SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
February 28, 2005
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Date of Earliest Reported Event
AMEN Properties, Inc.
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(Exact name of registrant as specified in its Charter)
Delaware
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(State or other jurisdiction of incorporation)
000-22847
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(Commission File Number)
54-1831588
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(IRS Employer Identification No.)
303 W. Wall Street, Suite 2300
Midland, Texas 79701
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(Address of principal executive offices) (Zip Code)
(432) 684-3821
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(Registrant's telephone number, including area code)
NA
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(Former Name or Former Address, if Changed Since Last Report)
Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of
1934
FORM 8-K
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On February 28, 2005 Amen Properties, Inc. (the "Company") entered into
a loan agreement (the "Note") with Western National Bank, Midland, Texas. The
Note is a certain Revolving Line of Credit in an amount of $5,000,000. Uneder
the Note, the Bank may, but is not obligated to advance more than $2,500,000 and
borrowings under the Note are subject to a borrowing bas equal to the lessor
amount of: (a) $5,000,000 or (b) seventy-five percent (75%) of the eligible
accounts of the Company and its subsidiary W Power and Light LP. The Note bears
a variable interest rate equal to the Prime Rate, defined as the prime rate in
the money rate table of THE WALL STREET JOURNAL, a Dow Jones publication, as of
each business day. Interest is computed on the unpaid principal balance of the
Note and is due and payable as it accrues monthly, commencing March 31, 2005,
and thereafter on the last day of each and every succeeding month until
maturity, March 31, 2008, when the entire amount of the Note, principal and
accrued, unpaid interest, shall be due and payable. The Note is secured by a
security agreement to all of the accounts receivable of the Company's wholly
owned subsidiary, W Power and Light, LP. In addition the Note is guaranteed by
certain accredited investors further described in Item 3.02, which guarantees
are partially secured by letters of credit. The loan agreement also contains
other customary conditions and events of default, the failure to comply with, or
occurrence of, would prevent any further borrowings and would generally require
the repayment of any outstanding borrowings along with accrued interest under
the loan agreement. The proceeds from the Note are intended to be used to fund
potential capital requirements in order to facilitate the growth of the
Company's retail electric provider subsidiary, W Power and Light, LP, and for
general corporate purposes.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
By Form 8-K filed on February 3, 2005, the Company reported that it had
finalized an agreement involving a private placement under Regulation D of a new
series of preferred stock (the "Series C Preferred") and common stock purchase
warrants (the "Warrants") to accredited investors (the "Purchase Agreement").
The closing under the Purchase Agreement was anticipated to occur on or before
February 28, 2005. Certain delays occurred in connection with closing the
transaction, and the parties agreed to extend the closing date to March 31, 2005
or such earlier time as all conditions to closing are satisfied, pursuant to a
Second Amendment to Securities Purchase Agreement dated February 28, 2005 (the
"Second Amendment"). The Second Amendment also modified the Purchase Agreement
and the Certificate of Designation (as defined under Item 5.03 below) to address
issues raised in connection with the Marketplace Rules of the Nasdaq Stock
Market, which modifications have been approved by Nasdaq. A copy of the Second
Amendment together with the Purchase Agreement as previously amended is attached
as an exhibit hereto.
The Company closed the sale and issuance of Series C Preferred and
Warrants pursuant to the Purchase Agreement, as amended by the Second Amendment
(the "Amended Purchase Agreement"), on March 1, 2005. The purchase price
consisted of a total of $2 million in cash and limited guaranties from the
investors in favor of Western National Bank covering the credit facility
described under Item 1.01 above. No underwriting discounts or commissions were
paid in connection with this issuance. Certain facts related to the exemption
from registration of the issuance of the securities under securities law are set
forth in the Amended Purchase Agreement as representations of the investors,
including without limitation their investment intent, their status as accredited
investors, the information provided to them, the restricted nature of the
securities, and similar matters.
The Series C Preferred ranks equally to the Company's outstanding
Series A Preferred Stock (the "Series A Preferred") and the outstanding Series B
Preferred Stock (the "Series B Preferred") and prior to the Common Stock, par
value $.01 per share, of the Company (the "Common Stock") upon liquidation of
the Company. The Series A Preferred, Series B Preferred, Series C Preferred and
the Common Stock are equal as to the payment of dividends. Each share of Series
C Preferred is convertible into four shares of Common Stock, for a total of
500,000 shares, subject to adjustment pursuant to anti-dilution provisions. The
Warrants are exercisable into a total of 250,000 shares of Common Stock at an
initial exercise price of $4.00 (also subject to adjustment pursuant to
anti-dilution provisions), and expire three years from the date of issuance. The
complete terms of the securities are set forth in the Certificate of Designation
and form of Warrant, which are attached hereto as exhibits.
To assure that the Company is in full compliance with Nasdaq
marketplace rules, (i) the conversion of the Series C Preferred and the exercise
of the Warrants are subject to a cap in the number of shares of Common Stock
issuable upon such conversion or exercise equal to twenty percent (20%) of the
number of shares of Common Stock outstanding on the closing date unless and
until the issuance and sale of the Series C Preferred and the Warrants are
approved by the stockholders of the Company under such rules of the Nasdaq Stock
Market, (ii) the officers and directors purchasing securities under the Amended
Purchase Agreement (being Eric Oliver, Jon Morgan and Bruce Edgington) are
further restricted from converting or exercising the purchased securities until
the transaction is approved by the stockholders of the Company or they exchange
the purchased securities for similar securities with a greater
conversion/exercise price, and (iii) the voting rights of the Series C Preferred
are limited and restricted as set forth in the Certificate of Designation.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS CHANGE IN
FISCAL YEAR
The filing of the Certificate of Designation of Series and Designation
of Rights and Preferences of the Series C Convertible Preferred Stock of Amen
Properties, Inc. (the "Certificate of Designation") with the Delaware Secretary
of State on March 1, 2005 constituted an amendment to the Company's Certificate
of Incorporation, designating the terms, rights and preferences of a new series
of preferred stock of the Company.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
3.1 Certificate of Designation of Series and Determination of Rights
and Preferences of Series C Convertible Preferred Stock of Amen
Properties, Inc.
4.1 Form of Warrant issued under the Securities Purchase Agreement,
as amended
10.1 Loan Agreement Between Amen Properties, Inc. and Western
National Bank.
10.2 Western National Bank Revolving Line of Credit Note.
10.3 Securities Purchase Agreement between the Company and certain
accredited investors, as amended by a First Amendment to
Securities Purchase Agreement dated January 28, 2005
10.4 Second Amendment to Securities Purchase Agreement dated February
28, 2005
99.1 Press Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMEN Properties, Inc.
(Registrant)
Date: March 3, 2005 By /s/ Eric Oliver
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Chairman of the Board of Directors
and Chief Executive Officer
(Signature)