Exhibit 10.1
 

AMENDMENT NO. 5
(Amended and Restated Credit Agreement)

This Amendment No. 5 ("Agreement") dated as of July 22, 2009 ("Effective Date")
is among Abraxas Energy Partners, L.P., a Delaware limited partnership
("Borrower"), the lenders party to the Credit Agreement described below from
time to time as Lenders, and Société Générale, as Administrative Agent (in such
capacity, the "Administrative Agent") and as Issuing Lender (in such capacity,
the "Issuing Lender").

RECITALS

A.                      The Borrower, the Lenders, the Issuing Lender and the
Administrative Agent are parties to the Amended and Restated Credit Agreement
dated as of January 31, 2008, as amended by that certain Amendment No. 1 dated
as of January 16, 2009, that certain Amendment No. 2 dated as of April 30, 2009,
that certain Amendment No. 3 dated as of May 7, 2009, and that certain Amendment
No. 4 dated as of June 30, 2009 (as so amended and as the same may be further
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"; each capitalized term defined in the Credit Agreement and
used herein without definition shall have the meaning assigned to such term in
the Credit Agreement, unless expressly provided to the contrary).

B.                      Contemporaneously herewith, the Borrower, the
Subordinated Agent and the Subordinated Lenders (each as defined in the Credit
Agreement) propose to make certain amendments to the Subordinated Credit
Agreement (as defined in the Credit Agreement) pursuant to that certain
Amendment No. 5 dated as of July 22, 2009 (the "Subordinated Credit Agreement
Amendment") among the Borrower, the Subordinated Agent and the Subordinated
Lenders.

C.                      The Borrower has proposed that it merge with and into
Abraxas Petroleum Corporation ("APC") (the "Merger"), pursuant to the Amended
and Restated Agreement and Plan of Merger dated as of July 17, 2009 (the "Merger
Agreement") by and among the Borrower, APC and Merger Sub (as defined in the
Merger Agreement).

D.                      The Borrower wishes to have the option to terminate all
of the Hydrocarbon Hedge Agreements that were required to be established on (a)
the Closing Date pursuant to Section 3.01(p) of the Credit Agreement and (b) the
Amendment No. 2 Effective Date pursuant to Section 7.3 of Amendment No. 2, in
each case that are "in the money" (the "Proposed Hedge Terminations"), and
prepay the Obligations with the net cash proceeds thereof.  If the Borrower
decides to effect the Proposed Hedge Terminations, the date of the Proposed
Hedge Terminations shall be referred to as the "Hedge Termination Date".

E.                      The Borrower has requested that the Lenders (a) consent
to the Subordinated Credit Agreement Amendment and (b) make certain amendments
to the Credit Agreement as provided herein

F.                      The Borrower, the Administrative Agent and the Lenders
wish to, subject to the terms and conditions of this Agreement, make certain
amendments to the Credit Agreement as provided herein.

 

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THEREFORE, the Borrower, the Lenders, the Issuing Lender and the Administrative
Agent hereby agree as follows:

ARTICLE I.
 
DEFINITIONS
 
Section 1.1                      Terms Defined Above.  As used in this
Agreement, each of the terms defined in the opening paragraph and the Recitals
above shall have the meanings assigned to such terms therein.
 
Section 1.2                      Other Definitional Provisions. The words
"hereby", "herein", "hereinafter", "hereof", "hereto" and "hereunder" when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular Article, Section, subsection or provision of this
Agreement.  Article, Section, subsection and Exhibit references herein are to
such Articles, Sections, subsections and Exhibits of this Agreement unless
otherwise specified. All titles or headings to Articles, Sections, subsections
or other divisions of this Agreement or the exhibits hereto, if any, are only
for the convenience of the parties and shall not be construed to have any effect
or meaning with respect to the other content of such Articles, Sections,
subsections, other divisions or exhibits, such other content being controlling
as the agreement among the parties hereto.  Whenever the context requires,
reference herein made to the single number shall be understood to include the
plural; and likewise, the plural shall be understood to include the
singular.  Words denoting gender shall be construed to include the masculine,
feminine and neuter, when such construction is appropriate; and specific
enumeration shall not exclude the general but shall be construed as
cumulative.  Definitions of terms defined in the singular or plural shall be
equally applicable to the plural or singular, as the case may be, unless
otherwise indicated.
 
ARTICLE II.
 
CONSENT
 
Section 2.1                      Consent; Acknowledgment; Agreement.  Subject to
the terms of this Agreement, the Administrative Agent and the Lenders hereby
consent to the execution and delivery of the Subordinated Credit Agreement
Amendment and the terms and conditions thereof.  The consent by the Lenders and
by the Administrative Agent described in this Section 2.01 is referred to herein
as the "Consent."  The Consent is contingent upon the satisfaction of the
conditions precedent described in Article VI below.  Such Consent is strictly
limited to the extent described herein.  Nothing contained herein shall be
construed to be a consent to or a permanent waiver of the Sections covered by
the Consent provided for herein or any other terms, provisions, covenants,
warranties or agreements contained in the Credit Agreement or any other Loan
Document.  The Lenders reserve the right to exercise any rights and remedies
available to them in connection with any other present or future defaults with
respect to any provision of the Credit Agreement or any other Loan
Document.  The description herein of the Consent is based upon the information
provided to the Lenders on or prior to the date hereof, and, to the extent that
material information is incorrect or omitted with respect to any activity, event
or circumstance that could result in a Default or Event of Default, such Consent
shall not be deemed to apply to such activity, event or circumstance.  The
failure of the Lenders to give notice to the Borrower of any such Defaults or
Events of Default is not intended to be nor shall
 

 
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be a waiver thereof.  The Borrower hereby agrees and acknowledges that the
Lenders require and will require strict performance by the Borrower of all of
its obligations, agreements and covenants contained in the Credit Agreement and
the other Loan Documents pursuant to the terms thereof, and no inaction or
action regarding any Default or Event of Default is intended to be or shall be a
waiver thereof.
 
ARTICLE III.
 
AMENDMENTS
 
The Credit Agreement shall be amended as follows, effective as of the Hedge
Termination Date:
 
Section 3.1                      Section 1.01 of the Credit Agreement is hereby
amended by adding the following new terms in alphabetical order:
 
"Amendment No. 5 Hedge Termination Date" means the date on which the Borrower
effects the Proposed Hedge Terminations and Amendment No. 5 dated as of July 22,
2009 becomes effective in accordance with its terms.
 
"Proposed Hedge Terminations" means the termination of all of the Hydrocarbon
Hedge Agreements that were required to be established on (a) the Closing Date
pursuant to Section 3.01(p) and (b) the Amendment No. 2 Effective Date pursuant
to Section 7.3 of Amendment No. 2, in each case that are "in the money".
 
Section 3.2                      Section 2.02(a) of the Credit Agreement is
hereby amended to read in its entirety as follows:
 
(a)           Borrowing Base.  The Borrowing Base in effect as of the Amendment
No. 5 Hedge Termination Date has been set by the Administrative Agent and the
Lenders and acknowledged by the Borrower as $95,000,000.00.  The Borrowing Base
shall be determined in accordance with the standards set forth in Section
2.02(d) and is subject to periodic redetermination or reduction pursuant to
Sections 2.02(b), 2.02(c) and 6.04(b).
 
Section 3.3                      Section 5.12 of the Credit Agreement is hereby
amended to read in its entirety as follows:
 
Section 5.12.  Hedging Arrangements.  The Borrower shall maintain in effect all
of the Hydrocarbon Hedge Agreements that were required to be put in place on the
Amendment No. 5 Hedge Termination Date, which shall cover (a) for the period
from the Amendment No. 5 Hedge Termination Date through December 31, 2012,
notional volumes equal to or greater than 85% of the anticipated production
volumes of crude oil and natural gas, calculated separately, attributable to
Proven Reserves categorized as "proved, developed and producing" of the Loan
Parties as shown on the Internal Engineering Report dated as of June 1, 2009 and
(b) for the period from January 1, 2013 through December 31, 2013, notional
volumes equal to or greater than 70% of the anticipated production volumes of
crude oil and natural gas, calculated separately, attributable to Proven
Reserves categorized as "proved, developed
 

 
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and producing" of the Loan Parties as shown on the Internal Engineering Report
dated as of June 1, 2009.
 

ARTICLE IV.
 
RESERVED
 
ARTICLE V.
 
REPRESENTATIONS AND WARRANTIES
 
Section 5.1                      Representations and Warranties.  The Borrower
represents and warrants that: (a) its representations and warranties contained
in Article IV of the Credit Agreement and its representations and warranties
contained in the Security Instruments, the Guaranties, and each of the other
Loan Documents to which it is a party are true and correct in all material
respects on and as of the Effective Date, as though made on and as of such date,
except those representations and warranties that speak of a certain date, which
representations and warranties were true and correct as of such date; (b) no
Default has occurred and is continuing; (c) the execution, delivery and
performance of this Agreement are within the corporate power and authority
of  the Borrower and have been duly authorized by appropriate corporate action
and proceedings; (d) this Agreement constitutes the legal, valid, and binding
obligation of the Borrower enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the rights of creditors generally and general principles
of equity; (e) there are no governmental or other third party consents, licenses
and approvals required in connection with the execution, delivery, performance,
validity and enforceability of this Agreement; and (f) the Liens under the
Security Instruments are valid and subsisting and secure the Borrower's
obligations under the Loan Documents.
 
ARTICLE VI.
 
CONDITIONS
 
This Agreement shall become effective and enforceable against the parties hereto
as of the Hedge Termination Date, upon the occurrence of the following
conditions precedent:

Section 6.1                      Documentation.  The Administrative Agent shall
have received multiple original counterparts, as requested by the Administrative
Agent, of this Agreement duly and validly executed and delivered by duly
authorized officers of the Borrower, the Administrative Agent, the Issuing
Lender and the Required Lenders.
 
Section 6.2                      Subordinated Credit Agreement Amendment.  The
Administrative Agent shall have received true and correct copies of the fully
executed Subordinated Credit Agreement Amendment and such agreement shall have
become effective.
 
Section 6.3                      Prepayment.   The Administrative Agent shall
receive from the Borrower a prepayment of the Obligations, simultaneously with
the Proposed Hedge Terminations, in an amount equal to the greater of (a) the
net cash proceeds of the Proposed Hedge Terminations and (b) any Borrowing Base
Deficiency caused by the Borrowing Base reduction contained in this Agreement.
 

 
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Section 6.4                      Hydrocarbon Hedge Agreements.  The Borrower
shall have entered into Hydrocarbon Hedge Agreements (a) for the period from the
Hedge Termination Date through December 31, 2012, covering notional volumes
equal to or greater than 85% of the anticipated production volumes of crude oil
and natural gas, calculated separately, attributable to Proven Reserves
categorized as "proved, developed and producing" of the Loan Parties as shown on
the Internal Engineering Report dated as of June 1, 2009 and (b) for the period
from January 1, 2013 through December 31, 2013, covering notional volumes equal
to or greater than 70% of the anticipated production volumes of crude oil and
natural gas, calculated separately, attributable to Proven Reserves categorized
as "proved, developed and producing" of the Loan Parties as shown on the
Internal Engineering Report dated as of June 1, 2009.
 
Section 6.5                      Merger Agreement.  The Administrative Agent
shall have received true and correct copies of the fully executed Merger
Agreement, and such agreement shall be enforceable against the Borrower and APC
in accordance with its terms, except as such enforceability may be limited by
any applicable bankruptcy, insolvency, reorganization, moratorium, or similar
law affecting creditors' rights generally and by general principles of equity.
 
Section 6.6                      No Default.  No Default shall have occurred and
be continuing as of the Effective Date.
 
Section 6.7                      Representations.  The representations and
warranties in this Agreement shall be true and correct in all material respects.
 
Section 6.8                      Fees and Expenses.  The Borrower shall have
paid all fees and expenses of the Administrative Agent's outside legal counsel
and other consultants pursuant to all invoices presented for payment on or prior
to the Effective Date.
 
ARTICLE VII.
 
MISCELLANEOUS
 
Section 7.1                      Effect on Loan Documents; Acknowledgments.
 
(a)           The Borrower acknowledges that on the date hereof all Obligations
are payable without defense, offset, counterclaim or recoupment.
 
(b)           The Administrative Agent, the Issuing Lender, and the Lenders
hereby expressly reserve all of their rights, remedies, and claims under the
Loan Documents.  Nothing in this Agreement shall constitute a waiver or
relinquishment of (i) any Default or Event of Default under any of the Loan
Documents, (ii) any of the agreements, terms or conditions contained in any of
the Loan Documents, (iii) any rights or remedies of the Administrative Agent,
the Issuing Lender or any Lender with respect to the Loan Documents, or (iv) the
rights of the Administrative Agent, any Issuing Lender or any Lender to collect
the full amounts owing to them under the Loan Documents.
 
(c)           Each of the Borrower, the Administrative Agent, the Issuing
Lender, and the Lenders does hereby adopt, ratify, and confirm the Credit
Agreement, and acknowledges and agrees that the Credit Agreement and all other
Loan Documents are and remain in full force and effect, and the Borrower
acknowledges and agrees that its liabilities under the Credit Agreement
 

 
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and the other Loan Documents are not impaired in any respect by this Agreement
or the consent and amendment granted hereunder.
(d)           This Agreement is a Loan Document for the purposes of the
provisions of the other Loan Documents.  Without limiting the foregoing, any
breach of representations, warranties, and covenants under this Agreement shall
be a Default or Event of Default, as applicable, under the Credit Agreement.
 
Section 7.2                      Counterparts.  This Agreement may be signed in
any number of counterparts, each of which shall be an original and all of which,
taken together, constitute a single instrument.  This Agreement may be executed
by facsimile signature and all such signatures shall be effective as originals.
 
Section 7.3                      Successors and Assigns.  This Agreement shall
be binding upon and inure to the benefit of the Lenders, the Borrower, the
Administrative Agent, the Issuing Lender and their respective successors and
assigns permitted pursuant to the Credit Agreement.
 
Section 7.4                      Invalidity.  In the event that any one or more
of the provisions contained in this Agreement shall for any reason be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
 
Section 7.5                      Governing Law.  This Agreement shall be deemed
to be a contract made under and shall be governed by and construed in accordance
with the laws of the State of New York.
 
Section 7.6                      RELEASE.  THE BORROWER ACKNOWLEDGES THAT ON THE
DATE HEREOF ALL OBLIGATIONS ARE PAYABLE WITHOUT DEFENSE, OFFSET, COUNTERCLAIM OR
RECOUPMENT.  IN ADDITION, EACH OF THE BORROWER AND ITS SUBSIDIARIES (FOR
THEMSELVES AND THEIR RESPECTIVE SUCCESSORS, AGENTS, ASSIGNS, TRANSFEREES,
OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, ATTORNEYS AND AGENTS) HEREBY
RELEASES ANY AND ALL CLAIMS, CAUSES OF ACTION OR OTHER DISPUTES IT MAY HAVE
AGAINST THE ADMINISTRATIVE AGENT, THE ISSUING LENDER, ANY OF THE LENDERS, LEGAL
COUNSEL TO THE ADMINISTRATIVE AGENT, THE ISSUING LENDER OR ANY OF THE LENDERS,
CONSULTANTS HIRED BY ANY OF THE FOREGOING, OR ANY OF THEIR RESPECTIVE
AFFILIATES, SUBSIDIARIES, SHAREHOLDERS, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS OR ASSIGNS OF ANY KIND OR NATURE ARISING OUT OF,
RELATED TO, OR IN ANY WAY CONNECTED WITH, THE CREDIT AGREEMENT OR THE LOAN
DOCUMENTS, IN EACH CASE WHICH MAY HAVE ARISEN ON OR BEFORE THE DATE OF THIS
AGREEMENT.  EACH OF THE BORROWER AND ITS SUBSIDIARIES HEREBY ACKNOWLEDGES THAT
IT HAS READ THIS AGREEMENT AND HAS CONFERRED WITH ITS COUNSEL AND ADVISORS
REGARDING ITS CONTENT, INCLUDING THIS SECTION 7.6, AND IS FREELY AND VOLUNTARILY
ENTERING INTO THIS AGREEMENT, AND HEREBY AGREES TO WAIVE ANY CLAIM THAT THE
TERMS OF THIS AGREEMENT
 

 
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(INCLUDING, WITHOUT LIMITATION, THE RELEASES CONTAINED HEREIN) ARE INVALID OR
OTHERWISE UNENFORCEABLE.
 
Section 7.7                      Entire Agreement. THIS AGREEMENT, THE CREDIT
AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
 
[Signature Pages Follow]

 
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