amendedrragr.htm


    
      Exhibit
10.1

      AMENDMENT
NO. 2

       

      TO

       

      EXCHANGE
AND REGISTRATION RIGHTS AGREEMENT

       

      THIS
AMENDMENT NO. 2 TO EXCHANGE AND REGISTRATION RIGHTS AGREEMENT (this “Amendment”) is made
and entered into as of May 1, 2009, 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 ;

       

      WHEREAS, the Partnership,
Parent and the Purchasers amended the Original Agreement pursuant to the terms
of that certain Amendment No. 1 to Exchange and Registration Rights Agreement
dated as of October 6, 2008 (“Amendment No. 1”);
and

       

      WHEREAS, the Partnership,
Parent and the Purchasers have agreed to further amend the Original Agreement
and Amendment No. 1 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 as amended by Amendment No. 1 except
as otherwise defined in this Amendment.

       

      Section
2.                      Amendment of Original
Agreement.  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 “AMEX” is hereby deleted in its entirety.

       

      (2)           The
definition of “IPO” is hereby amended to read, in its entirety, as
follows:

       

      “IPO” means the
initial public offering of Common Units by the Partnership under the Securities
Act that results in the Common

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Units
being listed for trading on the New York Stock Exchange, Nasdaq or NYSE AMEX or
any affiliate of the New York Stock Exchange, Nasdaq or NYSE AMEX.

       

      (3)           The
definition of “Partnership Agreement” is hereby amended to read, in its
entirety, as follows:

       

      “Partnership
Agreement” means that certain Second Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of September 19,
2007.

       

      (4)           The
definition of “Stockholder Approval” is hereby amended to read, in its entirety,
as follows:

       

      “Stockholder Approval”
means the approval by the holders of the requisite number of shares of Common
Stock to the issuance of shares of Common Stock pursuant to the terms of this
Agreement at a duly called meeting of the Stockholders in accordance with the
rules of Nasdaq or such other securities exchange on which the Common Stock is
then quoted or traded and all other Laws.

       

      (5)           The
following definitions are hereby added to Section 1 and shall read in their
entirety as follows:

       

      A.           “Election Date” shall
have the meaning set forth in Section 3.3.

       

      B.           
“Nasdaq” means
the Nasdaq Stock Market.

       

      C.           “NYSE AMEX” means the
NYSE AMEX, LLC.

       

      (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, if the IPO has not been consummated on or before
5:00 p.m. on June 30, 2009 (the “Trigger Date”), then
beginning on the Business Day immediately following the Trigger Date (the “Initial Exchange
Date”) 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.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)           Section
3.3 of the Original Agreement is hereby amended to read, in its entirety, as
follows:

       

      Beginning
on the Business Day immediately following the date that Purchasers owning twenty
percent (20%) of the Purchased Common Units have delivered written notice to the
Partnership and Parent that they have elected to exchange Purchased Common Units
for Common Stock (the “Election Date”),
Parent shall take all action necessary to convene a meeting of its stockholders
(the “Parent
Stockholders”) to consider and vote upon the issuance of the aggregate
number of shares of Common Stock issuable upon exchange of the Purchased Common
Units for shares of Common Stock pursuant to this Agreement in excess of the
Initial Exchange Shares as soon as practicable, but in any event not later than
60 days after the Election Date (the “Stockholders’
Meeting”).  Except as provided in this Section 3.3, the board
of directors of Parent shall, in connection with such meeting, recommend
approval of the issuance of shares of Common Stock in excess of the Initial
Exchange Shares and take all other lawful action to solicit the approval of the
issuance of shares of Common Stock in excess of the Initial Exchange Shares by
the Parent Stockholders; provided, however, that the board of directors of
Parent shall not be required to recommend such approval if it advised by counsel
that such recommendation would violate its fiduciary duties to Parent’s
stockholders under applicable Law.

       

      (d)           Section
3.5 of the Original Agreement is hereby amended to read, in its entirety, as
follows:

       

      Notwithstanding
anything to the contrary set forth in this Agreement, prior to the receipt of
Stockholder Approval, in no event shall the total number of Exchange Shares that
Parent  shall be required to issue pursuant to this Agreement exceed
the maximum number of shares of Common Stock that Parent can issue without
Stockholder Approval pursuant to any rule of Nasdaq or any other national
exchange on which Parent’s Common Stock is then quoted or traded, subject to
equitable adjustments from time to time for stock-splits, stock dividends,
combinations, capital reorganizations and similar events relating to the Common
Stock occurring after the date of this Agreement.

       

      (e)           Section
7.1(a) of the Original Agreement is hereby amended to read, in its entirety, as
follows:

       

      subject
to receipt of necessary information from the Purchasers after prompt request
from Parent to the Purchasers to provide such information, no later than the
30th day following the Election Date (the “Filing Date”),
prepare and file with the Commission a registration statement on Form S-3 or
such other successor form (except that if Parent is not then eligible to
register for resale the Exchange Shares on Form S-3, in which case
such

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      registration
shall be on Form S-1 or any successor form) (a “Registration
Statement”) to enable the resale of the Exchange Shares, by the
Purchasers or their transferees from time to time over the Nasdaq or any other
national exchange on which Parent’s Common Stock is then quoted or traded, or in
privately-negotiated transactions.  No Purchaser may include any
Exchange Shares in the Registration Statement pursuant to this Agreement unless
such Purchaser furnishes to Parent in writing within ten (10) business days
after receipt of request therefor, such requested information;

       

      (f)           Section
7.1(b) of the Original Agreement is hereby amended to read, in its entirety, as
follows:

       

      use its
commercially reasonable efforts, subject to receipt of necessary information
from the Purchasers after prompt request from Parent to the Purchasers to
provide such information, to cause the Registration Statement to become
effective prior to the 120th day following the Election Date; provided, however,
that if Parent has filed the Registration Statement by the Filing Date and the
Commission has not declared the Registration Statement effective prior to the
date that is specified in Rule 3-12 of Regulation S-X promulgated by the
Commission, then the time period for becoming effective shall be extended to the
180th day following the Election Date (the “Effectiveness
Date”);

       

      (g)           Section
7.2 is hereby amended to read, in its entirety, as follows:

       

      Parent
and the Purchasers agree that the Purchasers will suffer damages if the
Registration Statement is not declared effective on or prior to Effectiveness
Date.  Parent and the Purchasers further agree that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, if
the Registration Statement is not declared effective on or prior to the
Effectiveness Date, Parent shall pay as Liquidated Damages, and not as a
penalty, 1% of (i) the Purchase Price multiplied by (ii) the number of Exchange
Shares held by such Purchaser (such product being the “Liquidated Damages
Amount”) per thirty (30) day period (which shall be pro rated for such
periods less than thirty (30) days) until the Registration Statement is declared
effective.  The Liquidated Damages Amount will be paid in cash, unless
Parent certifies that such cash payment would result in a breach under its
credit facilities or other documents evidencing indebtedness, then Parent may
pay the Liquidated Damages Amount in kind in the form of additional Common
Stock.  The determination of the number of shares of Common Stock to
be issued as the Liquidated Damages Amount shall be equal to the Liquidated
Damages Amount divided by the lesser of (i) the Purchase Price per share; and
(ii) the closing price of Parent’s Common Stock on the Nasdaq or any other
national exchange on which Parent’s Common Stock is then quoted or traded on the
date on which the Liquidated Damages payment is due.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      In no
event shall Parent be required to issue fractional shares pursuant to the terms
of this Section 7.2 and all fractional shares shall be rounded down to the next
lowest number of whole shares.  The parties agree that the amounts set
forth in this Section 7.2 represent a reasonable estimate on the part of the
parties, as of the date of this Agreement, of the amount of damages that will be
incurred by the Purchasers if the Registration Statement is not declared
effective on or prior to the Effectiveness Date.  Notwithstanding
anything to the contrary set forth in this Agreement, in no event shall the
total number of Exchange Shares that Parent shall be required to issue pursuant
to this Agreement exceed the maximum number of shares of Common Stock that
Parent can issue without Stockholder Approval pursuant to any rule of Nasdaq, or
any other national exchange on which Parent’s Common Stock is then quoted or
traded, subject to equitable adjustments from time to time for stock-splits,
stock dividends, combinations, capital reorganizations and similar events
relating to the Common Stock occurring after the date of this
Agreement.

       

      Section
3.                      Section
3 of Amendment No. 1 is hereby amended to read in its entirety, as
follows:

       

      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) June 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 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 as amended by Amendment No. 1 and Amendment No. 1 shall
remain

       in
full force and effect and all of the terms of the Original Agreement as amended
by Amendment No. 1 and Amendment No. 1 are hereby incorporated into this
Amendment.

       

      


       

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