Red Mountain Resources, Inc. 10-K 


Exhibit 10.12


 



 


FIFTH AMENDMENT TO SENIOR FIRST LIEN
SECURED CREDIT AGREEMENT

AND WAIVER


BY AND AMONG


INDEPENDENT BANK,


as Lender


AND


RED MOUNTAIN RESOURCES, INC.


CROSS BORDER RESOURCES, INC.


BLACK ROCK CAPITAL, INC.


RMR OPERATING, LLC,


 


as Borrowers


 


 


Effective

JUNE 30, 2015


 


 



 


 




    	 



    	 



    

 


FIFTH AMENDMENT TO SENIOR FIRST LIEN SECURED CREDIT AGREEMENT
AND WAIVER


This FIFTH
AMENDMENT TO SENIOR FIRST LIEN SECURED CREDIT AGREEMENT AND WAIVER (this “Agreement”) is made effective,
but not necessarily executed on, the 30th day of June, 2015 (the “Effective Date”), by and
among INDEPENDENT BANK, a Texas banking association, as lender under the Senior First Lien Secured Credit Agreement (the
“Lender”), and RED MOUNTAIN RESOURCES, INC., a Texas corporation, CROSS BORDER RESOURCES, INC., a Nevada
corporation, BLACK ROCK CAPITAL, INC., an Arkansas corporation, and RMR OPERATING, LLC, a Texas limited liability company
(the four entities immediately preceding, collectively, the “Borrowers”).


W I T N E
S S E T H:


WHEREAS, the
Borrowers and the Lender are parties to that certain Senior First Lien Secured Credit Agreement, dated February 5, 2013,
among the Borrowers and the Lender (as amended by that certain Amendment and Consent dated July 19, 2013, that certain
Amendment and Waiver dated September 12, 2013, that certain Third Amendment to First Lien Secured Credit Agreement and Waiver
dated effective as of March 1, 2015, and that certain Fourth Amendment to Senior First Lien Secured Credit Agreement dated
as of April 21, 2015, the “Credit Agreement”); and


WHEREAS, the parties
desire to affinn the amount of the Borrowing Base and the Commitment and increase the amount of the Monthly Commitment Reductions,
and the Borrowers have requested that the Lender waive any default or right to exercise any remedy as a result of the Borrowers
having failed to be in compliance with the requirements of Section 6.18 and Section 6.21 of the Credit Agreement, and Lender has
agreed to do so as provided in this Agreement; and


NOW, THEREFORE,
in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows:


ARTICLE I

DEFINITIONS AND INTERPRETATION


1.1


Terms Defined
Above. As used in this Agreement, each of the terms “Agreement,” “Borrowers,” “Lender”
and “Credit Agreement” shall have the meaning assigned to such term hereinabove.


1.2


Terms Defined in
Agreement. Each term defined in the Credit Agreement and used herein without definition shall have the meaning assigned to
such term in the Credit Agreement, unless expressly provided to the contrary.


1.3


References. References
in this Agreement to Schedule, Exhibit, Article, or Section numbers shall be to Schedules, Exhibits, Articles, or Sections of this
Agreement, unless expressly stated to the contrary. References in this Agreement to “hereby,” “herein,”
“hereinafter,” “hereinabove,” “hereinbelow, “ “hereof,” “hereunder”
and words of similar import shall be to this Agreement in its entirety and not only to the particular Schedule, Exhibit, Article,
or Section in which such reference appears. Specific enumeration herein shall not exclude the general and, in such regard, the
terms “includes” and “including” used herein shall mean “includes, without limitation,” or
“including, without limitation,” as the case may be, where appropriate. Except as otherwise indicated, references in
this Agreement to statutes, sections, or regulations are to be construed as including all statutory or regulatory provisions consolidating,
amending, replacing, succeeding, or supplementing the statute, section, or regulation referred to. References in this Agreement to “writing”
include printing, typing, lithography, facsimile reproduction, and other means of reproducing words in a tangible visible form.
References in 


 


 







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this Agreement to amendments and other contractual instruments shall be deemed to include all exhibits and appendices
attached thereto and all subsequent amendments and other modifications to such instruments, but only to the extent such amendments
and other modifications are not prohibited by the terms of this Agreement. References in this Agreement to Persons include their
respective successors and permitted assigns.


1.4


Articles and Sections.
This Agreement, for convenience only, has been divided into Articles and Sections; and it is understood that the rights and other
legal relations of the parties hereto shall be determined from this instrument as an entirety and without regard to the aforesaid
division into Articles and Sections and without regard to headings prefixed to such Articles or Sections.


1.5


Number and Gender.
Whenever the context requires, reference herein made to the single number shall be understood to include the plural; and likewise,
the plural shall be understood to include the singular. Definitions of terms defined in the singular or plural shall be equally
applicable to the plural or singular, as the case may be, unless otherwise indicated. Words denoting sex shall be construed to
include the masculine, feminine and neuter, when such construction is appropriate; and specific enumeration shall not exclude the
general but shall be construed as cumulative.


ARTICLE II

AMENDMENTS


2.1


Amendment Section
1.01 of the Credit Agreement. The term “Fifth Amendment” is hereby added to and made a part of Section
1.01 of the Credit Agreement and shall read as follows:


“‘Fifth Amendment’
means that certain Fifth Amendment to Senior First Lien Secured Credit Agreement and Waiver dated effective as of June 30, 2015,
between Borrowers and Lender.”


2.2


Amendment to Section
2.02 of the Credit Agreement. Section 2.02(a) of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:


“(a)


Borrowing
Base. The Borrowing Base in effect as of the date of the Fifth Amendment is $12,400,000.00 and the initial Monthly Commitment
Reduction is $125,000.00. The Monthly Commitment Reduction shall apply on July 1, 2015, and on the first date of each calendar
month thereafter until redetermined as set forth in this Section 2.02. Such Borrowing Base and the Monthly Commitment Reduction
shall remain in effect until the next redetermination made pursuant to this Section 2.02. The Borrowing Base and Monthly
Commitment Reduction shall be determined in accordance with the standards set forth in Section 2.02(d) and is subject to
periodic redetermination pursuant to Sections 2.02(b) and 2.02(c).”


ARTICLE III

WAIVER


3.1


Agreement. The Lender
waives any Default, Event of Default or right to exercise any remedy as a result of the failure by the Borrowers to be in compliance
with the following:


 


 




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(a)


the requirements
of Section 6.18 of the Credit Agreement with respect to the permitted ratio of consolidated current assets to consolidated current
liabilities of Borrowers for the fiscal quarter ended December 31, 2014; and


(b)


the requirements
of Section 6.21 of the Credit Agreement with respect to the trade payables or other accounts payable of Borrowers that may be past
due for more than 90 days for the fiscal quarter ended December 31, 2014 and the fiscal quarter ended March 31, 2015.


3.2


Limitation on Agreement.
Except for the waivers set forth above in this Article III, nothing contained herein shall otherwise be deemed a consent
to any violation of, or a waiver of compliance with, any term, provision or condition set forth in any of the Loan Documents or
a consent to or waiver of any other or future violations, breaches, Defaults or Events of Default. The waivers set forth above
in this Article III are made only with respect to the specific fiscal quarter(s) set forth above and shall not apply to
any other periods.


ARTICLE IV

RATIFICATION, REPRESENTATION, AND ACKNOWLEDGMENT


4.1


Ratifications.
The terms and provisions set forth in this Agreement shall modify and supersede all inconsistent terms and provisions set forth
in the Credit Agreement and, except as expressly modified and superseded by this Agreement, the terms and provisions of the Credit
Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect. Borrowers agree
that the Credit Agreement, as amended hereby, and the other Loan Documents continue to be legal, valid, binding obligations of
Borrowers enforceable against Borrowers in accordance with their respective terms.


4.2


Renewal and Extension
of Security Interests and Liens. Borrowers hereby renew and affirm the liens and security interests created and granted in
the Loan Documents. Borrowers agree that this Agreement shall in no manner affect or impair the liens and security interests securing
the Obligations, and that such liens and security interests shall not in any manner be waived, the purposes of this Agreement being
to modify the Credit Agreement as herein provided, and to carry forward all liens and security interests securing same, which are
acknowledged by Borrowers to be valid and subsisting.


4.3


Representations and Warranties.
Borrowers hereby represent and warrant to Lender as follows:


(a)


the execution,
delivery and performance of this Agreement and any and all other Loan Documents executed and delivered in connection herewith have
been authorized by all requisite corporate and limited liability company action on the part of Borrowers, as applicable, and do
not and will not conflict with or violate any provision of any applicable laws, rules, regulations or decrees, the Governing Agreements
of any Borrower, or any agreement, document, judgment, license, order or permit applicable to or binding upon any Borrower or its
assets. No consent, approval, authorization or order of, and no notice to or filing with, any court or governmental authority or
third person is required in connection with the execution, delivery or performance of this Agreement or to consummate the transactions
contemplated hereby;


(b)


the representations and
warranties contained in the Credit Agreement, as amended hereby, and the other Loan Documents are true and correct in all material
respects on and as of the date hereof as though made on and as of the date hereof, except to the extent such representations and
warranties relate to an earlier date;


 


 




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(c)


each Borrower is
in compliance in all material respects with all covenants and agreements contained in the Credit Agreement, as amended hereby,
and the other Loan Documents to which it is a party;


(d)


as of the date of this Agreement the
unpaid principal balance of the Note is $12,400,000.00, and such amount is unconditionally owed by Borrowers to Lender without
offset, defense or counterclaim of any kind or nature whatsoever;


(e)


as of the date
of this Agreement, the amount of the Commitment is Twelve Million Four Hundred Thousand and No/100 Dollars ($12,400,000.00),
which amount is subject to Monthly Commitment Reductions and termination pursuant to Article VII of the Credit Agreement;


(f)


as of the date of this Agreement, the
Letter of Credit Exposure is $0; and


(g)


notwithstanding
any provision in this Agreement, the Credit Agreement, or any Mortgage to the contrary, in no event is any Building (as
defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood
Insurance Regulation) included in the definition of “Mortgaged Property,” (as defined in the Mortgages) and no
Building or Manufactured (Mobile) Home is encumbered by any Mortgage. As used herein, “Flood Insurance
Regulations” shall mean (a) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor
statute thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statutes
thereto, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001 et seq.), as the same may be
amended or recodified from time to time, and (d) the Flood Insurance Reform Act of 2004 and any regulations promulgated
thereunder.


ARTICLE V

CONDITIONS PRECEDENT


5.1


Conditions. The effectiveness of
this Agreement is subject to the satisfaction of the following conditions precedent, unless specifically waived in writing by Lender:


(a)


Lender shall have
received the following documents, each in form and substance satisfactory to Lender:


(i)


this Agreement, duly executed by Borrowers;
and


(ii)


Resolutions of the
Board of Directors (or other governing body) of each Borrower certified by the Secretary or an Assistant Secretary (or other custodian
of records of each Borrower) which authorize the execution, delivery, and performance by each Borrower of this Agreement and the
other Loan Documents to be executed in connection herewith.


(b)


The representations
and warranties contained in the Credit Agreement, as amended hereby, and in each other Loan Document shall be true and correct
as of the date hereof, as if made on the date hereof, except to the extent such representation and warranties relate to an earlier
date;


(c)


No Event of Default shall
have occurred and be continuing and no Default shall exist, unless such Event of Default or Default has been specifically waived
in writing by Lender; and


 


 




    	Fifth Amendment to Senior First Lien Secured Credit Agreement and Waiver	4 



    	 



    

 


(d)


All corporate proceedings
taken in connection with the transactions contemplated by this Agreement and all documents, instruments and other legal matters
incident thereto, shall be satisfactory to Lender and its legal counsel.


ARTICLE VI

MISCELLANEOUS


6.1


Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns permitted pursuant to the Credit Agreement.


6.2


Rights of Third
Parties. Except as provided in Section 4.1, all provisions herein are imposed solely and exclusively for the benefit
of the parties hereto.


6.3


Counterparts.
This Agreement may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts
taken together shall be deemed to constitute one and the same instrument and shall be enforceable upon the execution of one or
more counterparts hereof by each of the parties hereto. In this regard, each of the parties hereto acknowledges that a counterpart
of this Agreement containing a set of counterpart execution pages reflecting the execution of each party hereto shall be sufficient
to reflect the execution of this Agreement by each necessary party hereto and shall constitute one instrument.


6.4


Integration.
THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. ALL PRIOR UNDERSTANDINGS,
STATEMENTS AND AGREEMENTS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF ARE SUPERSEDED BY THIS AGREEMENT.


6.5


Invalidity.
IN THE EVENT THAT ANY ONE OR MORE OF THE PROVISIONS CONTAINED IN THIS AGREEMENT SHALL FOR ANY REASON BE HELD INVALID, ILLEGAL
OR UNENFORCEABLE IN ANY RESPECT, SUCH INVALIDITY, ILLEGALITY OR UNENFORCEABILITY SHALL NOT AFFECT ANY OTHER PROVISION OF THIS
AGREEMENT.


6.6


Governing Law.
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF SUCH LAWS RELATING TO CONFLICT OF LAWS.


6.7


RELEASE. BORROWERS
ACKNOWLEDGE THAT THEY HAVE NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER
THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF THEIR LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE
RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE LENDER. BORROWERS VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE THE
LENDER, ITS PREDECESSORS, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS,
CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED
OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AGREEMENT IS EXECUTED, WHICH THE BORROWERS MAY NOW OR HEREAFTER HAVE AGAINST THE LENDER, ITS PREDECESSORS, AGENTS, DIRECTORS, OFFICERS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF


 


 




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WHETHER ANY SUCH
CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY OF THE OBLIGATIONS, INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST
LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION
FOR AND EXECUTION OF THIS AGREEMENT.


(Signatures appear on following pages)


 


 




    	Fifth Amendment to Senior First Lien Secured Credit Agreement and Waiver	6 



    	 



    

 


IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers, to be effective as of
the Effective Date.


	 	LENDER:
	 	 
	 	INDEPENDENT BANK,
	 	a Texas banking corporation
	 	 	 
	 	 	 
	 	By:	/s/ John Davis
	 	 	John Davis
	 	 	Executive Vice President
	 	 	 
	 	 	 
	 	BORROWER:
	 	 	 
	 	RED MOUNTAIN RESOURCES, INC.,
	 	a Texas corporation
	 	 	 
	 	By:	
	 	 	Alan W. Barksdale
	 	 	President & Chief Executive Officer
	 	 	 
	 	CROSS BORDER RESOURCES, INC.,
	 	a Nevada corporation
	 	 
	 	By:	
	 	 	Kenneth Lamb
	 	 	Chief Accounting Officer
	 	 	 
	 	BLACK ROCK CAPITAL, INC.,
	 	an Arkansas corporation
	 	 	 
	 	By:	
	 	 	Alan W. Barksdale
	 	 	President
	 	 	 
	 	RMR OPERATING, LLC,
	 	a Texas limited liability company
	 	 	 
	 	 	 
	 	By:	
	 	 	Alan W. Barksdale
	 	 	President


 


 






    	Fifth Amendment to Senior First Lien Secured Credit Agreement and Waiver	Signature Page