Exhibit 10.1


 


SECURITIES PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of December 20, 2017, between EnerJex Resources, Inc., a Nevada corporation
(the “Company”), and the purchaser identified on the signature page hereto (including its successors and assigns,
a “Purchaser”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933 (the “Securities
Act”), the Company desires to issue and sell to Purchaser, and Purchaser desires to purchase from the Company, securities
of the Company as more fully described in this Agreement.


 


NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and Purchaser agree as follows:


 


ARTICLE I.


DEFINITIONS


 


1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Certificate of Designation (as defined herein), and (b) the following terms have the meanings
set forth in this Section 1.1:


 


“8-K
Filing” means the Company’s filing with the United States Securities and Exchange Commission of a Form 8-K, described
in Section 4.2.


 


“Action” shall have the meaning ascribed
to such term in Section 3.1(j).


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.


 


“Board of Directors” means the board
of directors of the Company.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.


 


“Certificate
of Designation” means the Certificate of Designation filed by the Company with the Secretary of State of Nevada setting
forth the rights and preferences of the Series A Preferred Stock, a copy of which is annexed hereto as Exhibit A.


 


“Closing” means the closing of the
purchase and sale of the Securities pursuant to Section 2.1.


 


“Closing
Date” means the Trading Day on which (a) all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, (b) all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, and (c) the Purchaser pays
the Purchase Price to the Company.


 


“Closing Statement” means the Closing
Statement in the form on Annex A attached hereto.


 


“Commission” means the United States
Securities and Exchange Commission.


 


“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.


 




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“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.


 


“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


 


“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(k).


 


“Per
Share Purchase Price” equals $0.612.


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Preferred
Stock” means the 1,061,750 shares of the Company’s Series 10% A Preferred Stock issued hereunder having the rights,
preferences and privileges set forth in the Certificate of Designation.


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).


 


“Securities”
means the Preferred Stock.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock).


 


“Subscription
Amount” means, as to Purchaser, the aggregate amount to be paid for the Preferred Stock purchased hereunder as specified
below Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.


 




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“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.


 


“Trading Day” means a day on which
the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
or the New York Stock Exchange (or any successors to any of the foregoing). As of the Closing the NYSE American is the principal
Trading Market.


 


“Transaction
Documents” means this Agreement, the Certificate of Designation, all exhibits and schedules thereto and hereto and any
other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means Standard Registrar & Transfer Company Inc., the current transfer agent of the Company, with a mailing
address of 12528 South 1840 East, Draper, UT 84020 and a facsimile number of (801) 571-2551, and any successor transfer agent of
the Company.


 


ARTICLE II.


PURCHASE AND SALE


 


2.1           Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchaser, 1,061,750 shares of Preferred
Stock. The Purchaser shall deliver to the Company, via wire transfer immediately available funds equal to its Subscription Amount,
and the Company shall deliver to Purchaser its shares of Preferred Stock. Upon satisfaction of the covenants and conditions set
forth in Sections 2.2 and 2.3, the Closing shall occur at such location as the parties shall mutually agree.


 


2.2           Deliveries.


 


(a)           On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to Purchaser the following:


 


(i)          this
Agreement duly executed by the Company; and


 


(ii)         a
certificate evidencing 1,061,750 shares of Preferred Stock registered in the name of Purchaser.


 


(b)           On
or prior to the Closing Date, Purchaser shall deliver or cause to be delivered to the Company the following:


 


(i)          this
Agreement duly executed by Purchaser; and


 


(ii)         Purchaser’s
Subscription Amount by wire transfer to the account specified in writing by the Company.


 


2.3           Closing
Conditions.


 


(a)           The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:


 


(i)          the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the Closing Date of the representations and warranties of the Purchaser contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);


 




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(ii)         all
obligations, covenants and agreements of Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and


 


(iii)        the
delivery by Purchaser of the items set forth in Section 2.2(b) of this Agreement.


 


(b)           The
respective obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being
met:


 


(i)          the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company
contained herein (unless as of a specific date therein);


 


(ii)         all obligations,
covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; and


 


(iii)        the delivery
by the Company of the items set forth in Section 2.2(a) of this Agreement.


 


2.4           Purchaser’s
Right To Terminate. Anything in any of the Transaction Documents to the contrary notwithstanding, Purchaser has the right to terminate
this agreement and demand and receive back from the Company Purchaser’s Subscription Amount at any time until a Closing takes
place in connection with such Subscription Amount.


 


ARTICLE III.


REPRESENTATIONS AND WARRANTIES


 


3.1           Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules are attached hereto
as Annex B and shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent
of the disclosure contained in the corresponding section of the Disclosure Schedule (under which an exception to one section of
such Disclosure Schedules shall be deemed to be an exception to each other Section of this Article III as to which a reasonable
reader would infer, from the language of the disclosure, that such exception applies), the Company hereby makes the following representations
and warranties to Purchaser:


 


(a)           Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly
or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, other than liens
as set forth in the SEC Reports, subject to restrictions under applicable laws, and all of the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities.


 


(b)           Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 




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(c)           Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith
or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which
it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


 


(d)           No Conflicts.
The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents, the issuance and
sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do
not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) by the Company or any Subsidiary under, result in the creation
of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case
of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.


 


(e)           Filings, Consents
and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local or other governmental authority, any Trading Market,
shareholder or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.2 of this Agreement, and (ii) the filing of Form D with the Commission
and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).


 


(f)            Issuance
of the Securities; Registration. The Preferred Stock is duly authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, and free and clear of all Liens
except those created by Purchaser.


 




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(g)          Capitalization.
The capitalization of the Company is as set forth in the in Schedule 3.1(g). The Company has not issued any capital stock since
its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under
the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the
most recently filed periodic report under the Exchange Act. Other than as set forth on Schedule 3.1(g) of the Disclosure Letter
and Section 4.18, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. Except as disclosed in the Company SEC Reports or Schedule 3.1(g)
of the Disclosure Letter, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire any shares of Common Stock, or material contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents. Except as disclosed in in Schedule 3.1(g), the issuance and sale of the Preferred Stock will not obligate the
Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchaser) and will
not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any
of such securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid
and nonassessable, have been issued in material compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Preferred Stock.
Except as disclosed on Schedule 3.1(g) of the Disclosure Letter, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.


 


(h)           SEC Reports;
Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed
by the Company under the Securities Act and the Exchange Act, including pursuant to Section 12(g), 13(a) or 15(d) thereof, for
the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus
and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis
or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in
the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.


 


(i)           Material Changes;
Undisclosed Events, Liabilities or Developments. Except as set forth on Schedule 3.1(i) or in the Company’s SEC
Reports, since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed
in a subsequent SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company
has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made
any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before
the Commission any request for confidential treatment of information.


 




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(j)            Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect, nor
to the knowledge of the Company is there any reasonable basis for any such Action that would, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.


 


(k)           Regulatory Permits.
The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state,
local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation
or modification of any Material Permit.


 


(l)            Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan
of the Company.


 


(m)          Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of
the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting of the Company and its Subsidiaries.


 




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(n)           Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be
an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.


 


(o)           Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Securities and the Purchaser’s ownership of the Securities.


 


(p)           Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents and other
certain information that shall be publicly disclosed and disseminated upon the filing of the Current Report on Form 8-K required
to be filed pursuant to Section 4.2, the Company confirms that neither it nor any other Person acting on its behalf has provided
any of the Purchaser or their agents or counsel with any information that it believes constitutes or might constitute material,
non-public information which is not otherwise disclosed in the Prospectus Supplement. The Company understands and confirms that
the Purchaser will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure
furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their respective businesses
and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company
during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that Purchaser
makes or has made no representations or warranties with respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof. Investor acknowledges and agrees that the Investor has not requested from the Company, and the
Company has not delivered to the Investor, a private placement or similar memorandum or any “Risk Factors” or “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” of the type typically contained therein.


 


(q)           Tax Status.
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign
income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all
taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no basis for any such claim.


 




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(r)            Foreign Corrupt
Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.


 


(s)          Accountants.
The Company’s accounting firm is set forth in the Company’s SEC Reports. To the knowledge and belief of the Company,
such accounting firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December
31, 2017.


 


(t)           Acknowledgment
Regarding Purchaser Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by Purchaser
or any of its respective representatives or agents in connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchaser’s purchase of the Preferred Stock. The Company further represents to Purchaser
that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 


(u)           Regulation M
Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement
agent in connection with the placement of the Securities.


 


(v)           Office of Foreign
Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”).


 


(w)          U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.


 


(x)           Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company or any Subsidiary, threatened.


 




    	 	9	 



     


    

 


(y)           Private Placement.
Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, no registration under the
Securities Act is required for the offer and sale of the Preferred Stock by the Company to the Purchaser as contemplated hereby.


 


(z)           No General Solicitation.
Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Preferred Stock by any form of
general solicitation or general advertising. The Company has offered the Preferred Stock for sale only to the Purchaser within
the meaning of Rule 501 under the Securities Act.


 


(aa)         Labor Relations.
No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which
could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected by the Company to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, which could reasonably be expected to result in a Material Adverse Effect and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.


 


(bb)        Compliance. Except
as set forth in the SEC Reports, neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event
has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment,
decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule,
ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws
relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor
matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.


 


(cc)         Title to Assets.
The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable
title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case
free and clear of all Liens, except for liens as disclosed in the SEC Reports. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and
the Subsidiaries are in compliance, except where the non-compliance would not reasonably be expected to result in a Material Adverse
Effect.


 


		(dd)	Intellectual Property.



 


		(i)	The term “Intellectual Property Rights” includes:



 


		1.	the name of the Company, all fictional business names,
trading names, registered and unregistered trademarks, service marks, and applications (collectively, “Marks”);



 


		2.	all patents and patent applications (collectively, “Patents”);



 




    	 	10	 



     


    

 


		3.	all copyrights in both published works and unpublished
works (collectively, “Copyrights”);



 


		4.	all rights in mask works (collectively, “Rights in
Mask Works”); and



 


		5.	all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology, plans, drawings, and blue prints (collectively, “Trade
Secrets”);



 


owned, used, or licensed by the Company as licensee or licensor.


 


(ii)           Agreements.
The SEC Reports contain a complete and accurate list of all material contracts relating to the Company’s Intellectual Property
Rights to which the Company is a party or by which the Company is bound, except for any license implied by the sale of a product
and perpetual, paid-up licenses for commonly available software programs with a value of less than $10,000 under which the Company
is the licensee. There are no outstanding and, to the Company’s knowledge, no threatened disputes or disagreements with respect
to any such agreement.


 


(iii)          Know-How
Necessary for the Business. To the Company’s knowledge: the Company’s Intellectual Property Rights are all those necessary
for the operation of the Company’s businesses as it is currently conducted or as represented, in writing, to the Purchaser
to be conducted. To the Company’s knowledge: the Company is the owner of all right, title, and interest in and to each of
the Intellectual Property Rights, free and clear of all liens, security interests, charges, encumbrances, equities, and other adverse
claims, and has the right to use all of the Intellectual Property Rights, subject in each case to Permitted Liens. To the Company’s
knowledge, no employee of the Company has entered into any contract that restricts or limits in any way the scope or type of work
in which the employee may be engaged or requires the employee to transfer, assign, or disclose information concerning his work
to anyone other than of the Company.


 


(iv)          Know-How
Necessary for the Business. To the extent the Company owns any Patents: (A) the SEC Reports contain a complete and accurate list
of all of the Company’s Patents; (B) the Company is the owner of all right, title and interest in and to each of the Patents,
free and clear of all Liens and other adverse claims other than Permitted Liens; (C) all of the issued Patents are currently in
compliance with formal legal requirements (including payment of filing, examination, and maintenance fees and proofs of working
or use), are valid and enforceable, and, except as set forth on Schedule 3.1(o) of the Disclosure Letter, are not subject to any
maintenance fees or taxes or actions falling due within ninety days after the Closing Date; (D) no Patent has been or is now involved
in any interference, reissue, reexamination, or opposition proceeding; and (E) to the Company’s knowledge: (1) there is no
potentially interfering patent or patent application of any third party, and (2) no Patent is infringed or has been challenged
or threatened in any way. To the Company’s knowledge, none of the products manufactured and sold, nor any process or know-how
used, by the Company infringes or is alleged to infringe any patent or other proprietary right of any other Person.


 


(v)           Trademarks.
To the extent the Company owns any Marks: (A) the SEC Reports contain a complete and accurate list and summary description of all
Marks; (B) the Company is the owner of all right, title, and interest in and to each of the Marks, free and clear of all Liens
and other adverse claims other than Permitted Liens; (C) all Marks that have been registered with the United States Patent and
Trademark Office are currently in compliance with all formal legal requirements (including the timely post-registration filing
of affidavits of use and incontestability and renewal applications), are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the Closing Date; (D) except as set forth in Schedule 3.1(dd) of
the Disclosure Letter, no Mark has been or is now involved in any opposition, invalidation, or cancellation and, to the Company’s
knowledge, no such action is threatened with respect to any of the Marks and (E) to the Company’s knowledge: (1) there is
no potentially interfering trademark or trademark application of any third party, and (2) no Mark is infringed or has been challenged
or threatened in any way. To the Company’s knowledge, none of the Marks used by the Company infringes or is alleged to infringe
any trade name, trademark, or service mark of any third party.


 




    	 	11	 



     


    

 


(vi)          Copyrights.
To the extent the Company owns any Copyrights: (A) the SEC Reports contain a complete and accurate list of all Copyrights; (B)
the Company is the owner of all right, title, and interest in and to each of the Copyrights, free and clear of all Liens and other
adverse claims other than Permitted Liens; (C) except as set forth on Schedule 3.1(dd) of the Disclosure Letter, all the Copyrights
have been registered and are currently in compliance with formal requirements, are valid and enforceable, and are not subject to
any maintenance fees or taxes or actions falling due within ninety days after the date of the Closing; (D) no Copyright is infringed
or, to the Company’s knowledge, has been challenged or threatened in any way; (E) to the Company’s knowledge, none
of the subject matter of any of the Copyrights infringes or is alleged to infringe any copyright of any third party or is a derivative
work based on the work of a third party; and (F) all works encompassed by the Copyrights have been marked with the proper copyright
notice.


 


(vii)         Trade
Secrets. With respect to each Trade Secret of the Company, the documentation relating to such Trade Secret is current, accurate,
and sufficient in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge
or memory of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value
of its Trade Secrets. The Company has good title and an absolute (but not necessarily exclusive) right to use the Company’s
Trade Secrets subject to Permitted Liens. The Company’s Trade Secrets are not part of the public knowledge or literature,
and, to the Company’s knowledge, have not been used, divulged, or appropriated either for the benefit of any Person (other
than the Company) or to the detriment of the Company. Except as set forth on Schedule 3.1(dd) of the Disclosure Letter, no Trade
Secret of the Company is subject to any adverse claim or has been challenged or threatened in any way.


 


(ee)         Insurance.
The Company and the Subsidiaries are currently insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged.
Neither the Company nor any Subsidiary believes that it will not be able to acquire insurance coverage at reasonable cost as may
be necessary to continue its business.


 


(ff)          Private
Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, registration
under the Securities Act is not required for the offer and sale of the Securities by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.


 


(gg)         No
Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, neither
the Company, nor, to the knowledge of the Company, any of its Affiliates, nor any Person acting on its or, to the knowledge of
the Company, their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy
any security, under circumstances that would cause this offering of the Securities by the Company to be integrated with prior
offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under
the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities
of the Company are listed or designated.


 


(hh)        Fees. No brokerage,
finder’s fees, commissions or due diligence fees are or will be payable by the Company or any Subsidiary to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons.


 




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(ii)           Listing
and Maintenance Requirements. The Common Stock is quoted on the NYSE American under the symbol ENRJ. Except as set forth in the
SEC Reports, the Company has not, in the twenty-four (24) months preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market.


 


(jj)           No
General Solicitation. Neither the Company nor, to the knowledge of the Company, any person acting on behalf of the Company has
offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities
for sale only to the Purchaser and certain other “accredited investors” within the meaning of Rule 501 under the Securities
Act.


 


(kk)         No
Disagreements with Accountants and Lawyers. Except as set forth in the SEC Reports, there are no disagreements of any kind presently
existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently
employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect
the Company’s ability to perform any of its obligations under any of the Transaction Documents.


 


(ll)           Stock
Option Plans. Except as set forth in the SEC Reports, as of the date hereof, no stock options have been granted, nor any
commitments made to grant stock options, under the Stock Option Plans, and neither the Company nor any Subsidiary has ever
had an option plan, other than the Stock Option Plans and other stock option plans which were described in the SEC Reports
and are no longer in effect. The Company has not knowingly granted, and there is no and has been no Company policy or
practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial
results or prospects.


 


(mm)       Reporting Company/Shell
Company. The Company is a publicly-held company subject to reporting obligations pursuant to Section 12(g) of the Exchange Act.
Pursuant to the provisions of the Exchange Act. As of the Closing Date, the Company is not a “shell company” nor “former
shell company” as those terms are employed in Rule 144 under the Securities Act.


 


(nn)         No Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other
officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in
Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) . The Company has exercised reasonable care to
determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and will furnish to the Purchaser a copy of any disclosures
provided thereunder.


 


(oo)        Solvency.
The Company has no present intention that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction.


 


3.2           Representations
and Warranties of the Purchaser. Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date
to the Company as follows (unless as of a specific date therein):


 




    	 	13	 



     


    

 


(a)           Organization;
Authority. Purchaser is either an entity duly incorporation or formation, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar
power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by
Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of Purchaser. Each Transaction Document to which it is
a party has been duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of Purchaser, enforceable against it in accordance with its terms, except: (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by
applicable law.


 


(b)           Understandings
or Arrangements. Purchaser is acquiring the Preferred Stock as principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding the distribution of such Preferred Stock. Purchaser
is acquiring the Preferred Stock hereunder in the ordinary course of its business.


 


(c)           Purchaser
Status. At the time Purchaser was offered the Preferred Stock, it was, and as of the date hereof it is, it will be
either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the
Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.


 


(d)           Experience
of Purchaser. Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Preferred
Stock, and has so evaluated the merits and risks of such investment. Purchaser has been granted the opportunity to conduct a full
and complete examination of the records, documents and files of the Company, to ask questions of and receive answers from representatives
of the Company, its officers, directors, employees and agents concerning the Company and its business and prospects, the terms
and conditions of this Agreement, and the purchase of the Preferred Stock, and to obtain any additional information which Investor
deems necessary to verify the accuracy of any information received. Purchaser is able to bear the economic risk of an investment
in the Preferred Stock and, at the present time, is able to afford a complete loss of such investment.


 


(e)           General
Solicitation. Purchaser is not, to Purchaser’s knowledge, purchasing the Preferred Stock as a result of any advertisement,
article, notice or other communication regarding the Preferred Stock published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general solicitation or general advertisement.


 


The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect Purchaser’s right to
rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained
in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transaction contemplated hereby.


 


ARTICLE IV.


OTHER AGREEMENTS OF THE PARTIES


 


4.1           Removal
of Legends.


 


(a)           The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of the
Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of Purchaser
or in connection with a pledge as contemplated in Section 4.1(c), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of
such transferred Securities under the Securities Act.


 




    	 	14	 



     


    

 


(b)           The Purchaser
agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form:


 


[NEITHER] THIS
SECURITY [NOR THE SECURITIES [FOR] WHICH THIS SECURITY IS EXERCISABLE] HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ”) AND APPLICABLE STATE SECURITIES
LAWS,AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. TO THE EXTENT PERMITTED
BY APPLICABLE SECURITIES LAWS, THIS SECURITY [AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


(c)           The Company
acknowledges and agrees that Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such arrangement, Purchaser may transfer pledged or secured
Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no
legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of the Securities may reasonably request in connection with a pledge or
transfer of the Securities, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of
the Securities Act to appropriately amend the list of selling stockholders thereunder


 


4.2           Securities Laws
Disclosure; Publicity. The Company shall, by 9:00 a.m. (New York City time) on the Trading Day immediately following the date
hereof, file a Current Report on Form 8-K and press release disclosing the material terms of the transactions contemplated hereby,
including the Transaction Documents as exhibits thereto. From and after the 8-K Filing, the Company represents to the Purchaser
that it shall have publicly disclosed all material, non-public information delivered to the Purchaser by the Company or any of
its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents. In addition, effective upon the 8-K Filing, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and the Purchaser or any of their
Affiliates on the other hand, shall terminate. The Company and Purchaser shall consult with each other in issuing any other press
releases with respect to the transactions contemplated hereby, and neither the Company nor Purchaser shall issue any such press
release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release
of Purchaser, or without the prior consent of Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of Purchaser, or include the name of Purchaser in any filing with the Commission or
any regulatory agency or Trading Market, without the prior written consent of Purchaser, except: (a) as required by federal securities
law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required
by law or Trading Market regulations, in which case the Company shall provide the Purchaser with prior notice of such disclosure
permitted under this clause (b).


 




    	 	15	 



     


    

 


4.3           Non-Public Information.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents (including,
but not limited to, the disclosure schedules set forth in the Disclosure Schedules), the Company covenants and agrees that neither
it, nor any other Person acting on its behalf, will provide Purchaser or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto Purchaser shall have entered into a written agreement
with the Company regarding the confidentiality and use of such information. To the extent that the Company delivers any material,
non-public information to Purchaser without Purchaser’s consent, the Company hereby covenants and agrees that Purchaser shall
not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents,
employees or Affiliates, or a duty to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents,
employees or Affiliates not to trade on the basis of, such material, non-public information. The Company understands and confirms
that Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.


 


4.4           Use
of Proceeds. The Company shall use the net proceeds from the sale of the Preferred Stock hereunder for general corporate purposes,
including but not limited to paying debt service on the Company’s indebtedness, paying operating expenses in the ordinary course.


 


4.5           Merger
Proxy/Amendment of Designation Certificate. The Company is a party to a merger agreement by and among itself, its
wholly-owned subsidiary and AG Eagle Aerial Systems Inc. The merger agreement requires the amendment of the Preferred
Stock’s certificate of designation, including, but not limited to the conversion of the Preferred Stock into Common
Stock at a 1 for 10 conversion ratio upon completion of the Merger. The Company shall continue to use its reasonable best
efforts to comply with the terms and conditions of the merger agreement. The Company will revise its proxy proposal to amend
the certificate of designation for the Preferred Stock to increase the number of authorized shares of Preferred Stock to not
less than 241,599 shares.


 


4.6           Furnishing
of Information; Public Information.


 


(a)           Until the earliest
of the time that (i) no Purchaser owns any Securities, and (ii) five (5) years after the Closing Date, the Company covenants to
maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.


 


(b)           At any time commencing
on the Closing Date and ending at such time that all of the Securities may be sold without the requirement for the Company to be
in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company shall fail
for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public Information Failure”)
then, in addition to Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash
equal to 0.25% of the aggregate Subscription Amount of Purchaser’s Securities held by Purchaser on the day of a Public Information
Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of
(a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required for
the Purchaser to transfer the Preferred Stock pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant
to this Section 4.6 are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments
shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are
incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments
is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information
Failure Payments shall bear interest at the rate of 1% per month (prorated for partial months) until paid in full. Nothing herein
shall limit Purchaser’s right to pursue actual damages for the Public Information Failure, and Purchaser shall have the right
to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief.


 




    	 	16	 



     


    

 


4.7           Integration. The
Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities by the Company in a manner that
would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder
approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent
transaction.


 


4.8           Indemnification
of Purchaser. Subject to the provisions of this Section 4.8, the Company will indemnify and hold Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding a lack of such title or any other title), each Person who controls Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members,
partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements
made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser
Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents
or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser
Party of Securities Laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or
malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to
this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have
the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of such Purchaser Party’s counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel for all Purchaser Parties.
The Company will not be liable to any Purchaser Party under this Agreement (iv) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed; or (v) to
the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained
herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any
liabilities the Company may be subject to pursuant to law.


 




    	 	17	 



     


    

 


4.9           Reservation of
Common Stock. As of the date hereof, the Company has reserved for Purchaser and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for Purchaser for the purpose
of enabling the Company to issue Common Stock upon complete conversion of the Preferred Stock issued pursuant to this Agreement
and the Merger (such amount being the “Required Minimum”). If, on any date, the number of authorized but unissued (and
otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date (an “Authorized Share Failure”),
then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate of incorporation
to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon
as possible and in any event not later than the 90th day after such date. Without limiting the generality of the foregoing sentence,
as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90)
days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval
of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each
stockholder with a proxy statement and shall use its commercially reasonable efforts to solicit its stockholders’ approval of such
increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve
such proposal.


 


4.10         Listing
of Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Common
Stock on the Trading Market on which it is currently listed.


 


4.11         Reimbursement.
If Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by Purchaser to or with any current
stockholder), solely as a result of Purchaser’s acquisition of the Securities under this Agreement, the Company will
reimburse Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and
travel in connection therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement
obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise have,
shall extend upon the same terms and conditions to any Affiliates of the Purchaser who are actually named in such action,
proceeding or investigation, and partners, directors, agents, employees and controlling persons (if any), as the case may be,
of the Purchaser and any such Affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company, the Purchaser and any such Affiliate and any such Person. The Company also
agrees that neither the Purchaser nor any such Affiliates, partners, directors, agents, employees or controlling persons
shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company solely as a
result of acquiring the Securities under this Agreement.


 


4.12         Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations
under the Transaction Documents, including, without limitation, its obligation to issue the Common Stock pursuant to the Transaction
Documents, are unconditional and absolute, but subject to the terms and conditions of the Transaction Documents, and not subject
to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company
may have against Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders
of the Company.


 


4.13         Preservation of
Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and franchises in the
jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction in which such
qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified might reasonably
have a Material Adverse Effect upon the financial condition, business or operations of the Company taken as a whole.


 


4.14         DTC
Program. At all times that the Purchaser owns securities of the Company are outstanding, the Company will employ as the transfer
agent for the Common Stock a participant in the Depository Trust Company Automated Securities Transfer Program and cause the Common
Stock to be transferable pursuant to such program.


 


4.15         Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the sale of the Securities by the Company under
this Agreement as required under Regulation D. The Company shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the Closing under applicable
securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of Purchaser.


 




    	 	18	 



     


    

 


4.16         Series
A Voting rights. The Company requires that the Purchaser waive any right to appoint any director as a holder of the Preferred Stock
as set forth in Section 7 of the Certificate of Designation.


 


4.17         Ratchet
Rights. The Company acknowledges that upon the Company’s entering into this Agreement, the agreement to amend the Certificate
of Designation to allow for conversion of the Series A Preferred Stock into shares of the Company’s common stock trigger
the ratchet/anti-dilution rights of the Series B Preferred Stock and Series C Preferred Stock, issued by the Company per the dilutive
issuance notice.


 


ARTICLE V.


MISCELLANEOUS


 


5.1           Termination.
This Agreement may be terminated by Purchaser if the Closing has not been consummated, for any reason, on or before December 22,
2017.


 


5.2           Fees
and Expenses. At the Closing, the Company has agreed to reimburse Alpha Capital Anstalt (“Alpha”) the
non-accountable sum of $15,000.00 for its legal fees and expenses. Accordingly, in lieu of the foregoing payments, the
aggregate amount that Alpha is to pay for the Securities at the Closing shall be reduced by $15,000.00 in lieu thereof.
Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent
fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the
Company and any conversion or exercise notice delivered by Purchaser), stamp taxes and other taxes and duties levied in
connection with the delivery of any Securities to the Purchaser.


 


5.3           Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.


 


5.4           Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment as set forth on the signature
pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice
provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the
Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K.


 


5.5           Amendments;
Waivers. No provision of this Agreement or the Certificate of Designation may be waived, modified, supplemented or amended
except in a written instrument signed by the Company and the Purchaser. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right. Any amendment effected in accordance with accordance with
this Section 5.5 shall be binding upon Purchaser and holder of Securities and the Company.


 


5.6           Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.


 




    	 	19	 



     


    

 


5.7           Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of Purchaser
(other than by merger) . Purchaser may assign any or all of its rights under this Agreement to any Person to whom Purchaser assigns
or transfers any Preferred Stock, provided that such transferee agrees in writing to be bound, with respect to the transferred
Preferred Stock, by the provisions of the Transaction Documents that apply to the “Purchaser.”


 


5.8           No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth
in Section 4.8 and this Section 5.8.


 


5.9           Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any
claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is
an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process
being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding
to enforce any provisions of the Transaction Documents the prevailing party in such Action or Proceeding shall be reimbursed by
the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Action or Proceeding.


 


5.10         Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.


 


5.11         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together 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,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original thereof.


 


5.12         Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.


 




    	 	20	 



     


    

 


5.13         Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or
in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.


 


5.14         Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchaser and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation
the defense that a remedy at law would be adequate.


 


5.15         Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.


 


5.16         Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall
be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement.


 


5.17         WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 




    	 	21	 



     


    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


 


	ENERJEX RESOURCES, INC.	 	Address
    for Notice:
	 	 	EnerJex Resources, Inc. 
	 	 	ATTN: Robert G. Watson, Jr. 
	 	 	4040 Broadway, Suite 425 
	 	 	San Antonio, TX 78209 
	By: 	/s/  Louis
G. Schott	 	Facsimile No.: (210) 592-1670
	 	Louis
G. Schott, Interim Chief Executive Officer	 	Email: lschott@enerjexresources.com
	 	 	 
	With a copy to (which shall not constitute notice):	 	Dickinson Wright PLLC 
	 	 	Joel D. Mayersohn, Esq.
	 	 	350 East Las Olas Blvd., Suite 1750 
	 	 	Fort Lauderdale, FL 33301
	 	 	 
	 	 	Facsimile No.: (844) 670-6009
	 	 	Email: jmayersohn@dickinsonwright.com


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]


 




    	 	22	 



     


    

 


[PURCHASER
SIGNATURE PAGE TO ENRJ SECURITIES PURCHASE AGREEMENT]


 


IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


 


Name
of Purchaser: Alpha Capital Anstalt


 


	Signature of Authorized Signatory of Purchaser:	/s/ Konrad Ackermann	 




 


Name of Authorized Signatory:
Konrad Ackermann


 


Title of Authorized Signatory:
Director


 


Email
Address of Authorized Signatory: ____________________________________________________


 


Facsimile
Number of Authorized Signatory: __________________________________________________


 


	Address for Notice to Purchaser:	ALPHA
    CAPITAL ANSTALT
	 	Lettstrasse 32
	 	9490 Vaduz
	 	Principality of Liechtenstein
	 	e-mail: info@alphacapital.li


 


Address
for Delivery of Securities to Purchaser (if not same as address for notice):


 


	 	ALPHA
    CAPITAL ANSTALT
	 	c/o LH Financial Services Corp. 
	 	510 Madison Avenue Suite 1400 
	 	New York. NY 10022


 


Subscription
Amount: ________________


 


Shares
of Preferred Stock: ________________


 


EIN
Number: __________________________


 




    	 	23	 



     


    

 


Annex A


 


Closing Statement


 


Pursuant to the attached Securities Purchase
Agreement, dated as of December 20, 2017, the Purchaser shall purchase 1,061,750 shares of Preferred Stock from EnerJex Resources,
Inc., a Nevada corporation (the “Company”). All funds will be wired into an account maintained by the Company.
All funds will be disbursed in accordance with this Closing Statement.


 


Disbursement Date: December 20, 2017.








 



 


	I.  PURCHASE PRICE	 	 	 
	 	 	 	 
	Gross Proceeds to be Received	 	$	649,791.00	 
	 	 	 	 	 
	II. DISBURSEMENTS	 	 	 	 
	 	 	 	 	 
	$15,000.00 to Grushko & Mittman, P.C.	 	$	15,000.00	 
	 	 	 	 	 
	To the Company	 	$	634,791.00	 
	 	 	 	 	 
	Total Amount Disbursed:	 	$	649,791.00	 



  




    	 	24	 



     


    

 


Annex B


 


Company Disclosure Schedules


 




    	 	25	 



     


    

 


Enerjex
Resources, Inc.


 


Disclosure
Schedule




 


This
Disclosure Schedule (the “Disclosure Schedule”) contains exceptions to the representations and warranties
of Enerjex Resources, Inc., a Nevada corporation (the “Company”),
set forth in Section 3.1 of that certain “Securities Purchase Agreement” dated as of December 20, 2017 (the “Purchase
Agreement”), by and between the Company and the “Purchaser” named therein, and is an integral part of the
Purchase Agreement. Any capitalized term that is used in this Disclosure Schedule and not otherwise defined herein shall have
the meaning ascribed to such term in the Purchase Agreement. The section numbers of each exception noted in this Disclosure Schedule
correspond to the paragraph numbers appearing in the Purchase Agreement. Where the term “None” appears below, the
Company intend this to be a statement that, except for information disclosed elsewhere in this Company Disclosure Schedule and
expressly cross-referenced to such Section where the term “None” appears, there are no additional disclosures to be
made. Any matter disclosed herein pursuant to one Section of the Purchase Agreement is deemed disclosed for all other subsections
of Section 3, if such matter relates to more than one subsection of Section 3 and the level of particularity and manner of disclosure
of the matter expressly disclosed in one subsection of this Disclosure Schedule would make a reasonable Person aware that such
disclosure is relevant to such other subsections.


 


3.1           Representations
and Warranties of the Company


 


All references to any SEC Report in this
Disclosure Schedule speaks as of the date referenced in such SEC Report. Any reference to an SEC Report does not imply that the
information described therein is current as of the Effective Date of the Purchase Agreement unless otherwise noted herein. The
Company undertakes no obligation to update these disclosures except as and when required by law.


 




    	 	26	 



     


    

 


Schedule 3.1(a)


to the 


Securities Purchase Agreement


 


Subsidiaries


 


		1.	EnerJex Kansas, Inc. (f/k/a Midwest Energy, Inc.), a Nevada
corporation;






		2.	Black Raven Energy, Inc., a Nevada corporation;






		3.	Working Interest, LLC, a Kansas limited liability company;






		4.	Adena, LLC, a Colorado limited liability company;






		5.	Kansas Holdings, LLC, a Delaware limited liability company;






		6.	Black Sable Energy, LLC, a Texas limited liability company.



 




    	 	27	 



     


    

 


Schedule 3.1(g)


to the 


Securities Purchase Agreement


 


The capitalization of the Company is as set forth below. The
Series B and C preferred stock has anti-dilution provisions.


 


	ENRJ	 	Shares Out	 
	Common	 	 	15,294,891	 
	Preferred A	 	 	938,248	 
	Preferred B	 	 	413.17099	 
	Preferred C	 	 	450	 
	Warrants @ $0.30	 	 	-	 
	Options	 	 	157,664	 
	Deferred Compensation	 	 	2,248,264	 
	Total ENRJ	 	 	18,639,930	 



 




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