Exhibit 10.2

AMENDMENT NO. 1
 
TO
 
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
 
THIS AMENDMENT NO. 1 TO EXCHANGE AND REGISTRATION RIGHTS AGREEMENT (this
“Amendment”) is made and entered into as of October 6, 2008, by and among
ABRAXAS PETROLEUM CORPORATION, a Nevada corporation (“Parent”), ABRAXAS ENERGY
PARTNERS, L.P., a Delaware limited partnership (the “Partnership”), and the
Purchasers listed on the signature pages attached hereto (individually, a
“Purchaser” and collectively “Purchasers”).
 
RECITALS
 
WHEREAS, on May 25, 2007, the Partnership, Parent and the Purchasers entered
into that certain Exchange and Registration Rights Agreement dated as of May 25,
2007 (the “Original Agreement”), pursuant to which the Partnership agreed to
provide certain rights for the benefit of the Purchasers; and
 
WHEREAS, the Partnership, Parent and the Purchasers have agreed to amend the
Original Agreement as set forth in this Amendment.
 
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by each party hereto, the parties hereby agree as
follows:
 
Section 1.                      Capitalized Terms.  Capitalized terms used in
this Amendment shall have the meaning set forth in the Original Agreement except
as otherwise defined in this Amendment.
 
Section 2.                      Amendment.  Pursuant to Section 11.7 of the
Original Agreement, the Original Agreement is hereby amended as follows:
 
(a)           Section 1 of the Original Agreement is hereby amended as follows:
 
(1)           The definition of “Credit Agreement” is hereby amended to read, in
its entirety, as follows:
 
“Credit Agreement” means that certain Amended and Restated Credit Agreement
dated as of January 31, 2008 by and among the Partnership, the Lenders party
thereto, Société Générale, as Administrative Agent and as Issuing Lender, The
Royal Bank of Canada, as Syndication Agent, and The Royal Bank of Scotland PLC,
as Documentation Agent, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith or any
successor or
 

 
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replacement agreement (together with any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith), whether
with the same or any other lender, group of lenders or agent, in each case as
the same may be amended (including any amendment and restatement thereof),
modified, supplemented, extended, restated, substituted, increased, replaced,
renewed or refinanced from time to time in accordance with its terms.
 
(2)           The following definitions are hereby added to Section 1 and shall
read in their entirety as follows:
 
A.  “Maturity Date” means January 31, 2009.
 
B.  “Registration Rights Agreement” means that certain Registration Rights
Agreement dated as of May 25, 2007 as amended by Amendment No. 1 to Registration
Rights Agreement dated as of December 5, 2007 and as amended by Amendment No. 2
to Registration Rights Agreement dated as of October 6, 2008 by and among the
Partnership and the Purchasers named therein.
 
C.  “Subordinated Credit Agreement” means that certain Subordinated Credit
Agreement dated as of January 31, 2008 among the Partnership, the Lenders party
thereto, Société Générale, as Administrative Agent, and The Royal Bank of
Canada, as Syndication Agent, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith or any successor or replacement agreement (together with any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith), whether with the same or any other lender, group of
lenders or agent, in each case as the same may be amended (including any
amendment and restatement thereof), modified, supplemented, extended, restated,
substituted, increased, replaced, renewed or refinanced from time to time in
accordance with its terms.
 
(b)           Section 3.1 of the Original Agreement is hereby amended to read,
in its entirety, as follows:
 
“3.           Mechanics of Exchange.
 
3.1           Subject to the terms of this Section 3.1, if the IPO has not been
consummated on or before 5:00 p.m. on January 31, 2009 (the ”Trigger Date”),
then beginning on the Business Day immediately after the Trigger Date (the
“Initial Exchange Date”)
 

 
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and ending at the close of business on the Termination Date, each of the
Purchasers shall have the right to exchange each of the Purchased Common Units
into the Applicable Number of Exchange Shares; provided, however, that in the
event that the Subordinated Credit Agreement is terminated on or prior to the
Maturity Date and any replacement thereof has a maturity date as set forth
therein later than June 30, 2009, or if the Subordinated Credit Agreement is
amended, modified, supplemented, extended, restated, substituted, increased,
replaced, renewed or refinanced and the maturity date as set forth therein is a
date later than June 30, 2009, then the Trigger Date shall be April 30, 2009.”
 
(c)           Section 7.1(c) of the Original Agreement is hereby amended to
read, in its entirety, as follows:
 
(c)           use its commercially reasonable efforts to cause such Registration
Statement to remain continuously effective and prepare and file with the
Commission such amendments and supplements to the Registration Statement and the
prospectus used in connection therewith (the “Prospectus”) (and the applicable
Exchange Act reports incorporated therein by reference, so filed on a timely
basis) as may be necessary to keep the Registration Statement current, effective
and free from any material misstatement or omission to state a material fact for
a period ending on the date that is, with respect to each Purchaser’s Exchange
Shares purchased hereunder, the earlier of (i) the date on which the Purchaser
may sell all Exchange Shares then held by the Purchaser without restriction
under Rule 144(d), or (ii) such time as all Exchange Shares received by such
Purchaser pursuant to this Agreement have been sold or otherwise transferred
pursuant to a registration statement or otherwise
 
Section 3.                      Payment.  In consideration of each of the
Purchaser’s agreement to amend the Original Agreement and the Registration
Rights Agreement, the Partnership hereby agrees to pay to each of the Purchasers
who has executed and delivered this Amendment an amount equal to $0.0625 per
Common Unit in cash within 45 days following the end of each Quarter (as defined
in the Partnership Agreement) commencing with the Quarter ending December 31,
2008 and ending on the earlier to occur of (i) the date of the consummation of
the IPO, (ii) the date that the Partnership is first obligated to pay Liquidated
Damages or Shelf Liquidated Damages (each as defined in the Registration Rights
Agreement) pursuant to the Registration Rights Agreement, (iii) April 30, 2009,
(iv) the dissolution and liquidation of the Partnership, and (v) the date of the
receipt of Stockholder Approval; provided however, that if the Partnership
certifies that it is unable to pay the amount set forth in this Section 3 in
cash because such payment would result in a breach under any of the
Partnership’s or its subsidiaries’ credit facilities, then the Partnership may
pay all amounts payable under this Section 3 in kind in the form of the issuance
of additional Common Units.  The determination of the number of Common Units to
be issued under this Section 3 shall be equal to the amount of the payment
divided by the lesser of (i) market value of each Common Unit at the time the
payment is paid or (ii) $16.66 (subject to appropriate adjustments for any
subdivision or combination of Registrable Securities after the date
hereof).  For any partial Quarter, the amount of the payment set forth in this
Section 3 shall be equal to the product of (x) $0.0625 per Common Unit times (y)
a fraction, the
 

 
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numerator of which is the number of calendar days in the period commencing on
the first calendar day of the Quarter and ending on the calendar day that the
right to receive the payment provided in this Section 3 terminates and the
denominator of which is the number of calendar days in the Quarter.
 
Section 4.                      Counterparts.  This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Amendment.  In the event that this Amendment is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
date file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
 
Section 5.                      Headings.  The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
 
Section 6.                      Governing Law.  The laws of the State of New
York shall govern this Agreement without regard to principles of conflict of
laws.
 
Section 7.                      Original Agreement.  Except as expressly amended
by this Amendment, the Original Agreement shall remain in full force and effect
and all of the terms of the Original Agreement are hereby incorporated into this
Amendment.
 

 
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