JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS

 

  Re: Hudson Petroleum Ltd. Co. v. Cardinal Energy Group, Inc. and CEGX of
Texas, LLC; Cause No. 2014-038 in the 258th Judicial District Court, Shackelford
County, Texas; and           Concho Oilfield Services, LLC v. Cardinal Energy
Group, Inc., Cause No. 1:14-CV-00097-C in US District Court, Northern District
of Texas.

 

1.Concho Oilfield Services, LLC (hereinafter “Concho”), Hudson Petroleum Ltd.
Co. (hereinafter “Hudson”), Cardinal Energy Group, Inc. (hereinafter “Cardinal”)
and CEGX of Texas, LLC (hereinafter “CEGX”) (collectively the “Parties”) hereby
agree to settle all claims and controversies between them, asserted or
assertable in the cases referenced above.     2.The consideration to be given
for this settlement is as follows:

 

a.Cardinal shall pay a total of $125,000 to Concho as follows:

 

i)Cardinal will pay the sum of $75,000 to Concho within 30 days after this
agreement is executed;     ii)Cardinal will pay the sum of $25,000 to Concho
within 60 days after this agreement is executed; and     iii)Cardinal will
release all claims to the $25,000 deposit currently held by Concho.

 

b.Concho will provide a rig and necessary ancillary equipment and will use
commercially reasonable efforts to repair the Dawson-Conway 195B 5B well. Concho
will work diligently until the well is repaired, although in no event will
Concho be required to spend more than five (5) days working on said repairs.
Concho’s repair efforts shall be made at no cost to Cardinal or CEGX. Concho
will perform such work within 45 days after the execution of this agreement.    
c.In the event that Concho is unable to repair the Dawson-Conway 195B 5B well
within five (5) days, Concho agrees to pay a fee, not to exceed $25,000, to a
specialized fishing company of Cardinal’s choice.     d.In the event that
Dawson-Conway 195B 5B well remains inoperable after items “b” and “c” have been
performed, Cardinal reserves the right to instruct Concho to plug the Dawson
Conway 195B 5B well, and Concho agrees to perform such work at no cost to
Cardinal; however, in no case shall Concho be required to spend more than two
(2) additional days performing plugging work on the well.

 

JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS

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  e.Cardinal will assign to Hudson a 5% carried working interest in the Dawson
Conway properties if they become cash flow positive. The carried working
interest shall expire on the earlier of: (1) February 29, 2020; or (2) if the
Dawson Conway properties are sold to a third-party, on the date of the closing
of such sale; and        f.The terms of this settlement are strictly
confidential and shall not be disclosed by any party unless required by law.

 

3.The referenced styled and numbered causes shall be resolved by mutual agreed
orders of dismissal with prejudice with costs and attorneys’ fees taxed to party
incurring the same. The mutually agreed orders of dismissal shall be filed no
later than fifteen days after the signing of this agreement.     4.Concho and
Hudson hereby fully, finally, and forever release and discharge Cardinal and
CEGX from any and all claims, causes of action, lawsuits, liabilities, debts,
accounts, dues, reckonings, bonds, bills, covenants, contracts, controversies,
agreements, promises, variances, trespasses, extents, executions, sums of money,
damages, judgments, and demands of any nature whatsoever, in law or in equity,
both known and unknown, asserted or not asserted, foreseen or unforeseen, which
it ever had or may presently have against Cardinal and CEGX. The time period for
this release is from the beginning of time up to and including the date of this
Agreement and includes claims under any federal, state, or local statute,
regulation, ordinance, order, common law doctrine or rule, or any other legal
basis whatsoever for asserting a claim.     5.Cardinal and CEGX hereby fully,
finally, and forever release and discharge Concho and Hudson from any and all
claims, causes of action, lawsuits, liabilities, debts, accounts, dues,
reckonings, bonds, bills, covenants, contracts, controversies, agreements,
promises, variances, trespasses, extents, executions, sums of money, damages,
judgments, and demands of any nature whatsoever, in law or in equity, both known
and unknown, asserted or not asserted, foreseen or unforeseen, which it ever had
or may presently have against Concho and Hudson. The time period for this
release is from the beginning of time up to and including the date of this
Agreement and includes claims under any federal, state, or local statute,
regulation, ordinance, order, common law doctrine or rule, or any other legal
basis whatsoever for asserting a claim.     6.Each signatory hereto warrants and
represents the following:

 

  a.He or she has authority to bind the parties for whom this signatory acts;
and

 

JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS

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  b.The claims, suits, rights and/or interests which are the subject matter
hereto are owned by the patty asserting same, have not been assigned,
transferred or sold and are free of encumbrances.

 

7.If any party fails to abide by this agreement and suit is brought to enforce
the agreement, the prevailing party shall be entitled to recover reasonable
attorneys’ fees and expenses.     8.In addition to Paragraph 4 above, Cardinal
and CEGX specifically agree to forever release and hold harmless Concho and
Hudson, and Zurich American (hereinafter INSURER), Zurich Insurance Group,
Zurich North America and each of their respective agents, servants, employees,
successors, heirs, insurance carriers, attorneys and assigns, from any and all
actions or causes of action, claims or demands, which in any way arose out of
work performed by Concho and Hudson on behalf of Cardinal and/or CEGX,
including, but not limited to, any liability associated with alleged damage
caused to the Dawson Conway 195 B 5B well, and as to any and all claims asserted
or which could have been asserted by Cardinal and/or CEGX in either case above
and in particular, as set out in Defendant Cardinal Energy Group, Inc.’s First
Amended Counterclaim in Cause No. 1:14-CV-00097-C in US District Court, Northern
District of Texas. FURTHER, Cardinal and CEGX agree to indemnify and hold
harmless Concho and Hudson, their agents and INSURER, from any and all claims,
whether now known or unknown, made by third parties as to any such work
performed, or claimed to should have been performed, by Concho and Hudson on
behalf of Cardinal and/or CEGX.     9.In addition to Paragraph 5 above, Concho
and Hudson specifically agree to forever release and hold harmless Cardinal and
CEGX, and each of their respective agents, servants, employees, successors,
heirs, insurance carriers, attorneys and assigns, from any and all actions or
causes of action, claims or demands, which in any way arose out of Concho and
Hudson’s claims for non-payment of invoices for services rendered by Concho and
Hudson, and as to any and all claims asserted or which could have been asserted
by Concho and/or Hudson in either case above and in particular, as set out in
Plaintiff’s Original Petition in each of the referenced causes of action.
FURTHER, Concho and Hudson agree to indemnify and hold harmless Cardinal and
CEGX, their agents and INSURER, from any and all claims, whether now known or
unknown, made by third parties as to any claims for non-payment of invoices for
services rendered by Concho and Hudson on behalf of Cardinal and/or CEGX.    
10.This agreement is made and performable in Shackelford County, Texas. The sole
and exclusive venue and jurisdiction to enforce or adjudicate disputes
concerning this agreement shall be ONLY in Shackleford County District Court.
Suit may be filed in no other venue or jurisdiction.     11.Each signatory to
this settlement has entered into same freely and without duress after having
consulted with attorneys and professionals of his or her choice.

 

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12.The parties intend to be immediately bound by this settlement agreement. The
parties stipulate to all facts necessary for the Courts to render judgment on
this settlement agreement for which the parties waive all requirements of
pleadings and summary judgment motion procedure and stipulate to the entry of
judgments hereon. Only modifications in writing, signed by all parties and their
counsel, if any, shall be enforceable. Disputes about this agreement shall by
submitted to mediation prior to any lawsuit being filed.

 

Signed this 9 day of March 2015 by:

 

  /s/ Randy D. Hudson     Randy Hudson, on behalf of Concho Oilfield Services,
LLC and Hudson Petroleum, Ltd.

 

Signed this __ day of March 2015 by:

 

  /s/ Timothy W. Crawford     Timothy Crawford, on behalf of Cardinal Energy
Group, Inc. and CEGX of Texas, LLC

 

JOINT SETTLEMENT AGREEMENT and RELEASE OF ALL CLAIMS

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