EXHIBIT 10.10
Execution Copy
SERVICES AGREEMENT
by and between
Crusader Energy Group Inc.
and
Robert J. Raymond

 

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SERVICES AGREEMENT
     THIS SERVICES AGREEMENT (this “Agreement”) is made and entered into
effective as of the closing of the transaction contemplated by the Contribution
Agreement (as defined below) (the “Effective Date”), by and between Crusader
Energy Group Inc. (f/k/a Westside Energy Corporation), a Nevada corporation (the
“Company”), and Robert J. Raymond (“Raymond”).
RECITALS:
     A. Raymond possesses valuable skills and knowledge in the field of business
of the Company and desires to be retained by the Company as non-executive
Chairman of the Board on the terms and conditions set forth in this Agreement.
     B. The Company desires to retain Raymond on the terms and conditions set
forth in this Agreement.
AGREEMENTS:
     In consideration of the premises and of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
     1. Certain Definitions. As used in this Agreement, the following terms have
the meanings set forth below:
          (a) “Affiliate” means, with respect to any Person, any other Person
that directly or indirectly controls, is controlled by, or is under common
control with the Person in question. As used in this definition of “Affiliate,”
the term “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of Voting Securities, by contract, or otherwise.
          (b) “Beneficial Owner” or “Beneficial Ownership” or “Beneficially
Owns” shall have the meaning ascribed to such terms in, or be interpreted in a
manner consistent with, Rule 13d-3 under the Exchange Act and any successor to
such rule.
          (c) “Board” means the Board of Directors of the Company and any
committee thereof.
          (d) “Cause” means Raymond’s:
               (i) commission of an act of fraud, embezzlement,
mis-appropriation, willful misconduct, bad faith or dishonesty against the
Company;
               (ii) material breach of this Agreement which is not remedied
within 30 days after receipt of written notice from the Company specifically
identifying the manner in which the Company believes that Raymond has materially
breached this Agreement;

 

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               (iii) conviction, plea of no contest or nolo contendere, deferred
adjudication or unadjudicated probation for any felony or any crime involving
moral turpitude; or
               (iv) violation of the Company’s substance abuse policy.
          (e) “Change in Control” means the occurrence of any of the following
events:
               (i) Subject to the last paragraph of this definition, the
acquisition by any Person or Group of Beneficial Ownership of forty percent
(40%) or more of either (x) the then outstanding shares of Common Stock (the
“Outstanding Company Stock”) or (y) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors or similar governing body (the “Outstanding Company Voting
Securities” and, together with the Outstanding Company Stock, the “Company
Securities”); or
               (ii) Members of the Incumbent Board cease to constitute at least
a majority of the members of the Board; or
               (iii) Consummation of a reorganization, merger, consolidation,
sale or other disposition of all or substantially all of the assets of the
Company or an acquisition of assets of another company (a “Business
Combination”), in each case, unless, following such Business Combination, (A)
all or substantially all of the Persons who were the Beneficial Owners of
Company Securities immediately prior to such Business Combination Beneficially
Own, directly or indirectly, more than fifty percent (50%) of, respectively, the
then outstanding shares of common stock or common equity interests and the
combined voting power of the then outstanding Voting Securities, as the case may
be, of the entity resulting from such Business Combination (including without
limitation an entity which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Company Securities, (B)
no Person or Group (excluding any employee benefit plan (or related trust) of
the Company or the entity resulting from such Business Combination) Beneficially
Owns, directly or indirectly, forty percent (40%) or more of, respectively, the
then outstanding shares of common stock or common equity interests of the entity
resulting from such Business Combination or the combined voting power of the
then outstanding Voting Securities of such entity except to the extent that such
ownership results solely from ownership of the Company that existed prior to the
Business Combination, and (C) at least a majority of the members of the board of
directors or similar governing body of the entity resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
               (iv) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing clause (i) of this definition: (x) the following
acquisitions (whether the acquiring Person or Group acquires Beneficial
Ownership of forty percent (40%) or

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more of the Outstanding Company Stock or Outstanding Company Voting Securities
or any such acquisition results in any other Person or Group (other than the
acquiring Person or Group) Beneficially Owning forty percent (40%) or more of
the Outstanding Company Stock or Outstanding Company Voting Securities) shall
not constitute a Change in Control unless, following such acquisition, any
Person or Group (other than the acquiring Person or Group effecting the
acquisition pursuant to the following clauses (A) through (D)) who becomes the
Beneficial Owner of forty percent (40%) or more of the Outstanding Company Stock
or Outstanding Company Voting Securities as a result of one or more of such
acquisitions shall thereafter acquire any additional shares of Company
Securities and, following such acquisition, Beneficially Owns forty percent
(40%) or more of either the Outstanding Company Stock or Outstanding Company
Voting Securities, in which case such acquisition shall constitute a Change in
Control: (A) any acquisition directly from the Company, (B) any acquisition by
the Company, (C) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity controlled by the Company
or (D) any acquisition by any entity pursuant to a transaction which complies
with clauses (A), (B) and (C) of the foregoing clause (iii) of this definition;
and (y) the acquisition of Beneficial Ownership of shares of Common Stock by the
Crusader Parent Entities pursuant to the Contribution Agreement, the
corresponding acquisition of Beneficial Ownership of shares of Common Stock by
any other Person or Group deemed to Beneficially Own the Common Stock so
acquired by the Crusader Parent Entities (any such Person and/or Group,
collectively with the Crusader Parent Entities and the Crusader Distributees,
the “Crusader Group”) and the acquisition of Beneficial Ownership of shares of
Common Stock as a result of the distribution by a Crusader Parent Entity to
Crusader Distributees of shares of Common Stock acquired pursuant to the
Contribution Agreement or directly from the Company prior to the date of the
Contribution Agreement shall not constitute a Change of Control, provided that
if, (1) for so long as the shares of Common Stock Beneficially Owned by any
member of the Crusader Group equals or exceeds forty percent (40%) of the
Outstanding Company Stock or the Outstanding Company Voting Securities, such
member of the Crusader Group shall obtain Beneficial Ownership of shares of
Common Stock (other than as a result of any acquisition described in the
foregoing clauses (A) through (D) of this paragraph or pursuant to an award
issued under any equity based compensation plan of the Company, including
without limitation the LTIP) representing one percent (1%) or more of the
Outstanding Company Stock or Outstanding Company Voting Securities or (2) at any
time after such member of the Crusader Group shall cease to Beneficially Own
forty percent (40%) or more of the Outstanding Company Stock and Outstanding
Company Voting Securities, such member of the Crusader Group shall obtain
Beneficial Ownership of shares of Common Stock (other than as a result of any
acquisition described in the foregoing clauses (A) through (D) of this paragraph
or pursuant to an award issued under any equity based compensation plan of the
Company, including without limitation the LTIP) representing forty percent (40%)
or more of either the Outstanding Company Stock or Outstanding Company Voting
Securities, then in the case of either (1) or (2) a Change of Control shall be
deemed to occur.
          (f) “Common Stock” means the Company’s common stock, par value $.01
per share, and such other securities as may be substituted (or resubstituted)
for such Common Stock.
          (g) “Compensation Committee” means the Compensation Committee of the
Board.

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          (h) “Contribution Agreement” means the Contribution Agreement among
the Company and Crusader Management Corporation, David D. Le Norman, Knight
Energy Management Holding Company, LLC, Knight Energy Group II Holding Company,
LLC, Knight Energy Group I Holding Co., LLC, Crusader Energy Group Holding Co.,
LLC, Hawk Energy Fund I Holding Company, LLC, RCH Energy Opportunity Fund I,
L.P., Knight Energy Group, LLC, Knight Energy Group II, LLC, Knight Energy
Management, LLC, Hawk Energy Fund I, LLC, RCH Upland Acquisition, LLC and
Crusader Energy Group, LLC dated as of December 31, 2007.
          (i) “Crusader Distributees” means holders of equity interests in any
Crusader Parent Entity who receives a distribution from such Crusader Parent
Entity of shares of Common Stock acquired pursuant to the Contribution Agreement
or directly from the Company prior to the date of the Contribution Agreement.
          (j) “Crusader Parent Entities” has the meaning set forth in the
Contribution Agreement.
          (k) “Disability” means Raymond’s inability to perform, with or without
reasonable accommodations, the essential functions of Raymond’s position
hereunder for a period of 180 consecutive days due to mental or physical
incapacity, as determined by mutual agreement of a physician selected by the
Company or its insurers and a physician selected by Raymond; provided, however,
that if the opinion of the Company’s physician and Raymond’s physician conflict,
the Company’s physician and Raymond’s physician shall together agree upon a
third physician, whose opinion shall be binding. The foregoing definition of
“Disability” is not intended to and shall not affect the definition of
“disability” or any similar term in any insurance policy the Company or any of
its Subsidiaries may provide. Notwithstanding the foregoing definition of
Disability, Raymond will not be considered to have a Disability under any
provision of this Agreement that would trigger the payment of deferred
compensation within the meaning of Section 409A of the Code unless Raymond’s
Disability also meets the Section 409A definition of Disability.
          (l) “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
          (m) “Good Reason” means, subject to the terms and provisions of this
Agreement, the occurrence of one or more of the following events:
               (i) any removal of Raymond from the office of Chairman of the
Board of the Company except, in any such case, in connection with the
termination of Raymond’s retention hereunder by the Company for Disability or
for Cause or by Raymond other than for Good Reason;
               (ii) any termination or material reduction of a material benefit
under any Investment Plan or Welfare Plan in which Raymond participates unless
(A) there is substituted a comparable benefit that is economically substantially
equivalent to the terminated or reduced benefit prior to such termination or
reduction or (B) benefits under such Investment Plan

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or Welfare Plan are terminated or reduced with respect to all Raymond’s
previously granted benefits thereunder;
               (iii) any reduction in Raymond’s Annual Base Salary;
               (iv) any failure by the Company to comply with any of the
provisions of Section 3(b);
               (v) without limiting the generality of the foregoing, any
material breach by the Company of this Agreement other than an isolated,
insubstantial, and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Raymond; or
               (vi) a Change in Control,
          (n) “Group” shall have the meaning ascribed to such term in section
13(d)(3) or 14(d)(2) of the Exchange Act.
          (o) “Incumbent Board” shall mean individuals who, as of the Effective
Date, constitute the Board and any other individual who becomes a director of
the Company after that date and whose election or appointment by the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board.
          (p) “LTIP” means the 2008 Long-Term Incentive Plan of the Company.
          (q) “Person” means any individual, partnership, limited liability
partnership, joint venture, corporation, limited liability company, trust,
association, or other entity or organization.
          (r) “Pro Rata Bonus” means the amount equal to the product of (i) the
amount of the Annual Bonus (as defined in Section 3(b)(ii)), if any, to which
Raymond would have been entitled for the calendar year in which Raymond’s Date
of Termination occurs if Raymond was not terminated during such calendar year,
multiplied by (ii) a fraction, the numerator of which is the number of days that
have elapsed since the beginning of such calendar year through (but not
including) Raymond’s Date of Termination, and the denominator of which is the
total number of days in such calendar year. The amount, if any, of the Annual
Bonus to which Raymond would have been entitled for the calendar year in which
the Date of Termination occurs shall be determined by the Compensation Committee
in its sole reasonable discretion; provided, however, that for purposes of
determining the amount of the Pro Rata Bonus in connection with a termination of
Raymond’s retention upon a Change of Control, Raymond shall be deemed to have
been entitled to an Annual Bonus of not less than the amount of the last Annual
Bonus awarded to Raymond prior to such Change in Control, and provided further
however that any determination by the Compensation Committee as to satisfaction
of a performance standard shall be made in the same manner as such determination
is made for the other similarly-situation executives of the Company.

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          (s) “Subsidiary” means, with respect to any Person, any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by that Person.
          (t) “Voting Securities” means any securities that vote generally in
the election of directors, in the admission of general partners, or in the
selection of any other similar governing body.
          (u) “Without Cause” means a termination by the Company of Raymond’s
retention hereunder during the Term at the Company’s sole discretion for any
reason other than a termination based upon Cause, death or Disability; provided
that, “without Cause” does not include termination of this Agreement and
Raymond’ s retention pursuant to Section 2.
     2. Term; Non-Renewal of Term. Subject to the terms and provisions of this
Agreement, the Company hereby agrees to retain Raymond, and Raymond hereby
agrees to be retained by the Company, for the period (the “Term”) commencing on
the Effective Date and, unless Raymond is sooner terminated in accordance with
the terms hereof, expiring at 5:00 p.m., Oklahoma City, Oklahoma time, on
December 31, 2011; provided, however, that on January 1, 2009, and on each
January 1 occurring thereafter, the Term shall automatically (without any action
by either party) be extended for one additional calendar year unless, at least
30 days prior to each such January 1, the Company or Raymond shall have given
written notice (a “Non-Renewal Notice”) that it or Raymond, as applicable, does
not wish to extend this Agreement (a “Non-Renewal”). Either party may elect not
to renew this Agreement. The term “Term,” as utilized in this Agreement, shall
refer to the Term as so automatically extended. The Term shall expire as a
result of any Non-Renewal at 5:00 p.m., Oklahoma City, Oklahoma time, on the
last day of the Term during which a Non-Renewal Notice is given, and the
retention of Raymond shall terminate at that time.
     3. Terms.
          (a) Position and Duties.
               (i) During the Term, Raymond shall serve as Chairman of the Board
of the Company. In so doing, Raymond shall have such powers and duties as may be
assigned from time to time by the Board, so long as such powers and duties are
reasonable and customary for a non-executive chairman of the board of an
enterprise comparable to the Company.
               (ii) During the Term, and excluding any periods of vacation and
sick leave to which Raymond is entitled, Raymond agrees to (a) use Raymond’s
reasonable efforts to perform diligently, faithfully, effectively and
efficiently his responsibilities, and (b) use Raymond’s reasonable efforts to
promote the interests of the Company.
               (iii) Raymond shall not be an employee of the Company, and may
engage in any other business endeavors during the Term, including those which
compete with the Company; provided, however, that the foregoing shall not be
deemed to modify or limit Raymond’s covenants, agreements and obligations under
Section 3(a)(ii), Section 8 or Section 9. Raymond is an independent contractor
with respect to the services he provides to the Company.

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          (b) Compensation.
               (i) Annual Base Salary. During the Term, Raymond shall receive an
annual base salary (“Annual Base Salary”), which shall be paid bi-weekly in
accordance with the customary payroll practices for executives of the Company,
in the initial amount of $100,000 per year. At least annually (by no later than
January 31 of each year) during the Term, the Compensation Committee shall
review the Annual Base Salary of Raymond and may increase (but not decrease) the
Annual Base Salary by such amount as the Compensation Committee shall deem
appropriate. The term “Annual Base Salary” as used in this Agreement shall refer
to the Annual Base Salary as it may be so increased.
               (ii) Annual Bonus. During the Term, Raymond shall be eligible to
receive an annual bonus, in addition to the Annual Base Salary, (each, an
“Annual Bonus”), in such amounts and subject to such requirements as shall be
determined by the Compensation Committee.
               (iii) Option. Raymond shall be entitled to exercise the option to
purchase shares of common stock, par value $0.01 per share of the Company issued
to Raymond pursuant to Section 6(i) of the Company’s 2008 Long Term Incentive
Plan (the “Option”). The Option may be exercised only in the time and manner
described in the Option.
               (iv) Incentive, Savings, Stock Option and Retirement Plans.
During the Term, Raymond shall be entitled to participate in all incentive,
savings, stock option, equity-based, profit sharing and retirement plans,
practices, policies and programs applicable generally to directors of the
Company (“Investment Plans”), subject to all of the terms and conditions of such
Investment Plans.
               (v) Welfare Benefit Plans. During the Term, Raymond and Raymond’s
family shall be eligible for participation in and shall receive all benefits
under the welfare benefit plans, practices, policies and programs (“Welfare
Plans”) provided by the Company (including, without limitation, medical,
prescription, dental, short-term and long-term disability, salary continuance,
executive life, group life, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other directors of the
Company, subject to all of the terms and conditions of such Welfare Plans.
               (vi) Expenses. During the Term, Raymond shall be entitled to
receive prompt reimbursement for all reasonable business-related expenses
incurred by Raymond in the performance of Raymond’s duties in accordance with
the Company’s policies, practices and procedures.
               (vii) Pro-ration. Any payments or benefits payable to Raymond
hereunder in respect of any calendar year during which Raymond is retained by
the Company for less than the entire year, unless otherwise provided in the
applicable plan or arrangement, shall be pro-rated in accordance with the number
of days in such calendar year during which Raymond is so retained.

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     4. Termination.
          (a) Death. Raymond’s retention hereunder shall terminate automatically
upon Raymond’s death during the Term.
          (b) Disability. If the Disability of Raymond has occurred during the
Term, the Company may give to Raymond a written Notice of Termination (as
defined in Section 6(a)) in accordance with Section 6(a) of its intention to
terminate Raymond’s retention hereunder. In such event, Raymond’ s retention by
the Company shall terminate effective on the 30th day after receipt of such
notice by Raymond (the “Disability Effective Date”) provided that, within
30 days after receipt of the Notice of Termination, Raymond shall not have
returned to perform, with or without reasonable accommodations, the essential
functions of Raymond’s position. During any period of Raymond’s Disability, the
Company may assign Raymond’s duties to any other director on an interim basis
and any such action shall not be deemed “Good Reason” for Raymond to terminate
this Agreement pursuant to Section 4(d)(i) so long as Raymond continues to
receive the compensation and benefits under Section 3 during such period.
          (c) Termination by Company. Subject to Section 6(d), the Company may
terminate Raymond’s retention at any time during the Term for Cause or without
Cause.
          (d) Resignation by Raymond. At Raymond’s option, Raymond may terminate
Raymond’s retention hereunder (i) subject to Section 6(c), for Good Reason or
(ii) without Good Reason.
     5. Compensation Upon Termination. Raymond shall be entitled to the
following compensation from the Company upon the termination of Raymond’s
retention by the Company during the Term. The compensation provided for in this
Section 5 shall be in lieu of any other severance pay to which Raymond might
otherwise be entitled (whether contractual or under a severance plan, the WARN
Act, any other applicable law, or otherwise) and shall be conditioned on the
execution and delivery of a Release (as defined in Section 6(f)) signed by
Raymond or Raymond’s legal representative pursuant to Section 6(f). The timing
of payments pursuant to this Section 5 shall also be subject to the requirements
of Section 6(g) and Section 409A of the Code:
          (a) Death or Disability. If Raymond’s retention by the Company is
terminated by reason of Raymond’s death or Disability, the Company shall pay to
Raymond or Raymond’s legal representatives:
               (i) within 30 days after Raymond’s Date of Termination as defined
in Section 6(b), a lump sum in cash equal to the sum of Raymond’s Annual Base
Salary through the Date of Termination to the extent not previously paid and any
compensation previously deferred by Raymond (together with any accrued interest
or earnings thereon) (the “Accrued Obligations”);
               (ii) the amount of any Annual Bonus to which Raymond was entitled
for the calendar year ending prior to the Date of Termination to the extent not
previously paid and the amount of any Pro Rata Bonus, each of which amounts
shall be paid no later than the later of 30 days after the Date of Termination
or 10 business days after the date on which the

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Company has available to it the information reasonably required to determine the
amount to be paid;
               (iii) any amounts arising from Raymond’s participation in, or
benefits under, any Investment Plan (the “Accrued Investments”), which amounts
shall be paid in accordance with the terms and conditions of such Investment
Plan; and
               (iv) any amounts to which Raymond or Raymond’s spouse,
beneficiaries or estate are entitled from Raymond’s participation in, or
benefits under, any Welfare Plan (“Accrued Welfare Benefits”), which amounts
shall be paid in accordance with the terms and conditions of such Welfare Plan.
     Except as described in this Section 5(a), in the event of Raymond’s
termination by reason of Raymond’s death or Disability, Raymond and Raymond’s
legal representatives, as applicable, shall forfeit all rights to any other
compensation.
          (b) For Cause; Resignation by Raymond Without Good Reason; Non-Renewal
Election by Raymond. If the Company shall terminate the retention of Raymond
hereunder for Cause, or if Raymond resigns without Good Reason, or if Raymond’s
retention by the Company is terminated due to a Non-Renewal election by Raymond,
the Company shall have no further obligations to Raymond other than the
obligation for payment of:
               (i) the Accrued Obligations, which shall be payable within
30 days after Raymond’s Date of Termination;
               (ii) the amount of any Annual Bonus to which Raymond was entitled
for the calendar year ending prior to the Date of Termination to the extent not
previously paid, which amount shall be paid no later than the later of 30 days
after the Date of Termination;
               (iii) the Accrued Investments, which amounts shall be paid in
accordance with the terms and conditions of the Investment Plans; and
               (iv) the Accrued Welfare Benefits, which amounts shall be paid in
accordance with the terms and conditions of the Welfare Plans.
     Except as described in this Section 5(b), in the event of Raymond’s
termination by the Company for Cause or by Raymond without Good Reason or due to
a Non-Renewal election by Raymond, Raymond shall forfeit all rights to any other
compensation.
          (c) Without Cause; Resignation by Raymond for Good Reason: Non-Renewal
Election by the Company. If the Company terminates the retention of Raymond
hereunder without Cause (other than by reason of Raymond’s death or Disability
or a Non-Renewal by Raymond) or Raymond resigns for Good Reason or the retention
of Raymond hereunder is terminated due to a Non- Renewal election by the
Company, then the Company shall pay or provide Raymond:
               (i) within 30 days after Raymond’s Date of Termination, a lump
sum in cash equal to the aggregate of the Accrued Obligations;

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               (ii) the amount of any Annual Bonus to which Raymond was entitled
for the calendar year ending prior to the Date of Termination to the extent not
previously paid and any Pro Rata Bonus, each of which amounts shall be paid no
later than the later of 30 days after the Date of Termination or 10 business
days after the date on which the Company has available to it the information
reasonably required to determine the amount to be paid;
               (iii) the Accrued Investments, which amounts shall be paid in
accordance with the terms and conditions of the Investment Plans;
               (iv) the Accrued Welfare Benefits, which amounts shall be paid in
accordance with the terms and conditions of the Welfare Plans;
               (v) a lump-sum payment within 30 days of the Date of Termination
equal to the greater of (A) the undiscounted amount of Annual Base Salary
Raymond would have received for the rest of the Term based upon the highest
Annual Base Salary to which Raymond was entitled during the 24-month period
ending on the Date of Termination or (B) two years of the highest Annual Base
Salary to which Raymond was entitled during the 24-month period ending on the
Date of Termination; and
               (vi) if Raymond is entitled on the Date of Termination to
coverage under the medical, prescription, and dental portions of the Welfare
Plans, continuation at the Company’s sole cost and expense of such coverage for
Raymond and Raymond’s dependents for a period ending on the later to occur of
(A) the second anniversary of the Date of Termination or (B) the end of the full
Term. Notwithstanding any provision of the foregoing to the contrary, the
continued coverage provided pursuant to this Section 5(c)(vi) will count towards
the depletion of any continued health care coverage rights that Raymond and
Raymond’s dependents may have pursuant to COBRA, and Raymond’s or Raymond’s
dependents’ rights to continued health care coverage pursuant to this
Section 5(c)(vi) shall terminate at the time Raymond or Raymond’s dependents
become covered, as described in COBRA, under another group health plan that does
not limit coverage with respect to any preexisting conditions of Raymond or
Raymond’s dependents, and shall also terminate as of the date the Company ceases
to provide coverage to its senior executives generally under any such Welfare
Plan.
     The parties hereto acknowledge that in the event Raymond’s retention is
terminated in connection with a Change in Control, the consideration payable to
Raymond under Section 5(c)(v) hereof is related to the additional efforts and
services that will have been required of the Raymond in connection with such
Change in Control transaction and to Raymond’s obligations under Sections 7, 8
and 9 of this Agreement.
     Except as described in this Section 5(c), in the event of Raymond’s
termination by the Company without Cause or by Raymond for Good Reason or due to
a Non-Renewal election by the Company, Raymond shall forfeit all rights to any
other compensation.
     6. Other Provisions Relating to Termination.
          (a) Notice of Termination. Any termination by the Company for Cause or
without Cause or by reason of Raymond’s Disability, or by Raymond’s resignation
for Good Reason or without Good Reason, shall be communicated by Notice of
Termination to the other

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party hereto given in accordance with Section 10(b). For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon and (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Raymond under the provision so
indicated. The failure by the Company or Raymond to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Cause or
Good Reason shall not waive any right of the Company or Raymond hereunder or
preclude the Company or Raymond from asserting such fact or circumstance in
enforcing the Company’s or Raymond’s rights hereunder.
          (b) Date of Termination. “Date of Termination” means (i) if Raymond is
terminated by reason of Raymond’s death, the date of Raymond’s death; (ii) if
Raymond is terminated by reason of Raymond’s Disability, the Disability
Effective Date (provided that Raymond shall not have returned to perform, with
or without reasonable accommodation, the essential functions of Raymond’s
position during the 30-day period provided for in Section 4(b)); (iii) if
Raymond is terminated by the Company without Cause or by Raymond for Good Reason
or without Good Reason, then, subject to Section 6(c), the date specified in the
Notice of Termination (which date shall be a date between the date that the
Notice of Termination is given and 30 days thereafter (inclusive)); (iv) if
Raymond is terminated by the Company for Cause then, subject to Section 6(d),
the date on which the Notice of Termination is given; and (v) if Raymond is
terminated due to a Non-Renewal election by Raymond or the Company, the date on
which the Term expires.
          (c) Good Reason. Upon Raymond’s learning of the occurrence of any
event described in the definition of Good Reason in Section 1(j), Raymond may
resign his responsibilities hereunder for Good Reason within 60 days thereafter
by giving a Notice of Termination to the Company to that effect and describing
in reasonable detail the facts or circumstances giving rise to Raymond’s right
to terminate his responsibilities for Good Reason. Notwithstanding the
foregoing, the right of Raymond to terminate for Good Reason under
Section 4(d)(i) shall not limit the Company’s right to terminate Raymond for
Cause under Section 4(c) if Cause is determined to exist prior to the time Good
Reason is determined to exist.
          (d) Cause. Upon the Company learning of the occurrence of any event
described in Section 1(c), the Company may terminate Raymond’s retention
hereunder for Cause within 60 days thereafter by giving Raymond a Notice of
Termination to that effect and describing in reasonable detail the facts or
circumstances giving rise to the Company’s right to terminate for Cause.
Notwithstanding the foregoing, the right of the Company to terminate Raymond’s
retention for Cause under Section 4(c) shall not limit Raymond’s right to resign
for Good Reason under Section 4(d)(i) if Good Reason is determined to exist
prior to the time Cause is determined to exist.
          (e) Full Settlement; Mitigation. In no event shall Raymond be
obligated to seek other similar positions or take any other action by way of
mitigation of the amounts payable to Raymond under any of the provisions of this
Agreement, and such amounts shall not be reduced whether or not Raymond obtains
another similar position. The Company shall not be liable to Raymond for any
damages for breach of this Agreement in addition to the amounts payable under
Section 5 arising out of the termination of Raymond hereunder prior to the end
of

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the Term. The Company shall be entitled to seek damages from Raymond for any
breach of Section 8 by Raymond.
          (f) Release and Other Agreements. Notwithstanding any other provision
in this Agreement to the contrary, in consideration for receiving the severance
benefits described in Sections 5(c)(v) and 5(c)(vi), Raymond hereby agrees to
execute (and not revoke) a Release and Separation Agreement and a Waiver and
Release within 60 days of the Date of Termination in substantially the forms
attached hereto as Exhibit A (the “Release”). If Raymond fails to properly
execute and deliver the Release (or revokes the Release), Raymond agrees that
Raymond shall not be entitled to receive such severance benefits.
          (g) 409A Compliance. To the extent required by section 409A of the
Code, if on Raymond’s Date of Termination he is a “specified executive” within
the meaning of section 409A of the Code, any amounts that are payable to Raymond
by reason of his termination pursuant to Section 5 and that are not excluded
from application of Section 409A of the Code by reason of the “short term
deferral” exception to Section 409A of the Code will be delayed for a period of
six months following the Date of Termination. Any payments that would have been
paid to Raymond pursuant during such six-month period and that are delayed
pursuant to this Section 6(g) shall be paid to him in the form of a lump sum
payment at the end of the six-month period.
     7. Disclosure of, Access to and Entrustment of Confidential Information,
Business Opportunities and Business Goodwill. During the Term, the Company shall
disclose to Raymond, or place Raymond in a position to have access to or
develop, Confidential Information (as defined in Section 8(a)(i)), and/or shall
entrust Raymond with business opportunities of the Company, and/or shall place
Raymond in a position to develop business goodwill on behalf of the Company.
There is a need and desire on the part of the Company and Raymond to specify the
parties’ rights and obligations with respect to the ownership and protection of
such Confidential Information, business opportunities and goodwill. Accordingly,
as a material inducement to the Company to enter into this Agreement, in
consideration for the compensation and other benefits payable hereunder to
Raymond, to protect the Company’s Confidential Information that has been and
will be in the future disclosed or entrusted to Raymond (the disclosure of which
by Raymond in violation of this Agreement would adversely affect the business
goodwill of the Company), the business goodwill of the Company that has been and
will in the future be developed in Raymond and the business opportunities that
have been and will in the future be disclosed or entrusted to Raymond by the
Company; and for other good and valuable consideration, Raymond agrees to comply
with, and be bound by, Section 8 and Section 9. As used in this Section 7 and in
Sections 8 and 9, “Company” shall include the Company and any of its
Subsidiaries.
     8. Confidential Information; Ownership of Property.
          (a) Obligations to Maintain Confidentiality.
               (i) Raymond acknowledges that the Company has trade, business and
financial secrets and other confidential and proprietary information regarding
the Company and its business, in whatever form, tangible or intangible
(collectively, the “Confidential

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Information”), and that, during the course of Raymond’s retention by the
Company, Raymond has received, shall receive or be placed in a position to have
access to or develop Confidential Information. Raymond further acknowledges and
agrees that Raymond’s use of Confidential Information in the conduct of business
on behalf of a competitor of the Company would constitute unfair competition
with the Company and would adversely affect the business goodwill of the
Company. Confidential Information includes sales materials, technical
information, processes and compilations of information, records, specifications
and information concerning customers, prospective customers, customer and
prospective customer lists, and information regarding methods of doing business,
As defined herein, Confidential Information shall not include information that
is or was (i) obtained by Raymond from a source other than the Company or its
Affiliates, which source is not under a duty of non-disclosure in regard to such
information or (ii) becomes generally available to the public other than through
disclosure by Raymond in violation of the provisions of this Agreement.
               (ii) Raymond is aware of those policies implemented by the
Company to keep its Confidential Information secret, including those policies
limiting the disclosure of information on a need-to-know basis and requiring the
keeping of information in secure areas. Raymond acknowledges that the
Confidential Information has been or will be developed or acquired by the
Company through the expenditure of substantial time, effort and money and
provides or will provide the Company with an advantage over competitors who do
not know or use such Confidential Information.
               (iii) During and following Raymond’s retention by the Company,
Raymond shall hold in confidence and not directly or indirectly disclose, use
(for Raymond’s commercial advantage or otherwise), copy, make lists of, or make
available to others any Confidential Information except in Raymond’s good faith
performance of Raymond’s duties to the Company or to the extent authorized in
writing by the Board or required by law or compelled by legal process. Raymond
agrees to use reasonable efforts to give the Company notice of any and all
attempts to compel disclosure of any Confidential Information. Raymond further
agrees not to use any Confidential Information for the benefit of any person or
entity other than the Company.
               (iv) Raymond agrees that all Confidential Information and other
files, documents, materials, records, notebooks, customer lists, business
proposals, contracts, agreements and other repositories containing information
concerning the Company or the business of the Company, in whatever form,
tangible or intangible (including all copies thereof), that Raymond shall
prepare, or use, or be provided with as a result of Raymond’s retention by the
Company, shall be and remain the sole property of the Company. Upon termination
of Raymond’s retention hereunder, Raymond agrees that all Confidential
Information and other files, documents, materials, records, notebooks, customer
lists, business proposals, contracts, agreements and other repositories
containing information concerning the Company or the business of the Company
(including all copies thereof) in Raymond’s possession, custody or control,
whether prepared by Raymond or others, shall remain with or be returned to the
Company promptly after the Date of Termination. The materials required to be
returned pursuant to this Section 8(a)(iv) shall not include personal
correspondence or other personal property of Raymond that does not relate to the
Company or the business of the Company.

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          (b) Ownership of Work Product. Raymond acknowledges that all
discoveries, concepts, ideas, inventions, innovations, improvements,
developments, methods, processes, programs, designs, analyses, drawings,
reports, patent applications, copyrightable work and all registrations or
applications related thereto, all other proprietary information and all similar
or related information (whether or not patentable) that relate to the Company’s
or its Affiliates’ actual or anticipated business, research and development, or
existing or future products or services and that are conceived, developed,
contributed to, made, or reduced to practice by Raymond (either solely or
jointly with others) while retained by the Company (including any of the
foregoing that constitutes any proprietary information or records) (“Work
Product”) belong to the Company or its Affiliates, as applicable, and Raymond
hereby assigns, and agrees to assign, all of the above Work Product to the
Company or its Affiliates, as applicable.
     9. Non-Solicitation and Related Matters.
          (a) Raymond agrees that during the Term and for a period commencing
upon the termination of Raymond’s retention hereunder and ending upon the first
anniversary thereof, unless otherwise extended pursuant to the terms of this
Section 9, Raymond will not solicit, directly or indirectly, in the capacity of
employee, consultant, or in any other capacity whatsoever, one or more of the
employees, directors, officer or other persons who, at the time of solicitation,
or in the 180-day period prior thereto, are working full-time or part time for
the Company and will not endeavor, directly or indirectly in any manner
whatsoever, to encourage any of such person to leave his or her job with the
Company and will not endeavor, directly or indirectly in any manner whatsoever,
to incite or induce any client or customer of the Company to terminate, in whole
or in part, its business relations with the Company except to the extent the
solicitation is made through a public advertisement in a newspaper, trade
journal or similar public medium. Notwithstanding the foregoing provisions of
this Section 9(a), however, Raymond shall have no further obligations under this
Section 9(a) in the event of a termination of Raymond’s retention by the Company
without Cause or in the event of Raymond’s resignation for Good Reason or if
Raymond’s retention is terminated as a result of the Company’s Non-Renewal
election or if there is Change in Control.
          (b) The representations and covenants contained in this Section 9 on
the part of Raymond will be construed as ancillary to and independent of any
other provision of this Agreement, and the existence of any claim or cause of
action of Raymond against the Company or any officer, director, or shareholder
of the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants of
Raymond contained in this Section 9. In addition, the provisions of this
Section 9 shall continue to be binding upon Raymond in accordance with their
terms, notwithstanding the termination of Raymond hereunder for any reason.
          (c) If Raymond violates any covenant contained in this Section 9 and
the Company brings legal action for injunctive or other relief, the Company
shall not, as a result of the time involved in obtaining the relief, be deprived
of the benefit of the full period of any such covenant. Accordingly, the
covenant of Raymond contained in the Section 9 shall be deemed to have the
duration as specified above, which period shall commence upon the later of
(i) the termination of Raymond’s retention hereunder and (ii) the date of entry
by a court of competent jurisdiction of a final judgment enforcing the covenant
of Raymond in this Section 9.

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     10. Successors; Binding Agreement.
          (a) This Agreement is personal to Raymond and shall not be assignable
by Raymond otherwise than by will or the by laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by Raymond’s
personal and legal representatives, executors, administrators, heirs,
distributes, devisees and legatees.
          (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
          (c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, sale of assets or otherwise) to
all or substantially all of the business and/or assets of the Company, by a
written agreement in form and substance reasonably satisfactory to Raymond, to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Raymond to compensation from the Company in the same
amount and on the same terms as Raymond would be entitled to pursuant to
Section 5 if Raymond terminated for Good Reason after the occurrence of a Change
in Control, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement and after any such succession, “Company”
shall mean the Company as hereinbefore defined and any successor and/or assigns
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
     11. Miscellaneous.
          (a) Construction. This Agreement shall be deemed drafted equally by
both the parties. Its language shall be construed as a whole and according to
its fair meaning. Any presumption or principle that the language is to be
construed against any party shall not apply. The headings in this Agreement are
only for convenience and are not intended to affect construction or
interpretation. Any references to paragraphs, subparagraphs, sections,
subsections or clauses are to those parts of this Agreement, unless the context
clearly indicates to the contrary. Also, unless the context clearly indicates to
the contrary, (i) the plural includes the singular and the singular includes the
plural; (ii) “and” and “of’ are each used both conjunctively and disjunctively;
(iii) “any,” “all,” “each,” or “every” means “any and all”, and “each and
every”; (iv) “includes” and “including” are each “without limitation”; (v)
“herein,” “hereof” “hereunder” and other similar compounds of the word “here”
refer to the entire Agreement and not to any particular paragraph, subparagraph,
section or subsection; and (vi) all pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the entities or persons referred to may require.
          (b) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

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      If to Employee   If to the Company
Robert J. Raymond
  Crusader Energy Group Inc.
 
   
200 Crescent Court, Suite 1060
  4747 Gaillardia Parkway
 
   
Dallas, TX 75201
  Oklahoma City, OK 73142

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
          (c) Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
          (d) Withholding. The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
          (e) No Waiver. Except as expressly set forth in this Agreement, no
waiver by either party at any time of any breach by the other party of, or
compliance with, any condition or provision of this Agreement to be performed by
the other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at any time.
          (f) Equitable and Other Relief. Raymond acknowledges that money
damages would be both incalculable and an insufficient remedy for a breach of
Section 8 by Raymond and that any such breach would cause the Company
irreparable harm. Accordingly, the Company, in addition to any other remedies at
law or in equity it may have, shall be entitled, without the requirement of
posting of bond or other security, to equitable relief, including injunctive
relief and specific performance, in connection with a breach of Section 8 by
Raymond. If the Company files a pleading with a court seeking immediate
injunctive relief and this pleading is challenged by Raymond and injunctive
relief sought is not awarded, the Company shall pay all of Raymond’s costs and
attorneys’ fees. The parties consent to the exclusive jurisdiction of competent
state courts or federal courts in the State of Nevada for all litigation which
may be brought with respect to the terms of; and the transactions and
relationships contemplated by, this Agreement. The parties further consent to
the non-exclusive jurisdiction of any state court located within a district
which encompasses assets of a party against which a judgment has been rendered
for the enforcement of such judgment or award against the assets of such party.

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          (g) Entire Agreement. The provisions of this Agreement constitute the
entire and complete understanding and agreement between the parties with respect
to the subject matter hereof, and supersede all prior and contemporaneous oral
and written agreements, representations and understandings of the parties, which
are hereby terminated. Raymond and the Company acknowledge and represent that
there are no other promises, terms, conditions or representations (or written)
regarding any matter relevant hereto.
          (h) Attorney Fees. The prevailing party in any dispute or controversy
under or in connection with this Agreement shall be entitled to reimbursement
from the non-prevailing party for all costs and reasonable legal fees incurred
by such prevailing party.
          (i) Survival. Sections 1 and 4 through 11 of this Agreement shall
survive the termination of this Agreement.
          (j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICT OF LAWS OF NEVADA OR ANY OTHER JURISDICTION, AND, WHERE
APPLICABLE, THE LAWS OF THE UNITED STATES.
          (k) Amendments. This Agreement may not be amended or modified at any
time except by a written instrument approved by the Board and executed by the
Company and Raymond.
          (l) Raymond Acknowledgement. Raymond acknowledges that Raymond has
read and understands this Agreement, is fully aware of its legal effect, has not
acted in reliance upon any representatives or promises made by the Company other
than those contained in writing herein, and has entered into this Agreement
freely based on Raymond’s own judgment.
          (m) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. Any counterpart of this Agreement
that has attached to it separate signature pages which together contain the
signature of all parties hereto shall for all purposes be deemed a fully
executed original. Facsimile signatures shall constitute original signatures.
[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date and year first above written.

            COMPANY:

CRUSADER ENERGY GROUP INC.
      By:   /s/ David D. Le Norman         David D. Le Norman, President       
      /s/ Robert J. Raymond       Robert J. Raymond           

SIGNATURE PAGE TO SERVICES AGREEMENT

 

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EXHIBIT A
RELEASE AND SEPARATION AGREEMENT
     THIS RELEASE AND SEPARATION AGREEMENT (the “Release Agreement”) made and
entered into effective                     , by and between Crusader Energy
Group Inc., a                      corporation (the “Company”) and Robert J.
Raymond (“Raymond”).
W I T N E S S E T H:
     WHEREAS, Raymond is not and has not been an employee of the Company; and
     WHEREAS, Raymond has provided services to the Company pursuant to the terms
of a Services Agreement signed and dated                      (the “Services
Agreement”); and
     WHEREAS, the Company has decided to terminate the retention of Raymond
without Cause (other than by reason of Raymond’s death or Disability or a
Non-Renewal by Raymond) or Raymond has decided to resign for Good Reason or
Raymond’s retention is terminated due to Non-Renewal election by the Company;
     WHEREAS, as provided in Sections 5 and 6(f) of the Services Agreement, in
exchange for a release, the parties have agreed that the Company will provide
Raymond with the benefits described in Sections 5(c)(v) and 5(c)(vi) of the
Services Agreement; and
     WHEREAS, in consideration of the mutual promises contained herein, the
parties hereto are willing to enter into this agreement upon the terms and
conditions herein set forth.
     NOW, THEREFORE, in consideration of the premises, the terms and provisions
set forth herein, the mutual benefits to be gained by the performance thereof
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
     1. Separation and Resignation from Officer Positions.
     Effective as of the close of business on
                                        ,                     , Raymond will no
longer provide his services to the Company (the “Separation Date”). At that
time, Raymond agrees to resign any and all director, officer, or other positions
he holds with the Company or any of its affiliates and/or subsidiaries.
     2. Special Compensation for Waiver and Release.
     Waiver and Release. Raymond shall have up to twenty-one (21) calendar days
to consider whether to sign and return this Release Agreement to the Company by
first class mail, by hand delivery or by scanned document sent via facsimile or
electronic mail. In consideration for Raymond’s execution of and compliance with
this agreement, including but not limited to the execution of the Waiver and
Release attached hereto as Attachment “I”, the Company shall

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Robert J. Raymond
Separation Agreement
provide Raymond benefits as set forth in Sections 5(c)(v) and 5(c)(vi) of the
Services Agreement. The value of such benefits is in excess of what Raymond is
otherwise entitled to. This consideration is provided subject to the binding
execution by Raymond (without revocation) of the Waiver and Release. No payment
shall be made or other benefit described hereunder provided until the expiration
of the seven-day revocation period described in the Waiver and Release following
Raymond’s signing of the Waiver and Release (the “Effective Waiver Date”).
     3. Restrictive Covenants. As a material inducement to the Company to enter
into this Release Agreement, Raymond agrees that the covenants set forth in
Sections 7 through 9 of the Services Agreement remain in full force and effect
in accordance with their terms.
     4. Amendment of Agreement. This Release Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto.
     5. Waiver. No term or condition of this Release Agreement shall be deemed
to have been waived, nor shall there be an estoppel against the enforcement of
any provision of this agreement, except by written instrument of the party
charged with such waiver or estoppel.
     6. Notices. All notices or communications hereunder shall be made in
accordance with Section 11 (b) of the Services Agreement.
     7. Severability. If any provision of this Release Agreement is held to be
invalid, illegal or unenforceable, in whole or part, such invalidity will not
affect any otherwise valid provision, and all other valid provisions will remain
in full force and effect.
     8. Counterparts. This Release Agreement may be executed in two or more
counterparts, each of which will be deemed an original, and all of which
together will constitute one document.
     9. Titles. The titles and headings preceding the text of the sections and
subsections of this Release Agreement have been inserted solely for convenience
of reference and do not constitute a part of this agreement or affect its
meaning, interpretation or effect.
     10. Drafting. The agreements between Raymond and Company contained herein
shall not be construed in favor of or against the other party but shall be
construed as if all parties prepared this agreement.
     11. Release Not To Be Used As Evidence. This Release Agreement shall not be
admissible as evidence in any proceeding except one in which a party to this
Release Agreement seeks to enforce this Release Agreement or alleges this
Release Agreement has been breached, or one in which a court or administrative
agency of competent jurisdiction orders Raymond or the Company to produce this
Release Agreement.
     12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA,

2

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Robert J. Raymond
Separation Agreement
UNITED STATES OF AMERICA, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
     13. Entire Agreement. The Services Agreement and the Release Agreement,
together with Attachment I hereto constitute the entire agreement of the parties
with respect to the subject matter hereof.
     14. 409A Compliance. The parties acknowledge that all payments and benefits
provided under this Release Agreement are intended to meet the requirements and
restrictions of the nonqualified deferred compensation rules contained in
Section 409A of the Internal Revenue Code of 1986, as amended (to the extent
applicable thereto).
     IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
counterparts, all of which shall constitute one agreement, effective as of the
date and year first above written.

            CRUSADER ENERGY GROUP INC.
      By:           David D. Le Norman, President             ROBERT J. RAYMOND
      By:           Robert J. Raymond             

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Attachment “I”
CRUSADER ENERGY GROUP INC.
Waiver And Release
     Crusader Energy Group Inc. has offered to pay me certain severance benefits
(the “Benefits”) under the Release and Separation Agreement, dated as of
                     (the “Release Agreement”), which Release Agreement includes
benefits to which I am not otherwise entitled. These Benefits were offered to me
in exchange for my agreement, among other things, to waive all of my claims
against and release Crusader Energy Group Inc. and its predecessors, successors
and assigns (collectively referred to as the “Company”), all of the affiliates
(including parents and subsidiaries) of the Company (collectively referred to as
the “Affiliates”) and the Company’s and Affiliates’ directors and officers,
employees and agents, insurers, employee benefit plans and the fiduciaries and
agents of said plans (collectively, with the Company and Affiliates, referred to
as the “Corporate Group”) from any and all claims, demands, actions, liabilities
and damages arising out of or relating in any way to my service to, or
termination of such service, the Company or the Affiliates; provided, however,
that this Waiver and Release shall not apply to any claim or cause of action to
enforce or interpret any provision contained in the Release Agreement that may
arise after the date this Waiver and Release is executed. I have read this
Waiver and Release and the Release Agreement. I choose to accept this offer.
     I understand that signing this Waiver and Release is an important legal
act. I acknowledge that the Company has advised me in writing to consult an
attorney before signing this Waiver and Release. I understand that, in order to
be eligible for Benefits, I must sign and return to Crusader Energy Group Inc.
this Waiver and Release before 5 p.m. on                     . I acknowledge
that I am not and have never been an employee of the Company. I also acknowledge
that I have been given sufficient time to consider whether to sign the Release
Agreement and whether to execute this Waiver and Release.
     In exchange for the payment to me of Benefits, which are in addition to any
remuneration or benefits to which I am already entitled, I, among other things,
(1) agree not to sue in any local, state and/or federal court regarding or
relating in any way to my service to, or termination of service, to the Company
or the Affiliates, and (2) knowingly and voluntarily waive all claims and
release the Corporate Group from any and all claims, demands, actions,
liabilities, and damages, whether known or unknown, arising out of or relating
in any way to my employment with or separation from the Company or the
Affiliates.1 This Waiver and Release includes, but is not limited to, claims and
causes of action under: Title VII of the Civil Rights Act of 1964, as
 

1   Although I was never an employee of the Company, nothing in this Waiver and
Release or the Release Agreement should be construed as a waiver of my rights
vested under the terms of employee benefit plans sponsored by the Company or the
Affiliates or with respect to such rights or claims as may arise after the date
this Waiver and Release is executed or to amounts owed to me pursuant to the
terms of my Services Agreement with the Company. Additionally, I am not waiving
any rights that I may have under the Family and Medical Leave Act of 1993 or the
Fair Labor Standards Act. Furthermore, although I waive all rights to recovery
of any compensation or benefits that I might be entitled to as a result of
filing charges or claims with the Equal Employment Opportunity Commission and
the National Labor Relations Board, I am not giving up any right that I may have
to file charges or claims with these governmental agencies. Finally, I am not
waiving any rights that cannot by law be released by private agreement.

1

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amended (“Title VII”); the Age Discrimination in Employment Act of 1967, as
amended, including the Older Workers Benefit Protection Act of 1990 (“ADEA”);
the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991; the
Americans with Disabilities Act of 1990 (“ADA”); the Energy Reorganization Act,
as amended, 42 U.S.C. ss 5851; the Workers Adjustment and Retraining
Notification Act of 1988; the Pregnancy Discrimination Act of 1978; the Employee
Retirement Income Security Act of 1974, as amended; the Occupational Safety and
Health Act; claims in connection with workers’ compensation or “whistle blower”
statutes; and/or contract, tort, defamation, slander, wrongful termination or
any other state or federal regulatory, statutory or common law. Further, I
expressly represent that no promise or agreement which is not expressed in the
Release Agreement has been made to me in executing this Waiver and Release, and
that I am relying on my own judgment in executing this Waiver and Release, and
that I am not relying on any statement or representation of the Company, any of
the Affiliates or any other member of the Corporate Group or any of their
agents. I agree that this Waiver and Release is valid, fair, adequate and
reasonable, is with my full knowledge and consent, was not procured through
fraud, duress or mistake and has not had the effect of misleading, misinforming
or failing to inform me.
     I acknowledge that payment of Benefits to me by the Company is not an
admission by the Company or any other member of the Corporate Group that they
engaged in any wrongful or unlawful act or that the Company or any member of the
Corporate Group violated any federal or state law or regulation.
     Should any of the provisions set forth in this Waiver and Release be
determined to be invalid by a court, agency or other tribunal of competent
jurisdiction, it is agreed that such determination shall not affect the
enforceability of other provisions of this Waiver and Release. I acknowledge
that this Waiver and Release and the Release Agreement set forth the entire
understanding and agreement between me and the Company or any other member of
the Corporate Group concerning the subject matter of this Waiver and Release and
supersede any prior or contemporaneous oral and/or written agreements or
representations, if any, between me and the Company or any other member of the
Corporate Group. I understand that for a period of 7 calendar days following the
date that I sign this Waiver and Release, I may revoke my acceptance of the
offer, provided that my written statement of revocation is received on or before
that seventh day by Crusader Energy Group Inc., in which case the Waiver and
Release will not become effective. In the event I revoke my acceptance of this
offer, the Company shall have no obligation to provide me Benefits. I understand
that failure to revoke my acceptance of the offer within 7 calendar days from
the date I sign this Waiver and Release will result in this Waiver and Release
being permanent and irrevocable.

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     I acknowledge that I have read this Waiver and Release, have had an
opportunity to ask questions and have it explained to me and that I understand
that this Waiver and Release will have the effect of knowingly and voluntarily
waiving any action I might pursue, including breach of contract, personal
injury, retaliation, discrimination on the basis of race, age, sex, national
origin, or disability and any other claims arising prior to the date of this
Waiver and Release. By execution of this document, I do not waive or release or
otherwise relinquish any legal rights I may have which are attributable to or
arise out of acts, omissions, or events of the Company or any other member of
the Corporate Group which occur after the date of the execution of this Waiver
and Release.

     
 
   
 
Robert J. Raymond
   
 
   
 
   
 
Raymond’s Signature Date
   

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