Document:

EXHIBIT 10.4

                               OPERATING AGREEMENT
                                       FOR
                               SFF PRODUCTION, LLC

                      A Delaware Limited Liability Company

         This OPERATING AGREEMENT (this "Agreement") of SFF PRODUCTION, LLC (the
"Company"), effective as of December 4, 2007, is (a) adopted by the Managers (as
defined in Section  5.01),  (b)  executed  and agreed to, for good and  valuable
consideration,  by the Members (as defined in Section 2.01),  and (c) supersedes
and replaces all prior Operating Agreements adopted for the Company.

                                    Article 1
                                  Organization

         1.01.  Formation.  The Company has been organized as a Delaware limited
liability   company  by  the  filing  of  a   Certificate   of  Formation   (the
"Certificate")  under and pursuant to the Delaware Limited Liability Company Act
(as amended from time to time, the "Act").

         1.02.  Name. The name of the Company is "SFF  PRODUCTION,  LLC" and all
Company business must be conducted in that name, or such other names that may be
selected by the Managers and that comply with applicable law.

         1.03.  Registered  Office;  Registered Agent;  Offices.  The registered
office and registered  agent of the Company in the State of Delaware shall be as
specified  in the  Certificate  or as  designated  by the Managers in the manner
provided by  applicable  law. The offices of the Company shall be at such places
as the Managers may designate, which need not be in the State of Delaware.

         1.04. Purposes.  The purpose of the Company is to engage in any and all
lawful activities for which limited liability companies may be organized.

         1.05 Foreign Qualification.  Prior to the Company's conducting business
in any jurisdiction other than Delaware, the Managers shall cause the Company to
comply  with all  requirements  necessary  to qualify  the  Company as a foreign
limited liability company in that jurisdiction.

         1.06.  Term.  The term of the  Company  commenced  on the filing of the
Certificate  with the  Secretary  of State of  Delaware  and shall be  perpetual
unless dissolved as provided in this Agreement.

         1.07. No State-Law Partnership. The Members intend that the Company not
be a partnership (including a limited partnership) or joint venture, and that no
Member be a partner or joint  venturer  of any other  Member,  for any  purposes
other than  applicable  tax laws,  and this  Agreement  may not be  construed to
suggest otherwise.

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                                    Article 2
                      Membership; Dispositions of Interests

         2.01.  Members;  Sharing Ratios. The members of the Company ("Members")
are the persons or entities ("Persons")  executing this Agreement as of the date
hereof as members and each Person that is hereafter admitted to the Company as a
member  in  accordance  with  this  Agreement.  If a Member  shall  have  made a
Disposition  (as defined in Section  2.02) of all or any portion of its interest
in the  Company  ("Membership  Interest"),  but shall have  retained  any rights
therein,  then  solely  with  respect to the  Membership  Interest  (or  portion
thereof) so disposed,  all  references  to "Member" that appear in Article 4 and
Section  9.02(b)  shall be deemed to refer to the  assignee  of such  Membership
Interest.  The sharing  percentage of each Member  executing this Agreement (the
"Sharing Ratio") is set forth on Exhibit A.

         2.02.  Dispositions  of Membership  Interests.  A Member may not make a
sale,  assignment,  transfer,  conveyance,  gift,  bequest,  exchange,  or other
disposition (voluntarily, involuntarily, or by operation of law) ("Disposition")
of all or any portion of its Membership Interest,  other than a Disposition to a
Permitted  Transferee (as hereinafter  defined), a Disposition to another Member
in accordance with Article 7, or a Disposition  resulting from the death of such
Member  to a  person  who is  not a  Permitted  Transferee  (each  a  "Permitted
Disposition"),  except upon compliance with Section 7.03 and with the consent of
a Majority Interest (as defined in Section 5.07),  calculated  without reference
to the Member  desiring to make such  Disposition,  and  (without  limiting  the
generality of Section  5.07) each  Member's  consent may be given or withheld in
the Member's sole and absolute discretion, with or without cause, and subject to
such conditions as such Member shall deem appropriate ("Sole  Discretion").  Any
attempted Disposition of all or any portion of a Membership Interest, other than
in strict accordance with this Section 2.02, shall be null and void ab initio. A
Permitted Transferee who is a natural person shall be admitted to the Company as
a Member without the consent of the other Members and a Permitted Transferee who
is not a natural  person shall have the right upon its  designation  of a single
representative  with full power and  authority to act on behalf of the Permitted
Transferee to be admitted to the Company as a Member  without the consent of the
other Members. Except for a Permitted Transferee,  a Person to whom a Membership
Interest  is  Disposed  may be admitted to the Company as a Member only with the
unanimous consent of the other Members.  In connection with any Disposition of a
Membership Interest or any portion thereof,  and any admission of an assignee as
a Member,  the Member making such Disposition and the assignee shall furnish the
other  Members  with such  documents  regarding  the  Disposition  as a Majority
Interest  may  request  (in  form  and  substance  satisfactory  to  a  Majority
Interest), including a copy of the Disposition instrument, a ratification by the
assignee of this  Agreement  (if the assignee is to be admitted as a Member),  a
legal opinion that the Disposition  complies with  applicable  federal and state
securities laws, and a legal opinion that the Disposition will not result in the
Company's termination under Section 708 of the Internal Revenue Code of 1986 (as
amended from time to time, the "Code").  "Permitted  Transferee" for purposes of
this  Section 2.02 shall mean (i) a partner,  member,  and/or  shareholder  of a
Member,  (ii)  a  Member's  children,  the  estate  of a  deceased  Member,  the
beneficiaries under such deceased Member's last will and testament,  a spouse of
a Member, a trust created by a Member or under a deceased Member's last will and

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testament  for the  benefit  of such  Member's  immediate  family  (including  a
charitable remainder trust), or (iii) a corporation,  limited liability company,
or a partnership  controlled by a Member or by a  Member-controlled  entity. The
Members  agree that  breach of the  provisions  of this  Section  2.02 may cause
irreparable injury to the Company for which monetary damages (or other remedy at
law)  are  inadequate  in view  of (i) the  complexities  and  uncertainties  in
measuring the actual damages that would be sustained by reason of the failure of
a Member to comply with such provisions,  and (ii) the uniqueness of the Company
business and the relationship among the Members.  Accordingly, the Members agree
that  the   provisions  of  this  Section  2.02  may  be  enforced  by  specific
performance.

         2.03.  Encumbrances of Membership  Interests.  A Member may not pledge,
mortgage,  subject  to a  security  interest  or  lien,  or  otherwise  encumber
(voluntarily,  involuntarily,  or by operation of law) all or any portion of its
Membership Interest without the consent of the Managers and a Majority Interest,
calculated without reference to the Member desiring to make such encumbrance.

         2.04.   Creation  of  Additional   Membership   Interests.   Additional
Membership  Interests may be created and issued to existing  Members or to other
Persons,  and such other  Persons may be admitted to the Company as Members,  at
the  direction  of the  Managers  and a  Majority  Interest,  on such  terms and
conditions, and with such Sharing Ratios and commitments,  as the Managers and a
Majority  Interest  may  determine  at the time of  admission.  The Managers may
reflect the  admission  of any new  Members or the  creation of any new class or
group of Members in an amendment to this Agreement that need be executed only by
the Managers.

         2.05. Liability to Third Parties. Unless expressly agreed to in writing
by the  Member or  Manager,  as the case may be, no Member or  Manager  shall be
liable for the debts, obligations or liabilities of the Company.

         2.06. Spouses of Members.  Spouses of the Members do not become Members
as a result of such  marital  relationship.  Each spouse of a Member (who is not
himself or herself a Member) has executed this  Agreement  and does  acknowledge
and  understand  that this  Agreement  specifically  covers all  interest in the
Company now owned,  hereafter  acquired  by, or  otherwise  attributed  to their
spouse.

         2.07. Expulsion. A Member may not be expelled from the Company.

                                    Article 3
                              Capital Contributions

         3.01. Initial  Contributions.  Upon execution of this Agreement by each
Member,  such  Member  shall have made,  or shall  contemporaneously  make,  the
contributions to the capital of the Company ("Capital  Contributions") described
for that Member in Exhibit A, and reflected in the books of account  established
for the Company.

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         3.02. Subsequent Contributions. Without creating any rights in favor of
any third party,  each Member  shall  contribute  to the Company  that  Member's
Sharing  Ratio of such  additional  capital that in the judgment of the Managers
and a Majority  Interest is  necessary to enable the Company to cause the assets
of the Company to be properly  operated  and  maintained  and to  discharge  its
costs, expenses, obligations, and liabilities.

         3.03. Failure to Contribute. (a) If a Member does not timely contribute
all or any portion of a Capital  Contribution that Member is required to make as
provided in this Agreement,  the Managers may cause the Company to exercise,  on
notice to that Member (the  "Delinquent  Member"),  one or more of the following
remedies:

                           (i) taking such action (including court proceedings),
at the cost and  expense of the  Delinquent  Member,  as the  Managers  may deem
appropriate  to obtain  payment by the  Delinquent  Member of the portion of the
Delinquent  Member's  Capital  Contribution  that is in default,  together  with
interest  thereon from the date that the Capital  Contribution was due until the
date that it is made, at a rate per annum equal to the lesser of (A) the maximum
rate  permitted by applicable  law or (B) 2% plus the minimum prime lending rate
as  published  in the  Money  Rates  Section  of The Wall  Street  Journal  with
adjustments to be made on the same date as any change in that rate;

                           (ii)  exercising  the rights of a secured party under
the Uniform Commercial Code of the State of Delaware, as more fully set forth in
Section 3.03(b); or

                           (iii)   exercising  any  other  rights  and  remedies
available at law or in equity.

                  (b) Each Member  grants to the  Company,  as security  for the
payment of all Capital  Contributions that Member has agreed to make, a security
interest  in and a general  lien on its  Membership  Interest  and the  proceeds
thereof, all under the Uniform Commercial Code of the State of Delaware.  On any
default in the payment of a Capital Contribution, the Company is entitled to all
the rights and remedies of a secured party under the Uniform  Commercial Code of
the State of Delaware  with  respect to the  security  interest  granted in this
Section  3.03(b).  Each  Member  shall  execute  and  deliver to the Company all
financing  statements  and other  instruments  that the  Managers may request to
effectuate and carry out the preceding  provisions of this Section  3.03(b).  At
the option of the Managers, this Agreement or a carbon,  photographic,  or other
copy hereof may serve as a financing statement.

         3.04. Return of  Contributions.  A Member is not entitled to the return
of any part of its Capital  Contributions  or to be paid  interest in respect of
either its capital account or its Capital  Contributions.  An un-repaid  Capital
Contribution is not a liability of the Company or of any Member. A Member is not
required to  contribute or to lend any cash or property to the Company to enable
the Company to return any Member's Capital Contributions.

         3.05. Advances by Members. If the Company does not have sufficient cash
to pay its  obligations,  any Member(s) that may agree to do so with the consent
of the  Managers  may advance all or part of the needed funds to or on behalf of
the Company,  at such  interest  rate and on such other terms as such Member and
the Managers may agree. An advance  described in this Section 3.05 constitutes a
loan from the Member to the Company and is not a Capital Contribution.

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         3.06.  Capital  Accounts.  A capital  account shall be established  and
maintained for each Member. Each Member's capital account (a) shall be increased
by (i) the amount of cash funds contributed by that Member to the Company,  (ii)
the fair market value of property contributed by that Member to the Company (net
of  liabilities  secured  by  the  contributed  property  that  the  Company  is
considered  to assume or take  subject to under  section  752 of the Code),  and
(iii)  allocations  to that  Member  of the  Company  income  and gain (or items
thereof),  including  income  and  gain  exempt  from  tax and  income  and gain
described in Treas. Reg. ss. 1.704-1(b)(2)(iv)(g), but excluding income and gain
described in Treas. Reg. ss. 1.704-1(b)(4)(i), and (b) shall be decreased by (i)
the amount of cash funds  distributed  to that Member by the  Company,  (ii) the
fair market value of property  distributed to that Member by the Company (net of
liabilities secured by the distributed property that the Member is considered to
assume or take subject to under section 752 of the Code),  (iii)  allocations to
that Member of expenditures of the Company described in section  705(a)(2)(B) of
the Code, and (iv) allocations of Company loss and deduction (or items thereof),
including loss and deduction described in Treas. Reg. ss.  1.704-1(b)(2)(iv)(g),
but excluding  items  described in clause  (b)(iii)  above and loss or deduction
described in Treas. Reg. ss.  1.704-1(b)(4)(i)  or ss.  1.704-1(b)(4)(iii).  The
Members'  capital accounts also shall be maintained and adjusted as permitted by
the provisions of Treas.  Reg. ss.  1.704-1(b)(2)(iv)(f)  and as required by the
other  provisions  of  Treas.  Reg.  ss.  1.704-1(b)(2)(iv)  and  1.704-1(b)(4),
including adjustments to reflect the allocations to the Members of depreciation,
depletion,  amortization,  and gain or loss as computed for book purposes rather
than the allocation of the corresponding items as computed for tax purposes,  as
required by the Treas. Reg. ss. 1.704-1(b)(2)(iv)(g).  On the transfer of all or
part of a Membership  Interest,  the capital  account of the transferor  that is
attributable to the transferred  Membership Interest or part thereof shall carry
over to the  assignee in  accordance  with the  provisions  of Treas.  Reg.  ss.
1.704-1(b)(2)(iv)(1).

                                    Article 4
                          Distributions and Allocations

         4.01.  Distributions.  The Company  will  distribute  Net Cash Flow (as
defined in this  Section  4.01) to the Members in  proportion  to their  Sharing
Ratios at such times as the Managers  shall  determine;  provided  that,  unless
restricted by the terms of any loan agreement,  indenture, or other agreement to
which the Company is or becomes a party, the Company will make  distributions of
cash on hand at least equal to the Maximum Tax  Liability  for each year at such
times  (considering,  among other factors,  the  requirements  to make quarterly
estimated tax payments) that each Member will receive such  distributions  prior
to the times  payments of taxes or estimated  taxes are due.  All  distributions
under this  Section  4.01 shall be made to the  Members in  proportion  to their
Sharing Ratios. The term "Maximum Tax Liability" means for any taxable year, the
sum of hypothetical federal,  state and local taxes which shall be determined by
multiplying the Company's taxable income (as determined under Section 703 of the
Code including items required to be separately stated under Section 703(a)(1) of
the Code) for such year by (i) for  purposes  of  determining  the  hypothetical
federal tax,  the highest  marginal  federal  income tax rate in effect for such
year  (including  any surtax or surcharge)  and (ii) for purposes of determining

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state and local taxes,  the highest  effective  state and local tax rate, as the
case may be, imposed on such taxable income, taking into account state and local
rates in effect in any  jurisdiction  in which any Member is subject to a tax on
its allocable share of the Company's  taxable income. In the case of any Member,
which is, an entity treated as a pass-through  tax entity for federal,  state or
local purposes,  the partners,  members,  beneficiaries  or shareholders (as the
case may be) of such  entity  shall be  considered  as Members  for  purposes of
applying the immediate preceding  sentence.  The term "Net Cash Flow" shall mean
all cash funds derived by the Company (including  interest received on reserves,
borrowings  and  capital  transactions),  without  reduction  for  any  non-cash
charges,  but less cash  funds  used to pay  current  operating  expenses,  debt
payments,  capital  expenditures  and establish  reasonable  reserves for future
expenses and costs as determined by the Managers.

         4.02. Allocations. Except as may be required by Code Section 704(c) and
Treasury Regulation Section 1.704-1(b)(2)(iv)(d)(3),  all items of income, gain,
loss, deduction,  and credit of the Company shall be allocated to the Members in
their Sharing Ratios.

         4.03  Stop  Loss.  Notwithstanding  any other  provision  hereof to the
contrary,  no item of loss or deduction  of the Company  shall be allocated to a
Member if such  allocation  would result in a deficit  balance in such  Member's
capital account  established and maintained  pursuant to Section 3.06. Such item
of loss or deduction  shall be allocated among the Members whose capital account
balances  are positive in  proportion  to such  positive  balances to the extent
necessary  to reduce  the  balances  of such  other  Member's  capital  accounts
balances to zero, it being the intention of the Members that no Member's capital
account  balance shall fall below zero while any other Member's  capital account
has a positive  balance.  If there have been  allocations  of loss or  deduction
pursuant to this Section 4.03, then all items of income,  gain and credit of the
Company first allocated after such allocations of loss or deduction  pursuant to
this  Section  4.03 shall be  allocated  among the  Members to offset in reverse
order such  allocations of loss or deduction and  thereafter in accordance  with
Section 4.02.

         4.04 Qualified Income Offset.  A Member who  unexpectedly  receives any
adjustment,    allocation,    or   distribution   described   in   Treas.   Reg.
ss.1.704-1(b)(2)(ii)(d)(4),  (5), or (6) will be  specially  allocated  items of
income or gain  (consisting  of a prorata  portion  of each item of  partnership
income,  including gross income, and gain for such year) in an amount and in the
manner  sufficient  to eliminate any deficit  balance in his capital  account as
quickly  as  possible;  provided,  however,  that an  allocation  shall  be made
pursuant to this  Section  4.04 only if and to the extent that such Member would
have a deficit in his capital  account after all  allocations  in this Article 4
have  been  tentatively  made  as  if  this  Section  4.04  were  not  in  these
Regulations.  This Section 4.04 is intended to satisfy the  provisions of Treas.
Reg. ss.1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

                                    Article 5
                                   Management

         5.01. Management by Managers.  (a) Subject to the provisions of Section
5.02, the powers of the Company shall be exercised by or under the authority of,
and the business and affairs of the Company shall be managed under the direction
of, managers of the Company ("Managers").  No Member in its capacity as a Member

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has the right, power, or authority to act for or on behalf of the Company, to do
any act that would be binding on the Company,  or to incur any  expenditures  on
behalf of the Company.

                  (b) In managing  the  business  and affairs of the Company and
exercising  its  powers,  the  Managers  shall  act  (i)  collectively   through
resolutions  adopted at meetings  and in written  consents  pursuant to Sections
5.04 and 5.08;  and (ii) through  committees  and  individual  Managers to which
authorities and duties have been delegated  pursuant to Section 5.05. No Manager
has the right, power, or authority to act for or on behalf of the Company, to do
any act that would be binding on the Company,  or to incur any  expenditures  on
behalf of the  Company,  except in  accordance  with the  immediately  preceding
sentence.  Decisions or actions  taken by the Managers in  accordance  with this
Agreement  (including  this  Section  5.01 and Section  5.02)  shall  constitute
decisions  or actions  by the  Company  and shall be  binding  on each  Manager,
Member, Officer (as defined in Section 5.09), and employee of the Company.

         5.02. Decisions Requiring Member Consent.  Notwithstanding any power or
authority granted the Managers under the Act, the Certificate or this Agreement,
the  Managers may not make any decision or take any action for which the consent
of a Majority Interest or other consent of the Members is expressly  required by
the Act,  the  Certificate  or this  Agreement,  without  first  obtaining  such
consent.

         Each Member may, with respect to any vote, consent, or approval that it
is entitled to grant  pursuant to this  Agreement,  grant or withhold such vote,
consent, or approval in its Sole Discretion.

         5.03.  Selection  of  Managers.  The number of  Managers of the Company
shall be no fewer than three (3) and no more than five (5). Each Manager must be
elected by a Majority  Interest.  Each Manager  shall cease to be a Manager upon
the  earliest  to occur of the  following  events:  (a)  such  Manager  shall be
removed,  with or  without  cause,  by a Majority  Interest  at a meeting of the
Members called for that purpose;  (b) such Manager shall resign as a Manager, by
giving notice of such resignation to the Members; or (c) such Manager shall die,
wind up and terminate (unless its business is continued without the commencement
of liquidation or winding up). Any vacancy in any Manager position may be filled
by a Majority  Interest at a meeting of the Members called for that purpose,  or
by a  majority  of the  remaining  Managers,  though  less  than a quorum of the
Managers.

         5.04.  Meetings of Managers.  Meetings of the Managers may be called by
any Manager by notice  thereof  (specifying  the place and time of such meeting)
that is delivered to each other Manager at least 24 hours prior to such meeting.
Neither the business to be transacted  at, nor the purpose of, such meeting need
be  specified  in the notice (or waiver of  notice)  thereof.  Unless  otherwise
expressly provided in this Agreement, at any meeting of the Managers, a majority
of the Managers shall  constitute a quorum for the transaction of business,  and
an act of a majority of the Managers who are present at or participate in such a
meeting at which a quorum is present  or  participating  shall be the act of the
Managers.  The provisions of this Section 5.04 shall be inapplicable at any time
that there is only one Manager.

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         5.05.  Committees  of Managers;  Delegation  of Authority to Individual
Managers. The Managers may designate one or more committees, each of which shall
be comprised of one or more of the  Managers,  and may  designate one or more of
the Managers as alternate members of any committee.  Any such committee,  to the
extent provided in the resolution  establishing  it, shall have and may exercise
all of the authority that may be exercised by the Managers.  Regular and special
meetings  of  such  committee  shall  be held in the  manner  designated  by the
Managers or, if not so designated,  by such committee. The Managers may dissolve
any committee at any time. In addition, the Managers may delegate to one or more
Managers  such  authority  and duties,  and assign to them such  titles,  as the
Managers may deem  advisable.  Any such delegation may be revoked at any time by
the Managers.

         5.06.  Compensation.  The Managers shall receive such compensation,  if
any,  for  their  services  as may be  designated  by a  Majority  Interest.  In
addition,  the Managers  shall be entitled to be  reimbursed  for  out-of-pocket
costs and expenses incurred in the course of their service hereunder.

         5.07. Meetings of Members. Meetings of the Members may be called by the
Managers  or by  Members  having  among them at least ten  percent  (10%) of the
Sharing  Ratios of all Members.  Any such meeting shall be held on such date and
at such time as the Person  calling such meeting  shall specify in the notice of
the  meeting,  which  shall be  delivered  to each Member at least ten (10) days
prior to such meeting. Only business within the purpose or purposes described in
the  notice  (or waiver  thereof)  for such  meeting  may be  conducted  at such
meeting.  Unless otherwise expressly provided in this Agreement,  at any meeting
of the Members,  Members  holding  among them at least a majority of all Sharing
Ratios (a "Majority Interest"),  represented either in person or by proxy, shall
constitute a quorum for the  transaction  of business,  and an act of a Majority
Interest shall be the act of the Members.

         5.08.  Provisions  Applicable to All Meetings.  In connection  with any
meeting  of the  Managers,  Members,  or any  committee  of  the  Managers,  the
following provisions shall apply:

                  (a) Place of Meeting.  Any such  meeting  shall be held at the
principal  place of business of the  Company,  unless the notice of such meeting
(or  resolution  of the  Managers  or  committee,  as  applicable)  specifies  a
different place, which need not be in the State of Delaware.

                  (b)  Waiver  of Notice  Through  Attendance.  Attendance  of a
Person at such meeting (including  pursuant to Section 5.08(e)) shall constitute
a waiver of notice of such meeting, except where such Person attends the meeting
for the express  purpose of objecting to the  transaction of any business on the
ground that the meeting is not lawfully called or convened.

                  (c)  Proxies.  A Person may vote at such  meeting by a written
proxy  executed by that Person and  delivered  to another  Manager,  Member,  or
member of the committee, as applicable.  A proxy shall be revocable unless it is
stated to be irrevocable.

                  (d)  Action  by  Written  Consent.   Any  action  required  or
permitted to be taken at such a meeting may be taken without a meeting,  without
prior  notice,  and without a vote if a consent or consents in writing,  setting
forth the action so taken, is signed by the Managers, Members, or members of the

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committee,  as  applicable,  having not fewer than the minimum number of Sharing
Ratios or votes that would be necessary to take the action at a meeting at which
all Members,  Managers, or members of the committee, as applicable,  entitled to
vote on the action were present and voted.

                  (e)  Meetings  by  Electronic  Means.  Managers,  Members,  or
members  of the  committee,  as  applicable,  may  participate  in and hold such
meeting by means of telephone  conference,  videoconference,  the internet,  any
other electronic  communications  equipment, or any combination thereof by means
of which all Persons  participating  in the meeting  can  communicate  with each
other.

         5.09.  Officers.  The Managers may  designate one or more Persons to be
officers of the Company ("Officers"),  and any Officers so designated shall have
such title,  authorities,  duties,  and salaries as the Managers may delegate to
them. Any Officer may be removed as such,  either with or without cause,  by the
Managers.

         5.10.  Limitations  on  Liability  of  Managers.  The  liability of the
Managers to the Company and the Members shall be limited to the extent,  if any,
now or hereafter set forth in the Certificate.

         5.11. Conflicts of Interest. Subject to the other express provisions of
this Agreement,  each Member, Manager,  Officer, or affiliate thereof may engage
in and possess  interests  in other  business  ventures,  independently  or with
others,  excluding ones in competition with the primary business of the Company.
The  Company  may  transact  business  with any  Member,  Manager,  Officer,  or
affiliate  thereof,  provided  the  terms  of  those  transactions  are no  less
favorable than those the Company could obtain from unrelated third parties.  Any
Member or  affiliate  thereof may  purchase  service from the Company upon terms
which are as favorable  to the Member or  affiliate  as may be obtained  from an
unrelated provider of the same service.

         5.12.  Indemnification;  Reimbursement of Expenses;  Insurance.  To the
fullest  extent  permitted  by the Act:  (a) the Company  shall  indemnify  each
Manager  who was,  is, or is  threatened  to be made a party to any  threatened,
pending,  or completed action,  suit, or proceeding  ("Proceeding"),  any appeal
therein, or any inquiry or investigation  preliminary  thereto, by reason of the
fact that he or she is or was a Manager;  (b) the Company shall pay or reimburse
a  Manager  for  expenses  incurred  by him or her (i) in  advance  of the final
disposition  of a Proceeding  to which such Manager was, is, or is threatened to
be made a party,  and (ii) in connection with his or her appearance as a witness
or other  participation  in any  Proceeding.  The Company  shall  indemnify  and
advance expenses to an Officer of the Company to the extent required to do so by
the Act or other applicable law. The Company, by adoption of a resolution of the
Managers,  may indemnify and advance expenses to an Officer,  employee, or agent
of the Company to the same extent and subject to the same conditions under which
it may  indemnify  and advance  expenses to  Managers.  The  provisions  of this
Section 5.12 shall not be exclusive of any other right under any law, agreement,
the provision of the  Certificate or this Agreement,  or otherwise.  The Company
may purchase and maintain insurance to protect itself and any Manager,  Officer,
employee,  or agent of the  Company,  whether or not the Company  would have the
power to indemnify such Person under this Section 5.12.

                                       9
<PAGE>

                                    Article 6
                                      Taxes

         6.01.  Tax  Returns.  The  Company  shall  prepare  and timely file all
federal,  state, and local tax returns required to be filed by the Company. Each
Member shall furnish to the Company all pertinent  information in its possession
relating to the Company's  operations  that is necessary to enable the Company's
tax returns to be timely prepared and filed. The Company shall deliver a copy of
each such return to the Members,  together with such  additional  information as
may be  required  by the  Members in order for the  Members to timely file their
individual returns reflecting the Company's  operations.  The Company shall bear
the costs of the preparation and filing of its returns.

         6.02. Tax Elections.  The Company shall make the following elections on
the appropriate tax returns:

                  (a) to adopt a fiscal year  beginning  January 1st, and ending
December 31st; and

                  (b) any other  election the Managers may deem  appropriate and
in the best interests of the Members.

         6.03. Tax Matters Member. The Managers shall designate,  if applicable,
one Member to be the "tax  matters  partner"  of the  Company  pursuant  to Code
Section 6231(a)(7) (the "Tax Matters Member"). The Tax Matters Member shall take
such  action as may be  necessary  to cause to the  extent  possible  each other
Member to become a "notice partner" within the meaning of Code Section 6223. The
Tax Matters  Member shall inform each other  Member of all  significant  matters
that may come to its  attention in its capacity as Tax Matters  Member by giving
notice  thereof on or before the fifth business day after becoming aware thereof
and,  within  that  time,  shall  forward  to each  other  Member  copies of all
significant  written  communications  it may receive in that  capacity.  The Tax
Matters  Member  shall take no action  without the  authorization  of a Majority
Interest,  other than such action as may be required by applicable law. Any cost
or expense  incurred by the Tax Matters  Member in  connection  with its duties,
including  the  preparation  for or  pursuance  of  administrative  or  judicial
proceedings, shall be paid by the Company.

                                    Article 7
                               Buy-Out Procedures

         7.01   Procedure  for  Offer  to  Purchase.   In  the  event  a  Member
(hereinafter referred to for purposes of this Article 7 only as "Buying Member")
shall  desire to purchase  the entire  Membership  Interest of any other  Member
(hereinafter  referred  to for  purposes  of this  Article  7 only  as  "Selling
Member"),  Buying Member shall give notice to Selling Member of its intention to
acquire Selling Member's entire Membership  Interest and the terms of such offer
to  purchase  ("Offer to  Purchase").  The  Members  hereby  agree that upon the
issuance of an Offer to Purchase, Selling Member shall have an irrevocable right
of first  refusal  ("Right of First  Refusal") for no more than thirty (30) days
after the date of its  receipt  of the Offer to  Purchase,  to  purchase  Buying

                                       10
<PAGE>

Member's entire  Membership  Interest under the same terms,  including  purchase
price, as provided in Buying Member's Offer to Purchase.

         7.02 Selling Member's  Options.  Selling Member shall provide notice to
Buying  Member,  no more than thirty (30) days (the "Time Period") after receipt
of Buying Member's Offer to Purchase, of its intention to either:

                  (a) accept the Offer to Purchase;

                  (b) reject the Offer to Purchase; or

                  (c)  exercise  its Right of First  Refusal to purchase  Buying
Member's entire Membership Interest pursuant to Section 7.01.

If Selling Member does not respond as provided in this Section 7.02, then Buying
Member's  Offer to  Purchase  shall be deemed to have been  rejected  by Selling
Member.

         7.03     Preferential Purchase Right.

                  (a) Procedure.  Should any Member at any time desire to make a
Disposition  of all or a portion of its Membership  Interest  pursuant to a bona
fide offer from another Person (except for a Permitted  Disposition as described
in the Section 2.02),  such Member (the "Disposing  Member") shall promptly give
notice thereof (the "Disposition  Notice") to the Company and the other Members.
The Disposition Notice shall set forth all relevant  information with respect to
the  proposed  Disposition,  including  the name and address of the  prospective
acquirer,  the  purchase  price,  the precise  Membership  Interest  that is the
subject of the  Disposition,  and any other terms and conditions of the proposed
Disposition. The other Members shall have the preferential right to acquire such
Membership  Interest  for the same  purchase  price,  and on the same  terms and
conditions,  as are set forth in the  Disposition  Notice,  except  as  provided
otherwise in this Section 7.03.  Each Member  (other than the Disposing  Member)
shall have thirty (30) days following its receipt of the  Disposition  Notice in
which to notify the Disposing Member whether such Member desires to exercise its
preferential right. (A notice in which a Member exercises such right is referred
to herein as an "Exercise Notice",  and a Member who delivers an Exercise Notice
is referred to herein as a "Purchasing Member"). Any Member who does not respond
during the applicable period shall be deemed to have waived such right. If there
is more than one Purchasing Member,  each Purchasing Member shall participate in
the  purchase  in the  same  proportion  that  its  Sharing  Ratio  bears to the
aggregate  Sharing Ratios of all  Purchasing  Members (or on such other basis as
the Purchasing Members may mutually agree).

                  (b)  Non-Cash  Consideration.  If any portion of the  purchase
price,  as disclosed in the  Disposition  Notice,  is to be paid in a form other
than cash, the following procedures shall be applicable:

                           (i) If any  portion  of the  purchase  price is to be
represented by a promissory  note (which term shall include any form of deferred
payment  obligation),  the Disposition  Notice shall set forth the terms of such
promissory  note.  With  respect to such  portion of the  purchase  price,  each

                                       11
<PAGE>

Purchasing  Member shall have the option (to be elected in its Exercise Notice),
either (A) to deliver an equivalent  promissory  note, or (B) to pay in cash the
principal amount of such promissory note.

                           (ii) If any  portion of the  purchase  price is to be
payable in a form other than cash or a promissory  note, the Disposition  Notice
shall set forth the  Disposing  Member's  best estimate of the fair market value
thereof.  If one or more Purchasing Members disagree with such estimate,  and if
such disagreement is not resolved within twenty (20) days following  delivery of
the Disposition  Notice,  any such Person, by notice to the others,  may require
the determination of fair market value to be made pursuant to Article 11 and the
period  for  return  of  the  Exercise  Notice  shall  be  extended  until  such
disagreement  can be  resolved.  With  respect to such  portion of the  purchase
price,  each  Purchasing  Member  shall  have the  option,  to be elected in its
Exercise  Notice,  either (A) to make such portion of the price in the same form
as is specified in the Disposition Notice, or (B) to pay in cash the fair market
value of such portion of the price.

                  (c)  Closing.  If  the  preferential  right  is  exercised  in
accordance  with this Section  7.03,  the closing of such  purchase  shall occur
within thirty (30) days after the expiration of the  preferential  right period.
At the  closing,  (i) the  Disposing  Member  shall  execute  and deliver to the
Purchasing Members (A) an assignment of the Membership Interest described in the
Disposition  Notice,  in  form  and  substance  reasonably   acceptable  to  the
Purchasing Members, containing a general warranty of title as to such Membership
Interest  (including  that  such  Membership  Interest  is free and clear of any
encumbrances)  and  (B)  any  other  instruments  reasonably  requested  by  the
Purchasing  Members  to give  effect to the  purchase;  and (ii) the  Purchasing
Members shall deliver to the Disposing  Member the purchase  price  specified in
the Disposition  Notice.  The Sharing Ratios and capital accounts of the Members
shall be deemed adjusted to reflect the effect of the purchase.

                  (d) Waiver of Preferential Right. If following compliance with
this Section 7.03, no Members deliver an Exercise  Notice,  the Disposing Member
shall have the right, subject to compliance with the provisions of Section 2.02,
to Dispose of the Membership Interest described in the Disposition Notice to the
proposed  assignee  strictly  in  accordance  with the terms of the  Disposition
Notice for a period of ninety (90) days after the expiration of the preferential
right  period.  If,  however,  the  Disposing  Member fails so to Dispose of the
Membership Interest within such ninety (90) day period, the proposed Disposition
shall again become subject to the  preferential  right set forth in this Section
7.03.

                                    Article 8
                        Books, Records and Bank Accounts

         8.01. Maintenance of Books. The Managers shall keep or cause to be kept
at the principal  office of the Company  complete and accurate books and records
of the Company, supporting documentation of the transactions with respect to the
conduct  of the  Company's  business,  and  minutes  of the  proceedings  of its
Managers and Members.  The books and records shall be maintained with respect to
accounting matters in accordance with sound accounting practices,  and all books
and records shall be available at the Company's principal office for examination

                                       12
<PAGE>

by any Member or the  Member's  duly  authorized  representative  at any and all
reasonable times during normal business hours.

         8.02.  Reports.  Within  seventy-five  (75) days  after the end of each
taxable  year,  the  Managers  shall  cause to be sent to each  Person who was a
Member at the end of such taxable year a complete  accounting  of the  financial
affairs of the Company for the taxable year then ended.

         8.03. Accounts.  The Managers shall establish one or more separate bank
and  investment  accounts  and  arrangements  for the  Company,  which  shall be
maintained in the Company's name with financial  institutions and firms that the
Managers determine.  The Managers may not commingle the Company's funds with the
funds of any Manager or Member.

                                    Article 9
                    Dissolution, Winding Up, and Termination

         9.01. Dissolution. (a) The Company shall dissolve and its affairs shall
be wound up on the first to occur of the following events:

                           (i) the unanimous consent of the Members; or

                           (ii) entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Act.

                  (b) The death,  expulsion,  withdrawal,  or dissolution of any
Member,  or the  occurrence  of any other event that  terminates  the  continued
membership  of any  Member in the  Company  shall not  cause the  Company  to be
dissolved.  In the event of the death of a Member of the  Company,  the  Company
shall not be  dissolved  but shall  continue  uninterrupted  with such  deceased
Member's estate, beneficiaries of such deceased Member's estate and/or any other
Permitted Transferee of such deceased Member automatically becoming a Member.

         9.02.  Winding Up and  Termination.  (a) On the  occurrence of an event
described  in Section  9.01(a),  the  Managers  shall act as  liquidator  or may
appoint  one or  more  Members  as  liquidator.  The  liquidator  shall  proceed
diligently  to wind up the affairs of the Company as provided in the Act.  Until
final  distribution,  the  liquidator  shall  continue  to operate  the  Company
properties  with all of the power and  authority of the  Managers.  The costs of
winding up shall be borne as a Company expense.

                  (b) Any assets of the Company  remaining at the  conclusion of
the winding up process shall be distributed among the Members in accordance with
their positive capital accounts.  All distributions in kind to the Members shall
be made subject to the liability of each  distributee for costs,  expenses,  and
liabilities theretofore incurred or for which the Company has committed prior to
the date of termination. The distribution of cash and/or property to a Member in
accordance  with the provisions of this Section  9.02(b)  constitutes a complete
return to the Member of its Capital Contributions and a complete distribution to
the  Member  of its  Membership  Interest  and all the  Company's  property  and

                                       13
<PAGE>

constitutes a compromise to which all Members have consented  within the meaning
of Section 18-502(b) of the Act.

                  (c) On  completion  of such final  distribution,  the Managers
shall  file a  Certificate  of  Cancellation  with  the  Secretary  of  State of
Delaware,  cancel any other filings made pursuant to Section 1.05, and take such
other actions as may be necessary to terminate the existence of the Company.

         9.03. No Restoration of Deficit  Capital  Accounts.  No Member shall be
required to pay to the  Company,  to any other  Member or to any third party any
deficit  balance  that may exist  from time to time in any  capital  or  similar
account maintained for such Member for any purpose.

                                   Article 10
               Investment and Other Representations of the Members

         10.01. Investment Intent. EACH OF THE MEMBERS DOES HEREBY REPRESENT AND
WARRANT TO THE COMPANY AND TO EACH OF THE OTHER  MEMBERS  THAT HE, SHE OR IT HAS
ACQUIRED HIS, HER OR ITS INTEREST IN THE COMPANY FOR INVESTMENT, SOLELY FOR HIS,
HER OR ITS OWN  ACCOUNT,  WITH  THE  INTENTION  OF  HOLDING  SUCH  INTEREST  FOR
INVESTMENT, AND WITHOUT ANY INTENTION OF PARTICIPATING DIRECTLY OR INDIRECTLY IN
ANY REDISTRIBUTION OR RESALE OF ANY PORTION OF SUCH INTEREST IN VIOLATION OF THE
SECURITIES  ACT OF 1933,  AS AMENDED (THE  "SECURITIES  ACT") OR ANY  APPLICABLE
STATE SECURITIES LAW.

         10.02.  Unregistered  Membership  Interests.  EACH OF THE MEMBERS  DOES
HEREBY  ACKNOWLEDGE THAT HE, SHE OR IT IS AWARE THAT HIS, HER OR ITS INTEREST IN
THE COMPANY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES ACT IN RELIANCE UPON
EXEMPTIONS CONTAINED IN SUCH SECURITIES ACT AND THAT HIS, HER OR ITS INTEREST IN
THE COMPANY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  LAW OF ANY STATE IN
RELIANCE UPON THE EXEMPTIONS CONTAINED IN SUCH STATE SECURITIES LAW.

         10.03. Nature of Investment.  EACH OF THE MEMBERS DOES HEREBY REPRESENT
AND WARRANT TO THE COMPANY AND TO EACH OF THE OTHER  MEMBERS  THAT HE, SHE OR IT
IS  A  SOPHISTICATED   INVESTOR  AND  THE  NATURE  AND  AMOUNT  OF  THE  CAPITAL
CONTRIBUTION  HE, SHE OR IT AGREES TO MAKE HEREUNDER IS CONSISTENT WITH HIS, HER
OR ITS INVESTMENT  PROGRAM AND THAT SUCH MEMBER HAS SUFFICIENT  LIQUID ASSETS TO
ABSORB THE LOSS OF HIS, HER OR ITS ENTIRE  INVESTMENT  IN THE COMPANY.  FURTHER,
EACH OF THE MEMBERS DOES HEREBY ACKNOWLEDGE THAT:

                                       14
<PAGE>

         (A)      PRIOR TO HIS, HER OR ITS EXECUTION OF THIS AGREEMENT,  HE, SHE
                  OR IT HAS BEEN  FURNISHED  WITH  SUFFICIENT  WRITTEN  AND ORAL
                  INFORMATION  ABOUT THE COMPANY AND THE BUSINESS TO BE OPERATED
                  BY THE  COMPANY  TO  ALLOW  SUCH  MEMBER  TO MAKE AN  INFORMED
                  INVESTMENT  DECISION  PRIOR TO  PURCHASING  AN INTEREST IN THE
                  COMPANY;

         (B)      HE, SHE OR IT IS FULLY FAMILIAR WITH THE BUSINESS  PROPOSED TO
                  BE  CONDUCTED  BY THE COMPANY AND WITH THE  COMPANY'S  USE AND
                  PROPOSED  USE OF THE  PROCEEDS  OF THE SALE OF THE  MEMBERSHIP
                  INTERESTS;

         (C)      THE OFFER AND  PURCHASE  OF HIS,  HER OR ITS  INTEREST  IN THE
                  COMPANY   HAS  BEEN  MADE  IN  THE  COURSE  OF  A   NEGOTIATED
                  TRANSACTION INVOLVING DIRECT COMMUNICATION BETWEEN SUCH MEMBER
                  AND A REPRESENTATIVE OF THE COMPANY;

         (D)      HE,  SHE OR IT HAS  EITHER  (I)  HAD  EXPERIENCE  IN  BUSINESS
                  ENTERPRISES  OR  INVESTMENTS  ENTAILING RISK OF A TYPE OR TO A
                  DEGREE   SUBSTANTIALLY   SIMILAR  TO  THOSE   ENTAILED  IN  AN
                  INVESTMENT  IN THE COMPANY,  OR (II) HAS OBTAINED  INDEPENDENT
                  FINANCIAL ADVICE WITH RESPECT TO HIS, HER OR ITS INVESTMENT IN
                  THE COMPANY;

         (E)      HE, SHE OR IT HAS BEEN ADVISED THAT HIS, HER OR ITS MEMBERSHIP
                  INTEREST MAY NOT BE SOLD,  ASSIGNED OR  OTHERWISE  TRANSFERRED
                  EXCEPT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT,  IN THE
                  ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT COVERING SAID
                  INTEREST UNDER THE SECURITIES ACT OF 1933, AND THAT HE, SHE OR
                  IT WILL HAVE NO RIGHTS TO REQUIRE  REGISTRATION OF HIS, HER OR
                  ITS MEMBERSHIP INTEREST UNDER THE SECURITIES ACT OF 1933, AND,
                  IN VIEW OF THE  NATURE  OF THE  TRANSACTION,  REGISTRATION  IS
                  NEITHER CONTEMPLATED NOR LIKELY; AND

         (F)      PRIOR TO HIS, HER OR ITS EXECUTION OF THIS AGREEMENT,  HE, SHE
                  OR IT RECEIVED A COPY OF THIS AGREEMENT AND THAT HE, SHE OR IT
                  HAS  EXAMINED  THIS  DOCUMENT  OR CAUSED  THIS  DOCUMENT TO BE
                  EXAMINED BY HIS, HER OR ITS REPRESENTATIVE OR ATTORNEY.

                                       15
<PAGE>

         10.04.  Valid  Existence.  Each Member  represents  and warrants to the
Company and each other Member that:

         (a)      If that Member is a corporation, it is duly organized, validly
                  existing,  and in good standing under the laws of the state of
                  its  incorporation  and is duly qualified and in good standing
                  as a foreign  corporation in the jurisdiction of its principal
                  place of business (if not incorporated therein);

         (b)      If that Member is a partnership, trust, or other entity, it is
                  duly formed,  validly  existing,  and (if  applicable) in good
                  standing  in  the  jurisdiction  of  its  principal  place  of
                  business (if not formed therein);

         (c)      It has full corporate,  partnership, trust or other applicable
                  power  and  authority  to enter  into  this  Agreement  and to
                  perform its obligations hereunder and all necessary actions by
                  the board of directors (or trustees),  shareholders,  members,
                  managers, partners,  beneficiaries, or other persons necessary
                  for   the  due   authorization,   execution,   delivery,   and
                  performance  of this  Agreement  by that Member have been duly
                  taken;

         (d)      It has duly executed and delivered this Agreement; and

         (e)      The execution,  delivery, and performance of this Agreement do
                  not conflict with any other  agreement or arrangement to which
                  such Member is a party or by which it is bound.

         10.05. Indemnity and Survival. Each of the Members does hereby agree to
hold the Company  harmless and to indemnify the Company against all liabilities,
costs  and  expenses  incurred  by  the  Company  as a  result  of any  sale  or
distribution  by such Member in violation  of the  Securities  Act of 1933.  All
representations,  warranties and indemnities  made by such Member with reference
to the  Securities  Act of 1933  shall be deemed  to be  equally  applicable  in
connection  with  the  securities  law of  Delaware  or  any  other  state.  All
representations,  warranties and agreements  shall survive until the dissolution
and  termination  of the  Company,  except to the extent that a  representation,
warranty or agreement expressly provides otherwise.

                                   Article 11
                     Alternative Dispute Resolution ("ADR")

         11.01.  Agreement to Use Procedure.  The Members have entered into this
Agreement  in good faith and in the belief that it is mutually  advantageous  to
them. It is with that same spirit of cooperation  that they pledge to attempt to
resolve any dispute amicably  without the necessity of litigation.  Accordingly,
they agree if any dispute  arises  between them relating to this  Agreement (the
"Dispute"),  they will first  utilize the  procedures  specified in this Article
(the "Procedure") prior to any Additional  Proceedings (defined below in Section
11.11).

                                       16
<PAGE>

         11.02.  Initiation  of  Procedure.  The Member  seeking to initiate the
Procedure  (the  "Initiating  Member")  shall give  written  notice to the other
Members,  describing in general terms the nature of the Dispute,  the Initiating
Member's claim for relief and identifying one or more individuals with authority
to settle the Dispute on such  Member's  behalf.  The Member(s)  receiving  such
notice (the  "Responding  Member"),  whether one or more shall have fifteen (15)
business  days within  which to designate  by written  notice to the  Initiating
Member,  one or more  individuals  with  authority to settle the Dispute on such
Member's behalf. The individuals so designated shall be known as the "Authorized
Individuals". The Initiating Member and the Responding Member shall collectively
be referred to as the "Disputing Members" or individually "Disputing Member".

         11.03.  Direct  Negotiations.   The  Authorized  Individuals  shall  be
entitled to make such investigation of the Dispute as they deem appropriate, but
agree to promptly,  and in no event later than thirty (30) days from the date of
the  Initiating  Member's  written  notice,  meet to discuss  resolution  of the
Dispute. The Authorized Individuals shall meet at such times and places and with
such  frequency as they may agree.  If the Dispute has not been resolved  within
thirty (30) days from the date of their initial meeting,  the Disputing  Members
shall cease  direct  negotiations  and shall  submit the Dispute to mediation in
accordance with the following procedure.

         11.04.  Selection of Mediator.  The Authorized  Individuals  shall have
fifteen  (15)  business  days from the date they cease  direct  negotiations  to
submit to each other a written list of acceptable  qualified  attorney-mediators
not  affiliated  with any of the Members.  Within five (5) days from the date of
receipt of such list,  the  Authorized  Individuals  shall rank the mediators in
numerical  order of preference and exchange such rankings.  If one or more names
are on both  lists,  the  highest  ranking  person  shall be  designated  as the
mediator.  If no mediator has been selected under this procedure,  the Disputing
Members  agree  jointly to request a State or  Federal  District  Judge of their
choosing to supply within ten (10)  business days a list of potential  qualified
attorney-mediators.  Within  fifteen (15)  business days of receipt of the list,
the Authorized  Individuals shall again rank the proposed mediators in numerical
order of preference and shall simultaneously exchange such list and shall select
as the mediator the individual  receiving the highest combined ranking.  If such
mediator is not  available to serve,  they shall proceed to contact the mediator
who was next highest in ranking until they are able to select a mediator.

         11.05.  Time and Place of Mediation.  In consultation with the mediator
selected,  the  Authorized  Individuals  shall  promptly  designate  a  mutually
convenient time and place for the mediation,  and unless  circumstances  require
otherwise,  such  time  shall be not  later  than  forty-five  (45)  days  after
selection of the mediator.

         11.06.  Exchange of Information.  In the event any Disputing  Member to
this Agreement has substantial need for information in the possession of another
Disputing  Member to this Agreement in order to prepare for the  mediation,  all
Disputing  Members shall  attempt in good faith to agree to  procedures  for the
expeditious  exchange  of such  information,  with the help of the  mediator  if
required.

                                       17
<PAGE>

         11.07.  Summary  of Views.  At least  seven (7) days prior to the first
scheduled  session of the mediation,  each Disputing Member shall deliver to the
mediator and to the other  Disputing  Members a concise  written  summary of its
views on the matter in Dispute, and such other matters required by the mediator.
The mediator may also  request that a  confidential  issue paper be submitted by
each Disputing Member to him or her.

         11.08.  Parties to be  Represented.  In the  mediation,  each Disputing
Member shall be represented  by an Authorized  Individual and may be represented
by counsel at such Disputing Member's own expense.  In addition,  each Disputing
Member may, with permission of the mediator,  bring such  additional  Persons as
needed to respond to questions,  contribute information,  and participate in the
negotiations.

         11.09.  Conduct of Mediation.  The mediator shall  determine the format
for the meetings,  designed to assure that both the mediator and the  Authorized
Individuals  have an opportunity to hear an oral  presentation of each Disputing
Member's  views on the matter in dispute,  and that the  Authorized  Individuals
attempt to negotiate a resolution of the matter in dispute,  with or without the
assistance of counsel or others,  but with the  assistance  of the mediator.  To
this end, the mediator is authorized to conduct both joint meetings and separate
private  caucuses with the  Disputing  Members.  The mediation  session shall be
private.  The mediator will keep confidential all information learned in private
caucus  with  any  Disputing  Member  unless  specifically  authorized  by  such
Disputing  Member to make  disclosure of the  information to the other Disputing
Member.  The  Disputing  Members  agree  to sign a  document  agreeing  that the
mediator  shall be governed  by the  provisions  of Delaware  law and such other
rules  as  the  mediator  shall  prescribe.  The  Disputing  Members  commit  to
participate in the proceedings in good faith with the intention of resolving the
Dispute if at all possible.

         11.10.  Termination  of  Procedure.  The  Disputing  Members  agree  to
participate in the mediation procedure to its conclusion. The mediation shall be
terminated:  (i) by the  execution  of a settlement  agreement by the  Disputing
Members; (ii) by a declaration of the mediator that the mediation is terminated;
or (iii) by a written  declaration of a Disputing  Member to the effect that the
mediation  process is terminated at the  conclusion of one full day's  mediation
session.  Even if the  mediation  is  terminated  without  a  resolution  of the
Dispute,  the Disputing  Members agree not to terminate good faith  negotiations
and not to commence any Additional  Proceedings  prior to the expiration of five
(5) business days following the mediation.  Notwithstanding  the foregoing,  any
Disputing  Member  may  commence  Additional  Proceedings  within  such five (5)
business day period if the Dispute could be barred by an  applicable  statute of
limitations.

         11.11.  Arbitration.  The parties agree to participate in good faith in
the Alternative  Dispute Resolution ("ADR") to its conclusion.  If the Disputing
Members are not  successful in resolving  the dispute  through the ADR, then the
Disputing  Members  may agree to submit the matter to binding  arbitration  or a
private  adjudicator,  or  either  Disputing  Member  may  seek  an  adjudicated
resolution through the appropriate court ("Additional Proceedings").

         11.12.  Fees of Mediation;  Disqualification.  The fees and expenses of
the mediator  shall be shared  equally by the  Disputing  Members.  The mediator

                                       18
<PAGE>

shall be  disqualified  as a  witness,  consultant,  expert or  counsel  for any
Disputing Member with respect to the Dispute and any related matters.

         11.13.  Confidentiality.  The entire mediation process is confidential,
and no  stenographic,  visual  or  audio  record  shall be  made.  All  conduct,
statements,  promises, offers, views and opinions, whether oral or written, made
in the course of the mediation by any Disputing Member, their agents, employees,
counsel,  representatives or other invitees and by the mediator are confidential
and  shall,  in  addition  and where  appropriate,  be deemed  privileged.  Such
conduct,  statements,   promises,  offers,  views  and  opinions  shall  not  be
discoverable  or  admissible  for any  purpose,  including  impeachment,  in any
litigation or other proceeding  involving the parties and shall not be disclosed
to anyone not an agent, employee,  expert,  witness, or representative of any of
the  Members;  provided,   however,  that  evidence  otherwise  discoverable  or
admissible is not excluded from discovery or admission as a result of its use in
the mediation.

                                   Article 12
                               General Provisions

         12.01.  Offset.  Whenever  the Company is to pay any sum to any Member,
any amounts  that  Member owes the Company may be deducted  from that sum before
payment.

         12.02. Notices. Except as otherwise provided, all notices, requests, or
consents  under this  Agreement  shall be (a) in writing,  (b)  delivered to the
recipient  in  person,  by  courier or mail or by  facsimile,  telegram,  telex,
cablegram, email, instant message, or similar electronic transmission, (c) if to
a Member,  delivered  to such Member at the  applicable  address on Exhibit A or
such other  address as that  Member may  specify by notice to the  Managers  and
other Members, (d) if to the Managers or the Company,  delivered to the Managers
at the  registered  office  of the  Company,  or at such  other  address  as the
Managers  may  specify by notice to the  Members,  and (e)  effective  only upon
actual receipt by such Person(s). Whenever any notice is required to be given by
applicable law, the  Certificate,  or this Agreement,  a written waiver thereof,
signed by the Person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.

         12.03. Writings and Signatures.  Under this Agreement,  "signature" and
"signed" means any symbol executed or adopted by a person with present intention
to  authenticate  a writing.  Unless the context  requires  otherwise,  the term
includes a digital  signature,  an  electronic  signature,  and a facsimile of a
signature.  "Written"  or  "writing"  means an  expression  of  words,  letters,
characters,  numbers,  symbols,  figures,  or other textual  information that is
inscribed  on a  tangible  medium or that is stored  in an  electronic  or other
medium that is retrievable in a perceivable  form.  Unless the context  requires
otherwise,  the term (i)  includes  stored or  transmitted  electronic  data and
transmissions and reproductions of writings;  and (ii) does not include sound or
video  recordings  of  speech  other  than  transcriptions  that  are  otherwise
writings.

                                       19
<PAGE>

         12.04. Entire Agreement;  Supersedure.  This Agreement  constitutes the
entire agreement of the Members relating to the Company and supersedes all prior
contracts or agreements with respect to the Company, whether oral or written.

         12.05.  Effect of Waiver or Consent.  A waiver or  consent,  express or
implied, to or of any breach or default by any Person in the performance by that
Person of its obligations with respect to the Company is not a consent or waiver
to or of any other  breach or default in the  performance  by that Person of the
same or any other obligations of that Person with respect to the Company.

         12.06.  Amendments of Certificate  and Agreement.  The  Certificate and
this Agreement may be amended or restated only with the approval of the Managers
and a Majority Interest.

         12.07. Binding Effect.  Subject to the restrictions on Dispositions set
forth in this  Agreement,  this  Agreement  is binding on and shall inure to the
benefit  of the  Members  and their  respective  heirs,  legal  representatives,
successors, and assigns.

         12.08. Governing Law;  Severability.  THIS AGREEMENT IS GOVERNED BY AND
SHALL  BE  CONSTRUED  IN  ACCORDANCE  WITH THE  LAWS OF THE  STATE  OF  DELAWARE
(EXCLUDING ITS  CONFLICT-OF-LAWS  RULES).  If any provision of this Agreement or
the  application  thereof  to any  Person or  circumstance  is held  invalid  or
unenforceable to any extent, the remainder of this Agreement and the application
of that provision to other Persons or  circumstances is not affected thereby and
that provision shall be enforced to the greatest extent  permitted by applicable
law.

         12.09.  Construction.  Unless the context requires  otherwise:  (a) the
gender  (or lack of gender) of all words  used in this  Agreement  includes  the
masculine,  feminine,  and neuter;  (b) the word "including"  means  "including,
without  limitation";  (c) references to Articles and Sections refer to Articles
and  Sections of this  Agreement;  and (d)  references  to  Exhibits  are to the
Exhibits attached to this Agreement, each of which is made a part hereof for all
purposes.

         12.10.  Further  Assurances.  In connection with this Agreement and the
transactions  contemplated  hereby,  each Member  shall  execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary  or  appropriate  to  effectuate  and perform the  provisions  of this
Agreement and those transactions.

         12.11.  Counterparts.  This  Agreement may be executed in any number of
counterparts, all of which shall constitute the same instrument.  Delivery of an
executed  signature  of  this  Agreement  by  facsimile  transmission  shall  be
effective as delivery of a manually executed counterpart hereof.

         12.12 Informed  Decision.  Each Member,  by executing  this  Agreement,
represents and warrants that he has been furnished with  sufficient  written and
oral  information  about the  Company  and the  business  to be  operated by the
Company  to  allow  him to make an  informed  decision  prior  to  purchasing  a
Membership Interest in the Company.

         12.13  Admonition.  McMahon Surovik  Suttle,  P.C. (the "Law Firm") has
exclusively represented the Company in the preparation of this Agreement and has

                                       20
<PAGE>

not  undertaken to assist the Members,  or render legal or investment  advice to
the Members.  The Law Firm has not acted as securities counsel to the Company or
any Member,  and fully  disclaims any  engagement as such counsel.  The Law Firm
makes  no  representation  regarding  the  undertaking  of  the  Company  or the
prospective  value of any  Member's  interest in the  Company.  Each Member does
hereby  acknowledge that the Law Firm has directed that he/she/it seek competent
outside  counsel and  business  advice  other than from the Law Firm,  as to the
effects,  consequences  and  legalities of this  Agreement  and the  opportunity
offered hereunder.

         Adopted  by  the  undersigned  Managers  effective  on the  4th  day of
December, 2007.

                                            -----------------------------------
                                            Jon M. Morgan

                                            -----------------------------------
                                            John R. Norwood

                                            -----------------------------------
                                            Eric L. Oliver

         WHEREOF,  following  adoption of this  Agreement by the  Managers,  the
Members have adopted and executed this  Agreement to be effective as of the date
first set forth above.

                         [MEMBER SIGNATURE PAGES FOLLOW]

                                       21
<PAGE>

                                    EXHIBIT A
                                    ---------================================================================================

                     SECURITIES PURCHASE AND NOTE AGREEMENT

                          Dated as of November 30, 2007

                                  By and Among

                              AMEN PROPERTIES, INC.

                                       and

                               THE INVESTORS NAMED

                          ON THE SIGNATURE PAGES HERETO

================================================================================

<PAGE>

                     SECURITIES PURCHASE AND NOTE AGREEMENT

         This Securities  Purchase and Note Agreement (the  "Agreement") is made
and entered into as of the 30th day of November, 2007 (the "Effective Date"), by
and among Amen  Properties,  Inc.,  a  Delaware  corporation  ("Amen"),  and the
Persons whose names appear on the Signature Pages hereto (the "Investors").

                                    RECITALS

         A. Amen has entered into a Purchase and Sale Agreement with Bank of New
York Trust Company,  N.A.,  solely in its capacity as trustee of Santa Fe Energy
Trust ("SFF")  dated  November 30, 2007 and a Purchase and Sale  Agreement  with
Devon Energy Production Company,  L.P. dated November 30, 2007 (the "Acquisition
Agreements"),  whereby  Amen  has  agreed  to  acquire,  or  cause  one  of  its
Subsidiaries  to  acquire,  certain  oil and  gas  interests  (the  "Acquisition
Properties").

         B. In order to fund a portion  of the  purchase  price to  acquire  the
Acquisition  Properties,  the  Investors  have  agreed to make loans to Amen and
acquire Amen securities,  under and pursuant to the terms and conditions of this
Agreement.

                                   ARTICLE I
                                   DEFINITIONS

         Section 1.1 -  Definitions.  As used in this  Agreement,  the following
terms have the meanings indicated:

         "Acquisition"  means the  transaction  contemplated  by the Acquisition
Agreements.

         "Acquisition Agreements" has the meaning specified in the Recitals.

         "Acquisition  Documents"  means  the  Acquisition  Agreements  and  all
related agreements, documents and instruments.

         "Acquisition Properties" has the meaning specified in the Recitals.

         "Agreement"  has  the  meaning  ascribed  to  such  term  in the  first
paragraph hereof.

         "Certificate of  Designation"  means the Certificate of Designations of
Series D Preferred  Stock of Amen  Properties,  Inc. in  substantially  the form
attached hereto as Exhibit "A".

         "Closing" has the meaning ascribed to such term in Section 2.2.

         "Closing Date" has the meaning ascribed to such term in Section 2.2.

                                       1
<PAGE>

         "Commitment  Amount"  means the  aggregate  dollar  amount an  Investor
commits to invest (by making a Loan and purchasing  shares of Series D Preferred
Stock)  under  the  terms of this  Agreement  as set  forth  on each  Investor's
Signature Page.

         "Commitment  Percentage" means each Investor's  percentage of the total
Commitment Amount of all Investors and is determined by dividing each Investor's
Commitment Amount by the total Commitment Amounts of all Investors.

         "Common  Stock" means the common stock,  $0.01 par value per share,  of
Amen.

         "Contracts"  means  any  indenture,   mortgage,  deed  of  trust,  loan
agreement,  note, lease,  license,  franchise  agreement,  permit,  certificate,
contract  or  other  agreement  or  instrument  to  which  Amen  or  any  of its
Subsidiaries  is a party or to which their  respective  material  properties  or
assets are subject.

         "Environmental  Laws" means all (i) all federal statutes  regulating or
prescribing  restrictions  regarding  the use of  property  or other  activities
affecting the environment (air, water,  land, animal and plant life),  including
but  not  limited  to the  following:  the  Clean  Air  Act,  Clean  Water  Act,
Comprehensive Environmental Response,  Compensation and Liability Act, Emergency
Planning and Community  Right-to-Know  Act, Hazardous  Materials  Transportation
Act, National  Environmental Policy Act, Occupational Safety and Health Act, Oil
Pollution  Act of 1990,  Resource  Conservation  and Recovery Act, Safe Drinking
Water Act, and Toxic  Substances  Control Act; (ii) all regulations  promulgated
under  such  federal  statutes,  (iii)  all  local  and  state  laws,  rules and
regulations  regulating the use of or relating to or affecting the  environment,
and (iv) all common law rights, duties and obligations relating to the use of or
matters affecting the environment.

         "Equity  Securities"  means the Series D Preferred  Stock, the Warrants
and the Warrant Shares.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Governmental  Authority" means the United States, any foreign country,
state,  county, city or other political  subdivision,  agency or instrumentality
thereof.

         "Inside  Investors"  means the Investors  who are officers,  directors,
employees  or  consultants  of Amen,  which  shall  be  specified  on each  such
Investor's Signature Page.

         "Loan Funded Amount" means 38.70% of the Total Funded Amount.

         "Loans"  means the loans made by the Investors to Amen pursuant to this
Agreement.

         "Material   Adverse  Effect"  means  any  event  or  condition   which,
individually  or in the  aggregate,  would  reasonably  be  expected  to  have a
material  adverse  effect on the  business,  financial  condition  or results of
operations of Amen and its Subsidiaries, taken as a whole.

                                       2
<PAGE>

         "Notes" has the meaning set forth in Section 2.1.

         "Permits" means any licenses, permits, certificates,  consents, orders,
approvals and other  authorizations from, and all declarations and filings with,
all   federal,   state,   local  and   other   Governmental   Authorities,   all
self-regulatory  organizations  and all  courts  and other  tribunals  presently
required or  necessary  to own or lease,  as the case may be, and to operate the
properties of Amen and its Subsidiaries and to carry on the business of Amen and
its  Subsidiaries  as now or  proposed to be  conducted  as set forth in the SEC
Filings.

         "Preferred Purchase Price" means $10.00 per share of Series D Preferred
Stock.

         "Required  Consent"  means the  approval of Investors  with  Commitment
Amounts  representing in excess of 50% of the total Commitment Amounts of all of
the Investors.

         "SEC" means the Securities and Exchange Commission.

         "SEC Filings"  means Amen's reports and other filings made with the SEC
for a period of two (2) years prior to the date hereof and all exhibits thereto.

         "Securities" means the Notes, the Series D Preferred,  the Warrants and
the Warrant Shares.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Series D Funded Amount" means 61.30% of the Total Funded Amount.

         "Series D Preferred  Stock" means the Series D Preferred Stock of Amen,
par value $0.001 per share,  having the rights and preferences  substantially as
set forth in Exhibit "A".

         "Signature Page" means the counterpart signature page of this Agreement
signed by each Investor.

         "Stockholder Approval" has the meaning set forth in Section 5.9.

         "Subsidiary"  means,  when  used  with  reference  to  an  entity,  any
corporation,  a majority of the outstanding voting securities of which are owned
directly or indirectly  by such entity.  Such term shall also refer to any other
partnership,  limited  partnership,  limited liability  company,  joint venture,
trust, or other business entity in which such entity has a material interest.

         "Total  Funded  Amount"  means the  aggregate  amount  actually paid or
loaned, as the case may be, by all of the Investors to Amen at Closing.

         "Transactions"  means the transactions and obligations  contemplated by
this Agreement, including without limitation the issuance of the Securities.

                                       3
<PAGE>

         "Warrant" or  "Warrants"  means the  Company's  Common  Stock  Purchase
Warrants,  having  terms  substantially  as set forth in  Exhibit  "B"  attached
hereto.

         "Warrant  Certificate"  means a  certificate  evidencing  a Warrant  in
substantially the form attached hereto as Exhibit "B".

         "Warrant  Shares"  means  the  shares  of  Common  Stock  purchased  or
purchasable upon the exercise of the Warrants pursuant to the terms thereof.

         Section 1.2 - Other Definitions.  Other terms defined in this Agreement
have the meanings so given them.

         Section 1.3 - Construction.  Whenever the context requires,  the gender
of all words  used in this  Agreement  includes  the  masculine,  feminine,  and
neuter.  Except as specified otherwise,  all references to Articles and Sections
refer to articles and sections of this Agreement, and all references to exhibits
and schedules are to Exhibits and Schedules attached to this Agreement,  each of
which is made a part of this  Agreement for all purposes.  The word  "including"
shall  mean  "including,   without  limitation"  unless  the  context  otherwise
requires.

                                   ARTICLE II
                             INVESTMENT TRANSACTION

         Section 2.1 - Investments.

          (a)  Subject  to the  terms and  conditions  of this  Agreement,  each
     Investor agrees to purchase from Amen, and Amen agrees to issue and sell to
     such Investor,  shares of Series D Preferred Stock. The number of shares of
     Series D Preferred  Stock to be acquired by each  Investor will be equal to
     (i) the product of the Series D Funded Amount multiplied by such Investor's
     Commitment  Percentage  (rounded to the nearest whole  dollar),  divided by
     (ii) the Preferred Purchase Price.

          (b)  Subject  to the  terms and  conditions  of this  Agreement,  each
     Investor  agrees  to loan to Amen,  and Amen  agrees  to  borrow  from such
     Investor,   an  amount  equal  to  such  Investor's  Commitment  Percentage
     multiplied by the Loan Funded Amount (rounded to the nearest whole dollar).
     Each such Loan shall be evidenced by a promissory note in substantially the
     form attached hereto as Exhibit "C" (each, a "Note" and  collectively,  the
     "Notes"). The original principal amount of each Investor's Loan will be set
     forth on that Investor's Note upon funding of the Loan.

          (c) At Closing, Amen shall issue Warrants to the Investors for a total
     of 450,000  Warrant  Shares  divided  among the  Investors  based upon each
     Investor's Commitment Percentage.

         Section 2.2 - The Closing.  Subject to the terms and conditions of this
Agreement,  the closing of the Transactions  contemplated hereby (the "Closing")
will be held at the offices of Amen, 303 W. Wall,  Suite 2300,  Midland,  Texas,
contemporaneously  with the closing of the  Acquisition,  or such other place or

                                       4
<PAGE>

time as may be agreed by the  parties.  The date on which the Closing  occurs is
referred to herein as the "Closing  Date." At the Closing,  Amen will deliver to
each  Investor  (i) a stock  certificate  representing  the  shares  of Series D
Preferred Stock purchased by such Investor,  (ii) a Note  representing  the Loan
made by such  Investor,  and (iii) a Warrant  Certificate  for the Warrant to be
issued to such  Investor  pursuant  to Section  2.1, in each case in the name of
such  Investor,  or in the name of such  nominee or designee as the Investor may
request in writing at least five (5) days prior to Closing, upon receipt by Amen
of the Loan  proceeds and stock  purchase  price from each such Investor by wire
transfer of immediately  available funds to an account designated by Amen, or by
such other method as is mutually  agreed to by such Investor and Amen. Such Loan
and  stock  purchase  proceeds  shall be funded to Amen at such time and by such
method  as will  permit  Amen to use  such  proceeds  to fund a  portion  of the
purchase price in the Acquisition.

                                  ARTICLE III
                     REPRESENTATIONS AND WARRANTIES OF AMEN

         Amen  represents and warrants to the Investors as of the date hereof as
follows:

         Section 3.1 - Organization.  Each of Amen and its  Subsidiaries  (i) is
duly  organized,  validly  existing and in good  standing  under the laws of the
jurisdiction  of its  organization,  (ii) has full power and  authority  to own,
operate  and occupy its  properties  and to conduct its  business  as  presently
conducted,  and (iii) is  registered  or  qualified  to do business  and in good
standing in each  jurisdiction  in which it owns or leases property or transacts
business,  except  where the  failure to be so  qualified  would  reasonably  be
expected  to  have a  Material  Adverse  Effect,  and  no  proceeding  has  been
instituted in any such jurisdiction revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or qualification. Schedule
3.1  contains  a list of Amen's  Subsidiaries,  including  the  jurisdiction  of
organization  of, and direct and indirect  ownership of Amen in, each Subsidiary
(and whether such  ownership  is subject to a lien,  security  interest or other
encumbrance).

         Section  3.2 - Due  Authorization.  Amen has all  requisite  power  and
authority to execute,  deliver and perform its obligations under this Agreement,
and this Agreement has been duly  authorized and validly  executed and delivered
by Amen and constitutes a legal, valid and binding agreement of Amen enforceable
against Amen in  accordance  with its terms,  except as rights to indemnity  and
contribution  may be limited by state or federal  securities  laws or the public
policy  underlying  such laws,  and except as  enforceability  may be limited by
applicable bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
affecting  creditors'  and  contracting  parties'  rights  generally and general
principles of equity (regardless of whether such enforceability is considered in
a  proceeding  in  equity  or at  law).  Approval  of  this  Agreement  and  the
Transactions by the Board of Directors of Amen constitutes approval by the Board
of Directors of Amen of the Investors becoming Interested  Stockholders of Amen,
with respect to the Investors  acquisition of the Equity  Securities as provided
herein,  prior to the time the Investors become Interested  Stockholders  within
the meaning of Section 203 of the Delaware General Corporation Law.

                                       5
<PAGE>

         Section 3.3 -  Non-Contravention.  The  execution  and delivery of this
Agreement,  the issuance and sale of the Securities and the  consummation of the
Transactions will not (a) conflict with or constitute a violation of, or default
(with the passage of time or otherwise) under (i) any material  Contracts,  (ii)
the  charter,  by-laws or other  organizational  documents of Amen or any of its
Subsidiaries,  or (iii) to its knowledge,  any law,  administrative  regulation,
ordinance or order of any court or  governmental  agency,  arbitration  panel or
authority  binding  upon  Amen or any of its  Subsidiaries  or their  respective
properties,  except as to (i), (ii) and (iii) above those conflicts,  violations
or defaults  that would not  reasonably  be expected to have a Material  Adverse
Effect,  or (b) result in the  creation  or  imposition  of any  material  lien,
encumbrance,  claim, security interest or restriction whatsoever upon any of the
material  properties  or  assets  of  Amen  or  any of  its  Subsidiaries  or an
acceleration of indebtedness  pursuant to any material obligation,  agreement or
condition contained in any material bond, debenture,  note or any other evidence
of material indebtedness or any material indenture,  mortgage,  deed of trust or
any  other  material  agreement  or  instrument  to  which  Amen  or  any of its
Subsidiaries  is a party or by which any of them is bound or to which any of the
material  property or assets of Amen or any of its  Subsidiaries is subject.  No
consent,   approval,   authorization   or  other  order  of,  or   registration,
qualification  or filing with,  any  Governmental  Authority is required for the
execution  and  delivery  of  this  Agreement  and  the   consummation   of  the
Transactions;  except  for  those  that  have  been  made or  obtained,  for any
securities  filings  required to be made under federal or state securities laws,
and  where  any  failure  to make  or  obtain  any of the  foregoing  would  not
reasonably be expected to have a Material Adverse Effect.

         Section  3.4  -  Capitalization.  The  capitalization  of  Amen  as  of
September  30, 2007 is as set forth in the SEC Filings.  Amen has not issued any
capital  stock  since that date,  except  for shares of Common  Stock  issued as
compensation pursuant to employment agreements described in the SEC Filings. The
Equity Securities have been duly authorized, and if and when issued and paid for
in accordance with the terms of this Agreement, will be duly and validly issued,
fully paid and  non-assessable.  The outstanding shares of capital stock of Amen
have been duly and validly  issued and are fully paid and  non-assessable,  have
been issued in compliance with all federal and state  securities  laws, and were
not issued in violation of any preemptive  rights or similar rights to subscribe
for or purchase  securities.  Except as disclosed in the SEC Filings  (including
without  limitation  under  employee  benefit  plans and  employment  agreements
referred to in such SEC Filings),  there are no  outstanding  rights  (including
without  limitation,  preemptive  rights),  warrants or options to  acquire,  or
instruments convertible into or exchangeable for, any unissued shares of capital
stock  or  other  equity  interest  in  Amen,  or  any  contracts,  commitments,
agreements,  understandings or arrangements of any kind to which Amen is a party
relating thereto.  Without limiting the foregoing, no preemptive rights, co-sale
rights,  rights of first refusal or other  similar  rights exist with respect to
the issuance of the Equity Securities.  Amen owns the equity interest in each of
its Subsidiaries  specified in Schedule 3.1, free and clear of any pledge, lien,
security  interest,  encumbrance  or claim,  other than as described in Schedule
3.1. There are no stockholders  agreements,  voting  agreements or other similar
agreements with respect to the Common Stock to which Amen is a party,  except as
disclosed  in the SEC  Filings and except for voting  agreements  related to the
Stockholder Approval.

         Section  3.5 -  Legal  Proceedings.  There  is  no  material  legal  or
governmental  proceedings  pending to which Amen or any of its Subsidiaries is a
party or of which the business or property of Amen or any of its Subsidiaries is
subject.

                                       6
<PAGE>

         Section 3.6 - No Violations.  Neither Amen nor any of its  Subsidiaries
is (a) in violation of its charter, bylaws or other organizational documents, or
(b) to its knowledge,  (i) in violation of any law,  administrative  regulation,
ordinance or order of any court or Governmental Authority,  arbitration panel or
authority  applicable  to  Amen  or any of its  Subsidiaries,  which  violation,
individually or in the aggregate,  would be reasonably likely to have a Material
Adverse Effect,  or (ii) in default (and there exists no condition  which,  with
the passage of time or otherwise, would constitute a default) in the performance
of any material  Contracts,  which would be reasonably likely to have a Material
Adverse Effect.

         Section  3.7 -  Permits.  Each of Amen  and  its  Subsidiaries  has all
necessary Permits that are currently necessary for the operation of the business
of Amen and its Subsidiaries as currently  conducted and as described in the SEC
Filings,  except where the failure to currently  possess such Permits  would not
reasonably be expected to have a Material Adverse Effect.

         Section 3.8 - Financial  Statements.  The financial  statements of Amen
and the related notes contained in the SEC Filings present fairly, in accordance
with  generally  accepted  accounting  principles,  the  consolidated  financial
position of Amen and its Subsidiaries as of the dates indicated.  Such financial
statements  (including the related notes) have been prepared in accordance  with
generally  accepted   accounting   principles  applied  on  a  consistent  basis
throughout the periods therein specified.

         Section 3.9 - No Material  Adverse  Change.  Except as disclosed in the
SEC Filings or as provided in this Agreement,  since  September 30, 2007,  there
has not been (i) any change in the business, financial condition or operation of
Amen which would reasonably be expected to have a Material Adverse Effect,  (ii)
any  obligation,  direct  or  contingent,  that  is  material  to  Amen  and its
Subsidiaries considered as one enterprise, incurred by Amen or its Subsidiaries,
except obligations incurred in the ordinary course of business or related to the
Acquisition,  (iii) any dividend or distribution  of any kind declared,  paid or
made on the capital  stock of Amen,  or (iv) any loss or damage  (whether or not
insured) to the physical property of Amen or any of its Subsidiaries which would
reasonably be expected to have a Material Adverse Effect.

         Section 3.10 - Disclosure. The information contained in the SEC Filings
as of the date of such  information  did not  contain an untrue  statement  of a
material fact or omit to state a material fact required to be stated  therein or
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading.

         Section 3.11 - Compliance.  The Common Stock is registered  pursuant to
Section 12(b) of the Exchange Act and is listed on the Nasdaq  Capital Market of
the Nasdaq  Stock  Market (the  "Nasdaq  Stock  Market"),  and Amen has taken no
action  designed  to,  or  likely  to  have  the  effect  of,   terminating  the
registration of the Common Stock under the Exchange Act or de-listing the Common
Stock from the Nasdaq  Stock  Market,  nor has Amen  received  any  notification
within the twelve (12) months  preceding the date of this Agreement that the SEC
or  the  National   Association  of  Securities   Dealers,   Inc.   ("NASD")  is
contemplating terminating such registration or listing.

         Section 3.12 - Reporting Status.  Amen has filed in a timely manner all
documents  that Amen was  required  to file  under the  Exchange  Act during the

                                       7
<PAGE>

twelve  (12)  months  preceding  the  date of  this  Agreement.  Copies  of such
documents have been made available to each of the Investors.

         Section  3.13  -  Properties  and  Contracts.  Each  of  Amen  and  its
Subsidiaries  has good and  defensible  title to all  property  included  in the
financial  statements included in its SEC Filings,  free and clear of all liens,
charges,  encumbrances or restrictions,  except (i) liens granted to a lender by
Amen or a Subsidiary  of Amen as described  in the SEC Filings,  (ii)  statutory
liens in favor of taxing  authorities  or  others,  and (iii) to the  extent the
failure to have such title or the existence of such liens, charges, encumbrances
or  restrictions  would not  reasonably  be expected to have a Material  Adverse
Effect. All material Contracts are valid,  binding and enforceable  against Amen
or its  Subsidiaries,  as applicable,  and, to the knowledge of Amen, are valid,
binding and  enforceable  against the other party or parties  thereto and are in
full force and  effect  with only such  exceptions  as would not  reasonably  be
expected to have a Material Adverse Effect.  Amen and its  Subsidiaries,  and to
their best knowledge, the other parties thereto, are not in default under any of
the material  Contracts,  which default  would  reasonably be expected to have a
Material Adverse Effect.

         Section 3.14 - Environmental Matters. Except as would not reasonably be
expected to have a Material  Adverse  Effect and except as  disclosed in the SEC
Filings,  (i) each of Amen and its  Subsidiaries  is in compliance  with and not
subject to liability under applicable  Environmental Laws, (ii) each of Amen and
its  Subsidiaries  has made all filings and provided all notices  required under
any  applicable  Environmental  Law,  and has in full force and effect and is in
compliance with all Permits  required under any applicable  Environmental  Laws,
(iii)  there is no civil,  criminal  or  administrative  action,  suit,  demand,
hearing, notice of violation, proceeding, notice or demand letter or request for
information pending or, to the knowledge of Amen, threatened against Amen or its
Subsidiaries under any Environmental  Law, (iv) no lien, charge,  encumbrance or
restriction  has been recorded under any  Environmental  Law with respect to any
assets,  facility or property owned,  operated,  leased or controlled by Amen or
its Subsidiaries,  and (v) neither Amen nor its Subsidiaries has received notice
that it has  been  identified  as a  potentially  responsible  party  under  any
Environmental Law.

         Section 3.15 -  Insurance.  Each of Amen and its  Subsidiaries  carries
insurance  in such  amounts  and  covering  such  risks  in such  amounts  as is
customary  for  persons of a similar  size in the  businesses  in which they are
engaged.

                                   ARTICLE IV
                 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

         Each Investor hereby represents and warrants to Amen as follows:

         Section 4.1 - Authority.  The Investor has all requisite capacity,  and
if an entity requisite corporate,  partnership or other organizational power and
authority,  to  execute  and  deliver  this  Agreement  and  to  consummate  the
Transactions to be performed by the Investor.  If the Investor is an entity, the
execution  and  delivery  of  this  Agreement  and  the   consummation   of  the
Transactions  to be  performed  by the  Investor  have  been  duly  and  validly
authorized  by all  necessary  action  on the part of the  board  of  directors,
managers,  general partner or similar body of the Investor,  as the case may be,

                                       8
<PAGE>

and no other  corporate or similar  proceedings  are  necessary to authorize the
execution and delivery of this  Agreement by the Investor or to  consummate  the
Transactions  to be performed by the Investor.  This Agreement has been duly and
validly  executed and  delivered by the Investor and,  assuming  this  Agreement
constitutes valid and binding obligations of Amen, this Agreement  constitutes a
valid  and  binding  agreement  of  the  Investor,  enforceable  against  him in
accordance with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other  similar  laws now or hereafter in effect  relating to  creditors'  rights
generally, and (ii) general principles of equity and the discretion of the court
before which any proceeding  therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).

         Section  4.2  -  Consents  and  Approval;  No  Violation.  Neither  the
execution and delivery of this Agreement by the Investor,  the  consummation  of
the  Transactions  to be  performed  by  the  Investor,  nor  compliance  by the
Investor,  with any of the  provisions  hereof  will (i) if the  Investor  is an
entity,  conflict  with  or  result  in  any  breach  of any  provisions  of the
Investor's   organizational   documents,  (ii)  require  any  material  consent,
approval,  authorization  or permit of, or filing with or  notification  to, any
Governmental Authority, except for consents, approvals, authorizations, permits,
filings or  notifications  which have been  obtained or made,  (iii) result in a
default  (with or  without  due notice or lapse of time or both) or give rise to
any right of termination,  cancellation or acceleration  under any of the terms,
conditions or provisions of any material indentures,  loan or credit agreements,
receivables sale or financing agreements,  lease financing  agreements,  capital
leases,  mortgages,  security agreements,  bonds and notes and guaranties of any
such  obligations  to which the Investor is a party or by which the Investor may
be bound,  except for such defaults (or rights of  termination,  cancellation or
acceleration) as to which requisite  waivers or consents have been obtained,  or
(iv) violate any material order,  writ,  injunction,  decree,  statute,  rule or
regulation applicable to the Investor.

         Section  4.3 -  Securities  Laws.  The  Investor  (on his behalf and on
behalf of any  nominee or  designee  of the  Investor  who  receives  any of the
Securities) hereby represents and warrants to and covenants with Amen that:

          (a) Investor has adequate means of providing for his current needs and
     possible contingencies, and has no need now, and anticipates no need in the
     foreseeable  future,  to sell the Securities.  Investor is able to bear the
     economic risks of this investment,  and consequently,  without limiting the
     generality of the foregoing, Investor is able to hold the Securities for an
     indefinite period of time and has sufficient net worth to sustain a loss of
     the entire  investment  in the  Securities  in the event  such loss  should
     occur.

          (b) Investor recognizes that its investment in the Securities involves
     a high  degree of risk which may result in the loss of the total  amount of
     the investment. Investor acknowledges that he is aware of and has carefully
     considered all risks incident to the purchase of the Securities,  including
     without  limitation  those set forth in the SEC filings and those discussed
     in Schedule 4.3(b).

                                       9
<PAGE>

          (c)  Investor  is  acquiring  the  Securities  for his own account (as
     principal) for investment and not with a view to the distribution or resale
     thereof. Investor has not offered or sold any portion of the Securities and
     has no present  intention  of  dividing  the  Securities  with others or of
     reselling or otherwise disposing of any portion of the Securities.

          (d)  INVESTOR  IS AWARE  THAT HE MUST  BEAR THE  ECONOMIC  RISK OF HIS
     INVESTMENT IN THE SECURITIES  FOR AN INDEFINITE  PERIOD OF TIME BECAUSE THE
     SECURITIES HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OR UNDER THE
     SECURITIES LAWS OF ANY STATE,  AND THEREFORE CANNOT BE SOLD UNLESS THEY ARE
     SUBSEQUENTLY  REGISTERED  UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
     SECURITIES LAWS OR UNLESS AN EXEMPTION OR EXCEPTION FROM SUCH  REGISTRATION
     IS AVAILABLE AND,  FURTHER,  THAT ONLY AMEN CAN TAKE ACTION TO REGISTER THE
     SECURITIES,  AND  AMEN IS  UNDER  NO  OBLIGATION  TO DO SO.  INVESTOR  ALSO
     RECOGNIZES  THAT NO FEDERAL OR STATE AGENCY HAS PASSED UPON THE  SECURITIES
     OR MADE ANY FINDING OR DETERMINATION AS TO THE FAIRNESS OF AN INVESTMENT IN
     THE SECURITIES.

          (e) Investor has reviewed,  understands and agrees to the terms of the
     Series D Preferred  Stock and Warrants as set forth in the  Certificate  of
     Designations and form of Warrant Certificate, respectively.

          (f) Investor (i) acknowledges  receipt of sufficient  information from
     Amen  concerning  the  business of Amen and its  Subsidiaries  in order for
     Investor to make a fully  informed  investment  decision,  (ii) has had the
     opportunity  to review  and  obtain  copies of any  information  which Amen
     possesses and is desired by Investor  relating to the  Securities  and Amen
     and  its  Subsidiaries  (including  without  limitation  copies  of the SEC
     Filings),  and (iii) has been given the  opportunity to meet with officials
     of Amen and to have said officials answer any questions regarding the terms
     and conditions of this particular  investment,  and all such questions have
     been answered to Investor's full satisfaction.  While Amen has attempted to
     provide information that is as accurate as possible,  Investor acknowledges
     and  agrees  that Amen and its  representatives  cannot and do not make any
     assurances,   representations  or  warranties  with  respect  to  any  such
     information,  except for the  representations  expressly  set forth  herein
     concerning  information  included  in  the  SEC  Filings.  All  information
     described  in  this  Section  4.3(f),   including  without  limitation  the
     information  included in the SEC  Filings,  is qualified in all respects by
     the Risk Factors discussed in Schedule 4.3(b).  The Investor has sufficient
     knowledge and experience in financial and business matters to enable him to
     evaluate  the  merits  and risks of an  investment  in the  Securities.  In
     addition,  in  reaching  the  conclusion  that he desires  to  acquire  the
     Securities,  Investor has carefully  evaluated his financial  resources and
     investments, has consulted with such legal, accounting and other experts as
     necessary or appropriate,  and acknowledges and represents that Investor is
     able to bear the economic risks of this investment.  Investor  acknowledges
     and understands that none of the information  provided or made available by
     or on behalf of Amen constitutes any legal, tax or investment advice.

                                       10
<PAGE>

          (g)  Investor is an  "accredited  investor" as such term is defined in
     Rule 501 under the  Securities  Act.  Investor  will  provide  to Amen such
     information as may be reasonably  requested by Amen to enable it to satisfy
     itself as to such status and the knowledge  and  experience of Investor and
     his ability to bear the economic risk of an  investment  in the Shares.  If
     specified  on an  Investor's  Signature  Page,  such  Investor is a current
     stockholder of Amen.

          (h)  All  representations  and  warranties  made by  Investor  in this
     Agreement and all other oral or written information provided by Investor to
     Amen is and are true, correct and complete in all material  respects,  and,
     if there should be any  material  change in such  information  prior to the
     acceptance  of this  Agreement,  Investor  will  immediately  furnish  such
     revised or corrected information to Amen.

          (i)  The   address   and  social   security   number  or  federal  tax
     identification  number set forth on the  Investor's  Signature Page are his
     true and correct  state (or other  jurisdiction)  of  residence  and social
     security  number or federal  tax  identification  number.  Investor  has no
     present   intention   of   becoming  a  resident  of  any  other  state  or
     jurisdiction.  Investor  is not  subject  to  backup  withholding  and will
     provide such forms and documents as may be required by Amen to evidence his
     exemption  from backup or other  withholding  taxes and hereby  consents to
     withholding of any applicable taxes from his distributions from Amen.

          (j)  Investor   acknowledges  and  understands  that  certain  of  the
     information that he has received regarding Amen and its Subsidiaries may be
     material,  non-public  information,  and that  Investor will not be able to
     trade in the Common Stock while in  possession  of such  information  until
     that  information  has been properly  disseminated to the public or becomes
     immaterial to Amen and its Subsidiaries.

          (k) Investor acknowledges and agrees that if Investor is more than one
     person, the obligations of the Investor are and shall be joint and several,
     and the  representations  and warranties  herein contained are and shall be
     deemed to be made by and be  binding  upon each such  person and his heirs,
     executors,  administrators,  successors or assigns; that if the Investor is
     acquiring the  Securities  in a fiduciary  capacity,  the  representations,
     warranties  and  agreements  contained  herein shall be deemed to have been
     made on  behalf  of the  person  or  persons  for whom the  Investor  is so
     purchasing;  and that the representations and warranties of the Investor as
     set forth herein shall continue in effect following the consummation of the
     Transactions pursuant to this Agreement. In the event that execution hereof
     by Investor is performed by any person as agent for or other representative
     of the Investor,  such person  represents  that he is duly  authorized  and
     empowered  to sign and deliver  this  document on behalf of the Investor in
     the capacity stated and that the Investor will be bound by this Agreement.

          (l) Investor  acknowledges  that he understands  the meaning and legal
     consequences of the representations,  warranties and covenants set forth in
     this  Section  4.3 and  that  Amen  has  relied  and will  rely  upon  such
     representations,  warranties,  covenants and  certifications,  AND INVESTOR
     HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS AMEN, ITS SUBSIDIARIES

                                       11
<PAGE>

     AND THEIR RESPECTIVE OFFICERS,  DIRECTORS,  CONTROLLING PERSONS,  PARTNERS,
     AGENTS  AND  EMPLOYEES,  FROM  AND  AGAINST  ANY AND ALL  LOSS,  DAMAGE  OR
     LIABILITY,  JOINT OR SEVERAL,  AND ANY ACTION IN RESPECT THEREOF,  TO WHICH
     ANY SUCH PERSON MAY BECOME SUBJECT DUE TO OR ARISING OUT OF A BREACH OF ANY
     OF INVESTOR'S REPRESENTATIONS, WARRANTIES OR COVENANTS.

                                   ARTICLE V
                              ADDITIONAL AGREEMENTS

         Section 5.1 - Use of Proceeds.  The cash proceeds to Amen from the loan
represented  by the Notes shall be used by Amen on the  Closing  Date to acquire
the Acquisition Properties and for general corporate purposes.

         Section 5.2 - Access to Information.

          (a) Between the date hereof and the Closing Date,  Amen will afford to
     the  Investors  and their  authorized  representatives  full access  during
     normal business hours to the facilities and properties and to the books and
     records of Amen and its  Subsidiaries,  will permit the Investors and their
     authorized  representatives to make such reasonable inspections as they may
     require  and will  cause  its  officers  and those of its  Subsidiaries  to
     furnish  the  Investors  and  their  authorized  representatives  with such
     financial  and  operating  data and other  information  with respect to the
     business,   assets  and  properties  of  Amen  and  its  Subsidiaries,   as
     applicable, as the Investors and their authorized  representatives may from
     time to time request.

          (b) Investors shall hold strictly  confidential  all information  they
     obtain with respect to Amen or its  Subsidiaries  and will not use any such
     information  for  any  purpose  other  than  related  to the  Transactions;
     provided,  that  Investors  shall  not be  obligated  to hold  confidential
     information  which (i) was or  becomes  generally  available  to the public
     other  than  as  a  result  of  a   disclosure   by  any  Investor  or  its
     representatives,  (ii)  was or  becomes  available  to the  Investors  on a
     non-confidential   basis   from  a   source   other   than   Amen   or  its
     representatives,  so long as such source is not bound by a  confidentiality
     agreement  with  Amen  or  otherwise   prohibited  from   transmitting  the
     information to the Investors, or (iii) is required to be disclosed in order
     to comply with any applicable  law, order,  regulation or ruling;  provided
     further, that each Investor shall notify Amen prior to any disclosure under
     (iii) above and provide  Amen the  opportunity  to dispute or contest  such
     disclosure before any disclosure is made.

         Section 5.3 - Reservation  of Common  Stock.  Amen has and will reserve
and keep reserved for issuance, out of the authorized and unissued shares of the
Common Stock, a number of Warrant Shares sufficient to provide for issuance upon
the exercise of the outstanding  Warrants and shall keep such shares free of any
legal or contractual  preemptive  rights.  Amen will take all steps necessary to
keep the Warrant Shares duly authorized for issuance by all requisite  corporate
and other  action,  and to assure  that such  Warrant  Shares  when  issued upon
exercise of the Warrants will be validly issued, fully paid and non-assessable.

                                       12
<PAGE>

         Section 5.4 - Listing of Common Stock.  Amen shall use its commercially
reasonable  efforts to comply with all  requirements of the NASD with respect to
the potential  future  issuance of the Warrant Shares and the listing thereon on
the Nasdaq Stock Market.

         Section 5.5 - Future Sales of Common Stock.  Each Investor  agrees that
if Amen  engages  in an  underwritten  public  offering  for the sale by Amen of
shares of Common Stock during the one-year period following the Closing Date and
thereafter  so long as the Investor owns more than one percent (1%) of the total
number of shares of Common Stock then outstanding (for this purpose,  calculated
as if the Warrant Shares were  outstanding),  the Investor will, if so requested
by the  managing  underwriter  for such  offering,  execute  and deliver to such
managing  underwriter a "lock-up"  letter in a form  acceptable to such managing
underwriter.  The  obligations  of and  restrictions  on the Investor under such
"lock-up"  letter  shall be in effect for a maximum of 180 days as  specified by
the managing underwriter.

         Section 5.6 - Further  Assurances.  Subject to the terms and conditions
herein  provided,  Amen  and  each  Investor  agree  to use  their  commercially
reasonable  efforts to take,  or cause to be taken,  all actions,  and to do, or
cause to be done, all things  necessary,  proper or advisable  under  applicable
laws and regulations to consummate and make effective the Transactions.

         Section 5.7 - Public  Announcements.  The Investors shall not issue any
press  release or  otherwise  make any  public  statements  with  respect to the
existence of this Agreement or the Transactions, and Amen shall issue such press
releases or make such public  statements as may be required by applicable law or
the rules of the Nasdaq Stock Market.

         Section 5.8 - Restrictive  Legends.  Each  certificate  evidencing  the
Securities shall bear a legend in substantially the following form:

                  "THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A
                  SECURITIES   PURCHASE   AND   NOTE   AGREEMENT   DATED  AS  OF
                  ____________,  2007,  COPIES  OF  WHICH  ARE  ON  FILE  AT THE
                  PRINCIPAL  OFFICE OF AMEN AND WILL BE  FURNISHED TO THE HOLDER
                  ON REQUEST TO THE SECRETARY OF AMEN. SUCH AGREEMENT  PROVIDES,
                  AMONG  OTHER  THINGS,   FOR  CERTAIN   RESTRICTIONS  ON  SALE,
                  TRANSFER,  OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED BY
                  THIS CERTIFICATE."

         In addition,  unless  counsel to Amen shall have advised Amen that such
legend is no longer needed,  each  certificate  evidencing the Securities  shall
bear a legend in substantially the following form:

                  "THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN
                  REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,
                  OR ANY STATE  SECURITIES  LAW, AND SUCH  SECURITIES MAY NOT BE
                  SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE SAME ARE

                                       13
<PAGE>

                  REGISTERED AND QUALIFIED IN ACCORDANCE WITH  APPLICABLE  STATE
                  AND  FEDERAL  SECURITIES  LAWS,  OR IN THE  OPINION OF COUNSEL
                  REASONABLY   SATISFACTORY  TO  AMEN  SUCH   REGISTRATION   AND
                  QUALIFICATION ARE NOT REQUIRED."

         Section 5.9 - Stockholder Approval.

          (a) The parties hereto acknowledge and agree that pursuant to rules of
     the Nasdaq Stock Market,  the exercise  rights of the  Investors  under the
     Warrants  are  subject  to a cap on the  number of  shares of Common  Stock
     issuable  upon such  exercise  equal to five  percent (5%) of the number of
     shares of Common Stock  outstanding  on the Closing Date (the "Common Stock
     Cap") unless and until the issuance and sale of the Warrants (including the
     exercise price thereof) and Warrant Shares is approved by the  stockholders
     of Amen  under  such  rules  of the  Nasdaq  Stock  Market.  The  Investors
     acknowledge  and agree (i) to the  limitations  imposed by the Common Stock
     Cap as more fully set forth in the Warrant  Certificate,  (ii) that without
     Stockholder  Approval  they will not be able to acquire  all of the Warrant
     Shares,  which will adversely  effect the value of the Securities  they are
     acquiring hereunder,  and (iii) that the Notes are not convertible into any
     other  securities  of Amen and do not  give the  Investors  any  voting  or
     similar rights.

          (b) In addition to the  stockholder  approval  required  under Section
     5.9(a),  the parties  further  acknowledge  and agree that the rules of the
     Nasdaq Stock Market require the approval of the  stockholders  of Amen with
     respect to the issuance of shares of Common  Stock to any Inside  Investors
     upon the exercise of any of the Warrants.  Accordingly,  each of the Inside
     Investors  hereby  agrees not to convert or  exercise  any of the  Warrants
     acquired by such Inside Investor unless and until such issuance is approved
     by the  stockholders  of Amen in  accordance  with the rules of the  Nasdaq
     Stock  Market.  The  Inside  Investors  acknowledge  and agree that if such
     stockholder approval is not obtained,  they will not be entitled to acquire
     any of the  Warrant  Shares  which will  adversely  effect the value of the
     Securities they are acquiring hereunder.

          (c) The approval of the stockholders of the Company  described in this
     Section 5.9 shall be referred to herein as the "Stockholder Approval".

          (d) Amen agrees to solicit the Stockholder Approval in connection with
     its next stockholders meeting, but is under no obligation to hold a special
     meeting  regarding  such approval.  Each of the Investors  hereby agrees to
     vote any and all  securities  of the  Company  owned by such  Investor  and
     entitled to vote on the issue in favor of the Stockholder Approval.

         Section 5.10 - Negative  Covenants.  Until full payment and performance
of all obligations of Amen under this Agreement and the Notes, Amen will not and
will not permit its Subsidiaries to, without a Required Consent:

                                       14
<PAGE>

          (a) sell, lease, assign or otherwise dispose of or transfer any of the
     Acquisition  Properties,  except in the normal  course of its  business and
     except  for sales or  dispositions  which in the  aggregate  do not  exceed
     $5,000,000 during any calendar year; or

          (b) grant,  suffer or permit any contractual or noncontractual lien on
     or security interest in the Acquisition  Properties or fail to promptly pay
     when due all lawful claims, whether for labor, materials or otherwise.

                                   ARTICLE VI
                              INVESTORS' CONDITIONS

         The  obligations  of the Investors to effect the Closing are subject to
the  satisfaction of the following  conditions,  any one or more of which may be
waived by the Investors.

         Section 6.1 - Representations  and Covenants.  The  representations and
warranties  contained  in Article  III hereof  shall be true and  correct in all
material  respects on and as of the Closing Date as if made, and shall be deemed
to have been remade, on and as of the Closing Date (except to the extent made as
of a  specified  date).  Amen shall have  complied  with all of its  obligations
contained herein the performance of which is required on or prior to the Closing
Date.

         Section 6.2 - Required Consents and Approvals.  All filings,  consents,
approvals  and waivers  necessary to the  consummation  of the loan  transaction
shall have been obtained.

         Section  6.3  -  Closing  of  Acquisition.  The  Acquisition  shall  be
consummated and closed contemporaneous with the Closing.

         Section  6.4  -  Certificate  of   Designation.   The   Certificate  of
Designation  in the form of  Exhibit  "A" shall  have been duly  adopted  by all
requisite corporate action and filed with the Secretary of State of the State of
Delaware  on or before  the  Closing  Date,  and shall not have been  amended or
modified.

                                  ARTICLE VII
                                AMEN'S CONDITIONS

         The  obligations  of Amen to effect  the  Closing  are  subject  to the
satisfaction of the following  conditions any one or more of which may be waived
by Amen:

         Section 7.1 - Representations  and Covenants.  The  representations and
warranties  contained in Article IV hereof as to each Investor shall be true and
correct in all material  respects on and as of the Closing Date as if made,  and
shall be deemed to be remade, on and as of the Closing Date. Each Investor shall
have complied with all of his obligations  contained herein performance of which
is required on or prior to the Closing Date.

                                       15
<PAGE>

         Section 7.2 - Required Consents and Approvals. All consents,  approvals
and waivers  necessary to the  consummation of the loan  transaction  shall have
been obtained.

         Section  7.3  -  Closing  of  Acquisition.  The  Acquisition  shall  be
consummated and closed contemporaneous with the Closing.

         Section 7.4 - Additional Documents. Amen shall have received such other
certificates,  instruments  and  documents  from each  Investor  (and any of its
nominees or designees which acquire  Securities  hereunder) as it may reasonably
request pursuant to this Agreement.

                                  ARTICLE VIII
                            TERMINATION AND SURVIVAL

         Section 8.1 - Termination.  The Transactions contemplated hereby may be
abandoned at any time prior to the Closing, as follows:

          (a) by the mutual written consent of Amen and a Required Consent;

          (b) by Amen, on one hand, or the Investors (by Required  Consent),  on
     the other  hand  collectively  as one  party,  if there  shall  have been a
     material breach by the other party of any of the covenants contained herein
     or if any  representation  or warranty made by any other party is untrue in
     any material respect, in either case in a manner not capable of being cured
     on or before the Closing Date; or

          (c) by either Amen or a Required Consent,  if Closing has not occurred
     by January 31, 2008.

         Section  8.2 -  Survival;  Failure  to  Close.  If  this  Agreement  is
terminated without Closing, all representations,  warranties,  indemnities,  and
covenants  contained  herein  or made in  writing  by any  party  in  connection
herewith  will  automatically  terminate  and be of no further  force or effect,
except this Section 8.2 and Sections 4.3, 5.2(b) and 9.5 which shall survive any
such termination.

                                   ARTICLE IX
                                  MISCELLANEOUS

         Section 9.1 - Entire Agreement.  This Agreement  constitutes the entire
agreement  among the  parties  with  respect to the  subject  matter  hereof and
supersedes  all prior  agreements  and  understandings,  both  written and oral,
between the parties with respect to the subject matter hereof.

         Section 9.2 - Notices. All notices, requests, claims, demands and other
communications  hereunder  shall be in writing  and shall be deemed to have been
duly given when delivered in person, by facsimile, with confirmation of receipt,
or by registered or certified mail (postage prepaid,  return receipt  requested)
to the  respective  parties as follows (or to such other  address as a party may
designate in a notice to the other party given pursuant to this Section 9.2):

                                       16
<PAGE>

                  If to Amen:

                  Amen Properties, Inc.
                  303 W. Wall, Suite 2300
                  Midland, Texas 79701
                  Telephone:  (432) 684-3821
                  Facsimile:  (432) 685-3143
                  Attn:  Mr. Jon M. Morgan, President

                  If to the Investors:

                  To each  Investor at the address or fax number  specified  for
                  such Investor on his Signature Page.

         Section 9.3 - GOVERNING  LAW. THIS  AGREEMENT  SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS IN THE STATE OF TEXAS,  WITHOUT  REFERENCE
TO CONFLICTS OF LAWS  PRINCIPLES,  EXCEPT TO THE EXTENT GOVERNED BY THE DELAWARE
GENERAL CORPORATION LAW AS IT APPLIES TO AMEN AND THE SECURITIES.

         Section 9.4 - Severability.  Whenever possible,  each provision of this
Agreement  will be interpreted in such manner as to be effective and valid under
applicable  law, but if any provision of this Agreement is held to be prohibited
by or invalid under  applicable law, such provision will be ineffective  only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this  Agreement  unless the  consummation  of the  Transactions  contemplated
hereby is materially and adversely affected thereby.

         Section 9.5 - Expenses. Except as otherwise provided herein, each party
shall bear and pay all costs and expenses incurred by him or it or on his or its
behalf in connection with transactions  contemplated hereby,  including fees and
expenses of his or its representatives.

         Section 9.6 - Descriptive  Headings.  The descriptive  headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.

         Section 9.7 -  Counterparts.  This  Agreement may be executed in two or
more counterparts,  each of which shall be deemed an original,  but all of which
shall constitute one and the same agreement.  Faxed signatures of this Agreement
shall be deemed and shall constitute binding signatures for all purposes.

         Section 9.8 - Assignment.  Except as provided in this Section 9.8, none
of the Investors or Amen may assign his or its rights or obligations  hereunder;
provided,  however,  an Investor may assign his rights to acquire the Securities
to a nominee or designee, provided such assignment shall be completed and notice
thereof  given  to Amen at  least  five (5)  days  prior  to  Closing,  but such
assignment shall not relieve such Investor of his obligations hereunder, and any
such   nominee   or   designee   shall  be  deemed  to  have  made  all  of  the

                                       17
<PAGE>

representations,  warranties  and  covenants of such  Investor  herein and shall
agree in writing to be bound by this Agreement.

         Section  9.9 -  Amendments;  Waivers.  No  amendment  or  waiver of any
provision  of  this  Agreement,  nor  consent  to any  departure  by Amen or any
Investor therefrom,  shall in any event be effective unless the same shall be in
writing and signed by Investors  representing a Required Consent and Amen in the
case of amendments, and the affected Investor(s) or Amen, as the case may be, in
the case of waivers.

         Section 9.10 - Actions by Investors. Any action or decision to be taken
or made by Investors in this Agreement  shall be taken or made upon the approval
of a Required  Consent,  and upon such approval such action or decision shall be
binding upon all of the Investors.

         Section 9.11 - Qualified  Commercial Loan. Amen acknowledges,  confirms
and  agrees  that  (i)  the  Loans  contemplated  by this  Agreement  constitute
"qualified  commercial  loans"  under  Section  306.001,  et.  seq. of the Texas
Finance Code,  (ii) Amen shall execute such documents and take such other action
as the  Investors  may  reasonably  request  for the  Loans to  constitute  such
"qualified  commercial  loan", and (iii) the Investors have advised Amen to, and
Amen  has  had the  opportunity  to,  seek  the  advice  of an  attorney  and an
accountant in connection with the transaction contemplated by this Agreement.

                                       18
<PAGE>

                                                             Amen Signature Page

         IN WITNESS  WHEREOF,  the  parties  have caused  this  agreement  to be
executed and delivered on December ___,  2007, but effective for all purposes as
of the Effective Date.

                             AMEN PROPERTIES, INC.

                             By:
                                ------------------------------------------------
                                      Jon M. Morgan, Chief Executive Officer

                             Signature Pages of Investors Follow

                                       19
<PAGE>

                                                         Investor Signature Page

Commitment Amount:         $
                            ----------------

Commitment Percentage:              %
                           ---------

_____  Check here if Investor is a stockholder of Amen on the date hereof.

_____  Check here if Investor is an Inside Investor

         IN WITNESS  WHEREOF,  the Investor has executed this Note  Agreement on
December ___, 2007, but effective for all purposes as of the Effective Date.

                                             Signature of Investor:

                                             By:
                                                --------------------------------
                                             Name:
                                                  ------------------------------

Investor's Social Security
or Tax Identification Number:
                             ------------
Investor's Address:

--------------------------------   ---------------   -----------  -----------
(Number and Street)                     (City)         (State)     (Zip Code)

---------------------
Investor's Fax Number

<PAGE>

                                                                    Schedule 3.1

                                  Schedule 3.1
                                  ------------
                                       to
                     Securities Purchase and Note Agreement
                          dated as of November 30, 2007
                                  by and among
                              Amen Properties, Inc.
                         and the Investors named therein

                              Subsidiaries of Amen
                              --------------------

         NEMA  Properties,  LLC ("NEMA") is a  wholly-owned  subsidiary  of Amen
Properties, Inc. NEMA is organized under the laws of the State of Nevada.

         Amen  Minerals,  L.P. is owned 99% by NEMA as the sole limited  partner
and 1% by Amen Properties,  Inc., as the sole general partner,  and is organized
under the laws of the State of Delaware.

         Amen  Delaware,  L.P. is owned 99% by NEMA as the sole limited  partner
and 1% by Amen Properties,  Inc., as the sole general partner,  and is organized
under the laws of the State of Delaware.

         W Power and Light,  LP is owned 99% by NEMA as the sole limited partner
and 1% by Amen Properties,  Inc., as the sole general partner,  and is organized
under the laws of the State of Delaware.

         Priority  Power  Management,  Ltd.  is  owned  99% by NEMA as the  sole
limited partner and 1% by Amen Properties, Inc. as the sole general partner, and
is organized under the laws of the State of Texas.

         SFF  Royalty,  LLC is owned  33.33% by Amen  Properties,  Inc.,  and is
organized under the laws of the State of Delaware.

<PAGE>

                                                                 Schedule 4.3(b)

                                 Schedule 4.3(b)
                                 ---------------
                                       to
                     Securities Purchase and Note Agreement
                          dated as of November 30, 2007
                                  by and among
                              Amen Properties, Inc.
                         and the Investors named therein

                              Amen Properties, Inc.

                                  Risk Factors

         Investment in the  Securities  involves a  significant  degree of risk,
including  the  possible  loss  of  the  entire  investment.   No  guarantee  or
representation is or can be made as to Amen's performance.  Amen encourages each
Investor to seek advice from legal, accounting and financial professionals prior
to  acquiring  the  Securities.  In  considering  investing  in the  Securities,
Investors should carefully review and consider the terms of this Agreement,  the
SEC  Filings and the other  information  provided  by Amen,  and the  investment
considerations  and risks  associated  with this investment  including,  but not
limited to, the following  (references  to "we," "our" or "us" refer to Amen and
its Subsidiaries:

Cap on Exercise

         The  exercise  of  the  Warrants  is  subject  to a  limitation  (and a
prohibition with respect to Inside  Investors) on the number of shares of Common
Stock that can be issued  without  Stockholder  Approval  under the rules of the
Nasdaq Stock Market.  If such  Stockholder  Approval is not obtained,  the total
number of Warrant  Shares that may be issued upon  exercise of the Warrants will
be limited to no more than five percent (5%) of the number of outstanding shares
of Common Stock on the Closing Date (or in the case of the Inside Investors,  no
Warrant Shares can be issued).  As a result,  without  Stockholder  Approval the
Investors will not be entitled to acquire all of the Warrant Shares,  which will
adversely effect the value of the Securities acquired by the Investors.

Lack of Operating History

         In recent years, Amen has substantially changed its business plan. As a
result,  Amen's operating history under its current business plan is limited. In
addition,  one of Amen's  Subsidiaries is a recent start-up  electricity  retail
business  with  approximately  two  years of  operating  history.  Such  limited
operating  history  of Amen  and its  Subsidiaries  may not  provide  sufficient
information for Investors to base an evaluation of likely performance.

Risks Related to Projections and Estimates

         All statements  other than statements of historical facts regarding the
financial  position,  business strategy,  plans and objectives of management for

                                       S-1

<PAGE>

                                                                 Schedule 4.3(b)

future  operations of Amen and its  Subsidiaries  are  projections and estimates
based upon information  available to Amen at the time such statements were made,
whether  in an SEC  Filing or in other  information  provided  to you.  While we
believe  that  such   projections   and  estimates  are  based  upon  reasonable
assumptions,   there  are  significant  risks  and   uncertainties   that  could
significantly effect expected results. Important factors that could cause actual
results  to  differ  materially  from  those in the  projections  and  estimates
include,  without  limitation,  the Risk Factors discussed  herein,  and many of
those  factors are beyond our  control.  All written  and oral  projections  and
estimates  and  "forward  looking"  statements  attributable  to  Amen,  whether
contained  in the SEC Filings or  otherwise,  are  expressly  qualified in their
entirety by such factors.  Investors  should expect the  assumptions and related
projections and estimates to change as additional information becomes available.
However,  Amen does not intend to update or otherwise revise the projections and
estimates  provided to reflect  events or  circumstances  after the date of such
information or to reflect the  occurrence of  unanticipated  events.  A Investor
should carefully  review and consider the assumptions and estimates,  and obtain
the advice of legal and  accounting  experts and other  professionals  regarding
these  matters.   Actual  results  may  differ   materially  from  any  business
descriptions and operating  estimates  contained in the information  provided or
available to a Investor.

Volatility Of Oil And Gas Prices

         Anticipated results from our oil and gas royalty investments, including
the Acquisition  Properties,  are  substantially  dependent on prices of oil and
gas.  Prices for oil and gas are  subject to large  fluctuations  in response to
relative  minor  changes in the supply of, and demand for,  oil and gas,  market
uncertainty  and a variety  of  additional  factors  beyond our  control.  These
factors  include  weather  conditions,  the economy,  actions of the  government
regulation,  political  stability in the Middle East and elsewhere,  the foreign
supply of oil and gas,  the price of foreign  imports  and the  availability  of
alternate fuel sources. Any substantial extended decline in the price of oil and
gas could have an adverse impact on our revenue generating capability.

Uncertainty Of Estimated Oil and Gas Reserves

         Estimates of  economically  recoverable  oil and gas reserves are based
upon a number of variable factors and assumptions, which are speculative and not
under our  control.  Actual  production  and reserve  data used to value  future
acquisitions  will be  estimates  only and  will be  subject  to  uncertainties.
Estimated quantities of oil and natural gas may differ considerably from amounts
actually  recovered and thus future cash flows could be impaired or  accelerated
beyond management's expectations.

Determination of Prices

         The  purchase  price for the Series D Preferred  Stock and the exercise
price for the Warrants was determined by Amen,  based upon,  among other things,
the  short-term  capital  needs of Amen  related to the  Acquisition  and recent
market  prices  for  the  Common  Stock.  However,  such  prices  should  not be
considered  as any  indication of the future market price or value of the Common
Stock or the other Securities.

                                      S-2
<PAGE>

                                                                 Schedule 4.3(b)

Dependence On Key Personnel

         Amen  depends  to a  large  extent  on the  services  of its  executive
officers and the officers and managers of its Subsidiaries. Particularly, Amen's
Subsidiaries,  W Power and Light LP and Priority Power Management, Ltd. are both
heavily  dependent upon the knowledge and expertise of the respective  president
and senior managers. The loss of the services of any of those persons could have
a material adverse effect on Amen and its Subsidiaries.

Competition

         Amen  and  its  Subsidiaries   encounter  substantial   competition  in
acquiring  rental property and oil and gas royalties,  leasing rental space, and
securing trained personnel. Most competitors have substantially larger financial
resources,  staffs and facilities than Amen and its  Subsidiaries,  and Amen and
its  Subsidiaries  may be at a  significant  disadvantage  in  many  competitive
situations. See also "Reliance Upon New Business - The Retail Electricity Market
is Highly Competitive."

Adverse Market Conditions

         The economic  performance and value of Amen's properties are subject to
all of the risks associated with owning and operating real estate, including

               o    changes in the national, regional and local economic climate
               o    the attractiveness of our properties to tenants
               o    the ability of tenants to pay rent
               o    competition from other available properties
               o    changes in market rental rates
               o    the need to periodically  pay for costs to repair,  renovate
                    and re-let space
               o    changes in operating costs, including costs for maintenance,
                    insurance and real estate taxes
               o    changes  in laws  and  governmental  regulations,  including
                    those governing usage, zoning, the environment and taxes

Failure By Tenants To Make Rental Payments

         The  performance of Amen's real estate  investments  will depend on our
ability to collect rent from tenants.  At any time our tenants may  experience a
change  in  business  conditions  or a  downturn  in  their  business  that  may
significantly  weaken their financial  condition.  As a result,  our tenants may
delay a number of lease  commencements,  decline  to extend or renew a number of
leases upon expiration,  fail to make rental payments when due under a number of
leases,  close a number of offices or declare  bankruptcy.  Any of these actions
could result in the  termination  of the tenants'  leases and the loss of rental
income.

                                      S-3
<PAGE>

                                                                 Schedule 4.3(b)

Acquisitions Of Properties May Not Yield Expected Returns

         Newly acquired  properties may fail to perform as expected.  Management
may  underestimate  the  costs  necessary  to bring  acquired  properties  up to
standards  established for their intended market position.  In addition,  we may
not achieve expected cost savings and planned operating  efficiencies.  Acquired
properties  may not  perform as well as we  anticipate  due to various  factors,
including changes in  macro-economic  conditions and the demand for office space
or oil and gas royalties.  As Amen grows,  we have to invest further in overhead
to assimilate and manage a portfolio of potentially unrelated properties.

         We may face  significant  competition  for  acquisitions of properties,
which may increase the costs of  acquisitions.  We may compete for  acquisitions
of, and investments in,  properties with an  indeterminate  number of investors,
including  investors  with access to  significant  capital  such as domestic and
foreign corporations and financial  institutions,  publicly traded and privately
held REITs, private  institutional  investment funds,  investment banking firms,
life insurance companies and pension funds. This competition may increase prices
for the  types of  properties  in which we  invest.  In  addition,  the cost and
availability  of  capital  necessary  to  increase  our asset  base and  revenue
generating  capability  is  difficult  to predict  and in and of itself may be a
barrier to pursuing future acquisitions.

Amen's Asset Investments Are Illiquid

         Real estate property investments and oil and gas royalties, such as the
Acquisition  Properties,  generally cannot be disposed of quickly. Amen's recent
start-up  electricity  retail  business  and newly  acquired  energy  management
subsidiary,  Priority Power, are illiquid. Therefore, we may not be able to vary
our mix of assets or achieve  potentially  required  liquidity  in  response  to
economic or other conditions promptly or on favorable terms.

Some Potential Losses May Not Be Covered By Insurance

         Amen carries  insurance on our properties that we consider  appropriate
and consistent with industry practices.  Though we plan to assure to the best of
our ability that policy  specifications and insured limits of these policies are
adequate  and  appropriate,  there  may be  however,  certain  types of  losses,
including lease and other contract claims,  acts of war, acts of terror and acts
of God that generally may not be insured.  Should an uninsured loss or a loss in
excess of insured limits occur, we could lose all or a portion of the capital we
have invested in a property,  as well as the anticipated future revenue from the
property.  If that  happened,  we might  nevertheless  remain  obligated for any
mortgage debt or other financial obligations related to the property.  Though we
plan to maintain  insurance  policies with carriers with  sufficient  assets and
capital  to  cover  all  insured  perils,  there  may be  however,  failures  or
receiverships  of carriers  providing  insurance to Amen.  If this occurs,  Amen
could be essentially without coverage for perils and losses.

Ability To Service Long-Term Debt

         Certain of Amen's  activities are subject to risks normally  associated
with debt  financing.  The timing and amount of cash flows could be insufficient
to meet  required  payments of  principal  and  interest.  We may not be able to
refinance  acquired  debt,  which in virtually  all cases  requires  substantial

                                      S-4

<PAGE>

                                                                 Schedule 4.3(b)

principal  payments at maturity,  and, even if we can,  refinancing might not be
available on favorable  terms.  If principal  payments due at maturity cannot be
refinanced,  extended  or paid  with  proceeds  of other  capital  transactions,
including  new equity  capital,  cash flow may not be sufficient in all years to
repay all maturing debt.  Prevailing interest rates or other factors at the time
of refinancing,  including the possible reluctance of lenders to make commercial
real estate loans,  may result in higher  interest rates and increased  interest
expenses.

Potential Environmental Liabilities

         Under  various  environmental  laws,  a current  or  previous  owner or
operator of real property may be liable for the costs of removal or  remediation
of hazardous or toxic substances,  including  asbestos-containing materials that
are located on or under the property.  Specific  asbestos  remediation has taken
place in certain  of our  rental  buildings.  Environmental  laws  often  impose
liability  whether the owner or operator  knew of, or was  responsible  for, the
presence of those substances.  In connection with our ownership and operation of
properties, we may be liable for these costs, which could be substantial.  Also,
our  ability to arrange for  financing  secured by that real  property  might be
adversely  affected  because of the presence of hazardous or toxic substances or
the failure to properly  remediate  any  contamination.  In addition,  we may be
subject to claims by third  parties  based on damages and costs  resulting  from
environmental contamination at or emanating from our properties.

Non-Compliance With The Americans With Disabilities Act ("ADA")

         Under the ADA, all public  accommodations  are required to meet certain
federal  requirements  related to physical  access and use by disabled  persons.
While we believe  our  properties  comply in all  material  respects  with these
physical  requirements  or would be  eligible  for  applicable  exemptions  from
material  requirements  because of adaptive assistance provided, a determination
that we are not in  compliance  with the ADA could result in the  imposition  of
fines or an award of damages to private  litigants.  If we were required to make
modifications to comply with the ADA, our ability to meet financial  obligations
could be adversely affected.

Potential Adverse Effects On Our Net Operating Loss ("NOL")

         There  are  significant  limitations  of  utilization  of the NOL under
applicable  tax law as it relates to a change in  ownership  among  five-percent
(5%) owners exceeding fifty percent (50%), and a business continuity test. If we
are unable to meet these  standards,  utilization of the NOL could be limited or
reduced to zero.

Availability of Capital Resources

         Currently,  Amen's capital  resources are expected to be limited to the
borrowings  under its  credit  facility  with  Western  National  Bank,  the net
proceeds from the loans pursuant to the Notes and the net income from operations
of Amen and its  Subsidiaries.  In the event our current  capital  resources are
insufficient to fund our operations and capital expenditures, Amen may be forced
to seek other sources of financing, including without limitation,  incurrence of
debt and issuances of additional  equity  securities.  There can be no assurance

                                      S-5
<PAGE>

                                                                 Schedule 4.3(b)

that such  financing  will be  available on terms  acceptable  to Amen or on any
terms. If additional financing is not available, it will have a material adverse
effect on our operations.

Marketability of the Securities

         The Securities will not be readily marketable, have not been registered
under  applicable  securities laws and we have no intention to so register those
securities.  Acquisition,  ownership  and  transfer  of the  Securities  will be
restricted in order for Amen to maintain an exemption  from  registration  under
applicable state and federal  securities laws. There is no public market for the
Notes, the Series D Preferred, or the Warrants, and none is expected to develop.
An  investor  must plan to retain the  Notes,  the  Series D  Preferred  and the
Warrants for an indefinite period of time.

         The Common Stock is traded on the Nasdaq  Stock  Market.  However,  the
Warrant Shares have not been registered  under  applicable  securities laws, and
therefore will not be transferable  when issued unless so registered or pursuant
to an exemption from registration.  Amen is not obligated to register any of the
Securities.  In addition, the market in the Common Stock is not actively traded,
and the low volume of trading may have a significant effect on the trading price
of the Common Stock  unrelated to the  performance of Amen. Due to the foregoing
an investor may not be able to  liquidate  such shares when he desires to do so,
and may be required to retain the investment for an indefinite period of time.

Reliance Upon New and Recently Acquired Businesses

         Amen's  recently  (2004)  formed  Subsidiary,  W Power and  Light,  LP,
operates  in  the   electricity   retail  business  and  Amen's  newly  acquired
Subsidiary,  Priority Power Management,  Ltd.,  operates in the electricity load
aggregation, natural gas and electricity procurement, energy risk management and
energy  consulting  markets.  In addition to the general risks discussed  above,
these new businesses are subject to additional  risks  including those discussed
below.

         The Retail  Electricity  Market Is Highly  Competitive.  The market for
retail  electricity  customers  is very  competitive.  In certain  markets,  our
principal  competitors  include  the local  regulated  electric  utility  or its
non-regulated  affiliate. In other markets, we face competition from independent
electric  providers,  independent power producers and wholesale power providers.
In most cases, our competitors have the advantage of long-standing relationships
with  customers,  longer  operating  histories  and/or larger and better capital
resources.  As a  result,  it may not be  profitable  for us to enter  into some
markets and our ability to increase market share may be hindered.

         In  general,  we  compete  on the basis of price,  our  commercial  and
marketing  skills  relative  to  other  market  participants,  service  and  our
financial position. Other factors affecting our competitive position include our
ability to obtain electricity for resale and related transportation/transmission
services. Since many of our energy customers, suppliers and transporters require
financial  guarantees and other assurances regarding contract  performance,  our
access to letters of credit,  surety bonds and other forms of credit  support is
another factor affecting our ability to compete in the market.

                                      S-6

<PAGE>

                                                                 Schedule 4.3(b)

         Our Business Is Subject to Market Risks. Unlike a traditional regulated
electric  utility,  we are  not  guaranteed  a rate  of  return  on our  capital
investments.  Our  results of  operations,  financial  condition  and cash flows
depend,  in large part, upon  prevailing  market prices for wholesale and resale
electricity  in our markets  and the impact of  regulatory  decisions  on prices
charged  to our  customers.  Market  prices  may  fluctuate  substantially  over
relatively short periods of time,  potentially adversely affecting our business.
Changes in market prices for electricity  may result from the following  factors
among others:

               o    weather conditions;
               o    seasonality;
               o    demand for energy commodities;
               o    general economic conditions;
               o    forced   or   unscheduled   interruptions   in   electricity
                    available;
               o    disruption of electricity  transmission  or  transportation,
                    infrastructure or other constraints or inefficiencies;
               o    financial position of market participants;
               o    changes in market liquidity;
               o    natural disasters,  wars,  embargoes,  acts of terrorism and
                    other catastrophic events; and
               o    governmental regulation and legislation.

         Dependence Upon Third Party Providers. Amen does not own any generating
resources to supply  electricity  for our retail  business in this market.  As a
result, we must purchase all of the generation  capacity necessary to supply our
retail  energy  business  from third  parties.  In addition,  we depend on power
transmission  and  distribution  facilities  owned and operated by utilities and
others  to  deliver  energy  products  to  our  customers.  If  transmission  or
distribution  is inadequate  or  disrupted,  our ability to sell and deliver our
products may be hindered.  Any infrastructure failure that interrupts or impairs
delivery of electricity could have an adverse effect on our business.

         We are dependent on the  transmission  and  distribution  utilities for
reading our customers' energy meters. We also rely on the local transmission and
distribution  utility or, in some cases,  the independent  system  operator,  to
provide us with our customers' information regarding energy usage; and we may be
limited in our ability to confirm the accuracy of the information. If we receive
incorrect  or  untimely  information  from  the  transmission  and  distribution
utilities,   we  could  have  difficulty  properly  billing  our  customers  and
collecting amounts owed to us. Failure to receive correct and timely information
could have an adverse effect on our business.

         Concentration of Credit Risk.  Amen's revenues are derived  principally
from uncollateralized  customer electricity billings and rents from tenants. The
concentration  of credit risk in a limited  number of industries  may affect its
overall  exposure to credit risk because  customers and tenants may be similarly
affected by changes in economic and other conditions.

         Regulation of Electricity  Retail Business.  Amen's  electricity retail
business  operates in a regulatory  environment  that is undergoing  significant
changes as a result of varying  restructuring  initiatives at both the state and

                                      S-7

<PAGE>

                                                                 Schedule 4.3(b)

federal levels.  We cannot predict the future direction of these  initiatives or
the ultimate effect that this changing  regulatory  environment will have on our
business. Moreover, existing regulations may be revised or reinterpreted and new
laws and  regulations  may be adopted or become  applicable to our facilities or
our commercial activities.  Such future changes in laws and regulations may have
an  adverse   effect  on  our  business.   Regulators,   regional   transmission
organizations and independent  system operators have imposed and may continue to
impose price  limitations,  bidding rules and other  mechanisms in an attempt to
address price volatility and other issues in power markets.  If the trend toward
competitive  restructuring  of the power  market is  reversed,  discontinued  or
delayed,  our business growth prospects and financial results could be adversely
affected.

         Reliance on ERCOT.  ERCOT is  responsible  for handling  scheduling and
settlement for all electricity supply volumes in the ERCOT Region. ERCOT plays a
vital  role in the  collection  and  dissemination  of  metering  data  from the
transmission and distribution utilities to the retail electric providers. We and
other retail electric providers  schedule volumes based on forecasts,  which are
based,  in part,  on  information  supplied  by ERCOT.  To the extent that these
amounts are not  accurate or timely,  we could have  incorrectly  estimated  our
scheduled volumes and supply costs.

         In the event of a default by a retail electric  provider of its payment
obligations to ERCOT,  the portion of the obligation  that is  unrecoverable  by
ERCOT is assumed by the  remaining  market  participants  in  proportion to each
participant's  load ratio  share.  We would pay a portion of the amount  owed to
ERCOT should such a default occur if ERCOT is not successful in recovering  such
amount.  The default of a retail  electric  provider in its obligations to ERCOT
could have an adverse effect on our business.

         Our  Strategic  Plans  May  Not Be  Successful.  Amen's  retail  energy
business  operates in the  deregulated  segments of the electric power industry.
The  successes  of  our  long-term  strategic  plans  are  predicated  upon  the
continuation of the trend toward greater  competitive  markets in this industry.
If the trend towards competitive restructuring of the electric power industry is
reversed, discontinued or delayed, our business could be adversely affected.

         Non-Performance  By  Counterparties.  Our operations are exposed to the
risk that  counterparties  who owe us money or commodities and services will not
perform their obligations.  When such parties fail to perform their obligations,
we might be forced to replace the underlying  commitment at then-current  market
prices. In this event, we could incur reduced operating results or losses.

         Energy  Aggregation,  Supply  Procurement,  and Consulting Services are
Highly  Competitive  and  Relationship  Driven.  There are many  registered  and
non-registered electricity aggregators in Texas. Priority Power relies primarily
on  its   relationships   with  various  key  decision   makers   within  client
organizations  to  assure  contract  renewals.   If  new  decision  makers  with
relationships  external to Priority  Power  become  responsible  for  consultant
selection,   Priority  Power  could  lose   significant   amounts  of  business.
Additionally,  competitors  with lower fees may lure away clients  through lower
fee  structures,  expanded  service  offerings,  or superior  supply  management
capabilities.

                                      S-8

<PAGE>

                                                                 Schedule 4.3(b)

         Concentration   of  Oil  and  Gas  Customers.   Priority  Power  has  a
significant  concentration of customers within the oil and natural gas industry.
If that industry  experiences a significant  reduction in the domestic  price of
energy,  clients could choose not to renew  aggregation and consulting  services
contracts in a cost-cutting effort.

         Contract and Transaction  Execution Risk.  Priority Power manages large
volumes of energy on behalf of its clients. Through miscommunication,  incorrect
data,  and human  error,  there can be  hundreds  of  thousands  of  dollars  of
incremental energy expense incurred by clients.  While contractual  arrangements
may limit the actual monetary  liability of Priority Power for such events,  the
monetary damages can still be significant.

         Reduction of Retail Electric Providers.  Priority Power depends largely
on its ability to solicit and secure alternative  pricing proposals from REPs on
behalf of its clients.  If REPs choose not to participate in price solicitation,
or the number of REPs  diminishes such that there are only a few well-known REPs
in the market, clients may be less willing to outsource their energy procurement
needs.

         Increased Retail Price  Transparency.  As the marketplace  becomes more
transparent to all end-use customers, there may be less interest from clients in
paying  aggregators,  brokers,  and  supply  management  consultants  to solicit
pricing on their behalf.

THE FOREGOING SUMMARY OF CERTAIN CONSIDERATIONS AND RISKS DO NOT PURPORT TO BE A
COMPLETE EXPLANATION OF THE RISKS RELATED TO AN INVESTMENT IN AMEN.  PROSPECTIVE
INVESTORS  SHOULD READ THE ENTIRE NOTE  AGREEMENT  AND THE SEC FILINGS AND OTHER
INFORMATION PROVIDED BY AMEN BEFORE DETERMINING TO INVEST IN AMEN.

                                      S-9

<PAGE>

                                                                     Exhibit "A"

                                   EXHIBIT "A"
                                   -----------
                                       to
                     Securities Purchase and Note Agreement
                          dated as of November 30, 2007
                                  by and among
                              Amen Properties, Inc.
                         and the Investors named therein

                      CERTIFICATE OF DESIGNATION OF SERIES
                   AND DETERMINATION OF RIGHTS AND PREFERENCES
                                       OF

                            SERIES D PREFERRED STOCK

                                       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 D 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 as of November 30, 2007, 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  three  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") and the Series C Preferred Stock, par value $.001 per
share (the "Series C 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 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

                                      A-1

<PAGE>

                                                                     Exhibit "A"

         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  Preferred  Stock shall be  designated  and known as the
"Series D  Preferred  Stock."  The  number of shares  constituting  the Series D
Preferred  Stock shall be 430,000  shares.  The Series D Preferred  Stock shall,
with  respect to rights upon  liquidation,  dissolution  or winding up,  whether
voluntary or  involuntary,  rank 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 D Preferred Stock shall be
entitled  to  receive a  dividend  of 8.5% 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,  the holders of Series D 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 D
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 D Issue  Price") plus (ii) any  declared but unpaid  dividends
thereon  (such  sum,  the  "Series  D  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  Stock the full  liquidation
amount to which they are entitled  under this  Certificate,  then the holders of
shares of Series D 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.

                                      A-2

<PAGE>

                                                                     Exhibit "A"

         (b)  After  payment  in full of the  liquidation  amounts  to which all
outstanding shares of Series D 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  unless the  holders of at least a majority of the voting
power  of all  then  outstanding  shares  of  Series  D  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  Stock  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 Stock.

                  (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

                                      A-3

<PAGE>

                                                                     Exhibit "A"

         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  Series D  Preferred
         Stock.

SECTION 4.  VOTING RIGHTS.

         (a) Each holder of outstanding shares of Series D Preferred Stock shall
be entitled to Vote, as a separate class of stock,  only on the items  specified
in this  Certificate  or by applicable  law as requiring the vote or approval of
the  holders of the Series D  Preferred  Stock,  and shall not have the right to
vote as to any other matters.

         (b) In  addition  to the  other  voting  rights  provided  herein or by
applicable  law and for so long as any  shares of Series D  Preferred  Stock are
outstanding,  the holders of the Series D Preferred  Stock shall have the right,
voting  separately  as a class,  to nominate and elect two (2)  directors to the
Board in addition to the  directors  elected by the holders of the Common Stock;
provided,  that if, as a  Determination  Date (as defined  below),  the Series D
Equity  Percentage (as defined below) is less than ten percent (10%),  then from
such  Determination  Date  until  the  next  Determination  Date the  number  of
directors  that the  holders of the Series D  Preferred  Stock have the right to
nominate  and  elect  shall  be one (1)  instead  of two (2) (the  directors  so
nominated  and  elected  by the  holders  of the  Series D  Preferred  Stock are
referred to herein as the "Series D Directors").  Each Series D Director will be
elected at a time contemporaneous with the annual meeting of stockholders of the
Company by the  affirmative  vote of the  holders of at least a majority  of the
outstanding  shares of Series D Preferred Stock,  voting  separately as a class,
and shall hold  office  until the next  annual  meeting of  stockholders  of the
Company or his successor is elected and  qualified,  or until his earlier death,
removal  or  resignation.  A  Series  D  Director  may  only be  removed  by the
affirmative vote of the holders of at least a majority of the outstanding shares
of Series D Preferred  Stock,  voting  separately as a class.  The Company shall
establish  the number of  directors  of the  Company at a number  sufficient  to
include the Series D Directors  elected  pursuant to this Section  4(b). As used
herein,  (i) the term  "Determination  Date" means (A) initially,  the Effective
Date,  as defined in the  Purchase  Agreement,  and (B)  subsequently,  the date
persons are nominated for the other director positions of the Company;  (ii) the
term  "Purchase  Agreement"  means that  certain  Securities  Purchase  and Note
Agreement  dated as of November 30, 2007  between the Company and the  investors
named  therein;  and  (iii)  the term  "Series  D Equity  Percentage"  means the
percentage  determined by dividing 581,081 by the sum of 581,081 plus the number
of shares of Common Stock outstanding on the applicable  Determination Date, and
multiplying the result by 100.

SECTION 5.  COVENANTS.

         In addition to any other rights provided by law, the Company 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 the  Series D
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  Stock;  (ii)  amend or waive  any  provision  of this

                                      A-4

<PAGE>

                                                                     Exhibit "A"

Company's  Certificate of  Incorporation  or Bylaws in any manner that adversely
affects the  preferences,  privileges or rights of the Series D 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; or (iv) liquidate or wind up the Company. Each holder of
Series D  Preferred  Stock  shall be  subject  to and  bound by the terms of the
Purchase Agreement as if such holder were an Investor thereunder.

SECTION 6.  CONVERSION RIGHTS.

         The Series D Preferred Stock is not convertible.

SECTION 7.  REDEMPTION.

         (a) The Company at its option may redeem,  out of its available cash or
cash equivalents, any amount of the then outstanding Series D Preferred Stock at
a price per share equal to the Original Series D 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 D 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 D 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
D 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 D Preferred  Stock share  certificates in accordance with
Section 7(d), the Redemption  Price of the shares to their  respective  holders.
The balance of any funds deposited by the Company  pursuant to this Section 7(c)
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  D
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 D Preferred

                                      A-5

<PAGE>

                                                                     Exhibit "A"

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.

         IN WITNESS  WHEREOF,  the  Company has caused  this  Certificate  to be
executed this ____ day of ________________, 2007.

                                          AMEN PROPERTIES, INC.

                                          By:
                                             -----------------------------------
                                                   Jon M. Morgan
                                                   Chief Executive Officer

                                      A-6

<PAGE>

                                                                     Exhibit "B"

                                   EXHIBIT "B"
                                   ----------
                                       to
                     Securities Purchase and Note Agreement
                          dated as of November 30, 2007
                                  by and among
                              Amen Properties, Inc.
                         and the Investors named therein

                           Form of Warrant Certificate

         THIS  WARRANT  AND ANY  WARRANT  SHARES  ISSUED  UPON  EXERCISE OF THIS
WARRANT ARE SUBJECT TO A  SECURITIES  PURCHASE AND NOTE  AGREEMENT,  DATED AS OF
NOVEMBER  30, 2007,  A COPY OF WHICH IS ON FILE AT THE  PRINCIPAL  OFFICE OF THE
COMPANY AND WILL BE FURNISHED  TO THE HOLDER ON REQUEST TO THE  SECRETARY OF THE
COMPANY.  SUCH  SECURITIES  PURCHASE AND NOTE  AGREEMENT  PROVIDES,  AMONG OTHER
THINGS, FOR CERTAIN  RESTRICTIONS ON DISPOSITION OF THE SECURITIES  EVIDENCED BY
THIS CERTIFICATE.

         THIS  WARRANT,  THE PURCHASE  RIGHTS  EVIDENCED BY THIS WARRANT AND ANY
WARRANT  SHARES WHICH MAY BE ISSUED UPON  EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED  PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES
ACT"), OR ANY STATE  SECURITIES LAW, AND THIS WARRANT,  SUCH PURCHASE RIGHTS AND
WARRANT SHARES MAY NOT BE SOLD,  TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE
SAME ARE REGISTERED AND QUALIFIED IN ACCORDANCE  WITH THE SECURITIES ACT AND ANY
APPLICABLE  STATE  SECURITIES  LAWS,  OR IN THE  OPINION OF  COUNSEL  REASONABLY
SATISFACTORY  TO  THE  COMPANY  SUCH  REGISTRATION  AND  QUALIFICATION  ARE  NOT
REQUIRED.

No. ___                                                      Warrant to Purchase

                                                  _______ shares of Common Stock

Dated:                     , 2007
         ------------------
                                                          (subject to adjustment
                                                            as described herein)

                               WARRANT CERTIFICATE

                   Representing Common Stock Purchase Warrant

                              AMEN PROPERTIES, INC.
                              ---------------------

Purchase Price of Common Stock:     $6.02 per share (subject to adjustment)

         THIS WARRANT  CERTIFICATE  (this  "Warrant")  CERTIFIES that, for value
received,  __________________________________,  his  registered  assigns  or the

                                      B-1

<PAGE>

                                                                     Exhibit "B"

Holder (as defined below) hereof, is entitled, at any time prior to the close of
business on the Expiration  Date defined below, to purchase the number of shares
stated above (subject to adjustment as herein  provided) of Common Stock of Amen
Properties,  Inc., a Delaware corporation (the "Company"), at the purchase price
per share stated above (subject to adjustment as herein provided) (the "Purchase
Price") upon  surrender of this Warrant at the  Principal  Office of the Company
and payment of such  Purchase  Price in cash or by bank  cashier's  or certified
check.

         This Warrant is one of the Warrants  originally  issued by the Company,
initially covering an aggregate of 450,000 shares of Common Stock, pursuant to a
Securities Purchase and Note Agreement dated as of November 30, 2007 between the
Company  and  the  Investors   named  on  the   signature   pages  thereto  (the
"Agreement").

         Section 1. Definitions. The following terms have the meanings set forth
below. Additional terms are defined elsewhere herein.

         "Common Stock" means the Common Stock, par value $.01 per share, of the
Company.

         "Exercise  Date" with  respect to any Warrant  means each date on which
Warrant Shares are to be issued upon exercise of such Warrant.

         "Expiration Date" means June 30, 2008.

         "Holder" means the registered holder or holders of this Warrant and any
related Warrant Shares.

         "Holders" means the registered holders of all Warrants.

         "Investors"  means  all of the  initial  Holders  of the  Warrants  who
acquired the Warrants from the Company.

         "Principal  Office" means the principal office of the Company which, on
the date hereof,  is located at 303 West Wall, Suite 2300,  Midland Texas 79701.
The Company shall notify each Holder of any change in its principal office.

         "Purchase  Price"  has  the  meaning  assigned  to  that  term  in  the
introductory paragraph hereof.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Warrants" means the Company's  Common Stock Purchase  Warrants and any
Warrant Certificates representing such Common Stock Purchase Warrants (including
the Warrant  represented  by this Warrant  Certificate)  issued  pursuant to the
Agreement,  each  identical  as to the  terms  and  conditions  of this  Warrant
Certificate except as to the number of shares of Common Stock for which they may
be exercised,  evidencing,  in the  aggregate,  the right to purchase  initially
450,000  shares of Common Stock,  all Warrants  issued in exchange,  transfer or
replacement thereof.

                                      B-2

<PAGE>

                                                                     Exhibit "B"

         "Warrant  Shares"  means  the  shares  of  Common  Stock  purchased  or
purchasable by the Holder upon the exercise of this Warrant  pursuant to Section
2 hereof,  and,  where the  context  so  requires,  the  shares of Common  Stock
issuable upon exercise of any other Warrant by the Holder thereof.

         Any  capitalized  term not  otherwise  defined  herein  shall  have the
meaning specified in the Agreement.

         Section 2.  Exercise.
                     --------

                  A. General.  Subject to the limitation set forth in Section 2E
and any other  limitation  set forth  herein or in the  Agreement  or imposed by
applicable  law,  each Holder  shall be entitled to exercise any Warrant held by
it, in whole or in part, at any time or from time to time commencing on the date
of  issuance  of the  Warrant  until  5:00 p.m.,  Midland,  Texas  time,  on the
Expiration Date.

                  B. Manner of  Exercise.  In order to  exercise  any Warrant in
whole or in part,  the  Holder  shall  complete  one of the  subscription  forms
attached hereto,  deliver the Warrant to the Company at its Principal Office and
make  payment of the  Purchase  Price  pursuant  to one of the  payment  options
provided in this Section 2.B. Payment of the Purchase Price shall be made at the
option of the Holder by one or more of the following methods: (1) by delivery to
the Company of cash, a certified  check or a bank  cashier's  check in an amount
equal to the then aggregate  Purchase  Price,  (2) by instructing the Company to
withhold  a  number  of  Warrant  Shares  then  issuable  upon  exercise  of the
particular  Warrant with an aggregate Fair Market Value (as defined below) equal
to such Purchase  Price,  or (3) by surrendering to the Company shares of Common
Stock  previously  acquired by the Holder with an  aggregate  Fair Market  Value
equal to such Purchase Price, or any combination of the foregoing.  Upon receipt
thereof by the Company, the Holder shall immediately be deemed to be a holder of
record of the shares of Common Stock  specified in said  subscription  form, and
the Company shall, as promptly as practicable,  and in any event within ten (10)
business  days  thereafter,  execute and deliver or cause to be delivered to the
Holder a certificate or certificates representing the aggregate number of shares
of Common Stock specified in said  subscription  form. Each stock certificate so
delivered  shall be  registered in the name of such Holder or such other name as
shall be designated by such Holder, subject to compliance with federal and state
securities  laws and Section 4 hereof.  If the Warrant shall have been exercised
only in  part,  the  Company  shall,  at the  time  of  delivery  of said  stock
certificate or certificates, deliver to the Holder a Warrant in the form of this
Warrant  representing  the  right to  purchase  the  remaining  number of shares
purchasable  thereunder.  The Company  shall pay all  expenses,  taxes and other
charges  payable in connection with the  preparation,  execution and delivery of
stock  certificates  pursuant to this Section 2, except that, in case such stock
certificates  shall be  registered in a name or names other than the name of the
Holder,  funds sufficient to pay all stock transfer taxes which shall be payable
upon the execution and delivery of such stock certificate or certificates  shall
be paid by the Holder to the  Company at the time of  delivering  the Warrant to
the Company.  As used herein  "Fair Market  Value" on any day shall mean (i) the
average of the daily  closing  sale prices of the Common Stock during the twenty
(20) trading days immediately  preceding the day as of which "Fair Market Value"
is being determined,  on the principal  securities  exchange on which the Common

                                      B-3

<PAGE>

                                                                     Exhibit "B"

Stock is then  listed,  or if there shall have been no sales of the Common Stock
on such  exchange on such day,  the mean of the closing bid and asked  prices on
such  exchange  at the end of such day,  or (ii) if the  Common  Stock is not so
listed, the average of the high and low bid and prices on such day in a domestic
over-the-counter market, or (iii) any time the Common Stock is not listed on any
domestic  exchange or quoted in a domestic  over-the-counter  market,  the "Fair
Market Value" shall be determined by the Board of Directors of the Company.

                  C. Transfer  Restriction  Legend.  Each Warrant shall bear the
legends  set forth on the face of this  Warrant.  Each  certificate  for Warrant
Shares issued upon exercise or conversion of this Warrant, unless at the time of
exercise or conversion  such Warrant Shares are registered  under the Securities
Act, shall bear the legends described in Section 5.8 of the Agreement.

                  D.  Character  of Warrant  Shares.  All shares of Common Stock
issuable  upon the exercise of the Warrants  shall be duly  authorized,  validly
issued, fully paid and nonassessable.

                  E.  Limitation on Exercise.  Notwithstanding  anything  stated
herein to the  contrary,  unless and until the issuance and sale of the Warrants
and the Warrant  Shares are  approved or  ratified  by the  stockholders  of the
Company  in  accordance   with  the  rules  of  the  Nasdaq  Stock  Market  (the
"Stockholder Approval"),  the Warrants cannot be exercised for 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
Warrants (the "Common Stock Cap"),  and any Warrants held by a Holder that is an
Inside Investor (as defined in the Agreement) cannot be exercised for any shares
of  Common  Stock.  The  exercise  of this  Warrant  and the other  Warrants  is
expressly  limited by and subject to this Section 2E for all purposes unless and
until the Stockholder Approval is obtained. In the event the Common Stock Cap is
less  than the  number of shares of  Common  Stock  into  which the  outstanding
Warrants are  exercisable,  the exercise  right of the Warrants shall be reduced
pro rata among the outstanding  Warrants.  In no event shall the total number of
shares of Common Stock into which the Warrants are exercisable exceed the Common
Stock Cap prior to the Stockholder  Approval.  Upon  Stockholder  Approval,  the
Common  Stock  Cap and other  limitations  set  forth in this  Section  2E shall
terminate and this Warrant  shall be  exercisable  in accordance  with the terms
hereof excluding this Section 2E.

         Section 3.  Ownership and Exchange of the Warrants.
                     --------------------------------------

                  A.  Registered  Holder.  The  Company  may deem and  treat the
person in whose name each Warrant is  registered as the Holder and owner thereof
(notwithstanding  any  notations of ownership or writing  thereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary,  until presentation of such Warrant for exchange or transfer as
provided in this Section 3.

                  B. Exchange and Replacement.  Any Warrant is exchangeable upon
the surrender thereof by the Holder to the Company at its Principal Office for a
new Warrant or Warrants of like tenor and date representing in the aggregate the

                                      B-4

<PAGE>

                                                                     Exhibit "B"

right to purchase the number of shares purchasable thereunder,  each new Warrant
to represent  the right to purchase such number of shares as shall be designated
by the Holder at the time of surrender.  Subject to  compliance  with Section 4,
each Warrant and all rights thereunder are transferable in whole or in part upon
the books of the Company by the Holder  thereof in person or by duly  authorized
attorney,  and a new Warrant shall be made and delivered by the Company,  of the
same  class,  tenor and date as the Warrant  but  registered  in the name of the
transferee,  upon  surrender of the Warrant,  duly  endorsed,  at the  Principal
Office of the Company.  The Company will issue replacement Warrant  certificates
upon the loss,  theft,  destruction  or mutilation  thereof.  Warrants  shall be
promptly  canceled by the Company upon the surrender  thereof in connection with
any exchange, transfer or replacement. The Company shall pay all expenses, taxes
(other than stock transfer  taxes) and other charges  payable in connection with
the preparation, execution and delivery of Warrants pursuant to this Section 3.

         Section 4. Transfer of Warrants or Warrant Shares. This Warrant and the
related Warrant Shares shall not be  transferable  except in accordance with the
terms  and  conditions  specified  in  the  Agreement  and  in  accordance  with
applicable law.

         Section 5.  Adjustment  Provisions.  The aggregate  number of shares of
Common Stock issuable upon exercise of the Warrants,  and the Purchase Price per
share,  shall be subject to adjustment in the events and to the extent set forth
in Exhibit I.

         Section 6. Notices.  Any notice or other document required or permitted
to be given or delivered to Holders  shall be delivered at, or sent by certified
or  registered  mail to each Holder at, the address set forth for such Holder on
the signature  page hereof or to such other address as shall have been furnished
to the Company in writing by such Holder.  Any notice or other document required
or permitted to be given or delivered to the Company  shall be sent by certified
or  registered  mail  to  the  Company,  at  its  Principal  Office,  attention:
President,  or other such address as shall have been furnished to the Holders by
the Company.

         Section 7. No Rights as  Stockholder;  Limitation  of  Liability.  This
Warrant  shall  not  entitle  any  Holder  thereof  to any of  the  rights  of a
stockholder of the Company.  No provision  hereof, in the absence of affirmative
action by the Holder to  purchase  shares of Common  Stock,  and no  enumeration
herein of the rights or privileges  of the Holder of a Warrant,  shall give rise
to any liability of such Holder for the Purchase  Price or as a  stockholder  of
the Company,  whether such  liability is asserted by the Company or by creditors
of the Company.

         Section  8.  Miscellaneous.  This  Warrant  shall be  governed  by, and
construed  and enforced in accordance  with,  the laws of the State of Delaware.
This Warrant and any  provision  hereof may be changed,  waived,  discharged  or
terminated  only  by an  instrument  in  writing  signed  by the  party  (or any
predecessor  in  interest  thereof)  against  which  enforcement  of the same is
sought.  The headings in this  Warrant are for  purposes of  reference  only and
shall not affect the meaning or construction of any of the provisions hereof.

                                      B-5

<PAGE>

                                                                     Exhibit "B"

         WITNESS the due execution of this Warrant by a duly authorized  officer
of the Company.

                                AMEN PROPERTIES, INC.,
                                a Delaware corporation

                                By:
                                   ---------------------------------------------
                                         Jon M. Morgan, Chief Executive Officer

ATTEST:

--------------------------------------------
Secretary

ACCEPTED this ____ day of _________, 200__:

--------------------------------------------
[Holder]
[Holder's address]

                                      B-6

<PAGE>

                                                                     Exhibit "B"

                             FULL SUBSCRIPTION FORM
                             ----------------------

                  ____ To Be Executed by the Registered Holder

                  if He Desires to Exercise the Warrant in Full

         The undersigned  hereby  exercises the right to purchase the __________
shares of Common  Stock  covered  by the  attached  Warrant  at the date of this
subscription and herewith makes payment of the sum of $____________ representing
the  Purchase  Price of  $______________  per  share  in  effect  at this  date.
Certificates for such shares shall be issued in the name of and delivered to the
undersigned,  unless otherwise  specified in written  instructions signed by the
undersigned and accompanying this subscription.

Dated: _________, ____                               [                ]

                                            Signature
                                                      -----------------------
                                            Address:
                                                      -----------------------

                                                      -----------------------

                                      B-7

<PAGE>

                                                                     Exhibit "B"

                            PARTIAL SUBSCRIPTION FORM
                            -------------------------

                   ___ To Be Executed by the Registered Holder

                  if He Desires to Exercise the Warrant in Part

         The  undersigned  hereby  exercises  the right to  purchase  __________
shares of the total  number of shares of Common  Stock  covered by the  attached
Warrant at the date of this  subscription  and herewith makes payment of the sum
of $__________ representing the Purchase Price of __________ per share in effect
at this date.  Certificates  for such shares and a new Warrant of like tenor and
date for the  balance of the shares  not  subscribed  for shall be issued in the
name of and delivered to the undersigned,  unless otherwise specified in written
instructions signed by the undersigned and accompanying this subscription.

         (The  following  paragraph need be completed only if the Purchase Price
and number of shares of Common Stock specified in the attached Warrant have been
adjusted pursuant to Exhibit I thereof.)

         The shares hereby subscribed for constitute __________ shares of Common
Stock  (rounded  to the  nearest  whole  share)  resulting  from  adjustment  of
______________  shares of the total of  _______________  shares of Common  Stock
covered by the attached Warrant,  as said shares were constituted at the date of
the  Warrant,  leaving  a  balance  of  ________  shares  of  Common  Stock,  as
constituted at the date of the Warrant, to be covered by the new Warrant.

Dated:  _________,____                               [                       ]

                                            Signature
                                                      -----------------------
                                            Address:
                                                      -----------------------

                                                      -----------------------

                                      B-8

<PAGE>

                                                                     Exhibit "B"

                                    EXHIBIT I

                            ANTI-DILUTION PROVISIONS

         The number of Warrant  Shares  purchasable  upon the  exercise  of this
Warrant and the Purchase Price shall be subject to adjustment  from time to time
upon the happening of certain events as hereinafter described. Capitalized terms
used but not defined  herein  shall have the  meanings  assigned  thereto in the
Warrant.

         1. Special  Definitions.  For purposes of this Exhibit I, 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, options or shares granted or
         issued 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 of this Warrant.

                  (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 Section 3 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  stock  dividend,  stock  split,
                  split-up or other distribution on shares of Common Stock; or

                           (2) upon the exercise of Options;

                  (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  either
         directly as compensation or upon the exercise of options granted by the
         Company.

                  (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.

                                      B-9

<PAGE>

                                                                     Exhibit "B"

         2. No Adjustment of Conversion  Prices.  No adjustment in the number of
Warrant Shares shall be made (i) unless the  consideration per share (determined
pursuant to Section 5 below) for an  Additional  Share of Common Stock issued or
deemed to be issued by the Company is less than the Purchase  Price in effect on
the date of, and immediately  prior to, the issue of such  Additional  Shares of
Common Stock, or (ii) if prior to such issuance,  the Company  receives  written
consent  from the holders of at least a majority of the voting power of all then
outstanding  Warrants  agreeing  that no such  adjustment  shall  be made as the
result of the issuance of Additional Shares of Common Stock.

         3. 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 Section 5
hereof)  of such  Additional  Shares  of  Common  Stock  would be less  than the
Purchase 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 Purchase 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;

                  (B) Upon the  expiration  or  termination  of any  unexercised
         Option,  Right or  Convertible  Security,  the Purchase  Price shall be
         adjusted  immediately  to reflect the  Purchase  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
         Purchase  Price then in effect shall  forthwith be  readjusted  to such
         Purchase  Price as would  have been  obtained  had the  Purchase  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.

         4. Adjustment of Conversion  Prices 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 Section 3, but excluding  shares issued as

                                      B-10

<PAGE>

                                                                     Exhibit "B"

a dividend  or  distribution  as  provided in Section 7 or upon a stock split or
combination  as  provided  in  Section  6),  without  consideration,  or  for  a
consideration  per share less than the  Purchase  Price in effect on the date of
and  immediately   prior  to  such  issue,  or  without  the  requisite  consent
contemplated  by Section 2 hereof,  then and in such event,  the Purchase  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 the  Purchase  Price be
reduced below $2.80 per share,  concurrently  with such issuance at a price less
than the original Purchase Price.  Notwithstanding the foregoing, the applicable
Purchase 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.

         5. Determination of Consideration.  For purposes of this Exhibit I, 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;

                  (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  Section 3,
         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

                                      B-11

<PAGE>

                                                                     Exhibit "B"

                  of such number)  issuable  upon the exercise of such  Options,
                  Rights  or the  conversion  or  exchange  of such  Convertible
                  Securities.

         6. 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 Purchase 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  Purchase  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.

         7. 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 Purchase  Price shall be decreased as of
the time of such issuance, by multiplying the Purchase 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.

         8. 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  shall receive upon exercise of the Warrant 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 the
Warrants been  exercised  into Warrant  Shares on the date of such event and had
thereafter 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.

         9. Adjustment for Reclassification,  Exchange, or Substitution.  If the
Warrant Shares 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 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  the  Warrant  might  have been  exercised
immediately  prior to such  reorganization,  reclassification,  or  change,  all
subject to further adjustment as provided herein.

         10.  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

                                      B-12

<PAGE>

                                                                     Exhibit "B"

times in good faith  assist in the carrying  out of all the  provisions  of this
Exhibit  I and in the  taking  of  all  such  action  as  may  be  necessary  or
appropriate  in order to protect  the  exercise  rights of the  Holders  against
impairment to the extent required hereunder.

         11.  Certificate  as  to  Adjustments.  Upon  the  occurrence  of  each
adjustment or readjustment of the Purchase Price pursuant to this Exhibit I, 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 furnish or cause to be
furnished  to  such  Holder  a  similar   certificate  setting  forth  (i)  such
adjustments and readjustments, (ii) the Purchase Price 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  exercise of this  Warrant.  Despite such
adjustment or readjustment,  the form of each or all Warrants, if the same shall
reflect the initial or any  subsequent  Purchase  Price,  need not be changed in
order for the  adjustments or  readjustments  to be valid in accordance with the
provisions of this Warrant, which shall control.

                                      B-13

<PAGE>

                                                                     EXHIBIT "C"

                                   EXHIBIT "C"
                                   -----------
                                       to
                     Securities Purchase and Note Agreement
                          dated as of November 30, 2007
                                 by and among
                              Amen Properties, Inc.
                         and the Investors named therein

                             Form of Promissory Note

$__________                      PROMISSORY NOTE              ____________, 2007

         FOR VALUE RECEIVED, the undersigned, Amen Properties, Inc. (hereinafter
called  "Maker"),  promises to pay to the order of  ___________  ("Payee"),  the
principal   sum   of    ______________________________    and   __/100   Dollars
($___________)  in coin or  currency of the United  States of America,  together
with  interest  thereon  from and after the date hereof  until paid in full at a
rate per annum equal to the prime rate specified in The Wall Street Journal from
time to time plus one percent per annum (1.0%); provided, that the interest rate
shall in no event be greater  than the maximum  amount of  nonusurious  interest
allowed from time to time by applicable law (the "Highest Lawful Rate").  If the
aforementioned  prime  rate  changes  from  time to time  after the date of this
Promissory  Note  (this  "Note"),  the  interest  rate  under this Note shall be
automatically  increased or decreased, as the case may be, without any action by
or notice to any party,  effective as of the end of each calendar quarter during
the term of this Note  beginning on March 31, 2008,  and  thereafter on the last
day of each  calendar  quarter  during the term of this  Note.  The date of each
quarterly  adjustment  to the  interest  rate is  referred  to herein as a "Rate
Change Date".

         This Note  shall be due and  payable  in a single  payment  of the full
amount of the unpaid principal and accrued and unpaid interest on June 30, 2008,
the maturity date of this Note. No payment shall be past due and no default will
occur hereunder if such payment is made within ten (10) days of the due date.

         This Note is given  pursuant  and  subject to that  certain  Securities
Purchase and Note Agreement  among Maker,  Payee and other Investors dated as of
November  30,  2007  (the  "Note  Agreement").  This  Note is one of a number of
promissory notes given under the Note Agreement (the "Related  Notes"),  and the
amount of any payment made on this Note will be in proportion to the face amount
of this Note  compared  to the  aggregate  face  amount of this Note and all the
Related  Notes.  No  payment  will be made on this Note  unless  contemporaneous
payments are made on all of the Related  Notes,  and no payments will be made on
the  Related  Notes  unless  a  contemporaneous  payment  is made on this  Note.
Payments  on this Note  shall be made to Payee at Payee's  address  set forth on
Payee's signature page to the Note Agreement.

         Maker may prepay all or any portion of the remaining  principal balance
or accrued interest at any time, and from time to time,  without penalty or fee.
Any prepayment  hereunder shall be applied first to accrued and unpaid interest,
if any, owing on this Note and the balance to principal.

         All  agreements  between the Maker and Payee,  whether now  existing or
hereafter  arising and whether written or oral, are hereby limited so that in no
contingency  shall the  interest  paid or agreed to be paid to Payee  exceed the
maximum  amount  permitted  under  applicable  law. If,  under any  circumstance
whatsoever,  interest would otherwise be payable to Payee at a rate in excess of
the Highest Lawful Rate, then the interest  payable to Payee shall be reduced to
the maximum amount permitted under applicable law, and if under any circumstance
whatsoever  Payee  shall ever  receive  anything  of value  deemed  interest  by

                                      C-1

<PAGE>

                                                                     EXHIBIT "C"

applicable law which would exceed  interest at the Highest Lawful Rate, then any
excessive  interest  paid  shall be applied to the  reduction  of the  principal
amount  hereunder and not to the payment of interest or if such excess  interest
exceeds the unpaid  principal  balance hereof,  such excess shall be refunded to
Maker.  All  interest  paid or agreed to be paid to Payee  shall,  to the extent
permitted  by  applicable  law, be  amortized,  prorated,  allocated  and spread
throughout  the full period until  payment in full of the principal of this Note
so that the rate of interest hereon is uniform throughout the term hereof.  This
paragraph shall control all agreements between the undersigned and the Payee.

         THIS NOTE SHALL BE CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE
OF TEXAS EXCEPT FOR CONFLICTS OF LAWS PRINCIPALS  WHICH WOULD RESULT IN THE LAWS
OF ANOTHER JURISDICTION TO APPLY.

         THIS NOTE AND THE NOTE AGREEMENT  REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT  ORAL  AGREEMENTS  OF  THE  PARTIES.  THERE  ARE  NO  UNWRITTEN  ORAL
AGREEMENTS BETWEEN THE PARTIES.

         IN WITNESS WHEREOF,  Maker has executed this Note as of the ____ day of
_____________, 2007.

                                        AMEN PROPERTIES, INC.

                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                        Address:

                                        303 W. Wall St., Suite 2300
                                        Midland, Texas 79701

                                      C-2

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