Exhibit 10.2

 

EXHIBIT D

 

RELEASE AND COVENANT NOT TO SUE

 

THIS RELEASE AND COVENANT NOT TO SUE is made as of this 26th day of March, 2018
(this “Release and Covenant”), by PASS CREEK RESOURCES LLC, a Delaware limited
liability company (“Pass Creek”) and CORTLAND CAPITAL MARKET SERVICES LLC, a
Delaware limited liability company, in its capacity as administrative agent
(“Administrative Agent”) under the Credit Agreement (as defined in the Deed In
Lieu Agreement (as defined hereinafter)) to and for the benefit of ENERJEX
KANSAS, INC. (f/k/a Midwest Energy, Inc.), a Nevada corporation (“EnerJex
Kansas”), BLACK RAVEN ENERGY, INC., a Nevada corporation (“Black Raven”),
WORKING INTEREST, LLC, a Kansas limited liability company (“Working Interest”),
ADENA, LLC, a Colorado limited liability company (“Adena”), KANSAS HOLDINGS,
LLC, a Delaware limited liability company (“Kansas Holdings”) and BLACK SABLE
ENERGY, LLC, a Texas limited liability company (“Black Sable”; together with
EnerJex Kansas, Black Raven, Working Interest, Adena and Kansas Holdings,
collectively, the “Borrowers”), ENERJEX RESOURCES, INC., a Nevada corporation
(“Guarantor”) (Borrowers and Guarantor are hereinafter sometimes jointly
referred to as the “Obligors”).

 

This Release and Covenant is being executed and delivered pursuant to that
certain Deed in Lieu of Foreclosure Agreement dated as of March 26, 2018 (“Deed
In Lieu Agreement”), by and among the Obligors, Administrative Agent and Pass
Creek. Terms appearing as initially capitalized terms and not expressly defined
herein shall have the respective meanings given them in the Deed In Lieu
Agreement.

 

In consideration of the mutual covenants and agreements contained herein and in
the Deed In Lieu Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Pass Creek and
Administrative Agent each hereby agree as follows:

 

1.                   Pass Creek and Administrative Agent, for themselves and
their respective affiliates, successors and assigns (the “Covenantors”), do
hereby covenant and agree not to sue or commence, assert, bring, file or
continue in any court or other tribunal, in any jurisdiction, any suit, action,
litigation, complaint, counterclaim, cross-claim, cross-complaint, third-party
complaint or other pleading for any actions or causes of action of every kind
and nature whatsoever, whether fixed or contingent, known or unknown, direct or
indirect, and whether based on contract, tort, statute or other legal or
equitable theory of recovery (“Claim” or “Claims”), which the Covenantors have
had, have or hereafter may have against the Obligors, or any of their respective
past, present or future affiliates, managers, members, partners, shareholders,
officers, directors, affiliates, agents, employees, attorneys, legal
representatives, successors or assigns (collectively, the “Borrower Related
Parties”), with respect to, or in any way arising from, related to or connected
with, the Properties, the Loan or the Loan Documents, except and specifically
excluding the amounts owed as described on Schedule 1 attached hereto and made a
part hereof (collectively the “Excluded Obligations”).

 

2.                   This Release and Covenant constitutes a release,
satisfaction, and discharge of the indebtedness, obligations or liabilities
evidenced or secured by the Loan documents, except and specifically excluding
the Excluded Obligations.

 

3.                   Notwithstanding anything contained to the contrary set
forth herein:

 

(a)Neither this Release and Covenant nor the release set forth in Section 8(b)
of the Deed in Lieu Agreement nor any of the other provisions hereof or of the
Deed In Lieu Agreement nor any provision of applicable law shall be deemed to
release, discharge or otherwise affect any of the agreements, representations,
warranties, covenants, indemnities or other duties, obligations or liabilities
of the parties hereto as set forth in or arising from the provisions of this
Release and Covenant, the Deed In Lieu Agreement or the Closing Documents.

 

 

 

 

(b)This Release and Covenant shall not constitute a release of or operate to
release, satisfy, discharge or otherwise affect: (i) any action brought by the
Administrative Agent or Pass Creek under the Loan Documents, at law or in equity
for the purpose of obtaining from any Borrower title to the Properties or
easement or other rights in the Properties, (ii) render ineffective or
unenforceable Administrative Agent’s or Pass Creek’s right to foreclose the
Mortgages or to pursue any of their other rights or remedies under the Loan
Documents in any manner except that neither Administrative Agent nor Pass Creek
shall have any right to pursue or obtain (except with respect to the Excluded
Obligations) a deficiency and/or a personal judgment or award against the
Obligors or any Borrower Related Party, (iii) otherwise affect the provisions of
the Loan Documents, (iv) render ineffective or unenforceable Administrative
Agent’s or Pass Creek’s right to collect any amounts due from any Obligor with
respect to the Excluded Obligations, (v) render ineffective or unenforceable
Administrative Agent’s or Pass Creek’s right to collect any amounts due from any
Obligor with respect to any obligation to Administrative Agent or Pass Creek
which is not related to the Loan, (vi) render ineffective or unenforceable
Administrative Agent’s or Pass Creek’s right to enforce their respective rights
under the Deed In Lieu Agreement or this Release and Covenant, or (vii) render
ineffective or unenforceable Administrative Agent’s or Pass Creek’s right to
collect any amounts due from any Obligor with respect to any obligation to Pass
Creek or Administrative Agent which is not set forth in the Loan Documents.

 

(c)This Release and Covenant shall not be deemed to release, discharge or
otherwise affect the Excluded Obligations or any of the agreements,
representations, warranties, covenants, indemnities or other duties, obligations
or liabilities of the Obligors set forth in or arising from the provisions of
the Deed In Lieu Agreement or the Closing Documents.

 

4.             Notwithstanding anything contained herein to the contrary, this
Release and Covenant shall be null and void if:

 

(a)any suit, action, claim or proceeding (i) to enjoin, rescind or otherwise set
aside the Transfer of all or any portion of the Properties to Pass Creek and/or
its designee or any other transactions consummated pursuant to the Deed In Lieu
Agreement or the Closing Documents, (ii) to challenge the validity or
enforceability of the Transfer of the Properties to Pass Creek and/or its
designee or any of such other transactions, (iii) which might otherwise
adversely affect the validity or enforceability of the Transfer of the
Properties to Pass Creek and/or its designee or any of such other transactions
arising from the Deed In Lieu Agreement, or (iv) brought by any shareholder,
officer or employee of any of the Obligors or any unrelated third party against
Pass Creek or Administrative Agent arising out of the Loan or the transactions
contemplated pursuant to the Deed in Lieu Agreement or the Closing Documents
(any such suit, action, claim or proceeding being hereinafter referred to as an
“Adverse Proceeding”) has been or is commenced or made by or on behalf of the
Obligors, the Borrower Related Parties or any of their respective successors or
assigns; or

 

 

 

 

(b)any Adverse Proceeding has been or is commenced or made by any person or
entity other than the Obligors, the Borrower Related Parties, Pass Creek or its
designee (a “Third Party”) and, as a result of such Adverse Proceeding, Pass
Creek or its designee is obligated to convey (or reconvey, as the case may be)
all or any portion of the Properties to one or more of the Obligors or to a
receiver, trustee or other party for the benefit of the Obligors or any of their
respective creditors; or

 

(c)any Adverse Proceeding has been or is commenced or made by or on behalf of
the Obligors, the Borrower Related Parties or any of their respective successors
or assigns and, as a result of such Adverse Proceeding, Administrative Agent,
Pass Creek or its designee suffers any loss, cost, damage or expense against
which the Obligors fail to fully indemnify, defend and hold Administrative
Agent, Pass Creek, its designee and their respective successors and assigns
harmless as required under the terms of the Deed In Lieu Agreement; or

 

(d)any Obligor files a voluntary petition in bankruptcy or is adjudicated a
bankrupt or insolvent or files any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the present or any future federal, state, or other
statute or law; or

 

(e)the commencement of any involuntary petition in bankruptcy against any
Obligor or the institution against any Obligor of any reorganization,
arrangement, composition, readjustment, dissolution, liquidation or similar
proceedings under any present or future federal, state or other statute or law;
or

 

(f)any of Obligors’ representations or warranties contained in the Deed In Lieu
Agreement are untrue, or the Obligors breach any of their respective obligations
under the Deed In Lieu Agreement or under any of the Closing Documents.

 

5.             The Obligors hereby jointly and severally agree to indemnify,
defend (with counsel reasonably satisfactory to Administrative Agent or Pass
Creek, as applicable) and hold Administrative Agent, Pass Creek and their
respective affiliates, employees, directors, officers, shareholders, attorneys,
agents, successors and assigns harmless from and against any and all losses,
damages, claims, liability, costs and expenses (including court costs and
reasonable attorneys’ fees) that may be suffered or incurred by any such
indemnitees as a direct or indirect result of or in connection with any Adverse
Proceedings commenced by or on behalf of the Obligors or any of their respective
successors or assigns.

 

6.             In the event of a conflict between any term or provision of the
Deed In Lieu Agreement and any term or provision of this Release and Covenant,
the term or provision of this Release and Covenant shall govern.

 

7.            The undersigned each represent and warrant that it has full power
and authority to execute this Release and Covenant for and on behalf of Pass
Creek or Administrative Agent (as applicable) and that this Release and Covenant
is binding upon and enforceable against Pass Creek and Administrative Agent in
accordance with its terms.

 

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, this Release and Covenant Not To Sue has been signed and
delivered as of the date first written above.

 

  PASS CREEK:         PASS CREEK RESOURCES LLC, a Delaware limited liability
company         By:     Name:       Title:  

 

 

[Signature Page to Release and Covenant Not to Sue]

 

 

 

  

  ADMINISTRATIVE AGENT:         CORTLAND CAPITAL MARKET SERVICES LLC, a Delaware
limited liability company         By:     Name:        Title:  

 

 

[Signature Page to Release and Covenant Not to Sue]

 

 

 

 

Schedule 1

 

Excluded Obligations

 

Payment Summary  Payoff Amount  Credit Facility Amendment Fee (per First
Amendment)  $70,000.00  Outstanding principal balance of Guarantor Note 
$93,767.47  Outstanding Legal Fees and Expenses  $183,518.75  Credit Facility
Net Revenue Repayments  $71,959.69  Payments Owed to Haas Petroleum (paid by
Pass Creek)  $25,060.06  Fees owed to Cortland Capital Market Resources LLC 
$6,250.00  Total Payment Obligations  $450,555.97 

 

 

Schedule 1 to Release and Covenant Not to Sue