amendrra.htm


    
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

       


      
        
          
            


             

            4947042v.2

             

          

           


        

        
          
            

          

        

        
           


        

      


      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”)

       


      
        
          
             

            4947042v.2

          

           


        

        
          2

          
            

          

        

        
           


        

      


      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

       


      
        
          
             

            4947042v.2

          

           


        

        
          3

          
            

          

        

        
           


        

      


      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.

       

      


       

      [The remainder of this page is
intentionally left blank.]

       


      
        
          
             

            4947042v.2

          

           


        

        
          4