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SECURITIES PURCHASE AND NOTE AGREEMENT
Dated as of November 30, 2007
By and Among
AMEN PROPERTIES, INC.
and
THE INVESTORS NAMED
ON THE SIGNATURE PAGES HERETO
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SECURITIES PURCHASE AND NOTE AGREEMENT
This Securities
Purchase and Note Agreement (the "Agreement") is made
and entered into as of the 30th day of November, 2007 (the
"Effective Date"), by
and among Amen
Properties, Inc.,
a Delaware corporation ("Amen"), and the
Persons whose names appear on the Signature Pages hereto (the
"Investors").
RECITALS
A. Amen has entered into a Purchase and Sale Agreement with Bank of
New
York Trust Company,
N.A., solely in its
capacity as trustee of Santa Fe Energy
Trust ("SFF") dated
November 30, 2007 and
a Purchase and Sale
Agreement with
Devon Energy Production Company, L.P. dated November 30, 2007 (the
"Acquisition
Agreements"), whereby
Amen has agreed to acquire, or cause one of its
Subsidiaries to
acquire, certain oil and gas interests (the "Acquisition
Properties").
B. In order to fund a portion of the purchase price to acquire the
Acquisition
Properties, the
Investors have agreed to make loans to Amen
and
acquire Amen securities, under and pursuant to the terms
and conditions of this
Agreement.
ARTICLE I
DEFINITIONS
Section 1.1 -
Definitions. As used
in this Agreement,
the following
terms have the meanings indicated:
"Acquisition" means
the transaction
contemplated
by the Acquisition
Agreements.
"Acquisition Agreements" has the meaning specified in the
Recitals.
"Acquisition
Documents" means
the Acquisition Agreements and all
related agreements, documents and instruments.
"Acquisition Properties" has the meaning specified in the
Recitals.
"Agreement" has
the meaning ascribed to such term in the first
paragraph hereof.
"Certificate of
Designation" means the
Certificate of Designations of
Series D Preferred
Stock of Amen
Properties, Inc. in
substantially
the form
attached hereto as Exhibit "A".
"Closing" has the meaning ascribed to such term in Section 2.2.
"Closing Date" has the meaning ascribed to such term in Section
2.2.
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"Commitment Amount"
means the aggregate dollar amount an Investor
commits to invest (by making a Loan and purchasing shares of Series D Preferred
Stock) under
the terms of this Agreement as set forth on each Investor's
Signature Page.
"Commitment
Percentage" means each Investor's percentage of the total
Commitment Amount of all Investors and is determined by dividing
each Investor's
Commitment Amount by the total Commitment Amounts of all
Investors.
"Common Stock" means
the common stock,
$0.01 par value per share, of
Amen.
"Contracts" means
any indenture, mortgage, deed of trust, loan
agreement, note,
lease, license,
franchise agreement, permit, certificate,
contract or
other agreement or instrument to which Amen or any of its
Subsidiaries is a
party or to which their respective material properties or
assets are subject.
"Environmental Laws"
means all (i) all federal statutes regulating or
prescribing
restrictions regarding
the use of
property or other activities
affecting the environment (air, water, land, animal and plant life),
including
but not limited to the following: the Clean Air Act, Clean Water Act,
Comprehensive Environmental Response, Compensation and Liability Act,
Emergency
Planning and Community
Right-to-Know Act,
Hazardous Materials
Transportation
Act, National
Environmental Policy Act, Occupational Safety and Health Act,
Oil
Pollution Act of 1990,
Resource Conservation and Recovery Act, Safe
Drinking
Water Act, and Toxic
Substances Control
Act; (ii) all regulations promulgated
under such
federal statutes, (iii) all local and state laws, rules and
regulations regulating
the use of or relating to or affecting the environment,
and (iv) all common law rights, duties and obligations relating to
the use of or
matters affecting the environment.
"Equity Securities"
means the Series D
Preferred Stock, the
Warrants
and the Warrant Shares.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental
Authority" means the United States, any foreign country,
state, county, city or
other political
subdivision, agency or
instrumentality
thereof.
"Inside Investors"
means the Investors
who are officers,
directors,
employees or
consultants
of Amen, which shall be specified on each such
Investor's Signature Page.
"Loan Funded Amount" means 38.70% of the Total Funded Amount.
"Loans" means the
loans made by the Investors to Amen pursuant to this
Agreement.
"Material
Adverse Effect"
means any event or condition which,
individually or in the
aggregate,
would reasonably be expected to have a
material adverse
effect on the
business, financial condition or results of
operations of Amen and its Subsidiaries, taken as a whole.
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"Notes" has the meaning set forth in Section 2.1.
"Permits" means any licenses, permits, certificates, consents, orders,
approvals and other
authorizations from, and all declarations and filings with,
all federal, state, local and other Governmental Authorities, all
self-regulatory
organizations and all
courts and other tribunals presently
required or necessary
to own or lease,
as the case may be,
and to operate the
properties of Amen and its Subsidiaries and to carry on the
business of Amen and
its Subsidiaries
as now or proposed to be conducted as set forth in the SEC
Filings.
"Preferred Purchase Price" means $10.00 per share of Series D
Preferred
Stock.
"Required Consent"
means the approval of Investors with Commitment
Amounts representing
in excess of 50% of the total Commitment Amounts of all of
the Investors.
"SEC" means the Securities and Exchange Commission.
"SEC Filings" means
Amen's reports and other filings made with the SEC
for a period of two (2) years prior to the date hereof and all
exhibits thereto.
"Securities" means the Notes, the Series D Preferred, the Warrants and
the Warrant Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Series D Funded Amount" means 61.30% of the Total Funded
Amount.
"Series D Preferred
Stock" means the Series D Preferred Stock of Amen,
par value $0.001 per share, having the rights and preferences
substantially as
set forth in Exhibit "A".
"Signature Page" means the counterpart signature page of this
Agreement
signed by each Investor.
"Stockholder Approval" has the meaning set forth in Section
5.9.
"Subsidiary" means,
when used with reference to an entity, any
corporation, a
majority of the outstanding voting securities of which are
owned
directly or indirectly
by such entity. Such
term shall also refer to any other
partnership, limited
partnership,
limited liability
company, joint venture,
trust, or other business entity in which such entity has a material
interest.
"Total Funded
Amount" means the aggregate amount actually paid or
loaned, as the case may be, by all of the Investors to Amen at
Closing.
"Transactions" means
the transactions and obligations contemplated by
this Agreement, including without limitation the issuance of the
Securities.
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"Warrant" or
"Warrants" means the
Company's Common Stock Purchase
Warrants, having
terms substantially as set forth in Exhibit "B" attached
hereto.
"Warrant Certificate"
means a certificate evidencing a Warrant in
substantially the form attached hereto as Exhibit "B".
"Warrant Shares"
means the shares of Common Stock purchased or
purchasable upon the exercise of the Warrants pursuant to the terms
thereof.
Section 1.2 - Other Definitions. Other terms defined in this
Agreement
have the meanings so given them.
Section 1.3 - Construction. Whenever the context requires,
the gender
of all words used in
this Agreement
includes the masculine, feminine, and
neuter. Except as
specified otherwise,
all references to Articles and Sections
refer to articles and sections of this Agreement, and all
references to exhibits
and schedules are to Exhibits and Schedules attached to this
Agreement, each of
which is made a part of this Agreement for all purposes.
The word "including"
shall mean
"including,
without
limitation"
unless the context otherwise
requires.
ARTICLE II
INVESTMENT TRANSACTION
Section 2.1 - Investments.
(a) Subject
to the terms and conditions of this Agreement, each
Investor agrees to purchase from Amen, and Amen agrees to issue and
sell to
such
Investor, shares of
Series D Preferred Stock. The number of shares of
Series D Preferred
Stock to be acquired by each Investor will be equal to
(i)
the product of the Series D Funded Amount multiplied by such
Investor's
Commitment Percentage
(rounded to the
nearest whole dollar),
divided by
(ii)
the Preferred Purchase Price.
(b) Subject
to the terms and conditions of this Agreement, each
Investor agrees
to loan to Amen,
and Amen agrees to borrow from such
Investor, an
amount equal to such Investor's Commitment Percentage
multiplied by the Loan Funded Amount (rounded to the nearest whole
dollar).
Each
such Loan shall be evidenced by a promissory note in substantially
the
form
attached hereto as Exhibit "C" (each, a "Note" and collectively, the
"Notes"). The original principal amount of each Investor's Loan
will be set
forth on that Investor's Note upon funding of the Loan.
(c) At Closing, Amen shall issue Warrants to the Investors for a
total
of
450,000 Warrant
Shares divided among the Investors based upon each
Investor's Commitment Percentage.
Section 2.2 - The Closing. Subject to the terms and
conditions of this
Agreement, the closing
of the Transactions
contemplated hereby (the "Closing")
will be held at the offices of Amen, 303 W. Wall, Suite 2300, Midland, Texas,
contemporaneously with
the closing of the
Acquisition, or such
other place or
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time as may be agreed by the parties. The date on which the Closing
occurs is
referred to herein as the "Closing Date." At the Closing,
Amen will deliver
to
each Investor
(i) a stock
certificate
representing
the shares of Series D
Preferred Stock purchased by such Investor, (ii) a Note representing the Loan
made by such Investor,
and (iii) a Warrant
Certificate
for the Warrant to
be
issued to such
Investor pursuant
to Section
2.1, in each case in
the name of
such Investor,
or in the name of such
nominee or designee as
the Investor may
request in writing at least five (5) days prior to Closing, upon
receipt by Amen
of the Loan proceeds
and stock purchase
price from each such
Investor by wire
transfer of immediately available funds to an account
designated by Amen, or by
such other method as is mutually agreed to by such Investor and
Amen. Such Loan
and stock purchase proceeds shall be funded to Amen at such
time and by such
method as will
permit Amen to use such proceeds to fund a portion of the
purchase price in the Acquisition.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMEN
Amen represents and
warrants to the Investors as of the date hereof as
follows:
Section 3.1 - Organization. Each of Amen and its Subsidiaries (i) is
duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its
organization,
(ii) has full power
and authority
to own,
operate and occupy its
properties
and to conduct its
business as presently
conducted, and (iii)
is registered
or qualified to do business and in good
standing in each
jurisdiction in which
it owns or leases property or transacts
business, except
where the failure to be so qualified would reasonably be
expected to
have a Material Adverse Effect, and no proceeding has been
instituted in any such jurisdiction revoking, limiting or
curtailing, or seeking
to revoke, limit or curtail, such power and authority or
qualification. Schedule
3.1 contains
a list of Amen's
Subsidiaries,
including the jurisdiction of
organization of, and
direct and indirect
ownership of Amen in, each Subsidiary
(and whether such
ownership is subject
to a lien, security
interest or other
encumbrance).
Section
3.2 - Due Authorization. Amen has all requisite power and
authority to execute,
deliver and perform its obligations under this Agreement,
and this Agreement has been duly authorized and validly
executed and
delivered
by Amen and constitutes a legal, valid and binding agreement of
Amen enforceable
against Amen in
accordance with its
terms, except as
rights to indemnity
and
contribution may be
limited by state or federal securities laws or the public
policy underlying
such laws,
and except as
enforceability
may be limited by
applicable bankruptcy,
insolvency,
reorganization,
moratorium or similar laws
affecting creditors'
and contracting parties' rights generally and general
principles of equity (regardless of whether such enforceability is
considered in
a proceeding
in equity or at law). Approval of this Agreement and the
Transactions by the Board of Directors of Amen constitutes approval
by the Board
of Directors of Amen of the Investors becoming Interested
Stockholders of
Amen,
with respect to the Investors acquisition of the Equity
Securities as
provided
herein, prior to the
time the Investors become Interested Stockholders within
the meaning of Section 203 of the Delaware General Corporation
Law.
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Section 3.3 -
Non-Contravention. The
execution and delivery of this
Agreement, the
issuance and sale of the Securities and the consummation of the
Transactions will not (a) conflict with or constitute a violation
of, or default
(with the passage of time or otherwise) under (i) any material
Contracts,
(ii)
the charter,
by-laws or other
organizational
documents of Amen or
any of its
Subsidiaries, or (iii)
to its knowledge, any
law, administrative
regulation,
ordinance or order of any court or governmental agency, arbitration panel or
authority binding
upon Amen or any of its Subsidiaries or their respective
properties, except as
to (i), (ii) and (iii) above those conflicts, violations
or defaults that would
not reasonably
be expected to have a
Material Adverse
Effect, or (b) result
in the creation
or imposition of any material lien,
encumbrance, claim,
security interest or restriction whatsoever upon any of the
material properties
or assets of Amen or any of its Subsidiaries or an
acceleration of indebtedness pursuant to any material
obligation, agreement
or
condition contained in any material bond, debenture, note or any other evidence
of material indebtedness or any material indenture, mortgage, deed of trust or
any other material agreement or instrument to which Amen or any of its
Subsidiaries is a
party or by which any of them is bound or to which any of the
material property or
assets of Amen or any of its Subsidiaries is subject.
No
consent,
approval,
authorization or
other order of, or registration,
qualification or
filing with, any
Governmental
Authority is required
for the
execution and
delivery of this Agreement and the consummation of the
Transactions; except
for those that have been made or obtained, for any
securities filings
required to be made
under federal or state securities laws,
and where any failure to make or obtain any of the foregoing would not
reasonably be expected to have a Material Adverse Effect.
Section 3.4
- Capitalization. The capitalization of Amen as of
September 30, 2007 is
as set forth in the SEC Filings. Amen has not issued any
capital stock
since that date,
except for shares of Common Stock issued as
compensation pursuant to employment agreements described in the SEC
Filings. The
Equity Securities have been duly authorized, and if and when issued
and paid for
in accordance with the terms of this Agreement, will be duly and
validly issued,
fully paid and
non-assessable. The
outstanding shares of capital stock of Amen
have been duly and validly issued and are fully paid and
non-assessable,
have
been issued in compliance with all federal and state securities laws, and were
not issued in violation of any preemptive rights or similar rights to
subscribe
for or purchase
securities. Except as
disclosed in the SEC Filings (including
without limitation
under employee benefit plans and employment agreements
referred to in such SEC Filings), there are no outstanding rights (including
without limitation,
preemptive
rights), warrants or options to
acquire, or
instruments convertible into or exchangeable for, any unissued
shares of capital
stock or other equity interest in Amen, or any contracts, commitments,
agreements,
understandings or arrangements of any kind to which Amen is a
party
relating thereto.
Without limiting the foregoing, no preemptive rights, co-sale
rights, rights of
first refusal or other
similar rights exist
with respect to
the issuance of the Equity Securities. Amen owns the equity interest in
each of
its Subsidiaries
specified in Schedule 3.1, free and clear of any pledge, lien,
security interest,
encumbrance
or claim, other than as described in
Schedule
3.1. There are no stockholders agreements, voting agreements or other similar
agreements with respect to the Common Stock to which Amen is a
party, except as
disclosed in the SEC
Filings and except for
voting agreements
related to the
Stockholder Approval.
Section 3.5 -
Legal Proceedings. There is no material legal or
governmental
proceedings pending to
which Amen or any of its Subsidiaries is a
party or of which the business or property of Amen or any of its
Subsidiaries is
subject.
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Section 3.6 - No Violations. Neither Amen nor any of its
Subsidiaries
is (a) in violation of its charter, bylaws or other organizational
documents, or
(b) to its knowledge,
(i) in violation of any law, administrative regulation,
ordinance or order of any court or Governmental Authority,
arbitration panel
or
authority applicable
to Amen or any of its Subsidiaries, which violation,
individually or in the aggregate, would be reasonably likely to have
a Material
Adverse Effect, or
(ii) in default (and there exists no condition which, with
the passage of time or otherwise, would constitute a default) in
the performance
of any material
Contracts, which would
be reasonably likely to have a Material
Adverse Effect.
Section 3.7 -
Permits. Each of Amen and its Subsidiaries has all
necessary Permits that are currently necessary for the operation of
the business
of Amen and its Subsidiaries as currently conducted and as described in the
SEC
Filings, except where
the failure to currently possess such Permits would not
reasonably be expected to have a Material Adverse Effect.
Section 3.8 - Financial Statements. The financial statements of Amen
and the related notes contained in the SEC Filings present fairly,
in accordance
with generally
accepted accounting principles, the consolidated financial
position of Amen and its Subsidiaries as of the dates indicated.
Such financial
statements (including
the related notes) have been prepared in accordance with
generally accepted
accounting
principles
applied on a consistent basis
throughout the periods therein specified.
Section 3.9 - No Material Adverse Change. Except as disclosed in the
SEC Filings or as provided in this Agreement, since September 30, 2007, there
has not been (i) any change in the business, financial condition or
operation of
Amen which would reasonably be expected to have a Material Adverse
Effect, (ii)
any obligation,
direct or contingent, that is material to Amen and its
Subsidiaries considered as one enterprise, incurred by Amen or its
Subsidiaries,
except obligations incurred in the ordinary course of business or
related to the
Acquisition, (iii) any
dividend or distribution of any kind declared, paid or
made on the capital
stock of Amen, or (iv)
any loss or damage
(whether or not
insured) to the physical property of Amen or any of its
Subsidiaries which would
reasonably be expected to have a Material Adverse Effect.
Section 3.10 - Disclosure. The information contained in the SEC
Filings
as of the date of such
information did 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.
Section 3.11 - Compliance. The Common Stock is registered
pursuant to
Section 12(b) of the Exchange Act and is listed on the Nasdaq
Capital Market of
the Nasdaq Stock
Market (the
"Nasdaq Stock Market"), and Amen has taken no
action designed
to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or
de-listing the Common
Stock from the Nasdaq
Stock Market,
nor has Amen
received any notification
within the twelve (12) months preceding the date of this
Agreement that the SEC
or the National Association of Securities Dealers, Inc. ("NASD") is
contemplating terminating such registration or listing.
Section 3.12 - Reporting Status. Amen has filed in a timely manner
all
documents that Amen
was required
to file under the Exchange Act during the
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twelve (12)
months preceding the date of this Agreement. Copies of such
documents have been made available to each of the Investors.
Section 3.13
- Properties and Contracts. Each of Amen and its
Subsidiaries has good
and defensible
title to all
property included in the
financial statements
included in its SEC Filings, free and clear of all liens,
charges, encumbrances
or restrictions,
except (i) liens granted to a lender by
Amen or a Subsidiary
of Amen as described
in the SEC Filings,
(ii) statutory
liens in favor of taxing authorities or others, and (iii) to the extent the
failure to have such title or the existence of such liens, charges,
encumbrances
or restrictions
would not reasonably be expected to have a Material
Adverse
Effect. All material Contracts are valid, binding and enforceable
against Amen
or its Subsidiaries,
as applicable,
and, to the knowledge
of Amen, are valid,
binding and
enforceable against
the other party or parties thereto and are in
full force and effect
with only such
exceptions
as would not
reasonably
be
expected to have a Material Adverse Effect. Amen and its Subsidiaries, and to
their best knowledge, the other parties thereto, are not in default
under any of
the material
Contracts, which
default would
reasonably be expected
to have a
Material Adverse Effect.
Section 3.14 - Environmental Matters. Except as would not
reasonably be
expected to have a Material Adverse Effect and except as disclosed in the SEC
Filings, (i) each of
Amen and its
Subsidiaries is in
compliance with and
not
subject to liability under applicable Environmental Laws, (ii) each of
Amen and
its Subsidiaries
has made all filings
and provided all notices required under
any applicable
Environmental
Law, and has in full force and effect
and is in
compliance with all Permits required under any applicable
Environmental
Laws,
(iii) there is no
civil, criminal
or administrative action, suit, demand,
hearing, notice of violation, proceeding, notice or demand letter
or request for
information pending or, to the knowledge of Amen, threatened
against Amen or its
Subsidiaries under any Environmental Law, (iv) no lien, charge,
encumbrance or
restriction has been
recorded under any
Environmental Law with
respect to any
assets, facility or
property owned,
operated, leased or
controlled by Amen or
its Subsidiaries, and
(v) neither Amen nor its Subsidiaries has received notice
that it has been
identified
as a potentially responsible party under any
Environmental Law.
Section 3.15 -
Insurance. Each of
Amen and its
Subsidiaries
carries
insurance in such
amounts and covering such risks in such amounts as is
customary for
persons of a similar
size in the
businesses
in which they are
engaged.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor hereby represents and warrants to Amen as
follows:
Section 4.1 - Authority. The Investor has all requisite
capacity, and
if an entity requisite corporate, partnership or other
organizational power and
authority, to
execute and deliver this Agreement and to consummate the
Transactions to be performed by the Investor. If the Investor is an entity,
the
execution and
delivery of this Agreement and the consummation of the
Transactions to be
performed by the Investor have been duly and validly
authorized by all
necessary action on the part of the board of directors,
managers, general
partner or similar body of the Investor, as the case may be,
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and no other corporate
or similar proceedings
are necessary to authorize the
execution and delivery of this Agreement by the Investor or to
consummate
the
Transactions to be
performed by the Investor. This Agreement has been duly
and
validly executed and
delivered by the
Investor and, assuming
this Agreement
constitutes valid and binding obligations of Amen, this Agreement
constitutes a
valid and binding agreement of the Investor, enforceable against him in
accordance with its terms, except that the enforcement thereof may
be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or
other similar
laws now or hereafter
in effect relating to
creditors'
rights
generally, and (ii) general principles of equity and the discretion
of the court
before which any proceeding therefor may be brought
(regardless of whether such
enforcement is considered in a proceeding in equity or at law).
Section 4.2
- Consents and Approval; No Violation. Neither the
execution and delivery of this Agreement by the Investor,
the consummation of
the Transactions
to be performed by the Investor, nor compliance by the
Investor, with any of
the provisions
hereof will (i) if the Investor is an
entity, conflict
with or result in any breach of any provisions of the
Investor's
organizational
documents, (ii)
require any material consent,
approval,
authorization or
permit of, or filing with or notification to, any
Governmental Authority, except for consents, approvals,
authorizations, permits,
filings or
notifications which
have been obtained or
made, (iii) result in
a
default (with or
without due notice or lapse of time or
both) or give rise to
any right of termination, cancellation or acceleration
under any of the
terms,
conditions or provisions of any material indentures, loan or credit agreements,
receivables sale or financing agreements, lease financing agreements, capital
leases, mortgages,
security agreements,
bonds and notes and
guaranties of any
such obligations
to which the Investor
is a party or by which the Investor may
be bound, except for
such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been
obtained, or
(iv) violate any material order, writ, injunction, decree, statute, rule or
regulation applicable to the Investor.
Section 4.3 -
Securities
Laws. The Investor (on his behalf and on
behalf of any nominee
or designee
of the Investor who receives any of the
Securities) hereby represents and warrants to and covenants with
Amen that:
(a) Investor has adequate means of providing for his current needs
and
possible contingencies, and has no need now, and anticipates no
need in the
foreseeable future,
to sell the
Securities. Investor
is able to bear the
economic risks of this investment, and consequently, without limiting the
generality of the foregoing, Investor is able to hold the
Securities for an
indefinite period of time and has sufficient net worth to sustain a
loss of
the
entire investment
in the Securities in the event such loss should
occur.
(b) Investor recognizes that its investment in the Securities
involves
a
high degree of risk
which may result in the loss of the total amount of
the
investment. Investor acknowledges that he is aware of and has
carefully
considered all risks incident to the purchase of the Securities,
including
without limitation
those set forth in the
SEC filings and those discussed
in
Schedule 4.3(b).
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(c) Investor
is acquiring the Securities for his own account (as
principal) for investment and not with a view to the distribution
or resale
thereof. Investor has not offered or sold any portion of the
Securities and
has
no present intention
of dividing the Securities with others or of
reselling or otherwise
disposing of any portion of the Securities.
(d) INVESTOR
IS AWARE THAT HE MUST BEAR THE ECONOMIC RISK OF HIS
INVESTMENT IN THE SECURITIES FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR UNDER
THE
SECURITIES LAWS OF ANY STATE, AND THEREFORE CANNOT BE SOLD
UNLESS THEY ARE
SUBSEQUENTLY
REGISTERED UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION OR EXCEPTION FROM SUCH
REGISTRATION
IS
AVAILABLE AND,
FURTHER, THAT ONLY
AMEN CAN TAKE ACTION TO REGISTER THE
SECURITIES, AND
AMEN IS UNDER NO OBLIGATION TO DO SO. INVESTOR ALSO
RECOGNIZES THAT NO
FEDERAL OR STATE AGENCY HAS PASSED UPON THE SECURITIES
OR
MADE ANY FINDING OR DETERMINATION AS TO THE FAIRNESS OF AN
INVESTMENT IN
THE
SECURITIES.
(e) Investor has reviewed, understands and agrees to the
terms of the
Series D Preferred
Stock and Warrants as set forth in the Certificate of
Designations and form of Warrant Certificate, respectively.
(f) Investor (i) acknowledges receipt of sufficient information from
Amen
concerning
the business of Amen and its
Subsidiaries
in order for
Investor to make a fully informed investment decision, (ii) has had the
opportunity to review
and obtain copies of any information which Amen
possesses and is desired by Investor relating to the Securities and Amen
and
its Subsidiaries (including without limitation copies of the SEC
Filings), and (iii)
has been given the
opportunity to meet with officials
of
Amen and to have said officials answer any questions regarding the
terms
and
conditions of this particular investment, and all such questions have
been
answered to Investor's full satisfaction. While Amen has attempted to
provide information that is as accurate as possible, Investor acknowledges
and
agrees that Amen and its representatives cannot and do not make any
assurances,
representations or
warranties
with respect to any such
information, except
for the
representations
expressly set forth
herein
concerning information
included in the SEC Filings. All information
described in
this Section 4.3(f), including without limitation the
information included
in the SEC Filings,
is qualified in all
respects by
the
Risk Factors discussed in Schedule 4.3(b). The Investor has sufficient
knowledge and experience in financial and business matters to
enable him to
evaluate the
merits and risks of an investment in the Securities. In
addition, in
reaching the conclusion that he desires to acquire the
Securities, Investor
has carefully
evaluated his financial resources and
investments, has consulted with such legal, accounting and other
experts as
necessary or appropriate, and acknowledges and represents
that Investor is
able
to bear the economic risks of this investment. Investor acknowledges
and
understands that none of the information provided or made available by
or
on behalf of Amen constitutes any legal, tax or investment
advice.
10
<PAGE>
(g) Investor is an
"accredited
investor" as such term
is defined in
Rule
501 under the
Securities Act.
Investor will provide to Amen such
information as may be reasonably requested by Amen to enable it to
satisfy
itself as to such status and the knowledge and experience of Investor and
his
ability to bear the economic risk of an investment in the Shares. If
specified on an
Investor's
Signature Page, such Investor is a current
stockholder of Amen.
(h) All representations and warranties made by Investor in this
Agreement and all other oral or written information provided by
Investor to
Amen
is and are true, correct and complete in all material respects, and,
if
there should be any
material change in
such information
prior to the
acceptance of this
Agreement,
Investor will immediately furnish such
revised or corrected information to Amen.
(i) The address and social security number or federal tax
identification number
set forth on the
Investor's Signature
Page are his
true
and correct state (or
other jurisdiction)
of residence and social
security number or
federal tax
identification
number. Investor has no
present
intention of
becoming
a resident of any other state or
jurisdiction. Investor
is not subject to backup withholding and will
provide such forms and documents as may be required by Amen to
evidence his
exemption from backup
or other withholding
taxes and hereby
consents to
withholding of any applicable taxes from his distributions from
Amen.
(j) Investor
acknowledges
and understands that certain of the
information that he has received regarding Amen and its
Subsidiaries may be
material, non-public
information,
and that Investor will not be able to
trade in the Common Stock while in possession of such information until
that
information
has been properly
disseminated to the
public or becomes
immaterial to Amen and its Subsidiaries.
(k) Investor acknowledges and agrees that if Investor is more than
one
person, the obligations of the Investor are and shall be joint and
several,
and
the representations
and warranties
herein contained are
and shall be
deemed to be made by and be binding upon each such person and his heirs,
executors,
administrators,
successors or assigns; that if the Investor is
acquiring the
Securities in a
fiduciary capacity,
the representations,
warranties and
agreements
contained herein shall be deemed to have
been
made
on behalf of the person or persons for whom the Investor is so
purchasing; and that
the representations and warranties of the Investor as
set
forth herein shall continue in effect following the consummation of
the
Transactions pursuant to this Agreement. In the event that
execution hereof
by Investor is
performed by any person as agent for or other representative
of
the Investor, such
person represents
that he is duly
authorized
and
empowered to sign and
deliver this
document on behalf of
the Investor in
the
capacity stated and that the Investor will be bound by this
Agreement.
(l) Investor
acknowledges that he
understands the
meaning and legal
consequences of the representations, warranties and covenants set forth
in
this
Section 4.3 and that Amen has relied and will rely upon such
representations,
warranties, covenants
and certifications,
AND INVESTOR
HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS AMEN, ITS
SUBSIDIARIES
11
<PAGE>
AND
THEIR RESPECTIVE OFFICERS, DIRECTORS, CONTROLLING PERSONS, PARTNERS,
AGENTS AND
EMPLOYEES,
FROM AND AGAINST ANY AND ALL LOSS, DAMAGE OR
LIABILITY, JOINT OR
SEVERAL, AND ANY
ACTION IN RESPECT THEREOF, TO WHICH
ANY SUCH PERSON MAY
BECOME SUBJECT DUE TO OR ARISING OUT OF A BREACH OF ANY
OF
INVESTOR'S REPRESENTATIONS, WARRANTIES OR COVENANTS.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 - Use of Proceeds. The cash proceeds to Amen from the
loan
represented by the
Notes shall be used by Amen on the Closing Date to acquire
the Acquisition Properties and for general corporate purposes.
Section 5.2 - Access to Information.
(a) Between the date hereof and the Closing Date, Amen will afford to
the
Investors and their authorized representatives full access during
normal business hours to the facilities and properties and to the
books and
records of Amen and its Subsidiaries, will permit the Investors and
their
authorized
representatives to make such reasonable inspections as they may
require and will
cause its officers and those of its Subsidiaries to
furnish the
Investors and their authorized representatives with such
financial and
operating data and other information with respect to the
business, assets
and properties of Amen and its Subsidiaries, as
applicable, as the Investors and their authorized representatives may from
time
to time request.
(b) Investors shall hold strictly confidential all information they
obtain with respect to Amen or its Subsidiaries and will not use any such
information for
any purpose other than related to the Transactions;
provided, that
Investors shall not be obligated to hold confidential
information which (i)
was or becomes
generally available to the public
other than
as a result of a disclosure by any Investor or its
representatives, (ii)
was or becomes available to the Investors on a
non-confidential
basis from
a source other than Amen or its
representatives, so
long as such source is not bound by a confidentiality
agreement with
Amen or otherwise prohibited from transmitting the
information to the Investors, or (iii) is required to be disclosed
in order
to
comply with any applicable law, order, regulation or ruling; provided
further, that each Investor shall notify Amen prior to any
disclosure under
(iii) above and provide Amen the opportunity to dispute or contest such
disclosure before any disclosure is made.
Section 5.3 - Reservation of Common Stock. Amen has and will reserve
and keep reserved for issuance, out of the authorized and unissued
shares of the
Common Stock, a number of Warrant Shares sufficient to provide for
issuance upon
the exercise of the outstanding Warrants and shall keep such
shares free of any
legal or contractual
preemptive rights.
Amen will take all
steps necessary to
keep the Warrant Shares duly authorized for issuance by all
requisite
corporate
and other action,
and to assure
that such Warrant Shares when issued upon
exercise of the Warrants will be validly issued, fully paid and
non-assessable.
12
<PAGE>
Section 5.4 - Listing of Common Stock. Amen shall use its
commercially
reasonable efforts to
comply with all
requirements of the NASD with respect to
the potential future
issuance of the
Warrant Shares and the listing thereon on
the Nasdaq Stock Market.
Section 5.5 - Future Sales of Common Stock. Each Investor agrees that
if Amen engages
in an underwritten public offering for the sale by Amen of
shares of Common Stock during the one-year period following the
Closing Date and
thereafter so long as
the Investor owns more than one percent (1%) of the total
number of shares of Common Stock then outstanding (for this
purpose,
calculated
as if the Warrant Shares were outstanding), the Investor will, if so
requested
by the managing
underwriter
for such offering, execute and deliver to such
managing underwriter a
"lock-up" letter in a
form acceptable to
such managing
underwriter. The
obligations
of and restrictions on the Investor under such
"lock-up" letter
shall be in effect for
a maximum of 180 days as specified by
the managing underwriter.
Section 5.6 - Further
Assurances. Subject to
the terms and conditions
herein provided,
Amen and each Investor agree to use their commercially
reasonable efforts to
take, or cause to be
taken, all actions,
and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the
Transactions.
Section 5.7 - Public
Announcements. The
Investors shall not issue any
press release or
otherwise make any public statements with respect to the
existence of this Agreement or the Transactions, and Amen shall
issue such press
releases or make such public statements as may be required by
applicable law or
the rules of the Nasdaq Stock Market.
Section 5.8 - Restrictive Legends. Each certificate evidencing the
Securities shall bear a legend in substantially the following
form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A
SECURITIES
PURCHASE AND
NOTE AGREEMENT DATED AS OF
____________, 2007,
COPIES OF WHICH ARE ON FILE AT THE
PRINCIPAL OFFICE OF
AMEN AND WILL BE
FURNISHED TO THE HOLDER
ON REQUEST TO THE SECRETARY OF AMEN. SUCH AGREEMENT PROVIDES,
AMONG OTHER
THINGS, FOR CERTAIN RESTRICTIONS ON SALE,
TRANSFER, OR OTHER
DISPOSITION OF THE SECURITIES EVIDENCED BY
THIS CERTIFICATE."
In addition, unless
counsel to Amen shall
have advised Amen that such
legend is no longer needed, each certificate evidencing the Securities
shall
bear a legend in substantially the following form:
"THE SECURITIES
EVIDENCED BY THIS
CERTIFICATE HAVE NOT
BEEN
REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE
SECURITIES LAW, AND
SUCH SECURITIES MAY
NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE SAME ARE
13
<PAGE>
REGISTERED AND QUALIFIED IN ACCORDANCE WITH APPLICABLE STATE
AND FEDERAL
SECURITIES
LAWS, OR IN THE OPINION OF COUNSEL
REASONABLY
SATISFACTORY TO
AMEN SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED."
Section 5.9 - Stockholder Approval.
(a) The parties hereto acknowledge and agree that pursuant to rules
of
the
Nasdaq Stock Market,
the exercise rights of
the Investors
under the
Warrants are
subject to a cap on the number of shares of Common Stock
issuable upon such
exercise equal to five percent (5%) of the number of
shares of Common Stock
outstanding on the
Closing Date (the "Common Stock
Cap") unless and until the issuance and sale of the Warrants
(including the
exercise price thereof) and Warrant Shares is approved by the
stockholders
of
Amen under
such rules of the Nasdaq Stock Market. The Investors
acknowledge and agree
(i) to the limitations
imposed by the Common
Stock
Cap
as more fully set forth in the Warrant Certificate, (ii) that without
Stockholder Approval
they will not be able
to acquire all of the
Warrant
Shares, which will
adversely effect the
value of the Securities they are
acquiring hereunder,
and (iii) that the Notes are not convertible into any
other securities
of Amen and do not
give the Investors any voting or
similar rights.
(b) In addition to the
stockholder approval
required under Section
5.9(a), the parties
further acknowledge and agree that the rules of
the
Nasdaq Stock Market require the approval of the stockholders of Amen with
respect to the issuance of shares of Common Stock to any Inside Investors
upon
the exercise of any of the Warrants. Accordingly, each of the Inside
Investors hereby
agrees not to convert
or exercise
any of the
Warrants
acquired by such Inside Investor unless and until such issuance is
approved
by
the stockholders
of Amen in
accordance
with the rules of the
Nasdaq
Stock Market.
The Inside Investors acknowledge and agree that if such
stockholder approval is not obtained, they will not be entitled to
acquire
any
of the Warrant
Shares which will adversely effect the value of the
Securities they are acquiring hereunder.
(c) The approval of the stockholders of the Company described in this
Section 5.9 shall be
referred to herein as the "Stockholder Approval".
(d) Amen agrees to solicit the Stockholder Approval in connection
with
its
next stockholders meeting, but is under no obligation to hold a
special
meeting regarding
such approval.
Each of the Investors
hereby agrees to
vote
any and all securities
of the Company owned by such Investor and
entitled to vote on the issue in favor of the Stockholder
Approval.
Section 5.10 - Negative Covenants. Until full payment and
performance
of all obligations of Amen under this Agreement and the Notes, Amen
will not and
will not permit its Subsidiaries to, without a Required
Consent:
14
<PAGE>
(a) sell, lease, assign or otherwise dispose of or transfer any of
the
Acquisition
Properties, except in
the normal course of
its business and
except for sales or
dispositions
which in the
aggregate do not exceed
$5,000,000 during any calendar year; or
(b) grant, suffer or
permit any contractual or noncontractual lien on
or
security interest in the Acquisition Properties or fail to promptly
pay
when
due all lawful claims, whether for labor, materials or
otherwise.
ARTICLE VI
INVESTORS' CONDITIONS
The obligations
of the Investors to
effect the Closing are subject to
the satisfaction of
the following
conditions, any one or
more of which may be
waived by the Investors.
Section 6.1 - Representations and Covenants. The representations and
warranties contained
in Article
III hereof
shall be true and
correct in all
material respects on
and as of the Closing Date as if made, and shall be deemed
to have been remade, on and as of the Closing Date (except to the
extent made as
of a specified
date). Amen shall have complied with all of its obligations
contained herein the performance of which is required on or prior
to the Closing
Date.
Section 6.2 - Required Consents and Approvals. All filings, consents,
approvals and waivers
necessary to the
consummation
of the loan
transaction
shall have been obtained.
Section 6.3
- Closing of Acquisition. The Acquisition shall be
consummated and closed contemporaneous with the Closing.
Section 6.4
- Certificate of Designation. The Certificate of
Designation in the
form of Exhibit
"A" shall have been duly adopted by all
requisite corporate action and filed with the Secretary of State of
the State of
Delaware on or before
the Closing Date, and shall not have been
amended or
modified.
ARTICLE VII
AMEN'S CONDITIONS
The obligations
of Amen to effect
the Closing are subject to the
satisfaction of the following conditions any one or more of
which may be waived
by Amen:
Section 7.1 - Representations and Covenants. The representations and
warranties contained
in Article IV hereof as to each Investor shall be true and
correct in all material respects on and as of the Closing
Date as if made,
and
shall be deemed to be remade, on and as of the Closing Date. Each
Investor shall
have complied with all of his obligations contained herein performance of
which
is required on or prior to the Closing Date.
15
<PAGE>
Section 7.2 - Required Consents and Approvals. All consents,
approvals
and waivers necessary
to the consummation of
the loan transaction
shall have
been obtained.
Section 7.3
- Closing of Acquisition. The Acquisition shall be
consummated and closed contemporaneous with the Closing.
Section 7.4 - Additional Documents. Amen shall have received such
other
certificates,
instruments and
documents from each Investor (and any of its
nominees or designees which acquire Securities hereunder) as it may
reasonably
request pursuant to this Agreement.
ARTICLE VIII
TERMINATION AND SURVIVAL
Section 8.1 - Termination. The Transactions contemplated
hereby may be
abandoned at any time prior to the Closing, as follows:
(a) by the mutual written consent of Amen and a Required
Consent;
(b) by Amen, on one hand, or the Investors (by Required
Consent), on
the
other hand
collectively
as one party, if there shall have been a
material breach by the other party of any of the covenants
contained herein
or
if any representation
or warranty made by
any other party is untrue in
any
material respect, in either case in a manner not capable of being
cured
on
or before the Closing Date; or
(c) by either Amen or a Required Consent, if Closing has not occurred
by
January 31, 2008.
Section 8.2 -
Survival; Failure to Close. If this Agreement is
terminated without Closing, all representations, warranties, indemnities, and
covenants contained
herein or made in writing by any party in connection
herewith will
automatically
terminate and be of no further force or effect,
except this Section 8.2 and Sections 4.3, 5.2(b) and 9.5 which
shall survive any
such termination.
ARTICLE IX
MISCELLANEOUS
Section 9.1 - Entire Agreement. This Agreement constitutes the entire
agreement among the
parties with respect to the subject matter hereof and
supersedes all prior
agreements
and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
Section 9.2 - Notices. All notices, requests, claims, demands and
other
communications
hereunder shall be in
writing and shall be
deemed to have been
duly given when delivered in person, by facsimile, with
confirmation of receipt,
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective
parties as follows (or
to such other address
as a party may
designate in a notice to the other party given pursuant to this
Section 9.2):
16
<PAGE>
If to Amen:
Amen Properties, Inc.
303 W. Wall, Suite 2300
Midland, Texas 79701
Telephone: (432)
684-3821
Facsimile: (432)
685-3143
Attn: Mr. Jon M.
Morgan, President
If to the Investors:
To each Investor at
the address or fax number specified for
such Investor on his Signature Page.
Section 9.3 - GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS IN THE STATE OF TEXAS,
WITHOUT REFERENCE
TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO
THE EXTENT GOVERNED BY THE DELAWARE
GENERAL CORPORATION LAW AS IT APPLIES TO AMEN AND THE
SECURITIES.
Section 9.4 - Severability. Whenever possible, each provision of this
Agreement will be
interpreted in such manner as to be effective and valid under
applicable law, but if
any provision of this Agreement is held to be prohibited
by or invalid under
applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating
the remainder
of this Agreement
unless the
consummation
of the Transactions contemplated
hereby is materially and adversely affected thereby.
Section 9.5 - Expenses. Except as otherwise provided herein, each
party
shall bear and pay all costs and expenses incurred by him or it or
on his or its
behalf in connection with transactions contemplated hereby, including fees and
expenses of his or its representatives.
Section 9.6 -
Descriptive Headings.
The descriptive
headings of this
Agreement are inserted for convenience of reference only and do not
constitute a
part of and shall not be utilized in interpreting this
Agreement.
Section 9.7 -
Counterparts. This
Agreement may be
executed in two or
more counterparts,
each of which shall be deemed an original, but all of which
shall constitute one and the same agreement. Faxed signatures of this
Agreement
shall be deemed and shall constitute binding signatures for all
purposes.
Section 9.8 - Assignment. Except as provided in this Section
9.8, none
of the Investors or Amen may assign his or its rights or
obligations
hereunder;
provided, however,
an Investor may assign
his rights to acquire the Securities
to a nominee or designee, provided such assignment shall be
completed and notice
thereof given
to Amen at
least five (5) days prior to Closing, but such
assignment shall not relieve such Investor of his obligations
hereunder, and any
such nominee
or designee shall be deemed to have made all of the
17
<PAGE>
representations,
warranties and
covenants of such
Investor herein and shall
agree in writing to be bound by this Agreement.
Section 9.9 -
Amendments;
Waivers. No amendment or waiver of any
provision of
this Agreement, nor consent to any departure by Amen or any
Investor therefrom,
shall in any event be effective unless the same shall be in
writing and signed by Investors representing a Required Consent
and Amen in the
case of amendments, and the affected Investor(s) or Amen, as the
case may be, in
the case of waivers.
Section 9.10 - Actions by Investors. Any action or decision to be
taken
or made by Investors in this Agreement shall be taken or made upon the
approval
of a Required Consent,
and upon such approval
such action or decision shall be
binding upon all of the Investors.
Section 9.11 - Qualified Commercial Loan. Amen
acknowledges,
confirms
and agrees
that (i) the Loans contemplated by this Agreement constitute
"qualified commercial
loans" under Section 306.001, et. seq. of the Texas
Finance Code, (ii)
Amen shall execute such documents and take such other action
as the Investors
may reasonably request for the Loans to constitute such
"qualified commercial
loan", and (iii) the
Investors have advised Amen to, and
Amen has had the opportunity to, seek the advice of an attorney and an
accountant in connection with the transaction contemplated by this
Agreement.
18
<PAGE>
Amen Signature Page
IN WITNESS WHEREOF,
the parties have caused this agreement to be
executed and delivered on December ___, 2007, but effective for all
purposes as
of the Effective Date.
AMEN PROPERTIES, INC.
By:
------------------------------------------------
Jon M. Morgan, Chief Executive Officer
Signature Pages of Investors Follow
19
<PAGE>
Investor Signature Page
Commitment Amount: $
----------------
Commitment Percentage:
%
---------
_____ Check here if
Investor is a stockholder of Amen on the date hereof.
_____ Check here if
Investor is an Inside Investor
IN WITNESS WHEREOF,
the Investor has
executed this Note
Agre
