EXHIBIT 10.5
CONSOLIDATED, AMENDED AND RESTATED RENEWAL NOTE AND SECURITY AGREEMENT
This Note and Security Agreement is a consolidation, amendment, restatement and
renewal of
five existing Notes and Security Agreements between Borrower and Lender.

     
Atlanta, Georgia
     

December 18, 2003
  revised principal balance $1,000.000.00

     THIS CONSOLIDATED NOTE is dated as of the 18th day of December, 2003, by
and among National Loan Investors, L.P., a Delaware Limited Partnership
(“Lender”), having an address of Suite 1313, 3030 N.W. Expressway, Oklahoma
City, OK 73112, as assignee of Wachovia Bank, National Association (“Wachovia”);
The Wheatstone Energy Group, Inc., a Georgia corporation (the “Prior Borrower”)
having an address of 1231 Collier Road, NW, Suite 0, Atlanta, GA 30318; and WEGI
Acquisition, LLC, a Georgia Limited Liability Company (the “New Borrower”)
having an address of 1945 The Exchange, Suite 300, Atlanta, Cobb County, Georgia
30339-2029, assignee of the Prior Borrower.
RECITALS:
     A. Wachovia made the following loans to the Prior Borrower:
     1. Line of Credit Loan dated July 26, 2001, in an amount not to exceed One
Million Two Hundred Thousand Dollars ($1,200,000.00) (“Line of Credit Loan”),
evidenced by Note and Security Agreement dated July 26, 2001, as first amended
by that certain letter agreement dated October 31, 2002, and by Line of Credit
Extension and Modification Agreement dated February 28, 2003 (“Extension
Agreement”), which Line of Credit Loan has a revised maturity date of
December 1, 2003 by virtue of May 12, 2003 and August 25, 2003 Extension Letters
(“May 12 and August 25 Extension Letters”), and which is secured, inter alia, by
all collateral more particularly described in the documents evidencing said Line
of Credit Loan, including, but not limited to, that certain Security
Agreement-Commercial dated July 26, 2001 (“Security Agreement”), to include, but
not be limited to, Accounts, Inventory, Equipment, General Intangibles,
Instruments, Documents, Letter-of-Credit Rights, Deposit Accounts, Chattel
Paper, Investment Collateral and Proceeds and Products therefrom (all of which
terms are defined in the Security Agreement and accompanying Uniform Commercial
Code Financing Statements (“UCC’s”) (collectively, the “Line of Credit
Collateral”) (“NLI Loan Number 38300180”);
     2. Term Loan dated October 14, 1999 in the original principal amount of
$30,379.25 as evidenced by that certain Note and Security Agreement and
accompanying motor vehicle lien MV-1 and secured by a l999 White Ford F-350 SD
Pickup (the “Ford F-350 Loan”), which has a maturity date of November 1, 2004
(“NLI Loan Number 38300170”);
     3. Term Loan dated August 24, 2001 in the original principal amount of
$13,502.76 as evidenced by that certain Note and Security Agreement and
accompanying motor vehicle lien MV-1 and secured by a l998 Ford F-150 (the “Ford
F-150 Loan”) (“NLI Loan Number 38300190”);
     4. Term Loan dated October 11, 2001 in the original principal amount of
$12,500.00 as evidenced by that certain Note and Security Agreement and
accompanying motor vehicle lien MV-1 and secured by a 2000 White Ford Taurus SC
(the “Ford Taurus Loan”), which has a maturity date of November 1, 2004 (“NLI
Loan Number 38300210”);
     5. Term Loan dated December 5, 2001 in the original principal amount of
$18,166.70 as evidenced by that certain Note and Security Agreement and
accompanying UCC’s and secured by certain equipment collateral (the “Equipment
Loan”), which has a maturity date of January 1, 2005 (“NLI Loan Number
38300200”).
     (The Ford F-350 Loan, The Ford F-150 Loan, the Ford Taurus Loan and the
Equipment Loan are hereinafter collectively referred to as the “Term Loans”)
(the Line of Credit Loan and the Term Loans are hereinafter collectively
referred from time to time herein as the “Loans”) (The Line of Credit Collateral
and the additional collateral securing the various Term Loans as described above
are hereinafter collectively referred to as the “Collateral”) (the Loan
Documents are further affected by the terms of that

 

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certain Inter-Creditor Agreement dated February 21, 2002 by and between Venture
Capital Solutions, Limited Partnership, a North Carolina Limited Partnership
(“VCS”) and Wachovia Bank, N.A. (“Inter-Creditor Agreement”));
     B. The Loans were modified by: (i) the Extension Agreement, which
contained, inter alia, a cross-default/cross-collateralization feature for the
various Loans and the Collateral securing said Loans; (ii) the letter by
Wachovia to the Prior Borrower dated May 12, 2003 extending the maturity of the
Line of Credit Loan to October 1, 2003; and (iii) the letter by Wachovia to the
Prior Borrower dated August 25, 2003 extending the maturity of the Line of
Credit Loan to December 1, 2003. The Loans are modified on the date hereof by
that certain Consolidated, Amended and Restated Note and Security Agreement by
and among the Lender, the New Borrower and the Prior Borrower (the Consolidated
Note and Modification Agreement”). The Notes, Security Agreements, UCC’s,
MV-1’s, Extension Agreement, letters referenced in clauses (ii) and (iii) of the
first sentence of this paragraph, the Consolidated Notes and Modification
Agreement, all other documents previously executed, including, but not limited
to, the Commitment Letter dated July 5, 2001 from Wachovia Bank to Prior
Borrower, and letter agreement dated October 31, 2002, evidencing and securing
the Loans, and all amendments, extensions and renewals thereof subsequent to the
date hereof, are referred to herein collectively as the “Loan Documents.”
     C. Guarantors executed Guaranty Agreements dated May 22, 1996 and July 26,
2001, guaranteeing repayment of the Loans (collectively the “Guaranties”).
     D. Effective August 29, 2003, Wachovia, as lender and holder of the Loans,
transferred and assigned its interests in the Loans, Loan Documents and
Collateral to National Loan Investors, L.P.
     E. The current balances on each of the Loans as of December 18, 2003 prior
to modification are:
     1. Line of Credit Loan 38300180-principal $1,040,000.00; interest
$32,124.44 (total due: $1,072,124.44) (daily rate: $231.11); (current interest
rate: 8.00% percent per annum);
     2. Ford F-350 Loan 38300170-principal $8,763.10; interest $272.63 (total
due: $9,035.73) (daily rate: $1.95); (current interest rate: 8.00% percent per
annum);
     3. Ford F-150 Loan 38300190-principal $4,855.90; interest $75.00 (total
due: $4,930.90) (daily rate: $0.54); (current interest rate: 4.00% percent per
annum);
     4. Ford Taurus Loan 38300210-principal $5,208.17; interest $80.44 (total
due: $5,288.61) (daily rate: $0.58); (current interest rate: 4.00% percent per
annum);
     5. Equipment Loan 38300200-principal $8,578.73; interest $132.49 (total
due: $8,711.22) (daily rate: $0.95); (current interest rate: 4.00% percent per
annum);
     F. The New Borrower has agreed to acquire substantially all of the assets
of Prior Borrower, including, but not limited to, the Collateral, subject to the
Loan Documents, to assume and pay all sums due under the Loan Documents, and to
perform all obligations of the Prior Borrower under the Loan Documents, subject
to the terms of this Note and that certain Assumption Agreement (“Assumption
Agreement”) executed by the parties to this Note, the terms and conditions of
which are incorporated by reference into this Note. Lender is willing to enter
into this Agreement, allow the assumption of the Loans and to release the
Guarantors and Prior Borrower; provided that the terms of this Note and
accompanying Assumption Agreement are executed and delivered to Lender. It is
intended that Prior Borrower is executing this Note to evidence the
modifications, partial writeoff of a portion of the principal and interest owed
under the Loans, and Consolidation thereof, which this date are being
transferred to New Borrower and being assumed by New Borrower. Nothing herein
shall be deemed to create any new liability of Prior Borrower.
     G. Partial Principal Reduction and Partial Interest Waiver and
Modifications.
     1. To accommodate New Borrower and Prior Borrower’s ability to complete the
purchase/sale of the assets by New Borrower of Prior Borrower, Lender has agreed
to allow: a. the current past-due interest installments on the Loans

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in the amount of $32,685.00, and b. a portion of the outstanding principal in
the amount of $67,405.90 to be waived, provided that Closing occurs no later
than December 19, 2003, and provided that Lender is reimbursed for Lender’s
attorneys’ fees and costs of closing of this Note and related documents up to
the amount of $5,000.00, as more fully described in the Assumption Agreement. It
is intended that after the reduction of the interest and principal as described
in the preceding sentence, the revised principal balance of all Notes comprising
the Loans shall be consolidated, renewed, amended and restated to a consolidated
balance of $1,000,000.00, all as provided herein, and all Loan Documents shall
be and remain cross defaulted and cross collateralized with each other, as
further evidenced by the Assumption Agreement. All terms and conditions,
including the conditions precedent and subsequent set forth in the Assumption
Agreement are incorporated herein by this reference and are also expressly made
a part of this Note and are conditions to the effective date of this instrument.
     2. To approve the consolidation, amendment, restatement and renewal of all
of the Loans, Lender has required that certain terms and conditions of the Loans
be amended, as stated hereinbelow, including, but not limited to, change in the
interest rate, payments and Maturity Dates, to a revised Maturity Date of
December 18, 2011, with interest-only payments due on the first calendar day of
each month following the date of this Note, based upon the interest rate being
amended to the Prime Rate plus one and one half percent per annum, adjusted
every six months, with a partial discounted payoff opportunity for a reduction
in the revised principal balance (i.e., the revised principal balance as of the
effective date of this Consolidated Note to be $1,000,000.00) to $850,000.00 (it
being intended by the parties that the prior principal reduction as reflected in
Paragraph G.1 herein shall not be added into this amount) from the day after the
60th month anniversary of this Note up to (but not beyond) the revised Maturity
Date, with no prepayment penalty. Further, the revolving line of credit feature
in the Line of Credit Loan shall be removed, such that the entirety of this
Consolidated Note shall be a term Note, with no new monies advanced.
     NOW, THEREFORE, for and in consideration of the mutual benefits to be
derived herefrom and the further consideration of the sum of TEN AND NO/100
DOLLARS ($10.00), paid by New Borrower, and other good and valuable
consideration, receipt and sufficiency of which is hereby acknowledged, the
parties do hereby agree as follows:
     1. All terms, conditions and provisions of the various documents evidencing
the Loans as referenced above as well as the recitals set forth hereinabove in
this Agreement, are specifically incorporated herein by this reference, and are
deemed modified by virtue of this Note and accompanying Assumption Agreement.
     2. Effective as of the date of this Note, the Loan Documents for each of
the Loans shall be amended as set forth herein. In the event of conflict between
the terms, covenants and conditions of the prior Loan Documents for the Loans,
the terms of the documents executed in connection with this Consolidated Note
shall control. New Borrower and Lender hereby amend each of the Notes in their
entirety to read as set forth herein:
FOR VALUE RECEIVED, WEGI Acquisition, LLC, a Georgia Limited Liability Company
(hereinafter the “Borrower”) (the term “Borrower” as used for the remainder of
this Consolidated Note shall mean “New Borrower”), assignee of The Wheatstone
Energy Group, Inc., a Georgia corporation, hereby promises to pay to the order
of National Loan Investors, L.P., a Delaware Limited Partnership (hereinafter
the “Lender”), transferee and assignee of Wachovia Bank, N.A., at its office
where borrowed or at such other place as Lender hereafter may direct from time
to time in writing, Lender’s initial office being Suite 1313, 3030 N.W.
Expressway, Oklahoma City, OK 73112, in immediately available funds of lawful
money of the United States, the principal sum of One Million and 00/1 00 Dollars
($1,000.000.00) together with any unpaid interest hereon from date of advance,
in accordance with the terms contained in this Note. The optional provisions
applicable to this Note are checked below.
Repayment:

     
x
  One payment in full of principal and unpaid interest due on the amended
maturity date of December 18, 2011 (“Maturity Date”). The Borrower may NOT
borrow, repay and reborrow sums up to the principal amount set forth above, as
this is considered a term loan, not a revolving line of credit loan. IT IS
FURTHER EXPRESSLY AGREED THAT, AS AN ACCOMMODATION TO THE BORROWER AND IN
CONSIDERATION FOR THE ASSUMPTION OF THIS NOTE AS OUTLINED IN ACCOMPANYING
ASSUMPTION AGREEMENT OF EVEN DATE HEREWITH, LENDER WILL ACCEPT A DISCOUNTED
PRINCIPAL PAYOFF AT A TIME DEFINED AS: ON OR AFTER DECEMBER 19, 2008,

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  i.e., THE NEXT DAY AFTER THE 60TH MONTH OF THIS NOTE, AND BEFORE THE REVISED
MATURITY DATE SET FORTH ABOVE (“DISCOUNTED PAYOFF TIME PERIOD,” WHICH DISCOUNTED
PAYOFF TIME PERIOD SHALL COMMENCE DECEMBER 19, 2008 AND END ON THE MATURITY DATE
OF DECEMBER 18, 2011) OF THE PRINCIPAL AMOUNT OF $850,000.00. THE DISCOUNTED
PAYOFF SHALL BE ACCOMPANIED BY FULL PAYOFF OF ALL INTEREST AND OTHER CHARGES
ACCRUED AND NOT THEN PAID ON THE ENTIRE BALANCE BEFORE THE DISCOUNT IS
CALCULATED. THIS DISCOUNTED PAYOFF OPTION TO BORROWER IS EXPRESSLY CONDITIONED
UPON BORROWER REMAINING CURRENT IN ALL RESPECTS WITH TIMELY MONTHLY
INTEREST-ONLY PAYMENTS BEING PAID THROUGHOUT THE TERM OF THIS NOTE, CONDITIONED
UPON BORROWER NOT OTHERWISE BEING IN DEFAULT OF ITS OTHER OBLIGATIONS OWED TO
LENDER PURSUANT TO THE LOAN DOCUMENTS, AND CONDITIONED UPON BORROWER OTHERWISE
NOT BEING PLACED IN OR FILING FOR BANKRUPTCY OR OTHER SIMILAR RECEIVERSHIP
ACTIONS.
 
   
o
  On demand ________________________.
 
   
o
  ____________ payments of ____________ beginning ____________ and thereafter
____________ until ____________ when the entire principal amount then
outstanding and all accrued but unpaid interest shall be paid in full.
 
   
o
  On demand the principal amount set forth above or the unpaid principal amount
of all advances which the Lender actually makes hereunder to the Borrower,
whichever amount is less. The Borrower may NOT borrow, repay and reborrow sums
up to the principal amount set forth above, as this is considered a term loan,
not a revolving line of credit loan. This Note shall be used to evidence the
outstanding principal balance advanced hereunder until it is surrendered to the
Borrower by the Lender, and it shall continue to be used even though there may
be periods prior to such surrender when no amount of principal or interest is
owing hereunder. If advances of the principal amount hereof are to be made by
Lender to the Borrower after the date of this Note, Lender, at its sole
discretion, is hereby authorized to make such advances under this Note upon
telephonic or written communication of a borrowing request from any person
representing himself or herself to be the Borrower or, in the event the Borrower
is an organization, a duly authorized officer or representative of Borrower.

Interest:

     
Payable:
  x in arrears due on the first day of the calendar month immediately following
closing, and on the first day of each calendar month thereafter up until the
Maturity Date; whereupon, all principal and all interest and other charges not
then paid shall be due and payable, subject, however, to the discounted payoff
option described herein; o in advance.
 
  x in addition to the payments described above; o included in the payments
described above.
 
    Payable at the rate per annum of: x Prime Rate plus one and one half (1.50%)
percent per annum; o ____________% of Prime Rate;
o ____________% Fixed;
 
   
o
  Those rates which may be offered from time to time by the Lender and agreed to
by the Borrower and so noted by the Lender on an attachment hereto. In the event
of a good faith dispute among the parties to this Note as to rate under this
rate option, the rate shall be the Prime Rate, adjusted for any changes in the
Prime Rate as of the day such Prime Rate changes;
 
   
o
  The rate(s) set forth in Schedule I attached to this Note and incorporated
herein by reference;
 
   
o
  Those rates which have been offered by the Lender to the Borrower in the Loan
Agreement or Commitment Letter checked below, the provisions of which shall
determine such rates, the procedure for the selection of such rates and the time
periods for which such rates shall apply.
 
    In no case shall interest exceed the maximum rate permitted by applicable
law.
 
   
x
  In addition, Borrower agrees to pay to lender a non-refundable loan fee of
$___n-a____________.

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If the interest is based upon the Prime Rate, such interest rate will be
adjusted on:
x         The day the Prime Rate changes o Other ____________.
Due:      o On principal payment dates x every six months beginning on June 18,
2004 and December 18, 2004 and each June 18 and December 18 thereafter
throughout the remaining term of this Note.
Interest will be calculated on the basis of a year of 360 days and paid for the
actual number of days elapsed.
After demand or maturity (whether by acceleration or otherwise), as applicable,
interest on any unpaid balance hereof shall be payable on demand at a rate per
annum equal to the greater of 150% of the Prime Rate, or 2% above the rate
applicable prior to demand or maturity, adjusted for any changes in the Prime
Rate as of the day such Prime Rate changes, not to exceed the maximum rate
permitted by applicable law.
To the extent not prohibited by law, a late charge of four percent (4%) or the
applicable statutory maximum, whichever is greater, shall be assessed on any
payment remaining past due for fifteen (15) days or more unless interest on this
Note is payable in advance, in which case such period shall instead be thirty
(30) days or more; provided, however, that if any applicable statute allows a
shorter minimum time period for the imposition of a late charge, such shorter
time period shall prevail.
As used herein, “Prime Rate” refers to that interest rate so denominated and
announced by the Wall Street Journal in the Money Rates Section from time to
time as the prime rate basis for borrowings for key commercial center banks. The
Wall Street Journal’s Prime Rate is one of several interest rate bases used by
the Lender. The Lender lends at interest rates above and below the Prime Rate.
All payments on this Note shall be applied, in accordance with the then current
billing statement applicable to this Note, first to accrued interest, then to
fees, then to principal due, and then to late charges. Any remaining funds shall
be applied to the further reduction of principal. Notwithstanding the foregoing,
upon the occurrence of a default hereunder, payments shall be applied as
determined by Lender in its sole discretion.

     
x
  The terms and conditions in Security Agreements dated July 26, 2001, dated
October 14, 1999, August 24, 2001, October 11, 2001, December 5, 2001, letter
agreement dated October 31, 2002, Line of Credit Extension and Modification
Agreement dated February 28, 2003, and May 12 and August 25 Extension Letters,
all between the parties hereto, as the same may be amended from time to time,
shall be considered a part hereof to the same extent as if written herein.
 
   
x
  The terms and conditions in a Letter Agreement dated November 13, 2003, as
revised December 5, 2003, and Accompanying Assumption Agreement of even date
herewith between the Lender and the Borrower, as the same may be amended,
extended or replaced from time to time, shall be considered a part hereof to the
same extent as if written herein. It is expressly intended that the Assumption
Agreement shall survive closing and delivery of this Consolidated Note.

     In addition to any other collateral specified herein and in other
agreements, to secure the indebtedness evidenced by this Note, together with any
extensions, modifications, or renewals thereof, in whole or in part, as well as
all other indebtedness, obligations and liabilities of the Borrower to the
Lender, now existing or hereafter incurred or arising, including, without
limitation, all sums arising under any ISDA Master Agreement now or hereafter
executed between Borrower and Lender and any related schedules and confirmations
thereto (hereinafter sometimes referred to as the “Obligations”), except for
other indebtedness, obligations and liabilities owing to Lender that constitute
(a) consumer credit as defined in Federal Reserve Board Regulation Z and either
subject to the disclosure requirements of Federal Reserve Board Regulation Z or
state consumer protection laws or (b) non-consumer credit if under applicable
state law the maximum interest rate for such credit is reduced when secured
(herein collectively referred to as “Restricted Debt”), the Borrower does hereby
grant to the Lender a security interest in, and does hereby pledge to Lender the
following described property: all collateral more particularly described in
Security Agreement-Commercial dated July 26, 2001, the Term Loans evidenced by
the Note and Security Agreements dated October 14, 1999, August 24, 2001,
October 11, 2001 and December 5, 2001, as revised by the Extension Agreement,
and the May 12 and August 25 Extension Letters, and all other Loan Documents
that describe the collateral, between Borrower and Lender, and also that certain
New Vehicle Collateral, more fully described in the Assumption Agreement of even
date herewith, whether now owned or hereafter acquired, together with any and
all

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additions and accessions thereto or replacements thereof, returned or unearned
premiums from any insurance written in connection with this Note and any
products and/or proceeds of any of the foregoing. In no event, however, shall
the Lender have a security interest in any goods acquired by the Borrower for
personal, family or household purposes more than 10 days after the date of this
Note, unless such goods are added to or attached to the Collateral (as
hereinafter defined). In addition, to the extent not prohibited by law, the
Borrower hereby grants to the Lender a security interest in, and does hereby
pledge to Lender, (i) all other property of the Borrower now or hereafter in the
possession or control of the Lender (exclusive of any such property in the
possession or control of the Lender as a fiduciary other than as agent),
including, without limitation, all cash, stock or other dividends and all
proceeds thereof; and all rights to subscribe for securities incident thereto
and any substitutions or replacements for, or other rights in connection with,
any of the Collateral and (ii) any of Borrower’s deposit accounts (as such term
is defined in the Uniform Commercial Code of the State of Georgia, as the same
may be amended from time to time (the “Code”), whether such accounts be general
or special, or individual or multiple party, held by Lender and upon all drafts,
notes, or other items deposited for collection or presented for payment by the
Borrower with the Lender, and the Lender may at any time, without demand or
notice, appropriate and apply any of such to the payment of any of the
Obligations (except for Restricted Debt), whether or not due. All property
described in this paragraph, in which the Borrower has granted to the Lender a
security interest or security title hereunder, is herein collectively referred
to as the “Collateral.” If, with respect to any Collateral in the form of
investment securities, a stock dividend is declared or any stock split-up made
or right to subscribe issued, all the certificates for the shares representing
such stock dividend or split-up or right to subscribe will be immediately
delivered, duly endorsed, to the Lender as additional Collateral. The Lender
shall be deemed to have possession, control and custody of any Collateral
actually in transit to it or to any of its officers or agents.
     If at any time the Collateral pledged as security for any of the
Obligations shall be or become unsatisfactory to the Lender or should the Lender
deem itself insecure, the Borrower will immediately furnish such further
property to be held by the Lender as if originally pledged as Collateral
hereunder or make such payment on account as will be satisfactory to the Lender.
     The Lender shall have, but shall not be limited to, the following rights,
each of which may be exercised at any time or from time to time: (i) to transfer
this Note and the Collateral, and any transferee shall have all the rights of
the Lender hereunder and the Lender shall be thereafter relieved from any
liability with respect to any Collateral so transferred; (ii) to execute at any
time in the name of any party hereto and to file one or more financing
statements describing the Collateral, which financing statements may contain a
generic collateral description that is broader than the Collateral and which may
describe any agricultural liens or other statutory liens held by Lender; and
(iii) to request and receive current financial information from any party liable
for all or any part of the Obligations.
     The Lender shall have, but shall not be limited to, the following rights,
each of which may be exercised during which time an Event of Default has
occurred and is continuing: (i) to receive or take control of any income or
other proceeds of any of the Collateral; (ii) to transfer the whole or any part
of the Collateral in the name of itself or its nominees; (iii) to vote any
investment securities forming a part of the Collateral; and (iv) to notify the
obligors on any Obligation to make payment to the Lender of any amounts due
thereon.
     Borrower will at Lender’s request maintain insurance on the Collateral in
amounts at least equal to the fair market value of the Collateral and against
casualty, public liability and property damage risks and such other risks as
Lender may request; provided, however, if the Collateral described above is a
vehicle(s), Borrower agrees to obtain and maintain liability insurance as
required by law and collision and comprehensive insurance with a deductible not
exceeding $500.00. All insurance shall be with companies with a Best Insurance
Report Rating of B+ or better, and Borrower will pay all premiums for insurance
when due. Unless and until requested by Lender, Borrower shall not be required
to name Lender as additional insured in such policy or to provide Lender a copy
of the policy for or certificate evidencing such insurance, but when and if
requested by Lender, the Borrower shall immediately (but no later than five
(5) business days) (i) cause all policies of such insurance to specify that
Lender is an additional insured as its interests may appear and to provide that
such insurance shall not be cancellable by Borrower or the insurer without at
least 30 days advance written notice to Lender and that proceeds are payable to
Lender regardless of any act or omission of Borrower which would otherwise
result in a denial of a claim; and (ii) deliver all policies or certificates
thereof (with copies of such policies) to Lender. Borrower is authorized to
receive the proceeds of any insurance loss and shall apply such proceeds toward
either the repair or replacement of the Collateral or the payment of the
Obligations secured hereby, so long as no Event of Default exists hereunder. The
undersigned will also pay all taxes and other impositions on the Collateral as
well as the cost of repairs or maintenance to the Collateral. If the undersigned
fails to maintain such insurance or fails to pay any and all amounts for taxes,
repairs, maintenance and other costs, Lender may, at its option, but shall not
be required to, purchase such insurance or pay any premium owing with respect to

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such insurance or pay such amounts for taxes, repairs, maintenance and other
costs, and any such sum paid by Lender shall be payable by the Borrower on
demand by Lender or at its option may be added to the Obligations and secured
hereby. The loss, injury or destruction of the Collateral, with or without the
fault of Borrower, shall not release the Borrower from any liability hereunder
or in any way affect Borrower’s liability hereunder.
     The occurrence of any one or more of the following conditions or events
shall constitute an “Event of Default” hereunder: (i) any failure of any Obligor
(which term shall include the Borrower and each endorser, surety or guarantor of
this Note) to pay any of the Obligations when due or to observe or perform any
agreement, covenant or promise hereunder or in any other agreement, note,
instrument or certificate of any Obligor to the Lender, now existing or
hereafter executed in connection with any of the Obligations, including, but not
limited to, a loan agreement, if applicable, and any agreement guaranteeing
payment of any of the Obligations, which failure shall continue for fifteen
(15) days; (ii) any default of any Obligor in the payment or performance of any
other liabilities, indebtedness or obligations to Lender or to allow or permit
any other liabilities, indebtedness or obligations to Lender to be accelerated,
which default shall continue for fifteen (15) days; (iii) any failure of any
Obligor to furnish Lender current financial information within a reasonable time
after receipt of a written request; (iv) any failure of any Obligor or any
Pledgor of any security interest in the Collateral (the “Pledgor”) to observe or
perform any agreement, covenant or promise contained in any agreement,
instrument or certificate executed in connection with the granting of a security
interest in property to secure the Obligations or any guaranty securing the
Obligations, which failure shall not be cured within fifteen (15) days of
receipt of written notice of such failure from Lender; (v) any warranty,
representation or statement made or furnished to the Lender by or on behalf of
any Obligor or Pledgor in connection with the extension of credit evidenced by
this Note proving to have been false in any material respect when made or
furnished; (vi) any sale, foreclosure of or material encumbrance to any of the
Collateral, or the making of any material levy, seizure or attachment thereof or
thereon or the rendering of any material judgment or lien or garnishment or
attachment against any Obligor or Pledgor or its Collateral property (the term
“material” as used in this subparagraph (vi) shall mean that which would
materially impair the ability of New Borrower to repay the Obligations when
due); (vii) the dissolution, change in control (other than a transfer of control
to an affiliate of New Borrower; provided that Lender is notified in advance of
said transfer and provided that the transferee assumes the indebtedness
evidenced hereby), change of status to an organization, change of type of
organization, termination of existence, insolvency, business failure, or
appointment of a receiver of any part of the property of, assignment for the
benefit of creditors by, or the commencement of any proceeding under any
bankruptcy or insolvency laws, state or federal, by or against, the Borrower or
any other Obligor or Pledgor; (viii) if Borrower, any Pledgor or any Obligor
shall change its name (other than a change of name to “The Wheatstone Energy
Group, LLC,” which is expressly consented to by Lender), change its principal
residence, change its chief executive office, change its status to an
organization, change its state of organization, change its type of organization,
or change its organizational identification number, as applicable, without
giving Secured Party at least thirty (30) days’ written notice, or (ix) any
discontinuance or termination of any guaranty of any of the Obligations by a
guarantor other than the release of the guarantors contemplated by the
Assumption Agreement.
     Upon the occurrence of an Event of Default (and the expiration of any
applicable notice and/or grace periods), to the extent permitted by law, the
Lender at its option may terminate any obligation to extend any additional
credit or make any other financial accommodation to the Borrower and/or may
declare all of the Obligations to be immediately due and payable, all without
notice or demand, and shall have in addition to and independent of the right to
declare the Obligations to be due and payable and any other rights of the Lender
under this Note or any other agreement with any Obligor or any Pledgor, the
remedies of a secured party under the Code, including, without limitation
thereto, the right to take possession of the Collateral, or the proceeds thereof
and to sell or otherwise dispose thereof; and for this purpose, to sign in the
name of any Obligor of Pledgor any transfer, conveyance or instrument necessary
or appropriate in order for the Lender to sell or dispose of any of the
Collateral, and the Lender may, so far as the Borrower can give authority
therefor, enter upon the premises on which the Collateral or any part thereof
may be situated and remove the same therefrom, without being liable in any way
to any Obligor on account of entering any premises. The Lender may require the
Borrower to assemble the Collateral and make the Collateral available to the
Lender at a place to be designated by the Lender which is reasonably convenient
to both parties. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market, the
Lender shall give the Borrower written notice of the time and place of any
public sale thereof or of the time after which any private sale or other
intended disposition thereof is to be made. The requirement of sending
reasonable notice shall be met if such notice is mailed, postage prepaid, or
otherwise given, to the Borrower or Pledgor at the last address shown on the
Lender’s records at least ten (10) days before such disposition. Lender may
(i) comply with any applicable state or federal law requirements in connection
with a disposition of the Collateral, (ii) sell the Collateral without giving
any warranties as to the Collateral, and (iii) specifically disclaim any
warranties of title or the like and in so doing any of the foregoing will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral. If any Obligation (including but not

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limited to the Note) is a demand instrument, the statement of a maturity date,
the requirement for the payment of periodic interest or the recitation of
defaults and the right of Lender to declare any Obligation due and payable shall
not constitute an election by Lender to waive its right to demand payment under
a demand at any time and in any event as Lender in its sole discretion may deem
appropriate.
     The rights of the Lender specified herein shall be in addition to, and not
in limitation of the Lender’s rights under the Code, or any other statute or
rules of law conferring rights similar to those conferred by the Code, and under
the provisions of any other instrument or agreement executed by the Borrower,
any other Obligor or any Pledgor to the Lender. All prior agreements to the
extent inconsistent with the terms of this Note shall be construed in accordance
with the provisions hereof. Any rights or remedies of the Lender may be
exercised or taken in any order or sequence whatsoever, at the sole option of
the Lender. This agreement shall bind and inure to the benefit of the heirs,
legatees, executors, administrators and assigns of Lender and shall bind all
persons who become bound as a debtor to this security agreement.
     The security agreement set forth herein and the security interest in the
Collateral created hereby shall terminate only when all of the Obligations have
been indefeasibly paid in full and such payments are no longer subject to
rescission, recovery or repayment upon the bankruptcy, insolvency,
reorganization, moratorium, receivership or similar proceeding affecting the
Borrower or any other person. No waiver by the Lender of any default shall be
effective unless in writing nor operate as a waiver of any other default or of
the same default on a future occasion. All rights of the Lender hereunder shall
inure to the benefit of its successors and assigns, and all obligations of the
Borrower shall bind the heirs, legal representatives, successors and assigns of
the Borrower. The Borrower and each endorser, surety or guarantor of this Note,
whether bound by this or by separate instrument or agreement, shall be jointly
and severally liable for the indebtedness evidenced by this Note and hereby
severally (i) waive presentment for payment, demand, protest, notice of
nonpayment or dishonor and of protest and any and all other notices and demands
whatsoever, to the fullest extent permitted by applicable law; (ii) consent that
at any time, or from time to time, payment of any sum payable under this Note
may be extended without notice whether for a definite or indefinite time; and
(iii) agree to remain liable until all of the Obligations are paid in full
notwithstanding any impairment, substitution, release or transfer of Collateral
or any one or more Borrower or Obligor by the Lender, with or without
consideration, or of any extension, modification or renewal. No conduct of the
holder shall be deemed a waiver or release of such liability, unless the holder
expressly releases such party in writing. The Borrower shall pay to the holder
on demand all expenses, including reasonable attorneys’ fees and expenses of
legal counsel, incurred by the holder in any way arising from or relating to the
enforcement or attempted enforcement of the Note and any related guaranty,
collateral document or other document and the collection or attempted
collection, whether by litigation or otherwise, of the Note. Time is of the
essence.
     Borrower acknowledges that Lender may reproduce by electronic means or
otherwise any of the documents evidencing and/or securing the Obligations and
thereafter may destroy the original documents. Borrower does hereby agree that
any document so reproduced shall be and remain the binding obligation of
Borrower, enforceable and admissible in evidence against it to the same extent
as if the original documents had not been destroyed.
     This Note, and the rights and obligations of the parties hereunder, shall
be governed and construed in accordance with the laws of the State of Georgia,
except to the extent that the Code provides for the application of other law
with respect to the Collateral. No delay or omission to exercise any right or
power accruing upon any default, omission, or failure of performance shall
impair any such right or power, or shall such delay or omission be construed to
be a waiver thereof by the Lender. This Agreement may be executed simultaneously
in several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
     In executing this Agreement, each of the parties hereto represents,
warrants and certifies that it has received independent legal counsel and advice
from its respective attorneys with regard to the facts involved in connection
with the controversies set forth in this Agreement and subject matter hereof,
and with regard to the rights or asserted rights arising out of said
controversies, if any. In accepting the consideration referred to herein and in
executing and delivering this Agreement, each of the parties does so with the
full knowledge of any and all rights which each now has or, in the future, may
have in connection with the aforementioned controversies, if any. This Agreement
shall not be construed against the drafter.
     Whenever in this Agreement reference is made to any party or other person
or entity such reference shall be deemed to include a reference to the heirs,
executors, representatives, successors, assigns, and affiliates of such party.
Whenever used, the singular number shall include the plural, the plural shall
include the singular, and the use of any gender shall be applicable to all

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genders. This Agreement may not be changed, discharged or terminated orally, but
only by an instrument in writing signed by the parties against whom the
enforcement of the change, waiver, discharge or termination is sought. This
Agreement is intended to be performed in accordance with and only to the extent
permitted by all applicable laws, ordinances, rules, and regulations. If any
provision of this Agreement, or the application thereof to any person or
circumstance, shall be invalid or unenforceable, for any reason and to any
extent, the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not he affected thereby, but rather shall
be enforced to the greatest extent permitted by law. The parties hereto do
further agree that the provisions contained herein constitute the entire
agreement of the parties as of this date, except as outlined by the Assumption
Agreement, and that the terms hereof are contractual and not mere recitals.

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     IN WITNESS WHEREOF, the Borrower and Lender have executed this
Consolidated, Amended and Restated Renewal Note and Security Agreement under
seal the day and year set forth above.

             
 
  NEW BORROWER:    
 
           
 
  WEGI ACQUISITION, LLC, A GEORGIA LIMITED LIABILITY
COMPANY
 
           
 
  BY:   ABRI Facility Services, Inc., a Georgia corporation, its sole
member/manager
 
           
 
  By:   /s/J. Andrew Abrams   (SEAL)
 
           
 
      Name: J. Andrew Abrams, Co-Chair and Vice President (title)    
 
           
 
  Attest:   /s/Mark Thomas   (SEAL)
 
           
 
      Name: Mark Thomas, Chief Financial Officer (title)    
 
           
 
      (CORPORATE SEAL)    
 
           
 
  OLD BORROWER:    
 
           
 
  The Wheatstone Energy Group, Inc., a Georgia corporation
 
           
 
  By:   /s/Paul M. Williams   (SEAL)
 
           
 
      Name: Paul M. Williams, President (title)    
 
           
 
  Attest:   /s/M. Todd Jarvis   (SEAL)
 
           
 
      Name: M. Todd Jarvis, Secretary (title)    
 
           
 
      (CORPORATE SEAL)    
 
           
 
  LENDER:    
 
           
 
  NATIONAL LOAN INVESTORS, L.P.    
 
           
 
  By:   /s/Jimmy B. Hadden   (SEAL)
 
           
 
      Name: Jimmy B. Hadden
            Senior Resolution Officer    

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