Legend Oil & Gas, Ltd. 8-K


Exhibit 10.4


 





 


October 1st, 2016


 


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 Andrew Reckles (or his designee)
and Legend Oil & Gas, Ltd. and its affiliated entities (collectively, the “Company”) for the engagement
of Andrew Reckles, Managing Partner of Northpoint Energy Partners, 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



 


Mr. Reckles will continue 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 twenty-four (24) 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 $25,000 per month
payable in advance on the date hereof and each successive monthly anniversary date of this Agreement.


 


 


		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; OR should Mr. Reckles choose to participate in the Company benefit plan, he may do so and coverage
shall be provided for he and his wife.


 





(2) Starting in calendar year
2016, 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 quarterly during the year in which they are earned. The annual bonus is subject to the
“Termination” section below.


 


(3) for the term of this agreement, the Company
shall provide a Company vehicle to Northpoint for Mr. Reckles’ use.


 


(4) beginning October 1st, 2015, and
continuing for the term of this agreement, 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.


 


 




    	 



    	 



    

 


(5 “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 and unearned annual bonus through the contractual period.


 


(6) 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.


 


(7) Acquisition bonus: Should
the Company make a Material Acquisition, it is understood that the CEO and the BOD will work together to amend the “Base
Compensation” section of this document in order to properly compensate the CEO for the expansion of the duties that such
an acquisition would entail.


 


		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 payments that equal the balance of the term of this agreement for all “base compensation”,
as well as all “annual bonuses” as well as ANY other bonuses and benefits that would be payable under Section IV, B
“additional compensation of this agreement.


 


		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 Warren Binderman. 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:	Andrew Reckles	 
	 	 	Facsimile:	 
	 	 	Email: andy@andy@midconoil.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,
	 	 
	 	Andrew Reckles
	 	 
	 	By: 	
	 	Name:

        Title:
	Andrew Reckles
CEO



 


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