer)
ATLAS RESOURCES, INC.
ATTEST: A Pennsylvania corporation
By: /s/J.R. O'Mara,
J.R. O'Mara, President
APPENDIX I TO ESCROW AGREEMENT
Compensation for Services of Escrow Agent
Escrow Agent annual fee per year or any part thereof $3,000.00
APPENDIX II TO ESCROW AGREEMENT
Soliciting Dealer Execution Page
The undersigned Soliciting Dealer hereby executes this Soliciting Dealer
Execution Page for the purpose of becoming a party to the Escrow
Agreement for Atlas-Energy for the Nineties-Public #5 Ltd. entered into
by and among Atlas Resources, Inc., National City Bank of Pennsylvania,
Pittsburgh, Pennsylvania ("Escrow Agent") and the remaining Soliciting
Dealers, and agrees to all of the terms and conditions of said Escrow
Agreement.
SOLICITING DEALER
a ---------corporation
By:---------------------
(Print Name, Title and Address)
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ATTEST:
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(SEAL) Secretary