Common use of Capitalization; Indebtedness Clause in Contracts

Capitalization; Indebtedness. (a) The authorized capital stock of Parent consists of 30,000,000 shares of Common Stock and 15,000,000 shares of Preferred Stock. After giving effect to the Closing, there will be outstanding (i) 3,590,326 shares of Common Stock and 2,000,000 shares of Preferred Stock, (ii) options to purchase 342,356 shares of Common Stock, (iii) the rights associated with Parent's rights plan in place as of the date hereof and (iv) the Warrants. (b) All outstanding shares of capital stock of Parent have been duly authorized and validly issued and are fully paid and non-assessable. Other than the Parent Securities, there are no outstanding (i) shares of capital stock or voting securities of Parent, (ii) securities of Parent convertible into or exchangeable for shares of capital stock or voting securities of Parent or (iii) options or other rights to acquire from Parent, or other obligation of Parent to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Parent (the items in clauses 3.04(b)(i), 3.04(b)(ii), 3.04(b)(iii) and 3.04(b)(iv) being referred to collectively as the "Parent Securities"). There are no outstanding obligations of Parent or any Subsidiary to repurchase, redeem or otherwise acquire any Parent Securities, except the obligation of Parent to redeem its Preferred Stock in accordance with the terms thereof. (c) When executed and delivered pursuant to this Agreement, the Notes and the Warrants will constitute valid and binding obligations of the applicable Issuer. Upon the consummation of the Closing, the shares of Common Stock issuable upon the exercise of the Warrants will have been duly authorized and reserved for issuance upon exercise of the Warrants and, when issued upon such exercise and payment of the exercise price thereof, will be validly issued, fully paid and non-assessable, and the issuance of such shares is not subject to any preemptive or similar rights.

Capitalization; Indebtedness. (ai) The authorized capital stock of Parent the Company consists of 30,000,000 20,000,000 shares of common stock, par value $0.01 per share of the Company (the “Common Stock Stock”), and 15,000,000 1,000,000 shares of Preferred Stock. After giving effect to As of the ClosingCapitalization Date, there will be outstanding (i) 3,590,326 were 8,420,599 shares of Common Stock outstanding and 2,000,000 no shares of Preferred StockStock outstanding or designated as a series. As of the close of business on the Capitalization Date, (iiA) options to purchase 342,356 2,100,000 shares of Common StockStock have been reserved for issuance under the Abraxas Petroleum Corporation Amended and Restated 2005 Employee Long-Term Equity Incentive Plan, as amended (iiithe “Plan”), and 1,699,972 shares of Common Stock remain available pursuant to the Plan for award as Stock Options, Restricted Stock Awards, and Performance Based Restricted Stock (collectively, the “Company Stock Awards”) and (B) no shares of Common Stock were held by the rights associated with Parent's rights plan Company in place as its treasury. All of the date hereof issued and (iv) the Warrants. (b) All outstanding shares of capital stock of Parent Common Stock have been duly authorized and validly issued in accordance with applicable securities Laws and are fully paid paid, nonassessable and non-assessablefree of preemptive rights, with no personal liability attaching to the ownership thereof. Other than From the Parent SecuritiesCapitalization Date through and as of the date of this Agreement, no other shares of Common Stock or Preferred Stock have been issued. The Company does not have outstanding shareholder purchase rights or “poison pill” or any similar arrangement in effect. Except as set forth on Section 2.1(b)(i) of the Company Disclosure Schedules, there are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to the Equity Securities of, or other equity or voting interest in, the Company or any Company Subsidiary to which the Company or any Company Subsidiary is a party or is bound. (iii) No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding. As of the date of this Agreement, except (A) pursuant to the surrender of shares to the Company or the withholding of shares by the Company to cover Tax withholding obligations under the Company Stock Awards, (B) as set forth in Section 2.1(b)(i) and (C) the Company does not have and is not bound by any outstanding options, preemptive rights, rights of first offer, registration rights, warrants, calls, commitments or other rights or agreements calling for the purchase or issuance of, or securities or rights convertible into, or exchangeable for, any shares of Common Stock or any other equity securities of the Company or Voting Debt or any securities representing the right to purchase or otherwise receive any shares of capital stock of the Company (including any rights plan or voting securities agreement). The Company has no outstanding obligations to provide registration rights to any Person with respect to any Equity Securities of Parent, (ii) securities the Company or any of Parent convertible into or exchangeable for shares of capital stock or voting securities of Parent or its subsidiaries. (iii) options or other rights to acquire from Parent, or other obligation of Parent to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Parent (the items in clauses 3.04(b)(i), 3.04(b)(ii), 3.04(b)(iii) and 3.04(b)(iv) being referred to collectively as the "Parent Securities"). There are no outstanding obligations of Parent or any Subsidiary to repurchase, redeem or otherwise acquire any Parent Securities, except the obligation of Parent to redeem its Preferred Stock in accordance with the terms thereof. (c) When executed and delivered pursuant to this Agreement, the Notes and the Warrants will constitute valid and binding obligations of the applicable Issuer. Upon the consummation of Immediately following the Closing, except as set forth on Schedule 2.1(b)(iii), the shares Company and its subsidiaries will not have any obligations in respect of Common Stock issuable upon the exercise of the Warrants will have been duly authorized and reserved indebtedness for issuance upon exercise of the Warrants and, when issued upon such exercise and payment of the exercise price thereof, will be validly issued, fully paid and non-assessable, and the issuance of such shares is not subject to any preemptive or similar rightsborrowed money.

Capitalization; Indebtedness. (a) The authorized capital stock of Parent consists of 30,000,000 shares of Common Stock and 15,000,000 shares of Preferred Stock. After giving effect to the Closing, there will be outstanding (i) 3,590,326 shares of Common Stock and 2,000,000 shares of Preferred Stock, (ii) options to purchase 342,356 shares of Common Stock, (iii) the rights associated with Parent's rights plan in place as of the date hereof and (iv) the Warrants. (b) All outstanding shares of capital stock of Parent have been duly authorized and validly issued and are fully paid and non-assessable. Other than the Parent Securities, there are no outstanding (i) shares of capital stock or voting securities of Parent, (ii) securities of Parent convertible into or exchangeable for shares of capital stock or voting securities of Parent or (iii) options or other rights to acquire from Parent, or other obligation of Parent to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Parent (the items in clauses 3.04(b)(i3.04(B)(I), 3.04(b)(ii3.04(B)(II), 3.04(b)(iii3.04(B)(III) and 3.04(b)(iv) being referred to collectively as the "Parent SecuritiesPARENT SECURITIES"). There are no outstanding obligations of Parent or any Subsidiary to repurchase, redeem or otherwise acquire any Parent Securities, except the obligation of Parent to redeem its Preferred Stock in accordance with the terms thereof. (c) When executed and delivered pursuant to this Agreement, the Notes and the Warrants will constitute valid and binding obligations of the applicable Issuer. Upon the consummation of the Closing, the shares of Common Stock issuable upon the exercise of the Warrants will have been duly authorized and reserved for issuance upon exercise of the Warrants and, when issued upon such exercise and payment of the exercise price thereof, will be validly issued, fully paid and non-assessable, and the issuance of such shares is not subject to any preemptive or similar rights.such

Capitalization; Indebtedness. (ai) The authorized capital stock of Parent immediately prior to the Closing consists solely of 30,000,000 270,000,000 shares of Common Stock authorized common stock, par value $0.001 per share, of which 131,793,660 shares are issued and 15,000,000 outstanding, and 1,000,000 shares of Preferred Stock. After giving effect to the Closingpreferred stock, there will be outstanding (i) 3,590,326 par value $0.001 per share, of which no shares of Common Stock are issued and 2,000,000 shares of Preferred Stock, outstanding. (ii) options to purchase 342,356 shares All of Common Stock, (iii) the rights associated with Parent's rights plan in place as of the date hereof ’s issued and (iv) the Warrants. (b) All outstanding shares of capital stock of Parent (or other equity securities) have been duly authorized and validly issued and are fully paid and non-assessablenonassessable. Other than Except as provided in this Agreement, the Parent SecuritiesNote Issuance Agreement or the Merger Agreement, there are no outstanding (i) no subscription, warrant, option, convertible security or other right (contingent or otherwise) to purchase or acquire any shares of capital stock of Parent is authorized or voting outstanding, (ii) Parent has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right or to issue or distribute to holders of any shares of its capital stock or other equity securities any evidences of indebtedness or assets of Parent, (ii) securities of Parent convertible into or exchangeable for shares of capital stock or voting securities of Parent or (iii) options Parent has no obligation (contingent or other rights otherwise) to acquire from Parent, or other obligation of Parent to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Parent (the items in clauses 3.04(b)(i), 3.04(b)(ii), 3.04(b)(iii) and 3.04(b)(iv) being referred to collectively as the "Parent Securities"). There are no outstanding obligations of Parent or any Subsidiary to repurchasepurchase, redeem or otherwise acquire any Parent Securitiesshares of its capital stock (or other equity securities) or any interest therein or to pay any dividend or make any other distribution in respect thereof, except (iv) there are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to Parent, (v) no outstanding shares of Parent’s capital stock (or other equity securities) are subject to any Liens, other than Permitted Liens, and (vi) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the obligation of Parent to redeem its Preferred Stock in accordance with the terms thereof. (c) When executed and delivered pursuant to this Agreement, the Notes and the Warrants will constitute valid and binding obligations issuance of the Notes. All of the issued and outstanding shares of Parent’s capital stock (or other equity securities) have been offered, issued and sold by Parent in compliance with applicable Issuerfederal and state securities laws. Upon the Except for certain customary registration rights granted in connection with consummation of the Closingtransactions contemplated in the Merger Agreement and the Note Issuance Agreement Documents, there are no agreements or arrangements under which Parent is obligated to register the shares sale of Common Stock issuable upon any of its securities under the exercise Securities Act. (iii) As of the Warrants will have been duly authorized and reserved for issuance upon exercise Effective Date, Parent has no Indebtedness except as set forth on Section 4.2(d)(iii) of the Warrants and, when issued upon such exercise and payment of the exercise price thereof, will be validly issued, fully paid and non-assessable, and the issuance of such shares is not subject to any preemptive or similar rightsDisclosure Schedule.