Unassociated Document


    SECOND
AMENDMENT

    TO

    CREDIT
AGREEMENT

    


    THIS
SECOND AMENDMENT TO CREDIT AGREEMENT (this “Second
Amendment”) is entered into and effective as of the Second Amendment
Closing Date (as defined below) among ENERJEX RESOURCES, INC., a
Nevada corporation (“Parent”),
ENERJEX KANSAS, INC.
(f/k/a Midwest Energy, Inc.), a Nevada corporation (“EnerJex
Kansas”) and DD ENERGY,
INC., a Nevada corporation (“DD
Energy”) (collectively, “Borrowers”)
and TEXAS CAPITAL BANK,
N.A., a
national banking association, as a Bank, L/C Issuer and Administrative Agent (in
such latter capacity and together with its successors and permitted assigns in
such capacity the “Administrative
Agent”), and the several banks and financial institutions from time to
time parties to the Credit Agreement, as defined below (the “Banks”).  Capitalized
terms used but not defined in this Second Amendment have the meaning given them
in the Credit Agreement.

     

    RECITALS

     

    A.           Borrowers,
Administrative Agent, L/C Issuer and Banks entered into that certain Credit
Agreement dated as of July 3, 2008 (as amended by that certain Letter
Agreement dated July 3, 2008, that certain Letter Agreement dated May 15, 2009,
that certain First Amendment to Credit Agreement dated August 18, 2009, and as
further amended, modified or supplemented, the “Credit
Agreement”).

     

    B.           Borrowers,
Administrative Agent, L/C Issuer and Banks have agreed to amend the Credit
Agreement, subject to the terms and conditions of this Second
Amendment.

     

    AGREEMENT

     

    NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the undersigned hereby agree as follows:

     

    I.           Amendments to Credit
Agreement.

     

    Article I,
Definitions, of the Credit Agreement is hereby amended by adding the
following definitions in their proper alphabetical order:

     

    “Second
Amendment” means the Second Amendment to Credit Agreement dated as of the
Second Amendment Closing Date by and between Borrowers, Administrative Agent,
L/C Issuer and Banks.

     

    “Second Amendment
Closing Date” means January 13, 2010.

     

    Section 2.04, Borrowing Base
Determination, of the Credit Agreement is hereby amended by replacing the
text in Subsection (a) thereof with the following text:


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “(a) The
Borrowing Base in effect as of the Second Amendment Closing Date is $6,746,000
relative to the Proved Reserves attributable to the Borrowing Base Oil and Gas
Properties and the Monthly Borrowing Base Reduction is $55,000.  The
Borrowing Base shall be automatically reduced on the first day of each month by
the Monthly Borrowing Base Reduction beginning February 1, 2010.  The
Borrowing Base and the Monthly Borrowing Base Reduction shall be re-determined
from time to time pursuant to the provisions of this Section.”

     

    Section 7.12(b), Senior
Funded Debt to EBITDA Ratio, of the Credit Agreement is hereby amended by
replacing the text of such section with the following text:

     

    “(b)  Senior Funded Debt to EBITDA
Ratio.  For the quarterly period ending December 31, 2009,
permit the ratio of Senior Funded Debt to Borrowers’ and their Subsidiaries’
consolidated EBITDA for that preceding quarter to be greater than 6.25:1.00; or
for the quarterly period ending March 31, 2010, permit the ratio of Senior
Funded Debt to Borrowers’ and their Subsidiaries’ consolidated EBITDA for that
preceding quarter to be greater than 5.75:1.00; or for the quarterly period
ending June 30, 2010, permit the ratio of Senior Funded Debt to Borrowers’ and
their Subsidiaries’ consolidated EBITDA for that preceding quarter to be greater
than 5.25:1.00; or for the quarterly period ending September 30, 2010, permit
the ratio of Senior Funded Debt to Borrowers’ and their Subsidiaries’
consolidated EBITDA for that preceding quarter to be greater than 4.75:1.00; or
permit, as of the last day of each fiscal quarter ending after September 30,
2010, the ratio of Senior Funded Debt as of such date to Borrowers’ and their
Subsidiaries’ consolidated EBITDA for the 12 month period ending on such date to
be greater than 4.25:1.00.  For the purpose of calculating the
foregoing ratio, EBITDA will be annualized by: (i) multiplying by 4 for the
three-month period ending December 31, 2009, (ii) multiplying by 2 for the
six-month period ending March 31, 2010, and (iii) multiplying by 1.33 for the
nine-month period ending June 30, 2010.  For the twelve-month
period ending September 30, 2010, and for each period thereafter, EBITDA will be
calculated based on actual EBITDA for the previous four fiscal
quarters.

     

    Section 7.12(c), Interest
Coverage Ratio, of the Credit Agreement is hereby amended by replacing
the text of such section with the following text:

     

    “(c)  Interest Coverage
Ratio. Permit, as of the fiscal quarter ending on December 31, 2009
and the last day of each fiscal quarter thereafter, the ratio of Borrowers’ and
their Subsidiaries’ consolidated EBITDA to Interest Expense for the 12 month
period ending on such date to be less than 2.50:1.00; provided that for the purpose
of calculating the foregoing ratio, each of EBITDA and Interest Expense will be
annualized by: (i) multiplying by 4 for the three-month period ending December
31, 2009, (ii) multiplying by 2 for the six-month period ending March 31,
2010, and (iii) multiplying by 1.33 for the nine-month period ending
June 30, 2010.  For the twelve-month period ending September 30,
2010, and for each period thereafter, each of EBITDA and Interest Expense will
be calculated based on actual EBITDA and Interest Expense, respectively, for the
previous four fiscal quarters.

     

    II.           Conditions.  This
Second Amendment is subject to satisfaction of the following conditions
precedent:

     

    (a)           this
Second Amendment has been executed and delivered by all parties
hereto;


    
      
         


      

      
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    (b)           on
or before the Second Amendment Closing Date, Borrowers shall have paid to
Administrative Agent, in immediately available funds, an engineering fee in the
amount of $2,500 in accordance with Section 2.08(c) of the Credit Agreement;
and

    


    (c)           Borrowers
deliver to Administrative Agent such other documents as Administrative Agent
reasonably requests.

     

    III.          Representations, Warranties
and Covenants.  Borrowers represent and warrant to
Administrative Agent and Banks that (a) they possess all requisite power
and authority to execute, deliver and comply with the terms of this Second
Amendment, (b) this Second Amendment has been duly authorized and approved
by all requisite corporate action on the part of the Borrowers, (c) no
other consent of any Person (other than Administrative Agent and Banks) is
required for this Second Amendment to be effective, (d) the execution and
delivery of this Second Amendment does not violate their organizational
documents, (e) the representations and warranties in each Loan Document to
which they are a party are true and correct in all material respects on and as
of the Second Amendment Closing Date as though made on the Second Amendment
Closing Date, (f) they are in full compliance with all covenants and
agreements contained in each Loan Document to which they are a party,
(g) no Event of Default or Default has occurred and is continuing, and (h)
except as may be addressed in this Second Amendment, no exhibit or schedule to
the Credit Agreement is required to be supplemented, amended or modified in
connection with the transactions contemplated by this Second Amendment or any
other matters occurring prior to the Second Amendment Closing
Date.  In particular, but without limiting the generality of the
foregoing, Exhibit A attached to the Credit Agreement, as amended by this Second
Amendment or any prior amendment, describes all of Borrower’s Borrowing Base Oil
and Gas Properties.  The representations and warranties made in this
Second Amendment shall survive the execution and delivery of this Second
Amendment.  No investigation by Administrative Agent or any Bank is
required for Administrative Agent or any Bank to rely on the representations and
warranties in this Second Amendment.

     

    IV.          Scope of Amendment;
Reaffirmation; Release.  All references to the Credit Agreement
shall refer to the Credit Agreement as amended by this Second
Amendment.  Except as affected by this Second Amendment, the Loan
Documents are unchanged and continue in full force and
effect.  However, in the event of any inconsistency between the terms
of the Credit Agreement (as amended by this Second Amendment) and any other Loan
Document, the terms of the Credit Agreement shall control and such other
document shall be deemed to be amended to conform to the terms of the Credit
Agreement.  Borrowers hereby reaffirm their obligations under the Loan
Documents to which they are a party to and agree that all Loan Documents to
which they are a party to remain in full force and effect and continue to be
legal, valid, and binding obligations enforceable in accordance with their terms
(as the same are affected by this Second Amendment).  Borrowers hereby
release, discharge and acquit Administrative Agent, L/C Issuer and Banks from
any and all claims, demands, actions, causes of action, remedies, and
liabilities of every kind or nature (including without limitation, offsets,
reductions, rebates, or lender liability) arising out of any act, occurrence,
transaction or omission occurring in connection with the Credit Agreement and
the other Loan Documents prior to the Second Amendment Closing
Date.


    
      
         


      

      
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    V.           Miscellaneous.

     

    (a)           No Waiver of
Defaults.  Except as expressly provided for herein, this Second
Amendment does not constitute (i) a waiver of, or a consent to, (A) any
provision of the Credit Agreement or any other Loan Document, or (B) any present
or future violation of, or default under, any provision of the Loan Documents,
or (ii) a waiver of Administrative Agent’s or any Bank’s right to insist upon
future compliance with each term, covenant, condition and provision of the Loan
Documents.

     

    (b)           Form.  Each
agreement, document, instrument or other writing to be furnished to
Administrative Agent under any provision of this Second Amendment must be in
form and substance satisfactory to Administrative Agent and its
counsel.

     

    (c)           Headings.  The
headings and captions used in this Second Amendment are for convenience only and
will not be deemed to limit, amplify or modify the terms of this Second
Amendment, the Credit Agreement, or the other Loan Documents.

     

    (d)           Costs, Expenses and
Attorneys’ Fees.  Borrowers agree to pay or reimburse
Administrative Agent on demand for all its reasonable out-of-pocket costs and
expenses incurred in connection with the preparation, negotiation, and execution
of this Second Amendment, including, without limitation, the reasonable fees and
disbursements of Administrative Agent’s counsel.

     

    (e)           Successors and
Assigns.  This Second Amendment shall be binding upon and inure
to the benefit of each of the undersigned and their respective successors and
permitted assigns.

     

    (f)           Multiple
Counterparts.  This Second Amendment may be executed in any
number of counterparts with the same effect as if all signatories had signed the
same document.  All counterparts must be construed together to
constitute one (1) and the same instrument.  This Second Amendment may
be transmitted and signed by facsimile or portable document file
(pdf).  The effectiveness of any such documents and signatures shall,
subject to applicable law, have the same force and effect as manually-signed
originals and shall be binding on Borrowers, Administrative Agent, L/C Issuer
and Banks.  Administrative Agent may also require that any such
documents and signatures be confirmed by a manually-signed original; provided that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

     

    (g)           Governing
Law.  THIS SECOND AMENDMENT AND THE OTHER LOAN DOCUMENTS MUST
BE CONSTRUED, AND THEIR PERFORMANCE ENFORCED, UNDER TEXAS LAW.

     

    (h)           Entirety.  The Loan
Documents (as amended hereby) Represent the Final Agreement By and Among
Borrowers, Administrative Agent, L/C Issuer and Banks and May Not Be
Contradicted by Evidence of Prior, Contemporaneous, or Subsequent Oral
Agreements by the Parties.  There Are No Unwritten Oral Agreements
between the Parties.

     

    (Signature
pages follow)


    
      
         


      

      
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    IN
WITNESS WHEREOF, this Second Amendment is executed effective as of the Second
Amendment Closing Date.

     

    
      
        
          
            
              
                
                  
                    	 
      	
                            BORROWERS:

                          
	 
      	 
      
	 
      	
                            ENERJEX
      RESOURCES, INC.

                          
	 
      	 
      
	 
      	
                            By:

                          	
                            

                          
	 
      	 
      	
                            Steve
      Cochennet

                          
	 
      	 
      	
                            Chief
      Executive Officer

                          
	 
      	 
      
	 
      	
                            ENERJEX
      KANSAS, INC.

                          
	 
      	 
      
	 
      	
                            By:

                          	
                            

                          
	 
      	 
      	
                            Steve
      Cochennet

                          
	 
      	 
      	
                            Chief
      Executive Officer

                          
	 
      	 
      
	 
      	
                            –
      and –

                          
	 
      	 
      
	 
      	
                            DD
      ENERGY, INC.

                          
	 
      	 
      
	 
      	
                            By:

                          	
                            

                          
	 
      	 
      	
                            Steve
      Cochennet

                          
	 
      	 
      	
                            Chief
      Executive
Officer

                          


                  

                

              

            

          

        

      

    

    


    Signature
Page to Second Amendment


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      
        	 
      	
                ADMINISTATIVE
      AGENT, L/C ISSUER

                AND
      BANKS:

              
	 
      	 
      
	 
      	
                TEXAS
      CAPITAL BANK, N.A.,

              
	 
      	
                as
      Administrative Agent, L/C Issuer and

              
	 
      	
                a
      Bank

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Jonathan Gregory

              
	 
      	 
      	
                Jonathan
      Gregory,

              
	 
      	 
      	
                Executive
      Vice President

              


      

    

    


    Signature
Page to Second Amendment