Guaranty, Subordination And Cash Collateral Agreement

Exhibit 10.4

Execution

Exhibit H

GUARANTY, SUBORDINATION AND CASH COLLATERAL AGREEMENT

THIS CONTINUING GUARANTY, SUBORDINATION AND CASH COLLATERAL AGREEMENT (this " Agreement" ), dated as of June 1, 2009, is made by ATLAS AMERICA, INC., a Delaware corporation (the " Guarantor" ), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent for the Senior Creditors (the " Administrative Agent" ).

W I T N E S S E T H :

WHEREAS, the Senior Creditors have extended credit to Atlas Pipeline Holdings, L.P., a Delaware limited partnership (the " Borrower" ), pursuant to that certain Revolving Credit Agreement dated as of July 26, 2006, by and among the Borrower, Atlas Pipeline Partners GP, LLC, a Delaware limited liability company, as a guarantor, the financial institutions party thereto from time to time as Senior Creditors, and Wachovia Bank, National Association, in its capacity as the issuer of certain letters of credit and as the Administrative Agent for the Senior Creditors thereunder, and amended by that certain First Amendment to Revolving Credit Agreement (the " First Amendment" ) dated of even date herewith (such Revolving Credit Agreement, as amended by the First Amendment, together with the exhibits and schedules thereto and all extensions, renewals, amendments, substitutions and replacements thereto and thereof, is herein referred to as the " Credit Agreement" );

WHEREAS, the Guarantor owns, directly or indirectly (i) all of the issued and outstanding limited liability company interests of Atlas Pipeline Holdings GP, LLC, a Delaware limited liability company, the general partner of the Borrower, and (ii) approximately 64.4% of the issued and outstanding limited partnership units of the Borrower; WHEREAS, as a condition precedent to maintaining credit to the Borrower pursuant to the Credit Agreement and to the effectiveness of the amendments to the Credit Agreement set forth in the First Amendment, the Senior Creditors have required that the Guarantor execute and deliver to the Administrative Agent, for and on behalf of the Senior Creditors, this Agreement; WHEREAS, in consideration for the execution of this Agreement, the Borrower will issue to the Guarantor a promissory note in the form attached as Exhibit A (the " Guarantee Note" );

WHEREAS, the Guarantor has determined that the execution and delivery of this Agreement is in furtherance of its organizational purposes and in its best interest and that it will derive substantial benefit, whether directly or indirectly, from the execution of this Agreement, having regard for all relevant facts and circumstances; and

WHEREAS, the Guarantor has agreed to execute and deliver this Agreement to the Administrative Agent, for the benefit of the Senior Creditors.

NOW THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, and in order to fulfill the requirements of the First Amendment, the Guarantor agrees, for the benefit of each Senior Creditor, as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 Certain Terms . The following capitalized terms when used in this Agreement, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):

" Administrative Agent" is defined in the preamble.

" Agreement" is defined in the preamble.

" Borrower" is defined in the first recital.

" Cash Requirement" means, on any day, 102% of the unpaid principal balance of the Loans on such day.

" Collateral" is defined in Section 5.1 . " Credit Agreement" is defined in the first recital. " Guarantee Note" is defined in the fourth recital.

" Guaranteed Obligations" is defined in Section 2.1 .

" Guarantor" is defined in the preamble.

" Guarantor Material Adverse Effect" shall mean any material and adverse effect on (i) the assets, liabilities, financial condition, business, operations or affairs of the Guarantor and its consolidated Subsidiaries, taken as a whole, or (ii) the ability of the Guarantor and its consolidated Subsidiaries, taken as a whole, to carry out their business, or (iii) the ability of the Guarantor to meet its obligations under this Agreement on a timely basis, or (iv) the Administrative Agent' s or the Senior Creditors' ability to enforce their rights and remedies under this Agreement, at law or in equity.

" Insolvency Proceeding" means, with respect to any Person, any voluntary or involuntary liquidation, dissolution, receivership, conservatorship, assignment for the benefit of creditors, bankruptcy, reorganization, arrangement or composition of such Person (whether or not pursuant to bankruptcy, insolvency or other similar laws) and any other proceeding under laws for the protection of debtors involving such Person as a debtor. Unless otherwise specified, " Insolvency Proceeding" means an insolvency proceeding of the Borrower or any Obligor.

" PIK Interest" means the accrual and capitalization of unpaid interest or payment in kind with an additional Subordinated Note.

" Requirements Account" is defined in Section 4.4 .

" Senior Creditors" means the Administrative Agent, the Lenders, the Issuing Bank and any other Person to whom Indebtedness is owing.


Page 2

" Subordinated Notes" means (a) the note of even date herewith made by Borrower payable to Guarantor in the original principal amount of $15,000,000, (b) the Guarantee Note and (c) any PIK Interest paid with respect to the notes in clauses (a) and (b). " Subordinated Obligations" means all indebtedness, obligations or liabilities owed by any Borrower or any Obligor to the Guarantor from time to time, including without limitation all indebtedness, obligations or liabilities evidenced by the Subordinated Notes and including all principal, interest (including any interest accruing after the commencement of any Insolvency Proceeding), fees, expense reimbursement, indemnities or after amounts of any type.

" Taxes" is defined in clause (1) of Section 2.8 .

" Termination Date" means the 91st day following (or, if, for not less than 91 consecutive days prior to the date on which all Indebtedness has been paid in cash and satisfied in full, the Indebtedness shall have been fully secured by Collateral having on each such day a market value in excess of the Indebtedness outstanding on such day, then the first day following) the earliest date after the date hereof on which all Indebtedness has been paid in cash and satisfied in full and Senior Creditors do not have any outstanding commitment (whether or not conditioned on the satisfaction of any condition precedent) under the Loan Documents to lend money or otherwise extend credit to Borrower or any Obligor; provided, however, that this Agreement shall continue to be effective or be reinstated, as though such payment had not been made, if at any time any payment of any of the Indebtedness is rescinded or must otherwise be returned by Senior Creditors in connection with an Insolvency Proceeding involving Borrower or any Obligor. " Triggering Event" is defined in Section 4.4 . " UCC" means the Uniform Commercial Code applicable to the creation of the security interest provided herein, except to the extent that the Uniform Commercial Code of another jurisdiction is applicable to the perfection and effected perfection thereof.

SECTION 1.2 Credit Agreement Definitions . Unless otherwise defined herein or the context otherwise requires, capitalized terms used in this Agreement, including its preamble and recitals, have the meanings provided in the Credit Agreement.

ARTICLE II

GUARANTY; WAIVERS

SECTION 2.1 Agreement . The Guarantor hereby absolutely, unconditionally, and irrevocably (1) guarantees the full and punctual payment when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all Indebtedness (including all indebtedness, obligations and liabilities of the Borrower or any other Obligor now or hereafter existing under the Credit Agreement, the Notes or each other Loan Document to which the Borrower or such other Obligor is or may become a party), whether for principal, interest, fees, expenses or otherwise (including all such amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. a7362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. a7502(b) and a7506(b)) (" Guaranteed Obligations" ); provided, however , that in no event shall the Guaranteed Obligations (a) include any additional Loans funded under the Credit Agreement after the date hereof or any increase in the interest rate under the Credit Agreement as a result of an amendment to the provisions of the Credit Agreement or (b) exceed $17,500,000 and (2) indemnifies and holds harmless each Senior Creditor for any and all out-


Page 3

of-pocket costs and expenses (including reasonable attorney' s fees and expenses; but limited to fees and expenses of one firm of primary counsel and one firm of local counsel for each jurisdiction applicable thereto for all such Senior Creditors) for all such Senior Creditors) incurred by such Senior Creditors, as the case may be, in enforcing any rights under this Agreement. This Agreement constitutes a guaranty of payment when due and not of collection, and the Guarantor specifically agrees that it shall not be necessary or required that any Senior Creditors exercise any right, assert any claim or demand or enforce any remedy whatsoever against the Borrower or any other Obligor (or any other Person) before or as a condition to the obligations of the Guarantor hereunder.

SECTION 2.2 Acceleration of Agreement . The Guarantor agrees that, in the event of the occurrence of any event of the type described in Section 10.01(e), (f) or (g) of the Credit Agreement, with respect to the Borrower, any other Obligor or the Guarantor, and if such event shall occur at a time when any of the Indebtedness may not then be due and payable by the Borrower due to any automatic stay or other debtor relief laws, the Guarantor will pay to the Senior Creditors forthwith the full amount which would be payable hereunder by the Guarantor if all such Indebtedness were then due and payable.

SECTION 2.3 Continuing Unconditional Guaranty . This Agreement shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full force and effect until all Indebtedness of the Borrower and each other Obligor has been paid in full and all obligations of the Guarantor hereunder shall have been paid in full and all Hedging Agreements have terminated. The Guarantor may not rescind or revoke its obligations hereunder. The Guarantor guarantees that the Indebtedness of the Borrower and each other Obligor will be paid strictly in accordance with the terms of the Credit Agreement and each other Loan Document under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Senior Creditor or any holder of any Note with respect thereto. SECTION 2.4 Waivers of Rights and Defenses . The guaranty, security interest, subordination and other obligations, duties and liabilities of the Guarantor under this Agreement shall be absolute, unconditional and irrevocable irrespective of: (1) any lack of validity, legality or enforceability of the Credit Agreement, any Note or any other Loan Document; (2) the failure of any Senior Creditor or any holder of any Note (a) to assert any claim or demand or to enforce any right or remedy against the Borrower, any other Obligor or any other Person (including any other guarantor) under the provisions of the Credit Agreement, any Note, any other Loan Document or otherwise, or (b) to exercise any right or remedy against any other guarantor of, or collateral securing, any Indebtedness of the Borrower or any other Obligor; (3) any change in the time, manner or place of payment of, or in any other term of, all or any of the Indebtedness of the Borrower or any other Obligor, or any other extension, compromise or renewal of any Indebtedness of the Borrower or any other Obligor; (4) any reduction, limitation, impairment or termination of any Indebtedness of the Borrower or any other Obligor for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Guarantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Indebtedness of the Borrower, any other Obligor or otherwise; (5) any amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the terms of the Credit Agreement, any Note or any other Loan Document; (6) any addition, exchange, release, surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition of, or consent to departure from, any other guaranty, held by any Senior Creditor securing any of the Indebtedness of the Borrower or any other Obligor; (7) the insolvency or bankruptcy of, or similar event affecting, the Borrower or any other Obligor; or (8) any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, the Borrower, any other Obligor, any surety or any guarantor (other than the defense that the Guarantor' s liabilities or obligations shall have been indefeasibly paid in full). The


Page 4

Guarantor waives all rights and defenses which may arise with respect to any of the foregoing, and the Guarantor waives any right to revoke this Agreement with respect to future Indebtedness; provided, however, that in no event shall Guarantor waive the defense that its obligations hereunder have been indefeasibly paid in full. The Guarantor waives all rights or defenses under common law, in equity, under contract, by statute, or otherwise; provided, however, that in no event shall Guarantor waive the defense that its obligations hereunder have been paid or otherwise satisfied. SECTION 2.5 Reinstatement . The Guarantor agrees that this Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Indebtedness is rescinded or must otherwise be restored by any Senior Creditor, upon any Insolvency Proceeding involving the Borrower or any other Obligor or otherwise, all as though such payment had not been made.

SECTION 2.6 Waiver, etc . The Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Indebtedness of the Borrower or any other Obligor and this Agreement and any requirement that the Administrative Agent, any other Senior Creditor protect, secure, perfect or insure any security interest or Lien, or any property subject thereto, or exhaust any right or take any action against the Borrower, any other Obligor or any other Person (including any other guarantor) or entity or any collateral securing the Indebtedness of the Borrower or any other Obligor, as the case may be.

SECTION 2.7 Waiver of Subrogation . Until the Indebtedness is paid in full and all Hedging Agreements have terminated, the Guarantor shall not enforce or exercise any claim or other rights which it may now or hereafter acquire against the Borrower or any other Obligor that arise from the existence, payment, performance or enforcement of the Guarantor' s obligations under this Agreement or any other Loan Document, including any right of subrogation, reimbursement, exoneration, or indemnification, any right to participate in any claim or remedy of the Senior Creditors against the Borrower or any other Obligor or any collateral which the Administrative Agent now has or hereafter acquires, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including the right to take or receive from the Borrower or any other Obligor, directly or indirectly, in cash or other property or by set-off or in any manner, payment or security on account of such claim or other rights. If any amount shall be paid to the Guarantor in violation of the preceding sentence, such amount shall be deemed to have been paid to the Guarantor for the benefit of, and held in trust for, the Senior Creditors, and shall forthwith be paid to the Senior Creditors to be credited and applied upon the Indebtedness, whether matured or unmatured. The Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Credit Agreement and that the waiver set forth in this Section is knowingly made in contemplation of such benefits.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Guarantor represents and warrants to the Senior Creditors as of the date hereof that:

SECTION 3.1 Corporate Existence . The Guarantor: (i) is a corporation du ...