ESCROW AGREEMENT ATLAS RESOURCES PUBLIC #18-2009(C) L.P.
Exhibit
10.3
ATLAS
RESOURCES PUBLIC #18-2009(C) L.P.
ATLAS
RESOURCES PUBLIC #18-2009(C) L.P.
THIS
AGREEMENT is
made
to be effective as of ________________, 2009, by and among Atlas Resources,
LLC,
a Pennsylvania limited liability company (the “Managing General Partner”),
Anthem Securities, Inc., a Pennsylvania corporation (“Anthem”), the
“Dealer-Manager,” Atlas Resources Public #18-2009(C) L.P., a Delaware limited
partnership (the “Partnership”) and National City Bank, 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 ________ investor general partner interests
and up to _____ limited 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 to 10% ($1,000
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. Larger
subscriptions are 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 on a “best efforts” “all or none” basis for Subscription
Proceeds of $2,000,000 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
Financial Industry Regulatory Authority (“FINRA”), previously known as the
National Association of Securities Dealers, Inc., to participate in the offering
of the Units (“Selling Agents”).
WHEREAS,
the
Anthem Dealer-Manager Agreement, the “Dealer-Manager Agreement,” provides 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:
|
·
|
a
2.5% Dealer-Manager fee;
|
|
·
|
a
7% sales commission; and
|
|
·
|
an
up to .5% reimbursement of the Selling Agents’ bona fide 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 $2,000,000, excluding
any optional subscription by the Managing General Partner, its officers,
directors, and Affiliates.
1
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:
|
·
|
receipt
of the maximum Subscription Proceeds of $_____________; or
|
|
·
|
December
31, 2009.
|
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 $2,000,000,
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 and mailing address and wire transfer account
number information, if any. In this regard, the Selling Agents shall
promptly transmit any and all checks received by them from Investors
and
the original executed Subscription Agreement to the Dealer-Manager
by noon
of the next business day following receipt of the check by them.
By noon
of the next business day following the Dealer-Manager’s receipt of the
check and the original executed subscription documents, the Dealer-Manager
shall transmit the check and a copy of the executed Subscription
Agreement
and mailing address to the Escrow Agent. In the event of a wire transfer,
the wire transferred funds will be sent directly from the subscriber
to
the Escrow Agent and the Subscription Agreement, along with the wire
transfer account number information will be sent as set forth
above.
|
Payment
for each subscription for Units shall be in the form of a check or wire made
payable to the Escrow Agent as follows: “National City Bank, Escrow Agent, Atlas
Resources Public #18-2009(C) L.P.,” pending receipt of the Partnership’s minimum
Subscription Proceeds of $2,000,000.
|
3.
|
Investment
of Subscription Proceeds.
The Subscription Proceeds in the escrow account (“Escrow Account”) 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 of deposit issued or
guaranteed by the United States government. The interest and income
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 signed written Distribution of Subscription Proceeds notice
from an
authorized officer of the Managing General Partner that at least
the
minimum Subscription Proceeds of $2,000,000 have been received and
accepted by the Managing General Partner; and
|
2
|
(b)
|
determines
that Subscription Proceeds for at least $2,000,000 are Distributable
Subscription Proceeds;
|
then
the
Escrow Agent shall promptly release and distribute to the Managing General
Partner the Distributable Subscription Proceeds plus any interest paid and
investment income earned on the Subscription Proceeds while held by the Escrow
Agent in the escrow account (“Initial Distribution”). For purposes of the
Agreement, “Distributable Subscription Proceeds” are Subscription Proceeds which
have been deposited in the escrow account (1) by wire transfer; and (2) by
check, but in the case of checks only after a three day period from the date
of
deposit.
After
the occurrence of 4(a) and (b) above, Escrow Agent will provide a letter to
the
Managing General Partner confirming receipt of checks and/or wires representing
Subscription Proceeds totaling at least $2,000,000 have been received and the
anticipated date the funds will be considered Distributable Subscription
Proceeds.
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
become Distributable Subscription Proceeds after a 10 day period from the date
of deposit.
The
Managing General Partner shall immediately return to the Escrow Agent, upon
written request by Escrow Agent, any Subscription Proceeds distributed to the
Managing General Partner or refunded to an Investor to the extent that such
Subscription Proceeds were paid by a check which is returned or otherwise not
collected for any reason prior or subsequent to termination of this
Agreement.
|
5.
|
Separate
Partnership Account.
During the continuation of the offering after the Partnership is
funded
with cleared Subscription Proceeds of at least $2,000,000 and the
Escrow
Agent receives the Distribution of Subscription Proceeds notice described
in Paragraph 4 of this Agreement in good order, 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 $2,000,000 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 in writing, and the Escrow Agent promptly shall distribute
to
each Investor, for which Escrow Agent has (1) a copy of the Investor’s
Subscription Agreement with mailing address and wire transfer information,
(2) received Subscription Proceeds, and (3) become Distributable
Subscription Proceeds, 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 such Subscription Proceeds
relating to the subscription have been deposited with the Escrow
Agent
into the Escrow Account and the amount of time has passed which would
usually be sufficient for Subscription Proceeds paid by check to
have
returned unpaid by the bank on which the check was drawn and after
a three
day period from the date of deposit, 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 for which
Escrow Agent has a copy of the Investor’s Subscription Agreement with
mailing address and wire transfer information, (2) received Subscription
Proceeds, and (3) become distributable Subscription Proceeds, 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.
|
3
|
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, disbursements and advances
(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 $2,000,000 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 and signed 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 and shall under no circumstances
be
deemed a fiduciary for any of the parties to this Agreement. 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, damages fees and expenses (including reasonable attorney’s fees)
(collectively “Losses”) the Escrow Agent may suffer or incur by reason of
its execution and performance of this Agreement (including, but not
limited to, Losses incurred by the Escrow Agent in connection with
its
successful defense, in whole or in part, of any claim of gross negligence
or willful misconduct on its part). Escrow Agent shall not be liable
for
any action taken and believed by it to be authorized or within the
rights
or powers conferred upon by this Agreement, and may consult with
counsel
of its own choice and shall have full and complete authorization
and
protection for any action taken or suffered by it hereunder in good
faith
and in accordance with the opinion of such counsel. The foregoing
indemnities in this paragraph will survive the resignation or substitution
of the Escrow Agent or the termination of this
Agreement.
|
The
Escrow Agent shall be protected in acting or refraining from acting upon any
written notice, instruction, request, waiver, consent, authorization, or other
paper or document furnished to it hereunder for which the Escrow Agent, in
good
faith, believes to be genuine, to have been signed or presented by the proper
party or parties, and to be what it purports to be.
4
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 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. This Agreement sets
forth all matters pertinent to the duties contemplated hereunder, and no
additional obligations of the Escrow Agent shall be inferred from the terms
of
this Agreement or any other agreement.
|
10.
|
Resignation
or Removal of Escrow Agent/Merger.
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.
In
the
event that the bank acting as Escrow Agent merges or consolidates with another
bank or sells or transfers all or substantially all of its assets or trust
business, then the successor or resulting bank shall be the Escrow Agent
hereunder without the necessity of further action or the execution of any
document, so long as such successor or resulting bank meets the requirements
of
a successor escrow agent hereunder.
|
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
c/o
Allegiant Institutional Services
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
5
If
to the
Managing General Partner:
Atlas
Resources, LLC
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇.▇.
▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. Black
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
If
to
Anthem:
Anthem
Securities, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇.▇.
▇▇▇
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Any
party
may designate any other address to which notices and instructions shall be
sent
by notice duly given in accordance with this Agreement.
Notices
shall not be deemed to be received by the Escrow Agent until actual receipt
thereof.
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.
|
6
Any
reference to “Dollars” or “$” is a reference to lawful money of the United
States of America and all deposits and payments made hereunder or pursuant
to
the terms hereof shall be in U.S. dollars.
|
14.
|
Acknowledgements.
The parties hereto and subscribers acknowledge Escrow Agent has not
reviewed and is not making any recommendations with respect to the
securities offered. During the escrow period, the proceeds from the
offering are not subject to claims by creditors, by the Partnership,
the
Partnership’s affiliates, the escrow agent, or by the selling agents until
the proceeds have been released to the Partnership pursuant to the
terms
of this Agreement.
|
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
As
Escrow Agent
|
||
| |
|
|
| By: | ||
|
▇▇▇▇
▇▇▇▇▇▇▇, Administrator
|
||
|
ATLAS
RESOURCES, LLC
A
Pennsylvania limited liability company
|
||
| |
|
|
| By: | ||
|
▇▇▇▇▇
▇. Black, Vice President - Partnership
Administration
|
||
|
ANTHEM
SECURITIES, INC.
A
Pennsylvania corporation
|
||
| |
|
|
| By: | ||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇,
President
|
||
|
ATLAS
RESOURCES PUBLIC #18-2009(C)
L.P.
|
||
| By: | ATLAS RESOURCES, LLC
Managing
General Partner
|
|
| By: | ||
|
▇▇▇▇▇
▇. Black, Vice President - Partnership
Administration
|
||
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
|
$
|
3,000.00
|
||||
|
(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. |
Bank
Account Fees for investment of amounts in the accounts that the Managing
General Partner directs the Escrow Agent to open under the Agreement
(checking or savings accounts, or certificates of deposit offered
by any
National City Bank).
|
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.
FEE
SCHEDULE IS SUBJECT TO ANNUAL REVIEW AND/OR ADJUSTMENT UPON AMENDMENT THERETO.
8