Document:

votingregright.htm

     

    Exhibit 10.1

    
 

    VOTING,
REGISTRATION RIGHTS & LOCK-UP AGREEMENT

     

    THIS
VOTING, REGISTRATION RIGHTS & LOCK-UP AGREEMENT (this “Agreement”), dated as
of June 30, 2009, is by and among ABRAXAS PETROLEUM CORPORATION, a Nevada
corporation (“Abraxas”), ABRAXAS
ENERGY PARTNERS, L.P., a Delaware limited partnership (“Energy,” and together
with Abraxas, the “Abraxas Parties”),
and the limited partners signatory hereto (individually, a “Limited Partner” and,
collectively, the “Limited
Partners”).  Terms not defined in this Agreement shall have the
meaning given such terms in the Merger Agreement (as defined
below).

     

    RECITALS

     

    WHEREAS, Abraxas and Energy
propose to enter into an Agreement and Plan of Merger dated as of even date
herewith (as the same may be amended or supplemented, the “Merger Agreement”)
providing for the merger of Energy with and into Abraxas (the “Merger”);

     

    WHEREAS, on May 25, 2007,
Energy, Abraxas and the Limited Partners entered into that certain Exchange and
Registration Rights Agreement dated as of May 25, 2007, as amended by
Amendment No. 1 to Exchange and Registration Rights Agreement dated as of
October 6, 2008 and Amendment No. 2 to Exchange and Registration
Rights Agreement dated as of May 1, 2009 (as amended, the “Exchange Agreement”),
pursuant to which the Abraxas Parties agreed to provide certain rights for the
benefit of the Limited Partners;

     

    WHEREAS, Energy has previously
filed a registration statement on Form S-1 (No. 333-144537) under the
Act (the “IPO
Registration Statement”) relating to the initial public offering (“IPO”) of the common
units of Energy (the “Common
Units”);

     

    WHEREAS, each Limited Partner
owns the number of Common Units set forth opposite its name on Schedule A
hereto (such Common Units, together with any other Common Units acquired by such
Limited Partner, as beneficial owner thereof, after the date hereof and during
the term of this Agreement, being collectively referred to herein as the “Subject Units” of
such Limited Partner);

     

    WHEREAS, as a condition to its
willingness to enter into the Merger Agreement, the Abraxas Parties have
requested that the Limited Partners enter into this Agreement; and

     

    WHEREAS, as a condition to its
willingness to approve the Merger Agreement, each of the Limited Partners have
requested that the Abraxas Parties enter into this Agreement.

     

    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 are hereby
acknowledged by each party hereto, the parties hereby agree as
follows:

     

    
      
        
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    Article
I

     

    AGREEMENTS
OF THE LIMITED PARTNERS

     

    Each
Limited Partner covenants and agrees with the Abraxas Parties, solely as to such
Limited Partner, as follows:

     

    Section 1.1
Agreement to
Vote.  Such Limited Partner agrees that:

     

    (a) In Favor of
Merger.  At any meeting of the holders of the Common Units (the
“Unitholders”)
called to seek Energy Unitholder Approval or at any postponement or adjournment
thereof or in any other circumstances upon which a vote, consent or other
approval with respect to the Merger Agreement, any ancillary document or
agreement to the Merger Agreement, the Merger, or any other transaction
contemplated thereby is sought, the Limited Partner shall (i) if a meeting
is held, appear at such meeting or otherwise cause the Subject Units to be
counted as present at such meeting for purposes of establishing a quorum and
(ii) vote (or cause to be voted) the Subject Units in favor of granting
Energy Unitholder Approval.  In the event Energy Unitholder Approval
is sought without a meeting of the Unitholders, this Agreement shall constitute
an approval in writing pursuant to Section 13.11 of the Partnership Agreement of
the Merger and the Merger Agreement and all of the transactions contemplated
thereby.

     

    (b) Against Other
Transactions.  At any meeting of the Unitholders of Energy or
at any postponement or adjournment thereof or in any other circumstances upon
which the Limited Partner’s consent or other approval is sought, the Limited
Partner shall vote (or cause to be voted) the Subject Units against (i) any
merger agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by Energy,
(ii) any acquisition proposal and/or (iii) any amendment of Energy’s
certificate of limited partnership or the Partnership Agreement or other
proposal or transaction involving Energy or any of its subsidiaries, which
amendment or other proposal or transaction could in any manner impede,
frustrate, prevent or nullify any provision of the Merger Agreement, any
ancillary document or agreement to the Merger Agreement, the Merger, or any
other transaction contemplated thereby or change in any manner the voting rights
of any class of Energy’s units.  The Limited Partners shall not take
or commit or agree to take any action inconsistent with the
foregoing.

     

    (c) Revoke Other
Proxies.  Such Limited Partner represents and warrants that any
proxies heretofore given in respect of the Subject Units that may still be in
effect are not irrevocable, and such proxies are hereby revoked.

     

    (d) IRREVOCABLE
PROXY.  Such Limited Partner hereby irrevocably grants to, and
appoints, Abraxas, and any individual designated in writing by Abraxas, and each
of them individually, as such Limited Partner’s proxy and attorney-in-fact (with
full power of substitution and resubstitution), for and in the name, place and
stead of the Limited Partner, to vote the Subject Units, or grant a consent or
approval in respect of the Subject Units in a manner consistent with this Section 1.1.  Such
Limited Partner understands and acknowledges that Abraxas is entering into this
Agreement and the Merger Agreement in reliance upon such Limited Partner’s
execution and delivery of this Agreement.  Such Limited Partner
hereby

     

    
      
        
           

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    affirms
that the irrevocable proxy set forth in this Section 1.1
is given in connection with the execution of the Merger Agreement, and that such
irrevocable proxy is given to secure the performance of the duties of such
Limited Partner under this Agreement.  Such Limited Partner hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked.  Such Limited Partner hereby
ratifies and confirms that the proxy and attorney-in-fact may lawfully do or
cause to be done the matters set forth in this irrevocable
proxy.  Such irrevocable proxy is executed and intended to be
irrevocable.  The irrevocable proxy granted hereunder shall
automatically terminate upon the termination of this Agreement.  Upon
delivery of written request to do so by Abraxas, each such Limited Partner shall
as promptly as practicable execute and deliver to Abraxas a separate written
instrument or proxy that embodies the terms of the irrevocable proxy set forth
in this Section 1.1.

     

    Section 1.2
Exchange
Agreement Standstill.  Each Limited Partner agrees that it will
not exercise any of its rights, enforce any obligation of the Abraxas Parties or
take any other action under the Exchange Agreement, for a period beginning on
the date hereof and ending on the earliest to occur of (i) the Effective
Time; (ii) the fifth business day immediately following the termination of
the Merger Agreement; and (iii) the date on which that certain letter of
intent dated as of June 18, 2009 by and among Abraxas, Energy and the Limited
Partners (the “Letter of Intent”) is terminated by Abraxas, Energy or such
Limited Partner.  For purposes of clarity, the termination of the
Letter of Intent by any one Limited Partner, on the one hand, and the Abraxas
Parties, on the other, shall have no effect on this Agreement as to any other
Limited Partner, on the one hand, and the Abraxas Parties, on the
other.  At the Effective Time, the Exchange Agreement shall terminate
and be null, void and of no further force or effect.

     

    Section 1.3
No
Transfer.  Other than pursuant to the Merger or as otherwise
permitted in this Agreement, the Limited Partner shall not (i) sell,
transfer, pledge, assign or otherwise dispose of (including by gift, merger or
operation of law), encumber, hedge or utilize a derivative to transfer the
economic interest in (collectively, “Transfer”), or enter
into any Contract, option or other arrangement (including any profit sharing
arrangement) with respect to the Transfer of, any Subject Units to any Person
(other than an Affiliate of such Limited Partner who agrees to be bound by the
terms of this Agreement) other than pursuant to the Merger, (ii) enter into
any voting arrangement, whether by proxy, voting agreement, voting trust or
otherwise (including pursuant to any loan of Subject Units), with respect to any
Subject Units, (iii) take any action that would make any representation or
warranty of such Limited Partner herein untrue or incorrect in any material
respect, or have the effect of preventing or disabling the Limited Partner from
performing its obligations hereunder in any material respect, or
(iv) commit or agree to take any of the foregoing actions.  This
Section 1.3
shall automatically terminate at the Effective Time.

     

    Section 1.4
Certain Trading
Activities.  Other than with respect to the Merger, the Limited
Partner shall not, directly or indirectly, or permit any Person acting on behalf
of or pursuant to any understanding with such Limited Partner to, effect or
agree to effect any transactions in the securities of Abraxas; provided,
however, subject to compliance with applicable securities laws and the terms of
Section 7 of the Letter of Intent, the foregoing restriction shall not
apply to shares of Abraxas Common Stock that are not Merger Shares (as
hereinafter defined) and are or were acquired by any Limited Partner in third
party transactions unrelated to the Merger.  Notwithstanding anything
to the contrary set forth in this Section 1.4
or

     

    
      
        
           

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    otherwise
in this Agreement, the Limited Partner shall, not, directly or indirectly, or
permit any Person acting on behalf of or pursuant to any understanding with such
Limited Partner to, effect or agree to effect any Short Sale involving the
Abraxas Common Stock.  For purposes hereof, “Short Sales” means,
without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and sales and other transactions through non-U.S. broker dealers
or foreign regulated brokers.  This Section 1.4
shall automatically terminate at the Effective Time.

     

    Section 1.5
Lock-Up.

     

    (a) Each Limited
Partner agrees not to (A) offer for sale, sell, pledge, or otherwise
dispose of (or enter into any transaction or device that is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any of the Abraxas Common Stock received by such Limited Partner in
the Merger (the “Merger Shares”), or
announce any intention to do any of the foregoing, or (B) enter into any
swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of the Merger Shares,
whether any such transaction described in clause (A) or (B) above is to be
settled by delivery of the Merger Shares or other securities, in cash or
otherwise (the “Initial Lock-Up”),
for a period commencing at the Effective Time and ending on the date that is 90
days after the Effective Time (the “Initial Lock-Up
Period”).

     

    (b) Upon the
expiration of the Initial Lock-Up Period (the “First Release Date”),
one-third of the Merger Shares originally held by each Limited Partner shall
thereafter be unrestricted and freely tradable, subject to applicable securities
laws and the remaining two-thirds of the Limited Partners’ Merger Shares shall
remain subject to the Initial Lock-Up; provided, however, the
Limited Partners may sell or dispose of the remaining two-thirds of the Merger
Shares in compliance with applicable securities laws to an accredited investor
or qualified institutional buyer which becomes a party to this Agreement and is
reasonably acceptable to Abraxas.

     

    (c) Upon the
expiration of the twelve-month period immediately following the First Release
Date (the “Second
Release Date”), an additional one-third of the Merger Shares originally
held by each Limited Partner shall be unrestricted and freely tradable, subject
to applicable securities laws and the remaining one-third of the Limited
Partners’ Merger Shares shall remain subject to the Initial Lock-Up; provided, however, the
Limited Partners may sell or dispose of the remaining one-third of the Merger
Shares in compliance with applicable securities laws to an accredited investor
or qualified institutional buyer which becomes a party to this Agreement and is
reasonably acceptable to Abraxas.

     

    (d) Upon expiration
of the twelve-month period immediately following the Second Release
Date,  all of the Merger Shares originally held by each Limited
Partner shall be automatically released from any transfer restriction set forth
in this Section 1.5
and the Limited Partners may freely transfer their Merger Shares in accordance
with applicable securities laws.

     

    
      
        
           

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    The
Limited Partners may sell or dispose of their freely-tradable Merger Shares only
in accordance with the terms of this Agreement and pursuant to (A) a
registration statement covering Abraxas Common Stock as set forth in Sections 5.1 and
5.2, (B) any
section of Rule 144 (or any similar provision then in force under applicable
securities laws), (C) private sales in compliance with applicable securities
laws to accredited investors or qualified institutional buyers or (D) pursuant
to an Underwritten Offering (as defined in Section 5.3) as
set forth in Sections 5.2 or
5.3.

     

    Section 1.6 Public
Statement.  Such Limited Partner shall not issue any press
release or make any other public statement with respect to this Agreement, the
Merger Agreement, any ancillary agreement to the Merger Agreement, the Merger or
any other transaction contemplated hereby and thereby without the prior written
consent of Abraxas, except as may be required by applicable Law.

     

    ARTICLE
II

     

    AGREEMENTS
OF ABRAXAS

     

    Section 2.1
IPO
Standstill.  Energy shall not file any further amendments to
the IPO Registration Statement or take any other actions intended to consummate
the IPO for a period beginning on the date hereof and ending on the earliest to
occur of (i) the Effective Time; (ii) the fifth business day
immediately following the termination of the Merger Agreement; and (iii) the
date on which the Letter of Intent is terminated by Abraxas, Energy or Limited
Partners owning 10% of the Common Units.  At the Effective Time,
Energy shall withdraw the IPO Registration Statement.

     

    Section 2.2
Board
Membership.  Prior to the mailing of the Proxy Statement,
Energy shall designate Ed Russell and Brian Melton who currently serve on the GP
Board (individually an “Energy Director
Designee” and together the “Energy Director
Designees”) to serve as members of the Abraxas Board following the
Effective Time.  At the Effective Time, the Abraxas Board will
increase the size of the Abraxas Board by two members and elect the Energy
Director Designees to the Abraxas Board; provided, that each Energy
Director Designee is and shall be independent within the meaning ascribed
thereto by NASDAQ and the SEC at the time such individual is designated to serve
on the Abraxas Board.  Subject to the fulfillment of its fiduciary
duties under applicable Law and provided that each Energy Director Designee
remains independent within the meaning ascribed thereto by NASDAQ and the SEC,
the Abraxas Board will nominate and recommend approval of each Energy Director
Designee at the annual meeting of Abraxas stockholders in 2010 for election to
the Abraxas Board for a full three-year term.  On the date which is 24
months after the Effective Time, one of the Energy Director Designees will offer
to resign from the Abraxas Board and on the date which is 36 months after the
Effective Time, the remaining Energy Director Designee will offer to resign from
the Abraxas Board.  If at any time either of the Energy Director
Designees creates a vacancy on the Abraxas Board (by means of death, refusal to
stand for re-election, resignation, retirement, disqualification, removal from
office or otherwise), other than as contemplated by the preceding sentence, the
Abraxas Board shall fill such vacancy or nominate for approval to fill such
position, as applicable, with a person designated by the Unaffiliated
Unitholders and the Abraxas Board shall continue to nominate and recommend
approval of such person in any stockholder election consistent with the
provisions set forth in this Section 2.2.

     

    
      
        
           

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    Section 2.3
Due Diligence;
Access.  From the date hereof until the Effective Time and
subject to the requirements of applicable Laws, Abraxas and Energy shall
(a) provide to the Limited Partners and their respective counsel, financial
advisors, auditors and other authorized representatives reasonable access during
normal business hours after reasonable prior notice to the offices, properties,
books and records of Abraxas and Energy, (b) furnish to the Limited
Partners and their respective counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such persons may reasonably request (including furnishing to the
Limited Partners, to the extent available, the financial results of Abraxas and
its Subsidiaries in advance of any filing by Abraxas with the SEC or other
public disclosure containing such financial results), (c) instruct the
employees, counsel, financial advisors, auditors and other authorized
representatives of Abraxas and Energy to cooperate with the Limited Partners in
their investigation of Abraxas or Energy, as the case may
be.  Notwithstanding the foregoing provisions of this Section 2.3,
Abraxas and Energy shall not be required to, or to cause any of their respective
Subsidiaries to, grant access or furnish information to the Limited Partners or
any of their representatives to the extent that such information is subject to
an attorney/client or attorney work product privilege or that such access or the
furnishing of such information is prohibited by Law or an existing contract or
agreement.  The Limited Partners shall hold, and shall cause its
counsel, financial advisors, auditors and representatives to hold, any material
or non-public information concerning Abraxas received from Abraxas or its
Subsidiaries confidential.  Any investigation pursuant to this Section 2.3
shall be conducted in such manner as not to interfere unreasonably with the
conduct of the business of Abraxas, Energy or their respective
Subsidiaries.

     

    Section 2.4
Fees and
Expenses.  Abraxas and Energy will bear and pay their own costs
as well as expenses and the reasonable fees and expenses incurred on behalf of
the Limited Partners of one investment banking firm and one law firm in
connection with the negotiation, execution and delivery of this Agreement, the
Letter of Intent, the Merger Agreement and consummation of the proposed
Merger.

     

    Section 2.5
Other
Transactions.  Abraxas is not aware of, is not contemplating
and has not been approached by any third-party about (i) any merger
agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by Energy,
(ii) any acquisition proposal and/or (iii) any amendment of Energy’s
certificate of limited partnership or the Partnership Agreement or other
proposal or transaction involving Energy or any of its subsidiaries, which
amendment or other proposal or transaction could in any manner impede,
frustrate, prevent or nullify any provision of the Merger Agreement, any
ancillary document or agreement to the Merger Agreement, the Merger, or any
other transaction contemplated thereby or change in any manner the voting rights
of any class of Energy’s units.  If any such circumstance arises prior
to the Closing Date, Abraxas shall have the duty to notify the Limited Partners
regarding such circumstances as soon as reasonably practicable.

     

    
      
        
           

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    Article
III

     

    REPRESENTATIONS
AND WARRANTIES OF THE LIMITED PARTNERS

     

    Each
Limited Partner hereby represents and warrants to the Abraxas Parties, solely as
to such Limited Partner, as of the date hereof and as of the Effective Time, as
follows:

     

    Section 3.1Authority; Execution and
Deliver; Enforceability.  Such Limited Partner has all
requisite power and authority to execute this Agreement and to consummate the
transactions contemplated hereby.  The execution and delivery by the
Limited Partner of this Agreement and consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of such Limited Partner.  This Agreement constitutes the legal,
valid and binding obligation of the Limited Partner, enforceable against the
Limited Partner in accordance with its terms (subject to the effect of
(i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to rights of creditors
generally and (ii) rules of law and equity governing specific performance,
injunctive relief and other equitable remedies).

     

    Section 3.2
No
Conflicts.  The execution and delivery by such Limited Partner
of this Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or
both) under any provision of any Contract to which the Limited Partner is a
party or by which any properties or assets of the Limited Partner are bound or
any provision of any Law applicable to the Limited Partner or the properties or
assets of the Limited Partner, except for any such conflicts, breaches, defaults
or other occurrences that, individually or in the aggregate, have not had and
would not reasonably be expected to have a material adverse effect on such
Limited Partner’s ability to perform its obligations hereunder.

     

    Section 3.3
No
Consents.  No notice to, authorization, approval, order, permit
or consent of, or registration, declaration or filing with (collectively
referred to as “Consent”), any
Governmental Authority is required to be obtained or made by or with respect to
the Limited Partner in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated
hereby.

     

    Section 3.4
The Subject
Units.  Such Limited Partner is the record and beneficial (as
defined in Rule 13d-3 of the Exchange Act) owner of and has good and
marketable title to, the Subject Units, free and clear of any
Liens.  The Limited Partner does not own, of record or beneficially
(as defined in Rule 13d-3 of the Exchange Act), any equity interest in
Energy other than the Subject Units.  The Limited Partner has the
sole right to vote the Subject Units, and none of the Subject Units is subject
to any voting trust or other agreement, arrangement or restriction with respect
to the voting of the Subject Units, except as contemplated by this
Agreement.

     

    Section 3.5
Restricted
Securities.  Such Limited Partner understands that the Merger
Shares are characterized as “restricted securities” under the federal securities
Laws inasmuch as they are being acquired from Abraxas in a transaction not
involving a public offering and that under such Laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances.  In this connection, such
Limited

     

    
      
        
           

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    Partner
represents that it is knowledgeable with respect to Rule 144 promulgated
under the Securities Act.  Each such Limited Partner acknowledges and
agrees that the certificates representing the Merger Shares shall bear the
following legend:

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

     

    Section 3.6
Limited Partner
Intent.  Upon consummation of the Merger, such Limited Partner
will acquire the Merger Shares for investment purposes only and not with a view
to or for distributing or reselling such Merger Shares or any part
thereof.  Such Limited Partner understands that it must bear the
economic risk of this investment indefinitely, that the Merger Shares may not be
sold or transferred or offered for sale or transfer by it without registration
under the Securities Act and any applicable state securities or blue sky laws or
the availability of exemptions
therefrom.  Such Limited Partner understands that the transfer agent
of Abraxas will be issued stop-transfer restrictions with respect to the Merger
Shares unless such transfer is registered under the Securities Act and
applicable state and other securities laws or unless an exemption from such
registration is available or otherwise in accordance with this
Agreement.  Such Limited Partner understands and agrees that that if
such Limited Partner in the future decides to dispose of any of the Merger
Shares, that it may do so only in compliance with the provisions of this
Agreement, the Securities Act and applicable state securities Laws, as then in
effect, or pursuant to an exemption therefrom or in the manner contemplated in
any registration statement pursuant to which such securities are being
offered.

     

    Section 3.7
Limited Partner
Status.  Such Limited Partner is an accredited investor and/or
a qualified institutional buyer and upon consummation of the Merger will acquire
the Merger Shares only for its own account and not for the account of others,
for investment purposes and not on behalf of any other account or Person or with
a view to, or for offer or sale in connection with, any distribution
thereof.  Such Limited Partner is not an entity formed for the
specific purpose of acquiring the Merger Shares.

     

    Section 3.8
No Government
Declaration as to Merger Shares.  Such Limited Partner agrees
and is aware that no federal or state agency has passed upon or will pass upon
the Merger Shares, or made any findings or determination as to the fairness of
an investment in the Merger Shares.

     

    Section 3.9
Reliance on
Exemptions.  Such Limited Partner understands that the Merger
Shares are being offered and sold to such Limited Partner in reliance upon
specific exemptions from the registration requirements of United States federal
and state securities laws

     

    
      
        
           

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    and that
Energy is relying upon the truth and accuracy of, and such Limited Partner’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Limited Partner set forth herein to determine the
availability of such exemptions and the eligibility of such Limited Partner to
acquire the Merger Shares.

     

    Section 3.10
Experience of
Limited Partner.  Such Limited Partner, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Merger Shares, and has
so evaluated the merits and risks of such investment.  Such Limited
Partner is able to bear the economic risk of an investment in the Merger Shares
and, at the present time and in the foreseeable future, is able to afford a
complete loss of such investment.

     

    Section 3.11
Access to
Information.  Such Limited Partner has been
afforded:

     

    (a) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Abraxas Parties concerning the terms and conditions
of the offering of the Merger Shares and the merits and risks of investing in
the Merger Shares;

     

    (b) access to
information about the Abraxas Parties and their respective financial condition,
results of operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment; and

     

    (c) the opportunity
to obtain such additional information from the Abraxas Parties that is necessary
to make an informed investment decision with respect to the
investment.

     

    Section 3.12
Investment
Risk.  Such Limited Partner acknowledges that it is aware that
its investment in the Merger Shares is speculative and involves a high degree of
risk.

     

    Section 3.13
No Legal, Tax
or Investment Advice.  Such Limited Partner understands that
nothing in this Agreement or any other materials presented by or on behalf of
any Abraxas Party to such Limited Partner in connection with the investment in
the Merger Shares constitutes legal, tax or investment advice.  Such
Limited Partner has consulted such legal, tax and investment advisors as it, in
its sole discretion, has deemed necessary or appropriate in connection with its
investment in the Merger Shares.

     

    Section 3.14
Certain
Fees.  No brokerage or finder’s fees or commissions are or will
be payable by such Limited Partner to any broker, financial advisor or
consultant, finder, placement agent, investment
banker, bank or other Person with respect to the offer, sale and issuance of the
Merger Shares, and such Limited Partner has not taken any action that could
cause any of the Abraxas Parties to be liable for any such fees or commissions,
except as contemplated by Section 2.4.

     

    Section 3.15
Merger
Agreement.  Such Limited Partner understands and acknowledges
that the Abraxas Parties are entering into the Merger Agreement in reliance upon
the Limited Partner’s execution and delivery of this Agreement.

     

    
      
        
           

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    Section 3.16
Certain Trading
Activities.  Since the time that such Limited Partner was first
contacted by the Abraxas Parties or any other Person regarding the transactions
contemplated hereby and by the Merger Agreement, the Limited Partner has not,
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Limited Partner, effected or agreed to effect any
transactions in the securities of Abraxas (including, without limitation, any
Short Sales involving the Abraxas Common Stock).

     

    Section 3.17
Truth and
Accuracy. All representations and warranties made by such Limited Partner
in this Agreement are true and accurate as of the date hereof and shall be true
and accurate as of the Closing.  If at any time prior to the Closing
any representation or warranty shall not be true and accurate in any respect,
such Limited Partner shall so notify the Abraxas Parties.

     

    ARTICLE
IV

     

    REPRESENTATIONS
AND WARRANTIES OF THE ABRAXAS PARTIES

     

    The
Abraxas Parties hereby represent and warrant, jointly and severally, to the
Limited Partners, as of the date hereof and as of the Effective Time, as
follows:

     

    Section 4.1
Authority;
Execution and Deliver; Enforceability.  Each Abraxas Party has
all requisite organizational power and authority to execute this Agreement and
to consummate the transactions contemplated hereby.  The execution and
delivery by the Abraxas Parties of this Agreement and consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Abraxas Parties.  This Agreement constitutes
the legal, valid and binding obligation of each of the Abraxas Parties,
enforceable against each of the Abraxas Parties in accordance with its terms
(subject to the effect of (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to rights of creditors generally and (ii) rules of law and equity
governing specific performance, injunctive relief and other equitable
remedies).

     

    Section 4.2
No
Conflicts.  The execution and delivery by each Abraxas Party of
this Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or
both) under any provision of any Contract to which any Abraxas Party is a party
or by which any properties or assets of any Abraxas Party are bound or any
provision of any Law applicable to any of the Abraxas Parties or the properties
or assets of any of the Abraxas Parties, except for any such conflicts,
breaches, defaults or other occurrences that, individually or in the aggregate,
have not had and would not reasonably be expected to have a material adverse
effect on the ability of the Abraxas Parties to perform its obligations
hereunder.

     

    Section 4.3
No
Consents.  No Consent of any Governmental Authority is required
to be obtained or made by or with respect to any of the Abraxas Parties in
connection with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, other than the Abraxas
Stockholder Approval, the filing of such reports by Abraxas under the Exchange
Act as may be required in connection with this Agreement and the transactions
contemplated hereby and such filings by Abraxas with the NASDAQ or as may
be

     

    
      
        
           

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    required
in connection with this Agreement, the Merger Agreement and the transactions
contemplated hereby and thereby.

     

    Section 4.4
Merger
Agreement.  Each of the Abraxas Parties understands and
acknowledges that the Limited Partners are each entering into this Agreement in
reliance upon the Abraxas Parties’ execution and delivery of the Merger
Agreement and the consummation of the Merger.  The representations and
warranties, covenants and agreements of the Abraxas Parties set forth in the
Merger Agreement are incorporated by reference in this Agreement and shall be
deemed made to the Limited Partners.

     

    Section 4.5
Truth and
Accuracy. All representations and warranties made by the Abraxas Parties
in this Agreement are true and accurate as of the date hereof and shall be true
and accurate as of the Closing.  If at any time prior to the Closing
any representation or warranty shall not be true and accurate in any respect,
the Abraxas Parties shall so notify the Limited Partners.

     

    ARTICLE
V

     

    REGISTRATION
RIGHTS

     

    Section 5.1
Shelf
Registration of the Merger Shares.

     

    (a) Filing.  Abraxas
shall, subject to receipt of necessary information from the Limited Partners
after prompt request from Abraxas to the Limited Partners to provide such
information, no later than the 120 days following the Effective Time (the “Filing Date”),
prepare and file with the SEC a registration statement on Form S-3 or such
other successor form (except that if Abraxas is not then eligible to register
for resale the Merger 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 Merger Shares by the Limited
Partners or their transferees from time to time over the NASDAQ or any other
national exchange on which the Abraxas Common Stock is then quoted or traded, or
in privately-negotiated transactions.  No Limited Partner may include
any Merger Shares in the Registration Statement pursuant to this Agreement
unless such Limited Partner furnishes to Abraxas in writing within ten (10)
business days after receipt of request therefor, information necessary to
complete the Registration Statement.

     

    (b) Effectiveness
Date.  Abraxas shall, use its commercially reasonable efforts,
subject to receipt of necessary information from the Limited Partners after
prompt request from Abraxas to the Limited Partners to provide such information,
to cause the Registration Statement to become effective.

     

    (c) Continuous
Effectiveness.  Abraxas shall use its commercially reasonable
efforts to cause such Registration Statement to remain continuously effective
and prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith (the
“Prospectus”)
(and the applicable reports required by the Exchange Act and reports
incorporated therein by reference, each 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 Limited Partner’s Merger Shares
purchased hereunder, the earlier of

     

    
      
        
           

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    (i) 
the second anniversary of the Second Release Date and (ii) the date that
all of the Merger Shares have been sold by the Limited Partners or otherwise
transferred pursuant to a registration statement or otherwise.

     

    Section 5.2
Piggyback
Registration of the Merger Shares.

     

    (a)
Underwritten
Offering Participation.  If at
any time during the period beginning on the date the Initial Lock-up Period
expires and ending on the date the Second Release Date expires, Abraxas proposes
to issue and sell shares of Abraxas Common Stock pursuant to a registration
statement other than a shelf registration statement or pursuant to a supplement
to a shelf registration statement, in either case, for the sale of
Abraxas Common Stock in an Underwritten
Offering for its own account, then as soon as practicable but not less than ten
Business Days prior to the filing of (x) any preliminary prospectus supplement
to a prospectus that includes the Abraxas Common Stock, relating to such Underwritten Offering pursuant to
Rule 424(b), (y) the prospectus supplement to a prospectus that includes Abraxas
Common Stock, relating to such Underwritten Offering pursuant to Rule 424(b) (if
no preliminary prospectus supplement is used) or (z) such registration
statement, as the case may be (any of the foregoing, a “Piggyback Registration
Statement or Prospectus”), Abraxas shall give notice of such proposed
Underwritten Offering to the Limited Partners and such notice shall offer the
Limited Partners the opportunity to include in such Underwritten Offering such
number of Merger Shares as each such Limited Partner may request in
writing.  Subject to Section 5.2(b), Abraxas shall include in such
Underwritten Offering all such Merger Shares with respect to which Abraxas has
received requests within five Business Days after Abraxas’ notice has been
delivered in accordance with this Section 5.2(b).  If no request for
inclusion from a Limited Partner is received within the specified time, such
Limited Partner shall have no further right to participate in such Underwritten
Offering.  If, at any time after giving written notice of its
intention to undertake an Underwritten Offering and prior to the closing of such
Underwritten Offering, Abraxas shall determine for any reason not to undertake
or to delay such Underwritten Offering, Abraxas may, at its election, give
written notice of such determination to the Limited Partners that have requested
to participate in the Underwritten Offer (the “Selling Limited Partners”) and,
(i) in the case of a determination not to undertake such Underwritten Offering,
shall be relieved of its obligation to sell any Merger Shares included in such
offering in connection with such terminated Underwritten Offering, and (ii) in
the case of a determination to delay such Underwritten Offering, shall be
permitted to delay offering any such Merger Shares for the same period as the
delay in the Underwritten Offering.  If any Limited Partner
disapproves of the terms of an Underwritten Offering, such Holder may elect to
withdraw therefrom by written notice to Abraxas of such withdrawal up to and
including the time of pricing of such offering.  No such withdrawal
shall affect Abraxas’ obligation to pay all Registration Expenses as set forth
in Section 5.7.  This Section 5.2 shall be subject to the
underwriting procedures set forth in  Sections 5.3(b) and
5.3(c).

     

    (b)
Priority of
Registration.  If the managing underwriter or underwriters of
any proposed Underwritten Offering of Abraxas Common Stock determines that the
total amount of Abraxas Common Stock which the Selling Limited Partner and any
other Persons intend to include in such offering exceeds the number which can be
sold in such offering without being likely to have an adverse effect in any
material respect on the price, timing or distribution of the Abraxas Common
Stock offered or the market for the Abraxas Common Stock, then the
Abraxas

     

    
      
        
           

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    Common Stock to be included in such Underwritten
Offering shall include the number of Merger Shares that such managing
underwriter or underwriters advises Abraxas can be sold without having such
adverse effect, with such number to be first allocated to Abraxas and second, if
there remains availability for additional Abraxas Common Stock to be included in
such Underwritten Offering, pro rata among the Selling Limited Partners and
third, if there remains availability for additional Abraxas Common Stock to be
included in such Underwritten Offering, pro rata among other holders of
securities of Abraxas who have requested participation in the Underwritten
Offering.

     

    Section 5.3
Underwritten
Offering.

     

    (a) General.  In
the event the Limited Partners propose to sell their Merger Shares in an
Underwritten Offering other than pursuant to Section 5.2,
Abraxas shall use commercially reasonable efforts to retain an underwriter and
effect such sale through an Underwritten Offering and take all commercially
reasonable actions as are reasonably requested by the managing underwriter or
underwriters to expedite or facilitate the disposition of such shares of Abraxas
Common Stock, including the entering into an underwriting agreement, and
participation by Abraxas’ management in a “road show” or similar marketing
effort; provided, however, that Abraxas would
not be required to cause its management to participate in a “road show” or
similar marketing effort on behalf of any Limited Partners if (A) the
managing underwriter or underwriters of any such proposed underwritten offering
advise Abraxas that the gross proceeds of the underwritten offering are not
expected to exceed $10.0 million and (B) a “bought deal” or “overnight
transaction” is contemplated.

     

    (b) Underwriting
Procedures.  Each Selling Limited
Partner shall be obligated to enter into an underwriting agreement which
contains such representations, covenants, indemnities and other rights and
obligations as are customary in underwriting agreements for firm commitment
offerings of securities.  No Selling Limited Partner may participate
in such Underwritten Offering unless such Selling Limited Partner agrees to sell
its Merger Shares on the basis provided in such underwriting agreement and
completes and executes all questionnaires, powers of attorney, indemnities,
securities escrow agreements and other documents reasonably required under the
terms of such underwriting agreement, and furnish to Abraxas such information as
Abraxas may reasonably request in writing for inclusion in  the
Registration Statement.  Each Selling Limited Partner may, at its
option, require that any or all of the representations and warranties by, and
the other agreements on the part of, Abraxas to and for the benefit of such
underwriters also be made to and for such Selling Limited Partner’s benefit and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement also be conditions precedent to
its obligations. No Selling Limited Partner shall be required to make any
representations or warranties to or agreements with Abraxas or the underwriters
other than representations, warranties or agreements regarding such Selling
Limited Partner and its ownership of the securities being registered on its
behalf and its intended method of distribution and any other representation
required by law.  If any Selling Limited Partner disapproves of the
terms of the Underwritten Offering contemplated by this Section 5.3, such
Selling Limited Partner may elect to withdraw therefrom by notice to Abraxas and
the managing underwriter or underwriters and such withdrawal may be made up to
and including the time of pricing of the Underwritten Offering.  No
such withdrawal or abandonment shall affect Abraxas’ obligation to pay
registration expenses as set forth in Section
5.7.

     

    
      
        
           

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    (c) Appointment of
Underwriters.  In connection with an Underwritten Offering,
Abraxas shall have the sole right to appoint the managing
underwriters.

     

    (d) Definition of Underwritten
Offering.  “Underwritten
Offering” means an offering (including an offering pursuant to a Shelf
Registration Statement) (i) in which Abraxas Common Stock
is sold to an underwriter on a firm commitment basis for reoffering to
the public or an offering that is a “bought deal” with one or more investment
banks and (ii) the gross proceeds of such offering are expected to be not less
than $10.0 million.

     

    Section 5.4
Registration
Procedures.  Abraxas shall:

     

    (a) so long as a
Limited Partner holds Merger Shares, provide copies to and permit single legal
counsel designated by the Limited Partners to review the Registration Statement
and all amendments and supplements thereto, no fewer than three (3) business
days prior to their filing with the SEC, and not file any Registration
Statement, amendment or supplement thereto to which a holder of the Merger
Shares reasonably objects in writing within such three (3) business day
period;

     

    (b) furnish to the
Limited Partners with respect to the Merger Shares included in the Registration
Statement such number of copies of the Registration Statement, Prospectuses and
preliminary Prospectuses (“Preliminary
Prospectuses” and individually, “Preliminary Prospectus”) in
conformity with the requirements of the Securities Act and such other documents
as the Limited Partners may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Merger Shares by the
Limited Partners; provided, however, that the obligation
of Abraxas to deliver copies of Prospectuses or Preliminary Prospectuses to the
Limited Partners shall be subject to the receipt by Abraxas of reasonable
assurances from the Limited Partners that the Limited Partners will comply with
the applicable prospectus delivery requirements under the Securities Act and of
such other securities or blue sky laws as may be applicable in connection with
any use of such Prospectuses or Preliminary Prospectuses by the Limited
Partners;

     

    (c) file documents
required of Abraxas for customary blue sky clearance in states specified in
writing by the Limited Partners and use its commercially reasonable efforts to
maintain such blue sky qualifications during the period Abraxas is required to
maintain the effectiveness of the Registration Statement pursuant to Section 5.1(b);
provided, however, that Abraxas shall
not be required to qualify to do business or consent to service of process in
any jurisdiction in which it is not now so qualified or has not so
consented;

     

    (d) promptly notify
the Limited Partners after it receives notice of the time when the Registration
Statement has been declared effective by the SEC, or when a supplement or
amendment to any Registration Statement has been filed with the
SEC;

     

    (e) advise the
Limited Partners, promptly: (i) after it shall receive notice or obtain
knowledge of the issuance of any stop order by the SEC delaying or suspending
the effectiveness of the Registration Statement or of the initiation or threat
of any proceeding for that purpose; and it will promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order

     

    
      
        
           

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    should be
issued; and (ii) at any time when a Prospectus relating to the Merger
Shares is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of an event as a result of which, the Prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;

     

    (f) upon request
and subject to appropriate confidentiality obligations, furnish to each Limited
Partner copies of any and all transmittal letters or other correspondence with
the SEC or any other governmental agency or self-regulatory body or other body
having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering of Merger Shares;

     

    (g) in the case of
an Underwritten Offering, furnish upon request, (i) an opinion of counsel
for Abraxas dated the effective date of the applicable registration statement or
the date of any amendment or supplement thereto, and a letter of like kind dated
the date of the closing under the underwriting agreement, and (ii) a “cold
comfort” letter, dated the date of the applicable registration statement or the
date of any amendment or supplement thereto and a letter of like kind dated the
date of the closing under the underwriting agreement, in each case, signed by
the independent public accountants who have certified Abraxas’ financial
statements included or incorporated by reference into the applicable
registration statement, and each of the opinion and the “cold comfort” letter
shall be in customary form and covering substantially the same matters with
respect to such registration statement (and the prospectus and any prospectus
supplement included therein) as are customarily covered in opinions of issuer’s
counsel and in accountants’ letters delivered to the underwriters in
Underwritten Offerings of securities and such other matters as such underwriters
or Limited Partners may reasonably request;

     

    (h) otherwise use
its commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable, an earnings statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder;

     

    (i) make available
to the appropriate representatives of the managing underwriter and Limited
Partners access to such information and Abraxas personnel as is reasonable and
customary to enable such parties to establish a due diligence defense under the
Securities Act; provided, however, that Abraxas need
not disclose any such information to any such representative unless and until
such representative has entered into or is otherwise subject to a
confidentiality agreement with Abraxas satisfactory to Abraxas;

     

    (j) cause all the
Merger Shares registered pursuant to this Agreement to be listed on each
securities exchange or nationally recognized quotation system on which similar
securities issued by Abraxas are then listed; and

     

    (k) if any Limited
Partner could reasonably be deemed to be an “underwriter,” as defined in
Section 2(a)(11) of the Securities Act, in connection with the registration
statement in respect of any registration of Merger Shares of any Limited Partner
pursuant to this Agreement, and any amendment or supplement thereof (any such
registration statement or

     

    
      
        
           

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    amendment
or supplement a “Limited Partner Underwriter
Registration Statement”), then Abraxas will cooperate with such Limited
Partner in allowing such Limited Partner to conduct customary “underwriter’s due
diligence” with respect to Abraxas and satisfy its obligations in respect
thereof.  In addition, at any Limited Partner’s request, Abraxas will
furnish to such Limited Partner, on the date of the effectiveness of any Limited
Partner Underwriter Registration Statement and thereafter from time to time on
such dates as such Limited Partner may reasonably request, (i) a letter,
dated such date, from Abraxas’ independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to
such Limited Partner, and (ii) an opinion, dated as of such date, of
counsel representing Abraxas for purposes of such Limited Partner Underwriter
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, including standard “10b-5” assurances for such
offering, addressed to such Limited Partner. Abraxas will also permit legal
counsel to such Limited Partner to review and comment upon any such Limited
Partner Underwriter Registration Statement at least five (5) business days prior
to its filing with the SEC and all amendments and supplements to any such
Limited Partner Underwriter Registration Statement within a reasonable number of
days prior to their filing with the SEC and not file any Limited Partner
Underwriter Registration Statement or amendment or supplement thereto in a form
to which such Limited Partner’s legal counsel reasonably objects.

     

    Section 5.5
Transfer of
Shares After Registration; Suspension.

     

    (a) Each Limited
Partner agrees that it will not effect any disposition of the Merger Shares that
would constitute a sale within the meaning of the Securities Act except as
contemplated in the Registration Statement and as permitted by this Agreement,
and that it will promptly notify Abraxas in writing of any changes in the
information set forth in the Registration Statement regarding the Limited
Partner.

     

    (b) Except in the
event that paragraph (c) below applies, Abraxas shall if deemed necessary
by Abraxas: (i) prepare and file from time to time with the SEC a
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and so that, as thereafter delivered to purchasers of the
Merger Shares being sold thereunder, such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (ii) provide the
Limited Partners copies of any documents filed pursuant to Section 5.5(b),
and (iii) inform each Limited Partner that Abraxas has complied with its
obligations in Section 5.5(b)
(or that, if Abraxas has filed a post-effective amendment to the Registration
Statement which has not yet been declared effective, Abraxas will notify the
Limited Partners to that effect, will use its commercially reasonable efforts to
secure the effectiveness of such post-effective amendment as promptly as
possible and will promptly notify the Limited Partner pursuant to Section 5.5(c)
and Section 5.5(b)
hereof when the amendment has become effective).

     

    
      
        
           

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    (c) In the event of
(i) any request by the SEC or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information; (ii) the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose; (iii) the receipt by Abraxas of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Merger Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; or (iv) any event or
circumstance which, upon the advice of its counsel, necessitates the making of
any changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, then Abraxas shall
promptly deliver a notice in writing to the Limited Partners (the “Suspension Notice”)
to the effect of the foregoing and, upon receipt of such Suspension Notice, the
Limited Partners will refrain from selling any Merger Shares pursuant to the
Registration Statement (a “Suspension”) until
the Limited Partners’ receipt of copies of a supplemented or amended Prospectus
prepared and filed by Abraxas, or until the Limited Partners are advised in
writing by Abraxas that the current Prospectus may be used, and have received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus.  In the event of any
Suspension, Abraxas will use its commercially reasonable efforts to cause the
use of the Prospectus so suspended to be resumed as promptly as practicable
after the delivery of a Suspension Notice to the Limited
Partners.  Notwithstanding the foregoing, Abraxas shall not be
required to amend or supplement the Registration Statement, any related
Prospectus or any document incorporated therein by reference in the event that,
and for a period (a “Black Out Period”)
not to exceed, for so long as this Agreement is in effect, thirty (30) days
consecutively in any ninety (90) day period or ninety (90) days in any twelve
(12) month period if either (A) any action by Abraxas pursuant to this Section 5.5(c)
would violate applicable law or (B) (x) an event occurs and is
continuing as a result of which the Registration Statement, any related
Prospectus or any document incorporated therein by reference as then amended or
supplemented would, in Abraxas’ good faith judgment, contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and (y) (1) Abraxas determines in good faith
that the disclosure of such event at such time would have a material adverse
effect on the business, operations or prospects of Abraxas or (2) the
disclosure otherwise relates to a material business transaction which has not
yet been publicly disclosed in any relevant jurisdiction.

     

    Section 5.6
Indemnification.

     

    (a) For the purpose
of this Section 5.6:

     

    (i) the term “Selling Stockholder”
shall include the Limited Partners and their respective Affiliates;

     

    
      
        
           

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    (ii) the term
“Registration
Statement” shall include the Prospectus in the form first filed with the
SEC pursuant to Rule 424(b) of the Securities Act or filed as part of the
Registration Statement at the time of effectiveness if no Rule 424(b)
filing is required, any exhibit, supplement or amendment included in or relating
to the Registration Statement referred to in Section 5.1
and Section 5.2;
and

     

    (iii) the term
“untrue
statement” shall include any untrue statement or alleged untrue statement
of a material fact in the Registration Statement, or any omission or alleged
omission to state in the Registration Statement a material fact required to be
stated therein or necessary to make the statements therein not
misleading.

     

    (b) Abraxas agrees
to indemnify and hold harmless each Selling Stockholder and its officers,
directors, members and their respective successors and assigns (collectively,
the “Selling
Stockholder Indemnified Parties”) from and against any third party
losses, claims, damages or liabilities to which such Selling Stockholder
Indemnified Parties may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon (i) any
breach of the representations or warranties of Abraxas contained herein, or
failure to comply with the covenants and agreements of Abraxas contained herein,
(ii) any untrue statement of a material fact contained in the Registration
Statement as amended at the time of effectiveness or any omission of a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, or
(iii) any failure by Abraxas to fulfill any undertaking included in the
Registration Statement as amended at the time of effectiveness, and Abraxas will
reimburse such Selling Stockholder Indemnified Parties for any reasonable legal
or other expenses reasonably incurred in investigating, defending or preparing
to defend any such action, proceeding or claim, provided, however, that Abraxas
shall not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of, or is based upon, (1) an untrue statement made
in such Registration Statement or any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading in
reliance upon and in conformity with written information furnished to Abraxas by
or on behalf of such Selling Stockholder Indemnified Parties specifically for
use in preparation of the Registration Statement, (2) a breach of any
representations or warranties made by such Selling Stockholder herein, or the
failure of such Selling Stockholder Indemnified Parties to comply with its
covenants and agreements contained in this Agreement hereof or (3) the use
by the Selling Stockholder Indemnified Party of an outdated or defective
Prospectus after Abraxas has notified such Selling Stockholder Indemnified Party
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Selling Stockholder Indemnified Party of a supplemented Prospectus or
written notice from Abraxas that the use of the applicable Prospectus may be
resumed.  Abraxas shall reimburse each Selling Stockholder Indemnified
Party for the amounts provided for herein on demand as such expenses are
incurred.

     

    (c) Each Limited
Partner severally agrees to indemnify and hold harmless Abraxas (and each
person, if any, who controls Abraxas within the meaning of Section 15 of
the Securities Act, each officer of Abraxas who signs the Registration Statement
and each director of Abraxas) from and against any third party losses, claims,
damages or liabilities to which Abraxas (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings

     

    
      
        
           

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    in
respect thereof) arise out of, or are based upon, (i) any breach of the
representations and warranties of such Limited Partner contained herein,
(ii) any failure to comply with the covenants and agreements of such
Limited Partner contained herein, or (iii) any untrue statement of a
material fact contained in the Registration Statement or any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading if such untrue statement or omission was made in reliance
upon and in conformity with written information furnished by or on behalf of
such Limited Partner specifically for use in preparation of the Registration
Statement, and such Limited Partner will reimburse Abraxas (or such officer,
director or controlling person), as the case may be, for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that such
Limited Partner’s obligation to indemnify Abraxas or any other persons hereunder
shall be limited to the amount by which the value received by such Limited
Partner, as determined at the Effective Time, from the sale of the Merger Shares
to which such loss relates exceeds the amount of any damages which such Limited
Partner has otherwise been required to pay by reason of such untrue statement or
omission, provided further that, with respect to any indemnification obligation
arising under clause (iii) of this paragraph (b), such obligation
shall be limited to the net amount received by such Limited Partner from the
sale of the Merger Shares included in the Registration Statement in
question.

     

    (d) Promptly after
receipt by any indemnified person of a notice of a claim or the commencement of
any action in respect of which indemnity is to be sought against an indemnifying
person pursuant to this Section 5.6(d),
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, but the omission to so notify the
indemnifying person will not relieve it from any liability which it may have to
any indemnified person under this Section 5.6(d)
(except to the extent that such omission materially and adversely affects the
indemnifying person’s ability to defend such action or such failure results in
the forfeiture by the indemnifying party of substantial rights or defenses) or
from any liability otherwise than under this Section 5.6(d).  Subject
to the provisions hereinafter stated, in case any such action shall be brought
against an indemnified person, the indemnifying person shall be entitled to
participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified person promptly after receiving the aforesaid
notice from such indemnified person, shall be entitled to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
person.  After notice from the indemnifying person to such indemnified
person of its election to assume the defense thereof, such indemnifying person
shall not be liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection with the defense
thereof.  Notwithstanding the indemnifying party’s election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel (and local counsel) only in the event that (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would, in the opinion of counsel for the indemnified party, present such
counsel with a potential or actual conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not
have

     

    
      
        
           

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    employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party.  In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement; provided that such consent shall not be unreasonably
withheld.  No indemnifying person shall, without the prior written
consent of the indemnified person, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified person is or could
have been a party and indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an unconditional release of
such indemnified person from all liability on claims that are the subject matter
of such proceeding.

     

    (e) The parties to
this Agreement hereby acknowledge that they are sophisticated business persons
who were represented by counsel during the negotiations regarding the provisions
hereof including, without limitation, the provisions of this Section 5.6(e),
and are fully informed regarding said provisions.  They further
acknowledge that the provisions of this Section 5.6(e) fairly allocate
the risks in light of the ability of the parties to investigate Abraxas and its
business in order to assure that adequate disclosure is made in the Registration
Statement as required by the Securities Act.  The parties are advised
that federal or state public policy as interpreted by the courts in certain
jurisdictions may be contrary to certain of the provisions of this Section 5.6(e),
and the parties hereto hereby expressly waive and relinquish any right or
ability to assert such public policy as a defense to a claim under this Section 5.6(e)
and further agree not to attempt to assert any such defense.

     

    Section 5.7
Registration
Expenses.  Abraxas will bear all expenses incident to or
incurred in connection with the preparation and filing of the Registration
Statement whether or not declared effective, including, without limitation, all
registration and filing fees and expenses, fees and expenses of compliance with
federal and state securities laws or with blue sky laws, any FINRA filing fees
required to be made in connection with an Underwritten Offering of the Merger
Shares, application and filing fees and expenses, duplicating and printing
expenses, and fees and disbursements of counsel to Abraxas and all independent
accountants, but excluding fees and expenses of counsel to any of the Limited
Partners, fees and expenses of any accountants, engineers, consultants or any
other advisers to the Limited Partners, any underwriting discount or commission
and any broker-dealer sales commission that the Limited Partners may incur in
disposing of their Merger Shares.  Abraxas shall bear all costs
(including any legal fees) necessary to remove, when applicable, restrictive
legends and to convert any and all Merger Shares to DTC-eligible or an
electronic trading form.

     

    Section 5.8
Termination of
Conditions and Obligations.  The conditions precedent imposed
by this Agreement upon the transferability of the Merger Shares shall cease and
terminate as to any particular Merger Share when the sale of the Merger Share
shall have been effectively registered under the Securities Act and sold or
otherwise disposed of in accordance with the intended method of disposition set
forth in the Registration Statement and this Agreement.

     

    
      
        
           

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    Article
VI

     

    TERMINATION

     

    This Agreement shall automatically terminate upon
the earliest of (a) the termination of the Merger Agreement in accordance
with its terms and (b) the second anniversary of the Second Release
Date.  Except as set forth in the following sentence, upon termination
of this Agreement, all representations, warranties, covenants, agreements and
obligations of the parties under this Agreement will terminate, without any
liability or other obligation on the part of any party hereto to any Person in
respect hereof or the transactions contemplated hereby, and no party shall have
any claim against another (and no Person shall have any rights against such
party), whether under contract, tort or otherwise.  The terms of
Section 1.6 and Section 2.4 shall survive any termination of this
Agreement.

     

    ARTICLE
VII

     

    GENERAL
PROVISIONS

     

    Section 7.1
Notice.  All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to Abraxas in accordance with Section 10.5 of the Merger
Agreement and to each Limited Partners at its address set forth on such Limited
Partner’s signature page hereto (or at such other address for a party as shall
be specified by like notice).

     

    Section 7.2
Amendment.  Except
as otherwise provided herein, the provisions of this Agreement may be waived,
altered, amended or repealed, in whole or in part, only upon the mutual written
agreement of the Abraxas Parties and the Limited Partners holding in the
aggregate a majority of the Subject Units pursuant to this Agreement and if any
such amendment, modification, restatement or supplement would adversely affect
the rights or increase the obligations of any Limited Partner hereunder, the
approval of such Limited Partner will be required for such amendment,
modification, restatement or supplement.  This Section 7.2 shall not be
amended, modified, restated or supplemented without the written approval of all
of the Limited Partners.  No failure or delay on the part of any of
the parties in exercising any right, power or privilege hereunder, and no course
of dealing between or among any of the parties, shall operate as a waiver of any
right, power or privilege hereunder.  No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.  No notice to or demand on any of the parties in any case
shall entitle such party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any party to any
other or further action in any circumstances without notice or
demand.

     

    Section 7.3
Interpretation.  When
a reference is made in this Agreement to an Article or a Section, such reference
shall be to an Article or a Section to this Agreement unless otherwise
indicated.  The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.  Wherever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation.”

     

    
      
        
           

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    Section 7.4
Severability.  If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any
party.  Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent
possible.

     

    Section 7.5
Counterparts.  This
Agreement 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 Agreement.  In
the event that this Agreement 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 7.6
Entire
Agreement; No Third-Party Beneficiaries.  Except for the
provisions of Section 7 of the Letter of Intent which is specifically
incorporated by reference herein, this Agreement (i) constitutes the entire
agreement and supersedes all prior agreements, understandings and
representations, both written and oral, among the parties with respect to the
subject matter hereof and (ii) is not intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.

     

    Section 7.7
Governing
Law.  The laws of the State of New York shall govern this
Agreement without regard to principles of conflict of laws.

     

    Section 7.8
Assignment.  This
Agreement is not transferable or assignable, except that the rights and
obligations of each Limited Partner shall be transferable by such Limited
Partner to an Affiliate who agrees to be bound by the terms of this
Agreement.

     

    Section 7.9
Submission to
Jurisdiction.  Each of the parties to this Agreement hereby
(a) irrevocably submits to the non-exclusive personal jurisdiction of any
New York state or federal court, over any claim arising out of or relating to
this Agreement and irrevocably agrees that all such claims may be heard and
determined in such New York state or federal court, and (b) irrevocably
waives, to the fullest extent permitted by applicable law, any objection it may
now or hereafter have to the laying of venue in any proceeding brought in a New
York state or federal court, and any claim that any such proceeding brought in a
New York state or federal court, has been brought in an inconvenient forum;
provided, however, that nothing in this
paragraph is intended to waive the right of any of the parties to remove any
such action or proceeding commenced in any a New York state court to an
appropriate New York federal court to the extent the basis for such removal
exists under applicable law.  Each of the parties hereby irrevocably
agrees that service of process may be made on him, her or it by mailing, by
certified mail, a copy of such process to such party at his, her or its address
for notices specified herein.  Each of the parties agrees that a final
judgment in any such action or proceeding shall be

     

    
      
        
           

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    conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.  Nothing in this paragraph shall affect
the right of any of the parties to serve legal process in any other manner
permitted by law or affect the right of any of the parties to bring any action
or proceeding in the courts of any other jurisdictions, domestic or
foreign.

     

    Section 7.10
Remedies.  Each
of the parties to this Agreement agree that the covenants and obligations in
this Agreement relate to special, unique and extraordinary matters and that a
violation of any of the terms hereof would cause irreparable injury in an amount
which would be impossible to estimate or determine and for which any remedy at
law would be inadequate.  As such, the parties agree that if any of
the parties fails or refuses to fulfill any of its obligations under this
Agreement or to make any payment or deliver any instrument required hereunder,
then the other parties shall have the remedy of specific performance, which
remedy shall be cumulative and nonexclusive and shall be in addition to any
other rights and remedies otherwise available under any other contract or at law
or in equity and to which such party might be entitled.

     

    Section 7.11
Independent
Nature of Limited Partner’s Obligations and Rights.  The
obligations of each Limited Partner under this Agreement are several and not
joint with the obligations of any other present or subsequent purchaser of the
Merger Shares, and each Limited Partner shall not be responsible in any way for
the performance of the obligations of any other Limited Partner under this
Agreement.  The decision of each Limited Partner to enter into this
Agreement will be made by such Limited Partner independently of any other
Limited Partners and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of any Abraxas Party that may have been made or given by any other
Limited Partner or by any agent or employee of any such Limited Partner, and no
Limited Partner or any of its agents or employees shall have any liability to
any other Limited Partner (or any other Person) relating to or arising from any
such information, materials, statements or opinions.  Nothing
contained herein and no action taken by any Limited Partner pursuant hereto,
shall be deemed to constitute such Limited Partner as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that such Limited Partner is in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by this
Agreement.  Each Limited Partner acknowledges that no other Limited
Partner has acted as agent for such Limited Partner in connection with making an
investment in the Merger Shares and that no other Limited Partner will be acting
as agent of such Limited Partner in connection with monitoring its investment in
the Merger Shares.  Each Limited Partner shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement and it shall not be necessary for any other
Limited Partner to be joined as an additional party in any proceeding for such
purpose.  Each Limited Partner represents that it has been represented
by its own separate legal counsel in its review and negotiations of this
Agreement.

     

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Page Intentionally Left Blank]

    
      
        
           

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        23amend4arca.htm

    

      AMENDMENT NO.
4

      (Amended
and Restated Credit Agreement)

      

      This Amendment No. 4 ("Agreement") dated as
of June 30, 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, and that certain Amendment No. 3 dated as of May 7, 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. 4 dated as of June 30, 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
a definitive merger agreement (the "Merger Agreement")
between the Borrower and APC.

      

      D. 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.

      

      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

       

      
        
          
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      Section
1.3 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 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

       

      Section
3.1 Section
1.01 of the Credit Agreement is hereby amended as follows:

       

      (a) The
following new term is added in alphabetical order:

       

      "Amendment No. 4 Effective
Date" means June 30, 2009.

       

      
        
          
             

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      (b)
The defined term "May 14, 2009 Payment Amount" is deleted in its
entirety.

       

      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. 4
Effective Date has been set by the Administrative Agent and the Lenders and
acknowledged by the Borrower as $128,075,515.37.  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
2.02(e) of the Credit Agreement is hereby deleted in its entirety.

       

      Section
3.4 Section
2.06 of the Credit Agreement is hereby amended to read in its entirety as
follows:

       

      Section
2.06.  Repayment of
Advances.  The Borrower shall repay to the Administrative Agent
for the ratable benefit of the Lenders the outstanding principal amount of each
Advance, together with any accrued interest thereon, in installments in the
aggregate amounts and on the dates indicated as follows or on such earlier date
pursuant to Section 7.02 or Section 7.03:

       

      
        
          
            	
                    Date

                  	
                    Amount

                  
	
                    Maturity
      Date

                  	
                    all
      remaining principal, interest, fees and other amounts owing in respect of
      the Advances

                  

          

        

      

      

      Section
3.5 Article V
of the Credit Agreement is hereby amended to add the following new Section 5.15
to the end thereof:

       

      Section 5.15  Preliminary
Proxy Statement.  On or prior to July 10,
2009, APC shall file a preliminary proxy statement pursuant to the Securities
Exchange Act of 1934, as amended, which preliminary proxy statement shall be in
form and substance satisfactory to the Administrative Agent in its sole
reasonable discretion.

       

      Section
3.6 Section
6.05(b) of the Credit Agreement is hereby amended to add the following new
subsection (iv) to the end thereof:

       

      (iv)           with
respect to any such cash distribution, (a) the Borrower shall deposit cash in an
amount equal to such cash distribution into an account established with a Lender
(the "Designated
Escrow Account"), (b) the Administrative Agent shall have a first
priority, perfected security interest in the Designated Escrow Account on terms
and subject to documentation satisfactory to the Administrative Agent in its
sole discretion, (c) funds in an amount equal to any such cash distribution
shall be held in the Designated Escrow Account until the Subordinated Loan
Termination Date, (d) the Borrower shall not pay such cash distribution to any
of the equity holders of the Borrower until the Subordinated

       

      
        
          
             

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          3

          
            

          

        

        
           

        

      

      Loan
Termination Date has occurred, and (e) the Borrower hereby agrees and
acknowledges that during the existence of any Event of Default, the
Administrative Agent may apply any funds held in the Designated Escrow Account
to the Obligations in any order determined by the Administrative Agent;
and

       

      Section
3.7 Section
7.01(c)(i) of the Credit Agreement is hereby amended to read in its entirety as
follows:

       

      (i)
perform or observe any covenant contained in Section 5.02(a), Section
5.06(e), Section 5.12, Section 5.13, Section 5.15, or Article VI of this
Agreement or

       

      Section
3.8 Section
7.01 of the Credit Agreement is hereby amended to delete subsection (q)
thereof.

       

      ARTICLE
IV.

       

      AGREEMENT

       

      Section
4.1 Consent
Fee.  In connection with this Agreement, the Borrower agrees to
pay to the Administrative Agent for the account of the Lenders having
Commitments a consent fee in an aggregate amount equal to $2,400,000 (the "Consent Fee"), to be
distributed among such Lenders in accordance with their respective Pro Rata
Shares.  The Consent Fee shall be due and payable on the Effective
Date.

       

      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 upon
the occurrence of the following conditions precedent:

      
        
          
             

            HOUSTON\2299132

          

           

        

        
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      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 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
6.4 No
Default.  No Default shall have occurred and be continuing as
of the Effective Date.

       

      Section
6.5 Representations.  The
representations and warranties in this Agreement shall be true and correct in
all material respects.

       

      Section
6.6 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 and the other Loan Documents are not
impaired in any respect by this Agreement or the consent and amendment granted
hereunder.

       

      
        
          
             

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                  (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 (INCLUDING,
WITHOUT LIMITATION, THE RELEASES CONTAINED HEREIN) ARE INVALID OR OTHERWISE
UNENFORCEABLE.

       

      
        
          
             

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      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.

       

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