Legend Oil and Gas, Ltd. 10-Q

 

	Exhibit 10.1




 


 


 


November
16, 2015


 


Legend
Oil and Gas, Ltd.


555
North Point Center E.


Suite
400


Alpharetta,
GA 30022


 


 


Gentlemen:


 


This
letter agreement (the “Agreement”) amends the prior letter Agreement dated September 2015, and sets forth the
understanding between Northpoint Energy Partners, LLC (‘Northpoint”) and Legend Oil & Gas, Ltd. and its
affiliated entities (collectively, the “Company”) for the engagement of Andrew Reckles, Managing Partner of
Northpoint, to serve as Chairman of the Board and chief executive officer of the Company (“Mr. Reckles” or
the “CEO”) during the term hereof. This Agreement shall be effective on the date that it is executed by you
in the space provided for your signature below.


 


I. APPOINTMENT
OF CHIEF EXECUTIVE OFFICER


 


Northpoint
will continue to provide Mr. Reckles services as CEO of the Company subject to the terms and conditions of this amended Agreement.


 


II. TERM


 


The
term of Mr. Reckles appointment shall be effective on this date and shall be twelve (12) months from and after the date hereof
(the “Employment Term”) unless sooner terminated as more fully provided in Section V hereof. Each twelve-month
period of the Employment Term beginning on the date hereof shall be hereinafter referred to as an “Employment Year”.


 


III.
SCOPE AND LOCATION OF SERVICES 


  


Mr.
Reckles’ ordinary course duties as CEO will involve managing the Company’s day to day business affairs and he shall
have such duties, authority and responsibility as shall be determined and are assigned to him by the Board of Directors of the
Company (the “Board”), which duties, authority and responsibility are consistent with the position of CEO.
During the Employment Term, Mr. Reckles shall also serve as Chairman of the Board. During the Employment Term, Mr. Reckles shall
devote such time as is necessary to perform such duties and responsibilities but shall be free to engage in any other business,
profession or occupation for compensation or otherwise so long as same will not conflict or interfere with the performance of
such duties and responsibilities. The CEO shall perform his duties and responsibilities hereunder either at the offices of the
Company or Northpoint or such other place as is convenient to the CEO.


 


IV.
FEES AND EXPENSES


 


		A.	Amended
                                         Base Compensation



 


As
base compensation (“Base Compensation”) for the CEO’s services, the Company shall pay the CEO a non-refundable
fee of $20,000 per month payable in advance on the date hereof and each successive monthly anniversary date of this Agreement.


 


It
is currently understood and agreed, that as of the date of this Amended letter agreement, that Northpoint is owed, from deferred
bonuses and banking fees earned since June of 2014, and that the Company has accrued on its audited financial statements an amount
equal to $778,333. It is hereby understood, that with the exception of the “annual bonus” for 2015, Northpoint will,
with the execution of this amended agreement, waive all other accrued fees and bonuses.


 


		B.	Additional
                                         Compensation.



 


In
addition to the Base Compensation the CEO will receive additional compensation (the “Additional Compensation”)
as follows:


 


(1)
reimbursement, on a monthly basis, of his out-of-pocket costs and expenses to obtain health insurance policy coverage for himself
and his wife that is satisfactory to Mr. Reckles payable monthly by the Company provided, however, that the maximum amount payable
by the Company to Mr. Reckles in connection therewith shall not exceed $1000 per month;


 


(2)
Starting in calendar year 2015, an annual bonus (“annual bonus”) payable either in common stock of the Company or
cash or a combination thereof, at the option of the BOD in the amount of or having a value equal to up to 50% of your Base Compensation
at the time; annual bonuses shall be based on performance criteria to be determined by the Board; any annual bonus shall be accrued
and earned monthly throughout the Calendar year, but will be payable on February 1st of the year following the year
in which the bonus is earned. The annual bonus is accrued and earned monthly for each month of service performed in the Calendar
year and is to be paid to Mr. Reckles pursuant to the “Termination” section below and


 


(4)
beginning October 1st, 2015, the Company shall provide a Company vehicle to Northpoint for Mr. Reckles’ use.


 




    	 



    	 



    

  


(5)
beginning October 1st, 2015, the Company shall provide a two week annual paid vacation to Mr. Reckles. The vacation
shall be paid for by the company up to a total of $20,000.


 


(6)
“Change in Control” bonus. In the event of a change in control as defined below, Mr. Reckles is entitled to receive
a one time bonus, in cash, equal to 150% of his Base Compensation PLUS his to date accrued but unearned annual bonus.


 


(7)
EBITDA bonus. Should the Company achieve EBITDA in any quarter of $350,000 or greater, the CEO shall be entitled to a cash bonus
equal to $25,000.00.


 


(8)
Transaction Bonus. Should the Company acquire any other company or be acquired by another company during the term of this agreement,
the CEO shall receive a bonus equal to 2% of the value of the transaction. The bonus may be paid in cash or in stock of the Company
at the option of the Board.


 


		C.	Out-Of-Pocket
                                         Expenses



 


The
Company shall pay directly or reimburse the CEO, upon receipt of periodic billings, for all reasonable out-of-pocket expenses
incurred in connection with this Agreement and the engagement hereunder, including, but not limited to, travel, lodging, postage,
computer and research charges, attorneys’ fees, messenger services, telephone and facsimile services and other charges customarily
recoverable as out-of-pocket expenses. In addition, the Company shall pay to Northpoint or Mr. Reckles its or his reasonable legal
fees incurred in negotiating and drafting this Agreement.


 


V. Termination


 


		A.	Termination
                                         of Employment. 



 


The
Employment Term and the CEO’s employment hereunder may be terminated by Company and the CEO at any time upon mutual agreement
of the Company and the CEO or by the CEO or the Company as provided in this Section V. Except as hereinafter provided in this
Section V, upon termination of the CEO’s employment during the Employment Term, the CEO shall be entitled to the compensation
and benefits described in Section IV hereof through the Termination Date.


 


		B.	Expiration
                                         of the Term for Cause or Without Good Reason. 



 


The
CEO’s employment hereunder may be terminated by the Company for “Cause”, as such term is hereinafter
defined, or by the CEO without “Good Reason”, as such term is hereinafter defined. If the CEO’s employment is
terminated by the Company for Cause or by the CEO without Good Reason, the CEO shall be entitled to receive: (i) any accrued but
unpaid Base Compensation which shall be paid on the “Termination Date”, as hereinafter defined, within one
(1) week following the Termination Date; (ii) any earned but unpaid Annual Bonus with respect to any completed calendar/fiscal
year immediately preceding the Termination Date, which shall be paid on the otherwise applicable payment provided; and (iii) reimbursement
for unreimbursed business expenses properly incurred by the CEO including, without limitation, health insurance costs as provided
in Section IV hereof. For purposes of this Agreement, “Cause” shall mean:


 


		(1)	the
                                         CEO’s willful failure to perform his duties and responsibilities (other than any
                                         such failure resulting from incapacity due to physical or mental illness);



		(2)	the
                                         CEO’s willful failure to comply with any valid and legal directive of the Board;



		(3)	the
                                         CEO willful engagement in dishonesty, illegal conduct or gross misconduct, which is,
                                         in each case, materially injurious to the Company;



		(4)	the
                                         CEO’s embezzlement, misappropriation or fraud related to the CEO’s
                                         employment with the Company;



		(5)	the
                                         CEO’s conviction of or plea of guilty or nolo contendere to a crime that constitutes
                                         a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving
                                         moral turpitude[, if such felony or other crime is work-related, materially impairs the
                                         CEO’s ability to perform services for the Company or results in material/reputational
                                         or financial harm to the Company; or



		(6)	the
                                         CEO’s willful unauthorized disclosure of “Confidential Information”,
                                         as hereinafter defined.



 


For
purposes of this provision, no act or failure to act on the part of the CEO shall be considered “willful” unless it
is done, or omitted to be done, by the CEO in bad faith or without reasonable belief that the CEO’s action or omission was
in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by
the CEO in good faith and in the best interests of the Company. For purposes of this Agreement, “Good Reason” shall
mean the occurrence of any of the following, in each case during the Employment Term without the CEO ‘s written consent:
(i) any material breach by the Company of any material provision of this Agreement including, without limitation, failure to pay
the CEO any of the Base Compensation or Additional Compensation provided for herein within five (5) business days of the due date
thereof and a material, adverse change in the CEO’s authority, duties or responsibilities (other than temporarily while
the CEO is physically or mentally incapacitated or as required by applicable law and (ii) any Change in Control. For purposes
of this Agreement, “Change in Control” shall mean the occurrence of any of the following: (x) one person (or
more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such
person or group, constitutes more 50% of the voting power of the stock of the Company; (y) the sale of all or substantially all
of the Company’s assets; or (z) the merger or consolidation of the Company with another person, firm or entity that is not
currently an affiliate of the Company.


 




    	 



    	 



    

 


		C.	Without
                                         Cause or for Good Reason. 



 


The
Employment Term and the CEO’s employment hereunder may be terminated by the CEO for Good Reason or by the Company without
Cause. In the event of such termination, the CEO shall be entitled to receive one full year’s worth of the Base Compensation
and Additional Compensation provided for in Section IV hereof just as if the CEO had been employed for one full year beyond the
termination date.


 


		D.	Death
                                         or Disability. 



 


The
CEO’s employment hereunder shall terminate automatically upon the CEO’s death during the Employment Term, and the
Company may terminate the CEO s employment on account of the CEO’s Disability. If the CEO’s employment is terminated
during the Employment Term on account of the CEO’s death or Disability, the CEO (or the CEO’s estate and/or beneficiaries,
as the case may be) shall be entitled to receive all of the Base Compensation and Additional Compensation that would have accrued
and be payable to the CEO for the Employment Year in which his death or disability occurred. For purposes of clarification, any
Annual Bonus for the Employment Year in which the CEO’s death or disability may occur shall be prorated to the date of death
or disability. For purposes of this Agreement, “Disability” shall mean the CEO’s inability, due to physical
or mental incapacity, to substantially perform his duties and responsibilities under this Agreement for one hundred eighty (180)
days out of any three hundred sixty-five (365) day. Any question as to the existence of the CEO’s Disability as to which
the CEO and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to
the CEO and the Company. If the CEO and the Company cannot agree as to a qualified independent physician, each shall appoint such
a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability
made in writing to the Company and the CEO shall be final and conclusive for all purposes of this Agreement.


 


		E.	Notice
                                         of Termination. 



 


Any
termination of the CEO’s employment hereunder by the Company or by the CEO during the Employment Term (other than termination
pursuant to Section IV.D. on account of the CEO’s death) shall be communicated by written notice of termination (“Notice
of Termination”) to the other party hereto in accordance with Section X.J. hereof. The Notice of Termination shall specify:
(i) the termination provision of this Agreement relied upon; (ii) to the extent applicable, the facts and circumstances claimed
to provide a basis for termination of the CEO’s employment under the provision so indicated; and (iii) the applicable Termination
Date.


 


VI. CONFIDENTIALITY


 





The
CEO agrees to keep confidential all information obtained from the Company, and the CEO will not disclose to any other person or
entity, or use for any purpose other than specified herein, any information pertaining to the Company or any affiliate thereof,
which is either non-public, confidential or proprietary in nature (“Information”) that he obtains or is given
access to during the performance of his duties and responsibilities hereunder. The foregoing is not intended to nor shall it be
construed as prohibiting the CEO from disclosure pursuant to valid subpoena, order or other legal compulsion, but the CEO shall
not encourage, suggest, invite or request, or assist in securing, any such subpoena, court order, or other legal compulsion, and
the CEO shall immediately give notice of any such subpoena, court order, or legal compulsion to the Company. Furthermore, the
CEO may make reasonable disclosure of Information to third parties to the extent necessary in connection with his performance
of the his duties and responsibilities hereunder. In addition, the CEO shall have the right to disclose to others in the normal
course of business his involvement with the Company.


 


Information
includes data, plans, reports, schedules, drawings, accounts, records, calculations, specifications, flow sheets, computer programs,
source or object codes, results, models or any work product relating to the business of the Company, its subsidiaries, distributors,
affiliates, vendors, customers, employees, contractors and consultants.


 


VII. INDEMNIFICATION,
ADVANCEMENT AND EXCULPATION


 


The
Company agrees to indemnify, provide advancement to, and hold harmless Northpoint and the CEO and each of their respective partners,
employees and agents (the “Indemnified Persons”), to the fullest extent lawful, from and against any claims,
liabilities, losses, damages and expenses (or any action, claim, suit or proceeding (an “Action”) in respect
thereof), as incurred, related to or arising out of or in connection with the CEO’s services (whether occurring before,
at or after the date hereof) under the Agreement or any Indemnified Person’s role in connection therewith, whether or not
resulting from an Indemnified Person’s negligence (“Losses”), provided, however, that the Company shall
not be responsible for any Losses that arise out of or are based on any action of or failure to act by the CEO to the extent such
Losses are determined, by a final, non-appealable judgment by a court or arbitral tribunal, to have resulted solely from the CEO’s
gross negligence or willful misconduct.


 


The
Company agrees to reimburse and provide advancement to the Indemnified Persons for all expenses (including, without limitation,
fees and expenses of counsel), including all costs and expenses (including expenses of counsel) incurred by an Indemnified Person
to enforce the Indemnified Person’s rights hereunder, as they are incurred in connection with investigating, preparing,
defending or settling any Action for which indemnification, advancement or contribution has or is reasonably likely to be sought
by the Indemnified Person, whether or not in connection with litigation in which any Indemnified Person is a named party; provided
that if any such reimbursement is determined by a final, non-appealable judgment by a court or arbitral tribunal, to have resulted
solely from the CEO’s gross negligence or willful misconduct, such Indemnified Person shall promptly repay such amount to
the Company. The Company agrees that the CEO shall not have any personal liability to the Company for monetary damages for breach
of fiduciary duty, provided that this limitation shall not eliminate or limit the liability of the CEO: (i) for any breach of
the CEO’s duty of loyalty to the Company, (ii) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, or (iii) for any transaction from which the CEO received an improper personal benefit. Notwithstanding
the provisions hereof, the aggregate contribution of all Indemnified Persons to all Losses shall not exceed the amount of Base
Compensation actually received by the CEO with respect to the services rendered pursuant to the Agreement.


 




    	 



    	 



    




 


In
addition to the foregoing indemnification, advancement, and contribution rights, the Company agrees that the CEO will be entitled
to the benefit of the most favorable indemnities provided by the Company to its other officers and directors, whether under the
Company’s by-laws, certificates of incorporation, by contract or otherwise. The Company further agrees that it will include
and cover the CEO under the Company’s policy for directors’ and officers’ (“D&O”) insurance.
The Company agrees to maintain D&O insurance coverage for the CEO for a period of not less than three (3) years following
the date of termination of the CEO’s service under this Agreement. In the event that the Company is unable to include the
CEO under the Company’s D&O insurance policies or if the Company’s D&O policies do not have first dollar coverage
in effect for at least the first $3,000,000, it is agreed that the CEO is permitted to purchase a separate policy for D&O
insurance that covers only the CEO and invoice the Company for the costs associated with such policy as an out-of-pocket expense
reimbursement under this Agreement. If the CEO is unable to purchase such coverage, then the CEO shall have the right to terminate
this Agreement upon notice to the Company.


 


The
Company agrees that it will not settle or compromise or consent to the entry of any judgment in, or otherwise seek to terminate
any pending or threatened Action in respect of which indemnification, advancement, or contribution may be sought hereunder (whether
or not any Indemnified Person is a party to such Action) unless the CEO has given his prior written consent, or the settlement,
compromise, consent or termination (i) includes an express unconditional release of such Indemnified Person from all Losses arising
out of such Action and (ii) does not include any admission or assumption of fault on the part of any Indemnified Person.


 


Notwithstanding
anything in Section V of this Agreement to the contrary or inconsistent herewith, the provisions of this Section VII shall survive
termination of this Agreement for whatever reason and regardless of which party terminates this Agreement.


 


VIII.
DISCLOSURES


 


The
CEO is not aware of any business relationship he has that creates a potential or actual conflict of interest with respect to the
Company. Although the CEO is not aware of any relationships that connect him to any party in interest, because the CEO serves
clients on a national basis, it is possible that the CEO may have or will render services to or have business associates with
other entities which had or have relationships with the Company.


 


IX.
REPRESENTATIONS


 


		A.	By
                                         the Company. 



 


The
Company represents and warrants to the CEO that it has taken all necessary corporate and other action necessary for it to enter
in to this Agreement and to enable the CEO to perform his duties and responsibilities hereunder. Further, the Company represents
and warrants to the CEO that this Agreement, when executed by you and the undersigned is a valid and binding agreement on the
part of the Company enforceable in accordance with its terms.


 


		B.	By
                                         the CEO



 


The
CEO represents and warrants to the Company that his acceptance of employment with the Company and the performance of his duties
and responsibilities hereunder will not conflict with or result in a violation of, a breach of, or a default under any contract,
agreement or understanding to which he is a party or is otherwise bound.


 


X. GENERAL


 


		A.	Complete
                                         Agreement



 


This
Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any other prior
communications, understandings and agreements (both written and oral) between the parties with respect to the subject matter hereof.


 


		B.	Amendments



 


This
Agreement may be modified, amended or supplemented only by a written agreement between the parties hereto. The CEO will not be
responsible for performing any services not specifically described in this Agreement or in a subsequent writing signed by the
parties.


 


		C.	Governing
                                         Law



 


This
Agreement and all controversies arising from or related to the performance hereunder shall be governed by, and construed in accordance
with, the laws of the State of Colorado, without giving effect to such State’s conflicts of law principles.


 


		D.	Severability



 


If
any portion of this Agreement shall be determined to be invalid or unenforceable, the parties agree that the remainder shall be
valid and enforceable to the maximum extent possible.


 




    	 



    	 



    

 


		E.	Sole
                                         Benefit



 


This
Agreement has been and is made solely for the benefit of the Company, Northpoint and the CEO and their respective successors and
assigns, and no other person or entity shall acquire or have any right under or by virtue of this Agreement.


 


		F.	Assignment



 


Neither
party may assign or transfer its rights or obligations under this Agreement without the prior written consent of the other party.


 


		G.	No
                                         Waivers



 


Each
party agrees that no failure or delay by the other party in exercising any right, power or privilege hereunder will operate as
a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder.


 


		H.	Captions.
                                         



 


Captions
and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement
is to be construed by reference to the caption or heading of any section or paragraph.


 


		I.	Counterparts.
                                         



 


This
Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.


 


		J.	Notices



 


All
notices required or permitted to be delivered under this Agreement shall be sent, if to the CEO, to the attention of the CEO,
and if to the Company, to the attention of Marshall Diamond Goldberg. All notices under this Agreement shall be sufficient if
delivered by facsimile, electronic mail, or overnight courier. Any notice shall be deemed to have been given only upon actual
receipt. Mailed notices shall be addressed as set forth below, or to such other name or address as may be given in writing to
the other party.


 





	 	To the CEO:	Northpoint Energy Partners. LLC
	 	 	555 North Point Center East
	 	 	Alpharetta, GA 30022
	 	 	Attn: Andrew Reckles
	 	 	Facsimile:
	 	 	Email:  andy@northpointep.com
	 	 	 
	 	To the Company:	Legend Oil and Gas, Ltd.
	 	 	555 North Point Center East, Ste. 401
	 	 	Alpharetta, GA 30022
	 	 	Attn: Warren Binderman
	 	 	Facsimile:(678) 608-2565
	 	 	Email:  wbinderman@bindermanllc.com







 


Please
confirm the foregoing is in accordance with your understanding by signing and returning a copy of this Agreement.


 





	 	Sincerely,
	 	 	 
	 	Northpoint Energy Partners, LLC
	 	 	 
	 	 	 
	 	By:	
	 	Name:	Andrew Reckles
	 	Title:	 Managing Partner




 


 





	AGREED AND ACKNOWLEDGED:	 
	 	 	 
	Legend Oil and Gas, Ltd.	 
	 	 	 
	 	 	 
	By:	 	 
	Name:	Warren S. Binderman	 
	Title: 	President	 
	Dated: