EXHIBIT 10.2
PROMISSORY NOTE
$1,139,215.00 Denver, Colorado March 1, 2002
FOR VALUE RECEIVED, the undersigned, VENUS EXPLORATION, INC., a
Delaware corporation ("Maker"), promises to pay to the order of ST. MARY LAND &
EXPLORATION COMPANY, a Delaware corporation ("Payee"), at its offices in Denver,
Colorado, the principal sum of ONE MILLION ONE HUNDRED THIRTY-NINE THOUSAND TWO
HUNDRED FIFTEEN AND NO/100 DOLLARS ($1,139,215.00), with interest on the unpaid
principal balance hereof prior to default or maturity at the rate of seven
percent (7%) per annum. All past due principal of and all past due interest on
this Note shall bear interest at the highest lawful rate.
The entire principal balance of and all accrued and unpaid interest on
this Note are due and payable on May 1, 2002. This Note may be prepaid in whole
or in part without penalty. Partial prepayments shall be applied first to any
accrued and unpaid interest and the balance to principal.
This Note is secured by, among possibly other collateral, that certain
Guaranty of even date herewith, executed by Eugene L. Ames, Jr. in favor of
Payee. Failure to describe any other collateral securing payment of the
indebtedness evidenced by this Note shall in no way impair or restrict Payee's
rights with respect to such other collateral.
It is understood and agreed that if Maker shall default in the payment
of this Note, or if Maker shall default in the performance of any covenant in
any instrument securing payment of this Note, then the entire principal balance
of and all accrued and unpaid interest on this Note shall at once become due and
payable without notice, at the option of Payee. Failure by Payee to exercise
this option on any one or more occasions shall not constitute a waiver of the
right to exercise such option in the event of subsequent default.
The makers, signers, sureties, and endorsers of this Note jointly and
severally waive demand, presentment, notice of dishonor, notice of intent to
demand or accelerate payment hereof, diligence in collecting, grace, notice, and
protest, and agree to one or more extensions for any period or periods of time
and partial payments, before or after maturity, without prejudice to Payee; and
if this Note shall be collected by legal proceedings or through probate or
bankruptcy court, or shall be placed in the hands of an attorney for collection
after default or maturity, Maker agrees to pay all costs of collection,
including reasonable attorney's fees.
This Note is issued in extension and renewal of certain indebtedness
presently owing by Maker to Payee for unpaid oil and gas production revenues, as
more particularly detailed on attached Schedule I, but without prejudice to or
effect upon Payee's rights with respect to any other or additional indebtedness
owing by Maker to Payee, any collateral securing such indebtedness, and/or
Payee's rights of audit.
All agreements between Maker and Payee, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that under
no contingency, whether by reason or demand for payment or acceleration of the
maturity hereof or otherwise, shall the interest contracted for, charged, or
received by Payee exceed the Maximum Rate (as hereinafter defined). If, for any
circumstance whatsoever, interest would otherwise be payable to Payee in excess
of the Maximum Rate, the interest payable to Payee hereunder shall be reduced to
the Maximum Rate; and if for any circumstance Payee shall ever receive anything
of value deemed interest by applicable law in excess of the Maximum Rate, then
an amount equal to any such excess shall be applied to the reduction of the
principal hereof and not the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal hereof, such excess shall be refunded to
Maker. All interest paid or agreed to be paid to Maker shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full period until payment in full of the principal (including the
period of any renewal or extension hereof) so that the interest hereon for such
full period shall not exceed the Maximum Rate. As used herein, "Maximum Rate"
shall mean the maximum non-usurious rate of interest that at any time, or from
time to time, may be contracted for, taken, reserved, charged, or received under
applicable law on the indebtedness evidenced by this Note, after taking into
account, to the extent required by applicable law, any and all relevant
payments, charges, or other amounts under this Note and all instruments securing
payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES APPLICABLE TO
TRANSACTIONS IN TEXAS.
VENUS EXPLORATION, INC., a
Delaware corporation
By:
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Printed Name:
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Title:
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SECURED PROMISSORY NOTE PAGE 2