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Exhibit 10.1
CONTRIBUTION, CONVEYANCE AND ASSUMPTION
AGREEMENT
This Contribution and Assumption Agreement, dated as of
December 18, 2006 (this " Contribution Agreement "), is
by and among Atlas America, Inc., a Delaware corporation ("
Atlas America "), Atlas Energy Resources, LLC, a Delaware
limited liability company (" Atlas Energy "), and Atlas
Energy Operating Company, LLC, a Delaware limited liability company
(" Energy Operating "). The above-named entities are
sometimes referred to in this Contribution Agreement each as a "
Party " and collectively as the " Parties ."
WITNESSETH:
WHEREAS , Atlas America currently wholly owns the subsidiaries
listed on Schedule 1 hereto (collectively, the "
Subsidiaries ") and the assets described on Schedule
2 hereto (collectively, the " Assets ") representing
Atlas America’s natural gas and oil exploration, development,
operation, maintenance and production business (the "
Business ");
WHEREAS , Atlas America has formed Atlas Energy pursuant
to the Delaware LLC Act for the purpose of acquiring, owning and
operating the Business;
WHEREAS , in order to accomplish the objectives and
purposes in the preceding recital, the following actions have been
taken prior to the date hereof (the " Pre-Closing Actions
"):
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1.
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Atlas Resources, Inc., a Pennsylvania
corporation, merged with and into Atlas Resources, LLC, a
Pennsylvania limited liability company;
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2.
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Atlas Energy Corporation, an Ohio corporation,
merged with and into Atlas Energy Ohio, LLC, an Ohio limited
liability company;
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3.
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Viking Resources Corporation, a Pennsylvania
corporation, merged with and into Viking Resources, LLC, a
Pennsylvania limited liability company;
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4.
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REI-NY, Inc., a Delaware corporation, was
converted into REI-NY, LLC, a Delaware limited liability
company;
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5.
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Resource Well Services, Inc., a Delaware
corporation, was converted into Resource Well Services, LLC, a
Delaware limited liability company;
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6.
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AIC, Inc., a Delaware corporation, was converted
into AIC, LLC, a Delaware limited liability company;
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7.
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Resource Energy, Inc., a Delaware corporation,
was converted into and Resource Energy, LLC, a Delaware limited
liability company;
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8.
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Atlas Noble Corp., a Delaware corporation, was
converted into Atlas Noble, LLC, a Delaware limited liability
company;
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9.
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Atlas America, Inc., a Pennsylvania corporation,
merged with and into Atlas America, LLC, a Pennsylvania limited
liability company; and
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10.
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Energy Operating formed AER Pipeline
Construction, Inc., a Delaware corporation;
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WHEREAS , Atlas America and certain of
the Subsidiaries are parties to the Gathering Agreement (as defined
in Article I) and Atlas America has agreed to assume certain
obligations of those Subsidiaries thereunder;
WHEREAS , concurrently with the consummation of the transactions
contemplated hereby, each of the following shall occur:
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1.
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Atlas America will contribute the Assets and its
100% interest in each of the Subsidiaries (the " Equity
Interests ") to Energy Operating in exchange for
(a) 30,361,746 common units (" Common Units "),
(b) 748,456 Class A units (the " Class A Units "),
(c) the management incentive interests (the " Management
Incentive Interests "), and (d) the right to receive
$121,730,000, in part as a reimbursement of certain capital
expenditures incurred with respect to the Assets and
Subsidiaries;
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2.
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Atlas America will transfer to Atlas Energy
Management, Inc., a Delaware corporation (" Atlas Management
"), all of the Class A Units and the Management Incentive
Interests;
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3.
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In connection with the Offering, the public,
through the Underwriters, will contribute $132,825,000 in cash to
Atlas Energy less the Underwriters’ discounts and commissions
of $8,298,400 (the " Spread ") and a structuring fee of
$996,187 in exchange for 6,325,000 Common Units;
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4.
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Atlas Energy will pay transaction expenses
pursuant to the transactions contemplated by this Contribution
Agreement in the amount of approximately $1.8 million (exclusive of
the Spread and the structuring fee), and distribute $121,730,000 to
Atlas America; and
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5.
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In connection with the Underwriters exercise of
their over-allotment option, the public, through the Underwriters,
will contribute an additional $19,923,750 in cash to Atlas Energy
less the Spread of $1,244,760 and a structuring fee of $149,428 in
exchange for 948,750 Common Units and the Company will use the net
proceeds to redeem Common Units from Atlas America;
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NOW , THEREFORE , in consideration
of the mutual covenants, representations, warranties and agreements
herein contained, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.1 Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them below:
" APL " means Atlas Pipeline Partners, L.P., a Delaware
limited partnership.
" Atlas America Entities " means Atlas America and any
Person controlled, directly or indirectly, by Atlas America, other
than Atlas Energy, Energy Operating and any subsidiary of any such
Person.
" Atlas Energy Group " means Atlas Energy, Energy
Operating and any subsidiary of any such Person, treated as a
single consolidated entity, and each Investment Program.
" Atlas Energy Assets " means the Transferred Assets and
any assets and properties owned or leased by any member of the
Atlas Energy Group.
" Authority " means (i) the United States of
America, (ii) any state, province, county, municipality or
other governmental subdivision within the United States of America,
(iii) any court or any governmental department, commission,
board, bureau, agency or other instrumentality of the United States
of America, or of any state, province, county, municipality or
other governmental subdivision within the United States of America
and (iv) the National Association of Securities Dealers.
" Business Day " means any day other than a Saturday, a
Sunday or any other day when banks are not open for business
generally in the State of Delaware.
" Closing " means the closing of the transactions
contemplated pursuant to this Contribution Agreement.
" Closing Date " means the date of Closing.
" Delaware LLC Act " means the Limited Liability Company
Act of the State of Delaware, as amended and any successor to such
act.
" Gathering Agreement " means the Master Natural Gas
Gathering Agreement dated as of February 2, 2000 among Atlas
America, Resource Energy, LLC (formerly Resource Energy, Inc.),
Viking Resources, LLC (formerly Viking Resources Corporation) and
APL, as amended from time to time.
" Investment Program " means a Person principally engaged
in the drilling of natural gas and oil wells for which Atlas
America or any of the Subsidiaries or any of their subsidiaries
acts as a general partner, managing partner or manager and the
securities of which have been offered and sold to investors.
" Offering " means the initial public offering of the
Common Units contemplated by the Registration Statement.
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" Operating Agreement " means the Amended
and Restated Operating Agreement of Atlas Energy dated of even date
herewith by and among Atlas America, Inc. and the members party
thereto, as amended from time to time.
" Person " means an individual, corporation, partnership
(limited or general), limited liability company, trust, joint stock
company, unincorporated association or other legal entity.
" Registration Statement " means the registration
statement on Form S-1 filed with the U.S. Securities and Exchange
Commission by Atlas Energy (File No. 333-136094).
" Toxic Tort " means a claim or cause of action arising
from personal injury or property damage incurred by the plaintiff
that is alleged to have been caused by exposure to, or
contamination by, Hazardous Substances that have been released into
the environment by or as a result of the actions or omissions of
the defendant.
" Underwriters " means those of the underwriting
syndicate as referenced in the Underwriting Agreement between UBS
Securities LLC, as representative of the Underwriters, and Atlas
Energy, dated as of December 12, 2006.
ARTICLE II
CONTRIBUTION AND DISTRIBUTION TRANSACTIONS
Section 2.1 Contribution by Atlas America to Energy
Operating .
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(a) Contribution . Atlas America hereby grants,
contributes, conveys, bargains, assigns, transfers, sets over and
delivers to Energy Operating, its successors and assigns, for its
and their own use forever, all right, title and interest of Atlas
America in and to all of the Assets and all of the Equity Interests
(together with the Assets, the " Transferred Assets "),
subject to encumbrances that do not materially adversely affect the
value of the Transferred Assets or the ability of the Atlas Energy
Group to own and operate the Transferred Assets in substantially
the same manner as they were operated immediately prior to the
Closing Date, in exchange for (i) 30,301,746 Common Units,
(ii) 748,456 Class A Units, (iii) the Management
Incentive Interests and (iv) the right to receive
$121,730,000, in part as a reimbursement of certain capital
expenditures made with respect to the Transferred Assets.
TO HAVE AND TO HOLD all of such right, title and interest in the
Transferred Assets unto Energy Operating, its successors and
assigned, together with all and singular rights and appurtenances
thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Contribution Agreement, and in such
instruments of conveyance forever.
(b) Assumed Liabilities . Subject to Section 2.1(c),
Energy Operating hereby irrevocably and absolutely assumes, agrees
to perform, and when due, pay and discharge, only the obligations
and liabilities relating to the Transferred Assets which accrue on
or after the Closing Date and only to the extent such obligations
and liabilities are not overdue or delinquent on the Closing Date
without regard to any grace period and without the occurrence of
any increase in amounts due (the " Assumed Liabilities
");
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provided , however , that said
assumption and agreement to assume the Assumed Liabilities shall
not (i) increase the obligation of Energy Operating with
respect to the Assumed Liabilities beyond that of Atlas America,
(ii) waive any valid defense that was available to Atlas
America with respect to the Assumed Liabilities or
(iii) enlarge any rights or remedies of any third party under
any of the Assumed Liabilities.
(c) Prorations . All obligations and liabilities assumed
by Energy Operating under this Contribution Agreement that relate
to both periods of time prior to the Closing Date and periods of
time from and after the Closing Date shall be prorated as of the
close of business on the Closing Date, whether or not such
adjustment would normally be made as of such time. It is the
intention of the Parties that Energy Operating should operate the
Business and the Transferred Assets for its own account from and
after the Closing Date.
Section 2.2 Contribution by Atlas America to Atlas
Management . Atlas America hereby grants, contributes,
conveys, bargains, assigns, transfers, sets over and delivers to
Atlas Management, its successors and assigns, for its and their own
use forever, all right, title and interest of Atlas America in and
to (i) 748,456 Class A Units and (ii) the Management
Incentive Interests.
Section 2.3 General Provisions Relating to Assumption
of Liabilities . Notwithstanding anything to the contrary
contained in this Agreement including the terms and provisions of
this Article II, none of the Parties shall be deemed to have
assumed, and none of the Transferred Assets have been or are being
contributed subject to, (a) any liens or security interests
securing consensual indebtedness covering any of the Transferred
Assets, except for encumbrances permitted by this Contribution
Agreement, and all such liens and security interests shall be
deemed to be excluded from the assumptions of liabilities made
under this Article II or (b) any of the liabilities covered by
the indemnities set forth in this Contribution Agreement to the
extent such liabilities are covered by such indemnities, and all
such liabilities shall be deemed to be excluded from the
assumptions of liabilities made under this Article II to the extent
that such liabilities are covered by such indemnities.
Section 2.4 Public Cash Contribution . The
Parties acknowledge a capital contribution by the public through
the Underwriters to Atlas Energy of $132,825,000 in cash
($123,530,413 after the Spread of $8,298,400 and the structuring
fee of $996,187) in exchange for 6,325,000 Common Units.
Section 2.5 Specific Conveyances . To further
evidence the contributions and conveyances of the Transferred
Assets, each party making such contribution and conveyances may
have executed and delivered to the party receiving such
contribution certain conveyance, assignment and bill of sale
instruments (the " Specific Conveyances "). The Specific
Conveyances shall evidence and perfect such sale and contribution
made by this Contribution Agreement and shall not constitute a
second conveyance of any assets or interests therein and shall be
subject to the terms of this Contribution Agreement.
Section 2.6 Payment of Transaction Expenses by Atlas
Energy . The Parties acknowledge (a) the payment by
Atlas Energy, in connection with the transactions contemplated
hereby, of estimated transaction expenses in the amount of $1.8
million (exclusive of
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the Spread and the structuring fee) and
(b) the distribution by Atlas Energy of $121,730,000 to Atlas
America, in part as a reimbursement of certain capital expenditures
incurred with respect to the Transferred Assets.
Section 2.7 Issuance of New Certificates . At
the Closing, Atlas Energy shall issue to each of Atlas America and
Atlas Management a certificate or certificates, which may be held
in book entry form, representing the number of Common Units and
Class A Units to be issued to each of them pursuant to this
Article II. Each such certificate shall be registered in the name
of the Person or Persons specified by the recipient thereof to
Atlas Energy in writing at least two Business Days prior to the
Closing.
Section 2.8 Certificate Legends . The
certificates evidencing the Common Units and Class A Units
shall bear a legend substantially in the form set forth below and
containing such other information as Atlas Energy may deem
necessary or appropriate:
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T HE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED , OR ANY
STATE SECURITIES
LAWS , AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED , SOLD , TRANSFERRED , PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH
LAWS OR PURSUANT TO AN EXEMPTION THEREFROM WHICH , IN THE
OPINION OF COUNSEL FOR THE HOLDER ,
WHICH COUNSEL
AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS COMPANY , IS AVAILABLE .
ARTICLE III
GATHERING AGREEMENT
Section 3.1 Assumption of Obligations by Atlas
America . Atlas America hereby expressly assumes, for itself
and its successors and assigns, the obligations of each of the
Atlas Energy, Energy Operating and the Subsidiaries, as they may
appear, to timely pay gathering fees to APL under Article 7 and 8
of the Gathering Agreement accruing from and after the Closing Date
and agrees to keep, perform and observe all of the covenants and
conditions contained therein on the part of any of them to be kept,
performed and observed from and after the Closing Date.
Section 3.2 Assignment by Atlas Energy . Each
of Atlas Energy and Energy Operating, on their own behalf and on
behalf of the Subsidiaries, hereby irrevocably assigns, sets over,
transfers and conveys to Atlas America all of the right, title and
interest of any of them in and to all of the gathering fees
(i) accruing to any of them from the Investment Programs or
(ii) attributable to the production interest of Atlas Energy,
Energy Operating or any of the Subsidiaries for gas gathered from
and after the Closing Date pursuant to the Gathering Agreement (the
" Assigned Amounts "). Each of Atlas Energy and Energy
Operating shall pay, and shall cause each of the Subsidiaries to
pay, the Assigned Amounts to Atlas America within 15 Business Days
after the end of the month in which received by them.
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ARTICLE IV
ADDITIONAL TRANSACTIONS
Section 4.1 Over-Allotment Option . The Parties
acknowledge that the Underwriters exercised their option to
purchase additional Common Units (the " Option ") in whole
and that the public, through the Underwriters, contributed
additional cash of $19,923,750 in cash ($18,529,562 after the
Spread of $1,244,760 and the structuring fee of $149,428) to Atlas
Energy in exchange for an additional 948,750 Common Units.
Section 4.2 Redemption of Common Units by Atlas
Energy . The Parties acknowledge that Atlas Energy will use
the net proceeds from the issuance of the additional Common Units
pursuant to the exercise of the Option to redeem 948,750 Common
Units from Atlas America at a redemption price equal to the same
net price received by Atlas Energy from the Underwriters.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Atlas
America . Atlas America hereby represents and warrants to Atlas
Energy and Energy Operating as follows as of the date of this
Contribution Agreement:
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(a) Status of Atlas America . Atlas America has been duly
incorporated and is validly existing and in good standing under the
laws of the State of Delaware, with all corporate power and
authority necessary to own or hold its properties and conduct the
businesses in which it is engaged and to execute and deliver this
Contribution Agreement and to consummate the transactions
contemplated hereby.
(b) Title to Subsidiaries . Atlas America owns 100% of
the issued and outstanding equity interests in the Subsidiaries;
the Subsidiaries own 100% of the issued and outstanding equity
interests in their subsidiaries as set forth on Schedule 1 ;
and all such equity interests have been duly authorized and validly
issued in accordance with the charter documents of the relevant
entity, and Atlas America and the Subsidiaries own their respective
equity interests free and clear of all liens, claims, options,
charges, encumbrances or restrictions of any kind. There are no
outstanding warrants, options, agreements, convertible or
exchangeable securities, phantom stock or other commitments
pursuant to which any Subsidiary or any of their subsidiaries is or
may become obligated to issue, sell, purchase, return or redeem any
shares of capital stock or other securities and no equity
securities of any Subsidiary or any of their subsidiaries are
reserved for issuance for any purpose.
(c) Corporate Action/Enforceability . All corporate
action required to be taken by Atlas America or any of its
securityholders for the authorization, execution and delivery of
this Contribution Agreement and the consummation of the
transactions contemplated by this Contribution Agreement and the
Pre-Closing Actions have been validly taken. This Contribution
Agreement constitutes the valid and binding obligations of Atlas
America, enforceable in accordance with its terms
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except as such enforceability may be limited by
applicable bankruptcy or other similar laws affecting the rights
and remedies of creditors generally as well as by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) Conflicts . None of the (i) the execution,
delivery and performance of this Contribution Agreement by Atlas
America, or (ii) consummation of the transactions contemplated
hereby and the Pre-Closing Actions by Atlas America
(A) conflicts or will conflict with or constitutes or will
constitute a violation of Atlas America’s or any member of
the Atlas Energy Group’s certificate of incorporation, bylaws
or other organizational documents, (B) conflicts or will
conflict with or constitutes or will constitute a breach or
violation of, or a default (or an event that, with notice or lapse
of time or both, would constitute such a default) under, any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which Atlas America or any member of the
Atlas Energy Group is a party or by which Atlas America’s or
any member of the Atlas Energy Group’s properties may be
bound, (C) violates or will violate any statute, law or
regulation or any order, judgment, decree or injunction of any
Authority having jurisdiction over Atlas America or any member of
the Atlas Energy Group or any of their respective properties or
assets, or (D) results or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of Atlas America or any member of the Atlas Energy Group,
which conflicts, breaches, violations, defaults or liens, in the
case of clauses (B) or (D), would, individually or in the
aggregate, have a material adverse effect on (i) the
transactions contemplated hereby or (ii) the ownership and use
by Atlas Energy, Energy Operating and the Subsidiaries of the Atlas
Energy Assets at or after the Closing Date (a " Material Adverse
Effect ").
(e) Consents . No permit, consent, approval,
authorization, order, registration, filing or qualification of or
with any Authority having jurisdiction over Atlas America, any
member of the Atlas Energy Group or any of their respective
properties or by any other third party is required in connection
with (i) the execution, delivery and performance of this
Contribution Agreement by Atlas America, or (ii) the
consummation by Atlas America of the transactions contemplated by
this Contribution Agreement and the Pre-Closing Actions, except for
such consents that have been obtained or as to which the lack
thereof is not reasonably likely to have a Material Adverse
Effect.
(f) Title to Property . Upon Closing, one or more members
of Atlas Energy Group will have:
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(i)(A) good and defensible title to the producing oil and gas
property interests (including the wells and the working and net
revenue interests attributable thereto) (the " Wells ")
included in the Atlas America reserve report, dated March 31,
2006, included in Registration Statement (the " Reserve
Report "), subject only to encumbrances that do not materially
adversely affect the value of such oil and gas property interests
or the ability of the Atlas Energy Group to operate such oil and
gas property interests in substantially the same manner as they
were operated immediately prior to the Closing Date and
(B) good and defensible title to each oil and gas lease as to
which proved undeveloped reserves were included in the Reserve
Report (the " Leases "), subject only to encumbrances that
do not materially adversely affect the value of any
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such Lease or, in the event that the Atlas Energy
Group does not have good and defensible title to such Lease (each,
a " Defective Lease "), then (1) the Atlas Energy Group
has good and defensible title to an oil and gas lease as to which
no reserves were indicated therefor in the Reserve Report (each, a
" Substitute Lease "), (2) one or more drilling
locations have been identified
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