EnerJex Resources, Inc.
27 Corporate Woods, Suite 350
10975 Grandview Drive
Overland Park, Kansas 66210

June 5, 2009

The Buyers of Senior Secured Debentures
of EnerJex Kansas, Inc. and Common Stock
of EnerJex Resources, Inc.

 
RE:
Amendment to Debentures and Transaction Documents (this “Letter Agreement”)

Dear Buyers:

Reference is made to the June 21, 2007 Senior Secured Debentures (the
“Debentures”), the Securities Purchase Agreement (the “Purchase Agreement”), and
the Pledge and Security Agreement (the “Security Agreement”) and other
agreements and documents associated therewith (collectively, the “Transaction
Documents”), all dated as of April 11, 2007, by and among EnerJex Kansas, Inc.
(the “Company”), EnerJex Resources, Inc. (“Parent”) and each of the Debenture
Holders set forth on the signature pages hereto (each individually a “Buyer”
and, collectively, 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 Company wishes to extend the Maturity Date of the Debentures to
September 30, 2010.
 
B.           The Buyers wish to amend the Debentures to allow for the conversion
of the Debentures into shares of Parent’s common stock.
 
C.           On or about July 3, 2008, the Company entered into a three-year $50
million senior secured credit facility with Texas Capital Bank, N. A. (the
“Credit Facility”) and the Company and the Buyers entered into the Subordination
Agreement.
 
D.           The Company, the Parent and the Buyers agree that all of the
proceeds received by the Company or the Parent from any equity offering (an
“Offering”) of their respective equity securities shall, subject to compliance
with the Credit Facility, first be applied to redeem the Debentures.
 
E.           The Company and the Buyers wish to amend certain Sections of the
Debentures and the Transaction Documents as set forth herein.

 
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F.           Certain 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.           Offering.  The Company and Parent covenant and agree that any net
proceeds from any Offering shall, subject to the terms and conditions of the
Credit Facility and the Subordination Agreement, first be applied to fully
redeem the obligations of Principal and accrued but unpaid Interest outstanding
under the Debentures.  If the net proceeds from any such Offering are not
sufficient to fully redeem all obligations of Principal and accrued but unpaid
Interest outstanding under the Debentures, then the Company shall apply all of
the net proceeds of the Offering to redeem a pro rata amount of the Debentures
from each holder based on the principal amount of the Debentures at that time
outstanding.
 
3.           Amendments to Debentures.  The Company and the Buyers hereby agree
that:
 
 
a.
Section (1) of each of the Debentures are modified to state the “Maturity Date”
shall be September 30, 2010.

 
 
b.
Section (2) of each of the Debentures is modified in its entirety to read as
follows:

 
 
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“INTEREST; INTEREST RATE.”
 
 
(a)
Interest Rate and Payment. Interest on this Debenture shall commence accruing on
the Issuance Date and shall be computed on the basis of a 365-day year and
actual days elapsed and shall be payable in arrears for each Payment Quarter on
the first day of the succeeding Payment Quarter during the period beginning on
the Issuance Date and ending on, and including, the Maturity Date (each, an
“Interest Date”). Interest shall be payable on each Interest Date, to the record
holder of this Debenture on the applicable Interest Date, (i) in cash (“Cash
Interest”), (ii) in payment in kind with an increase in the Principal amount of
this Debenture (“PIK Interest”), or (iii), at the option of the Company with the
prior written consent of the Required Holders, in shares of Common Stock
(“Interest Shares”) or a combination thereof, provided that the Interest which
accrued during any period may be payable in Interest Shares if, and only if, the
Company delivers written notice (each, an “Interest Election Notice”) of such
election to each holder of the Debentures on or prior to the tenth (10th)
Trading Day prior to the Interest Date (each, an “Interest Notice Due
Date”).  Each Interest Election Notice must specify the amount of Interest that
shall be paid as Cash Interest, if any, the amount of Interest that shall be
paid as PIK Interest, and the amount of Interest that shall be paid in Interest
Shares.  Interest to be paid on an Interest Date in PIK Interest shall be paid
through the increase in the Principal amount of this Debenture. Interest to be
paid on an Interest Date in Interest Shares shall be paid in a number of fully
paid and nonassessable shares (provided, that if the issuance would result in
the issuance of a fraction of a share of Common Stock, the Company shall round
such fraction of a share of Common Stock up to the nearest whole share) of
Common Stock equal to the quotient of (a) the amount of Interest payable on such
Interest Date less any Cash Interest paid (b) less any PIK Interest paid and (c)
the Interest Conversion Price in effect on the applicable Interest Date.  If any
Interest Shares are to be paid on an Interest Date, then the Company shall (X)
provided that the Company’s transfer agent (the “Transfer Agent”) is
participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program and such action is not prohibited by applicable law or
regulation or any applicable policy of DTC, credit such aggregate number of
Interest Shares to which the Holder shall be entitled to the Holder’s or its
designee’s balance account with DTC through its Deposit Withdrawal Agent
Commission system, or (Y) if the foregoing shall not apply, issue and deliver
within three Trading Days after the applicable Interest Date, to the address set
forth in the register maintained by the Company for such purpose pursuant to the
Securities Purchase Agreement or to such address as specified by the Holder in
writing to the Company at least two Business Days prior to the applicable
Interest Date, a certificate, registered in the name of the Holder or its
designee, for the number of Interest Shares to which the Holder shall be
entitled.  Notwithstanding the foregoing, the Company shall not be entitled to
pay Interest in Interest Shares and shall be required to pay such Interest (i)
in cash as Cash Interest, or (ii) in payment in kind as PIK Interest, on each
Interest Date if, unless consented to in writing by the Holder, during the
period commencing on the applicable Interest Notice Due Date through the
applicable Interest Date, the Equity Conditions have not been satisfied.
Interest accrues at the Interest Rate on all outstanding unpaid Principal owed
under this Debenture and all accrued Interest is payable on each Interest
Date.  Upon the occurrence and during the continuance of an Event of Default,
the Interest Rate shall be increased to fifteen percent (15.00%) (the “Default
Rate”).  In the event that such Event of Default is subsequently cured, the
adjustment referred to in the preceding sentence shall cease to be effective as
of the date of such cure; provided that the Interest as calculated and unpaid at
such increased rate during the continuance of such Event of Default shall
continue to apply to the extent relating to the days after the occurrence of
such Event of Default through and including the date of cure of such Event of
Default.  The Company shall pay any and all taxes that may be payable with
respect to the issuance and delivery of Interest Shares; provided that the
Company shall not be required to pay any tax that may be payable in respect of
any issuance of Interest Shares to any Person other than the Holder or with
respect to any income tax due by the Holder with respect to such Interest
Shares.

 
 
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(b)
PIK Interest. The Interest Rate for Interest Payments to be made by PIK Interest
shall be paid at a rate equal to 12.50% per annum. In addition, if the Company
chooses to pay an Interest Payment in PIK Interest, the Parent shall issue the
Holder shares of its Common Stock equal to an additional 2.50% of the Quarterly
Interest Payment due (the “PIK Interest Shares”). The number of shares of Common
Stock to be issued on an Interest Date in PIK Interest Shares shall be paid in a
number of fully paid and nonassessable restricted shares (provided, that if the
issuance would result in the issuance of a fraction of a share of Common Stock,
the Parent shall round such fraction of a share of Common Stock up to the
nearest whole share) of Common Stock equal to the quotient of (a) the amount of
Interest payable on such Interest Date and (c) the Interest Conversion Price in
effect on the applicable Interest Date.

 
(c)
Interest Rate Adjustment. In the event this Debenture is not redeemed in
accordance with Section 5 hereof on or before April 1, 2010, the Interest Rate
of this Debenture shall increase to a rate equal to 14.00% per annum through the
Maturity Date. In addition, the PIK Interest shall increase to 16.5%.

 
c.
Sections (3) through (23) shall be renumbered Sections (4) through (24),
respectively.

 
 
d.
A new Section (3) shall be added to each of the Debentures, as follows:

 
“CONVERSION”
 
 
(a)
Conversion at Option of Holder.

 
i.
This Debenture shall be convertible into shares of Common Stock at the option of
the Holder, in whole or in part at any time and from time to time. , after the
Issuance Date. The number of shares of Common Stock issuable upon a conversion
hereunder equals the quotient obtained by dividing (x) the outstanding amount of
this Debenture to be converted by (y) the Conversion Price (as defined below).

 
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ii.
The Holder shall effect conversions by delivering to the Company a completed
notice in the form attached hereto as Exhibit A (a “Conversion Notice”). The
date on which a Conversion Notice is delivered is the “Conversion Date.” Unless
the Holder is converting the entire Principal amount outstanding under this
Debenture, the Holder is not required to physically surrender this Debenture to
the Company in order to effect conversions. Conversions hereunder shall have the
effect of lowering the outstanding principal amount of this Debenture plus all
accrued and unpaid Interest thereon in an amount equal to the applicable
conversion. The Holder and the Company shall maintain records showing the
Principal amount converted and the date of such conversions. In the event of any
dispute or discrepancy, the records of the Company shall be controlling and
determinative in the absence of manifest error.

 
iii.
Conversion on or before May 31, 2010. The Holder is entitled, at its option, to
convert at any time through 5:00 PM Central Standard Time on May 31, 2010, all
or any part of the Principal amount of this Debenture, plus accrued Interest,
into shares of the Parent’s Common Stock, $0.001 par value per share, at the
price per share equal to $3.00.

 
iv.
Conversion after May 31, 2010 through the Maturity Date. From June 1, 2010
through the Maturity Date, assuming the Debenture has not been redeemed, the
Holder is entitled, at its option, to convert at any time all or any part of the
Principal amount of this Debenture, plus accrued Interest, into shares of the
Parent’s Common Stock, $0.001 par value per share, at the price per share equal
to that price which shall be computed as 100.0% of the arithmetic average of the
Weighted Average Price of the Common Stock on each of the thirty (30)
consecutive Trading Days immediately preceding the Conversion Date.

 
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v.
Subparagraphs (iii) and (iv) above are individually referred to as a “Conversion
Price”.

 
(b)
Adjustments. If the Parent, at any time while this Debenture is outstanding,
shall (a) pay a stock dividend or otherwise make a distribution or distributions
on shares of its Common Stock or any other equity or equity equivalent
securities payable in shares of Common Stock, (b) subdivide outstanding shares
of Common Stock into a larger number of shares, (c) combine (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares, or (d) issue by reclassification of shares of the Common Stock any
shares of capital stock of the Parent, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

 
(c)
Rounding. All price calculations under this Section 3 shall be rounded to the
nearest $0.01.

 
(d)
Notice. Whenever the Conversion Price is adjusted pursuant to Section 3 hereof,
the Company shall promptly mail to the Holder a notice setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.

 
 
4.
Conditional Waiver.

 
 
a.
The Buyers hereby waive any existing Event of Default previously made known to
the Buyers by the Company in writing with respect to any and all violations of
or defaults now existing under the Transaction Documents, and agree not to
exercise any rights or remedies available as a result of the occurrence thereof,
including, but not limited to, the imposition of interest at the Default Rate
prior to the date hereof.

 
 
b.
In addition, the Buyers hereby waive any other 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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c.
The Company hereby represents and warrants to the Buyers that it has no
knowledge of any other material Defaults or Events of Default under the
Transaction Documents, other than those previously disclosed to the Buyers in
writing.

 
 
d.
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(c).

 
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.
 
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.

 
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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.
 
15.           Notices.  Copies of notices to the Company pursuant to each
Transaction Document shall be sent to, Law Offices of Anthony N. DeMint, 8350
West Sahara Avenue, Suite 270, Las Vegas, Nevada  89117, Telephone:
702-586-4690, Facsimile: 702-586-6449, E-mail: demintlaw@cox.net, Attention:
Anthony N. DeMint, rather than Husch Blackwell Sanders LLP.
 
Kindly confirm your agreement with the foregoing by signing the copy of this
letter where indicated below.
 
 [Signature Pages Follow]

 
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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.

 

 
Very Truly Yours,
     
Company:
 
ENERJEX KANSAS, INC.
       
By:
     
Name: Steve Cochennet
   
Title: Chief Executive Officer
       
Parent:
 
ENERJEX RESOURCES, INC.
       
By:
 
   
Name: Steve Cochennet
   
Title: Chief Executive Officer

 
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Agreed to and accepted:
       
MORMEG, LLC
             
By:
     
Name: Mark Haas
   
Title: Managing Member
 

 
 
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WEST COAST OPPORTUNITY FUND, LLC
             
By:
     
Name: Atticus Lowe
   
Title: Chief Investment Officer
 

 
 
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ENABLE GROWTH PARTNERS LP
             
By:
     
Name: Brendan O’Neil, CFA
   
Title: Principal and Portfolio Manager
 

 
 
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ENABLE OPPORTUNITY PARTNERS LP
             
By:
     
Name: Brendan O’Neil, CFA
   
Title: Principal and Portfolio Manager
 

 
 
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FREY LIVING TRUST
             
By:
     
Name: Philip Frey Jr.
   
Title: Trustee
 

 
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