This error may occur on atom installation as well as other times that CLASSPATH or encryption files are accessed.
The java.lang.NoClassDefFoundError always indicates that the classes needed cannot be found.
Normally, this would indicate that your CLASSPATH settings are incorrect or corrupted. It is also possible the following JAR files do not exist or are corrupted: JRE/lib/security/local_policy.jar and JRE/lib/security/US_export_policy.jar.
Re-installing Java should resolve this error.