LINE OF CREDIT NOTE Borrower: Lender: The Exploration Company of Delaware, Inc. Hibernia National Bank Suite 250 P. O. Box 61540 San Antonio, Texas 78232 New Orleans, LA 70130 Principal Amount: Maturity Date of Note: Date of Note: PROMISE TO PAY. THE...

Exhibit 10.23
LINE OF CREDIT NOTE
Borrower:		Lender:
The Exploration Company of Delaware, Inc.		Hibernia National Bank
000 Xxxxx Xxxx 1604 East		000 Xxxxxxxxxx Xx.
Xxxxx 000		P. O. Xxx 00000
Xxx Xxxxxxx, Xxxxx 00000		Xxx Xxxxxxx, XX 00000
______________________________________________________________________________
Principal Amount:	Maturity Date of Note:		Date of Note:
U.S. $25,000,000.00	March 4, 2006		December 31, 2003
PROMISE TO PAY. THE EXPLORATION COMPANY OF DELAWARE, INC. ("Borrower") promises to pay to the order of HIBERNIA NATIONAL BANK ("Lender") in lawful money of the United States of America the sum of twenty five million and 00/100 dollars (U.S. $25,000,000.00), or such other or lesser amounts as may be reflected from time to time on the books and records of Lender as evidencing the aggregate unpaid principal balance of loan advances made to Borrower on a revolving line of credit basis as provided below, together with simple interest assessed on the variable rate(s) basis provided below, with interest being assessed on the unpaid principal balance of this Note as outstanding from time to time, commencing on the date hereof and continuing until this Note is paid in full. Interest on Base Rate Advances under this Note shall be calculated on the basis of a 365 (or in a leap year 366) day year and the actual number of days elapsed, and on LIBO Rate Advances under this Note shall be calculated on a 365/360 simple interest basis, that is, by applying the ratio of the annual interest rate over a year of 360 days, times the outstanding principal balance, times the actual number of days the principal balance is outstanding.
LOAN AGREEMENT. This Note is made and executed pursuant to a loan agreement between Borrower and Lender dated as of March 4, 2002, as amended (as amended, renewed or restated from time to time, the "Loan Agreement"), and is entitled to the benefits thereof. Unless otherwise defined herein, each capitalized term used herein shall have the same meaning set forth in the Loan Agreement. Reference is made to the Loan Agreement for provisions for the acceleration of the maturity hereof on the occurrence of certain events specified therein, for mandatory prepayments required of the Borrower in certain circumstances, and for all other pertinent provisions.
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LINE OF CREDIT. This Note is a revolving line of credit "master note." Advances under this Note may be requested only in writing by Borrower or by an authorized person. All communications, instructions or directions by telephone or otherwise to Lender are to be directed to Lender's office at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000. The following persons are authorized to request advances under the Line of Credit until Lender receives from Borrower at Lender's address shown above written notice of revocation of their authority: Xxxxx Xxxxxx or P. Xxxx Xxxxx. Borrower agrees to be liable for all sums either (a) advanced in accordance with the instructions of an authorized person or (b) credited pursuant to the Loan Agreement to any of Borrower's deposit accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (a) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower has with Lender, including the Loan Agreement and any other agreement made in connection with the signing of this Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; or (d) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender pursuant to the Loan Agreement.

PAYMENT. Borrower will pay interest on Base Rate Advances at the Base Rate monthly in arrears on the last day of each successive calendar month. Borrower will pay interest on LIBO Rate Advances at the applicable LIBO Rate (including as to Tranche B Advances the Tranche B Rate) in arrears on the last day of each successive calendar month. Borrower will pay the balance of all outstanding principal on this Note, together with all accrued but unpaid interest, at the Maturity Date. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. All payments and prepayments made by Borrower hereunder shall be made to Lender, in immediately available funds, before 11:00 a.m. (Central Time) on the day that such payment is required, or otherwise is, to be made. Any payment received and accepted by Lender after such time shall be considered for all purposes (including the calculation of interest to the extent permitted by law) as having been made on the next following Business Day. Whenever any payment to be made hereunder falls on a day other than a Business Day, then unless otherwise provided in the Loan Agreement such payment shall be made on the next succeeding Business Day (without penalty or default), and such extension of time shall in each case be included in the calculation of interest. Unless otherwise agreed or required by applicable law, payments will be applied first to accrued unpaid interest, then to principal, and any remaining amount to any unpaid collection costs and late charges.

VARIABLE INTEREST RATES. This Note bears interest on and after the date hereof to and including the Maturity Date as to Tranche A Advances at the variable rate(s) per annum equal to the Base Rate or LIBO Rate, as selected by Borrower in accordance with the Loan Agreement, and as to Tranche B Advances at the Tranche B Rate. The interest rate on this Note is subject to change from time to time based on changes in the Prime Rate and the LIBO Rate. If the index rate used in determining the Prime Rate becomes unavailable during the term of this Note,

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Lender may designate a substitute index after notice to Borrower. Lender will tell Borrower the Prime Rate upon Borrower's request. Borrower understands that Lender may make loans based on other rates as well. The interest rate change will not occur more than once each day. Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. The unpaid principal balance of this Note shall bear interest from and after an Event of Default or the Maturity Date until paid at the Default Rate from time to time in effect.

PREPAYMENT. Borrower may prepay this Note in full or in part at any time by paying the then unpaid principal balance of this Note, plus accrued simple interest and any unpaid late charges through date of prepayment, subject to restrictions regarding permitted timing and advance notice set forth in the Loan Agreement, but without penalty or premium. Borrower may be required to prepay this Note from time to time in accordance with the Loan Agreement. If Borrower prepays this Note in full, or if Lender accelerates payment, Borrower understands that, unless otherwise required by law, any prepaid fees or charges will not be subject to rebate and will be earned by Lender at the time this Note is signed.

LATE CHARGE. If Borrower fails to pay any payment under this Note in full within ten (10) days of when due, Borrower agrees to pay Lender a late payment fee in an amount equal to 10.000% of the delinquent interest due. Late charges will not be assessed following declaration of default and acceleration of maturity of this Note.

DEFAULT. If any Event of Default occurs, Lender shall have all the rights and remedies (including acceleration of the Maturity Date of this Note) available to it pursuant to the Loan Agreement or applicable law. Upon the occurrence of an Event of Default, Lender shall have the right, at its sole option, to declare formally this Note to be in default and to accelerate the maturity and insist upon immediate payment in full of the unpaid principal balance then outstanding under this Note, plus accrued interest, together with reasonable attorneys' fees, costs, expenses and other fees and charges as provided herein, and Lender shall have the rights and remedies set forth in the Loan Agreement. Lender shall have the further right, again at its sole option, to declare formal default and to accelerate the maturity and to insist upon immediate payment in full of each and every other loan, extension of credit, debt, liability and/or obligation of every nature and kind that Borrower may then owe to Lender, whether direct or indirect or by way of assignment, and whether absolute or contingent, liquidated or unliquidated, voluntary or involuntary, determined or undetermined, secured or unsecured, whether Borrower is obligated alone or with others on a "solidary" or "joint and several" basis, as a principal obligor or otherwise, all without further notice or demand, unless Lender shall otherwise elect.

DEFAULT RATE. If Borrower defaults under this Note, Lender shall have the right to prospectively increase the simple interest rate under this Note to be equal to the Prime Rate plus five (5%) percent per annum until this Note is paid in full.

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ATTORNEYS' FEES. If Lender refers this Note to an attorney for collection, or files suit against Borrower to collect this Note, or if Borrower files for bankruptcy or other relief from creditors, Borrower agrees to pay Lender's reasonable attorneys' fees.

NSF CHECK CHARGES. In the event that Borrower makes any payment under this Note by check and Borrower's check is returned to Lender unpaid due to nonsufficient funds in any deposit account, Borrower agrees to pay Lender an additional NSF check charge equal to $25.00.

DEPOSIT ACCOUNTS. As collateral security for repayment of this Note and all renewals and extensions, as well as to secure any and all loans, notes, indebtedness and obligations that Borrower may now or in the future owe to Lender or incur in Lender's favor, whether direct or indirect, absolute or contingent, due or to become due, of any nature and kind whatsoever (with the exception of any indebtedness under a consumer credit card account), Borrower is granting Lender a continuing security interest in any and all funds that Borrower may now and in the future have on deposit with Lender or in certificates of deposit or other deposit accounts as to which Borrower is an account holder (with the exception of XXX, pension, and other tax-deferred deposits). Borrower further agrees that Lender may at any time apply any funds that Borrower may have on deposit with Lender or in certificates of deposit or other deposit accounts as to which Borrower is an account holder against any amounts then due and payable under this Note or any and all other present and future indebtedness and obligations that Borrower may then owe to Lender and is then due and payable, in principal, interest, fees, costs, expenses, and attorneys' fees.

FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial statements and other related information at such frequencies and in such detail as Lender may reasonably request.

COLLATERAL. This Note is secured by the Collateral and collateral documents as provided in the Loan Agreement.

GOVERNING LAW. BORROWER AGREES THAT THIS NOTE AND THE LOAN EVIDENCED HEREBY SHALL BE GOVERNED UNDER THE LAWS OF THE STATE OF LOUISIANA. SPECIFICALLY, THIS BUSINESS OR COMMERCIAL NOTE IS SUBJECT TO LA. R.S. 9:3509 ET SEQ.

WAIVERS. Borrower and each guarantor of this Note hereby waive presentment for payment, protest, notice of protest and notice of nonpayment, and all pleas of division and discussion, and severally agree that their obligations and liabilities to Lender hereunder shall be on a "solidary" or "joint and several" basis. Borrower and each guarantor further severally agree that discharge or release of any party who is or may be liable to Lender for the indebtedness represented hereby, or the release of any collateral directly or indirectly securing repayment hereof, shall not have the effect of releasing any other party or parties, who shall remain liable to Lender, or of releasing any other collateral that is not expressly released by Lender. Borrower and each

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guarantor additionally agree that Lender's acceptance of payment other than in accordance with the terms of this Note, or Lender's subsequent agreement to extend or modify such repayment terms, or Lender's failure or delay in exercising any rights or remedies granted to Lender, shall likewise not have the effect of releasing Borrower or any other party or parties from their respective obligations to Lender, or of releasing any collateral that directly or indirectly secures repayment hereof. In addition, any failure or delay on the part of Lender to exercise any of the rights and remedies granted to Lender shall not have the effect of waiving any of Lender's rights and remedies. Any partial exercise of any rights and/or remedies granted to Lender shall furthermore not be construed as a waiver of any other rights and remedies; it being Borrower's intent and agreement that Lender's rights and remedies shall be cumulative in nature. Borrower and each guarantor further agrees that, should any event of default occur or exist under this Note, any waiver or forbearance on the part of Lender to pursue the rights and remedies available to Lender, shall be binding upon Lender only to the extent that Lender specifically agrees to any such waiver or forbearance in writing. A waiver or forbearance on the part of Lender as to one event of default shall not be construed as a waiver or forbearance as to any other default. Borrower and each guarantor of this Note further agrees that any late charges provided for under this Note will not be charges for deferral of time for payment and will not and are not intended to compensate Lender for a grace or cure period, and no such deferral, grace or cure period has been or will be granted to Borrower in return for the imposition of any late charge. Borrower recognizes that Borrower's failure to make timely payment of amounts due under this Note will result in damages to Lender, including but not limited to Lender's loss of the use of amounts due, and Borrower agrees that any late charges imposed by Lender hereunder will represent reasonable compensation to Lender for such damages. Failure to pay in full any installment or payment timely when due under this Note, whether or not a late charge is assessed, will remain and shall constitute an event of default hereunder.

SUCCESSORS AND ASSIGNS LIABLE. Borrower's and each guarantor's obligations and agreements under this Note shall be binding upon Borrower's and each guarantor's respective successors, heirs, legatees, devisees, administrators, executors and assigns. The rights and remedies granted to Lender under this Note shall inure to the benefit of Lender's successors and assigns, as well as to any subsequent holder or holders of this Note.

CAPTION HEADINGS. Caption headings of the sections of this Note are for convenience purposes only and are not to be used to interpret or to define their provisions. In this Note, whenever the context so requires, the singular includes the plural and the plural also includes the singular.

USURY CONSIDERATIONS. It is the intention of Borrower to conform strictly to applicable usury laws. Accordingly, if the transactions contemplated hereby would be usurious under applicable law (excluding applicable Louisiana law), then, in that event notwithstanding anything to the contrary in any agreement entered into as security for this Note, it is agreed as follows: (i) the aggregate of all interest that is taken, reserved, contracted for, charged or received under this Note or under any of the other aforesaid agreements or otherwise in

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connection with this Note shall under no circumstances exceed the maximum amount of interest allowed by applicable law, and any excess shall be credited on this Note by the holder hereof (or if the Note shall have been paid in full, refunded to Borrower); and (ii) in the event that maturity of this Note is accelerated by reason of default hereunder or otherwise, or in the event of any permitted prepayment, then such consideration that constitutes interest may never include more than the maximum amount allowed by applicable law, and excess interest, if any, provided for in this Note or otherwise shall be cancelled automatically as of the date of such acceleration or prepayment and, if theretofore prepaid, shall be credited on this Note (or if this Note shall have been paid in full, refunded to Borrower). To the extent that Louisiana law would be deemed the applicable law (as is the intent of Borrower hereunder), the provisions of this Note entitled Default Rate shall control.
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL
(a)     Borrower hereby irrevocably and unconditionally:
	1)	submits for itself and its property in any legal action or proceedings relating to this Note, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of Louisiana, the courts of the United States of America for the Eastern District of Louisiana, and appellate courts from any thereof;
	2)	consents that any such action or proceedings may be brought in such courts, and waives any objections that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
	3)	agrees that service of process in any such action or proceedings may be effected by mailing a copy by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Borrower at its address set forth above or at such other address at which Lender shall have been notified pursuant thereto; and,
	4)	agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to xxx in any other jurisdiction.
(b)     LENDER AND BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST THE OTHER.
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SEVERABILITY. If any provision of this Note is held to be invalid, illegal or unenforceable by any court, that provision shall be deleted from this Note and the balance of this Note shall be interpreted as if the deleted provision never existed.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
RENEWAL. This note is given in renewal of Indebtedness of Borrower to Lender, and nothing in this Note shall constitute the satisfaction or extinguishment of such Indebtedness, nor shall it be a novation of the amount owed by Borrower to Lender under Borrower's previous note dated March 4, 2002; rather this Note merely evidences a replacement of the amounts available to be borrowed by Borrower.
BORROWER:	THE EXPLORATION COMPANY OF DELAWARE, INC.
	By:__/s/ Xxxxx X. Sigmon___________________
	Name:      Xxxxx X. Xxxxxx Title:        President
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STATE OF TEXAS	)
	)
	) SS:
	)
COUNTY OF BEXAR	)
BEFORE ME, the undersigned Notary Public duly commissioned qualified and sworn within and for the State and County written above, personally came and appeared Xxxxx X. Xxxxxx, to me personally known, and who being by me duly sworn, did say that he is the authorized President of The Exploration Company of Delaware, Inc., whose name is subscribed to the foregoing Line of Credit Note and that he executed the foregoing Line of Credit Note by authority of said corporation's Board of Directors on behalf of said corporation as its free act and deed.
THUS DONE AND SIGNED before me and the two undersigned witnesses in the County and State aforesaid, on this 31st day of December, 2003. Witness my hand and official seal.
WITNESSES:
/s/ P. Xxxx Xxxxx                 Name	_/s/_James E. Sigmon__________________       Name: Xxxxx X. Xxxxxx
/s/_Robert X. Xxx, Xx.___     Name
	_/s/ Xxxx Black_______________ ________          NOTARY PUBLIC
	Seal
	My Commission expires:_February 14,2005
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