MASTER SEPARATION AND DISTRIBUTION AGREEMENT (this "Agreement") dated

as of May 14, 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.





{PAGE}



         "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.



                                       2

{PAGE}



         "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

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