WESTERN NATIONAL BANK
REVOLVING LINE OF CREDIT NOTE
$5,000,000.00
Midland, Texas
FEBRUARY 28, 2005
1. For value received, AMEN PROPERTIES, INC. (the "MAKER") promises to pay to
the order of WESTERN NATIONAL BANK (the "BANK"), at its offices at 508 West
Wall, Suite 1100, Midland, Texas 79701, in lawful money of
the United States of
America, the sum of FIVE MILLION AND NO/100 ($5,000,000.00), together with
interest on the principal amount from time
to time outstanding
hereunder, from
the date of each disbursement of such principal
until maturity,
at a variable
rate of interest per annum (the
"VARIABLE RATE") equal to the Prime Rate,
as
defined hereinbelow, but in no event to exceed the
"Highest Lawful Rate",
as
hereinafter defined, and in no event to be less than
five and one-half percent
(5.50%), with adjustments in the Variable Rate to be made on
the same date as
the effective date of any change in the Prime Rate and adjustments due to
changes in the Highest Lawful Rate to be made on the
effective date of any
change in the Highest Lawful Rate.
2. This Note is executed pursuant to the terms of that
certain Loan
Agreement,
dated February 28, 2005 by and among Maker, as Borrower; McGraw Brothers
Investments, Moriah Investment Partners, W Power and Light, LP,
Jon M. Morgan,
Eric Oliver, LCM Partnership, James M. Alexander, Forrest Gilliam, Jr., John
Bergman, John Norwood and Bruce E.
Edgington, as
Guarantors; and the
Bank, as
Lender (the "LOAN AGREEMENT"). This Note incorporates by
reference the terms of
the Loan Agreement. In the event of a conflict
between the terms of
this Note
and the terms of the Loan Agreement, the terms of the Loan Agreement will be
deemed to be controlling.
3. Notwithstanding the foregoing,
if at any time the
Variable Rate exceeds the
Highest Lawful Rate, the rate of interest
to accrue on this Note will be limited
to the Highest Lawful Rate, but any
subsequent reductions
in such Variable Rate
will not reduce the rate of interest to accrue on this Note below the
Highest
Lawful Rate until the total amount of interest accrued on this Note equals
the
amount of interest which would have accrued if the Variable Rate had at all
times been in effect.
4. If at maturity or final payment of this Note the total
amount of interest
paid or accrued under the foregoing
provisions is less
than the total amount of
interest which would have accrued if the
Variable Rate had at all times been in
effect, then Maker agrees to pay to Bank,
to the extent
permitted by law,
an
amount equal to the difference between (a) the lesser of (i) the amount of
interest which would have accrued on this
Note if the Highest Lawful Rate had at
all times been in effect, or (ii) the amount of interest which would have
accrued if the Variable Rate had at all
times been in effect, and (b) the amount
of interest accrued in accordance with the
other provisions of this Note.
5. The term "PRIME RATE" shall be defined
as that rate
established as the prime
rate in the money rate table of THE WALL STREET JOURNAL, a Dow Jones
publication, as of each Business Day, as
hereinafter defined, (and for holidays
or weekends, the Prime Rate shall be the
prime rate published in that money rate
table of THE WALL STREET JOURNAL, as of the
close of business on the most recent
Business Day immediately preceding such weekend or
holiday). Without
notice to
the Borrower or any other person, the Prime Rate may change from
time to time
pursuant to the preceding sentence, with
the effective date of each change to be
the effective date reflected in the money
rate table of THE WALL STREET JOURNAL.
The Prime Rate is a reference rate and does
not necessarily represent the lowest
or best rate actually charged to any customer. The Bank may make commercial
loans or other loans at rates of interest
at, above, or below the Prime Rate.
"BUSINESS DAY" shall mean a day other than a
Saturday, Sunday or
legal holiday
for commercial banks under the laws of the
State of Texas.
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6. The term "HIGHEST LAWFUL RATE" will mean the maximum
nonusurious
interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged, collected or received by the Bank
in connection with
this Note under laws applicable to the Bank
which are presently in effect or, to
the extent allowed by law, under applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
7. The principal balance of this Note shall be due and payable on or before
MARCH 31, 2008.
8. Interest, computed on the unpaid principal
balance of this Note shall be due
and payable as it accrues monthly,
commencing on MARCH
31, 2005, and thereafter
on the last day of each and every
succeeding month during the term hereof, until
maturity, MARCH 31, 2008, when the entire amount of this Note, principal and
accrued, unpaid interest, shall be due and
payable.
9. This is a Revolving Line of Credit Note.
Accordingly, it is contemplated that
there will be advances and payments on this Note from time to time,
but no
advances or payments (including total payment of the
unpaid principal
balance
outstanding prior to maturity) shall affect or impair the validity or
enforceability of this Note as to future
advances hereunder. Other than interest
payments required of Maker as provided in
the immediately
preceding
paragraph,
all payments made by Maker prior to maturity
shall be credited to
outstanding
principal. In no event shall outstanding
principal advances hereunder at any
time exceed the face amount of this Note or the
Borrowing Base established
pursuant to the terms of the Loan
Agreement, whichever is lesser.
10. All past due principal and interest on
this Note will bear interest from the
maturity thereof until paid, at the Highest
Lawful Rate. Interest
on this Note
will be computed on a 365/365 or 366 simple
interest basis,
depending upon the
number of days in the applicable year; that is, by applying the ratio of the
annual interest over a year of 365 or 366
days, multiplied by
the outstanding
principal balance, multiplied by the a
