AMENDMENT NO. 1 TO AGREEMENT
AND PLAN OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this "Amendment")
dated as of the 29th day of September, 1998 is entered into by and among
Resource America, Inc., a Delaware corporation ("RAI"), Atlas America, Inc., a
Pennsylvania corporation and a wholly-owned subsidiary of RAI ("AAI"), The Atlas
Group, Inc., a Pennsylvania corporation ("Atlas") and the shareholders of Atlas
identified on the signature pages hereto (the "Principal Shareholders").
WITNESSETH:
WHEREAS, the parties hereto are parties to an Agreement and Plan of
Merger dated as of July 13, 1998 (the "Agreement"); and
WHEREAS, the parties hereto want to amend the Agreement on the terms
and conditions of this Amendment;
NOW, THEREFORE, in consideration of the premises set forth above and
the considerations set forth below, and intending to be legally bound, the
parties hereby agree as follows:
1. Definitions. All capitalized terms not defined herein shall have the
meaning ascribed to them in the Agreement.
2. Amendment and Restatement of Section 3.3 of the Agreement. Section
3.3 of the Agreement is amended and restated to provide in full as follows:
"3.3 Outstanding Atlas Common Stock. The shares of Atlas
Common Stock issued and outstanding and owned by the
shareholders of Atlas (the "Shareholders") immediately prior
to the Merger shall (such holdings on such date will be as set
forth on Exhibit "B" hereto), by virtue of the Merger,
automatically and without any action on the part of any holder
thereof, become and be converted into that number of shares of
RAI Common Stock calculated by multiplying the number of such
shares of Atlas Common Stock owned by such Shareholder by the
"Exchange Ratio" determined as follows: divide (i) Sixty-
Three Million Dollars ($63,000,000), plus (ii) the amount that
would be required to be paid upon the exercise of all then
outstanding options to purchase Atlas Common Stock, whether or
not currently exercisable, plus or minus (iii) the adjustment
required pursuant to Section 6.8 hereof (the combination of
(i), (ii) and (iii) being referred to herein as the "Equity
Consideration"), by the Index Price (as hereinafter defined)
and divide the quotient by the sum of the number
of shares of Atlas Common Stock that are issued and
outstanding immediately prior to the Merger plus the number of
shares of Atlas Common Stock subject to outstanding options,
whether or not currently exercisable, immediately prior to the
Merger. As used in this Agreement, the term "Index Price"
shall mean $14.3133. Any shares of Atlas Common Stock owned by
Atlas shall be cancelled and retired upon the Effective Date
and no consideration shall be issued in exchange therefor.
By way of example, if, immediately prior to the
Merger the number of outstanding shares of Atlas Common Stock
is 276,930, the number of shares of Atlas Common Stock into
which options are convertible is 14,652, the amount that would
be required to convert all of the options into Atlas Common
Stock is $14,652, the aggregate amount of the items set forth
in clause (i) of Section 6.8 is $25,000,000, the reduction
required by clause (ii) of Section 6.8 is zero and the Index
Price is $14.3133, the Exchange Ratio would be:
$ 63,000,000 - $25,000,000 - 0 + $14,652
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276,930 + 14,652 =
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$ 14.3133
$ 38,014,652
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291,582 = 130.3738 = 9.10858
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$ 14.3133 $ 14.3133
On those facts, each Shareholder would be entitled to
9.10858 shares of RAI Common Stock for each share of Atlas
Common Stock owned by him, and each holder of options to
acquire shares of Atlas Common Stock would be entitled to
options to acquire that number of RAI Common Stock equal to
9.10858 times the number of shares of Atlas Common Stock for
which he held options at an exercise price of $0.10979 per
share of RAI Common Stock. The aggregate number of RAI shares
issuable upon the merger would be 2,522,439 (subject to
reduction due to fractional shares not being issued), and an
additional 133,458 (subject to reduction due to fractional
shares not being issued) shares would be issuable upon
exercise of the options
Subsequent to the Effective Date, certain
Shareholders and option holders of Atlas will have the right
to exchange, within five (5) business days of the Effective
Date, shares of RAI Common Stock received in the Merger for an
amount of cash from RAI not to exceed twenty percent (20%) of
the difference between Sixty-Three Million Dollars
($63,000,000) and the adjustment required pursuant to Section
6.8 hereof. The list of persons entitled to such exchange
option shall be determined by Atlas management prior to the
Effective Date, provided that no single individual shall be
allocated more than Three Million Dollars ($3,000,000) of such
cash amounts. Such exchange will be made at the Index Price."
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3. Amendment of Section 3.7 of the Agreement. Section 3.7 of the
Agreement is hereby amended by deleting the reference to "NASDAQNMS" and
substituting therefor "National Association of Securities Dealers, Inc. National
Market System."
4. Amendment to Section 3.11(b) of the Agreement. Section 3.11(b) of
the Agreement is hereby amended by adding thereto the following "and to persons
who were formerly members of the syndication sales force of Atlas and become
members of the syndication sales force of the Continuing Corporation."
5. Amendment to Section 3.11(e) of the Agreement. Section 3.11(e) of
the Agreement is hereby amended by deleting the reference to "$70,000,000" on
line 4 and substituting therefor "$63,000,000."
6. Amendment to Section 4.2 of the Agreement. Section 4.2 of the
Agreement is hereby amended by deleting "280,430" on line 2 and substituting
"276,930."
7. No Material Adverse Change. RAI and AAI hereby waive any claim that
the June 30, 1998 Balance Sheet demonstrates a material adverse change from
April 30, 1998 within the meaning of Section 4.23 of the Agreement and hereby
waive any claim of a material adverse change from April 30, 1998 within the
meaning of Section 4.23 of the Agreement resulting from increased costs of
drilling and completing xxxxx, from not increasing the price charged to third
parties for such drilling and completion and from declines in natural gas
prices. Atlas and the Principal shareholders hereby represent and warrant to RAI
and AAI that since June 30, 1998, there has been no material increase in Atlas'
cost of drilling and completing xxxxx.
Atlas and the Principal Shareholders hereby waive any claim
that there has been a material adverse change with respect to RAI within the
meaning of Section 5.6 of the Agreement based on any accounting treatments or
affects of any challenge to such treatments.
8. Amendment and Restatement of Section 7.1.7 of the Agreement. Section
7.1.7 of the Agreement is hereby amended and restated to provide in full as
follows:
" 7.1.7 Each of Xxxxxxx X. Xxxxx, Xxxxx X'Xxxx and Xxxxx Xxxx
shall have executed and delivered to the Continuing
Corporation a Non-Competition and Confidentiality Agreement
substantially in the form of Exhibit "C-1" hereto. The
Non-Competition and Confidentiality Agreements for Messrs.
Xxxxxxx X. Xxxxx, Xxxxx X'Xxxx and Xxxxx Xxxx shall be
executed and delivered simultaneously with execution of this
Agreement.
Each of J. Xxxxxx Xxxxxxx, Xxxxx Xxxxx and Xxxx Xxxxx shall
have executed and delivered to the Continuing Corporation an
Employment Agreement substantially in the form of Exhibit
'C-2.' attached."
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9. Amendment to Section 10.2 (g) of the Agreement. On line 2 of Section
10.2(g), Change "$24.025" to "14.3133;" on line 3 of Section 10.2(g), change
"Four Hundred Sixteen Thousand Two Hundred Thirty-three (416,233)" to "Six
Hundred Ninety-Eight Thousand Six Hundred Fifty-one (698,651)." Delete the last
sentence that begins "An indemnified Party..." and substitute therefor the
following: "Notwithstanding anything to the contrary herein contained, upon
delivery to the Escrow Agent of a certificate for the number of shares of RAI
Common Stock set forth on Exhibit "G," attached hereto and made a part hereof,
registered in the name of a Principal Shareholder, such Principal Shareholder
shall have no personal responsibility, or be otherwise personally liable, for
any past or future Loss or Expense. RAI and each Principal Shareholder hereby
authorize and direct the Exchange Agent to deliver to the Escrow Agent as soon
as reasonably possible certificates for those numbers of shares of RAI Common
Stock set forth on Exhibit 'G' to be issued to each Principal Shareholder."
10. Amendment to Section 10.2(h) of the Agreement. Delete the last two
sentences beginning "If there is ..." and substitute for those two sentences the
following: "If there is any further loss RAI would be entitled to additional
Collateral if any."
11. Execution in Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document. For the purpose of this
paragraph, signatures transmitted by facsimile will be acceptable as originals.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date and year first written above.
Resource America, Inc.
By:
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Title:
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Atlas America, Inc.
By:
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Title:
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The Atlas Group, Inc.
By:
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Title:
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PRINCIPAL SHAREHOLDERS:
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Xxxxxxx X. Xxxxx
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Xxxxxx X. Xxxxxxxx
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Xxxxx X. X'Xxxx
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Xxxxx X. Xxxx
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Xxxxxx X. Xxxxxx
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Xxxxx X. Kritzo
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Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxx
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Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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The Atlas Energy Group, Inc.
Employee Stock Ownership Plan,
Xxxxx X. Kritzo, Trustee
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