CONTRIBUTION AND CONVEYANCE AGREEMENT By and Among, ATLAS AMERICA, INC., AIC, LLC, VIKING RESOURCES LLC, ATLAS PIPELINE HOLDINGS GP, LLC and ATLAS PIPELINE HOLDINGS, L.P. Dated as of July 26, 2006
Table of Contents
Execution Copy
By and Among,
ATLAS AMERICA, INC.,
AIC, LLC,
VIKING RESOURCES LLC,
ATLAS PIPELINE HOLDINGS GP, LLC
AIC, LLC,
VIKING RESOURCES LLC,
ATLAS PIPELINE HOLDINGS GP, LLC
Dated as of July 26, 2006
Table of Contents
Table of Contents
| 8 | ||||
| 9 | ||||
| 9 | ||||
| 9 | ||||
| 9 | ||||
| 9 |
ii
Table of Contents
This Contribution and Conveyance Agreement, dated as of July 26, 2006 (this “Contribution
Agreement”), is by and among Atlas Pipeline Holdings, L.P., a Delaware limited partnership
(“Atlas Holdings”), Atlas Pipeline Holdings GP, LLC, a Delaware limited liability company
(“Holdings GP”), Atlas America, Inc., a Delaware corporation (“Atlas America”),
AIC, LLC, a Delaware limited liability company (“AIC”) and Viking Resources LLC, a Delaware
limited liability company (“Viking”). The above-named entities are sometimes referred to
in this Contribution Agreement each as a “Party” and collectively as the “Parties.”
Capitalized terms used herein shall have the meanings assigned to such terms in Section 1.1.
W I T N E S S E T H:
WHEREAS, AIC, Viking and Atlas America (each an “MLP GP Owner” and, the owners
together known as the “MLP GP Owners”) currently own a 39.36%, 23.56% and 37.08% interest,
respectively, in Atlas Pipeline Partners GP, LLC, a Delaware limited liability company and the
general partner of the MLP (“MLP GP”);
WHEREAS, Holdings GP and Atlas America have formed Atlas Holdings pursuant to the Delaware
Revised Uniform Limited Partnership Act (the “Delaware LP Act”) for the purpose of
facilitating the Offering and, with respect to the MLP GP Owners, transferring the economic
benefits of their existing ownership interests in the MLP GP to Atlas Holdings in order to promote
the long-term growth opportunities of the Parties;
WHEREAS, in order to accomplish the objectives and purposes in the preceding recital, each of
the following actions has been taken prior to the date hereof:
| 1. | Atlas America formed Holdings GP under the terms of the Delaware Limited Liability Company Act (the “Delaware LLC Act”) and contributed $1,000 to Holdings GP in exchange for all of the member interests in Holdings GP. | ||
| 2. | Holdings GP and Atlas America formed Atlas Holdings under the terms of the Delaware LP Act and Holdings GP contributed $.01 for a .001% general partner interest and Atlas America contributed $999.99 to Atlas Holdings in exchange for a 99.999% limited partner interest. |
WHEREAS, concurrently with the consummation of the transactions contemplated hereby, each of
the following shall occur:
| 3. | AIC and Viking will distribute their interests in the MLP GP to Atlas America; | ||
| 4. | Atlas America will then contribute its 100% interest in the MLP GP to Atlas Holdings in exchange for 17,500,000 units (“Common Units”) representing limited partner interests aggregating an 82.9% limited partner interest in Atlas Holdings, and the right to receive the net proceeds of the public offering, in part as a reimbursement of certain capital expenditures incurred with respect to the MLP GP. |
Table of Contents
| 5. | In connection with Atlas Holdings’ Offering, the public, through the Underwriters, will contribute $82,800,000 in cash to Atlas Holdings less the Underwriters’ discounts and commissions of $5,589,000 (the “Spread”) and a structuring fee of $207,000 in exchange for 3,600,000 Common Units representing a 17.1% limited partner interest in Atlas Holdings. | ||
| 6. | Atlas Holdings will pay transaction expenses pursuant to the transactions contemplated by this agreement in the amount of approximately $1,200,000 (exclusive of the Underwriters’ Spread and the structuring fee), and will distribute the balance of the proceeds from the Offering to Atlas America. |
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
The terms set forth below in this Article I shall have the meanings ascribed to them below or
in the part of this Contribution Agreement referred to below:
“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.
“Commission” means the U.S. Securities and Exchange Commission.
“Common Units” means the common units of Atlas Holdings, representing limited partner
interests.
“Closing” means the closing of the transactions contemplated pursuant to the
Contribution Agreement.
“Delaware LLC Act” means the Limited Liability Company Act of the State of Delaware,
as amended and any successor to such act.
“Delaware LP Act” means the Delaware Revised Uniform Limited Partnership Act, as
amended and any successor to such act.
“Effective Time” means immediately prior to the closing under the Underwriting
Agreement.
“Offering” means the initial public offering of the Common Units contemplated by the
Registration Statement.
“Person” means an individual, corporation, partnership (limited or general), limited
liability company, trust, joint stock company, Governmental Authority, unincorporated association
or other legal entity.
“Securities Act” means the Securities Act of 1933, as amended.
2
Table of Contents
“Underwriters” means those of the underwriting syndicate as referenced in the
Underwriting Agreement between Xxxxxx Brothers Inc., as representative of the Underwriters, Atlas
Holdings and Holdings GP, dated as of July 26, 2006.
ARTICLE II
CONTRIBUTION AND DISTRIBUTION TRANSACTIONS
CONTRIBUTION AND DISTRIBUTION TRANSACTIONS
Section 2.1 Distribution of Interests in MLP GP. AIC and Viking hereby distribute,
grant, bargain, assign, transfer, set over and deliver to Atlas America, its successor and assigns,
for its and their own use forever, a 39.36% and 23.56% member interest in the MLP GP, respectively,
and Atlas America hereby accepts such member interest in the MLP GP.
Section 2.2 Contribution of Interests in MLP GP by Atlas America to Atlas Holdings.
Atlas America hereby grants, contributes, bargains, assigns, transfers, sets over and delivers to
Atlas Holdings, its successor and assigns, for its and their own use forever, a 100% member
interest in the MLP GP (0.001% on behalf of Holdings GP) (the “Transferred Assets”) in exchange
for (a) 17,500,000 units representing limited partner interests with an aggregate 82.9% interest in
Atlas Holdings and (b) the right to receive the net proceeds of the Offering, in part as a
reimbursement of certain capital expenditures made with respect to MLP GP.
Section 2.3 Public Cash Contribution. The Parties acknowledge a capital contribution
by the public through the Underwriters to Atlas Holdings of $82,800,000 in cash, ($77,211,000 after
the Underwriters’ Spread of $5,589,000 and $77,004,000 after the payment of the structuring fee of
$207,000) in exchange for 3,600,000 Common Units representing a 17.1% interest in Atlas Holdings.
Section 2.4 Payment of Transaction Expenses by Atlas Holdings. The Parties
acknowledge (a) the payment by Atlas Holdings, in connection with the transactions contemplated
hereby, of estimated transaction expenses in the amount of $1,200,000 (exclusive of the
Underwriters’ Spread and the structuring fee) and (b) the distribution by Atlas Holdings of its
remaining cash of approximately $75,804,000 to Atlas America, in part as a reimbursement of certain
capital expenditures incurred with respect to the MLP GP.
Section 2.5 Issuance of New Certificates. At the Closing, Atlas Holdings shall issue to
Atlas America a certificate or certificates, which may be held in book entry form, representing the
number of Common Units to be issued to Atlas America pursuant to Section 2.2. Each such
certificate shall be registered in the name of the Person or Persons specified by the recipient
thereof to Atlas Holdings in writing at least two Business Days prior to the Closing.
Section 2.6 Certificate Legends. The certificates evidencing Common Units delivered
pursuant to Section 2.2 shall bear a legend substantially in the form set forth below and
containing such other information as Atlas Holdings may deem necessary or appropriate:
The 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
3
Table of Contents
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 limited partnership, is
available.
ARTICLE III
ADDITIONAL TRANSACTIONS
ADDITIONAL TRANSACTIONS
Section 3.1 Over-Allotment Option. The Parties acknowledge that in the event the
option to purchase additional Common Units is exercised in whole or in part by the Underwriters
(the “Option”), the public, through the Underwriters, will contribute additional cash to
Atlas Holdings in exchange for up to an additional 540,000 Common Units.
Section 3.2 Redemption of Common Units by Atlas Holdings. The Parties acknowledge, in
the event that the Option is exercised in whole or in part by the Underwriters, Atlas Holdings will
use the net proceeds from the issuance of such additional Common Units to redeem a number of Common
Units from Atlas America equal to the number of Common Units issued pursuant to the exercise of the
Option at a redemption price equal to the same net price received by Atlas Holdings from the
Underwriters.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of Atlas America. Atlas America hereby
represents and warrants to Atlas Holdings as follows as of the date of this Contribution Agreement:
(a) Atlas America has been duly incorporated and is validly existing 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) As of the date of this Contribution Agreement, following the consummation of the
transaction described in Section 2.1, Atlas America owns 100% of the issued and outstanding
member interests in the MLP GP; such member interests have been duly authorized and validly
issued in accordance with the limited liability company agreement of the MLP GP, as amended
and/or restated on or prior to the date on which the Offering is consummated (the “Closing
Date”) or any settlement date, and Atlas America owns such member interests free and clear
of all liens, encumbrances, security interests, equities, charges or claims.
(c) All corporate action required to be taken by Atlas America or any of its
securityholders for the authorization, execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement has been validly taken.
4
Table of Contents
(d) None of the (i) the execution, delivery and performance of this Agreement by Atlas
America, or (ii) consummation of the transactions contemplated hereby (A) conflicts or will
conflict with or constitutes or will constitute a violation of its certificate of
incorporation or bylaws, (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 is a
party or by which Atlas America or any of its properties may be bound, (C) violates or will
violate any statute, law or regulation or any order, judgment, decree or injunction of any
Governmental Authority or body having jurisdiction over Atlas America, or any of its
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, 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 by this Agreement or (ii) the ownership and use by Atlas Holdings of the
Transferred Assets at or after the Effective Time (a “Material Adverse Effect”).
“Governmental Authority” means (i) the United States of America, (ii) any state, province,
county, municipality or other governmental subdivision within the United States of America,
and (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.
(e) No permit, consent, approval, authorization, order, registration, filing or
qualification (a “consent”) of or with any Governmental Authority or body having
jurisdiction over Atlas America or any of its properties is required in connection with (i)
the execution, delivery and performance of this Agreement by Atlas America, or (ii) the
consummation by Atlas America of the transactions contemplated by this Agreement, except for
such consents that have been obtained.
ARTICLE V
FURTHER ASSURANCES
FURTHER ASSURANCES
From time to time after the Effective Time, and without any further consideration, the Parties
agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale,
conveyances, instruments, notices, releases, acquittances and other documents, and will do all such
other acts and things, all in accordance with applicable law, as may be necessary or appropriate
(a) more fully to assure that the applicable Parties own all of the properties, rights, titles,
interests, estates, remedies, powers and privileges granted by this Contribution Agreement, or
which are intended to be so granted, or (b) more fully and effectively to vest in the applicable
Parties and their respective successors and assigns beneficial and record title to the interests
contributed and assigned by this Contribution Agreement or intended so to be and to more fully and
effectively carry out the purposes and intent of this Contribution Agreement.
5
Table of Contents
ARTICLE VI
EFFECTIVE TIME
EFFECTIVE TIME
Notwithstanding anything contained in this Contribution Agreement to the contrary, none of the
provisions of Article II or Article III of this Contribution Agreement shall be operative or have
any effect until the Effective Time, at which time all the provisions of Article II and Article III
of this Contribution Agreement shall be effective and operative in accordance with Article VIII,
without further action by any party hereto.
ARTICLE VII
INDEMNIFICATION
INDEMNIFICATION
Section 7.1 Indemnification by Atlas America. Subject to the other provisions of this
Article VII, Atlas America shall indemnify, defend and hold harmless Atlas Holdings from and
against any losses, damages, liabilities, claims, demands, causes of action, judgments,
settlements, fines, penalties, costs and expenses (including, without limitation, court costs and
reasonable attorney’s fees and expert fees) of any and every kind and character (“Losses”), insofar
as such Losses arise out of or are based upon:
(a) the failure of Atlas America to be the owner of the Transferred Assets as is
necessary for Atlas Holdings to continue to own the Transferred Assets and to derive the
benefits therefrom in accordance with the terms of such equity interests;
(b) the failure of Atlas America to have at the Effective Time on the Closing Date any
consent or approval of a Governmental Authority necessary to allow transfer by Atlas America
of the Transferred Assets; and
(c) all federal, state and local income tax liabilities attributable to the Transferred
Assets allocable prior to the Effective Time on the Closing Date, including any such income
tax liabilities of Atlas America that may result from the consummation of the transactions
contemplated by this Contribution Agreement.
Section 7.2 Indemnification by Atlas Holdings. Atlas Holdings shall indemnify, defend
and hold harmless Atlas America from and against all Losses suffered or incurred by Atlas America
arising out of or relating to the Transferred Assets, except with respect to matters for which
Atlas Holdings is entitled to indemnification therefor under Section 7.1
Section 7.3 Indemnification Procedure.
(a) As used in this Section 7.3, the term “Indemnifying Party” refers to Atlas America,
in the case of any indemnification obligation arising under Section 7.1, and to Atlas
Holdings, in the case of any indemnification obligation arising under Section 7.2; and the
term “Indemnified Party” refers to Atlas Holdings, in the case of any indemnification
obligation arising under Section 7.1, and to Atlas America, in the case of any
indemnification obligation arising under Section 7.2.
(b) The Indemnified Party agrees that within a reasonable period of time after it
becomes aware of facts giving rise to a claim for indemnification under this Article VII,
6
Table of Contents
it will provide notice thereof in writing to the Indemnifying Party, specifying the
nature of and specific basis for such claim.
(c) The Indemnifying Party shall have the right to control, at its sole cost and
expense, all aspects of the defense of (and any counterclaims with respect to) any claims
brought against the Indemnified Party that are covered by the indemnification under this
Article VII, including, without limitation, the selection of counsel, determination of
whether to appeal any decision of any Governmental Authority and the settling of any such
matter or any issues relating thereto; provided, however, that no such settlement shall be
entered into without the consent of the Indemnified Party (which consent shall not be
unreasonably withheld) unless it includes a full release of the Indemnified Party from such
matter or issues, as the case may be.
(d) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with
respect to (i) its pursuit of insurance coverage or recoveries with respect to the claims
covered by the indemnification under this Article VII and (ii) all aspects of the defense of
any claims covered by the indemnification under this Article VII, including, without
limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other
notice relating thereto that the Indemnified Party may receive, permitting the name of the
Indemnified Party to be utilized in connection with such defense, the making available to
the Indemnifying Party of any files, records or other information of the Indemnified Party
that the Indemnifying Party considers relevant to such defense and the making available to
the Indemnifying Party of any employees of the Indemnified Party; provided, however, that in
connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the
impact thereof on the operations of the Indemnified Party and further agrees to maintain the
confidentiality of all files, records, and other information furnished by the Indemnified
Party pursuant to this Section 7.3. In no event shall the obligation of the Indemnified
Party to cooperate with the Indemnifying Party as set forth in the immediately preceding
sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay
for counsel in connection with the defense of any claims covered by the indemnification set
forth in this Article VII provided, however, that the Indemnified Party may, at its own
option, cost and expense, hire and pay for counsel in connection with any such defense. The
Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party informed
as to the status of any such defense, but the Indemnifying Party shall have the right to
retain sole control over such defense.
(e) The date on which written notification of a claim for indemnification is received
by the Indemnifying Party shall determine whether such claim is timely made within the
limitations specified in Section 7.1. No claim for indemnification pursuant to Section
7.1(a) shall be brought or made unless, prior to thirty (30) days after the actual knowledge
by the Indemnified Party of the Losses set forth in Section 7.1(a), the Indemnified Party
shall have delivered to the Indemnifying Party a good faith written notice to the effect
that the Indemnified Party has incurred Losses entitled to be indemnified against under
Section 7.1(a), which notice specifies in reasonable detail the amount of such Losses and
the nature and basis of such claim.
7
Table of Contents
ARTICLE VIII
MISCELLANEOUS
MISCELLANEOUS
Section 8.1 Order of Completion of Transactions. The transactions provided for in
Article II and Article III of this Contribution Agreement shall be completed immediately following
the Effective Time in the following order: first, the transactions provided for in Article II shall
be completed in the order set forth therein; and second, following the completion of the
transactions as provided in Article II, the transactions, if they occur, provided for in Article
III shall be completed.
Section 8.2 Costs. Atlas Holdings shall pay all expenses, fees and costs, including
but not limited to, all sales, use and similar taxes arising out of the contributions, conveyances
and deliveries to be made hereunder and shall pay all documentary, filing, recording, transfer,
deed, and conveyance taxes and fees required in connection therewith. In addition, Atlas Holdings
shall be responsible for all costs, liabilities and expenses (including court costs and reasonable
attorneys’ fees) incurred in connection with the implementation of any conveyance or delivery
pursuant to Article VI.
Section 8.3 Headings; References; Interpretation. All Article and Section headings in
this Contribution Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and
“hereunder” and words of similar import, when used in this Contribution Agreement, shall refer to
this Contribution Agreement as a whole, including, without limitation, all Schedules and Exhibits
attached hereto, and not to any particular provision of this Contribution Agreement. All personal
pronouns used in this Contribution Agreement, whether used in the masculine, feminine or neuter
gender, shall include all other genders, and the singular shall include the plural and vice versa.
The use herein of the word “including” following any general statement, term or matter shall not be
construed to limit such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not non-limiting
language (such as “without limitation”, “but not limited to”, or words of similar import) is used
with reference thereto, but rather shall be deemed to refer to all other items or matters that
could reasonably fall within the broadest possible scope of such general statement, term or matter.
Section 8.4 Successors and Assigns. The Contribution Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and assigns.
Section 8.5 No Third Party Rights. The provisions of this Contribution Agreement are
intended to bind the Parties as to each other and are not intended to and do not create rights in
any other person or confer upon any other person any benefits, rights or remedies and no person is
or is intended to be a third party beneficiary of any of the provisions of this Contribution
Agreement.
Section 8.6 Counterparts. This Contribution Agreement may be executed in any number
of counterparts, all of which together shall constitute one agreement binding on the parties
hereto.
8
Table of Contents
Section 8.7 Governing Law. This Contribution Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to contracts made and to
be performed wholly within such state without giving effect to conflict of law principles thereof.
Section 8.8 Severability. If any of the provisions of this Contribution Agreement are
held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any
political body having jurisdiction over the subject matter hereof, such contravention or invalidity
shall not invalidate the entire Contribution Agreement. Instead, this Contribution Agreement shall
be construed as if it did not contain the particular provision or provisions held to be invalid and
an equitable adjustment shall be made and necessary provision added so as to give effect to the
intention of the Parties as expressed in this Contribution Agreement at the time of execution of
this Contribution Agreement.
Section 8.9 Amendment or Modification. This Contribution Agreement may be amended or
modified from time to time only by the written agreement of all the Parties. Each such instrument
shall be reduced to writing and shall be designated on its face as an Amendment to this
Contribution Agreement.
Section 8.10 Integration. This Contribution Agreement and the instruments referenced
herein supersede all previous understandings or agreements among the Parties, whether oral or
written, with respect to their subject matter. This document and such instruments contain the
entire understanding of the Parties with respect to the subject matter hereof and thereof. No
understanding, representation, promise or agreement, whether oral or written, is intended to be or
shall be included in or form part of this Contribution Agreement unless it is contained in a
written amendment hereto executed by the parties hereto after the date of this Contribution
Agreement.
Section 8.11 Deed; Xxxx of Sale; Assignment. To the extent required and permitted by
applicable law, this Contribution Agreement shall also constitute a “deed,” “xxxx of sale” or
“assignment” of the assets and interests referenced herein.
[signature pages follow]
9
Table of Contents
IN WITNESS WHEREOF, the parties to this Contribution Agreement have caused it to be duly
executed as of the date first above written.
| ATLAS AMERICA, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| AIC, LLC | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| VIKING RESOURCES LLC | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Table of Contents
| ATLAS PIPELINE HOLDINGS GP, LLC | ||||||
| By: | Atlas America | |||||
| its sole member | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| ATLAS PIPELINE HOLDINGS, L.P. | ||||||
| By: | Atlas Pipeline Holdings GP, LLC | |||||
| its general partner | ||||||
| By: | Atlas America | |||||
| its sole member | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
