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      SEVERANCE
AND NON-COMPETITION AGREEMENT

       

             
This  SEVERANCE AND NON-COMPETITION AGREEMENT (“Agreement”) is made
and entered into by and between Argyle Security, Inc., a Delaware corporation
(the “Company”), and Mr.
Matthew A. Kepke, an individual (the “Employee”), effective as of February 1,
2009 (the “Effective
Date”).  Capitalized terms not otherwise defined shall have the
meaning ascribed to such terms in Schedule I.

       

             
A.           Whereas, the
Company is a corporation organized under the laws of the State of Delaware and
is conducting business in San Antonio, Bexar County, Texas and New York City,
New York County, New York.

       

             
B.           Whereas, the
Company and the Employee desire to establish certain terms and conditions
related to their employment relationship on the terms set forth in this
Agreement.

       

             
NOW, THEREFORE, in consideration of (i) the mutual covenants herein contained
(ii) Employee’s current and ongoing exposure to Confidential
Information  (as defined in Section 2.1 of this Agreement) of the
Company, (iii) employment of Employee upon the terms, conditions and covenants
set forth between Company and Employee and each act performed pursuant hereto,
and (iv) other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and Employee agree as
follows:

      

      I.

      Term
of Employment

      

      1.1           Term.  The Employee’s employment shall be “at
will,” meaning that either the Employee or the Company shall be entitled to
terminate the employment at any time and for any reason, with or without Cause
(hereinafter defined).  Any contrary representations that may have
been made to the Employee shall be superseded by this Agreement.  This
Agreement shall constitute the full and complete agreement between the Employee
and the Company on the “at-will” nature of the Employee’s employment, which may
only be changed in an express written agreement signed by the Employee and a
duly authorized officer of the Company.

       

      1.2           Rights Upon
Termination. Except as expressly
provided in this Section 1.2, upon the termination of the Employee’s
employment, the Employee shall only be entitled to the compensation and benefits
earned up through the date of termination.  Employee’s right to
compensation for periods after the Employee’s employment with the Company
terminates shall be determined in accordance with the following:

       

                  (a)           Change of Control/Termination Without
Cause or for Good Reason.  In the event the Employee’s
employment with the Company is terminated within the two (2) year period
immediately following the occurrence of a Change of Control, either (i) by the
Company without Cause, or (ii) by the Employee for Good Reason, then the
Employee shall, subject to Employee’s execution of a separation and release
agreement provided by the Company (the “Separation
Agreement”), and subject further to the applicable requirements of
Section 1.2(i):

       

                  (i)  receive
a lump sum payment in the amount of (a) 2 times (Employee’s base salary in
effect on the date of termination (“Salary”) plus
Employee’s target bonus (“Bonus”)) plus (b)
Employee’s current year bonus earned up through the date of termination
(calculated by taking Employee’s annual target bonus times a fraction, the
numerator of which is the number of days Employee was employed during the year
of termination and the denominator of which is 365), with such target bonus and
current year bonus determined in accordance with the Company’s  bonus
plan then in effect which is applicable to Employee.   The lump
sum payment to be paid under this clause (i) shall be paid within thirty (30)
days following the date of Employee’s termination; and

       

                  (ii)  receive
a lump sum payment equal to 24 times the monthly premium cost (determined as of
the date of termination) for Employee’s medical insurance under the Company’s
benefit plans then in effect, with such amount to be paid within thirty (30)
days following the date of Employee’s termination;

       

                  (b)           Termination Without Cause or for Good
Reason.  In the event
Employee’s employment with the Company is terminated before the occurrence of a
Change of Control or more than two (2) years after the occurrence of a Change of
Control, either (i) by the Company without Cause , or (ii) by the Employee for
Good Reason , then the Employee shall, subject to Employee’s execution of a
Separation Agreement:

       

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 1

          
            

          

        

        
          
          

        

      

       

                  (i)  receive
an amount of (a) 1 times (Employee’s Salary plus Employee’s target bonus) plus
(b) Employee’s current year bonus earned up through the date of termination
(calculated by taking Employee’s annual target bonus times a fraction, the
numerator of which is the number of days Employee was employed during the year
of termination and the denominator of which is 365), with such target bonus and
current year bonus determined in accordance with the Company’s  bonus plan then in
effect which is applicable to Employee. All such amounts to be paid hereunder
shall be paid in equal monthly installments beginning on the thirtieth (30th) day
following the date of Employee’s termination and continuing on the same day in
each subsequent month for a period of 11 months thereafter; and

       

                  (ii)  receive
monthly payments in the amount necessary to continue Employee’s medical benefits
coverage in effect at the time of termination with such
amounts to be paid out in monthly installments at the same times as the payments
in (b) (i) above for a period of 12 months following the date of such
termination;

       

                  (c)           Death.  If Employee
dies during the term of employment, Employee’s employment and this Agreement
shall automatically terminate as of the date of Employee’s death. Upon such
termination, the Company shall have no further obligation to Employee or his
estate, except to pay to the estate any accrued, but unpaid, Salary up through
the date of such termination, plus Bonus, plus those benefits payable in
accordance with (b) (i) above.

       

                  (d)           Disability.  If,
during the term of employment, Employee is prevented from performing his duties
for Company by reason of becoming totally disabled, then the Company, on prior
notice to Employee, may terminate Employee’s employment and this
Agreement.  For purposes of this Agreement, Employee shall be deemed
to have become totally disabled when (i) he receives “total disability benefits”
under the Company’s disability plan (whether funded with insurance or
self-funded by the Company), if such a plan is maintained by the Company, or
(ii) the Company’s  Board (exclusive of Employee if he sits on the
Board), upon the written report of a qualified physician (after complete
examination of Employee) designated by the Board, determines that Employee has
become physically and/or mentally incapable of performing his duties under this
Agreement on a permanent basis.  In the event of termination of
Employee under this subsection (d), the Company shall pay Employee any accrued
but unpaid Salary, as of the date on which such permanent disability is
determined, but then remains unpaid, plus those benefits payable in accordance
with (b) (i) and (ii) above.. The provisions of the preceding sentence shall not
affect Employee’s rights to receive payments under the Company’s disability
insurance plan, if any, or under any individual disability insurance plan that
the Employee may have in place.

       

                  (e)           Notwithstanding
anything to the contrary contained in this Section 1.2, to the extent that the
Employee is determined to be a "key employee" (as defined in Section 416(i) of
the Code but without regard to paragraph (5) thereof), the payment or payments
under this Section 1.2 which constitute "nonqualified deferred compensation"
under Section 409A of the Code shall be made to the Employee no earlier
than the earlier of the last day of the sixth complete calendar month following
the termination of the Employee's employment with the Company, or (ii) the date
of the Employee's death, consistent with the requirements of Section 409A of the
Code. Any payment or payments delayed by reason of the immediately preceding
sentence shall be paid to the Employee in a single lump sum on the first day
following the last day of the sixth complete calendar month following the date
of the termination of the Employee's employment with the Company, in order to
catch up to the original payment schedule. Notwithstanding the immediately
preceding 2 sentences, no delay shall be required to the extent that such
payments (i) are payable during the short-term deferral period set forth in
Treasury Regulation Section 1.409A-1(b)(4), and/or (ii) do not exceed an amount
equivalent to 200% of the lesser of (A) the Employee's annualized compensation
from the Company for the Employee's taxable year immediately preceding his or
her taxable year in which the Employee's termination of employment with the
Company occurs, or (B) the maximum amount of compensation that may be taken into
account under tax-qualified retirement plans pursuant to Section 401(a)(17) of
the Code, for the calendar year in which the termination of the Employee's
employment with Company occurs.

       

                  (f)           Excess Parachute Payments.  (i) If it is determined that any
amount, right or benefit paid or payable (or otherwise provided or to be
provided) to the Employee by the Company or any of its affiliates under this
Agreement or any other plan, program or arrangement under which Employee
participates or is a party, other than amounts payable under this Section 1.2(f)
(collectively, the “Payments”), would
constitute an “excess parachute payment” within the meaning of Section 280G of
the Code, subject to the excise tax imposed by Section 4999 of the Code, as
amended from time to time (the “Excise Tax”), and the
present value of such Payments (calculated in a manner consistent with that set
forth in the applicable regulations promulgated under Section 280G of the Code)
is equal to or less than $25,000.00 greater than the threshold at which such
amount becomes an “excess parachute payment,” then the amount of the Payments
payable to the Employee under this Agreement shall be reduced (a “Reduction”) to the
extent necessary so that no portion of such Payments payable to the Employee is
subject to the Excise Tax.

       

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 2

          
            

          

        

        
          
          

        

      

       

                  (ii)
In the event it shall be determined that the amount of the Payments payable to
the Employee is more than $25,000.00 greater than the threshold at which such
amount becomes an “excess parachute payment,” then the Employee shall be
entitled to receive an additional payment from the Company (a “Gross-Up Payment”) in
an amount such that, after payment by the Employee of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income and employment taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment
(and any interest and penalties imposed with respect thereto), the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax (including any
interest and penalties imposed with respect thereto) imposed upon the
Payments.

       

                  (iii)
All determinations required to be made under Section 1.2(f), including whether
and when a Gross-Up Payment or a Reduction is required, the amount of such
Gross-Up Payment or Reduction and the assumptions to be utilized in arriving at
such determination, shall be made by an independent, nationally recognized
accounting firm mutually acceptable to the Company and the Employee (the “Auditor”); provided
that in the event a Reduction is determined to be required, the Employee may
determine which Payments shall be reduced in order to comply with the provisions
of Section 1.2 (f). The Auditor shall promptly provide detailed supporting
calculations to both the Company and Employee following any determination that a
Reduction or Gross-Up Payment is necessary. All fees and expenses of the Auditor
shall be paid by the Company. Any Gross-Up Payment, as determined pursuant to
Section 1.2(f), shall be paid by the Company to the Employee within five (5)
days of the receipt of the Auditor’s determination. All determinations made by
the Auditor shall be binding upon the Company and the Employee; provided that
if, notwithstanding the Auditor’s initial determination, the Internal Revenue
Service (or other applicable taxing authority) determines that an additional
Excise Tax is due with respect to the Payments, then the Auditor shall
recalculate the amount of the Gross-Up Payment or Reduction Amount, if
applicable, based upon the determinations made by the Internal Revenue Service
(or other applicable taxing authority) after taking into account any additional
interest and penalties (the “Recalculated Amount”)
and the Company shall pay to the Employee the excess of the Recalculated Amount
over the Gross-Up Payment initially paid to the Employee or the amount of the
Payments after the Reduction, as applicable, within five (5) days of the receipt
of the Auditor’s recalculation the Gross-Up Payment.

      

      II.

      Restrictive
Covenants

      

      2.1           Trade Secrets and
Proprietary and Confidential Information.  Employee recognizes and
acknowledges that Employee has acquired in the past, is presently acquiring, and
will continue to acquire in the future during his employment with the Company,
access to certain trade secrets and confidential and proprietary information of
the Company, including, but not limited to: (i) technical
information,  know-how, trade secrets, financial data, marketing and
sales plans, customer and supplier lists, Developments (as defined in Section
2.6 of this Agreement) and other commercial information relating to the
Company’s business and (ii) certain information that the Company has acquired or
received from third parties in confidence (collectively, the “Confidential
Information”).  Employee acknowledges that the Confidential
Information he obtains through his employment hereunder constitutes valuable,
special and unique property of the Company and that the Company would suffer
great loss and damage if he should violate the covenants set forth in this
Agreement.  Employee acknowledges that such covenants and conditions
are reasonable and necessary for the protection of the Company’s
business.

      

      2.2           Nondisclosure of
Trade Secrets, Proprietary and Confidential Information. Employee agrees
that, without the prior written approval of the Company, Employee shall not
during the Term of Employment or thereafter for any reason disclose any of the
Confidential Information of the Company  to any
person,  firm, company or other entity (except for authorized
personnel of the Company) for any reason or purpose whatsoever; provided,
however, that this Section shall not apply to the extent that Employee shall be
required to provide information pursuant to a valid, lawful subpoena or court
order so long as Employee shall have made his best efforts in good faith to
cause the court of relevant jurisdiction, to the greatest extent possible, to
limit the scope of such subpoena or order and protect the confidentiality of the
information so disclosed.

      

      2.3           Solicitation of
Employees.  Employee
agrees that during the term of employment and for a period of two (2) years
following termination of Employee’s employment hereunder, he will not, directly
or indirectly, by himself or by acting in concert with others, employ or attempt
to employ or solicit for employment with any business that is competitive with
the Company, any of the Company’s employees, contractors, or other personnel, or
seek to influence any employees, contractors, or other personnel of the Company
to leave their employment or other engagement with the Company.

       

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 3

          
            

          

        

        
          
          

        

      

       

      2.4           Solicitation of
Business of Company.  Employee covenants and agrees that
during the term of employment and for a period of two (2) years following
termination of Employee’s employment hereunder, Employee will not attempt,
directly or indirectly, by himself or acting in concert with others, to
influence any of the Company’s clients, suppliers or other business associates
not to do business with or not to continue to do business with the Company or
any of its affiliates.

      

      2.5           Non-Competition.  Because
Employee's services to the Company are special and because the Company agrees to
provide Confidential Information of the Company to Employee from the moment of
execution of this Agreement and on an ongoing basis throughout the term of
employment,  Employee covenants and agrees that during his term of
employment and for a period of two (2) years thereafter, Employee will not,
without the prior written consent of the Company, directly or indirectly, either
on his own behalf or on behalf of or in connection with any person, partnership,
limited liability company, corporation, professional company or otherwise,
engage in any business that would be directly or indirectly competitive with the
Company (including any subsidiaries and affiliates) as of the date of Employee's
termination in any market served by the Company.

      

      2.6           Survival of
Covenants.  The
provisions of this Article II shall survive any expiration or termination of
this Agreement and shall continue to bind the parties hereto in accordance with
the terms hereof.  The covenants contained in this Article II shall be
construed as covenants or agreements independent of any other provision of this
Agreement, and the allegation or existence of any claim or cause of action of
Employee against the Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the
covenants contained herein.

      

      2.7           Reformation.  If any provision of this Article
II should be found by any court of competent jurisdiction to be unenforceable by
reason of being too broad as to the period of time, territory or scope set forth
therein, then that provision shall be modified to reflect the maximum period of
time, the largest territory or the broadest scope, as the case may be, that
would be found enforceable by such court.

      

      2.8           Remedies.  In
the event of breach or threatened breach by Employee of any provision of this
Article II, the Company shall be entitled to relief by temporary restraining
order, temporary injunction, permanent injunction or otherwise in addition to
other legal and equitable relief to which the Company may be entitled, including
any and all monetary damages that the Company may incur as a result of said
breach, violation or threatened breach or violation.  The Company may
pursue any remedy available to it concurrently or consecutively in any order as
to any breach, violation or threatened breach or violation, and the pursuit of
one of such remedies at any time shall not be deemed an election of remedies or
waiver of the right to pursue any other of such remedies as to such breach,
violation or threatened breach or violation, or as to any other breach,
violation or threatened breach or violation.

      

      III.

      Miscellaneous
Provisions

      

      3.1           Binding
Arbitration.  Any controversy between the Company and Employee
involving the construction or application of any of the terms, covenants or
conditions of this Agreement shall, on the written request of one party served
on the other, be submitted to arbitration. Such arbitration shall comply with
and be governed by the provisions of the Texas General Arbitration Act, Sections
171.001 through 171.098 of the Texas Civil Practice and Remedies Code. The
Company and Employee shall each appoint one person as an arbitrator to hear and
determine the dispute, and if they shall be unable to agree, then the two
arbitrators so chosen shall select a third impartial arbitrator whose decision
shall be final and conclusive upon the Company and Employee. The expense of
arbitration proceedings conducted under this Section 3.1 shall be borne by the
parties in such proportions as the arbitrators decide.  This provision
shall not prohibit the Company from seeking any injunctive relief from a court
at any time.

      

      3.2           Notices. 
Whenever, in connection with this Agreement, any notice is required to be
given or any other act or event is to be done or occur on or by a particular
number of days, and the date thus particularized should be a Saturday, Sunday,
or holiday in the City of San Antonio, Texas, that date shall be postponed to
the next day that is not a Saturday, Sunday, or holiday in the City of San
Antonio, Texas.  If a notice or other document is required to be given
hereunder to the Company or Employee, that notice or other document shall be
personally delivered, sent by a nationally recognized overnight courier or be
mailed to the party entitled to receive the same by registered or certified
mail, return receipt requested, at the appropriate address set forth below or at
such other address as such party shall designate in a written notice given in
accordance with this Section:

       

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 4

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  Company:

                	
                  Employee:

                
	 
      	 
      
	
                  Argyle
      Security, Inc.

                	
                  Mr.
      Matthew A. Kepke

                
	
                  Attn:  Donald
      F. Neville, CFO

                	
                  68
      Soundview Drive

                
	
                  12903
      Delivery Drive

                	
                  Port
      Washington, NY 11050

                
	
                  San
      Antonio, Texas 78247

                	 
      

        

      

      

      Notice
shall be deemed given on the date of actual delivery if delivered in person or
by nationally recognized overnight courier, or, if mailed, then on the date
noted on the return receipt.

      

      3.3             Binding
Effect.  The rights and obligations of the parties shall inure
to the benefit of and shall be binding upon their respective heirs,
representatives, successors and assigns, as the case may be.

      

      3.4           Severability.  If
any provision contained in this Agreement is determined to be void, illegal or
unenforceable, in whole or in part, then the other provisions contained herein
shall remain  in full force and effect as if the provision that was
determined to be void, illegal or unenforceable had not been contained
herein.

      

      3.5           Waiver,
Modification and Integration.  The waiver by any party hereto of
a breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by any party.  This instrument
contains the entire agreement of the parties concerning the subject matter
hereof and supersedes all prior or contemporaneous representations,
understandings and agreements, either oral or in writing, between the parties
hereto with respect to the subject matter hereof and all such prior or
contemporaneous representations, understandings and agreements, both oral and
written, are hereby terminated. This Agreement may be modified, altered or
amended by the Company at any time.

      

      3.6           GOVERNING
LAW.  THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND ACTIONS HEREON SHALL BE
BROUGHT EXCLUSIVELY IN BEXAR COUNTY, TEXAS.

      

      3.7           Counterpart
Execution.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute but one and the
same instrument.

      

      3.8           Captions.  The
captions herein are inserted for convenience only and shall not affect the
construction of this Agreement.

      

      3.9           Assignment. 
In the event of any merger or consolidation of the Company with any other
corporation, partnership, limited liability company or other entity or company,
sale by the Company of a major portion of its assets or of its business and good
will, or any other corporate reorganization involving the Company, this
Agreement may be assigned and transferred to such successor in interest as an
asset of the Company upon such assignee assuming the Company’s obligations under
this Agreement. Upon any such assignment, Employee shall continue to perform his
duties and obligations according to the terms of this Agreement. Employee shall
not have any right to delegate or transfer any duty or obligation to be
performed by her under this Agreement to any third party.

      

      3.10.           Attorneys’ Fees
and Costs.  If any
dispute arising under this Agreement is finally adjudicated by a court of
competent jurisdiction, the party that prevails shall be entitled to recover its
legal fees and costs, including reasonable attorneys’ fees, from the other
party.

      

      3.11.           Gender.  References
in this Agreement to the male gender shall be deemed to include the female and
neuter genders and vice-a-versa, unless otherwise stated or unless the
circumstances eliminate such inclusion.

       

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 5

          
            

          

        

        
          
          

        

      

       

      3.12.           Drafting.  No provision of
this Agreement will be interpreted in favor of, or against, any of the parties
hereto by reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or
thereof.

      

      3.13           Construction and
Interpretation of the Word “or”.  For the purposes of this
Agreement, the word “or” shall be deemed to include both the disjunctive and
conjunctive (i.e. “and/or”) where appropriate and to reflect the manifest intent
of the parties.

      

      3.14           Section
409A. All payments of
"nonqualified deferred compensation" (within the meaning of Section 409A of the
Code) by the Company to the Employee are intended to comply with the
requirements of Section 409A of the Code, and this Agreement shall be
interpreted consistent therewith. Neither the Company or the Employee,
individually or in combination, may accelerate any such deferred payment, except
in compliance with Section 409A of the Code, and no amount shall be paid prior
to the earliest date on which it is permitted to be paid under Section 409A of
the Code.  Notwithstanding anything to the contrary contained in Section
3.5, no amendment may be made to this Agreement if it would cause the Agreement
or any payment hereunder to not be in compliance with the requirements of
Section 409A of the Code.  Unless otherwise expressly provided, any
payment of compensation by the Company to the Employee, whether pursuant to this
Agreement or otherwise, shall be made on or before the fifteenth day of the
third calendar month next following the later of the end of the calendar year or
the end of the Company's fiscal year, in either case in which the Employee's
right to such payment vests (ie, is not subject to a "substantial risk of
forfeiture" for purposes of Section 409A of the Code).

      

      

      

      

      [SIGNATURE
PAGE TO FOLLOW]

      
 

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 6

          
            

          

        

        
          
          

        

      

      

      IN
WITNESS WHEREOF, this Agreement is executed as of the date first set forth
above.

       

      
        
          	 	Company:	 
	 	 	 
	 	ARGYLE
      SECURITY, INC. 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      Ron Chaimovski 	 
	 	 	Name: 
      Ron Chaimovski 	 
	 	 	Title:    Executive
      Chairman 	 
	 	 	 	 

        

      

      

        
          	 	Employee:	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      Matthew A. Kepke 	 
	 	 	MATTHEW
      A. KEPKE 	 
	 	 	 	 

        

      

       

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 7

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
I

      DEFINITIONS
SCHEDULE

      

      

      Change of
Control  means the earliest to occur of the
following:

      

      (i)  the public announcement
by the Company or any person (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company or of any subsidiary of the
Company) (“Person”) that such
Person, who or which, together with all “affiliates” and “associates” (within
the meanings of such terms under Rule 12b-2 of the Exchange Act) of such Person,
shall be the beneficial owner of (fifty percent (50%) or more of the Company’s
voting stock then outstanding;

       

      (ii)  the commencement of,
or after the first public announcement of any Person to commence, a tender or
exchange offer the consummation of which would result in any Person becoming the
beneficial owner of the Company’s voting stock aggregating fifty percent (50%)
or more of the Company’s then outstanding voting stock;

       

      (iii)  the announcement of
any transaction relating to the Company required to be described pursuant to the
requirements of Item 6(e) of Schedule 14A of Regulation 14A of the Securities
and Exchange Commission under the Exchange Act;

       

      (iv)  a proposed change in
the constituency of the Company’s Board of Directors (the “Board”) such that,
during any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the Board cease for any reason to constitute at least
a majority thereof, unless the election or nomination for election by the
shareholders of the Company of each new director was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who were members of
the Board at the beginning of the period;

       

       

      (v)  the Company enters into
an agreement of merger, consolidation, share exchange or similar transaction
with any other corporation other than a transaction which would result in the
Company’s voting stock outstanding immediately prior to the consummation of such
transaction continuing to represent (either by remaining outstanding or by being
converted into voting stock of the surviving entity) at least two-thirds (2/3)
of the combined voting power of the Company’s or such surviving entity’s
outstanding voting stock immediately after such transaction;

       

      (vi)  the Board approves a
plan of liquidation or dissolution of the Company or an agreement for the sale
or disposition by the Company (in one transaction or a series of transactions)
of all or substantially all of the Company’s assets to a person or entity which
is not an affiliate of the Company; or

       

      (vii)  Any other event which
shall be deemed by a majority of the members of the Board to constitute a
“Change of Control.”

       

      Cause means termination of
Employee, upon written notice, limited to one or more of the following
reasons:

      

                      (i)  fraud,
misappropriation or embezzlement by Employee in connection with the Company as
determined by the affirmative vote of at least a majority of the Board
(exclusive of Employee if he sits on the Board), or any other act of personal
dishonesty, fraud or misrepresentation taken by Employee which was intended to
result in substantial gain or personal enrichment for Employee at the expense of
the Company;

      

                      (ii) 
mismanagement or neglect of Employee’s duties as determined by the affirmative
vote of at least a majority of the Board (exclusive of Employee if he sits on
the Board);

      

                      (iii)  willful
and unauthorized disclosure of Confidential Information (as defined in Section
2.1 of this Agreement);

      

                      (iv)  Employee’s
breach of any material term or provision of this Agreement, after written notice
to Employee of the particular details of the breach and the failure of Employee
to cure the breach within thirty (30) days thereafter;

       

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 8

          
            

          

        

        
          
          

        

      

       

                      (v)  failure
or refusal of the Employee to comply with the policies, procedures, standards or
regulations of the Company, as may be in effect from time to time;

       

                      (vi)  Employee’s
conviction of a felony or other crime;

       

                      (vii)  Employee’s
breach or violation of any other Company policy, procedure or agreement after
written notice to Employee of the particular details of the breach and the
failure of Employee to cure such breach within thirty (30) days
thereafter

      

      Good Reason any of the
following which occur without the Employee’s consent, but only to the extent
that (a) the termination of employment occurs within one (1) year following the
initial existence of any of the events  set forth in (i), (ii) or
(iii) below, (b) Employee provides written notice to the Company of the
occurrence of any of the events set forth in (i), (ii), or (iii) below within
ninety (90) days
from the date of its initial existence, and (c) the Company fails to cure the
occurrence within thirty (30) days after receipt of written notice from
Employee:

      

      (i)  reduction of Employee’s
Salary unless such reduction is generally applicable to all senior executives as
determined by the Board;

      

      (ii)  the Employee’s duties
and or responsibilities are materially reduced;

      

      (iii)  relocation of
Employee’s regular work address to a location which requires Employee to travel
more than 50 miles from his residence.

       

       

      
        
          
          

        

        
          Kepke
Severance and Non-Competition Agreement - Page 9Exhibit
10.2

    

    ESCROW
AGREEMENT

    

    ATLAS RESOURCES PUBLIC
#18-2009(B) L.P.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ATLAS
RESOURCES PUBLIC #18-2009(B) L.P.

    

    ESCROW
AGREEMENT

    

    THIS AGREEMENT (the
“Agreement”) is 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(B) L.P., a Delaware limited
partnership (the “Partnership”) and Wells Fargo Bank, N.A., 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 39,148 investor general partner interests and up to 699.5
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 remaining Subscription Proceeds of $398,475,000;
  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.  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 to the Escrow
      Agent.

            

    

     

    Payment
for each subscription for Units shall be in the form of a check or wire made
payable to the Escrow Agent as follows: “Wells Fargo Bank, N.A., Escrow Agent,
Atlas Resources Public #18-2009(B) L.P.,” pending receipt of the Partnership’s
minimum Subscription Proceeds of $2,000,000.  The Escrow Agent shall
hold the Subscription Proceeds in a separate account (the “Escrow
Account”).

     

    
      	
              3.

            	
              Investment of Subscription
      Proceeds; Tax.

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Subscription Proceeds shall be deposited in an interest bearing account
      maintained by the Escrow Agent as directed in writing 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.  In the absence of complete written
      instructions from the Managing General Partner, the Subscription Proceeds
      shall be deposited and invested in the Wells Fargo Money Market Deposit
      Account, which is further described herein on Appendix I.  The
      Managing General Partner confirms that it has read and understands
      Appendix I.  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.  The
      Escrow Agent shall have no responsibility or liability for any loss which
      may result from any investment or sale of investment made pursuant to
      this Agreement.  The parties hereto acknowledge that the
      Escrow Agent is not providing investment supervision, recommendations, or
      advice.

            

    

    

      Escrow
Agreement

       

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              For
      tax reporting purposes, all interest or other taxable income earned on the
      Investor Funds in any tax year shall be taxable to the
      Partnership.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Upon
      or before the execution of this Agreement, the parties hereto shall
      provide the Escrow Agent with certified tax identification numbers by
      furnishing appropriate IRS forms W-9 or W-8 and other forms and documents
      that the Escrow Agent may reasonably request.  The parties
      hereto understand that if such tax reporting documentation is not so
      certified to the Escrow Agent, the Escrow Agent may be required by the
      Internal Revenue Code of 1986, as amended, to withhold a portion of any
      interest or other income earned on the Subscription Proceeds pursuant to
      this Agreement.  The Managing General Partner shall also provide
      tax reporting documentation for the subscribers as the Escrow Agent may
      reasonably request, should the Escrow Agent be required to disburse
      Subscription Proceeds or income on Subscription Proceeds back to the
      subscribers.

            

    

     

    
      	
              4.

            	
              Distribution of Subscription
      Proceeds.

            

    

     

    
      	
               
      

            	
              (a)

            	
              If
      the Escrow Agent:

            

    

     

    
      	
               
      

            	
              (i)

            	
              receives
      proper written notice from an authorized officer of the Managing General
      Partner that at least the minimum Subscription Proceeds of $2,000,000 have
      been received, deposited with the Escrow Agent and accepted by the
      Managing General Partner; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              determines
      that Subscription Proceeds for at least $2,000,000 are Distributable
      Subscription Proceeds (as defined
below);

            

    

     

    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.  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 at the time that enough time has passed to permit
payments to have returned unpaid by the bank on which the check was
drawn.

     

    
      	
               
      

            	
              (b)

            	
              Following
      the distribution under Section 4(a), 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
      released and distributed to the Managing General Partner by the Escrow
      Agent promptly after the Subscription Proceeds become Distributable
      Subscription Proceeds after a 1 business day period from the date of
      deposit.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Escrow
      Agent shall have no duty to make any disbursement, investment or other use
      of Subscription Proceeds until and unless it has good and collected funds.
      In the event that any checks deposited in the Escrow Account are returned
      or prove uncollectible after the funds represented thereby have been
      released by the Escrow Agent, then the Managing General Partner shall
      promptly reimburse the Escrow Agent for any and all costs incurred for
      such, upon request, and the Escrow Agent shall deliver the returned checks
      directly to the Investor.  The Escrow Agent shall be under no
      duty or responsibility to enforce collection of any check delivered to it
      hereunder.

            

    

     

    Escrow Agreement

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
              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 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.

            	
              Subscriptions of Pennsylvania Investors.
      Notwithstanding any other provision of this Agreement to the
      contrary:

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Escrow Agent shall deposit Subscription Proceeds from Pennsylvania
      Investors into a separate fund (“Pennsylvania Escrow Fund”) within the
      Escrow Account to be held in escrow pursuant to this Agreement for up to
      120 calendar days after the Subscription Proceeds of the first
      Pennsylvania Investor are received by the Escrow Agent.  The
      Pennsylvania Escrow Fund shall be automatically renewed for additional 120
      calendar day periods during the term of this Agreement. Funds shall be
      promptly released from the Pennsylvania Escrow Fund and distributed to the
      Managing General Partner in the same manner as described in Paragraph 4
      with respect to the Escrow Fund when Escrow Agent receives a Distribution
      of Subscription Proceeds Notice from an authorized officer of the Managing
      General Partner that   the total of all Subscription
      Proceeds received and accepted by the Managing General Partner, including
      Subscription Proceeds from Pennsylvania Investors and all other
      Subscription Proceeds (including the minimum Subscription Proceeds of
      $2,000,000), total $19,923,750 or more, and directing the Escrow Agent to
      make such distributions to the Managing General
  Partner.

            

    

     

    The
parties agree that the Dealer-Manager and the Managing General Partner will
specifically identify subscriptions of Pennsylvania Investors to the Escrow
Agent by written notice(s) which shall be provided to Escrow Agent so that such
notice is received by Escrow Agent prior to submission to Escrow Agent of
Pennsylvania Subscription Proceeds by way of either wire transfer or
check.  Upon receipt of each such written notice, the Escrow Agent
will not commingle those subscriptions with subscriptions of residents of other
states but rather will hold such Pennsylvania Subscription Proceeds in the
Pennsylvania Escrow Fund in the Escrow Account.  Any interest and
investment income earned on such Pennsylvania Subscription Proceeds shall also
be held in the Pennsylvania Escrow Fund.

     

    
      	
               
      

            	
              (b)

            	
              If
      total Subscription Proceeds, including Subscription Proceeds received from
      Pennsylvania Investors, of at least $19,923,750 have not been received and
      accepted by the Managing General Partner at the end of the first 120 day
      escrow period, the Partnership must notify the Pennsylvania Investors in
      writing by certified mail or any other means whereby a receipt of delivery
      is obtained within ten (10) calendar days after the end of the escrow
      period that they have a right to have their Subscription Proceeds returned
      to them, together with any interest earned thereon and without deduction
      for any fees.  If a Pennsylvania Investor requests the return of
      the Investor’s Subscription Proceeds within ten (10) calendar days after
      receipt of notification, the Managing General Partner must return the
      Pennsylvania Investor’s Subscription Proceeds within 15 days after the
      Managing General Partner’s receipt of the Pennsylvania Investor’s request,
      and the Managing General Partner will promptly direct the Escrow Agent in
      a signed writing to return the Pennsylvania Investor’s Subscription
      Proceeds, plus any interest paid and investment income earned on the
      Pennsylvania Investor’s Subscription Proceeds while held by the Escrow
      Agent in the Pennsylvania Escrow Fund, directly to the Pennsylvania
      Investor.  Upon receipt of such signed, written direction from
      the Managing General Partner, the Escrow Agent shall disburse such amount
      to the Investor within three (3) Business Days after the Escrow Agent’s
      receipt of such Managing General Partner’s written
      direction.  If the Pennsylvania Investor does not timely request
      the return of the Investor’s Subscription Proceeds, then the Investor’s
      Subscription Proceeds will continue to be held in the Pennsylvania Escrow
      Fund within the Escrow Account for another 120 day period, as described in
      6(a), under the terms and conditions of this Agreement and this Paragraph
      6 shall again apply to the Pennsylvania Investor’s Subscription
      Proceeds.

            

    

     

    Escrow Agreement

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
              7.

            	
              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 that the minimum Subscription Proceeds of $2,000,000 has not
      been met, and the Escrow Agent promptly shall distribute to each Investor,
      for which Escrow Agent has a copy of the 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 the Escrow Agent
      in writing of the rejection, and the Escrow Agent shall promptly
      distribute to the 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.

            

    

     

    
      	
              8.

            	
              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 II 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 $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.

            

    

     

    
      	
              9.

            	
              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.  Upon or before the execution of
      this Agreement, the Managing General Partner shall deliver to the Escrow
      Agent an authorized signers list in the form of Appendix III to this
      Agreement.

            

    

     

    
      	
              10.

            	
              Limitation on Liability of Escrow
      Agent.

            

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Escrow Agent shall not be liable for any action taken or omitted by it
      except to the extent that a court of competent jurisdiction determines
      that the Escrow Agent’s gross negligence or willful misconduct was the
      primary cause of loss.

            

    

     

    
      	
            	
              (b)

            	
              IN
      NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY
      SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND
      WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST PROFITS), EVEN IF THE ESCROW
      AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND
      REGARDLESS OF THE FORM OF ACTION.

            

    

     

    Escrow Agreement

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      
      

    

     

    
      	
               
      

            	
              (c)

            	
              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
      accordance with this Agreement.  The Escrow Agent is acting
      solely as escrow agent hereunder and owes no duties, covenants or
      obligations, fiduciary or otherwise, to any person by reason of this
      Escrow Agreement, except as otherwise explicitly set forth in this
      Agreement, and no implied duties, covenants or obligations, fiduciary or
      otherwise, shall be read into this Agreement against the Escrow
      Agent.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Managing
      General Partner, Dealer-Manager and Partnership will jointly and severally
      indemnify the Escrow Agent, defend and 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 provisions of
      this paragraph shall survive the assignment or termination of this
      Agreement and the resignation or removal of the Escrow
    Agent.

            

    

     

    
      	
               
      

            	
              (e)

            	
              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.

            

    

     

    
      	
               
      

            	
              (f)

            	
              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, until the Escrow Agent (i) receives a final non-appealable
      order of a court of competent jurisdiction or a final non-appealable
      arbitration decision directing delivery of the Subscription Proceeds, (ii)
      receives a written agreement executed by each of the parties involved in
      such disagreement or dispute directing delivery of the Subscription
      Proceeds, in which event the Escrow Agent shall be authorized to disburse
      the Subscription Proceeds in accordance with such final court order,
      arbitration decision, or agreement, or (iii) files an interpleader action
      in any court of competent jurisdiction, and upon the filing thereof, the
      Escrow Agent shall be relieved of all liability as to the Subscription
      Proceeds and shall be entitled to recover attorneys’ fees, expenses and
      other costs incurred in commencing and maintaining any such interpleader
      action.  The Escrow Agent shall be entitled to act on any such
      agreement, court order, or arbitration decision without further question,
      inquiry, or consent.

            

    

     

    
      	
               
      

            	
              (g)

            	
              No
      provision of this Agreement shall require the Escrow Agent to risk or
      advance its own funds or otherwise incur any financial liability or
      potential financial liability in the performance of its duties or the
      exercise of its rights hereunder.

            

    

     

    
      	
               
      

            	
              (h)

            	
              The
      parties agree that the Escrow Agent had no role in the preparation of the
      Subscription Agreement, has not reviewed the Subscription Agreement, and
      makes no representations or warranties with respect to the information
      contained therein or omitted therefrom. The Escrow Agent has not reviewed
      or approved any agreement or matter of background related to this
      Agreement, other than this Agreement
itself.

            

    

     

    Escrow Agreement

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      
      

    

     

    
      	
              11.

            	
              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 joint 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.

     

    
      	
              12.

            	
              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.

            

    

     

    
      	
              13.

            	
              Notice.  Any
      notices or instructions 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 written confirmation of receipt (originals
      to be followed in the mail), or by a nationally recognized overnight
      courier, as follows:

            

    

     

    If to the
Escrow Agent:

     

    Wells
Fargo Bank, N.A.

    Four
Gateway Center, Suite 1400

    Pittsburgh,
Pennsylvania 15222

     

    Attention:  Denise
Fuhrer

     

    Phone:
(412) 454-4612

    Facsimile:
(412) 454-4610

     

    
      If to the
Managing General Partner:

       

      Atlas
Resources, LLC

      Westpointe
Corporate Center One

      1550
Coraopolis Heights Road, 2nd
Floor

      P.O. Box
611

      Moon
Township, Pennsylvania 15108

       

      Attention:  Karen
A. Black

       

      Phone:
(412) 262-2830

      Facsimile:
(412) 262-7430

    

     

    Escrow Agreement

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    If to
Anthem:

     

    Anthem
Securities, Inc.

    Westpointe
Corporate Center One

    1550
Coraopolis Heights Road, 2nd
Floor

    P.O. Box
926

    Moon
Township, Pennsylvania 15108

     

    Attention:  Justin
T. Atkinson

     

    Phone:
(412) 262-1680

    Facsimile:
(412) 262-7430

     

    Any party
may designate any other address to which notices and instructions shall be sent
by notice to all other parties hereto duly given in accordance with this
Agreement.

     

    14.           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 counterparts, each of which shall be deemed
      an original, but all of which shall constitute the same
      instrument.

            

    

     

    
      	
              15.

            	
              Acknowledgements.  The
      parties hereto acknowledge Escrow Agent has not reviewed and is not making
      any recommendations with respect to the Units offered.  During
      the term of this Agreement, the Subscription Proceeds 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.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          WELLS FARGO BANK, N.A.

                                        
	
                                          As
      Escrow Agent

                                        
	 
      
	
                                          By:

                                        	 
      
	 
      	
                                          Denise
      Fuhrer, Vice President

                                        
	 
      	 
      
	
                                          ATLAS
      RESOURCES, LLC

                                        
	
                                          A
      Pennsylvania limited liability company

                                        
	 
      	 
      
	
                                          By:

                                        	 
      
	 
      	
                                          Karen
      A. Black, Vice President – Partnership
  Administration

                                        

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Escrow Agreement

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                ANTHEM
      SECURITIES, INC.

                                              
	
                                                A
      Pennsylvania corporation

                                              
	 
      	 
      
	
                                                By:

                                              	 
      
	 
      	
                                                Justin
      T. Atkinson, President

                                              
	 
      	 
      
	
                                                ATLAS
      RESOURCES PUBLIC #18-2009(B) L.P.

                                              
	 
      	 
      
	
                                                By:

                                              	
                                                ATLAS
      RESOURCES, LLC

                                              
	 
      	
                                                Managing
      General Partner

                                              
	 
      	 
      
	
                                                By:

                                              	 
      
	 
      	
                                                Karen
      A. Black, Vice President – Partnership
  Administration

                                              

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Escrow Agreement

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    APPENDIX
I TO ESCROW AGREEMENT

    

    Agency
and Custody Account Direction

    For
Cash Balances

    Wells
Fargo Money Market Deposit Accounts

    

    Direction
to use the following Wells Fargo Money Market Deposit Accounts for Cash Balances
for the escrow account or accounts (the “Account”) established under the Escrow
Agreement to which this Appendix I is attached.

    

    You are
hereby directed to deposit, as indicated below, or as I shall direct further in
writing from time to time, all cash in the Account(s) in the following money
market deposit account of Wells Fargo Bank, National Association
(Bank):

    

    Wells
Fargo Money Market Deposit Account (MMDA)

    

    I
understand that amounts on deposit in the MMDA are insured, subject to the
applicable rules and regulations of the Federal Deposit Insurance Corporation
(FDIC), in the basic FDIC insurance up to a total of
$250,000.   I understand that deposits in the MMDA are not
secured.

    

    I
acknowledge that I have full power to direct investments of the
Account(s).

    

    I
understand that I may change this direction at any time and that it shall
continue in effect until revoked or modified by me by written notice to
you.

     

    Escrow Agreement

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    APPENDIX
II 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                                                    
        $

    (or any portion thereof)

    

    II.           Remittance
of checks returned to subscribers

    (set out in section 6 of the governing
agreement)

    

    III.           Wire
transfers                                                                                                    
              
n/a 

     

    IV.           Purchase
or Sale of Securities

    

    V.           
Investments (document limits investment to a checking or savings account, or
certificates of deposit) such products offered by any Wells Fargo Bank, N.A.
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

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    APPENDIX
III TO ESCROW AGREEMENT

    

    CERTIFICATE
AS TO AUTHORIZED SIGNATURES

     

    The
specimen signatures shown below are the specimen signatures of the individuals
who have been designated as authorized representatives of Atlas Resources, LLC
and are authorized to initiate and approve transactions of all types for the
escrow account or accounts established under the Escrow Agreement to which this
Appendix III is attached, on behalf of Managing General Partner.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                Name
      / Title

                                              	 
      	
                                                Specimen
      Signature

                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                Name

                                              	 
      	
                                                Signature

                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                Title

                                              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                Name

                                              	 
      	
                                                Signature

                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                Title

                                              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                Name

                                              	 
      	
                                                Signature

                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                Title

                                              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                Name

                                              	 
      	
                                                Signature

                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                Title

                                              	 
      	 
      

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
Escrow Agreement

    
      
         

      

      
        12

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