a5864785ex10_2.htm


    Exhibit 10.2

     

     

    
      CERTIFICATE
OF DESIGNATION OF SERIES

      AND
DETERMINATION OF RIGHTS AND PREFERENCES

      OF

      


      SERIES E
CONVERTIBLE PREFERRED STOCK

      AND
ELIMINATING SERIES A, B and C

      


      OF

      


      AMEN
PROPERTIES, INC.

      


      AMEN
PROPERTIES, INC., a Delaware corporation (the "Company"),
acting pursuant to Section 151 of the General Corporation Law of Delaware, does
hereby submit the following Certificate of Designation of Series and
Determination of Rights and Preferences of its Series E Convertible Preferred
Stock (this "Certificate").

      


      FIRST:  The
name of the Company is Amen Properties, Inc.

      


      SECOND: By
unanimous consent of the Board of Directors (the "Board") of
the Company dated December 1, 2008, the following resolutions were duly
adopted:

      


      WHEREAS
the Certificate of Incorporation of the Company (the "Certificate of
Incorporation") authorizes 5,000,000 shares of preferred stock, par value
$.001 per share ("Preferred
Stock"), issuable from time to time in one or more series;

      


      WHEREAS,
the Company has previously designated four series of Preferred Stock, the Series
A Preferred Stock, par value $.001 per share (the "Series A
Preferred"), the Series B Preferred Stock, par value $.001 per share (the
"Series B
Preferred"), the Series C Preferred Stock, par value $.001 per share
(the "Series C
Preferred"), and the Series D Preferred Stock, par value $.001 per
share (the "Series D
Preferred");

      


      WHEREAS,
all shares of Series A Preferred, Series B Preferred or Series C Preferred
have been issued, converted, retired and cancelled and cannot be
reissued;

      


      WHEREAS,
rights and preferences of the Series D Preferred are set forth in the
Certificate of Designation of Series and Determination of Rights and
Preferences, as amended, for the Series D Preferred (the "Series D
Designations");

      


      WHEREAS
the Board of the Company is authorized, subject to limitations prescribed by law
and by the provisions of paragraph four (4) of the Company's Certificate of
Incorporation, to establish and fix the number of shares to be included in any
series of Preferred Stock and the designation, rights, preferences, powers,
restrictions and limitations of the shares of such series; and

       

      
        
          
          

        

        
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      WHEREAS it
is the desire of the Board to establish and fix the number of shares to be
included in a new series of Preferred Stock and the designation, rights,
preferences and limitations of the shares of such new series.

      


      NOW,
THEREFORE, BE IT RESOLVED that pursuant to paragraph four of the Company's
Certificate of Incorporation, there is hereby established a new series of
Preferred Stock, and that the Board does hereby fix and determine the
designation, rights, preferences, powers, restrictions and limitations set forth
as follows:

      


      SECTION
1.  DESIGNATION; RANK.

      


      This
series of cumulative convertible Preferred Stock shall be designated and known
as the "Series C
Preferred Stock." The number of shares constituting the Series E
Preferred Stock shall be 815,000 shares. The Series E Preferred Stock shall,
with respect to rights upon liquidation, dissolution or winding up, whether
voluntary or involuntary, rank equal to the Series D Preferred Stock, and
prior to the common stock of the Company, par value $.01 per share (the "Common
Stock").

      


      SECTION
2.  DIVIDENDS.

      


      The
holders of outstanding shares of Series E Preferred Stock shall be entitled to
receive a dividend of 10.0% per annum payable at the end of each calendar
quarter, at the election of the Board, out of funds legally available for such
purpose, in preference and priority to any payment of any dividend on the Common
Stock.  Such dividends shall be payable only when, as and if declared
by the Board, and such dividends shall accrue and be cumulative.

      


      SECTION
3.  LIQUIDATION PREFERENCE.

      


      (a)           Upon
any liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, but before any distribution or payment shall be made to the holders
of any Common Stock, and in equal preference to the holders of the Series D
Preferred, the holders of Series E Preferred Stock shall be entitled to be paid
out of the remaining assets of the Company legally available for distribution
with respect to each share of Series E Preferred Stock an amount equal to the
sum of (i) $10.00 per share, as adjusted for any stock dividends,
combinations or splits with respect to such shares (the "Original Series E
Issue Price") plus (ii) any declared but unpaid dividends thereon
(such sum, the "Series E
Liquidation Value"). If upon any such liquidation, dissolution or winding
up of the Company the remaining assets of the Company available for distribution
to its stockholders shall be insufficient to pay the holders of shares of Series
D Preferred and Series E Preferred Stock the full liquidation amount to which
each is entitled under the Series D Designations and this Certificate, as the
case may be, then the holders of shares of Series D Preferred and Series E
Preferred Stock shall share ratably in any distribution of the remaining assets
of the Company in proportion to the respective amounts which would otherwise be
payable in respect of the shares of such Preferred Stock held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.

       

      
        
          
          

        

        
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      (b)           After
payment in full of the liquidation amounts to which all outstanding shares of
Series D Preferred and Series E Preferred Stock are entitled, then the remaining
assets of the Company legally available for distribution, if any, shall be
distributed to the holders of Common Stock.

      


      (c)           The
following events shall be considered a liquidation for purposes of
Section 3(a) above and Section 6 (a) below unless the holders of at least a
majority of the voting power of all then outstanding shares of each of the
Series D Preferred and the Series E Preferred Stock, vote
otherwise:

      


      (i)           any
merger, consolidation or other business combination of the Company in which the
stockholders of the Company immediately prior to such transaction will,
immediately after such transaction (by virtue of securities issued in the
transaction or otherwise), beneficially own (as determined pursuant to rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") capital stock representing less than fifty percent (50%) of the
voting power of the surviving entity's voting stock immediately after such
transaction; or

      


      (ii)           a
sale of all or substantially all of the assets of the Company to any other
entity, where the Company's stockholders immediately prior to such sale will,
immediately after such sale (by virtue of securities issued as consideration for
the Company's sale or otherwise), beneficially own (as determined pursuant to
Rule 13d-3 under the Exchange Act) capital stock representing less than fifty
percent (50%) of the voting power of the acquiring entity's voting
stock.

      


      (d)           In
either of the events in Section 3(c) above, if the consideration received by the
Company is other than cash, its value will be deemed its fair market value as
determined in good faith by the Board. Any securities shall be valued as
follows:

      


      (i)           Securities
not subject to investment letter or other similar restrictions on free
marketability covered by (ii) below:

      


      (A)           If
traded on a securities exchange or through the Nasdaq National Market, the value
shall be deemed to be the average of the closing prices of the securities on
such quotation system over the thirty (30) day period ending three (3) days
prior to the closing;

      


      (B)           If
actively traded over-the-counter, the value shall be deemed to be the average of
the closing bid or sale prices (whichever is applicable) over the thirty (30)
day period ending three (3) days prior to the closing; and

      


      (C)           If
there is no active public market, the value shall be the fair market value
thereof, as mutually determined by the Board and the holders of at least a
majority of the voting power of all then outstanding shares of Series D
Preferred and Series E Preferred Stock.

       

      
        
          
          

        

        
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      (ii)           The
method of valuation of securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely by
virtue of a stockholder's status as an affiliate or former affiliate) shall be
to make an appropriate discount from the market value determined as above in (i)
(A), (B) or (C) to reflect the approximate fair market value thereof, as
mutually determined by the Board and the holders of at least a majority of the
voting power of all then outstanding shares of each of the Series D
Preferred and Series E Preferred Stock.

      


      SECTION
4.  VOTING RIGHTS.

      


      (a)           Each
holder of outstanding shares of Series E Preferred Stock shall be entitled to
the number of votes equal to the number of whole shares of Common Stock into
which all of the shares of Series E Preferred Stock held by such holder would be
convertible (subject to the Conversion Cap described in Section 6(1) hereof and
as adjusted from time to time pursuant to Sections 6(e), (f), (g) and (h)
hereof) at each meeting of stockholders of the Company (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Company for their action or
consideration.  Except as provided by law, by the express provisions
hereof, or by the provisions establishing any other series of Preferred Stock,
holders of Series E Preferred Stock and of any outstanding other series of
Preferred Stock shall vote together with the holders of Common Stock as a single
class.

      


      (b)           Notwithstanding
the foregoing, the Series E Preferred Stock will not be entitled (i) to
vote with respect to any approval or ratification by the stockholders of the
Company of the designation, issuance and sale of the Series E Preferred Stock by
the Company in accordance with the rules of the Nasdaq Stock Market, and
(ii) to the number of votes equal to the number of shares of Common Stock
into which the Series E Preferred Stock is convertible that are in excess of the
Conversion Cap unless and until Stockholder Approval is obtained (as such
capitalized terms are defined in Section 6 hereof).

      


      SECTION
5.  COVENANTS.

      


      In
addition to any other rights provided by law, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of at
least fifty percent (50%) of the outstanding shares of each of the Series D
Preferred and Series E Preferred Stock, (i) authorize or create (by
reclassification or otherwise) any new class or series of shares of capital
stock with rights senior or equal to the Series D Preferred or Series E
Preferred Stock; (ii) amend or waive any provision of this Corporation's
Certificate of Incorporation or Bylaws in any manner that adversely affects the
preferences, privileges or rights of the Series D Preferred or Series E
Preferred Stock; (iii) redeem or repurchase Common Stock or any other junior
equity security, except for shares repurchased upon the termination of an
employee, officer, director or consultant pursuant to a restricted stock
purchase agreement; (iv) pay or declare any dividend on the Common Stock or any
other junior equity security other than a dividend payable in shares of Common
Stock; or (v) liquidate or wind up the Corporation.

      


      SECTION
6.  CONVERSION RIGHTS.

       

      
        
          
          

        

        
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      The
holders of the Series E Preferred Stock shall have conversion rights as follows
(the "Conversion
Rights"):

      


      (a)           Right to
Convert.  Each share of Series E Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from time to
time, into such number of fully paid and nonassessable shares of Common Stock as
is determined by dividing the Original Series E Issue Price by the Conversion
Price (as defined below) in effect at the time of conversion.  Subject
to the Conversion Cap provided under Section 6(l) and other limitations set
forth herein, the Series E Preferred Stock is convertible into an aggregate of
1,358,333 shares of Common Stock.  The Conversion Price (the "Conversion
Price") is $6.00 per share of Common
Stock. The Conversion Price is the price at which shares of Common Stock shall
be deliverable upon conversion of Series E Preferred Stock, without the payment
of additional consideration by the holder thereof. Such initial Conversion Price
and the rate at which shares of Series E Preferred Stock may be converted into
shares of Common Stock, shall be subject to adjustment as provided
below.

      


      (b)           Fractional
Shares.  No fractional shares of Common Stock shall be issued
upon conversion of the Series E Preferred Stock. In lieu of fractional shares,
the Company shall round such fraction to the nearest whole number.

      


      (c)           Mechanics of
Conversion.

      


      (i)           In
order to convert shares of Series E Preferred Stock into shares of Common Stock,
the holder shall surrender the certificate or certificates for such shares of
Series E Preferred Stock at the office of the transfer agent (or at the
principal office of the Company if the Company serves as its own transfer
agent), together with written notice that such holder elects to convert all or
any number of the shares represented by such certificate or certificates. Such
notice shall state the number of shares of Series E Preferred Stock which the
holder seeks to convert.  The number of shares of Common Stock into
which each share of Series E Preferred Stock is convertible is subject to and
limited by the Conversion Cap provided in Section 6(l).  If
required by the Company, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Company, duly executed by the registered holder or his
or its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent or the Company shall be the
conversion date ("Conversion
Date"). As soon as practicable after the Conversion Date, the Company
shall promptly issue and deliver at such office to such holder a certificate or
certificates for the number of shares of Common Stock to which such holder is
entitled. Such conversion shall be deemed to have been made at the close of
business on the date of such surrender of the certificate representing the
shares of Series E Preferred Stock to be converted, and the person entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder of such shares of Common Stock on
such date.



      
        
          
          

        

        
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      (ii)           The
Company shall at all times during which the Series E Preferred Stock shall be
outstanding, reserve and keep available out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of the Series E
Preferred Stock, such number of its duly authorized shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding Series E Preferred Stock. Before taking any action which would cause
an adjustment reducing the Conversion Price below the then par value of the
shares of Common Stock issuable upon conversion of the Series E Preferred Stock,
the Company will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock at such adjusted Conversion
Price.

      


       (iii)           All
shares of Series E Preferred Stock which shall have been surrendered for
conversion as herein provided shall no longer be deemed to be outstanding and
all rights with respect to such shares, including the rights, if any, to receive
dividends, notices and to vote, shall immediately cease and terminate on the
Conversion Date, except only the right of the holders thereof to receive shares
of Common Stock in exchange therefor, and if applicable, cash for any fractional
shares of Common Stock.  Any shares of Series E Preferred Stock so
converted shall be retired and cancelled and shall not be reissued, and the
Company may from time to time take such appropriate action as may be necessary
to reduce the number of shares of authorized Series E Preferred Stock
accordingly.

      


      (d)           Adjustments to Conversion
Price for Diluting Issues.

       

      (i)           Special
Definitions.  For purposes of this Subsection 6(d), the
following definitions shall apply:

       

      (A)           "Option"
shall mean rights, options or warrants to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities, excluding rights or options
granted to employees, vendors, officers, directors and executives of, and
consultants or shareholders to, the Company in an amount not exceeding the
number of Reserved Employee Shares.

       

      (B)           "Original Issue
Date" shall mean the date on which the first share of Series E Preferred
Stock is first issued.

       

      (C)           "Convertible
Securities" shall mean any evidences of indebtedness, shares or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.

       

      (D)           "Additional Shares
of Common Stock" shall mean all shares of Common Stock issued (or,
pursuant to Subsection 6(d)(iii) below, deemed to be issued) by the Company
after the Original Issue Date, other than Reserved Employee Shares and other
than shares of Common Stock issued or issuable:

       

      (1)           by
reason of a dividend, stock split, split-up or other distribution on shares of
Common Stock;

       

      
        
          
          

        

        
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      (2)           upon
the exercise of Options as set forth in Subsection 6(d)(i)(A); or

       

      (3)           upon
conversion of shares of Series E Preferred Stock.

       

      (E)           "Reserved Employee
Shares" shall mean shares of Common Stock issued to employees, officers,
directors, shareholders and executives of, and consultants or vendors to, the
Company upon the exercise of options granted under the Company's employee stock
option plans, which plans have been approved by the Company's stockholders, or
as payment of compensation.

      


      (F)           "Rights to Acquire
Common Stock" (or "Rights")
shall mean all rights issued by the Company to acquire Common Stock whether by
exercise of a warrant, option or similar call, or conversion of any existing
instruments, in either case for consideration fixed, in amount or by formula, as
of the date of issuance.

      


      (ii)           No Adjustment of Conversion
Price.  No adjustment in the number of shares of Common Stock
into which the Series E Preferred Stock is convertible shall be made, by
adjustment in the applicable Conversion Price thereof, (A) unless the
consideration per share (determined pursuant to Subsection 6(d)(v) below) for an
Additional Share of Common Stock issued or deemed to be issued by the Company is
less than the Conversion Price in effect on the date of, and immediately prior
to, the issue of such Additional Shares, or (B) if, prior to such issuance,
the Company receives written notice from the holders of at least a majority of
the voting power of all then outstanding shares of Series A Preferred, Series B
Preferred and Series E Preferred Stock, voting together as a single class,
agreeing that no such adjustment shall be made as the result of the issuance of
Additional Shares of Common Stock.

      


      (iii)           Issue of Securities Deemed Issue of
Additional Shares of Common Stock.  If the Company at any time
or from time to time after the Original Issue Date shall issue any Options or
Convertible Securities or Rights to Acquire Common Stock, then the maximum
number of shares of Common Stock (as set forth in the instrument relating
thereto without regard to any provision contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options, Rights
or, in the case of Convertible Securities, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue; provided, however, that Additional Shares
of Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Subsection 6(d)(v) hereof) of such Additional
Shares of Common Stock would be less than the Conversion Price in effect on the
date of and immediately prior to such issue, or such record date, as the case
may be, and provided, further, that in any such case:

      


      (A)           No
further adjustment in the Conversion Price shall be made upon the subsequent
issue of shares of Common Stock upon the exercise of such Options, Rights or
conversion or exchange of such Convertible Securities;

       

      
        
          
          

        

        
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      (B)           Upon
the expiration or termination of any unexercised Option, Right or Convertible
Security, the Conversion Price shall be adjusted immediately to reflect the
Conversion Price which would have been in effect had such Option, Right or
Convertible Security (to the extent outstanding immediately prior to such
expiration or termination) never been issued; and

      


      (C)           In
the event of any change in the number of shares of Common Stock issuable upon
the exercise, conversion or exchange of any Option, Right or Convertible
Security, including, but not limited to, a change resulting from the
anti-dilution provisions thereof, the Conversion Price then in effect shall
forthwith be readjusted to such Conversion Price as would have been obtained had
the Conversion Price adjustment that was originally made upon the issuance of
such Option, Right or Convertible Security which were not exercised or converted
prior to such change been made upon the basis of such change, but no further
adjustment shall be made for the actual issuance of Common Stock upon the
exercise or conversion of any such Option, Right or Convertible
Security.

      


      (iv)           Adjustment of Conversion Price upon
Issuance of Additional Shares of Common Stock.  If the Company
shall at any time after the Original Issue Date issue Additional Shares of
Common Stock (including Additional Shares of Common Stock deemed to be issued
pursuant to Subsection 6(d)(iii), but excluding shares issued as a dividend or
distribution as provided in Subsection 6(f) or upon a stock split or combination
as provided in Subsection 6(e)), without consideration, or for a consideration
per share less than the Conversion Price in effect on the date of and
immediately prior to such issue, or without the requisite number of notices
contemplated by Subsection 6(d)(ii) hereof, then and in such event, the
Conversion Price shall be reduced by a full ratchet anti-dilution adjustment to
such lesser price (calculated to the nearest cent), but in no case will convert
at a price below $2.80 per share, concurrently with such issuance at a price
less than the original Conversion Price.  Notwithstanding the
foregoing, the applicable Conversion Price shall not be reduced if the amount of
such reduction would be an amount less than $.20, but any such amount shall be
carried forward and reduction with respect thereto made at the time of and
together with any subsequent reduction which, together with such amount and any
other amount or amounts so carried forward, shall aggregate $.20 or
more.

      


      (v)           Determination of
Consideration.  For purposes of this Subsection 6(d), the
consideration received by the Company for the issue of any Additional Shares of
Common Stock shall be computed as follows:

      


      (A)           Cash
and Property. Such consideration shall:

      


      (1)           insofar
as it consists of cash, be computed at the aggregate of cash received by the
Company, excluding amounts paid or payable for accrued interest or accrued
dividends;

       

      
        
          
          

        

        
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      (2)           insofar
as it consists of property other than cash, be computed at the fair market value
thereof at the time of such issue, as determined in good faith by the Board;
and

      


      (3)           in
the event Additional Shares of Common Stock are issued together with other
shares or securities or other assets of the Company for consideration which
covers both, be the proportion of such consideration so received, computed as
provided in clauses (1) and (2) above, as determined in good faith by the
Board.

      


      (B)           Options,
Rights and Convertible Securities. The consideration per share received by the
Company for Additional Shares of Common Stock deemed to have been issued
pursuant to Subsection 6(d)(iii), relating to Options, Rights and Convertible
Securities, shall be determined by dividing

      


      (1)           the
total amount, if any, received or receivable by the Company as consideration for
the issue of such Options, Rights or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to the Company upon the
exercise of such Options, Rights or the conversion or exchange of such
Convertible Securities, by

      


      (2)           the
maximum number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such
Options, Rights or the conversion or exchange of such Convertible
Securities.

      


      (e)           Adjustment for Stock Splits
and Combinations.  If the Company shall at any time or from
time to time after the Original Issue Date effect a subdivision of the
outstanding Common Stock, the Conversion Price then in effect immediately before
that subdivision shall be proportionately decreased. If the Company shall at any
time or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock, the Conversion Price then in effect immediately before
the combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.

      


      (f)           Adjustment for Certain
Dividends and Distributions.  In the event the Company at any
time or from time to time after the Original Issue Date shall make or issue a
dividend or other distribution payable in shares of Common Stock, then and in
each such event the Conversion Price shall be decreased as of the time of such
issuance, by multiplying the Conversion Price by a fraction, the numerator of
which shall be the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance, and the denominator of which
shall be the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance plus the number of shares of
Common Stock issuable in payment of such dividend or distribution.

       

      
        
          
          

        

        
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      (g)           Adjustments for Other
Dividends and Distributions.  In the event the Company at any
time, or from time to time after the Original Issue Date shall make or issue, a
dividend or other distribution payable in securities of the Company other than
shares of Common Stock, then and in each such event provision shall be made so
that the holders of shares of the Series E Preferred Stock shall receive upon
conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Company that they would
have received had their Series E Preferred Stock been converted into Common
Stock on the date of such event and had thereafter, during the period from the
date of such event to and including the Conversion Date, retained such
securities receivable by them as aforesaid during such period given application
to all adjustments called for during such period, under this paragraph with
respect to the rights of the holders of the Series E Preferred
Stock.

      


      (h)           Adjustment for
Reclassification, Exchange, or Substitution.  If the Common
Stock issuable upon the conversion of the Series E Preferred Stock shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
above), then and in each such event the holder of each share of Series E
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification, or other change, by holders of the
number of shares of Common Stock into which such shares of Series E Preferred
Stock might have been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.

      


      (i)           No
Impairment.  The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 6 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series E Preferred Stock against impairment to the extent required
hereunder.

      


      (j)           Certificate as to
Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Conversion Prices pursuant to this Section 6, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and  shall file a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based with its corporate records.  The
Company shall, upon the reasonable written request of any holder of Series E
Preferred Stock, furnish or cause to be furnished to such holder a similar
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price(s) then in effect, and (iii) the number of shares of Common
Stock and the amount, if any, of other property which then would be received
upon the conversion of Series E Preferred Stock. Despite such adjustment or
readjustment, the form of each or all Series E Preferred Stock certificates, if
the same shall reflect the initial or any subsequent Conversion Price, need not
be changed in order for the adjustments or readjustments to be valid in
accordance with the provisions of this Certificate, which shall
control.

       

      
        
          
          

        

        
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      (k)           Notice of Record
Date.  In the event

      


      (i)           that
the Company declares a dividend (or any other distribution) on its Common Stock
payable in Common Stock or other securities of the Company;

      


      (ii)           that
the Company subdivides or combines its outstanding shares of Common
Stock;

      


      (iii)           of
any reclassification of the Common Stock of the Company (other than a
subdivision or combination of its outstanding shares of Common Stock or a stock
dividend or stock distribution thereon); or

      


      (iv)           of
the involuntary or voluntary dissolution, liquidation or winding up of the
Company;

      


      then the
Company shall cause to be filed at its principal office and shall cause to be
mailed to the holders of the Series E Preferred Stock at their last addresses as
shown on the records of the Company, or such transfer agent, at least 10 days
prior to the record date specified in (A) below or 20 days before the date
specified in (B) below, a notice stating

      


      (A)           the
record date of such dividend, distribution, subdivision or combination, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, subdivision or combination
are to be determined, or

      


      (B)           the
date on which such reclassification, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, dissolution or winding up.

      


      (l)           Limitation on Conversion
Rights.  Notwithstanding anything stated herein to the
contrary, unless and until the issuance of the Series E Preferred Stock is
approved or ratified by the stockholders of the Company in accordance with the
rules of the Nasdaq Stock Market (the "Stockholder
Approval"), the Series E Preferred Stock cannot be converted into a total
number of shares of Common Stock equal to or greater than five percent (5%) of
the number of shares of Common Stock outstanding immediately prior to the
issuance of the Series E Preferred Stock (the "Conversion
Cap").  The Conversion Rights are expressly limited by and
subject to the Conversion Cap for all purposes, unless and until the Stockholder
Approval is obtained.  The Conversion Cap shall be applied pro rata to
the Conversion Rights of each outstanding share of Series E Preferred Stock,
reducing the number of shares of Common Stock into which each share of Series E
Preferred Stock is convertible equally.  In no event shall the number
of shares of Common Stock into which the Series E Preferred Stock is convertible
exceed the Conversion Cap prior to the Stockholder Approval.  Upon
Stockholder Approval, the Conversion Cap shall terminate for all purposes and
this Certificate shall be deemed amended to delete all references to the
Conversion Cap and the conversion limitation set forth in this
Section 6(l).  The Company may, but shall not be required to,
file an amendment to its Certificate of Incorporation to reflect the Stockholder
Approval.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      


      SECTION
7.  REDEMPTION.

      


      (a)           Upon
and at any time subsequent to the third anniversary of the Original Issue Date
(as defined in Section 6(d)(i) above), the Company at its option may redeem, out
of its available cash or cash equivalents, any amount of the then outstanding
and not previously converted (pursuant to Section 6) Series E Preferred Stock
issued on the Original Issue Date, at a price per share equal to the Original
Series E Issue Price, plus any declared, but unpaid dividends thereon upon
notice provided in accordance with Section 7(b). Shares subject to redemption
pursuant to this Section shall be redeemed from each holder of Series E
Preferred Stock on a pro rata basis.

      


      (b)           At
least thirty (30) days prior to the dates that the Company elects to redeem
shares of the Series E Preferred Stock pursuant to Section 7(a) (each a "Redemption
Date," together the "Redemption
Dates"), the Company shall send a notice (the "Redemption
Notice") to all holders of the outstanding Series E Preferred Stock of
such redemption to be effected, specifying the number of shares to be redeemed
from such holder, the Redemption Date, the price per share to be paid (the
"Redemption
Price") and the place at which payment may be obtained.

      


      (c)           On
or prior to the Redemption Date, the Company shall deposit the Redemption Price
of all shares to be redeemed as of such date with a bank or trust company having
aggregate capital and surplus in excess of $50,000,000, as a trust fund, with
irrevocable instructions and authority to the bank or trust company to pay, upon
receipt of notice from the Company that such holder has surrendered the Series E
Preferred Stock share certificates in accordance with Section 7(d), the
Redemption Price of the shares to their respective holders.  Any
moneys deposited by the Company pursuant to this Section 7 for the redemption of
shares thereafter converted into shares of Common Stock pursuant to Section 6
hereof no later than the fifth (5th) day preceding the Redemption Date shall be
returned to the Company forthwith upon such conversion. The balance of any funds
deposited by the Company pursuant to this Section 7 remaining unclaimed at the
expiration of one (1) year following such Redemption Date shall be returned to
the Company promptly upon its written request.

      


      (d)           On
such Redemption Date, each holder of shares of Series E Preferred Stock to be
redeemed shall surrender such holder's certificates representing such shares to
the Company in the manner and at the place designated in the Redemption Notice,
and thereupon the Redemption Price of such shares shall be payable to the order
of the person whose name appears on such certificate or certificates as the
owner thereof and each surrendered certificate shall be canceled. In the event
less than all the shares represented by such certificates are redeemed, a new
certificate shall be issued representing the unredeemed shares. From and after
such Redemption Date, all rights of the holder of such redeemed shares as a
holder of Series E Preferred Stock (except the right to receive the Redemption
Price without interest upon surrender of their certificates) shall cease and
terminate with respect to such shares.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      


      (e)           In
the event of a call for redemption of any shares of Series E Preferred Stock,
the Conversion Rights (as defined in Section 6) for such Series E Preferred
Stock shall terminate as to the shares designated for redemption at the close of
business on the fifth (5th) day preceding the Redemption Date, unless default is
made in payment of the Redemption Price.

      


      IN WITNESS
WHEREOF, the Company has caused this Certificate to be executed this ____ day of
December, 2008.

      


      
        
          	 	
                  AMEN
      PROPERTIES, INC.

                	 
	 	 	 	 
	
                   

                	
                  
                    By:

                  

                	
                	 
	 	 	
                  Jon
      M. Morgan

                	 
	 	 	
                  President

                	 
	 	 	 	 


        



       

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