SEPARATION AGREEMENT

 

This Separation Agreement (“Agreement”), dated as of June 14, 2007, is between
EnerJex Resources, Inc., a Nevada corporation (the “Company”), and Todd R. Bart,
an individual resident of the State of Kansas (“Bart”). The Company and Bart are
hereinafter referred to as the “Parties.”

 

WHEREAS, Bart has been employed by the Company as its Chief Financial Officer
and as Chief Financial Officer of Midwest Energy, Inc., the Company’s direct
subsidiary (“Midwest”);

 

WHEREAS, Bart is ceasing his employment with the Company and service to Midwest
on the date of this Agreement (the “Separation Date”);

 

WHEREAS, the Parties desire to settle fully and finally, in the manner set forth
herein, all differences between them which have arisen, or which may arise,
prior to, or at the time of, the execution of this Agreement, including (without
limitation) any and all claims and controversies arising out of the employment
relationship between the Parties and the cessation thereof;

 

NOW, THEREFORE, in consideration of the foregoing and the covenants set forth in
this Agreement, the Parties hereby agree as follows:

 

1.     Cessation of Service. On the Separation Date Bart resigns from, and
ceases, his employment with the Company and his service to Midwest. The
preceding sentence shall also serve as Bart’s concurrent resignation from each
office that he has or has had with the Company and Midwest.

 

 

2.  

General Releases and Covenants Not to Sue:

 

 

(a)

Bart, for himself and on behalf of his agents, attorneys-in-fact, heirs,
assigns, successors, executors, and administrators, IRREVOCABLY AND
UNCONDITIONALLY RELEASES, ACQUITS AND FOREVER DISCHARGES the Company, any
subsidiary, affiliated, and related corporations, firms, associations,
partnerships, and other entities (including, without limitation, Midwest), their
successors and assigns, and the current and former owners, shareholders,
directors, officers, partners, managers, members, employees, agents, attorneys,
representatives, and insurers of such corporations, firms, associations,
partnerships, and entites, and their guardians, successors, assigns, heirs,
executors, and administrators (collectively, “Company Releasees”) from any and
all claims, liabilities, obligations, agreements, damages, causes of action,
costs, losses, and attorneys’ fees and expenses whatsoever, whether known or
unknown, whether connected with Bart’s employment by the Company and service to
Midwest or not, including (without limitation) any dispute, claim, charge, or
cause of action arising under Title VII of the Civil Rights Act of 1964, as

 

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amended, 42 U.S.C. § 2000e, et seq., the Americans with Disabilities Act of
1990, 42 U.S.C. § 12101, et seq., the Texas Commission on Human Rights Act, Tex.
Labor Code § 21.001, et seq., the Age Discrimination in Employment Act of 1967,
as amended, 29 U.S.C. § 621 et seq., the Bart Retirement Income Security Act of
1974, as amended, 29 U.S.C. § 1001, et seq., and any other municipal, local,
state, or federal law, common or statutory, which may have arisen, or which may
arise, prior to or at the time of the execution of this Agreement.

 

 

(b)

The Company, for itself and on behalf of its agents, attorneys-in-fact, assigns,
and successors and Midwest and their respective agents, attorneys-in-fact,
assigns, and successors, IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS AND
FOREVER DISCHARGES Bart and his agents, attorneys-in-fact, guardians,
successors, assigns, heirs, executors, and administrators (collectively, “Bart
Releasees”) from any and all claims, liabilities, obligations, agreements,
causes of action, costs, losses, damages, and attorneys’ fees and expenses
whatsoever, whether known or unknown, whether connected with Bart’s employment
by the Company and service to Midwest or not, which may have arisen, or which
may arise, prior to or at the time of the execution of this Agreement; excluding
from the foregoing release, however, any claim that the Company or Midwest may
hereafter have arising from or relating to any third-party claims made against
the Company or Midwest because of any actions taken by Bart, or any commitments
or representations made by Bart, that violated any of Bart’s fiduciary
obligations to the Company or Midwest.

 

 

(c)

Each of the Parties acknowledges and agrees that it or he is expressly releasing
all claims known and suspected as well as all those unknown or not suspected and
that its or his release includes and contemplates the extinguishment of all
claims under any and all applicable laws.

 

 

(d)

Bart also COVENANTS NOT TO SUE, OR OTHERWISE PARTICIPATE IN ANY ACTION OR CLASS
ACTION against, any of the Company Releasees based upon any of the claims
released in paragraph 2(a) above.

 

 

(e)

The Company also COVENANTS NOT TO SUE, OR OTHERWISE PARTICIPATE IN ACTION OR
CLASS ACTION against, any of the Bart Releasees based upon any of the claims
released in paragraph 2(b) above.

 

3. Complete and Absolute Defense. This Agreement constitutes, among other
things, a full and complete release of any and all claims released by either
party, and it is the intention of the parties hereto that this Agreement is and
shall be a complete and absolute defense to anything released hereunder. The
parties expressly and knowingly waive their respective rights to assert any
claims against the other which are released hereunder, and covenant not to sue
the other party or Released Parties based upon any claims released hereunder.
The parties further represent

 

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and warrant that no charges, claims or suits of any kind have been filed by
either against the other as of the date of this Agreement.

 

4.     Revocation: Bart may revoke this Agreement by written notice to the
Company within seven days after his execution hereof (the “Revocation Period”).
Bart agrees that he will not receive the payments and benefits provided by this
Agreement if he revokes this Agreement. Bart also acknowledges and agrees that
if written notice of revocation of this Agreement has not been received by the
Company before the expiration of the Revocation Period, he will have forever
waived his right to revoke this Agreement, and this Agreement shall thereupon
and thereafter be enforceable.

 

5.     Non-Admission: Bart acknowledges and agrees that by entering into this
Agreement, the Company does not admit, but specifically denies, any violation of
any local, state, or federal law.

 

6.     Return of Company Property: Bart agrees that he shall return all property
belonging to the Company or Midwest in his possession, custody, or control on,
or as soon as practicable after, the Separation Date.

 

 

7.  

Confidentiality. Bart hereby agrees and covenants, that:

 

 

(a)  

he shall not divulge to any person or entity other than the Company, without
express written authorization of the Company’s Chief Executive Officer, any
proprietary or confidential information, whether written or oral, received or
gained by him in the course of his employment by the Company or Midwest or of
his duties with the Company or Midwest (“Confidential Information”), nor shall
he make use of any such Confidential Information on his own behalf or on behalf
of any other person or entity, for so long as such Confidential Information is
not known to the general public; and

 

 

(b) 

he shall return or cause to be returned to the Company’s Chief Executive Officer
any and all property of the Company or Midwest of any kind or description
whatsoever, including, but not limited to, any Confidential Information, which
has been furnished to him or is held by him, at his residence or elsewhere, and
shall not retain any copies, duplicates, reproductions or excerpts thereof.

 

8.     Mutual Non-Disparagement: Bart, solely on behalf of himself and his
attorneys, and the Company, solely on behalf of its officers, directors,
partners, managers, members, employees, agents, and attorneys who are managing
agents with actual authority to speak for the Company, with regard to Bart and
his employment with the Company and his service to Midwest, expressly
acknowledge, agree, and covenant that they will not make any statements,
comments, or communications that could constitute disparagement of one another
or that may be considered to be derogatory or detrimental to the good name or
business reputation of one another; provided, however, that the terms of this
paragraph shall not apply to communications between Bart and his spouse, mental
health professional, clergy, or attorneys, or between the Company and its

 

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advisors and attorneys, to the extent (in any such case) that such
communications are subject to a claim of privilege existing under common law,
statute, or rule of procedure. Where applicable, this mutual non-disparagement
covenant applies to any public or private statements, comments, or
communications in any form, whether oral, written, or electronic. The Parties
further agree that they will not in any way solicit any such statements,
comments, or communications.

 

 

9.  

Payments and Benefits to Bart: In consideration for all of Bart’s covenants
herein:

 

 

(a)

The Company shall pay Bart, upon expiration of the Revocation Period (if this
Agreement has not been revoked by Bart) and subject to subparagraph (b) below,
$56,000. Such amount shall be paid by check drawn on an account of the Company.

 

 

(b)

The payment specified in subparagraph (a) above is contingent upon the full
repayment of Bart’s promissory note in the principal amount of $22,000 (“Loan”),
including accrued and unpaid interest. All amounts due under the Loan will be
automatically deducted from the payment set forth in subparagraph (a) and the
net amount shall be remitted to Bart upon expiration of the Revocation Period.

 

 

(c)

The Company shall provide Bart, as a former officer of the Company and a former
officer Midwest, rights to indemnification under the applicable corporate
documents of the Company and Midwest and coverage under any directors’ and
officers’ insurance policy maintained by the Company for itself and Midwest.

 

 

(d)

The Company shall accelerate, upon the expiration of the Revocation Period, the
vesting of all outstanding and unvested options to purchase shares of the
Company’s Common Stock granted to Bart under the Company’s applicable stock
option plans and held by him as of the Separation Date. Each existing option
agreement between the Company and Bart regarding those outstanding options shall
be deemed amended by the preceding sentence.

 

 

(e)

The Company shall afford Bart three months after the Separation Date to exercise
his vested options to purchase shares of the Company’s Common Stock under the
Company’s applicable stock option plans. The Company shall cooperate with Bart
in the exercise of those options that he chooses to exercise (in accordance with
the terms of the documents governing those options).

 

 

(f)

The company will offer Bart six months of executive outplacement services with
Right Management. The contact person is John Copeland and he can be reached at
913 323 2310.

 

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(g)

The Company will offer up to five sessions with Bill Tidd with Saint Luke’s
Health Systems for employee assistance during the transition process. Bill can
be reached at 816 931 3073.

 

 

(h)

The Company shall inform Bart of, and cooperate with any exercise by Bart of,
his rights under the Consolidated Omnibus Benefits Reconciliation Act (COBRA) on
and after the Separation Date.

 

10. Tax Consequences of Payments: The Parties acknowledge and agree that the
Company shall not withhold taxes or FICA from any of the payments and benefits
described in paragraph 9 above and shall only report those proceeds as income as
required by law. Bart, in consultation with his tax advisor, shall determine
issues respecting the tax consequences of these payments. Bart agrees to
indemnify the Company against, and hold the Company harmless from taxes, if any,
and any penalties and interest assessed against the Company resulting from the
Parties’ tax treatment of the payments and benefits described in paragraph 9
above.

 

11.     Governing Law: This Agreement shall be governed by, enforced under, and
construed in accordance with the laws of the State of Kansas, except only to the
extent preempted by federal law.

 

12.     Statement of Understanding: By executing this Agreement, Bart
acknowledges that (a) he has had at least 21 days to consider the terms of this
Agreement and has considered its terms for that period of time or has knowingly
and voluntarily waived his right to do so; (b) he has consulted with, or has had
sufficient opportunity to consult with, an attorney of his own choosing
regarding the terms of this Agreement; (c) he has read this Agreement and fully
understands its terms and their import; (d) except as provided by this
Agreement, he has no contractual right or claim to the benefits described
herein; (e) the consideration provided for herein is good and valuable; and (f)
he is entering into this Agreement voluntarily, of his own free will, and
without any coercion, undue influence, threat, or intimidation of any kind or
type whatsoever.

 

13. Executed Counterparts. This Agreement may be executed in one or more
counterparts, and any executed copy of this Agreement shall be valid and have
the same force and effect as the originally-executed Agreement.

 

14. Modification. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Bart and the Company.

 

15. Assignability. Bart’s obligations and agreements under this Agreement shall
be binding on Bart’s heirs, executors, legal representatives and assigns and
shall inure to the benefit of any successors and assigns of the Company. The
Company may assign this Agreement or any of its rights or obligations arising
hereunder to any party, as part of a sale of its assets or other similar change
of control.

 

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16. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto in respect of the subject matter hereof, and this Agreement
supersedes all prior and contemporaneous agreements between the parties hereto
in connection with the subject matter hereof.

 

17. Severability. Should any portion of this Agreement be found void or
unenforceable for any reason by a court of competent jurisdiction, the parties
intend that such provision be limited or modified so as to make it enforceable,
and if such provision cannot be modified to be enforceable, the unenforceable
portion shall be deemed severed from the remaining portions of this Agreement,
which shall otherwise remain in full force and effect. If any portion of this
Agreement is so found to be void or unenforceable for any reason in regard to
any one or more persons, entities, or subject matters, such portion shall remain
in full force and effect with respect to all other persons, entities, and
subject matters. This paragraph shall not operate, however, to sever the
Executive's obligation to provide the binding release to all entities intended
to be released hereunder.

 

[Signature Page Follows]

 

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EXECUTED in Overland Park, Kansas, this 19th day of June, 2007.

 

 

 

 

BART:

 

 

 

 

/s/Todd R. Bart

TODD R. BART

 

 

 

 

EXECUTED in Overland Park, Kansas, this 14th day of June, 2007.

 

 

 

 

ENERJEX RESOURCES, INC.

 

 

 

 

By:

/s/Steve Cochennet

Steve Cochennet, Chief Executive Officer

 

 

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