ENERJEX RESOURCES, INC.
00
Xxxxxxxxx Xxxxx, Xxxxx 000
00000
Xxxxxxxxx Xxxxx
Overland
Park, Kansas 66210
January
27, 2010
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West
Coast Opportunity Fund, LLC
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Xxxx
Living Trust
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0000
Xxxxx Xxxxxxx Xxxx
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0000
XX Xxxxxxxx Xxx
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Montecito,
CA 93108
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Stuart,
FL 34997
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Enable
Growth Partners LP
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Enable
Opportunity Partners LP
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C/o
Enable Capital Management
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C/o
Enable Capital Management
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One
Ferry Building, Suite 225
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Xxx
Xxxxx Xxxxxxxx, Xxxxx 000
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San
Francisco, CA 94111
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San
Francisco, CA 94111
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RE:
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Amendment to
Debentures and Transaction Documents (this “Letter
Agreement”)
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Dear
Buyers:
Reference
is made to the June 21, 2007 Senior Secured Debentures, as amended (the “Debentures”), the
Securities Purchase Agreement, as amended (the “Purchase Agreement”),
and the Pledge and Security Agreement, as amended (the “Security Agreement”)
and other agreements and documents associated therewith, as amended through the
date hereof (collectively, the “Transaction
Documents”), all originally dated as of April 11, 2007, by and among
EnerJex Kansas, Inc.
(the “Company”), EnerJex Resources, Inc.
(“Parent”),
West Coast Opportunity Fund,
LLC (“West
Coast”), Xxxx Living
Trust (“Xxxx”), Enable
Growth Partners LP (“Enable Growth”) and Enable Opportunity Partners LP
(“Enable Opportunity”) (collectively, West Coast, Xxxx, Enable Growth and Enable
Opportunity may be referred to as the “Buyers”). Capitalized
terms used but not otherwise defined herein have the meanings ascribed to such
terms in the Debentures, Purchase Agreement, the Security Agreement and/or the
Transaction Documents.
WHEREAS:
A. The
Debentures allow for the retirement of a portion of the Parent’s common stock
held by the Buyers in accordance with Exhibit A to the Debentures (the
“Redemption Schedule”).
B. The
Company is currently in the process of selling certain assets designated as the
Weidemier/Xxxxxx project, which is anticipated to close on or before March 10,
2010 (the “Asset Sale”).
C. The
Company, the Parent and the Buyers wish to amend the Redemption Schedule as set
forth herein.
1
X. Xxxxxxx
of the Transaction Documents provide that amendments may be made by written
consent of the Company and holders of at least sixty-five percent of the
aggregate number of Registrable Securities issued under the Securities Purchase
Agreement, and the undersigned Buyers constitute such requisite
holders.
NOW THEREFORE, in
consideration of the premises and mutual promises herein contained, the Company
and the Buyers hereby agree as follows:
1. Defined Terms.
Capitalized terms used in this Letter Agreement which are not defined herein
shall have the meaning ascribed to them in the Transaction
Documents.
2. Amendment to Redemption
Schedule. The Company, the Parent and the Buyers hereby agree
that the January and February redemption payment set forth on Exhibit A to the
Debentures (“Redemption Payments”) shall be extended to be paid on or before
March 10, 2010 to coincide with the anticipated close of the Asset
Sale.
3. Asset Sale Proceeds.
The Company hereby agrees to immediately use proceeds from the Asset Sale
(excluding the associated debt owed to Texas Capital) to make the full
Redemption Payments owed through March 31, 2010.
4. Conditional
Waiver.
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a.
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The
Buyers hereby waive any existing Event of Default under the Transaction
Documents that does not, directly or indirectly, have a material negative
impact on the Buyers’ security interest in the collateral or other
properties of the Company in which it has a security interest, or have a
material negative impact in the Buyers’ priority of payment under the
Debentures.
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b.
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The
Company hereby represents and warrants to the Buyers that it has no
knowledge of any material Defaults or Events of Default under the
Transaction Documents.
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c.
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The
waivers granted by the Buyers in favor of the Company that are contained
in this Agreement shall be null and void in the event the Company has
breached its representation in
Section 4(b).
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5. Governing
Law. This Letter Agreement shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Letter Agreement and all disputes arising
hereunder shall be governed by, the laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
York.
6. Amendment. It
is the intention of the parties that this Letter Agreement modifies and amends
the Transaction Documents to the extent set forth herein or as otherwise
necessary to effectuate the intentions of the parties as set forth
herein.
2
7. No
Waiver. The execution of this Letter Agreement is not, and
shall not be deemed to constitute, a waiver, cure, or forbearance of any default
arising prior or subsequent to the date of this Letter Agreement, nor shall it
constitute a reinstatement of the terms described in the Transaction Documents,
except as set forth herein. The Company agrees that no delay on the
part of any of the Buyers in exercising any power or right shall operate as a
waiver of any such power or right or preclude the further exercise of any other
power or right. Any remedies contained herein are cumulative and not
exclusive of any remedies provided by law. Notice to or demand in
circumstances under which the terms of this Letter Agreement do not require such
notice or demand shall not entitle the Company to further notice or demand nor
constitute a waiver of the rights of the Buyers to take any other or further
action without notice or demand.
8. Continuing Validity of
Transaction Documents. Except as expressly provided for in
this Letter Agreement, the other Transaction Documents and all other documents
executed in connection therewith shall continue unchanged in full force and
effect, in accordance with their respective terms, and the parties hereby
expressly confirm and reaffirm all of their respective liabilities, obligations,
duties and responsibilities under and pursuant to the other Transaction
Documents.
9. Transaction Document.
This Letter Agreement shall be deemed and constitute a “Transaction Document”
under the Securities Purchase Agreement.
10. Recitals. The
recitals set forth above are true and correct and are hereby incorporated into
this Letter Agreement as if set forth at length herein.
11. Counterparts. This
Letter Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to each other
party; provided that a facsimile signature shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.
12. Headings. The
headings of this Letter Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this Letter
Agreement.
13. Severability. If
any provision of this Letter Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Letter Agreement in that jurisdiction
or the validity or enforceability of any provision of this Letter Agreement in
any other jurisdiction.
14. Further
Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the terms of this
Letter Agreement and the consummation of the transactions contemplated
hereby.
Kindly
confirm your agreement with the foregoing by signing the copy of this letter
where indicated below.
3
IN
WITNESS WHEREOF, the parties hereto have executed or caused this Letter
Agreement to be duly executed by an authorized officer as of the date first
above written.
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Very
Truly Yours,
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Company:
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ENERJEX
KANSAS, INC.
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By:
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/s/ Xxxxx Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Chief Executive Officer
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Parent:
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By:
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/s/ Xxxxx Xxxxxxxxx
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Name:
Xxxxx Xxxxxxxxx
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Title:
Chief Executive Officer
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4
WEST
COAST OPPORTUNITY FUND,
LLC
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By:
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/s/ Xxxxxxx Xxxx
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Name:
Xxxxxxx Xxxx
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Title:
Chief Investment Officer
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5
ENABLE
GROWTH PARTNERS LP
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By:
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/s/ Xxxxx Xxxxxx
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Name: Xxxxx
Xxxxxx
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Title:
CEO
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6
ENABLE
OPPORTUNITY PARTNERS LP
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By:
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/s/ Xxxxx Xxxxxx
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Name: Xxxxx
Xxxxxx
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Title:
CEO
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7
XXXX
LIVING TRUST
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By:
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/s/ Xxxxxx Xxxx Xx.
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Name:
Xxxxxx Xxxx Xx.
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Title:
Trustee
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