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EXHIBIT 99.2 - REVOLVING
CREDIT NOTE
REVOLVING CREDIT NOTE
$15,000,000.00 ISSUE DATE: JANUARY ___, 2007
FOR VALUE RECEIVED, SOUTH TEXAS OIL COMPANY, a Nevada
corporation
("DEBTOR"), HEREBY PROMISES TO PAY to the order of LONGVIEW FUND,
L.P.
("PAYEE"), at the offices of Payee, 600 Montgomery Street, 44th
Floor, San
Francisco, CA 94111, or at such other place as Payee may from time
to time
designate, the principal sum equal to the lesser of (a) FIFTEEN
MILLION DOLLARS
($15,000,000.00) or (b) the aggregate unpaid principal amount of
all Advances
made by Payee to Debtor, which amount shall be payable by Debtor in
lawful
money of the United States of America and in immediately available
funds in
accordance with the terms of the Loan Agreement (as defined below).
Debtor
hereby further promises to pay interest (the "Interest") to the
order of Payee
on the unpaid principal balance hereof at a rate per annum (the
"Interest
Rate") equal to the "prime rate" published in The Wall Street
Journal from time
to time, plus four percent (4%). The Interest Rate shall be
increased or
decreased as the case may be for each increase or decrease in the
prime rate in
an amount equal to such increase or decrease in the prime rate;
each change to
be computed as of the first Business Day of each calendar quarter
and applied
to the Obligations outstanding during such calendar quarter. The
Interest Rate
shall not be less than eight percent (8%). Interest shall be
payable
quarterly, in arrears, commencing on the first day of the first
calendar
quarter after the initial Advance is made and on the first day of
each
consecutive calendar quarter thereafter and on the Maturity Date,
whether by
acceleration or otherwise. Interest will be payable in the manner
and in
accordance with the provisions of the Loan Agreement, which
provisions are
hereby incorporated herein by reference.
1. For the purposes hereof, "Loan Agreement" shall mean that
certain Loan
Agreement, dated as of the date hereof, between Payee and Debtor,
as
the same now exists or may hereafter be amended, restated,
renewed,
replaced, substituted, supplemented, extended, or otherwise
modified.
Security Agreement shall mean that certain Security Agreement dated
as
of the date hereof, between Payee and Debtor, as the same now
exists
or may hereafter be amended, restated, renewed, replaced,
substituted,
supplemented, extended, or otherwise modified. All capitalized
terms
used herein and not otherwise defined herein shall have the
meanings
ascribed to such terms in the Loan Agreement and Security
Agreement.
2. This Note evidences the aggregate outstanding principal balance,
from
time to time, of the Advances made by Payee to Debtor pursuant to
the
Loan Agreement. It is contemplated that there may be times when
no
indebtedness is owing hereunder; but notwithstanding any such
occurrence, this Note shall remain valid and shall be in full
force
and effect as to the Advances made subsequent to each such
occurrence.
3. This Note is secured by Collateral and is entitled to all of
the
benefits and rights as set forth in the Loan Agreement,
Security
Agreement and the Transaction Documents.
4. If any Event of Default shall occur, or if the Loan Agreement
shall be
terminated, in addition to all rights and remedies of Payee under
the
Loan Agreement and the Transaction Documents, applicable law or
otherwise, all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively and
concurrently, any or all of the Obligations, including, without
limitation, al
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