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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.
<PAGE>
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 actual numb
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