UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 1, 2010

ENERJEX RESOURCES, INC.
(Name of small business issuer in its charter)
 
Nevada
000-30234
88-0422242
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer Identification
No.)

27 Corporate Woods, Suite 350
10975 Grandview Drive
Overland Park, KS
66210
(Address of Principal Executive Offices)
(Zip Code)

Registrant’s telephone number, including area code: (913) 754-7754
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 

Item 1.01 Entry Into a Material Definitive Agreement

MorMeg “Black Oaks” Amendment

Effective April 1, 2010, the Registrant entered into Amendment No. 6 to the Joint Exploration Agreement with MorMeg, LLC (the “ Amendment ”).  The Amendment amends certain terms of the Joint Exploration Agreement, dated March 30, 2007, between MorMeg, LLC and the Registrant as follows:

 
·
The Registrant shall have until August 1, 2010 (the “ Additional Capital Deadline ”) to contribute $1 million in additional capital toward the development of the Black Oaks Field, as defined in the Joint Exploration Agreement.

 
·
After the Additional Capital Deadline, the Registrant is required to provide additional $1 million dollar capital contributions every sixty (60) days or upon full deployment of the prior capital contribution, whichever is later, following the Additional Capital Deadline until the Black Oaks development is completed or the parties agree in writing otherwise.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Debenture Amendment

On April 1, 2010, the Registrant and EnerJex Kansas, Inc., a wholly owned subsidiary of the Registrant, entered into a letter agreement (the “ Debenture Amendment ”) with the holders of certain senior secured debentures dated June 21, 2007 (the “ Debentures ”). The Debenture Amendment includes the following material changes to the Debentures and the Securities Purchase Agreement, and the Pledge and Security Agreement  and other agreements and documents associated therewith, all dated as of April 11, 2007:

 
·
The maturity date of Debentures was extended to December 31, 2010; and

 
·
The provision allowing for the conversion of the debentures into shares of the Registrant’s restricted common stock was removed from the Debentures.

The description of the Debenture Amendment is not a complete description of all terms of the Debenture Amendment and is qualified in its entirety by reference to the Debenture Amendment, which is attached as Exhibit 10.2 hereto and incorporated herein by reference.
 
Cochennet Employment Agreement

Effective April 1, 2010, C. Stephen Cochennet, the Registrant’s chief executive officer and president, agreed to waive all salary payable to him (approximately $50,000) for the months of April, May and June of 2010. All other terms and provisions of Mr. Cochennet’s employment agreement dated August 1, 2008 remain unchanged.
 
1
 
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(a)   Resignation of Directors . Effective April 1, 2010, (i) Daran Dammeyer resigned as a member of the Registrant’s board of directors, chairman of the Registrant’s audit committee and as a member of the Registrant’s governance, compensation and nominating committee, (ii) Robert Wonish resigned as a member of the Registrant’s board of directors, chairman of the Registrant’s governance, compensation and nominating committee and as a member of the Registrant’s audit committee, and (iii) Dr. James Rector resigned as a member of the Registrant’s board of directors and as a member of the Registrant’s governance, compensation and nominating committee. The Registrant is not aware of any disagreement Messrs. Dammeyer, Wonish or Dr. Rector may have with it on any matter relating to the Registrant’s operations, policies or practices.

(c) Appointment of Officer . On April 1, 2010, the Registrant’s board of directors appointed Mark Haas to serve as chief operating officer for the Registrant.
 
Mark Haas . Mr. Haas has been the President of Haas Petroleum, LLC, an oil and natural gas operator, since its inception in 1974. He is also the President of Skyy Drilling, LLC, a full service drilling company formed in 2002, and the Managing Director of MorMeg, LLC, an E&P company. From 1970 until 1974, Mr. Haas worked at Haas Oil Company where he learned the fundamentals of Kansas oil production and geology from his father, Mr. John Haas, who was inducted into the Kansas Oil Producers Hall of Fame for his vast contributions to the state’s oil industry and is patriarch of four generations in the oil industry. Haas Oil Company was founded in 1955 by Mark Haas’ father, who continues to be active in the oil industry, consults with Mark on a regular basis.
 
Since its formation in 1974, Haas Petroleum has grown from being a small producer to becoming one of the top oil producers in the state of Kansas and is licensed to operate in both Kansas and Oklahoma and has recently begun operations in Texas.  Mr. Haas owns four full service drilling rigs and employs a total of 40 full-time employees among his service and producing operations. Mr. Haas serves as the operator of our Greenwood and Woodson counties Joint Development program and has consulted with EnerJex on our other operations since 2007.
 
(d)   Appointment of Directors .   On April 1, 2010, the Registrant’s remaining board members appointed Thomas Kmak, Loren Moll and Mark Haas to fill the vacancies on the board of directors for the Registrant. Messrs. Kmak, Moll and Haas’ terms will continue until the next annual stockholder’s meeting or until their respective successors are duly appointed. There are no arrangements or understandings between any of Messrs. Kmak, Moll or Haas and any other persons pursuant to which they were elected to serve on the Registrant’s board. The board of directors has determined that Messrs. Kmak and Moll will each serve on the Registrant’s audit and governance, compensation and nominating committees. There are no compensatory arrangements with Messrs. Kmak, Moll or Haas at this time.
 
2
 
Thomas Kmak. Since October of 2007, Mr. Kmak has been the CEO of Fiduciary Benchmarks Insights, LLC which provides benchmarking of fees and services for defined contribution plans through advisors/consultants, recordkeepers and other plan service providers. Prior to founding Fiduciary Benchmarks, Tom was CEO of JPMorgan Retirement Plan Services. Tom started that business in 1990 and when he left 18 years later it employed 1,100 people serving 200 large plan sponsors with over 1.5 million participants and over $115 billion in assets. Tom graduated Phi Beta Kappa with Bachelor of Arts degrees in economics and computational mathematics from DePauw University in Greencastle, Indiana.

Loren Moll. Since November 1996, Mr. Moll has been a partner of Caldwell & Moll, L.C., a law firm in Overland Park, Kansas.  Mr. Moll has 24 years of experience in the practice of law. His practice has focused on the representation of small businesses and entrepreneurs concerning a wide array of both everyday and complex legal issues.   In addition to practicing law, since 2003 Mr. Moll has served as a director of Petrol Oil and Gas, Inc., a publicly traded energy development company, where he has also served as President and CEO.  Prior to starting his own law firm, Mr. Moll was an associate attorney at Bryan Cave LLP and partner of Lewis, Rice and Fingersh, L.C.  Mr. Moll graduated from the University of Kansas with a Bachelor of Arts degree and a Juris Doctorate.

Mark Haas. See resume above.

Item 8.01 Other Events.

Texas Capital Credit Facility Modification

On July 3, 2008, the Registrant and its subsidiaries entered into a three-year $50 million Senior Secured Credit Facility (the “ Credit Facility ”) with Texas Capital Bank, N.A.  Borrowings under the Credit Facility are subject to a borrowing base limitation based on the Registrant’s current proved oil and gas reserves and are subject to semi-annual redeterminations and interim adjustments.  The initial borrowing base was set at $10.75 million and was reduced to $7.428 million in November 2008.  The Borrowing Base was most recently reviewed by Texas Capital Bank in January 2010 and it was determined that it should be reduced by $55,000 per month beginning February 2010.

In April 2010, the Registrant negotiated a deferral of the March, April, and May 2010 payments to June, July, and August of 2010; thereby increasing the payments for June, July, and August to $110,000 each. The Credit Facility is secured by a lien on substantially all assets of the Registrant and its subsidiaries. The Credit Facility has a term of three years, and all unpaid principal and interest will be due and payable in full on July 3, 2011.  
 
3

Item 9.01 Financial Statements and Exhibits.

(d)
Exhibits.
 
Exhibit
Number
 
Description
     
10.1
 
Amendment No. 6 to Joint Exploration Agreement effective as of November 6, 2008 between MorMeg, LLC and EnerJex Resources, Inc.
10.2
 
Debenture Holder Amendment Letter dated April 1, 2010

 
4
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
ENERJEX RESOURCES, INC.
   
 
By:
/s/ Steve Cochennet
   
Steve Cochennet, Chief Executive Officer
   
Date: April 8, 2010
 
 
 
5
 

AMENDMENT 6 TO JOINT EXPLORATION AGREEMENT

This Amendment 6 (“Sixth Amendment”) to that certain Joint Exploration Agreement (“JEA”) dated March 30, 2008 by and between MorMeg, LLC, a Kansas limited liability company, referred to herein as “MorMeg,” and EnerJex Resources, Inc., a Nevada corporation, referred to herein as ”EnerJex” is effective as of April 1, 2010. MorMeg and EnerJex are jointly referred to herein as “the parties”.

Recitals

A.           Pursuant to Section C and D1 of the JEA, EnerJex was to provide $4,000,000 in funding toward the development of Black Oaks (the “Minimum Funding”);

B.           Pursuant to Section D.5. of the JEA, following the Minimum Funding, EnerJex was required to, within a reasonable length of time, secure and contribute additional funding so as not to cause more than thirty (30) days delay of project activities due to lack of funding to develop Black Oaks;

C.           On or about July 3, 2008, EnerJex entered a new three-year $50 million senior secured credit facility with Texas Capital Bank, N. A. (the “Credit Facility”); and

D.           MorMeg and EnerJex desire to amend the JEA pursuant to the terms of this Sixth Amendment.

NOW, THEREFORE, for and in consideration of the foregoing, and of the mutual covenants, agreements, undertakings, representations and warranties contained herein, the parties hereto agree as follows:

 
1.
Section D5 of the JEA is hereby amended and restated in its entirety as follows:

5.  Notwithstanding anything to the contrary herein or elsewhere, EnerJex will have until August 1, 2010 (the “Additional Capital Deadline”) to contribute One Million dollars ($1,000,000) in additional capital towards the development of Black Oaks. Further, EnerJex shall provide additional One Million dollar ($1,000,000) capital contributions every sixty (60) days or upon full deployment of the prior capital contribution, whichever is later, following the Additional Capital Deadline until the Black Oaks development is completed or the parties agree in writing otherwise. It is the parties intent that the timing of such additional capital contributions are required so as not to cause more than sixty (60) days delay of project activities due to lack of funding to complete the project. In the event EnerJex is not successful in obtaining additional funding, or all funding, to complete the Black Oaks development described in Section 6, MorMeg may cancel and declare the JEA of no force and effect from the point of cancellation forward. In the event of cancellation of the JEA by MorMeg, the following procedure and formula will be used to distribute the ownership and pay the debts of the project.
 
 
A.
The project revenues from whatever source will be used to repay all debt associated with the project, including without limitation any loan or debt incurred by EnerJex to obtain funding for the Black Oaks Project.
 
 
1
 
 
 
B.
When the project debt is paid, the working interest of the individual leases within the Black Oaks block will be assigned to EnerJex in the undivided interest that the total EnerJex investment bears to the total of that investment plus the pre-project commencement value stated in paragraph 2 of the Recitals, with the remaining undivided interest (which shall not be a carried interest) being assigned to MorMeg. The parties agree to reassign working interest if necessary to redistribute the working interest according to the above formula.

 
2.
In the event of a conflict between this Sixth Amendment and the JEA and any amendments thereto, this Sixth Amendment shall prevail to the extent of such conflict.

 
3.
This Sixth Amendment shall be of no force and effect upon a material default by EnerJex under the Credit Facility.

 
4.
Other than as specifically provided in this Sixth Amendment, all other provisions of the JEA shall remain in full force and effect.  This Sixth Amendment constituting the sole and entire agreement between the parties as to the matters contained herein, and supersedes any and all conversations, letters and other communications which may have been disseminated by the parties relating to the subject matter hereof, all of which are void and of no effect.

 
5.
Any capitalized terms not defined herein have the meaning set forth in the JEA.

 
6.
This Sixth Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and the parties hereto may execute this Sixth Amendment by signing any such counterpart.

 
7.
The parties hereby agree to take or cause to be taken such action, and to do and perform all such other acts and things as are necessary, advisable or appropriate to carry out the intent and terms of this Sixth Amendment

IN WITNESS WHEREOF, the parties have executed this Sixth Amendment as of the 1 st day of April, 2009.
 
MorMeg:
   
 
MORMEG, LLC, a Kansas limited liability company
   
 
By: 
/s/ Mark Haas
 
 
Name: Mark Haas
 
Title: Managing Member
   
EnerJex:
   
 
EnerJex Resources, Inc., a Nevada corporation
   
 
By: 
/s/ C. Stephen Cochennet
 
 
Name: C. Stephen Cochennet
 
Title: Chief Executive Officer
 
 
2
 

ENERJEX RESOURCES, INC.
27 Corporate Woods, Suite 350
10975 Grandview Drive
Overland Park, Kansas 66210

April 1, 2010

West Coast Opportunity Fund, LLC
Frey Living Trust
1202 Coast Village Road
5005 SE Williams Way
Montecito, CA 93108
Stuart, FL 34997
   
Enable Growth Partners LP
Enable Opportunity Partners LP
C/o Enable Capital Management
C/o Enable Capital Management
One Ferry Building, Suite 225
One Ferry Building, Suite 225
San Francisco, CA 94111
San Francisco, CA  94111

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

Dear Buyers:

Reference is made to the June 21, 2007 Senior Secured Debentures, as amended (the “ Debentures ”), the Securities Purchase Agreement, as amended (the “ Purchase Agreement ”), and the Pledge and Security Agreement, as amended (the “ Security Agreement ”) and other agreements and documents associated therewith, as amended through the date hereof (collectively, the “ Transaction Documents ”), all originally dated as of April 11, 2007, by and among EnerJex Kansas, Inc. (the “ Company ”), EnerJex Resources, Inc. (“ Parent ”), West Coast Opportunity Fund, LLC (“ West Coast ”), Frey Living Trust (“Frey”), Enable Growth Partners LP (“Enable Growth”) and Enable Opportunity Partners LP (“Enable Opportunity”) (collectively, West Coast, Frey, Enable Growth and Enable Opportunity may be referred to as the “ Buyers ”).  Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in the Debentures, Purchase Agreement, the Security Agreement and/or the Transaction Documents.

WHEREAS :
 
A.           The Company wishes to extend the Maturity Date of the Debentures to December 31, 2010.
 
B.           The Company and the Buyers desire to amend the Debentures to remove the Section allowing for the Buyers to convert the Debentures into shares of Parent’s common stock.
 
C.           The Company and the Buyers wish to amend certain Sections of the Debentures and the Transaction Documents as set forth herein.
 
D.           Certain of the Transaction Documents provide that amendments may be made by written consent of the Company and holders of at least sixty-five percent of the aggregate number of Registrable Securities issued under the Securities Purchase Agreement, and the undersigned Buyers constitute such requisite holders.
 
 
1
 

NOW THEREFORE , in consideration of the premises and mutual promises herein contained, the Company and the Buyers hereby agree as follows:
 
1.            Defined Terms . Capitalized terms used in this Letter Agreement which are not defined herein shall have the meaning ascribed to them in the Transaction Documents.
 
 
2.
Amendments to Debentures .  The Company and the Buyers hereby agree that:
 
 
a.
Section (1) of each of the Debentures is modified to state the “Maturity Date” shall be December 31, 2010.
 
 
b.
Section (3) “ CONVERSION ” shall be deleted in its entirety.

 
c.
Sections (4) through (24) shall be renumbered Sections (3) through (23), respectively to account for the deletion of Section (3) as set forth above.
 
 
3.
Conditional Waiver .
 
 
a.
The Buyers hereby waive any existing Event of Default under the Transaction Documents that does not, directly or indirectly, have a material negative impact on the Buyers’ security interest in the collateral or other properties of the Company in which it has a security interest, or have a material negative impact in the Buyers’ priority of payment under the Debentures.
 
 
b.
The Company hereby represents and warrants to the Buyers that it has no knowledge of any material Defaults or Events of Default under the Transaction Documents.
 
 
c.
The waivers granted by the Buyers in favor of the Company that are contained in this Agreement shall be null and void in the event the Company has breached its representation in Section 4(b).
 
 
4.
Governing Law .  This Letter Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Letter Agreement and all disputes arising hereunder shall be governed by, the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.
 
 
5.
Amendment .  It is the intention of the parties that this Letter Agreement modifies and amends the Transaction Documents to the extent set forth herein or as otherwise necessary to effectuate the intentions of the parties as set forth herein.
 
 
2
 

 
6.
No Waiver .  The execution of this Letter Agreement is not, and shall not be deemed to constitute, a waiver, cure, or forbearance of any default arising prior or subsequent to the date of this Letter Agreement, nor shall it constitute a reinstatement of the terms described in the Transaction Documents, except as set forth herein.  The Company agrees that no delay on the part of any of the Buyers in exercising any power or right shall operate as a waiver of any such power or right or preclude the further exercise of any other power or right.  Any remedies contained herein are cumulative and not exclusive of any remedies provided by law.  Notice to or demand in circumstances under which the terms of this Letter Agreement do not require such notice or demand shall not entitle the Company to further notice or demand nor constitute a waiver of the rights of the Buyers to take any other or further action without notice or demand.
 
 
7.
Continuing Validity of Transaction Documents .  Except as expressly provided for in this Letter Agreement, the other Transaction Documents and all other documents executed in connection therewith shall continue unchanged in full force and effect, in accordance with their respective terms, and the parties hereby expressly confirm and reaffirm all of their respective liabilities, obligations, duties and responsibilities under and pursuant to the other Transaction Documents.
 
 
8.
Transaction Document . This Letter Agreement shall be deemed and constitute a “Transaction Document” under the Securities Purchase Agreement.
 
 
9.
Recitals . The recitals set forth above are true and correct and are hereby incorporated into this Letter Agreement as if set forth at length herein.
 
 
10.
Counterparts .  This Letter Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.
 
 
11.
Headings .  The headings of this Letter Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Letter Agreement.
 
 
12.
Severability .  If any provision of this Letter Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Letter Agreement in that jurisdiction or the validity or enforceability of any provision of this Letter Agreement in any other jurisdiction.
 
 
13.
Further Assurances .  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the terms of this Letter Agreement and the consummation of the transactions contemplated hereby.
 
 
3
 

Kindly confirm your agreement with the foregoing by signing the copy of this letter where indicated below.
 
IN WITNESS WHEREOF, the parties hereto have executed or caused this Letter Agreement to be duly executed by an authorized officer as of the date first above written.
 
 
Very Truly Yours,
   
 
Company:
 
ENERJEX KANSAS, INC.
   
 
By:
/s/ Steve Cochennet
   
Name: Steve Cochennet
   
Title: Chief Executive Officer
   
 
Parent:
 
ENERJEX RESOURCES, INC.
   
 
By:
/s/ Steve Cochennet
   
Name: Steve Cochennet
   
Title: Chief Executive Officer
 
 
4
 

WEST COAST OPPORTUNITY FUND,
LLC
   
By:
/s/ Atticus Lowe
 
 
Name: Atticus Lowe
 
 
Title: Chief Investment Officer
 
 
 
5
 

ENABLE GROWTH PARTNERS LP
   
By:
/s/ Mitch Levine
 
 
Name: Mitch Levine
 
 
Title: CEO
 
 
 
6
 

ENABLE OPPORTUNITY PARTNERS LP
 
By:
/s/ Mitch Levine
 
 
Name: Mitch Levine
 
 
Title: CEO
 

 
7
 

FREY LIVING TRUST
 
By:
/s/ Philip Frey, Jr.
 
 
Name: Philip Frey Jr.
 
 
Title: Trustee
 
 
 
8