Master Separation And Distribution Agreement

MASTER SEPARATION AND DISTRIBUTION AGREEMENT


MASTER SEPARATION AND DISTRIBUTION AGREEMENT (this "Agreement") dated as of ______, 2004 by and between Resource America, Inc., a Delaware corporation ("RAI") and Atlas America, Inc., a Delaware corporation and an indirect, wholly owned subsidiary of RAI ("Atlas").


RECITALS


WHEREAS, RAI owns, directly or indirectly, all of the issued and outstanding common stock, par value $0.01 per share, of the Company;


WHEREAS, RAI presently intends to spin-off in one or more transactions that collectively have the effect that all or a substantial part of the shares of RAI Common Stock are distributed to all or some of the stockholders of RAI in a tax-free transaction (the "Spin-Off");


WHEREAS, prior to the Spin-Off, the Company proposes to issue shares of its common stock in an initial public offering (the "IPO") registered under the Securities Act of 1933, as amended; and


WHEREAS, the parties intend in this Agreement, including the Exhibits attached hereto, to set forth the principal arrangements between them regarding the IPO and Spin-Off.


NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, meaning and intending to be bound hereby, agree as follows:


ARTICLE I
DEFINITIONS


Section 1.01 Definitions. As used in this Agreement, the following terms will have the following meanings:


"Affiliates" means, with respect to any specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with such specified Person; provided, however, that prior to the Spin-Off, Affiliates of Atlas or RAI shall only include Persons who would be affiliates of Atlas or RAI, respectively, assuming that the Spin-Off had occurred immediately prior to the determination as to whether such Person was an affiliate of Atlas or RAI, respectively.


"Ancillary Agreements" means the Registration Rights Agreement, Transition Services Agreement and the Tax Matters Agreement.


"Atlas Business" has the meaning ascribed thereto in Section 6.01(a)(i).


"Atlas Common Stock" means the common stock, par value $0.01 per share of Atlas, any other class of Atlas's capital stock representing the right to vote generally for the election of directors and, for so long as Atlas continues to be a subsidiary corporation includible in a consolidated federal income tax return of RAI, any other security of Atlas treated as stock for purposes of Section 1504 of the Code.


"Atlas Public Filings" has the meaning ascribed thereto in Section 5.01(vi).


"Atlas Transfer Agent" means the company designated by Atlas as the transfer agent and registrar for the Atlas Common Stock.


"Code" means the Internal Revenue Code of 1986, as amended from time to time, together with the rules and regulations promulgated thereunder.


"Confidential Information" means, with respect to any party hereto, (i) any Information concerning such party, its business or any of its Affiliates that was obtained by another party hereto, (ii) any Information concerning such party that is obtained by another party under Section 4.03, or (iii) any other Information obtained by, or furnished to, another party hereto.


"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, together with the rules and regulations promulgated thereunder.


"Indemnified Party" means any Person who is entitled to receive payment or defense from an Indemnifying Party pursuant to this Agreement.


"Indemnifying Party" means any party who is required to pay or defend any other Person pursuant to this Agreement.


"Information" means all records, books, contracts, instruments, computer data and other data.


"IPO Effective Date" means the date on which the IPO Registration Statement is declared effective


by the SEC.
"IPO Registration Statement" means the Registration Statement on Form S-1, Registration No. 333-112653, of Atlas, including all exhibits thereto and as supplemented and amended from time to time.


"Losses" has the meaning ascribed thereto in Section 6.01(a).


"Owning Party" has the meaning ascribed thereto in Section 4.02.


"Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture association, joint stock company, trust unincorporated organization or government or any agency or political subdivision thereof.


"Prior Relationship" means the ownership relationship between RAI and Atlas at any time prior to the Spin-Off Date.


"Public Filings" has the meaning ascribed thereto in Section 5.01(vi).


"RAI Business" means any assets, business or operations of RAI or any of its Affiliates other than the Atlas Business. "RAI Public Filings" has the meaning ascribed thereto in Section 5.01(vi).


"RAI Transfer Agent" means the company designated by RAI as the transfer agent and registrar for RAI's common stock.


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"Registration Rights Agreement" means the Registration Rights Agreement to be entered into on or before the IPO Effective Date between RAI and Atlas, in substantially the form attached hereto as Exhibit A.


"Related Parties" has the meaning ascribed thereto in Section 4.03.


"Representatives" means directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.


"Requestor" has the meaning ascribed thereto in Section 4.03.


"Retention Period" has the meaning ascribed thereto in Section 4.04.


"SEC" means the Securities and Exchange Commission.


"Securities Act" means the Securities Act of 1933, as amended from time to time, together with the rules and regulations promulgated thereunder.


"Spin-Off Date" is the date upon which the Spin-Off is consummated.


"Subsidiary" means, with respect to any Person, any other Person a majority of the equity ownership or voting stock of which is at the time owned, directly or indirectly, by such Person and/or one or more other Subsidiaries of such Person; provided, however, that prior to the Spin-Off, a Subsidiary of RAI shall only include Persons who would be a Subsidiary of RAI assuming the Spin-Off has occurred immediately prior to the determination as to whether such Person were a Subsidiary of RAI.


"Tax Matters Agreement" means the Tax Matters Agreement to be entered into on or before the IPO Effective Date between RAI and Atlas, in substantially the form as attached hereto as Exhibit B.


"Third Party Claim" has the meaning ascribed thereto in Section 6.07(b).


"Transition Services Agreement" means the Transition Services Agreement to be entered into on or before the IPO Effective Date between RAI and Atlas, in substantially the form attached hereto as Exhibit C.


ARTICLE II
THE IPO AND THE SPIN-OFF


Section 2.01. The IPO and Other Primary Offerings. Until the Spin-Off Date, Atlas shall consult with, and cooperate in all respects with, RAI in connection with any primary offering of the Atlas Common Stock or any other securities of Atlas and shall, at RAI's direction, promptly take any and all actions necessary or desirable to consummate such transactions.


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Section 2.02. The Spin-Off. RAI shall, in its sole and absolute discretion, determine whether to proceed with all or part of the Spin-Off and all terms of the Spin-Off, including, without limitation, the form, structure and terms of any transaction(s) and/or offering(s) to effect the Spin-Off and the timing of and conditions to the consummation of the Spin-Off. Atlas shall cooperate with RAI in all commercially reasonable respects to accomplish the Spin-Off and shall, at RAI's direction, promptly take any and all actions necessary or desirable to effect the Spin-Off, including, without limitation, the registration under the Securities Act of Atlas Common Stock on an appropriate registration form or forms to be designated by RAI. RAI shall select any investment banker(s) and manager(s) in connection with the Spin-Off, as well as any other institutions providing services in connection with the Spin-Off.


Section 2.03. Certain Stockholder Matters. From and after the distribution of Atlas Common Stock in connection with any transaction(s) included as part of the Spin-Off and until such Atlas Common Stock is duly transferred in accordance with applicable law, Atlas shall regard the Persons receiving Atlas Common Stock in such transaction(s) as record holders of Atlas Common Stock in accordance with the terms of such transaction(s) without requiring any action on the part of such Persons. Atlas agrees that, subject to any transfers of such stock, (a) each such holder shall be entitled to receive all dividends payable on, and exercise voting rights and all other rights and privileges with respect to, the shares of Atlas Common Stock then held by such holder and (b) each such holder shall be entitled, without any action on the part of such holder, to receive one or more certificates representing, or other evidence of ownership of, the shares of Atlas Common Stock then held by such holder. RAI shall cooperate, and shall instruct the RAI Transfer Agent to cooperate, with Atlas and the Atlas Transfer Agent, and Atlas shall cooperate, and shall instruct the Atlas Transfer Agent to cooperate, with RAI and the RAI Transfer Agent, in connection with all aspects of the Spin-Off and all other matters relating to the issuance and delivery of certificates representing, or other evidence of ownership of, the shares of Atlas Common Stock distributed to the holders of RAI Common Stock in connection with any transaction(s) included as part of the Spin-Off. Following the Spin-Off, RAI shall promptly, but in no event no later than two business days thereafter, instruct the RAI Transfer Agent to deliver to the Atlas Transfer Agent true, correct and complete copies of the stock and transfer records reflecting the holders of RAI Common Stock receiving shares of Atlas Common Stock in connection with any transaction(s) included as part of the Spin-Off.


2.04 The Special Dividend. Immediately before the initial sale of Atlas Common Stock in the IPO, Atlas shall declare a special dividend to the then sole stockholder of Atlas in an amount equal to the net proceeds of the IPO less intercompany debt owed to RAI or its Affiliates plus the net proceeds of the exercise of the underwriters' overallotment option.


ARTICLE III
EXPENSES


Section 3.01. Except as otherwise provided in this Agreement, the Ancillary Agreements or any other agreement between the parties relating to the IPO or the Spin-Off, all costs and expenses of either party hereto in connection with the IPO and the Spin-Off shall be paid by the party that incurs such costs and expenses.


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ARTICLE IV
ACCESS TO INFORMATION


Section 4.01. Restrictions on Disclosure of Information. (a) Without limiting any rights or obligations under any other agreement between or among the parties hereto and/or any of their respective Affiliates relating to confidentiality, for a period of 3 years following the date hereof, each of the parties hereto agrees that it shall not, and shall not permit any of its Affiliates or Representatives to, disclose any Confidential Information to any Person, other than to such Affiliates or Representatives on a need-to-know basis in connection with the purpose for which the Confidential Information was originally disclosed. Such Information shall no longer be deemed Confidential Information to the extent that it is or was (i) in the public domain other than by the breach of this Agreement or by breach of any other agreement between or among the parties hereto and/or any of their respective Affiliates, (ii) available to such party outside the context of the Prior Relationship on a nonconfidential basis prior to its disclosure by the other party, (iii) lawfully acquired outside the context of the Prior Relationship on a nonconfidential basis or independently developed by, or on behalf of, such party by Persons who do not have access to, or descriptions of, any such Confidential Information, (iv) required to be disclosed by law, governmental order or the rules and regulations of the SEC, or (v) mutually agreed to by the parties.


(b) Each of the parties hereto shall maintain, and shall cause its respective Affiliates to maintain, policies and procedures, and develop such further policies and procedures as shall from time to time become necessary or appropriate, to ensure compliance with this Section 4.01.


Section 4.02. Legally Required Disclosure of Confidential Information. If any of the parties to this Agreement or any of their respective Affiliates or Representatives become legally required to disclose any Confidential Information, such disclosing party shall promptly notify the party owning the Confidential Information (the "Owning Party") and shall use all commercially reasonable efforts to cooperate with the Owning Party so that the Owning Party may seek a protective order or other appropriate remedy and/or waive compliance with this Section 4.02. All expenses reasonably incurred in seeking a protective order or other remedy shall be borne by the Owning Party. If such protective order or other remedy is not obtained, or if the Owning Party waives compliance with this Section 4.02, the disclosing party or its Affiliate or Representative, as applicable, shall (a) disclose only that portion of the Confidential Information it is compelled by law to disclose, (b) use all commercially reasonable efforts to obtain reliable assurance requested by the Owning Party that confidential treatment will be accorded such Confidential Information, and (c) promptly provide the Owning Party with a copy of the Confidential Information so disclosed, in the same form and format so disclosed, together with a description of all Persons to whom such Confidential Information was disclosed.


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Section 4.03. Access to Information. (a) During the Retention Period, each of the parties hereto shall cooperate with and afford, and shall cause their respective Affiliates, Representatives, Subsidiaries, successors and/or assignees, and shall use reasonable efforts to cause joint ventures that are not Affiliates (collectively, "Related Parties") to cooperate with, and afford to the other party, reasonable access upon reasonable advance written request to all Information (other than Information created after the Spin-Off Date (i) the disclosure of which would have the effect of waiving a legal privilege, or (ii) which is the subject of a confidentiality agreement between such party and a third party which prohibits disclosure to the other party, provided that such party shall use all commercially reasonable efforts to obtain such third party's consent to disclosure of such Information) within such party's or any Related Party's possession. Access to the requested Information shall be provided so long as it relates to the requesting party's (the "Requestor") assets, business and operations, and access is reasonably required by the Requestor as a result of the parties' Prior Relationship for purposes of auditing, accounting, claims or litigation (except for claims or litigation between the parties hereto), employee benefits, regulatory or tax purposes or fulfilling disclosure or reporting obligations including, without limitation, Information reasonably necessary for the preparation of reports required by or filed under the Securities Act or the Exchange Act with respect to any period entirely or partially prior to the Spin-Off Date or any other reasonable purpose.


(b) Each party agrees to cooperate fully to allow access to each other's employees (i) to the extent that they are reasonably necessary to discuss and explain all requested Information with and to the requesting party and (ii) with respect to any claims brought against the other involving the conduct of the Atlas Business prior to the Spin-Off Date.


Section 4.04. Record Retention. RAI and Atlas shall preserve and keep all of their respective books and records in the possession of such party or its Related Parties, whether in electronic form or otherwise, for no less than the later of (i) the re ...