Document:

a5864785ex10_1.htm

    Exhibit
10.1

     

     

      
        

      

    

     

     

    
      SECURITIES
PURCHASE AGREEMENT

       

      

       

      by
and among

       

      

       

      CERTAIN
MEMBERS OF

       

      SFF
PRODUCTION, LLC

       

      as
Sellers,

       

      

       

      and

       

      

       

      AMEN
PROPERTIES, INC.

       

      as
Buyer

       

      

       

      

       

      dated
as of

       

      December
22, 2008

       

       

       

      
        
 

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      SECURITIES
PURCHASE AGREEMENT

       

      

       

      This
SECURITIES PURCHASE AGREEMENT (this "Agreement"),
dated as of December 22, 2008, is entered into by and among Amen
Properties, Inc. ("Buyer")
and the members identified on Schedule 2.1
(the "Sellers")
of SFF Production, LLC (the "Company").  All
of the foregoing are each sometimes referred to herein individually as a "Party"
and collectively as the "Parties."

       

      RECITALS:

       

      A. Sellers own the membership interests
(the "Interests")
in the Company described on Schedule 2.1.

       

      B. Sellers have agreed to sell, and Buyer
has agreed to purchase, the Interests pursuant to the terms hereof.

       

      C. Buyer is currently a member of the
Company, owning a 33.3% membership interest.

       

      NOW,
THEREFORE, in consideration of the mutual benefits to be derived from this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereby agree as
follows:

       

      ARTICLE 1. — DEFINITIONS

       

      1.1.            Certain Defined
Terms.  As used in this Agreement, each of the following terms
is defined below:

       

      "Affiliate"
means, with respect to any Person, any other Person that, directly or
indirectly, through one or more intermediaries or otherwise, controls, is
controlled by, or is under common control with, such Person.

       

      "Agreement"
is defined in the preamble hereto.

       

      "Applicable
Environmental Laws" means all Applicable Laws in effect at any time
pertaining to pollution or the protection of the environment, including those
relating to waste materials and/or hazardous substances.

       

      "Applicable
Law" means any statute, law, rule, or regulation or any judgment, order,
writ, injunction, or decree of any Governmental Entity to which a specified
Person or property is subject.

       

      "Appraisal"
means that certain appraisal of the assets of the Company prepared by Ryder
Scott Company LP ("Ryder
Scott") to be completed after Closing.

       

      "Balance Sheet
Date" is defined in Section
4.8.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      "Buyer" is
defined in the preamble hereto.

       

      "Buyer
Indemnified Parties" is defined in Section
9.3.

       

      "Certificate of
Designation" means the Certificate of Designations of Series E Preferred
Stock of Buyer in substantially the form attached hereto as Exhibit
"A".

       

      "Closing"
is defined in Section
3.1.

       

      "Closing
Date" is defined in Section
3.1.

       

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

       

      "Common Stock
Cap" is defined in Section
6.12(a).

       

      "Company"
is defined in the Recitals.

       

      "Confidential
Information" is defined in Section
6.6.

       

      "Conversion
Shares" means the shares of Common Stock into which the Series E
Preferred Stock is convertible.

       

      "Damages"
means losses, claims, damages, judgments, settlements, penalties, obligations,
costs, liabilities and expenses (including reasonable attorneys’ fees and
expenses), of any nature whatsoever, which result from or arise out of an
action, petition, plea, charge, complaint, suit, litigation, arbitration,
mediation, hearing or similar event, occurrence or Proceeding.

       

      "Effective
Date" means 11:59 p.m., Central Time, on December 31,
2008.

       

      "Encumbrances"
means liens, charges, pledges, options, mortgages, deeds of trust, security
interests, claims, restrictions (whether on voting, sale, transfer, disposition,
or otherwise), easements, and other encumbrances of every type and description,
whether imposed by law, agreement, understanding, or otherwise.

       

      "Equity
Securities" means the Series E Preferred Stock and the Conversion
Shares.

       

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

       

      "Financial
Statements" is defined in Section
4.7.

       

      "Governmental
Entity" means any court or tribunal in any jurisdiction (domestic or
foreign) or any public, governmental, or regulatory body, agency, department,
commission, board, bureau, or other authority or instrumentality (domestic or
foreign).

       

      "Hazardous
Substance" means any substance defined as a hazardous substance under any
Applicable Environmental Law.

       

      
        
          
          

        

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

       

      "Interests"
is defined in the Recitals.

       

      "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 Buyer and its
Subsidiaries, taken as a whole.

       

      "Material
Contracts" is defined in Section
4.12.

       

      "Nasdaq Stock
Market" is defined in Section
5.11.

       

      "Net Revenue
Interest" means as to any of the Properties constituting an oil and gas
interest, the "net revenue interest" of the Company in such Property set forth
in the books and records of the Company provided to Buyer prior to
Closing.

       

      "Organizational
Documents" is defined in Section
4.1.

       

      "Permits"
is defined in Section
4.16.

       

      "Party"
and "Parties"
are defined in the preamble hereto.

       

      "Permitted
Encumbrance" means (i) royalties, overriding royalties, net profits
interests, production payments and other burdens on production which do not
reduce the Company's Net Revenue Interest in any of the Properties to less than
the Net Revenue Interest designated in the books and records of the Company
provided to Buyer; (ii) liens for Taxes and assessments not yet delinquent,
or, if delinquent, that are being contested in good faith in the ordinary course
of business and for which adequate reserves have been established;
(iii) undetermined or inchoate liens or charges constituting or securing
the payment of expenses that were incurred incidental to the maintenance,
development, production or operation of the Properties, which are not yet
delinquent, or, if delinquent, that are being contested in good faith in the
ordinary course of business and for which adequate reserves have been
established; (iv) materialman’s, mechanic’s, repairman’s, employee’s,
contractor’s and operator’s liens or other similar liens or charges for amounts
arising in the ordinary course of business which are not yet delinquent, or, if
delinquent, that are being contested in good faith in the ordinary course of
business and for which adequate reserves have been established; (v) obligations
or duties affecting the Properties to any governmental authority with respect to
any franchise, grant, license or permit and all Applicable Laws, rules,
regulations and orders of all governmental authorities; (vi) easements, rights
of way, servitudes, permits, surface leases and other rights in respect of
surface operations, office leases, pipelines, plat restrictions and similar
encumbrances, provided that they do not materially detract from the value, or
materially increase the cost of operation of the Properties; (vii) the
Material Contracts; and (viii) liens, charges and other Encumbrances and
irregularities in the chain of title which, because of remoteness in or passage
of time, statutory cure periods, marketable title acts or other similar reasons,
have not affected or interrupted, and are not reasonably expected to affect or
interrupt, the claimed ownership of the Company to any of the Properties or the
receipt of production revenues from the Properties affected
thereby.

       

      
        
          
          

        

        
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      "Person"
means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, enterprise, unincorporated organization, or
Governmental Entity.

       

      "Proceedings"
means all proceedings, actions, claims, suits, investigations, and inquiries by
or before any arbitrator or Governmental Entity.

       

      "Properties"
means, collectively, the properties, assets, rights, and interests owned by the
Company.

       

      "Purchase
Price" is defined in Section 2.2.

       

      "Required
Consent" means the approval of Sellers owning in excess of 50% of the
total Interests.

       

      "SEC"
means the Securities and Exchange Commission.

       

      "SEC
Filings" means Buyer'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
Act" means the Securities Act of 1933, as amended.

       

      "Seller"
and "Sellers"
are defined in the recitals.

       

      "Seller
Indemnified Parties" is defined in Section
9.2.

       

      "Seller
Parties" and "Seller
Party" means the Company and Sellers.

       

      "Series E
Preferred Stock" means the Series E Preferred Stock of Buyer, par value
$0.001 per share, having the rights and preferences substantially as set forth
in the Certificate of Designations.

       

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

       

      "Stockholder
Approval" has the meaning set forth in Section 6.12.

       

      "Subsidiaries"
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.

       

      "Taxes"
means any federal, state, local, or foreign income taxes or similar assessments,
or any sales, use, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, customs,
ad valorem, duties, capital stock, franchise, profits, withholding, social
security, unemployment, disability, real property, personal property, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.

       

      
        
          
          

        

        
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      "Working
Interest" means as to any of the Properties constituting an oil or gas
interest, the "working interest" of the Company in such Property as set forth in
the books and records of the Company provided to Buyer prior to
Closing.

       

      ARTICLE
2. — TRANSACTION

       

      2.1.          Agreement to Sell and
Purchase.  At the Closing, but effective as of the Effective
Date, and on the terms and subject to the conditions set forth in this
Agreement, each Seller will transfer to Buyer the Interests owned by such Seller
as set forth on Schedule 2.1,
free and clear of all Encumbrances.

       

      2.2.          Purchase
Price.  In consideration of the sale of the Interests
hereunder, Buyer will deliver to Sellers an aggregate purchase price of
$6,827,576.00 (the "Purchase
Price"), subject
to adjustment as provided in Section 2.3,
consisting of (a) an aggregate of $1,365,515.00 in cash or cash equivalent
payable at Closing, and (b) an aggregate of 546,206 shares of Series E
Preferred Stock.  The Purchase Price will be allocated among the
Sellers as set forth on Schedule 2.1.

       

      2.3.  Adjustment to Purchase
Price.  The Purchase Price shall be adjusted as
follows:

       

      (a) adjusted upward by (i) the amount as of
the Effective Date of all prepaid ad valorem, property or similar Taxes and
assessments based upon or measured by ownership of the Properties, insofar as
such prepaid Taxes relate to periods of time after the Effective Date; (ii) an
amount equal to all costs and expenses paid by the Company prior to the
Effective Date but are attributable to the period of time from and after the
Effective Date; (iii) an amount equal to the proceeds from the sale of
hydrocarbons received by the Company after the Effective Date but attributable
to hydrocarbons produced prior to the Effective Date; (iv) an amount equal
to the amount of cash of the Company on the Effective Date; (v) an amount
equal to the amount, if any, that the product of the PV 10-value of the
Properties set forth in the Appraisal multiplied by the amount of the Interests
(expressed as a percentage) exceeds the Purchase Price; and (vi) any other
amount provided for in this Agreement or agreed upon by Buyer and
Sellers.

       

      (b) adjusted downward by (i) an amount
equal to all unpaid ad valorem, property, production, severance and similar
Taxes and assessments based upon or measured by the ownership of property or the
production of hydrocarbons or the receipt of proceeds therefrom accruing to the
Properties prior to the Effective Date; (iii) an amount equal to all
expenditures, liabilities and costs relating to the Properties that are unpaid
as of the Effective Date and assessed for or attributable to periods of time or
the ownership of production prior to the Effective Date; (iv) an amount
equal to all income, employment, franchise and other Taxes, and penalties and
interest related thereto, paid or payable by Company after the Effective Date
but attributable to periods on or prior to the Effective Date; (v) an
amount equal to all other liabilities of the Company not otherwise included in
adjustment to the Purchase Price pursuant to this Section 2.3(b), paid or
payable after the Effective Date but attributable to periods on or prior to the
Effective Date; (vi) an amount equal to all cash in, or attributable to,
third party suspense accounts held by the Company as of the Effective Date;
(vii) an amount equal to the amount, if any, that the Purchase Price
exceeds the product of the PV-10 value of the Properties set forth in the
Appraisal multiplied by the amount of the Interests (expressed as a percentage);
and (viii) any other amount provided for in this Agreement or agreed upon
by Buyer and Sellers.

       

      
        
          
          

        

        
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      ARTICLE
3. — CLOSING

       

      3.1.  Closing.  The
closing of the transactions contemplated hereby (the "Closing")
will take place on December 31, 2008 at the principal office of Buyer, or
at such earlier time as selected by Buyer or at such other time or place or on
such other date as the Parties may agree.  The date on which the
Closing occurs is herein referred to as the "Closing
Date," but the
transaction described herein shall be effective as of the Effective
Date.

       

      3.2.          Closing
Deliveries.  At the Closing,

       

      (a) Buyer will (i) deliver the
Purchase Price, as adjusted by the Preliminary Settlement Statement (as defined
below), to Sellers, and (ii) deliver to Sellers the various certificates,
instruments, and documents referred to in Section
7.1.  Sellers shall be solely responsible for providing the
allocation of the Purchase Price among them as set forth on Schedule 2.1,
and Buyer shall not be responsible for nor have any liability with respect to
such allocation.

       

      (b) Each Seller (i) will execute and
deliver to Buyer an Assignment of Membership Interest in substantially the form
attached hereto as Exhibit "B" conveying
to Buyer all of such Seller’s right, title and interest in and to the Interests;
(ii) will execute and deliver to Buyer, to the extent the Organizational
Documents provide that the Interests are to be represented by
certificates, certificate(s) representing all of the Interests; and
(iii) will execute and deliver the various certificates, instruments, and
documents referred to in Section
7.2.

       

      (c)            Sellers
and Buyer shall execute and deliver a settlement statement (the "Preliminary
Settlement Statement") that shall set forth each adjustment to the
Purchase Price and the calculation of such adjustments to the extent known or
estimated at Closing.  All adjustments to the Purchase Price shall be
made first to the cash portion of the Purchase Price and only if such
adjustments exceed said cash portion will any adjustment be made to the
remaining Purchase Price.

       

      ARTICLE
4. — REPRESENTATIONS AND WARRANTIES OF SELLERS

       

      Each
Seller represents and warrants to Buyer as of the date hereof and as of the
Closing Date, that:

       

      4.1.          Organizational
Matters.  Each Seller Party that is an entity is duly
organized, validly existing, and in good standing under the laws of its state of
organization.  No Proceeding to dissolve any Seller Party that is an
entity is pending or, to the best knowledge of the Seller Parties,
threatened.  Each Seller Party is duly authorized to conduct its
business and is in good standing under the laws of each jurisdiction where such
qualification is required.  Each Seller Party has the requisite power
and authority necessary to own or lease its properties and to carry on its
businesses as currently conducted and any business in which it currently
proposes to engage.  Sellers have delivered to Buyer correct and
complete copies of each of the operating agreements of the Company, the
certificates of formation of the Company, and all other similar documents,
instruments or certificates executed, adopted, or filed in connection with the
creation, formation, or organization of the Company, including any amendments
thereto (collectively as provided to Buyer, the "Organizational
Documents"). No Seller Party is in breach of any provision of the
Organizational Documents.  The Company does not own any equity
interests in any Person.

       

      
        
          
          

        

        
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      4.2.            Interests.  Each
Seller is the record and beneficial owner of the Interest owned by such Seller
as designated on Schedule 2.1,
and upon consummation of the transactions contemplated hereby, Buyer will
acquire, good, valid, and marketable title to all of the Interests, free and
clear of all Encumbrances.  No other Person owns or has any right to
own any of the Interests.  Sellers possess full authority and legal
right to sell, transfer and assign to Buyer such Interests.  There are
no claims pending, or, to the knowledge of Sellers, threatened against either
the Company or Sellers that concern or affect title to such Interests, or that
seek to compel the issuance of membership interests or other securities of the
Company.  The Interests are duly authorized, validly issued, fully
paid and non-assessable and are not subject to preemptive
rights.  Except as otherwise provided in the Organizational Documents,
(i) there are no existing warrants, options, conversion rights, calls or
other commitments of any character pursuant to which the Company, or any member
thereof, may become obligated to increase or decrease any Person’s member
interest or admit any Person as a member; (ii) the Company does not have
any commitment or obligation (contingent or otherwise) to increase or decrease
any Person’s member interest or admit any Person as a member; and (iii) the
Interests are not subject to any agreements or understandings among any Persons
with respect to the voting or transfer thereof.

       

      4.3.            Authority Relative to this
Agreement.  Each Seller Party has full power and authority to
execute, deliver, and perform this Agreement and to consummate the transactions
contemplated hereby.  The execution, delivery, and performance by such
Seller Party of this Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary action of such
Seller Party.  This Agreement has been duly executed and delivered by
each Seller Party and constitutes, and each other agreement, instrument, or
document executed or to be executed by such Seller Party in connection with the
transactions contemplated hereby has been, or when executed will be, duly
executed and delivered by such Seller Party and constitutes, or when executed
and delivered will constitute, a valid and legally binding obligation of each
such Seller Party, enforceable against such Seller Party in accordance with
their respective terms.

       

      4.4.            Noncontravention.  The
execution, delivery, and performance by each Seller Party of this Agreement and
the consummation by it of the transactions contemplated hereby do not and will
not (a) conflict with or result in a violation of any provision of the
Organizational Documents or the governing documents of such Seller Party (if
such Seller is an entity), (b) conflict with or result in a violation of
any provision of, or constitute (with or without the giving of notice or the
passage of time or both) a default under, or give rise (with or without the
giving of notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, any material bond, debenture, note,
mortgage, indenture, lease, contract, agreement, or other material instrument or
obligation to which any Seller Party is a party, (c) result in the creation
or imposition of any Encumbrance upon the Interests or the Properties, or (d)
violate any Applicable Law binding upon any Seller Party or require a consent,
approval, order or authorization of, or declaration, filing, or registration
with, any Governmental Entity.

       

      
        
          
          

        

        
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        4.5.     Brokers or
Finders.  No Seller Party has incurred, and no Seller Party
will incur, directly or indirectly, as a result of any action taken by any
Seller Party under this Agreement, any liability for brokerage or finders’ fees
or commissions or any similar charges in connection with this Agreement, for
which Buyer or the Company will have any liability.

         

        4.6.             Compliance with
Laws.  The Company and its predecessors and Affiliates have
complied with all Applicable Laws, and each Seller Party is not aware of any
violations, whether alleged or acknowledged, of any applicable regulations,
rules or orders promulgated by any federal or state regulatory agency, or any of
their predecessor agencies, which affect in any respect the operation or value
of the Company or the Properties.

         

        4.7.             Financial
Statements.  The financial statements for the Company which
have been provided to Buyer (the "Financial
Statements") were prepared in accordance with generally accepted
accounting principles consistently applied, and accurately and completely
represent the financial condition of the Company, as of the dates set forth
therein, and are consistent with the books and records of the
Company.

         

        4.8.             Subsequent
Events.  Since the date of the most recent Financial Statements
which include a balance sheet (the "Balance Sheet
Date") the Company has operated in the ordinary course of business and
there has not been any material adverse change with respect to the
Company.  Without limiting the foregoing, since that date, none of the
following have occurred:

         

        (a)    the Company
has not sold, leased, transferred, or assigned any assets other than for a fair
consideration in the ordinary course of business;

         

        (b)            the
Company has not entered into any contract or agreement (or series of related
contracts or agreements), or any amendment or modification of any contract or
agreement, either involving more than $50,000 or outside the ordinary course of
business;

         

        (c)            no
Encumbrance has been imposed upon any of the Properties;

         

        (d)            the
Company has not made any capital expenditure (or series of related capital
expenditures) involving more than $25,000 individually, $50,000 in the
aggregate, or outside the ordinary course of business;

         

        (e)            the
Company has not issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any liability for borrowed money or capitalized
lease;

         

        (f)             the
Company has not delayed or postponed the payment of accounts payable or other
liabilities outside the ordinary course of business;

         

        
          
            
            

          

          
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        (g)             the
Company has not canceled, compromised, waived, or released any claim or cause of
action (or series of related claims or causes of action) outside the ordinary
course of business;

         

        (h)             there
has been no change made or authorized to the Organizational Documents of the
Company;

         

        (i)              the
Company has not issued, sold, or otherwise disposed of any of its member
interests;

         

        (j)              the
Company has not experienced any damage, destruction, or loss (whether or not
covered by insurance) to its Properties in excess of $25,000;

         

        (k)             the
Company has not made any material change in any of the accounting principles
followed by it or the method of applying such principles;

         

        (l)              the
Company has not made any change in any material Tax election or the manner Taxes
are reported;

         

        (m)            there
has not been any other occurrence, event, incident, action, failure to act, or
transaction with respect to the Company either involving more than $25,000
(individually or in the aggregate) or outside the ordinary course of business;
and

         

        (n)             the
Company has not committed to any of the foregoing.

         

        4.9.     Liabilities.  The
Company does not have any liability (and there is no basis for any present or
future claims, causes of action or orders against it giving rise to any
liability), except for (a) liabilities quantified on the face of the
Financial Statements (rather than in any notes thereto) and not heretofore paid
or discharged, and (b) liabilities which have arisen after the Balance
Sheet Date in the ordinary course of business which, individually or in the
aggregate, are not material and are of the same character and nature as the
liabilities quantified on the face of the Financial Statements as of the Balance
Sheet Date, none of which results from or relates to any breach of contract,
breach of warranty, tort, infringement, or breach of law or arose out of any
claim, cause of action or order.

         

        4.10.           Insurance.  The
Company carries insurance in such amounts and covering such risks as is
customary for Persons of similar size in the business in which they
engage.

         

        4.11.           Title to and Condition of
Properties.  The Properties owned by the Company are included
in the Financial Statements and the Properties constituting oil and gas
interests are listed in the Appraisal.  The Company has good,
marketable, and indefeasible title to the Properties free and clear of all
Encumbrances, other than Permitted Encumbrances.  The Properties have
been maintained in accordance with normal industry practice and are in good
operating condition (as applicable).  There exists no unrecorded
document or agreement that would result in the impairment or loss of the
Company's title to any of the Properties or the value therefore or impede the
operations thereof by the Company.  The Net Revenue Interest and
Working Interest, as applicable, for each of the Properties constituting oil and
gas interests set forth in the Appraisal are complete and accurate.

         

        
          
            
            

          

          
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        4.12.           Material
Contracts.  Seller Parties have provided to Buyer true and
correct copies of all material contracts, agreements, leases, mortgages,
instruments or other documents to which  the Company or its respective
Properties are subject or bound (the "Material
Contracts").  The Company, each Seller and, to the Seller
Parties' knowledge, each other party thereto, has complied with and is not in
default under any such Material Contracts.  No event has occurred
which, with notice or lapse of time, would constitute a breach or default under
any Material Contract, and no party has repudiated any provision of the
contracts.  Without limiting the generality of the foregoing, the
Company does not have any obligation or liability to refund or reimburse any
funds received.  All Material Contracts are in full force and effect
and will not be terminated or give rise to a termination right or otherwise be
effected by this Agreement or the transactions contemplated hereby.

         

        4.13.           Taxes.  The
Company has filed all federal, state and other tax reports or returns, if any,
required to be filed by the Company.  All Taxes shown on such tax
reports or returns and all other Taxes and assessments owed by the Company have
been properly and timely paid.  Company has made all required deposits
for Taxes and has established adequate reserves for Taxes.  No taxing
authority or agency is now asserting or, to the knowledge of any Seller Party,
threatening to assert against the Company any deficiency or claim for additional
Taxes or interest thereon or penalties in connection
therewith.  Company has not granted any waiver of any statute of
limitations with respect to, or any extension of a period of assessment of, any
Taxes.

         

        4.14.           Consents.  There
are no preferential rights of purchase or consents to assign in favor of third
parties with respect to any of the Interests and no consents to transfers
thereof are required, except as may be contained in the Organizational
Documents, all of which have been waived or obtained.  There are no
preferential rights or consents required with respect to any of the Properties
due to or resulting from the transaction contemplated by this
Agreement.

         

        4.15.           Environmental.  The
Company, and to the knowledge of each Seller the predecessors in interest to the
Company, have complied and are in compliance with all Applicable Environmental
Laws.  At no time during the Company's ownership thereof have the
Properties been used by the Company or by anyone else during any period of time
for the generation, storage, or disposal of a Hazardous Substance or as a
landfill or a waste disposal site for regulated waste.  With respect
to the Properties, Company has not entered into, and, to the best knowledge of
each Seller, no predecessor to the Company or operator of any Properties has
entered into, or is subject to, any contracts, agreements or Applicable
Environmental Laws that relate to the future use of any of the Properties or
that require any change in the present condition of any of the
Properties.  Neither the execution of this Agreement nor the
consummation of the transactions contemplated by this Agreement will violate any
agreements, consents, orders, decrees, judgments, license, or permit conditions,
or, to the best knowledge of each Seller, require the consent or approval of any
agency charged with enforcing any Applicable Environmental Law.

         

        4.16.           Licenses and
Permits.  The Company has obtained and holds in good standing
all licenses, permits, variances, exemptions, orders, franchises, approvals and
authorizations of all Governmental Entities necessary for the lawful conduct of
its business and the lawful ownership, use and operation of its assets ("Permits").  None
of the Permits will be adversely affected by the consummation of the
transactions contemplated under this Agreement or requires any filing or consent
in connection therewith.  The Company is in compliance with the terms
of the Permits and no investigation or review by any Governmental Entity with
respect to the Company is pending or, to the knowledge of the Seller Parties,
threatened.

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

         

        4.17.   Proceedings.  There
is no claim, dispute, suit, action, investigation, or other Proceeding before
any Governmental Entity, nor threatened, against the Company or any of the
Properties that has or might result in the impairment or loss of the Company's
title to any of the Properties or the value thereof or impede the operation of
the Properties.

         

        4.18.           Certain Business
Relationships.  None of the Sellers nor any of their Affiliates
(a) have been involved in any business arrangement or relationship with the
Company within the past twelve (12) months, (b) own any asset that is used
in the Company's business, and (c) has any claim or cause of action against
the Company.

         

        4.19.           Securities Law
Representations.  Each Seller makes the following
representations with respect to the Equity Securities received by such Seller as
part of the Purchase Price:

         

        (a)    EACH SELLER
IS ABLE TO BEAR THE ECONOMIC RISK OF ITS INVESTMENT IN THE EQUITY SECURITIES FOR
AN INDEFINITE PERIOD OF TIME.  THE EQUITY SECURITIES HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT, AS AMENDED, OR UNDER THE SECURITIES LAWS OF
ANY STATE, AND THEREFORE CANNOT BE TRANSFERRED OR SOLD UNLESS THE EQUITY
SECURITIES IS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT, AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION OR EXCEPTION FROM SUCH
REGISTRATION IS AVAILABLE AND SUCH AVAILABILITY OF THE EXEMPTION SHALL BE
ESTABLISHED TO THE SATISFACTION OF BUYER AND ITS COUNSEL.  EACH SELLER
ALSO RECOGNIZES THAT NO FEDERAL OR STATE AGENCY HAS PASSED UPON THE EQUITY
SECURITIES OR MADE ANY FINDING OR DETERMINATION AS TO THE FAIRNESS OF THE
ACCEPTANCE OF THE EQUITY SECURITIES.  Each Seller acknowledges and
understands that there is no public market for the Equity Securities and that no
market for the Equity Securities is likely to develop.

         

        (b)            Each
Seller recognizes that his acceptance of the Equity Securities involves a high
degree of risk which may result in the loss of the total amount of the principal
thereof.  Each Seller acknowledges that such Seller is aware of and
has carefully considered all risks incident to the acquisition of the Equity
Securities, including without limitation the risks set forth in the SEC
Filings.  Each Seller has carefully considered and understands and
accepts all such risks.

         

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

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        (d)    Each Seller
has had the opportunity to review the SEC Filings and other publicly available
information concerning Buyer and has determined that such information is
sufficient to make an informed investment decision.  While Buyer has
attempted to provide information that is as accurate as possible, Investor
acknowledges and agrees that Buyer 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 such
information, including without limitation the information included in the SEC
Filings, is qualified in all respects by the risk factors discussed in the SEC
Filings.  Investor acknowledges and understands that none of the
information provided or made available by or on behalf of Buyer constitutes any
legal, tax or investment advice.  Each Seller has sufficient knowledge
and experience in financial and business matters to enable such Seller to
evaluate the merits and risks of an investment in the Equity
Securities.  In addition, in reaching the conclusion that each Seller
desires to accept the Equity Securities, such Seller has carefully evaluated its
financial resources and investments, has consulted with such legal, accounting
and other experts as necessary, and acknowledges that such Seller is able to
bear the economic risks of this investment.

         

        (e)            Each
Seller is an "accredited investor" as such term is defined in Rule 501 under the
Securities Act.  Each Seller will provide to Buyer such information as
may be reasonably requested by Buyer to enable it to satisfy itself as to
accredited status of the each Seller and the knowledge and experience of each
Seller and his ability to bear the economic risk of an investment in the Equity
Securities.

         

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

         

        (g)             Sellers
acknowledge and understand that certain of the information that they have
received regarding Buyer and its Subsidiaries may be material, non-public
information, and that Sellers 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 Buyer and its
Subsidiaries.

         

        (h)             Sellers
acknowledge that they understand the meaning and legal consequences of the
representations, warranties and covenants set forth in this Section 4.19
and that Buyer has relied and will rely upon such representations, warranties,
covenants and certifications.

         

        4.20.    Information
Provided.  All representations and warranties made by each
Seller Party and all other oral or written information provided by each Seller
Party to Buyer and by the Company to Ryder Scott is and are true, correct and
complete in all material respects.

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

        ARTICLE
5. — REPRESENTATIONS AND WARRANTIES OF BUYER

         

        Buyer
represents and warrants to Sellers that:

         

        5.1.    Organization; Existence;
Qualification.  Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware.

         

        5.2.            Authority Relative to this
Agreement.  Buyer has full corporate power and authority to
execute, deliver, and perform this Agreement and to consummate the transactions
contemplated hereby.  The execution, delivery, and performance by
Buyer of this Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
of Buyer.  This Agreement has been duly executed and delivered by
Buyer and constitutes, and each other agreement, instrument, or document
executed or to be executed by Buyer in connection with the transactions
contemplated hereby has been, or when executed will be, duly executed and
delivered by Buyer and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of Buyer, enforceable against
Buyer in accordance with their respective terms.

         

        5.3.            Noncontravention.  The
execution, delivery, and performance by Buyer of this Agreement and the
consummation by it of the transactions contemplated hereby do not and will not
(a) conflict with or result in a violation of any provision of the
organizational documents of Buyer, (b) conflict with or result in a violation of
any provision of, or constitute (with or without the giving of notice or the
passage of time or both) a default under, or give rise (with or without the
giving of notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, any bond, debenture, note, mortgage,
indenture, lease, contract, agreement, or other instrument or obligation to
which Buyer is a party, or (c) violate any Applicable Law binding upon Buyer or
require a consent, approval, order or authorization of, or declaration, filing
or registration with, any Governmental Entity.

         

        5.4.            Brokers or
Finders.  Buyer has not incurred, and will not incur, directly
or indirectly, as a result of any action taken by Buyer under this Agreement,
any liability for brokerage or finders’ fees or commissions or any similar
charges in connection with this Agreement, for which any Seller has or will have
any liability.

         

        5.5.            Capitalization.  The
capitalization of Buyer as of September 30, 2008 is as set forth in the SEC
Filings.  Buyer 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 Buyer 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 Buyer, or any contracts,
commitments, agreements, understandings or arrangements of any kind to which
Buyer is a party relating thereto.  Buyer owns the equity interest in
each of its Subsidiaries specified in Schedule 5.5,
free and clear of any pledge, lien, security interest, encumbrance or claim,
other than as described in Schedule 5.5.  There
are no stockholders agreements, voting agreements or other similar agreements
with respect to the Common Stock to which Buyer is a party, except as disclosed
in the SEC Filings and except for voting agreements related to the Stockholder
Approval.

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

        5.6.            Legal
Proceedings.  There is no material legal or governmental
Proceedings pending to which Buyer or any of its Subsidiaries is a party or of
which the business or property of Buyer or any of its Subsidiaries is
subject.

         

        5.7.            No
Violations.  Neither Buyer 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 Entity, arbitration panel or authority
applicable to Buyer 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.

         

        5.8.            Financial
Statements.  The financial statements of Buyer and the related
notes contained in the SEC Filings present fairly, in accordance with generally
accepted accounting principles, the consolidated financial position of Buyer 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.

         

        5.9.            No Material Adverse
Change.  Except as disclosed in the SEC Filings or as provided
in this Agreement, since September 30, 2008, there has not been (i) any change
in the business, financial condition or operation of Buyer which would
reasonably be expected to have a Material Adverse Effect, (ii) any obligation,
direct or contingent, that is material to Buyer and its Subsidiaries considered
as one enterprise, incurred by Buyer or its Subsidiaries, except obligations
incurred in the ordinary course of business or related to this transaction,
(iii) any dividend or distribution of any kind declared, paid or made on
the capital stock of Buyer, or (iv) any loss or damage (whether or not
insured) to the physical property of Buyer or any of its Subsidiaries which
would reasonably be expected to have a Material Adverse Effect.

         

        5.10.          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.

         

        5.11.          Compliance.  The
Common Stock is registered pursuant to the Exchange Act and is listed on the
Nasdaq Capital Market of the Nasdaq Stock Market (the "Nasdaq Stock
Market"), and Buyer has taken no action designed to, or to its knowledge
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 Buyer received any notification within the twelve (12) months
preceding the date of this Agreement that the SEC or the Nasdaq Stock Market is
contemplating terminating such registration or listing.

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

        5.12.          Reporting
Status.  Buyer has filed all documents that Buyer was required
to file under the Exchange Act during the twelve (12) months preceding the date
of this Agreement.  Copies of such documents have been made available
to each of the Sellers.

         

        ARTICLE
6. — COVENANTS OF SELLER PARTIES AND BUYER

         

        6.1.    General.  Buyer
and each Seller Party will use their reasonable best efforts to take all action
and to do all things necessary in order to consummate and make effective the
transactions contemplated by this Agreement, and each Seller Party agrees not to
take any action which might effect any Interest and not to vote, consent, act or
determine not to act under the Organizational Documents without the prior
written consent of Buyer.  Sellers will operate, manage and administer
the Company in a good and workmanlike manner consistent with past practices, and
cause the Company to carry on the business of the Company in substantially the
same manner as before execution of this Agreement, including without limitation
maintaining all insurance, Permits and Material Contracts in full force and
effect and maintaining the Properties in accordance with industry
standards.  Sellers will, except for emergency action taken in the
face of serious risk to life, property or the environment (a) submit to
Buyer, for prior written approval, all requests for operating or capital
expenditures and all proposed contracts, agreements and actions relating to
(i) any indebtedness to be incurred by the Company or any sale of any of
the Properties, (ii) the Interests, the Company or the Properties which
involve individual commitments of more than $10,000 or which would create any
burdens on the Company, the Interests or the Properties, or (iii) all
activities described in Section 4.8 or
outside the ordinary course of business of the Company; (b) consult with,
inform and advise Buyer regarding all material matters concerning the operation,
management and administration of the Company and the Properties; and
(c) obtain Buyer's written approval prior to voting, consenting, acting or
determining not to act under any operating, unit, joint venture, partnership or
similar agreement, including the Organizational Documents.  No Seller
Party will take any action that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier, or other business
associate of the Company from maintaining at least as favorable business
relationships with the Company after the Closing as it maintained with the
Company prior to the Closing.  Each of the Seller Parties will, and
will cause its Affiliates to, refer all customer inquiries relating to the
business of the Company to Buyer, or an Affiliate thereof, from and after the
Closing.

         

        6.2.            Consents and
Approvals.

         

        (a)    Following the
execution of this Agreement, each Seller Party will use its reasonable best
efforts to obtain as soon as practicable (but in any event prior to the Closing)
all consents necessary for each Seller Party to consummate the transactions
contemplated hereby and to perform its obligations hereunder.  Each
Seller Party will use its reasonable best efforts to satisfy or cause to be
satisfied each of the conditions to the Closing set forth in Article
7.

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

         

        (b)            Following
the execution of this Agreement, Buyer will use reasonable best efforts to
obtain as soon as practicable (but in any event prior to the Closing) all
consents necessary for Buyer to consummate the transactions contemplated hereby
and to perform its other obligations hereunder. Buyer will use reasonable best
efforts to satisfy or cause to be satisfied each of the conditions to the
Closing set forth in Article
7.

         

        6.3.            Full Access and Due
Diligence.

         

        (a)            At
all times during the term of this Agreement, the Company will permit
representatives of Buyer to have full access at all reasonable times to all
premises, Properties, personnel, books, records (including Tax records),
contracts, and documents of or pertaining to the Company to conduct due
diligence reviews (including without limitation to conduct an audit of the
Financial Statements and other financial information), together with the
opportunity to discuss the Company and its business with the Company or its
officers, accountants, employees, consultants, agents and counsel, all as Buyer
deems reasonably necessary or appropriate for a due diligence review of the
Company and its business.  Buyer may make copies of such records, at
their expense, but shall immediately return all such copies so made if this
Agreement is terminated.

         

        (b)            Without
limiting the foregoing, the Company shall provide to Buyer promptly on or before
execution of this Agreement copies of the Financial Statements and Material
Contracts and other information requested by Buyer for the purpose of conducting
a due diligence review of the Company, the Properties and the
Interests.

         

        6.4.            Notice of
Developments.  Each Party will give prompt written notice to
the others of any material adverse development causing a breach of any such
Party’s representations and warranties herein.  No disclosure by any
Party pursuant to this Section 6.4 will be
deemed to amend or supplement any of the schedules or to prevent or cure any
misrepresentation or breach of warranty.

         

        6.5.            Exclusivity.  The
Seller Parties will not solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of any of the
Interests or the Properties (including any acquisition structured as a merger,
consolidation, share exchange or other form of transaction) during the term of
this Agreement.

         

        6.6.            Confidentiality.  From
and after the Closing Date, each Seller will treat and hold as confidential all
information (the "Confidential
Information") concerning the businesses and affairs of Buyer or the
Company, refrain from using any of the Confidential Information except in
connection with this Agreement, and deliver promptly to Buyer or destroy, at the
request and option of Buyer, all tangible embodiments (and all copies) of the
Confidential Information which are in Seller’s possession. If any Seller is
requested or required (by oral question or request for information or documents
in any action) to disclose any Confidential Information, such Seller will notify
Buyer promptly of the request or requirement so that Buyer may seek an
appropriate protective order or waive compliance with this Section
6.6.  If, in the absence of a protective order or the receipt of a
waiver hereunder, any Seller is, on the written advice of counsel, compelled to
disclose any Confidential Information to any Governmental Entity, arbitrator, or
mediator or else stand liable for contempt, that Seller may disclose the
Confidential Information to the Governmental Entity, arbitrator, or mediator;
provided, however, that the disclosing Seller will use its best efforts to
obtain, at the request of Buyer, an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential Information
required to be disclosed as Buyer will designate.

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

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

         

        6.8.            Listing of Common
Stock.  Buyer shall use its commercially reasonable efforts to
comply with all requirements of the Nasdaq Stock Market with respect to the
potential future issuance of the Conversion Shares and the listing thereon on
the Nasdaq Stock Market.

         

        6.9.            Future Sales of Common
Stock.  Each Seller agrees that if Buyer engages in an
underwritten public offering for the sale by Buyer of shares of Common Stock
during the one-year period following the Closing Date and thereafter so long as
the Sellers own more than one percent (1%) of the total number of shares of
Common Stock then outstanding (for this purpose, calculated as if the Conversion
Shares were outstanding), the Sellers 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 Sellers under
such "lock-up" letter shall be in effect for a maximum of 180 days as specified
by the managing underwriter.

         

        6.10.          Public
Announcements.  The Sellers shall not issue any press release
or otherwise make any public statements with respect to the existence of this
Agreement or the transactions contemplated hereby, and Buyer 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.

         

        6.11.          Restrictive
Legends.  Each certificate evidencing the Equity Securities
shall bear a legend in substantially the following form:

         

        "THE
SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A SECURITIES PURCHASE
AGREEMENT DATED AS OF DECEMBER 22, 2008, COPIES OF WHICH ARE ON FILE AT THE
PRINCIPAL OFFICE OF AMEN PROPERTIES, INC. AND WILL BE FURNISHED TO THE HOLDER ON
REQUEST TO THE SECRETARY OF AMEN PROPERTIES, INC.  SUCH AGREEMENT
PROVIDES, AMONG OTHER THINGS, FOR CERTAIN RESTRICTIONS ON SALE, TRANSFER, OR
OTHER DISPOSITION OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE."

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

         

        In
addition, unless counsel to Buyer shall have advised Buyer that such legend is
no longer needed, each certificate evidencing the Equity 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 REGISTERED AND QUALIFIED IN ACCORDANCE WITH APPLICABLE STATE AND FEDERAL
SECURITIES LAWS, OR IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO AMEN
PROPERTIES, INC. SUCH REGISTRATION AND QUALIFICATION ARE NOT
REQUIRED."

         

        6.12.          Stockholder
Approval.

         

        (a)            The
parties hereto acknowledge and agree that pursuant to rules of the Nasdaq Stock
Market, the conversion rights of the Sellers under the terms of the
Series E Preferred Stock 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 of the Series E Preferred Stock
(including the conversion price thereof) and Conversion Shares is approved by
the stockholders of Buyer under such rules of the Nasdaq Stock
Market.  The Sellers acknowledge and agree (i) to the limitations
imposed by the Common Stock Cap as more fully set forth in the Certificate of
Designation, (ii) that without Stockholder Approval they will not be able
to acquire all of the Conversion Shares, which may adversely effect the value of
the Series E Preferred Stock they are acquiring hereunder, and (iii) that
the Series E Preferred Stock will not be entitled to vote in connection
with the Stockholder Approval.

         

        (b)            In
addition to the Stockholder Approval required under Section 6.12(a), the
parties further acknowledge and agree that the rules of the Nasdaq Stock Market
require the approval of the stockholders of Buyer with respect to the issuance
of shares of Common Stock to any Inside Investors upon the conversion of any of
the Series E. Preferred Stock.  Accordingly, each of the Inside
Investors hereby agrees not to convert or exercise any of the Series E
Preferred Stock acquired by such Inside Investor unless and until such issuance
is approved by the stockholders of Buyer 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 Conversion Shares which may adversely effect the value of the
Series E Preferred Stock they are acquiring hereunder.

         

        (c)            The
approval of the stockholders of the Company described in this Section 6.12
shall be referred to herein as the "Stockholder
Approval".

         

        
          
            
            

          

          
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        (d)            Buyer
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 Sellers hereby agrees to vote
any and all securities of the Company owned by such Seller and entitled to vote
on the issue in favor of the Stockholder Approval.

         

        6.13.          Expenses.  Each
Party shall be responsible for all of its own expenses, including but not
limited to, legal, accounting and other professional fees and the fees of its
financial advisors incurred with respect to this Agreement and the transactions
provided for herein.

         

        6.14.          Further
Assurances.  After Closing, each of the Parties will execute,
acknowledge and deliver to the other such further instruments, and take such
other action, as may be reasonably requested in order to more effectively assure
to each of the Parties all of the respective properties, rights, titles,
interests, estates and privileges intended to be assigned, delivered or inuring
to the benefit of each of the Parties in consummation of the transactions
contemplated hereby.

         

        6.15.          Post-Closing
Adjustments.

         

        (a)            Within
ninety (90) days after the Closing, Buyer shall prepare and deliver to Sellers,
in accordance with this Agreement and generally accepted accounting principles,
a statement (the "Final Settlement
Statement") setting forth each adjustment to the Purchase Price that was
not finally determined as of the Closing. Within one hundred twenty (120) days
after the Closing, Sellers (acting by a Required Consent) shall deliver to Buyer
a written notice containing any changes that Sellers propose be made to the
Final Settlement Statement. The parties shall undertake to agree with respect to
the amounts due pursuant to such proposals within one hundred eighty (180) days
after the Closing. The final agreed Purchase Price paid by Buyer to Sellers
after all adjustments is hereinafter referred to as the "Final Purchase
Price." The date upon which such agreement is reached or upon which the
Final Purchase Price is established shall be herein called the "Final Settlement
Date."  If the Final Purchase Price is more than the Purchase
Price paid at Closing, Buyer shall pay to Sellers in immediately available funds
the amount of such difference.  If the Final Purchase Price is less
than the Purchase Price paid at Closing, Sellers shall pay to Buyer, in
immediately available funds, the amount of such difference.  Such
payment by Buyer or Sellers shall be made within five (5) days of the Final
Settlement Date.  If the Parties are unable to resolve any disputed
item within such period, any disputed item shall be submitted to a nationally
recognized independent accounting firm mutually agreeable to the Parties who
shall be instructed to resolve such disputed item within thirty (30)
days.  The resolution of disputes by the accounting firm so selected
shall be set forth in writing and shall be conclusive, binding and
non-appealable upon the Parties with respect to the accounting matters submitted
and the Final Settlement Statement shall become final and binding upon the
Parties on the date of such resolution.  The fees and expenses of such
accounting firm shall be paid one-half by Buyer and one-half by
Sellers.

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

        ARTICLE
7. — CONDITIONS TO OBLIGATIONS OF THE PARTIES

         

        7.1.    Conditions Precedent to the
Obligations of Sellers.  The
obligations of Sellers to consummate the transactions contemplated by this
Agreement will be subject to the fulfillment or waiver by a Required Consent on
or prior to the Closing of each of the following conditions:

         

        (a)    Each and
every representation of Buyer under this Agreement will be true and accurate in
all material respects as of the date when made and will be deemed to have been
made again at and as of the time of the Closing (except to the extent it relates
to a specified date) and will at and as of such time of the Closing be true and
accurate in all material respects except as to changes specifically contemplated
by this Agreement.

         

        (b)            Buyer
will have performed and complied in all material respects with each and every
covenant, agreement, and condition required by this Agreement to be performed or
complied with by Buyer prior to or at the Closing.

         

        (c)            No
Proceeding will, on the Closing Date, be pending or threatened before any
Governmental Entity seeking to restrain, prohibit, or obtain Damages in
connection with the consummation of the transactions contemplated by this
Agreement.

         

        (d)            All
consents and approvals necessary to permit the consummation of the transactions
contemplated by this Agreement will have been obtained, and, with respect to any
applicable consents of Governmental Entities, no stay or appeal will have been
entered and be pending.

         

        (e)            The
Certificate of Designation in substantially 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.

         

        7.2.    Conditions Precedent to the
Obligations of Buyer.  The
obligations of Buyer to consummate the transactions contemplated by this
Agreement will be subject to the fulfillment or waiver on or prior to the
Closing of each of the following conditions:

         

        (a)            Each
and every representation of each Seller Party under this Agreement will be true
and accurate in all material respects as of the date when made and will be
deemed to have been made again at and as of the time of the Closing (except to
the extent it relates to a specified date) and will at and as of such time of
the Closing be true and accurate in all material respects except as to changes
specifically contemplated by this Agreement.

         

        (b)            Seller
Parties will have performed and complied in all material respects with each and
every covenant, agreement and condition required by this Agreement to be
performed or complied with by Seller Parties prior to or at the
Closing.

         

        (c)            No
Proceeding will, on the Closing Date, be pending or threatened before any
Governmental Entity seeking to restrain, prohibit, or obtain Damages in
connection with the consummation of the transactions contemplated by this
Agreement.

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

         

        (d)            Buyer
shall be fully satisfied with all matters reviewed in connection with their due
diligence in accordance with Section 6.3.

         

        (e)            All
consents and approvals necessary to permit the consummation of the transactions
contemplated by this Agreement will have been obtained, and, with respect to any
applicable consents of Governmental Entities, no stay or appeal will have been
entered and be pending.

         

        ARTICLE
8. — TERMINATION

         

        8.1.    Termination.  This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time prior to Closing:

         

        (a)            by
mutual written consent of a Required Consent of Sellers and Buyer;

         

        (b)            by
either Sellers (upon approval of a Required Consent) or Buyer if any
Governmental Entity shall have issued any injunction or taken any other action
permanently restraining, enjoining or otherwise prohibiting the consummation of
the transactions contemplated hereby and such injunction or other action shall
have become final and nonappealable;

         

        (c)            by
either of Sellers (upon approval of a Required Consent) or Buyer if the Closing
shall not have occurred by January 31, 2009, provided, however, that the
right to terminate this Agreement under this Section 8.1(c) shall not be
available to any party whose breach of any representation or warranty or failure
to fulfill any covenant or agreement under this Agreement has been the cause of
or resulted in the failure of the Closing to occur on or before such
date;

         

        (d)            by
Buyer if (i) Sellers shall have failed to comply in any material respect with
any of the covenants or agreements contained in this Agreement to be complied
with or performed by Sellers at or prior to such date of termination; (ii) any
representation or warranty of Sellers contained in this Agreement shall not be
true in all material respects when made or at the time of termination as if made
on such date of termination (except to the extent it relates to a particular
date); or (iii) any condition set forth in Section 7.2 is
not satisfied or waived at or prior to Closing; or

         

        (e)            by
Sellers (upon approval of a Required Consent) if (i) Buyer shall have failed to
comply in any material respect with any of the covenants or agreements contained
in this Agreement to be complied with or performed by Buyer at or prior to such
date of termination; (ii) any representation or warranty of Buyer contained in
this Agreement shall not be true in all material respects when made or on or at
the time of termination as if made on such date of termination (except to the
extent it relates to a particular date); or (iii) any condition set forth
in Section 7.1 is
not satisfied or waived at or prior to Closing.

         

        8.2.    Effect of
Termination.  If this Agreement
is terminated pursuant to this Article 8 this
Agreement will forthwith become null and void and have no effect without any
liability on the part of any Party or their respective Affiliates, except for
the provisions of this Section 8.2 and such
other portions of this Agreement as are necessary to the enforcement and
construction of Section
8.2.  Nothing in this Agreement will, however, relieve any
Party of any liability for breach of this Agreement occurring prior to such
termination or for breach of any provision of this Agreement that specifically
survives termination hereunder.  Buyer will have all remedies provided
herein and all remedies at law or in equity in the event of a breach of this
Agreement by any Seller Party.  The prevailing party in any legal
Proceeding brought under or to enforce the provisions of this Agreement will be
additionally entitled to recover court costs and reasonable attorneys’ fees from
the non-prevailing party.

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

         

        ARTICLE
9. – SURVIVAL AND INDEMNIFICATION

         

        9.1.    Survival.  The
representations and warranties contained in Article 4 and Article 5 of
this Agreement, and the covenants and other agreements made under this
Agreement, including, without limitation, covenants in respect of
indemnification, will survive the Closing without limitation and will remain
fully enforceable in accordance with their terms.

         

        9.2.    Indemnification by
Buyer.
Buyer will protect, defend, indemnify and hold harmless Sellers and their
respective partners, members, managers, stockholders, officers, directors,
employees, Affiliates, agents, representatives, successors and assigns (the
"Seller
Indemnified Parties"), from and against any and all Damages sustained by
any of the Seller Indemnified Parties as a result of any breach of any
representation, covenant, or agreement of Buyer contained in this Agreement or
in any of the certificates, instruments, or documents delivered by Buyer
pursuant hereto.

         

        9.3.            Indemnification by Sellers.  Sellers,
jointly and severally, will protect, defend, indemnify and hold harmless Buyer
and its stockholders, officers, directors, employees, Affiliates, agents,
representatives, successors and assigns (the "Buyer
Indemnified Parties"), from and against any and all Damages sustained by
any of the Buyer Indemnified Parties as a result of any breach of any
representation, covenant, or agreement of any Seller Party contained in this
Agreement, or in any of the certificates, instruments, or documents delivered by
any Seller Party pursuant hereto or as a result of events with respect to the
Company or any Interests which occurred prior to the Closing Date.

         

        ARTICLE
10. — MISCELLANEOUS

         

        10.1.          Notices.  Except
as otherwise expressly provided herein, all communications required or permitted
under this Agreement will be in writing and any communication or delivery
hereunder will be deemed to have been duly given and received when actually
delivered to the address of the Parties to be notified as set forth below and
addressed as follows:

         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

         

        If to
Seller Parties, as follows:

         

        SFF
Production, LLC

        400 Pine
Street, Suite 1010

        Abilene,
Texas 79601

        Attn:  Dan
McFarland

        Phone:  325-677-6177

        Fax:  325-677-6176

        

        If to Buyer:

        

        Amen Properties, Inc.

        300 North Coit Road, Suite
1150

        Richardson, Texas 75080

        Attn:  Mr. Kris
Oliver

        Phone:  972-664-1610

        Fax:  972-664-1632

         

        Provided,
however, that any notice required under this Agreement will be effective if
given verbally within the time provided, so long as such verbal notice is
followed by written notice thereof in the manner provided herein within 24 hours
following the end of such time period.  Any Party may, by written
notice so delivered to the other, change the address to which delivery will
thereafter be made.

         

        10.2.    Waiver.  Any
of the terms, provisions, covenants, representations, warranties or conditions
hereof may be waived only by a written instrument executed by the Party waiving
compliance.  Except as otherwise expressly provided in this Agreement,
the failure of any Party at any time or times to require performance of any
provision hereof will in no manner affect such Party’s right to enforce the
same.  No waiver by any Party of any condition, or of the breach of
any term, provision, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, will
be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or of the breach of any
other term, provision, covenant, representation or warranty.

         

        10.3.            Binding Effect;
Assignment.  All of the terms, provisions, covenants,
obligations, indemnities, representations, warranties and conditions of this
Agreement will be enforceable by the Parties and their respective successors and
assigns.  The rights of each Party under this Agreement are personal
to that Party and may not be assigned or transferred to any other party, firm,
corporation or other entity, without the prior, express and written consent of
the other Parties, except that Buyer will have the right to assign any of its
rights and obligations hereunder to one or more Affiliates of Buyer without such
consent.  Any attempt to assign this Agreement in violation of the
foregoing will be absolutely void.  The non-assigning Party may
condition its consent to assign this Agreement on the assigning Party providing
appropriate guarantee of its assignee’s performance.

         

        10.4.            Taxes.  Upon
Closing, Sellers will be responsible for and will pay all Taxes attributable to
or arising from the ownership of the Interests on or prior to the Effective
Date, and Buyer will be responsible for and will pay all Taxes attributable to
or arising from the ownership or operation of the Interests after the Effective
Date.  Any Party which pays such Taxes for the other Party will be
entitled to prompt reimbursement upon evidence of such payment.  Each
Party will be responsible for its own federal income Taxes, if any, as may
result from this transaction.

         

        
          
            
            

          

          
            23

            
              

            

          

          
            
            

          

        

         

        10.5.            Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS OTHERWISE APPLICABLE TO SUCH DETERMINATIONS, EXCEPT TO THE
EXTENT GOVERNED BY THE DELAWARE GENERAL CORPORATION LAW AS IT APPLIES TO BUYER
AND THE EQUITY SECURITIES.

         

        10.6.            Entire Agreement and
Amendment.  This Agreement embodies the entire agreement
between the Parties related to the subject matter hereof and replaces and
supersedes all prior agreements, arrangements and understandings related to the
subject matter hereof, whether written or oral.    No other
statement, or promise made by any Party, or to any employee, officer or agent of
any Party, which is not contained in this Agreement or in a written agreement
signed by the Parties will be binding or valid.  This Agreement may be
supplemented, altered, amended, modified or revoked by writing only, signed by
Buyer and Sellers representing a Required Consent.  The headings
herein are for convenience only and will have no significance in the
interpretation hereof.  The Parties stipulate and agree that this
Agreement will be deemed and considered for all purposes, as prepared through
the joint efforts of the Parties, and will not be construed against one party or
the other as a result of the preparation, submittal or other event of
negotiation, drafting or execution thereof.  It is understood and
agreed that there will be no third-party beneficiary of this Agreement, and that
the provisions hereof do not impart enforceable rights in anyone who is not a
party or a successor or assignee of a party hereto.

         

        10.7.    Exhibits.  All
Exhibits and Schedules attached to this Agreement, and the terms of those
Exhibits and Schedules which are referred to in this Agreement, are made a part
hereof and incorporated herein by reference.

         

        10.8.            Delivery of Files After
Closing.  Any files and records relating to the Company or the
Properties will be provided by Seller Parties to Buyer as soon as reasonably
possible after the Closing Date at a location to be specified by
Buyer.

         

        10.9.            Counterparts.  This
Agreement may be executed in any number of counterparts, and each and every
counterpart will be deemed for all purposes one agreement.  Faxed
signatures shall be deemed effective and binding for all purposes.

         

        10.10.          Consent to Transfers of
Interests.  The Seller Parties consent to, and waive any and
all rights to acquire, notices or other restrictions on transfer relating to,
the transfer of interests in the Company by other members of the Company to
Buyer, whether set forth in the Organizational Documents or
otherwise.

         

        10.11.          Specific
Performance.  The Parties hereby acknowledge and agree that the
failure of any party to this Agreement to perform its obligations hereunder in
accordance with their specific terms or to otherwise comply with such
obligations, including its failure to take all actions as are necessary on its
part of the consummation of the transaction contemplated hereby, will cause
irreparable injury to the other Parties to this Agreement for which Damages,
even if available, will not be an adequate remedy.  Accordingly, each
of the Parties hereto hereby consents to the issuance of injunctive relief by
any court of competent jurisdiction to compel performance of any Party's
obligations, including an injunction to prevent breaches, and to the granting by
any such court of the remedy of specific performance of the terms and conditions
hereof.

         

        
          
            
            

          

          
            24

            
              

            

          

          
            
            

          

        

         

        10.12.          Actions by
Sellers.  Any action or decision to be taken or made by Sellers
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 Sellers.

         

        10.13.          Joinder by the
Company.  The Company is executing this Agreement for the
purpose of confirming and agreeing to the representations, warranties and
covenants of Sellers relating to the Company.

         

        [Remainder
of this Page Intentionally Left Blank]

         

         

         

         

         

         

         

         

         

         

         

        
          
            
            

          

          
            25

            
              

            

          

          
            
            

          

        

        Signature Page to
Securities Purchase Agreement

         

        IN WITNESS WHEREOF, the Parties have executed this
Agreement, or caused this Agreement to be executed by their duly authorized
representatives, all as of the day and year first above
written.

         

        BUYER:

        

        AMEN
PROPERTIES, INC.

        

        

        By:                                                                           

        Name:___________________________________

        Title:____________________________________

        

        

        ACKNOWLEDGED
AND AGREED:

        

        SFF
PRODUCTION, LLC

        

        

        By:                                                      

        Name:                                                               

        Title:                                                               

        

        

        

        [Additional
Signature Pages Follow]

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        Signature
Page to Securities Purchase Agreement

        
 

        IN WITNESS WHEREOF, the Parties have
executed this Agreement, or caused this Agreement to be executed by their duly
authorized representatives, all as of the day and year first above
written.

         

        SELLER:

        

        UNIVERSAL
GUARANTY LIFE INS. CO.

        

        

        By:                                                                           

        Name:___________________________________

        Title:____________________________________

        

        

        _____  Check
here if Seller is a stockholder of Buyer on the date hereof.

        

        _____  Check
here if Seller is an Inside Investor

         

        
          Seller's
Social Security
or Tax
Identification Number:________________

        

        
 

        
          	
                  Seller's
      Address:

                  _____________________________

                  (Number
      and Street)

                	
                   

                  __________________
(City)

                	
                   

                  ___________

                  (State)

                	
                   

                  __________
(Zip
      Code)

                
	
                   

                  _____________________

                  Seller's
      Fax Number

                	 	 
      	 
      

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          Signature Page to
Securities Purchase Agreement

        

         

         

        IN WITNESS WHEREOF, the Parties have
executed this Agreement, or caused this Agreement to be executed by their duly
authorized representatives, all as of the day and year first above
written.

         

        SELLER:

        

        AMERICAN
CAPITOL INSURANCE

        

        

        By:                                                                           

        Name:___________________________________

        Title:____________________________________

        

        

        _____  Check
here if Seller is a stockholder of Buyer on the date hereof.

        

        _____  Check
here if Seller is an Inside Investor

        

        
          
            Seller's
Social Security
or Tax
Identification Number:________________

          

          
 

          
            	
                    Seller's
      Address:

                    _____________________________

                    (Number
      and Street)

                  	
                     

                    __________________
(City)

                  	
                     

                    ___________

                    (State)

                  	
                     

                    __________
(Zip
      Code)

                  
	
                     

                    _____________________

                    Seller's
      Fax Number

                  	 	 
      	 
      

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

        Signature Page to
Securities Purchase Agreement

         

         

        IN WITNESS WHEREOF, the Parties have
executed this Agreement, or caused this Agreement to be executed by their duly
authorized representatives, all as of the day and year first above
written.

         

        SELLER:

        

        SOFTVEST,
L.P.

        

        

        By:                                                                           

        Name:___________________________________

        Title:____________________________________

        

        

        _____  Check
here if Seller is a stockholder of Buyer on the date hereof.

        

        _____  Check
here if Seller is an Inside Investor

         

        
          Seller's
Social Security
or Tax
Identification Number:________________

        

        
 

        
          	
                  Seller's
      Address:

                  _____________________________

                  (Number
      and Street)

                	
                   

                  __________________
(City)

                	
                   

                  ___________

                  (State)

                	
                   

                  __________
(Zip
      Code)

                
	
                   

                  _____________________

                  Seller's
      Fax Number

                	 	 
      	 
      

        

      

      
        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          Signature Page to
Securities Purchase Agreement

        

         

         

        IN WITNESS WHEREOF, the Parties have
executed this Agreement, or caused this Agreement to be executed by their duly
authorized representatives, all as of the day and year first above
written.

         

        SELLER:

        

        CORNERSTONE
MINERALS CORPORATION

        

        

        By:                                                                           

        Name:___________________________________

        Title:____________________________________

        

        

        _____  Check
here if Seller is a stockholder of Buyer on the date hereof.

        

        _____  Check
here if Seller is an Inside Investor

        

        
          
            Seller's
Social Security
or Tax
Identification Number:________________

          

          
 

          
            	
                    Seller's
      Address:

                    _____________________________

                    (Number
      and Street)

                  	
                     

                    __________________
(City)

                  	
                     

                    ___________

                    (State)

                  	
                     

                    __________
(Zip
      Code)

                  
	
                     

                    _____________________

                    Seller's
      Fax Number

                  	 	 
      	 
      

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        IN WITNESS WHEREOF, the Parties have
executed this Agreement, or caused this Agreement to be executed by their duly
authorized representatives, all as of the day and year first above
written.

         

        SELLER:

        

        

        

          
            

          

        

        JON
MORGAN

        

        

        _____  Check
here if Seller is a stockholder of Buyer on the date hereof.

        

        _____  Check
here if Seller is an Inside Investor

        

        
          
            Seller's
Social Security
or Tax
Identification Number:________________

          

          
 

          
            	
                    Seller's
      Address:

                    _____________________________

                    (Number
      and Street)

                  	
                     

                    __________________
(City)

                  	
                     

                    ___________

                    (State)

                  	
                     

                    __________
(Zip
      Code)

                  
	
                     

                    _____________________

                    Seller's
      Fax Number

                  	 	 
      	 
      

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          Signature Page to
Securities Purchase Agreement

        

        

         

        IN WITNESS WHEREOF, the Parties have
executed this Agreement, or caused this Agreement to be executed by their duly
authorized representatives, all as of the day and year first above
written.

         

        SELLER:

        

        

        

          
            

          

        

        JOHN
NORWOOD

        

        

        _____  Check
here if Seller is a stockholder of Buyer on the date hereof.

        

        _____  Check
here if Seller is an Inside Investor

        

        
          
            Seller's
Social Security
or Tax
Identification Number:________________

          

          
 

          
            	
                    Seller's
      Address:

                    _____________________________

                    (Number
      and Street)

                  	
                     

                    __________________
(City)

                  	
                     

                    ___________

                    (State)

                  	
                     

                    __________
(Zip
      Code)

                  
	
                     

                    _____________________

                    Seller's
      Fax Number

                  	 	 
      	 
      

          

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Schedule
2.1

        to

        Securities
Purchase Agreement

        dated
as of December 22, 2008

        by
and among

        Amen
Properties, Inc.

        and
the Sellers named therein

         

        LIST OF SELLERS AND
ALLOCATION OF PURCHASE PRICE

         

        

        
          
            	
                     

                    Name

                  	
                     

                    Interest

                  	
                    Percentage
      Allocated

                    Purchase Price

                  
	 
      	 
      	 
      
	
                    Universal
      Guaranty Life Ins. Co.

                  	
                    17.8%

                  	
                    39.04%

                  
	 
      	 
      	 
      
	
                    American
      Capitol Insurance

                  	
                    4.2%

                  	
                    9.21%

                  
	 
      	 
      	 
      
	
                    Softvest,
      L.P.

                  	
                    7.9%

                  	
                    17.33%

                  
	 
      	 
      	 
      
	
                    Cornerstone
      Minerals Corporation

                  	
                    5.7%

                  	
                    12.50%

                  
	 
      	 
      	 
      
	
                    Jon
      Morgan

                  	
                    5.0%

                  	
                    10.96%

                  
	 
      	 
      	 
      
	
                    John
      Norwood

                  	
                    5.0%

                  	
                    10.96%

                  
	 
      	 
      	 
      
	
                    Total

                  	
                    45.6%

                  	
                         100%

                  

          

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Schedule
4.1

        to

        Securities
Purchase Agreement

        dated
as of December 22, 2008

        by
and among

        Amen
Properties, Inc.

        and
the Sellers named therein

         

        ORGANIZATIONAL
DOCUMENTS

        

        
          	
                  1.

                	
                  Certificate
      of Formation of SFF Production, LLC filed with the Delaware Secretary of
      State on December 4, 2007.

                

        

        

        
          	
                  2.

                	
                  Operating
      Agreement of SFF Production, LLC dated as of December 4,
      2007.

                

        

         

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         Schedule
5.5

        to

        Securities
Purchase Agreement

        dated
as of December 22, 2008

        by
and among

        Amen
Properties, Inc.

        and
the Sellers named therein

        

        

        SUBSIDIARIES OF
BUYER

        

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

        

        Amen Minerals, LLC is wholly
owned by Amen Properties, Inc., as the sole general partner, and is organized
under the laws of the State of Delaware.

        

        Amen Delaware, LLC is wholly
owned 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 Properties, LLC 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, LLC
is wholly owned  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
33.3% by Amen Properties, Inc., and is organized under the laws of the State of
Delaware.

        

        SFF Production, LLC is owned
33.3% by Amen Properties, Inc., and is organized under the laws of the State of
Delaware.

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        Exhibit
"A"

        to

        Securities
Purchase Agreement

        dated
as of December 22, 2008

        by
and among

        Amen
Properties, Inc.

        and
the Sellers named therein

         

        CERTIFICATE
OF DESIGNATION OF SERIES

        AND
DETERMINATION OF RIGHTS AND PREFERENCES

        OF

        

        SERIES E
CONVERTIBLE 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 E Convertible Preferred
Stock (this "Certificate").

        

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

        

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

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            A-1

            
              

            

          

          
            
            

          

        

        

        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

        

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

        

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

        

        SECTION
1.  DESIGNATION; RANK.

        

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

        

        SECTION
2.  DIVIDENDS.

        

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

        

        SECTION
3.  LIQUIDATION PREFERENCE.

        

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

         

        
          
            
            

          

          
            A-2

            
              

            

          

          
            
            

          

        

        

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

        

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

        

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

        

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

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            A-3

            
              

            

          

          
            
            

          

        

        

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

        

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

        

        SECTION
4.  VOTING RIGHTS.

        

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

        

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

        

        SECTION
5.  COVENANTS.

        

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

         

        
          
            
            

          

          
            A-4

            
              

            

          

          
            
            

          

        

        

        SECTION
6.  CONVERSION RIGHTS.

        

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

        

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

        

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

        

        (c)           Mechanics of
Conversion.

        

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

         

        
          
            
            

          

          
            A-5

            
              

            

          

          
            
            

          

        

        

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

        

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

        

        (d)           Adjustments to Conversion
Price for Diluting Issues.

        

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

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            A-6

            
              

            

          

          
            
            

          

        

        

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

        

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

        

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

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            A-7

            
              

            

          

          
            
            

          

        

        

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

        

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

        

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

        

        (iv)           Adjustment of Conversion Price upon
Issuance of Additional Shares of Common Stock.  If the Company
shall at any time after the Original Issue Date issue Additional Shares of
Common Stock (including Additional Shares of Common Stock deemed to be issued
pursuant to Subsection 6(d)(iii), but excluding shares issued as a dividend or
distribution as provided in Subsection 6(f) or upon a stock split or combination
as provided in Subsection 6(e)), without consideration, or for a consideration
per share less than the Conversion Price in effect on the date of and
immediately prior to such issue, or without the requisite number of notices
contemplated by Subsection 6(d)(ii) hereof, then and in such event, the
Conversion Price shall be reduced by a full ratchet anti-dilution adjustment to
such lesser price (calculated to the nearest cent), but in no case will convert
at a price below $4.42 per share, concurrently with such issuance at a price
less than the original Conversion Price.  Notwithstanding the
foregoing, the applicable Conversion Price shall not be reduced if the amount of
such reduction would be an amount less than $.20, but any such amount shall be
carried forward and reduction with respect thereto made at the time of and
together with any subsequent reduction which, together with such amount and any
other amount or amounts so carried forward, shall aggregate $.20 or
more.

        

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

        

        (A)           Cash
and Property. Such consideration shall:

         

        
          
            
            

          

          
            A-8

            
              

            

          

          
            
            

          

        

        

        (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 Subsection 6(d)(iii), relating to Options, Rights and Convertible
Securities, shall be determined by dividing

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            A-9

            
              

            

          

          
            
            

          

        

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            A-10

            
              

            

          

          
            
            

          

        

        

        (k)           Notice of Record
Date.  In the event

        

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

        

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

        

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

        

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

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            A-11

            
              

            

          

          
            
            

          

        

        

        SECTION
7.  REDEMPTION.

        

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

        

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

        

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

        

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

         

        
          
            
            

          

          
            A-12

            
              

            

          

          
            
            

          

        

        

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

        

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

        

        AMEN
PROPERTIES, INC.

        

        

        By:           [EXHIBIT ONLY – DO NOT
SIGN]

        Jon M. Morgan

        President

        

        

        
          
            
            

          

          
            A-13

            
              

            

          

          
            
            

          

        

         

        

         

        Exhibit
"B"

        to

        Securities
Purchase Agreement

        dated
as of December 22, 2008

        by
and among

        Amen
Properties, Inc.

        and
the Sellers named therein

         

         

        FORM OF ASSIGNMENT OF
MEMBERSHIP INTEREST

         

        _____________________________________________________
("Assignor"),
with offices at, _____________________________________________________ for the
payment of Ten and No/100 Dollars ($10.00) and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and subject to the
terms and conditions hereof, hereby grants, sells, assigns, transfers, conveys
and delivers to Amen Properties, Inc. ("Assignee"),
with offices at 303 W. Wall, Suite 2300, Midland, Texas 79701, all of Assignor’s
right, title and interest in and to Assignor's membership interests in SFF
Production, LLC, a Delaware limited liability company, owned of record or
beneficially by Assignor, free and clear of all Encumbrances.

         

        Assignor will, at any time and from
time to time after the date hereof, upon Assignee’s request and for no further
consideration, execute, acknowledge, and deliver or cause to be executed and
delivered, all further documents or instruments necessary to effect the
transaction embodied in this Assignment of Membership Interest.  This
Assignment of Membership Interest is executed pursuant and subject to that
certain Securities Purchase Agreement dated December 22, 2008 by and
between Assignor and Assignee (the "Agreement").  Capitalized
terms used but not defined herein shall have the meanings assigned thereto in
the Agreement.

         

        The representations and warranties set
forth in the Agreement are hereby incorporated herein by reference.

         

        This Assignment of Membership Interest
is made with full substitution and subrogation of Assignee, its successors and
assigns, to the rights of Assignor under, in and to all warranties made by
others with respect to the rights, titles and interests being conveyed
hereunder.

         

        To have and to hold the same unto
Assignee and its successors and assigns forever.

         

        
          
            
            

          

          
            B-1

            
              

            

          

          
            
            

          

        

         

        EXECUTED as of December ___, 2008,
but effective for all purposes as of 11:59 p.m., Central Time, on
December 31, 2008.

         

        

         

        ASSIGNOR:

        

        

        By:           [EXHIBIT ONLY – DO NOT
SIGN]

        Name:_______________________________

        Title:________________________________

        

        

        ASSIGNEE:

        

        AMEN
PROPERTIES, INC.

        

        

        By:           [EXHIBIT ONLY – DO NOT
SIGN]

        Name:_______________________________

        Title:________________________________

        

        

        

B-2a5864785ex10_2.htm

    Exhibit 10.2

     

     

    
      CERTIFICATE
OF DESIGNATION OF SERIES

      AND
DETERMINATION OF RIGHTS AND PREFERENCES

      OF

      

      SERIES E
CONVERTIBLE PREFERRED STOCK

      AND
ELIMINATING SERIES A, B and C

      

      OF

      

      AMEN
PROPERTIES, INC.

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      

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

      

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

      

      SECTION
1.  DESIGNATION; RANK.

      

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

      

      SECTION
2.  DIVIDENDS.

      

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

      

      SECTION
3.  LIQUIDATION PREFERENCE.

      

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

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

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

      

      SECTION
4.  VOTING RIGHTS.

      

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

      

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

      

      SECTION
5.  COVENANTS.

      

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

      

      SECTION
6.  CONVERSION RIGHTS.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

      (c)           Mechanics of
Conversion.

      

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

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

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

      

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

      

      (d)           Adjustments to Conversion
Price for Diluting Issues.

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

      (A)           Cash
and Property. Such consideration shall:

      

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

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

      (k)           Notice of Record
Date.  In the event

      

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

      

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

      

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

      

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

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      SECTION
7.  REDEMPTION.

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

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

      

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

      

      
        
          	 	
                  AMEN
      PROPERTIES, INC.

                	 
	 	 	 	 
	
                   

                	
                  
                    By:

                  

                	
                	 
	 	 	
                  Jon
      M. Morgan

                	 
	 	 	
                  President

                	 
	 	 	 	 

        

       

      13

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