Document:

CONSENT, WAIVER AND FIRST AMENDMENT

TO AMENDED AND RESTATED CREDIT AGREEMENT

BETWEEN

CROSS BORDER RESOURCES, INC.

AND

TEXAS CAPITAL BANK, N.A.

Effective

February 29, 2012

 

 

 

 

 

 

    	 

    	 

    
 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	ARTICLE I	DEFINITIONS AND INTERPRETATION	1
	 	 	 
	1.1	Terms Defined Above	1
	1.2	Terms Defined in Agreement	1
	1.3	References	1
	1.4	Articles and Sections	2
	1.5	Number and Gender	2
	1.6	Negotiated Transaction	2
	 	 	 
	ARTICLE II	CONSENT AND WAIVER	2
	 	 	 
	2.1	Consent and Waiver	2
	2.2	Limitation on Consent and Waiver	2
	 	 	 
	ARTICLE III	AMENDMENT TO AGREEMENT	2
	 	 	 
	ARTICLE IV	CONDITIONS TO EFFECTIVENESS	3
	 	 	 
	ARTICLE V	RATIFICATION AND ACKNOWLEDGEMENT	3
	 	 	 
	ARTICLE VI	REPRESENTATIONS AND WARRANTIES	3
	 	 	 
	ARTICLE VII	MISCELLANEOUS	4
	 	 	 
	7.1	Successors and Assigns	4
	7.2	Rights of Third Parties	4
	7.3	Counterparts	4
	7.4	Integration	4
	7.5	Invalidity	4
	7.6	Governing Law	4

 

    	-i-

    	 

    
 

CONSENT, WAIVER AND FIRST AMENDMENT

TO AMENDED AND RESTATED CREDIT AGREEMENT

This CONSENT, WAIVER
AND FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is made and entered into effective
the 29th day of February, 2012 (the “Effective Date”), by and between CROSS BORDER RESOURCES, INC.,
a Nevada corporation (the “Borrower”), and TEXAS CAPITAL BANK, N.A., a national banking association (the “Lender”).

W I T N E S S E T H:

WHEREAS, the Borrower
and the Lender are parties to that certain Amended and Restated Credit Agreement dated January 31, 2011 (the “Agreement”);
and

WHEREAS, the Borrower
has requested that the Lender consent to certain actions by the Borrower which, without such consent, violate certain provisions
of the Agreement and waive any Default or Event of Default which would otherwise arise from such actions, and the Lender has agreed
to do so as provided in this Amendment;

WHEREAS, the Borrower
and the Lender desire to amend the Agreement in the particulars hereinafter provided;

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 Consent, Waiver and First Amendment to Amended and Restated Credit Agreement,
each of the terms “Agreement,” “Amendment,” “Borrower,” “Effective
Date,” “Guarantor” and “Lender” shall have the meaning assigned to such term hereinabove.

1.2             
Terms Defined in Agreement. Each term defined in the Agreement and used herein without definition shall have the
meaning assigned to such term in the Agreement, unless expressly provided to the contrary.

1.3             
References. References in this Amendment to Schedule, Exhibit, Article, or Section numbers shall be to Schedules,
Exhibits, Articles, or Sections of this Amendment, unless expressly stated to the contrary. References in this Amendment to “hereby,”
“herein,” “hereinafter,” “hereinabove,” “hereinbelow,” “hereof,” “hereunder”
and words of similar import shall be to this Amendment 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 Amendment 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 Amendment
to “writing” include printing, typing, lithography, facsimile reproduction, and other means of reproducing words in
a tangible visible form. References in this Amendment 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 Amendment. References in this Amendment
to Persons include their respective successors and permitted assigns.

    	 

    	 

    
 

1.4             
Articles and Sections. This Amendment, 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.

1.6             
Negotiated Transaction. Each party to this Amendment affirms to the other that it has had the opportunity to consult,
and discuss the provisions of this Amendment with, independent counsel and fully understands the legal effect of each provision.

Article
II

CONSENT AND WAIVER

2.1             
Consent and Waiver. The Lender hereby consents to the payment or redemption in full, but not in part, of the Subordinated
Debt, in whole or in part with funds advanced to or for the benefit of the Borrower pursuant to the Agreement,

and waives any Default or Event of Default
which would otherwise arise from such actions.

2.2             
Limitation on Consent and Waiver. Except for the consent and waiver set forth above in Section 2.1, 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.

Article
III

AMENDMENT TO AGREEMENT

As of the Effective
Date, Section 2.4(a) of the Agreement is amended to read as follows in its entirety:

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        “(a)        Proceeds of all
Loans shall be used solely by the Borrower (i) to refinance the Indebtedness of the Borrower under the Existing Credit Agreement,
(ii) to acquire and develop Oil and Gas Properties, (iii) for the Borrower’s working capital and general business purposes
and capital expenditures not otherwise prohibited under applicable provisions of this Agreement, (iv) to advance funds to the Guarantors
for working capital and general business purposes and capital expenditures not prohibited under the provisions of this Agreement
or to acquire and develop Oil and Gas Properties, (v) to pay fees and expenses incurred in connection with this Agreement and for
other general business purposes of the Borrower and (vi) repay or redeem, in full or in part, the Subordinated Debt.”

Article
IV

CONDITIONS TO EFFECTIVENESS

The effectiveness
of this Amendment is subject to satisfaction of the condition that the Lender shall have received from the Borrower payment, in
immediately available funds, of (i) a fee in the amount of $50,000 in connection with the increase of the Borrowing Base in effect
under the Agreement to the amount set forth in Article V and (ii) a fee in the amount of $50,000 as consideration for agreeing
to this Amendment. Upon satisfaction of the foregoing condition, this Amendment shall be effective as of the Effective Date.

Article
V

RATIFICATION AND ACKNOWLEDGEMENT

Each of the Borrower
and the Lender does hereby adopt, ratify and confirm the Agreement, as the same is amended hereby, and acknowledges and agrees
that the Agreement, as amended hereby, is and remains in full force and effect. Each of the Borrower and the Lender hereby agrees
and acknowledges that, as of the date of execution of this Amendment by both the Borrower and the Lender, the Borrowing Base is
$9,500,000 and the Monthly Reduction Amount is $0, which amounts it is agreed shall remain in effect until the next redetermination
of the Borrowing Base and the Monthly Reduction Amount in accordance with the applicable provisions of the Agreement.

Article
VI

REPRESENTATIONS AND WARRANTIES

The Borrower does
hereby re-make in favor of the Lender each of the representations and warranties made by it in the Loan Documents to which it is
a party and further represents and warrants that each of such representations and warranties made by it remains true and correct
as of the date of execution of this Amendment, updated and amended
by the disclosures and information included in the Borrower's public filings made with the Securities and Exchange Commission.

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Article
VII

MISCELLANEOUS

7.1             
Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted pursuant to the Agreement.

7.2             
Rights of Third Parties. Except as provided in Section 7.1, all provisions herein are imposed solely and exclusively
for the benefit of the parties hereto.

7.3             
Counterparts. This Amendment 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 Amendment containing a set of counterpart execution pages reflecting the execution of each
party hereto shall be sufficient to reflect the execution of this Amendment by each necessary party hereto and shall constitute
one instrument.

7.4             
Integration. This Amendment
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 Amendment.

7.5             
Invalidity. In the event that any one or more of the provisions contained in this Amendment 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 Amendment.

7.6             
Governing Law. This Amendment
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 conflicts of law.

 

 

(Signatures appear on following pages)

 

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IN WITNESS WHEREOF,
the parties hereto have executed and delivered this Consent, Waiver and First Amendment to Amended and Restated Credit Agreement
to be effective as of the Effective Date.

	 	BORROWER:
	 	 
	 	CROSS BORDER RESOURCES, INC.
	 	 
	 	 
	 	By: /s/Everett Willard Gray II               
	 	Name:  Everett Willard Gray II
	 	Title:    Chief Executive Officer
	 	 
	 	LENDER:
	 	 
	 	TEXAS CAPITAL BANK, N.A.
	 	 
	 	 
	 	By:/s/ Jonathan Gregory                             
	 	              Jonathan Gregory
	 	              Executive Vice President

    	-5-AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS AMENDMENT TO EMPLOYMENT
AGREEMENT (this “Amendment”) is effective as of the 6th day of March, 2012 (the “Effective Date”)
by and between Everett Willard “Will” Gray II, a resident of the State of Texas (“Executive”), and
cross border resources, inc., a Nevada corporation having its principal office at
22610 US Hwy 281 North, Suite 218, San Antonio, Texas, 78258 (the “Company”).

 

WHEREAS, the Company
is an oil and gas exploration and production company headquartered in San Antonio, Texas focused on drilling exploratory and developmental
wells in the Permian Basin region of the United States;

 

WHEREAS, the Company
and Executive entered into an employment agreement dated as of the 31st day of January, 2011 (“Employment Agreement”);
and

 

WHEREAS, the Company
and Executive have agreed to amend the terms of the Employment Agreement by this Amendment.

 

NOW, THEREFORE,
in consideration of the foregoing premises and other good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged by the parties, it is hereby agreed as follows:

 

1.            Defined Terms.
Unless otherwise defined herein, capitalized terms used in this Amendment shall have the meanings set forth in the Employment
Agreement.

 

2.            Interpretation. To the extent that the terms and conditions of this Amendment conflict with the terms and
conditions of the Employment Agreement, the terms and conditions of this Amendment shall control.

 

3.            Amended
Sections of the Employment Agreement.

 

3.01.Section 5.1 of
the Employment Agreement is hereby deleted in its entirety and replaced with the following:

 

5.1          Termination
by the Company. The Company will have the following rights to terminate this Agreement prior to the expiration of the Term:

 

(a)          Non-Renewal.
The Company may elect not to renew this Agreement by the service of written notice to the Executive not less than ninety (90) days
prior to the expiration of the Initial Term or not less than thirty (30) days prior to the expiration of any Renewal Term (the
“Company Non-Renewal Notice”). In the event the Company timely delivers a Company Non-Renewal Notice to Executive,
Executive will be paid his current Annual Base Salary for the remainder of the Initial Term or a Renewal Term, as the case may
be, plus a lump sum cash payment for any accrued but unused vacation through the end of the Initial Term or a Renewal Term, as
the case may be, in accordance with the Company’s employment policies. Executive shall not be entitled to any further payments
or benefits after the effective date of termination.

 

    	 

    	 

    
 

(b)          Termination
without Cause. The Company may terminate this Agreement without Cause at any time by the service of written notice of termination
to the Executive specifying an effective date of such termination not sooner than (i) ninety (90) days after the date of such notice,
if such notice is delivered during the Initial Term, and (ii) thirty (30) days after the date of such notice, if such notice is
delivered during any Renewal Term (the “Company Termination Date”). In the event Executive is terminated without
Cause by the Company (other than for death or Disability) during the Initial Term, Executive will be paid the following compensation
within sixty (60) days of the Company Termination Date: a lump sum cash payment in an amount equal to (a) twenty-four months of
the Executive’s Annual Base Salary; plus (b) the monetary equivalent of the benefits that would have been provided to Executive
for a period of twenty-four (24) months. In the event Executive is terminated without Cause by the Company (other than for death
or Disability) during any Renewal Term, Executive will be paid the following compensation within sixty (60) days of the Company
Termination Date: (a) a lump sum cash payment in an amount equal to one month of Executive’s Annual Base Salary; plus (b)
a lump sum cash payment for any accrued but unused vacation through the Company Termination Date in accordance with the Company’s
employment policies.

 

(c)          Termination
for Cause. The Company may terminate this Agreement for Cause by service of written notice of the event constituting Cause,
and such Cause continues for a period of thirty (30) days after written notification; provided, however, that in
the event Cause cannot or is unable to be cured, then subject to this subsection (b), termination for Cause shall happen immediately
following delivery of written notice. In the event this Agreement is terminated by the Company for Cause, the Company will not
have any further obligations towards Executive hereunder including, without limitation, any obligation of the Company to provide
any further payments or benefits to the Executive after the effective date of such termination. For purposes of this Agreement,
“Cause” shall mean any of the following: (1)  an intentional act of fraud, embezzlement, theft or
any other material violation of law by Executive; (2)  grossly negligent or intentional damage to the Company’s
reputation or assets caused by Executive; (3) grossly negligent or intentional disclosure by Executive of Confidential Information
(as defined below) contrary to Executive’s obligations set forth herein; (4) the willful and continued failure by Executive
to substantially perform required duties for the Company (other than as a result of Disability or death); (5) a material breach
of this Agreement by Executive; or (6) the willful engagement in illegal conduct, gross misconduct by Executive, or a clearly established
violation by Executive of the Company’s written policies and procedures, which is demonstrably and materially injurious to
the Company, monetarily or otherwise. Any termination for Cause must be approved by a majority of the disinterested or independent
members of the Board of Directors. If written notice has been delivered to Executive alleging termination for Cause, Executive
will have the right to request a Board of Directors meeting to be held at a mutually agreeable time and location to be attended
by the members of the Board of Directors, at which meeting Executive will have an opportunity to be heard. Failing such determination
and opportunity for hearing within thirty (30) days after delivery of the Company’s written notice, any termination of this
Agreement will be deemed to have occurred without Cause during the Initial Term.

 

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3.02       Subsection
(c) of 5.2 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

 

(c)          Termination
for Good Reason. Executive may terminate this Agreement for Good Reason by service of written notice of the event constituting
Good Reason, and such Good Reason continues for a period of thirty (30) days after written notification; provided, however,
that in the event such Good Reason cannot or is unable to be cured, then, subject to this subsection (b), termination for Good
Reason shall happen immediately following delivery of written notice. Notice shall be provided within one (1) year of the date
of the event constituting Good Reason occurred. In the event Executive terminates this Agreement for Good Reason during the Initial
Term, then Executive will be paid the following compensation within sixty (60) days of the Executive Termination Date: (a) twenty-four
months of the Executive’s Annual Base Salary; plus (b) the monetary equivalent of the benefits that would have been provided
to Executive for a period of twenty-four (24) months. In the event Executive terminates this Agreement for Good Reason during any
Renewal Term, the Executive will be paid the following compensation within sixty (60) days of the Executive Termination Date: (a)
a lump sum cash payment in an amount equal to one month of Executive’s Annual Base Salary; plus (b) a lump sum cash payment
for any accrued but unused vacation through the Company Termination Date in accordance with the Company’s employment policies.
For purposes of this Agreement, “Good Reason” shall mean any of the following: (1) a material diminution in
Executive’s authority, duties, or responsibilities (including reporting responsibilities), except in connection with the
termination of his employment for Cause, or as a result of his Disability or death; (2) a material diminution in Executive’s
Annual Base Salary, except in the case of consent or in the case the Company had a net loss for the previous fiscal year; (3) the
Company requiring Executive (without the consent of Executive) to be based at any place outside a fifty (50) mile radius of
his place of employment immediately prior to such proposed relocation, except for reasonably required travel on the Company’s
business; (4) any material breach by the Company of any provision of this Agreement; or (5) any purported termination of Executive’s
employment for Cause by the Company which does not otherwise comply with the terms of this Agreement. If written notice has been
delivered to the Company alleging termination for Good Reason, the Board of Directors of the Company will have the right to request
a meeting with Executive to be held at a mutually agreeable time and location, at which meeting the Company and Executive will
have an opportunity to be heard. Failing such determination and opportunity for hearing within thirty (30) days after delivery
of Executive’s written notice, any termination of this Agreement by Executive will be deemed to have occurred without Good
Reason.

 

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3.03         Section
5.3 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

 

5.3          Termination
After Corporate Transaction. If during the Initial Term of this Agreement a Corporate Transaction (as hereafter defined)
occurs, then Executive will be entitled to a severance payment within ten (10) days of the Corporate Transaction, as if he had
been terminated without Cause. Executive’s right to the foregoing payment shall not be in addition to any payment Executive
may be entitled to but in lieu of such payment.

 

(a)          For the
purpose of this Agreement, a “Corporate Transaction” means the occurrence of any of the following:

 

(1)          The acquisition
by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”).

 

(2)          The individuals
who, as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board of Directors. Any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the directors
then comprising the Incumbent Board will be considered a member of the Incumbent Board as of the date hereof, but any such individual
whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than
the Incumbent Board will not be deemed a member of the Incumbent Board as of the date hereof.

 

(3)          The consummation
of a reorganization, merger, or consolidation of the Company (a “Business Combination”), unless following such
Business Combination, all or substantially all of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the surviving company’s outstanding shares of common stock or the combined
voting power.

 

    	4

    	 

    
 

(4)          The approval
by the shareholders of the Company of a complete liquidation or dissolution of the Company.

 

(5)          A
sale, disposition or liquidation of at least 50% of the Company’s assets.

 

3.04          Section
5.7 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

 

Executive's entitlement to the benefits
provided in this Section 5 are contingent on Executive delivering to the Company and not revoking a Separation Agreement and General
Release, the form of which is attached hereto as Exhibit B (with removal of those provisions which may not be applicable given
the circumstances of the payment).

.

4.          Counterparts.
This Amendment may be executed in counterparts, each of which will be deemed to be an original and taken together shall be considered
as one document. Further, this document may be executed by facsimile signature and Company and Executive hereby acknowledge their
intent to be bound by the facsimile signatures the same as if they are original signatures.

5.          Agreement
Effective. Except as herein modified, all terms and conditions of the Employment Agreement shall remain in full force and
effect, shall not be considered amended or modified except as is specifically set forth in this Amendment and are herby ratified
and confirmed in all respects.

6.          Ratification.
Except as otherwise provided herein, the Employment Agreement shall continue in full force and effect, in accordance with
its terms, and Company and Executive hereby expressly ratify, confirm and reaffirm all of their respective liabilities, obligations,
duties and responsibilities under and pursuant to the Employment Agreement, as modified by this Amendment, and the same shall
constitute valid and binding agreements of each party, enforceable against such party in accordance with its terms.

 

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IN WITNESS WHEREOF,
the parties have executed this Amendment as of the date first set forth above.

  

	 	CROSS BORDER RESOURCES, INC.
	 	 
	 	 
	 	By:   /s/ Brad Heidelberg                                                        
	 	         Brad Heidelberg
	 	         Director and Chair of the Compensation Committee
	 	 
	 	EXECUTIVE
	 	 
	 	 
	 	/s/ Everett Willard Gray II                                        
	 	Everett Willard “Will” Gray II 

 

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