EXHIBIT 10.5 


AMENDED AND RESTATED SENIOR SECURED PROMISSORY NOTE

OF

RED MOUNTAIN RESOURCES, INC.


	
  

 	
  

 
	
 $6,000,000.00

 	
 December 10, 2012

 



          FOR VALUE
RECEIVED, the undersigned, RED MOUNTAIN
RESOURCES, INC., a Florida corporation (“Borrower”), having an address at 2515
McKinney Avenue, Suite 900, Dallas, Texas 75201, promises to pay to the order
of HYMAN BELZBERG (“HB”), WILLIAM
BELZBERG (“WB”),
CADDO MANAGEMENT, INC., a
Louisiana corporation (“Caddo”),
and RMS ADVISORS, INC., a Delaware
corporation (“RMS”, and
together with HB, WB and Caddo, collectively, “Lender”), having an office for payment at: 9665 Wilshire
Blvd., Suite M-10, Beverly Hills, CA 90212 or such other place as the Lender
may designate in writing, the principal amount up to and not to exceed SIX
MILLION United States Dollars (U.S. $6,000,000), to the extent advanced
hereunder and then outstanding, with interest on the unpaid principal balance
from the date of this Amended and Restated Senior Secured Promissory Note (this
“Promissory Note”), until
paid, at the Interest Rate (as hereinafter defined) provided herein. 


          This
Promissory Note amends and restates in its entirety that certain Senior Secured
Promissory Note of Red Mountain Resources, Inc., dated November 16, 2011, in
the original principal amount of $4,000,000.00, which note was given by
Borrower in favor of HB, WB and Caddo, as amended by that certain Amendment No.
1 to Senior Secured Promissory Note of Red Mountain Resources, Inc., dated as
of November 16, 2012 (as amended, the “Original
Note”).


1. Rate of Interest.
The outstanding principal balance of this Promissory Note shall bear interest
at a rate of twelve percent (12%) per annum (the “Interest Rate”). Interest on the principal amount hereof
and all other Obligations shall be computed on the basis of a 360-day year and
shall be charged for the actual number of days elapsed during any month or
other accrual period.


2. Date and Time of Payment.
Commencing on January 1, 2013 and on the first day of each month thereafter
through and until the Maturity Date (as defined below), Borrower shall pay to
Lender consecutive monthly installments of interest only in an amount equal to
the Monthly Payment Amount. The “Monthly
Payment Amount” shall equal interest only on the outstanding
principal balance, calculated at an annual interest rate equal to the Interest
Rate or the Default Rate, as applicable. 


All accrued and unpaid interest and the unpaid principal balance hereof
are due and payable on the earlier to occur of (a) the Maturity Date or (b) the
date of termination of this Promissory Note, whether by its terms, by
prepayment, or by acceleration. If any payment of principal or interest
on this Promissory Note shall become due and payable on a day other than a
business day, such payment shall be made on the next succeeding business day.
All amounts outstanding under this Promissory Note shall constitute Borrower’s
obligations and shall include, without limitation, all principal, interest
(including all interest which accrues after the commencement of any case or
proceeding by or against Borrower in bankruptcy whether or not allowed in such
case or proceeding), expenses, reasonable attorneys’ fees and any other sum
chargeable to Borrower hereunder and owing to Lender under this Promissory Note
(all such obligations and all other obligations of Borrower under this
Promissory Note being hereinafter referred to as the “Obligations”).


3. Use of Proceeds. On December 10 , 2012, the Lender shall
advance the sum of U.S. $2,000,000 to the Borrower (the “Advance”) by wire transfer of immediately available
funds to an account designated by the Borrower. Prior to the Advance, the Borrower and Lender acknowledge that there was U.S.
$4,000,000 of outstanding principal under the Promissory Note. Borrower represents and warrants that the loan evidenced by this
Promissory Note is for commercial purposes, and not for personal, household or consumer purposes.



    	



    	 



    
 


4. Default Rate.
Notwithstanding Section 1, after the occurrence of any Event of Default
and for so long as such Event of Default continues, and in any event from and
after the Maturity Date, all outstanding principal under this Promissory Note
shall bear interest until paid in full at a rate of interest equal to the
lesser of (i) eighteen percent (18%) per annum or (ii) the maximum rate
permitted by applicable law (the “Default
Rate”).


5. Maturity. To the
extent not sooner due and payable in accordance with this Promissory Note, the
Obligations shall be due and payable on February 14, 2013 (the “Maturity Date”). Upon payment of the
Obligations hereunder in full by or on behalf of Borrower, this Promissory Note
shall be deemed paid in full, and Lender shall contemporaneously execute a
release of the Liens in a form agreed to by the parties.


6. Prepayment. This Promissory Note may be prepaid,
in whole or in part at any time, without the payment of a premium, provided
that (i) Maker gives the holder of this Promissory Note written notice of
Borrower’s intention to prepay this Promissory Note or a portion thereof, (ii)
such prepayment is accompanied by payment of the greater of (x) all interest
accrued hereunder and unpaid through the date of prepayment (the “Prepayment Date”) and (y) all interest
on the outstanding principal amount of this Promissory Note that would have
been accrued and have been unpaid had the outstanding principal amount of the
Promissory Note not been repaid until the Maturity Date, in each case including
any other sums due and owing to the holder of this Promissory Note, whether
under this Promissory Note, the Security Instruments (as defined below), or any
other document or agreement entered into between Borrower and Lender in
connection with this Promissory Note (the “Minimum
Interest”). Borrower acknowledges that in the event of an
acceleration of payment of this Promissory Note following an Event of Default
(as defined below), a tender of payment of an amount necessary to satisfy the
Obligations, but not including the Minimum Interest, made at any time prior to
a foreclosure sale by Borrower, its successors or assigns or by anyone on
behalf of Borrower, shall be presumed to be and conclusively deemed to
constitute a prepayment hereunder and shall therefore be subject to the Minimum
Interest as calculated in accordance with this Promissory Note with the date of
prepayment being deemed the date of occurrence of the foreclosure sale or the
tender of payment of the amount necessary to pay the entire indebtedness
evidenced hereby in full, including the Minimum Interest.


7. Application of Payments.
All payments shall be made by Borrower in lawful money of the United States
without setoff, counterclaim or any other deduction whatsoever and shall be applied to amounts then
due and payable in the following order: (a) to Lender’s costs and expenses
reimbursable in connection herewith; (b) to interest accrued on the outstanding
principal balance of this Promissory Note; (c) to the principal amount hereof;
and (d) to all other Obligations, or in such other manner as Lender shall
determine in its sole and exclusive discretion.


8. Guarantee. The
Obligations of Borrower are secured by the unconditional guarantees of
Borrower’s wholly-owned subsidiary companies, BLACK
ROCK CAPITAL, INC., an Arkansas corporation, and RMR OPERATING, LLC, a Texas limited
liability company (each a “Subsidiary”
and together the “Subsidiaries”),
as evidenced by that certain Guaranty Agreement, dated of even date with the
Original Note, a true and correct copy of which is attached hereto as Exhibit
A and incorporated herein by this reference (the “Guarantee”). The Guarantee remains in
full force and effect with respect to this Promissory Note.


9. Security. This
Promissory Note shall be further secured by: (a) first-priority and
second-priority real property liens issued in favor of Lender pertaining to the
ownership or lessee interests of Borrower and Guarantors in certain developed
and undeveloped oil and gas leases covering mineral interest in lands located
in the States of Texas and New Mexico, together with a security interest in all
proceeds, interests, personal property and as-extracted collateral (as defined
by the Uniform Commercial Code) related to such interests (as more fully
described in Exhibit B); and (b) a Stock Pledge Agreement with respect
to 2,136,164 shares of Cross Border Resources, Inc. (“XBOR”), together with such evidence of
control of the foregoing stock as may be approved by Lender in its sole
discretion ((a) and (b) above, collectively, the “Collateral”). The identification of the Collateral except
for the XBOR stock is shown in one or more oil and gas lien documents attached
hereto as Exhibit B, which have been duly executed, in a recordable
form, by Borrower and Guarantors (collectively, the “Security Instruments”). The Collateral
includes certain leases in which Borrower or its Subsidiaries did not have an
interest as of the date of the Original Note, but in which they have acquired
an interest since the date of the Original Note, using proceeds disbursed
pursuant to the terms of the Original Note. Lender shall be entitled to file,
in any applicable jurisdiction, such financing statements as it shall deem
necessary or desirable in order to perfect its liens on the Collateral.



    	



    	 



    
 


10. Priority. This
Promissory Note shall be a senior obligation of Borrower, and for so long as
this Promissory Note shall be outstanding (i) Borrower shall be prohibited from
incurring any future indebtedness secured by all or any portion of the
Collateral without the prior written consent of Lender and (ii) if approved by
Lender in writing such future indebtedness incurred by Borrower shall be deemed
subordinate and inferior to, all respective right, title and interest of Lender
in, to and under this Promissory Note and any and all documents and instruments
evidencing, securing or otherwise relating to this Promissory Note and Borrower
shall cause to be executed such documents evidencing such subordination,
including but not limited to one or more intercreditor agreements, as Lender
shall require in Lender’s sole and absolute discretion.


11. Representations and Warranties.
Borrower makes the following representations and warranties to Lender, which
representations and warranties are true, correct, and complete as of the date
hereof, and shall remain true, correct and complete at all times that this
Promissory Note is outstanding.


	
  

 	
  

 
	
  

 	
 (a)
 Due Organization and
 Qualification. Borrower is duly organized and validly existing
 and in good standing under the laws of the jurisdiction of its organization
 and qualified to do business in any jurisdiction where it is required to be
 so qualified, and has all requisite power and authority to (i) own its assets
 and carry on its business, and (ii) execute, deliver and perform the
 Obligations.

 
	
  

 	
  

 
	
  

 	
 (b)
 Due Authorization; No Conflict.
 The execution, delivery, and performance by Borrower of this Promissory Note
 have been duly authorized by all necessary action on the part of Borrower.
 This Promissory Note has been duly executed and delivered by Borrower. The
 execution, delivery, and performance by Borrower of this Promissory Note and
 the consummation of the transactions contemplated hereby, do not and will not
 (i) violate any provision of federal, state, provincial or local law or
 regulation applicable to Borrower, its organizational documents, or any
 order, judgment, or decree of any court or other governmental authority, (ii)
 conflict with, result in a breach or termination of, or constitute (with any
 required due notice or lapse of time or both) a default under any material
 contractual obligation of Borrower, (iii) result in or require the creation
 or imposition of any lien of any nature whatsoever upon any properties or
 assets of Borrower, other than liens or security interests in favor of
 Lender, or (iv) require any approval of any of Borrower’s stockholders or any
 approval or consent of any other person or entity, other than consents or
 approvals that have been obtained and that are still in force and effect. The
 execution, delivery, and performance by Borrower of this Promissory Note do
 not and will not require any registration with, consent, or approval of, or
 notice to, or other action with or by, any governmental authority, other than
 consents or approvals that have been obtained and that are still in force and
 effect or the filing of liens or security interests in favor of Lender. This
 Promissory Note when executed and delivered by Borrower will be the legally
 valid and binding obligation of Borrower, enforceable against Borrower in
 accordance with its term, except as enforcement may be limited by (i)
 equitable principles or (ii) bankruptcy, insolvency, reorganization,
 moratorium, or similar laws relating to or limiting creditors’ rights
 generally, but (subject to the limitations set forth in the immediately
 preceding clauses (i) and (ii)) such unenforceability will not render this
 Promissory Note invalid as a whole or substantially interfere with
 realization of the principal benefits and/or security provided thereby.

 
	
  

 	
  

 
	
  

 	
 (c)
 No Litigation. No
 litigation, investigation or proceeding of or before any arbitrator or government
 authority is (i) pending or, to the knowledge of Borrower (after due and
 diligent inquiry), threatened with respect to this Promissory Note or the
 Collateral or any of the transactions contemplated hereby or (ii) pending or,
 to the knowledge of Borrower (after due and diligent inquiry), threatened by
 or against Borrower, its properties or revenues which, if adversely
 determined, would have a material adverse effect on its business, operations,
 property or financial condition, when taken as a whole.

 
	
  

 	
  

 
	
  

 	
 (d)
 No Default.
 Borrower is not in default under or with respect to any contractual
 obligation (including but not limited to any obligations arising under or in
 way related to Borrower’s obligations under any of the leases that comprise
 the Collateral) and no event of default has occurred or is continuing with
 respect to Borrower.

 
	
  

 	
  

 
	
  

 	
 (e)
 Taxes. Borrower
 has filed or caused to be filed all tax returns required to be filed by it
 and has paid all taxes due and payable on said returns or on any assessments
 made against Borrower or any of its property (including the Collateral). All other taxes, fees or other
 charges on Borrower or any of its property by any governmental authority have
 been paid and no tax liens have been filed.

 







    	



    	 



    
 


	
  

 	
  

 
	
  

 	
 (f)
 Validity of Leases.
 The leases and other agreements that are shown in Exhibit B and which
 constitute the Collateral are in full force and effect, the interests of the
 Borrower and the Guarantors are as indicated in those documents, and those
 interests have not been burdened by Borrower’s or Guarantor’s issuance of any
 secondary obligations in favor of third parties, including (by way of example
 only) net profit interests or overriding royalty interests, except as
 otherwise specified in Exhibit B and except as to the leases set forth
 on Exhibit B as expressly subject to a first priority deed of trust
 superior to the lien of Lender. Borrower has complied with all obligations
 arising under the leases and agreements included in the Collateral and is
 aware of no claim or condition which may result in cancellation or
 termination of such leases and agreements, or Borrower’s interest therein.

 


12. Covenants of Borrower.
As of the date hereof and so long as the Obligations hereunder, or any portion
thereof, shall be outstanding:


	
  

 	
  

 	
  

 
	
  

 	
 (a)
 Borrower will preserve and keep in force and effect, its corporate
 existence and all licenses and permits necessary to the proper conduct of its
 business;

 
	
  

 	
  

 
	
  

 	
 (b)
 Borrower will promptly pay and discharge, all taxes, assessments,
 charges or levies imposed upon Borrower, or upon or in respect of all or any
 part of the property or business of Borrower, all trade accounts payable in
 accordance with usual and customary business terms and all claims for work,
 labor or materials, which if unpaid might become a lien or charge upon any
 property of Borrower (including the Collateral); provided, Borrower
 shall not be required to pay such tax, assessment, charge, levy, account
 payable or claim if (i) the validity, applicability or amount thereof is
 being contested in good faith by appropriate action or proceeding which will
 prevent the forfeiture or sale of any property of Borrower, and (ii) Borrower
 shall set aside on its books, adequate reserves with respect thereto and
 subject to the reasonable approval of Lender;

 
	
  

 	
  

 
	
  

 	
 (c)
 Borrower will promptly comply with all laws, ordinances or
 governmental rules and regulations to which it is subject, the violations of
 which would materially and adversely affect its properties, business,
 prospects, profits or condition or would result in any material lien or
 charge upon any property of Borrower (including the Collateral);

 
	
  

 	
  

 
	
  

 	
 (d)
 Borrower will maintain, preserve and keep its properties, including
 the Collateral, which are used or useful in the conduct of its business in good
 repair and working order;

 
	
  

 	
  

 
	
  

 	
 (e)
 Borrower will not create, assume or incur or in any manner become
 liable with respect of any indebtedness to be secured by the Collateral,
 except this Promissory Note and any future indebtedness permitted hereunder as
 permitted by Section 10 set forth above;

 
	
  

 	
  

 
	
  

 	
 (f)
 Borrower will not create or incur any mortgage, pledge, security
 interest, encumbrance, lien or charge of any kind (a “Lien”) on the Collateral or upon any
 income or profits therefrom, or upon any property or assets purchased
 directly with funds disbursed by Lender pursuant to this Promissory Note,
 which shall become part of and shall serve as the Collateral, except:

 
	
  

 	
  

 
	
  

 	
  

 	
 (i)
 Liens for property taxes and assessments or levies and liens that are
 not yet due and payable, or that may
 thereafter be paid without penalty or that are being contested in good faith
 by appropriate actions or proceedings and for which appropriate reserves are
 established as determined by Lender in its sole and absolute discretion;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)
 Liens of or resulting from any judgment or award, the time for appeal
 or petition for rehearing of which shall not have expired or in respect of
 which the Borrower shall in good faith be prosecuting an appeal or proceeding
 for a review and in respect of which a stay of execution pending such appeal
 or proceeding for review shall have been secured; or

 







    	



    	 



    
 


	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)
 Liens or priority claims (A) incidental to the conduct of business, or
 (B) arising from the ownership or lease of properties and assets and not in
 connection with the borrowing of money, provided, in each case, the
 obligation secured is not overdue, or if overdue, is being contested in good
 faith by appropriate actions or proceedings and provided, further,
 that Borrower shall have received the prior written consent of Lender to any
 Lien described in this paragraph.

 
	
  

 	
  

 	
  

 
	
  

 	
 (g) Maintenance of Leases and
 Agreements. With respect to any and all mineral leases or related
 agreements comprising the Collateral, Borrower will (or will cause Guarantors
 to): (i) comply with all of its covenants and obligations under such leases
 and agreements, whether express or implied at law; (ii) promptly notify
 Lender of any demands, suits or notices received regarding any claims of
 breach, violation or termination of such leases and agreements; (iii)
 undertake and perform all obligations and conditions necessary to maintain
 such leases and agreements and Borrower’s interest therein in full force and
 effect for so long as any Obligations under this Promissory Note are
 outstanding; (iv) in the event of loss or termination of any such lease or
 agreement, promptly pay down the Obligations in an amount equivalent to the
 reasonably allocable collateral value of such lease or agreement; provided,
 that the Lender may, in its sole and absolute discretion, accept substitute
 collateral of reasonably equivalent value acceptable to Lender; and (v) not
 assign or transfer any of the Collateral or any interest in any of the
 Collateral, including without limitation any net profits interest, overriding
 royalty interest, working interest, production payment or other interest,
 without Lender’s express written consent, which consent may be withheld by
 Lender in its sole and absolute discretion.

 


13. Events of Default; Remedies;
Acceleration.


	
  

 	
  

 	
  

 
	
  

 	
 (a) The occurrence of any one or more of the following events
 (regardless of the reason therefor) shall constitute an “Event of Default”
 hereunder:

 
	
  

 	
  

 
	
  

 	
  

 	
 (i)
 Borrower fails to make any payment of the outstanding principal
 balance of this Promissory Note, any payment of interest due hereunder, or on
 any of the other Obligations as and when due and payable, and such failure
 continues for a period of 5 days after written notice thereof from Lender;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)
 Any representation or warranty of Borrower made in this Promissory
 Note or any other document made by or on behalf of Borrower in connection
 herewith and the transactions contemplated hereby proves to have been false
 or incorrect in any material respect or Borrower shall fail to comply in all
 respects with any covenant herein or therein and such failure continues for a
 period of 30 days after written notice thereof from Lender;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)
 Borrower shall violate any provision of this Promissory Note or any
 other document made by or on behalf of Borrower in connection herewith and
 the transactions contemplated hereby, including, without limitation, failure
 to comply with the terms and provisions of Section 10 of this
 Promissory Note, which violation continues beyond any applicable notice and
 cure period;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iv)
 A case or proceeding is commenced against Borrower, or any Guarantor
 of this Promissory Note, seeking a decree or order (A) under Title 11 of the
 United States Bankruptcy Code (11 U.S.C. §§101 et seq., as amended, and any successor statute, the “Bankruptcy
 Code”), or any other applicable federal, state or foreign bankruptcy or
 other similar law, rule or regulation, (B) appointing a custodian, receiver,
 liquidator, assignee, trustee or sequestrator (or similar official) for
 Borrower or for any material part of Borrower’s assets (or for any Subsidiary
 or any material part of Subsidiary’s assets), or (C) ordering the winding-up
 or liquidation of the affairs of Borrower or any Subsidiary, and such case or
 proceeding shall remain undismissed or unstayed for sixty (60) days or more
 or a decree or order granting the relief sought in such case or proceeding
 shall be entered by a court of competent jurisdiction;

 







    	



    	 



    
 


	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (v)
 Borrower or a Subsidiary, without the prior written consent of Lender
 (A) files a petition seeking relief under the Bankruptcy Code, or any other
 applicable federal, state or foreign bankruptcy or other similar law, rule or regulation, (B) consents to
 or fails to contest in a timely and appropriate manner the institution of
 proceedings thereunder or the filing of any such petition or the appointment
 of or taking possession by a custodian, receiver, liquidator, assignee,
 trustee or sequestrator (or similar official) for Borrower or for any
 material part of Borrower’s assets, (C) makes an assignment for the benefit
 of creditors, (D) takes any action in furtherance of the foregoing or (E)
 admits in writing its inability to pay its debts as such debts become due;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vi)
 If this Promissory Note or any financing statement, deed of trust,
 security agreement or other instrument executed, delivered or filed in
 connection herewith or with the security interest granted to Lender
 hereunder, shall, for any reason, fail or cease to create a valid and
 perfected lien on or security interest in any or all of the Collateral or the
 Collateral shall be compromised, encumbered, cancelled, expired, terminated
 or otherwise rescinded, all as determined by Lender in its sole and absolute
 discretion;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (vii)
 If either of the following conditions occur, as determined by the
 Lender in the exercise of its sole but reasonable discretion: (A) Borrower is
 unable in the ordinary course of business to pay its debts as they are due;
 or (B) the sum of Borrower’s debts exceeds the fair market value of all of
 Borrower’s assets and property. Prior to a default being declared under this
 sub-paragraph, Lender shall provide Borrower written notice of Lender’s
 determination. Borrower shall, thereafter, have ten (10) days to provide
 evidence of its ability to pay its debts satisfactory to Lender. A default
 under this sub-paragraph shall only then occur if, subsequent to the
 conclusion of such 10-day period and after consideration of any evidence
 provided by Borrower, Lender continues to believe, in the exercise of its
 reasonable discretion, that Borrower is in imminent danger of being unable to
 timely pay any amounts due to Lender under this Promissory Note as such
 amounts become due; or

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (viii)
 If Borrower shall default on any material obligations of Borrower or
 an event of default shall occur with respect to any material agreement of
 Borrower, whether such agreement shall be in effect or effective subsequent
 to this Promissory Note.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b) Immediately upon the occurrence of any Event of Default, Lender
 may (i) in its sole and absolute discretion elect to accelerate and declare
 as immediately due any and all Obligations owed hereunder; (ii) proceed to
 protect and enforce Lender’s rights by suit in equity, action at law and/or
 other appropriate proceeding, either for specific performance of any covenant
 or condition contained in this Promissory Note or in any instrument or
 document delivered to Lender pursuant to this Promissory Note, or in aid of
 the exercise of any power granted in this Promissory Note or any such
 instrument or document, and (iii) proceed to enforce payment of the
 Obligations in such manner as Lender may elect, including the enforcement of
 the Guarantee and/or foreclosure of the Collateral and to realize upon any
 and all rights of Lender hereunder. Upon the occurrence of any Event of
 Default, Lender shall have a right to immediately enforce its rights
 hereunder and proceed against or foreclose upon the Collateral without notice
 to Borrower. All of Lender’s rights hereunder shall be cumulative. Lender
 shall have all other rights and remedies not inconsistent herewith as
 provided under applicable law or in equity, and no exercise by Lender of one
 right or remedy shall be deemed an election, and no waiver by Lender of any
 Event of Default shall be deemed a continuing waiver. No delay by Lender
 shall constitute a waiver, election or acquiescence by it and no waiver in
 one circumstance shall be deemed to be a waiver in any other.

 
	
  

 	
  

 
	
  

 	
 (c) In the event that the Obligations hereunder shall be paid in full
 by or on behalf of Borrower, after the acceleration of this Promissory Note
 but prior to the Maturity Date, then this Promissory Note shall be deemed
 paid in full, and Lender shall promptly release any Lien of Lender on the
 Collateral.

 


14. Certain Rights and Waivers.
To the maximum extent permitted by applicable law, Borrower hereby expressly
waives: (a) all presentments, demands for performance, notices of
nonperformance (except to the extent expressly required by this Promissory
Note), protests, notices of protest and notices of dishonor; (b) any
requirement of diligence or promptness on the part of Lender in the enforcement
of its rights under this Promissory Note; and (c) any defense (other than
indefeasible payment in full) which it may now or hereafter have with respect
to its liability under this Promissory Note. No release of any security for the
Obligations or any person liable for payment of the Obligations, no extension of time for payment of this Promissory Note
or any installment hereof, and no alteration, amendment or waiver of any
provision of the other documents executed in connection herewith made by
agreement between Lender and any other person or party shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of
Borrower, and any other person or party who may become liable under the
documents executed in connection herewith, for the payment of all or any part
of the Obligations.



    	



    	 



    
 


15. Assignments.
Borrower may not assign or transfer any of its rights or obligations hereunder
(including its interest in the Collateral) without the express, written consent
of Lender first had and obtained, which consent may be granted or withheld in
Lender’s sole and absolute discretion. Any such purported assignment or
transfer by Borrower without the express, written consent of Lender shall be
null and void ab initio.


16. Costs and Expenses.
Borrower agrees to pay all reasonable costs and expenses of Lender, including
without limitation all reasonable fees and disbursements of counsel, advisors,
consultants, examiners and appraisers for Lender, in connection with (a) the
amendment and restatement of this Promissory Note and advancement of the
additional principal amount under Section 3, together with issuance and/or
modification of the Security Instruments and other documents ancillary thereto
deemed necessary by Lender to secure the loan evidenced by this Promissory Note
(which fees and disbursements of Lender’s counsel, advisors, consultants,
examiners and appraisers shall not exceed $15,000), (b) any enforcement
(whether through negotiations, legal process or otherwise) of this Promissory
Note, the Security Instruments, or any other agreement or instrument relating
to the Collateral, (c) any workout or restructuring of this Promissory Note
during the pendency of one or more Events of Default, (d) any bankruptcy case
or proceeding of Borrower or any appeal thereof, and (e) upon the occurrence
and during the continuance of an Event of Default, any efforts to verify,
protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise
dispose of any of the Collateral.


17. Excess Interest.
It is expressly stipulated and agreed to be the
intent of Borrower and Lender at all times to comply strictly with the applicable
Texas law governing the maximum rate or amount of interest payable on the
indebtedness evidenced by this Promissory Note and the “Related Indebtedness”
(as defined below) (or applicable United States federal law to the extent that
it permits Lender to contract for, charge, take, reserve or receive a greater
amount of interest than under Texas law). If the applicable law is ever
judicially interpreted so as to render usurious any amount (a) contracted for,
charged, taken, reserved or received pursuant to this Promissory Note or any
other communication or writing by or between Borrower and Lender related to the
transaction or transactions that are the subject matter of this Promissory
Note, (b) contracted for, charged, taken, reserved or received by reason of
Lender’s exercise of the option to accelerate the maturity of this Promissory
Note and/or any and all indebtedness paid or payable by Borrower to Lender
pursuant to any loan document other than the Promissory Note (such other
indebtedness being referred to in this Section as the “Related Indebtedness”), or (c) Borrower
will have paid or Lender will have received by reason of any voluntary
prepayment by Borrower of this Promissory Note and/or the Related Indebtedness,
then it is Borrower’s and Lender’s express intent that all amounts charged in
excess of the maximum lawful rate shall be automatically canceled, ab initio,
and all amounts in excess of the maximum lawful rate theretofore collected by
Lender shall be credited on the principal balance of this Promissory Note
and/or the Related Indebtedness (or, if this Promissory Note and the Related
Indebtedness have been or would thereby be paid in full, refunded to Borrower),
and the provisions of this Promissory Note and any other documents ancillary to
the loan evidenced by this Promissory Note shall immediately be deemed reformed
and the amounts thereafter collectible hereunder and thereunder reduced,
without the necessity of the execution of any new document, so as to comply
with the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder and thereunder; provided, however,
if this Promissory Note has been paid in full before the end of the stated term
of this Promissory Note, then Borrower and Lender agree that Lender shall, with
reasonable promptness after Lender discovers or is advised by Borrower that
interest was received in an amount in excess of the maximum lawful rate, either
refund such excess interest to Borrower and/or credit such excess interest against
the principal amount of this Promissory Note then owing by Borrower to Lender.
Borrower hereby agrees that as a condition precedent to any claim or
counterclaim (in which event such proceeding shall be abated for such time
period) seeking usury penalties against Lender, Borrower will provide written
notice to Lender, advising Lender in reasonable detail of the nature and amount
of the violation, and Lender shall have sixty (60) days after receipt of such
notice in which to correct such usury violation, if any, by either refunding
such excess interest to Borrower or crediting such excess interest against this
Promissory Note then owing by Borrower to Lender. All sums contracted for,
charged, taken, reserved or received by Lender for the use, forbearance or
detention of any debt evidenced by this Promissory Note and/or the other loan
documents shall, to the extent permitted by applicable law, be amortized or
spread, using the actuarial method, throughout the
stated term of this Promissory Note (including any and all renewal and
extension periods) until payment in full so that the rate or amount of interest
on account of this Promissory Note does not exceed the maximum lawful rate from
time to time in effect and applicable to this Promissory Note for so long as
the debt evidenced thereby is outstanding. In no event shall the provisions of
Chapter 346 of the Texas Finance Code apply to this Promissory Note. To the
extent that Lender is relying on Chapter 303 of the Texas Finance Code to
determine the maximum lawful rate payable on the Promissory Note, Lender will
utilize the weekly ceiling from time to time in effect as provided in such
Chapter 303, as amended. To the extent United States federal law permits Lender
to contract for, charge, take, receive or reserve a greater amount of interest
than under Texas law, Lender will rely on United States federal law instead of
such Chapter 303 for the purpose of determining the maximum lawful rate.
Additionally, to the extent permitted by applicable law now or hereafter in
effect, Lender may, at its option and from time to time, utilize any other
method of establishing the maximum lawful rate under such Chapter 303 or under
other applicable law by giving notice, if required, to Borrower as provided by
applicable law now or hereafter in effect.



    	



    	 



    
 


18. CHOICE OF LAW.
THE VALIDITY OF THIS PROMISSORY NOTE, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE BORROWER AND LENDER WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REFERENCE TO CONFLICTS OF LAW PRINCIPLES EXCEPT TO THE EXTENT NECESSARY
TO ENFORCE THIS CHOICE OF LAW PROVISION.


19. Notices. All
communications hereunder shall be in writing and shall be deemed to be duly
given and received (a) upon delivery if delivered personally or upon confirmed
transmittal if by facsimile, (b) on the next business day if sent by nationally
recognized overnight courier, or (c) four (4) business days after mailing if
mailed by prepaid certified or registered mail, return receipt requested, in
each case to the appropriate notice address or facsimile number.


20. Independent Arm’s Length
Transaction. It is understood and agreed that this Promissory
Note and the transactions contemplated hereby and thereby were negotiated in an
arms-length transaction separate and distinct from any other transaction or
contractual obligations and are independent of any transaction or transactions
between Borrower, on the one hand, and Lender and any of its affiliates or
related entitles on the other hand. Borrower further agrees that the
contractual obligations of Borrower hereunder are in no way dependent or
conditioned upon any other agreements, contracts or transactions whatsoever
unless expressly stated herein.


21. Parties.
Nothing herein is intended to create or stipulate any benefit for any third
party, including without limitation any Guarantor.


22. Further Assurances.
Upon request of Lender, Borrower will promptly correct any defects, errors, or
omissions in the execution or acknowledgment of this Promissory Note or the
Security Instruments, and execute, acknowledge, and deliver such other
assurances and instruments as shall, in the opinion of Lender, be necessary to
fulfill the terms of this Promissory Note.


23. Severability.
In the event that any one or more of the provisions contained in this
Promissory Note 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 Promissory Note.


24. No Waiver by Lender.
No course of dealing on the part of Lender, its officers or employees, nor any
failure or delay by Lender with respect to exercising any of its rights or
remedies hereunder, nor any extension of time to Borrower to cure any Event of
Default hereunder, shall operate as a waiver thereof, nor shall the exercise or
partial exercise of any such right or remedy preclude the exercise of any other
right or remedy.


25. Time of the Essence.
Time shall be of the essence with respect to all provisions of this Promissory
Note.



    	



    	 



    
 


26. Amendment. This
Promissory Note cannot be changed, modified, amended, waived, extended,
discharged or terminated orally or by estoppel or waiver, regardless of any
claimed partial performance referable thereto, or by any alleged oral
modification or by any act or failure to act on the part of Borrower or Lender.


27. Construction.
If any paragraph, clause or provision of this Promissory Note is construed or
interpreted by a court of competent jurisdiction to be void, invalid or
unenforceable, such voidness, invalidity or unenforceability will not affect
the remaining paragraphs, clauses and provisions of this Promissory Note, which
shall nevertheless be binding upon the parties hereto with the same effect as
though the void or unenforceable part had been severed and deleted.


28. JURY WAIVER.
ALL PARTIES TO THIS AGREEMENT HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER
PARTY.


29. JURISDICTION.
BORROWER HEREBY IRREVOCABLY SUBMITS ITSELF TO THE JURISDICTION AND VENUE OF THE
STATE AND FEDERAL COURTS OF TEXAS AND EACH STATE WHERE THE COLLATERAL IS
LOCATED AND AGREES, AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN
ANY LEGAL PROCEEDING RELATING TO THIS PROMISSORY NOTE IN ACCORDANCE WITH THE
LAWS OF SUCH JURISDICTIONS. 


[End of text; signature on next page]



    	



    	 



    
 


          IN WITNESS
WHEREOF, the undersigned has executed this Amended and Restated Senior Secured
Promissory Note as of the date first written above.


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 RED MOUNTAIN RESOURCES, INC.,

 
	
  

 	
 A FLORIDA CORPORATION

 
	
  

 	
  

 
	
  

 	
 BY: 

 	
 /s/ Alan W.
 Barksdale

 	
  

 
	
  

 	
 NAME: Alan W. Barksdale 

 
	
  

 	
 TITLE: Chief Executive Officer