EXHIBIT 10.2

 
TERMINATION AND RELEASE AGREEMENT
 
This Termination and Release Agreement (“Agreement”) is made and entered into to
be effective this 16th day of December, 2011, by and between Recovery Energy,
Inc., a Nevada corporation (“Recovery”) and TRW Exploration, LLC, a Delaware
limited liability company (“Participant”).
 
RECITALS
 
A.   Recovery and Participant are parties to an Acquisition and Development
Agreement dated effective as of October 1, 2010 (the “Development
Agreement”).  Terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Development Agreement.
 
B.   Under the Development Agreement, Participant purchased 60% of Recovery’s
right, title and interest in, to and under the Leases insofar as the Leases
cover the Lands (the “Subject Interests”) but no formal assignment was made of
the Subject Interests.
 
C.   Pursuant to Section 5 of the Development Agreement, Recovery drilled two
wells (the “Carry Wells”) with respect to which Participant funded approximately
$7,070,000 and in connection therewith, the parties entered into a Joint
Operating Agreement, including various amendments and agreements related thereto
(the “JOA”).
 
D.   Pursuant to the Development Agreement, Recovery and Participant have, among
other things, agreed to an area of mutual interest (“AMI”).
 
E.   Recovery desires to purchase and Participant desires to sell all of
Participant’s right, title and interest in the Subject Interests and the Carry
Wells for consideration consisting of 1,500,000 shares (the “Shares”) of the
common stock of the Company, $0.001 par value per share (the “Common Stock”),
and Recovery and Participant further desire to resolve and settle all matters
with respect to the Carry Wells and terminate the Development Agreement,
including the AMI, and the JOA.
 
AGREEMENT
 
NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby specifically
acknowledged, Recovery and Participant agree as follows:
 
1.   Termination of Interests.  Participant hereby forfeits, waives and assigns
to Recovery all beneficial interest with respect to all right, title and
interest it purchased, earned or otherwise acquired under the Development
Agreement, including all rights to assignment of the Subject Interests and
rights to assignment related to the Carry Wells (the “Interests”).
 
 
 
1

--------------------------------------------------------------------------------

 
 
2.   Termination of Agreements.
 
(a)   Development Agreement.  Recovery and Participant hereby agree to terminate
the Development Agreement, including without limitation the AMI therein, except
for Section 14 (Confidentiality) thereof, which shall survive and remain in full
force and effect.
 
(b)   JOA.  Recovery and Participant hereby agree to terminate the JOA except
for that Agreement Concerning Relationship of the Parties for Tax Purposes
attached as Exhibit G to the JOA (“Tax Partnership”) shall remain in full force
and effect for the purposes set forth in Section 4.
 
(c)   Effect of Terminations.  After giving effect to Sections 2(a) and (b)
above, and after the date hereof, the Development Agreement and the JOA, except
as specifically set forth above, shall be of no further force and effect.  For
purposes of clarification only (and not by way of limitation), the parties
acknowledge and agree that as of and from the date hereof:
 
(i)   Participant and Recovery will have no further rights or obligations with
respect to the Carry Wells;
 
(ii)   Participant shall have no claim or interest whatsoever and of any nature
or kind to participate or share in any manner in the development of the Leases
or in any future wells drilled on the AMI Lands or to share in any manner from
the production therefrom; and
 
(iii)   Participant further agrees that, as of and from the date hereof Recovery
shall have no obligation to grant, convey or assign or otherwise provide to
Participant any interest of any kind in any of the Lands or in any wells,
drilled thereon or in lands pooled or communitized therewith.
 
3.   Issuance of Shares.  As consideration for Participant’s assignment of the
Interests, Recovery hereby agrees to issue the Shares to
Participant.  Participant acknowledges and agrees that the Shares will be
“restricted” securities as defined in Rule 144 under the Securities Act of 1933,
as amended (the “Securities Act”), and that the certificate for such Shares
shall bear a restrictive legend restricting transfer thereof.
 
4.   Intangible Drillings Costs.  The parties agree to amend the Tax Partnership
to reallocate intangible drilling costs incurred in 2011 to Recovery.
 
5.   Tax Matters.  The parties agree that the value of the Shares will be equal
to the closing price of the Common Stock on Nasdaq Stock Market on the date of
this Agreement and that the Interests transferred by Participant to Recovery
constitute Class V assets within the meaning of IRS Form 8594
 
6.   Representations of Recovery; Existence/ Authority.  Recovery is a
corporation validly organized and in good standing under the laws of the State
of Nevada.  This Agreement, and all documents to be executed in connection
herewith, have been duly authorized, executed and delivered on behalf of
Recovery and the Shares issued hereunder have been duly authorized and issued by
Recovery.
 
 
2

--------------------------------------------------------------------------------

 
 
7.   Representations of Participant.
 
(a)   Existence/ Authority.  Participant is a limited liability company validly
organized and in good standing under the laws of the State of Delaware.  This
Agreement, and all documents to be executed in connection herewith, have been
duly authorized, executed and delivered on behalf of Participant.
 
(b)   Title.  Participant represents and warrants that it has not assigned,
pledged, mortgaged or otherwise encumbered the Interests or any portion thereof
to a third party prior to the date hereof.
 
(c)   Consents.  No consent of any governmental entity or other person is
required on the part of Participant in connection with the execution, delivery
and performance by Participant of this Agreement or the assignment of the
Interests, except for governmental consents customarily obtained after a
transfer.
 
(d)   Investment Representations.  Participant understands that the Shares have
not been registered under the Securities Act in reliance on exemptions from the
registration requirements of the Securities Act applicable to issuances of
securities not involving a public offering.  Participant acknowledges and agrees
that it is acquiring the Shares for investment purposes and solely for its own
account and with no intention of or view to distribute or resell the Shares, or
any part of the Shares, in any transaction that would be in violation of the
securities laws of the United States of America or of any state, including the
Securities Act.  Participant represents to Recovery that: (a) prior to acquiring
the Shares, Participant has made an investigation of Recovery and its business
and has had access to all information with respect thereto which Participant
needed to make an informed decision to acquire the Shares and (b) Participant
possesses the experience and sophistication to adequately evaluate the merits
and risks of its investment in the Shares.  Participant is an “accredited
investor” within the meaning of Regulation D promulgated under the Securities
Act.
 
8.   Mutual Release.
 
(a)   Recovery, on behalf of itself and its former and present shareholders,
officers, agents, directors, principals and representatives, hereby fully,
finally and forever releases and discharges Participant and each of its former
and present members, officers, agents, directors, principals and representatives
of and from any and all liabilities, claims, demands and damages, whether known
or unknown, arising out of any acts or omissions occurring, or facts or
circumstances existing, on the date of this Agreement or any earlier date and
relating to or arising out of the Development Agreement or the JOA (each a
“Claim” and, collectively, the “Claims”).
 
(b)   Participant, on behalf of itself and its former and present members,
officers, agents, directors, principals and representatives, hereby fully,
finally and forever releases and discharges Recovery and each of its
shareholders, officers, agents, directors, principals and representatives of and
from any and all Claims.
 
(c)   Each of Recovery and Participant hereby covenant and agree never to
institute (or participate in) or cause to be instituted or continue prosecution
of any suit or other form of action or proceeding of any kind or nature
whatsoever against any the other party hereto by reason of or in connection with
any of the Claims released, acquitted and discharged in Section 7(a) and (b)
above.
 
 
3

--------------------------------------------------------------------------------

 
 
(d)   Each of Recovery and Participant hereby covenant and agree that it has not
sold, assigned or otherwise transferred any such Claim.
 
(e)   Each of Recovery and Participant knowingly grants the release contained
herein notwithstanding that such party may hereafter discover facts in addition
to, or different from, those to which that party now knows of believes to be
true, and without regard to the subsequent discovery of existence of such
different or additional facts, and expressly waives any and all rights that any
such party may have under any statute, procedural rule or common law principle,
in equity or otherwise, which would limit the effect of the release contained
herein to those Claims actually known or suspected to exist at the time of the
effectiveness of this Agreement.
 
(f)   Each party understands, acknowledges and agrees that the release of Claims
set forth herein may be pleaded as a full and complete defense and/or as a
cross-complaint or counterclaim against, and may be used as a basis for an
injunction against, any action, suit, or other proceeding which may be
instituted, prosecuted or attempted in breach of the provisions herein.
 
9.   Recovery Indemnity.  Upon the execution of this Agreement, Recovery
(a) agrees to assume, pay, perform and discharge all claims, costs, expenses,
liabilities and obligations (the “Obligations”) relating to the ownership and
operation of the Subject Interests and the drilling and reclamation of all wells
thereon after the effective date of this Agreement, and (b)  shall defend,
indemnify and save and hold harmless Participant and its officers, members and
agents, from and against all claims and liabilities of every kind and nature
asserted by a third party against Participant or its officers, members and
agents after the date of this Agreement which arise directly or indirectly with
regard to the Subject Interests after the effective date of the Development
Agreement.
 
10.   Further Assurances.  The parties shall from time to time execute such
additional instruments and documents, take such additional actions, and give
such further assurances as are or may be reasonable or necessary to implement
this Agreement.
 
11.   Binding Effect.  The terms of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
 
12.   Governing Law.  This Agreement shall be construed in accordance with the
laws of the State of Colorado, without regard to conflicts of laws principles,
except with respect to real property matters, which shall be governed and
construed in accordance with the laws of the State of Wyoming.
 
13.   Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original for all purposes and all of which collectively
shall be deemed one and the same instrument.
 
 
4

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the date first set forth above
 

  RECOVERY       Recovery Energy, Inc.        
By:
/s/ Roger A. Parker   Name:  Roger A. Parker   Title: Chief Executive Officer

 

  PARTICIPANT       TRW Exploration, LLC      
 
By:
/s/ John W. Galuchie, Jr.   Name: John W. Galuchie, Jr.   Title: President

 
 
5

--------------------------------------------------------------------------------

 
 
ACKNOWLEDGMENTS
 

 STATE OF COLORADO   )    ) ss.  COUNTY OF DENVER  )

 
This instrument was acknowledged before me this 16th day of December, 2011 by
Roger A. Parker, as Chief Executive Officer of Recovery Energy, Inc., a Nevada
corporation.
 
Witness my hand and official seal.
 
My commission expires:                                                  
                                                                          
 
 
/s/ Ruth Elder  
Notary Public

           

STATE OF NJ  )    ) ss. COUNTY OF SOMERSET  )

          
This instrument was acknowledged before me this 14th day of December, 2011 by
John W. Galuchie, Jr., President, of TRW Exploration, LLC, a Delaware limited
liability company.
 
Witness my hand and official seal.
 
My commission expires:  July 13, 2016
 
 
 /s/ P. Sheldon  
Notary Public

 
 
 6

--------------------------------------------------------------------------------