Exhibit 10.1
 
 

 [ckc.gif]
 C.K. COOPER & COMPANY
           Our Insight, Your Growth
       

 
April 8, 2010

Mr. Roger Parker
RECOVERY ENERGY, INC
1515 Wynkoop Street, Ste. 200
Denver, CO 80202

Re: Financial Advisory Agreement

Gentlemen:

This letter will confirm our understanding that C.K. Cooper & Company, Inc.
(“CKCC”)  has been engaged to act as exclusive financial advisor to Recovery
Energy, Inc, (the “Company”) to advise the Company regarding strategic matters.

In its capacity as financial advisor, CKCC will, upon request:
 

   ● undertake a complete review and evaluation of the Company and its
properties, and provide a market valuation of the Company;          ● assist
management with the creation of a strategic overview, including the definition
of execution points and assist in the implementation of this plan;          ●
advise the Company on its strategy positioning, market perception and manners in
which to enhance share value, valuation multiples and overall liquidity;        
 ● assist in the negotiation with potential lenders, joing venture partners and
investors;          ● evaluate, advise and execute corporate finance
transactions; and          ● assist  the Company in analyzing purchase proposals
received.

 
The Company agrees to pay CKCC, in immediately available funds, as compensation
for its services under this engagement the following fees at the times and
manner specified below:
 

   ● $125,000 of which $25,000 shall be paid upon execution of this engagement
agreement and the remaining $100,000 payable in ten (10) monthly installments of
$10,000 starting May 1, 2010, and;          ● $125,000 shall be paid through the
issuance of common stock. The number of shares issued shall be equal to 30,995
or $125,000 by $4.033. The share price used was based on the previous 30 day
volume weighted average price beginning 4/17/2010 spanning to 2/25/2010 (per
Bloomberg Finance L.P). The shares shall have no registration rights.      

 
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RECOVERY ENERGY, INC.
April 8, 2010
Page 2

The Company and CKCC shall enter into a separate mutually agreeable engagement
letter with respect to any capital formation, or transaction advisory, which
shall provide for customary fees for the specific transaction.

In addition, the Company shall, promptly upon request, reimburse CKCC for all
reasonable out-of-pocket, expenses (including any reasonable fees and
disbursements of CKCC's outside advisers) incurred in connection with this
letter agreement up to a maximum amount of $5,000 in any one calendar month or
$50,000 in the aggregate (subject to increase with the prior consent of the
Company). Any expense in excess of $2,000 shall be approved in advance by the
Company.

The Company agrees to furnish CKCC the names all parties on it discussed a
transaction or which it contacted prior to CKCC's engagement, or which contact
the Company concerning a transaction during the term of this engagement.

If during the term of this engagement, the Company decides to conduct a sale
transaction, material sale of assets or other extraordinary corporate
transaction or a public private offering of securities, the Company agrees to
notify the CKCC and to provide CKCC with a right of first refusal to act as the
non-exclusive financial advisor, lead placement agent or lead underwriter, as
the case may be, or such other role as necessary and appropriate, for any such
transaction or offering at fees, and upon terms, customary and consistent with
industry practice that would be agreed between the Company and CKCC in good
faith,

The Company agrees that all advice and any documents prepared or given by CKCC
in connection with its engagement hereunder is for the benefit and use of the
Company in connection with the services covered by this letter agreement and
that no such advice or documents shall be used for any other purpose or be
disclosed, reproduced, disseminated, quoted or referred to at any time, in any
manner or for any purpose, nor shall any public references to CKCC or the
documents be made by or on behalf of the Company, in each case without CKCC's
prior written consent, which consent shall not be unreasonably withheld.

The Company agrees that CKCC has been retained to act solely as financial
advisor to the Company, and to not act as an advisor to or agent of any other
person, and that the Company's engagement of CKCC is not intended to confer
rights upon any person not a party hereto (including stockholders, employees or
creditors of the Company) as against CKCC or its affiliates, or their directors,
officers, employees or agents. The Company further agrees that under no
circumstances shall the execution of this letter agreement or any act of CKCC
hereunder commit or be deemed a commitment by CKCC (or any affiliate) to provide
or arrange any bank financing, other debt or equity financing for any
transaction or to purchase any security in connection therewith. The Company
acknowledges that CKCC will act as an independent contractor under this letter
agreement and shall not assume the responsibilities of a fiduciary to the
Company or its stockholders in connection with the performance of CIKCC's
services hereunder.

The Company acknowledges that CKCC is a full service securities firm engaged in
a broad range of securities activities and financial services, including
securities trading, investment management, financing and brokerage activities.
In the ordinary course of CKCC's business, CKCC or its affiliates (i) may at any
time hold long or short positions, and may trade or otherwise effect
transactions, for CKCC's own account or the accounts of customers, in debt or
equity securities of the Company or any other company that may be involved in
any proposed transaction and (ii) may at any time be providing or arranging
financing and other financial services to other companies that may be involved
in a competing transaction. Notwithstanding the foregoing, CKCC will not use or
disclose any confidential information of the Company obtained during its
engagement hereunder in connection with any services described in this paragraph

 
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RECOVERY ENERGY, INC.
April 8, 2010
Page 3

In addition, CKCC and its affiliates may from time to time perform various
investments banking and financial advisory services for other companies which
may live conflicting interests with the Company. CKCC will not use or disclose
any confidential information of the Company obtained during its engagement
hereunder in connection with its representation of such companies and will not
disclose confidential information of such other companies to the Company.

The Company acknowledges that CKCC does not provide legal, tax or accounting
advice and that the Company confirms that it will rely on its own independent
advisors for such advice.

The Company and CKCC agree to the provisions with respect to the Company’s
indemnity of CKCC and other matters set forth in Schedule A, the terms of which
are incorporated herein in their entirety.

The Company may terminate CKCC's engagement hereunder after the six month
anniversary provided it gives CKCC fifteen days advance notice of such
termination. It is understood that upon termination, this letter agreement shall
have no further force or effect, except that any termination of CKCC's
engagement hereunder for any reason shall not affect the Company's obligations
to provide indemnification as provided in Schedule A hereto, and to reimburse
expenses as set forth herein and therein. In the event that CKCC terminates this
letter agreement, CKCC shall not be entitled to any further payment resulting
from this engagement as set forth above, In addition, Provisions relating to the
status of CKCC as an independent contractor, the limitation on to whom CKCC
shall owe any duties, governing law, successors and assigns, and the waiver of
the right to trial by jury shall survive any termination of this letter
agreement.

This letter agreement, including Schedule A, and any rights, duties or
obligations hereunder may not be waived, amended, modified or assigned, in any
way, in whole or in part, including by operation of law, without written consent
of, and Shall inure to the benefit and be binding upon the successors, assigns
and personal representatives of, each of the parties hereto. This  letter
agreement embodies the entire agreement and understanding of the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof.

The Company acknowledges that CKCC may place advertisements in mailings and
financial and other newspapers and journals at CKCC's expense describing its
services to the Company , for any publicly announced or completed Transaction
and use the Company's logo, provided that we will not disclose, without your
consent, the size of the Transaction or proceeds you receive in such
advertisements unless such information is already publicly available.

Schedule A to this letter agreement is an integral part of this 1etter agreement
and shall survive any termination or expiration hereof. In case any provision o
this letter agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provision of this letter agreement
shall not in any way be affected or impaired thereby. This letter agreement and
any claim, or dispute of any kind or nature whatsoever arising out or, or
relating to this letter agreement or CKCC's engagement hereunder, directly or
indirectly (including any claim concerning advice provided pursuant to this
letter agreement), shall governed by and construed in accordance with the laws
of the State of California, without regard to conflict of law principles. Any
rights to trial, jury with respect to any claim, action or proceeding„ directly
or indirectly, arising out of, or relating to, this letter agreement or CKCC's
engagement hereunder are waived by CKCC and the Company.

We are pleased to accept this engagement and look forward to working with the
Company. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate if this
letter, which shall thereupon constitute a binding agreement.

 
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RECOVERY ENERGY, INC.
April 8, 2010
Page 4
 
 

  Very truly yours,     C.K. COOPER & COMPANY, INC.          
 
By:
/s/ Alexander G. Montano       Name:         Alexander G. Montano      
Title:           Managing Director          

 
Accepted and agreed to as of the date first written above:
 

RECOVERY ENERGY, INC.        
By:
/s/ Jeffery A. Beunier     Name:    Jeffrey A. Beunier     Title:      CEO      
 

 
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SCHEDULE A

INDEMNIFICATION

The Company agrees to indemnify CKCC, any controlling person of CKCC and each of
their respective directors, officers, employees, agents, affiliates and
representatives (each, an "Indemnified Party") and hold each of them harmless
against any and all losses, claims, damages, expenses, liabilities, joint or
several (collectively, "Liabilities") to which the Indemnified Parties may
become liable, directly or indirectly, arising out of or relating to the
engagement under the letter agreement to which this Schedule A is attached (the
"Letter Agreement"), unless the Liabilities resulted from the negligence or
willful misconduct of any Indemnified Party. The Company further agrees to
reimburse each Indemnified Party promptly upon request for all reasonable
expenses (including reasonable attorneys' fees and expenses) as they are
incurred in connection with the investigation of, preparation for, defense of,
or providing evidence in, any action, claim, suit, proceeding or investigation,
directly or indirectly, arising out of, or relating to, the engagement under the
Letter Agreement, whether or not pending or threatened and whether or not any
indemnified party is a formal party to such proceeding; provided, however, that
if the Liabilities resulted from the negligence or willful misconduct of any
Indemnified Party, the Indemnified Parties shall remit to the Company any
amounts reimbursed pursuant to this sentence. The Company also agrees that no
Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise to the Company or any person asserting claims on
behalf of or in right of the Company, directly or indirectly, arising out of or
relating to, the engagement under the Letter Agreement, unless such liability
resulted from the negligence or willful misconduct of such Indemnified Party. In
the event that an Indemnified Party is requested or required to appear as a
witness in any action brought by or on behalf of or against the Company or any
affiliate of the Company, in which such Indemnified Party is not named (anti is
not subsequently named) as a defendant, the Company agrees to reimburse CKCC for
all reasonable expenses incurred by it in connection with such Indemnified
Party's appearing in preparing to appear as such a witness, including, without
limitation, the reasonable fees and disbursements of its outside legal counsel.

An Indemnified Party shall promptly notify the Company in writing as to any
action, claim, suit, Proceeding or investigation for which indemnity may be
sought, but the omission so to notify the Company will not relieve the Company
from any liability which it may have to any Indemnified Party hereunder to the
extent that it is not materially prejudiced as a result of such failure unless
such omission is intentional. After such notice to the Company, the Company
shall be entitled to participate in, and to the extent that it shall elect by
written notice delivered to such Indemnified Party promptly after receiving the
aforesaid notice of such Indemnified Party, to assume the defense, thereof with
counsel reasonably satisfactory to such Indemnified Party to represent such
Indemnified Party in such action, claim, suit proceeding or investigation and
shall pay as incurred the fees and expenses of such counsel related to such
action, claim, suit, proceeding or investigation. In any action, claim, suit,
proceeding or investigation, any Indemnified Party shall have the right to
retain its own separate counsel at such Indemnified Party's own expense and not
subject to reimbursement by The Company; provided, however, that the Company
shall pay as incurred the reasonable fees and expenses of such counsel incurred
in connection with investigation, preparing, defending, paying settling or
compromising any action, claim, suit, proceeding or investigation if (i) the use
of counsel chosen by the Company to represent both the Company and such
Indemnified Party would present such counsel with an actual or potential
conflict of interest; (ii) the Company shall not have employed satisfactory
counsel to represent the Indemnified Party within a reasonable time after notice
of the institution of such action, claim, suit, proceeding or investigation; or
(iii) the Company shall authorize the Indemnified Party to employ separate
counsel (in addition to any local counsel) at the expense of the Company. The
Company shall not, in connection with any action, claim, suit, proceeding or
investigation, be liable for the fees and expenses of more than one separate law
firm (in addition to any local counsel) for Indemnified Parties, and in the
event that separate counsel is to be retained to represent one or more
Indemnified parties, such concrete counsel shall be chosen by CKCC and
reasonably approved by the Company. The Company will not be liable for any
settlement, compromise or consent to the entry of any judgment in action, claim,
suit, proceeding, or investigation affected without the prior written consent of
the Company, which consent shall not be unreasonable withheld.

 
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The Company agrees that, without CKCC's prior written consent, it will not
settle, compromise or consent to the entry of any judgment in any claim, action,
suit, proceeding or investigation in respect of which indemnification could be
sought hereunder (whether or not CKCC or any other Indemnified Party is an
actual or potential party to suchclaim, action, suit, proceeding or
investigation),unless (a) such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Party from any liabilities
arising out of such claim, action, suit, proceeding or investigation, (b) such
settlement does no admit any wrongdoing by CKCC and (c) the parties agree that
the terms of such settlement shall remain confidential.

The Company and CKCC agree that if any indemnification or reimbursement sought
pursuant to the first paragraph of this Schedule A is for any reason unavailable
or insufficient to hold it harmless (except by reason of the negligence or
willful misconduct of an Indemnified Party) then, whether or not CKCC is the
person entitled to indemnification or reimbursement, the Company and CKCC shall
contribute to the Liabilities for such indemnification or reimbursement is held
unavailable in such proportion as a appropriate to reflect (a) the relative
benefits to the Company on the one hand and CKCC on the other hand, in
connection with the transaction to which such indemnification or reimbursement
relates or (b) if the allocation provided by clause (a) above is not available,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in such clause (a), but also the relative fault of the parties as
well as any other relevant equitable considerations, provided, however, that in
no event shall the amount to be contributed by CKCC exceed the fees actually
received by CKCC under the Letter Agreement. The Company agrees that, for the
purpose of this paragraph, the relative benefits to the Company and CKCC of the
contemplated transaction (whether or not such transaction is consummated) shall
be deemed to be in the same proportion that the aggregate consideration payable,
exchangeable of transferable (or contemplated to be payable, exchangeable or
transferable) in such transaction bears to the fees paid or payable to CKCC as
financial advisor under the Letter Agreement.

The rights of the Indemnified Parties referred to above shall be in addition to
any rights that any Indemnified Party may otherwise have.
 
 
 
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