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Exhibit 10.1  


 
 

IN THE UNITED STATES DISTRICT COURT
  FOR THE NORTHERN DISTRICT OF TEXAS
  FORT WORTH DIVISION    
    



	MID-CONTINENT CASUALTY COMPANY	 	§	 	 
	 	 	§	 	 
	Plaintiff,	 	§	 	 
	 	 	§	 	 
	VS.	 	§	 	C.A. NO. 4-06cv-434-A
	 	 	§	 	 
	CANO PETROLEUM, INC., W.O. ENERGY	 	§	 	 
	OF NEVADA, INC., W.O. OPERATING	 	§	 	 
	COMPANY, LTD. AND W.O. ENERGY, INC.	 	§	 	 
	 	 	§	 	 
	Defendants.	 	§	 	 




 
 

SETTLEMENT AGREEMENT AND RELEASE    
    


        This Settlement Agreement and Release (the "Agreement") is made and entered into by MID-CONTINENT CASUALTY
COMPANY, its assigns, predecessors, or successors in interest, parent and sister companies, owners, stockholders, reinsurers, officers, directors, partners, subsidiaries,
affiliates, agents, representatives, servants, employees and attorneys, (collectively "MID-CONTINENT") and CANO
PETROLEUM, INC., its assigns, predecessors, or successors in interest, parent and sister companies, owners, stockholders, officers, directors, partners, subsidiaries,
affiliates, agents, representatives, servants and employees, W.O. ENERGY OF NEVADA, INC., its assigns, predecessors, or successors in interest, parent
and sister companies, owners, stockholders, officers, directors, partners, subsidiaries, affiliates, agents, representatives, servants and employees, W.O. OPERATING
COMPANY, LTD., its assigns, predecessors, or successors in interest, parent and sister companies, owners, stockholders, officers, directors, partners, subsidiaries,
affiliates, agents, representatives, servants, employees limited partners and general partners, WO ENERGY, INC., (incorrectly identified as W.O.
Energy, Inc. in the Caption of the above-referenced C.A. NO. 4-06cv-434-A) its assigns, predecessors, or
successors in interest, parent and sister companies, owners, stockholders, officers, directors, partners, subsidiaries, affiliates, agents, representatives, servants and employees,  LADDER ENERGY COMPANIES, INC.,
 its assigns, predecessors, or successors in interest, parent and sister companies, owners, stockholders, officers,
directors, partners, subsidiaries, affiliates, agents, representatives, servants and employees, and SQUARE ONE ENERGY, INC., its assigns,
predecessors, or successors in interest, parent and sister companies, owners, stockholders, officers, directors, partners, subsidiaries, affiliates, agents, representatives, servants and employees,
(hereinafter collectively referred to as "CANO"). 


 
 

I. RECITALS    
    


        WHEREAS, MID-CONTINENT issued a commercial general liability policy of insurance to  CANO,
Policy No. 04-GL-000594906, for the term commencing July 1, 2005 and expiring July 1, 2006 with a
general aggregate limit of $2,000,000 and a per occurrence limit of $1,000,000 (the "Primary Policy"); 


        WHEREAS,
MID-CONTINENT issued a commercial excess policy of insurance, Policy No. 04-XS-139536,
for the policy term commencing July 1, 2005 and expiring July 1, 2006 with an aggregate coverage limit of $5,000,000 (the "Excess Policy"); 







 



        WHEREAS,
beginning on or about March 12, 2006, a fire or fires (the number of fires is in dispute) began in the Texas Panhandle area allegedly destroying real property and
improvements, allegedly resulting in the loss of human life and causing bodily injuries to others, and allegedly injuring or killing livestock and wildlife (the "Wildfires"); 


        WHEREAS,
CANO was served with the petition in the lawsuit styled Cause No. 9840; The Tom L. and Anne
Burnett Trust, et al. v. Cano Petroleum, Inc. et al.; In the 100th Judicial District Court of Carson County, Texas (the "Burnett
Ranches Lawsuit") on or about March 24, 2006, and CANO tendered the Burnett
Ranches Lawsuit to MID-CONTINENT on or about March 27, 2006, and demanded defense and indemnity; 


        WHEREAS,
several other lawsuits were subsequently filed against CANO as identified below, and are hereinafter referred to as the
"Underlying Lawsuits:" 



	(a)
	Cause
No. 1922; Robert and Glenda Adcock, et al. v. Cano Petroleum, Inc. et al.; In the 31st Judicial
District Court of Roberts County, Texas;



	(b)
	Cause
No. 1920; Joseph Craig Hutchison and Judy Hutchison v. Cano Petroleum, Inc. et al.; In the 31st
Judicial District Court of Roberts County, Texas;



	(c)
	Cause
No. 1923; Chisum Family Partnership Ltd. v. Cano Petroleum, Inc. et al.; In the 31st Judicial
District Court of Roberts County, Texas;



	(d)
	Cause
No. 1928, Rebecca Lee Martinez, As Next Friend of Naomi E. Villarreal, Minor Daughter as a Legal Heir of Gerardo Villarreal, Deceased, et al., v.
Cano Petroleum, Inc., et al,; In the 31st Judicial District Court of Roberts County, Texas;



	(e)
	Cause
No. 1931, Yolanda Villareal, Individually and on Behalf of, the Estate of Gerardo Villareal v. Cano Petroleum, Inc., W.O. Energy of
Nevada, Inc., W.O. Operating Company, Ltd., W.O. Energy, Inc.; In the 233rd Judicial District Court of Gray County, Texas; and



	(f)
	Cause
No. 2006CVE000964D1; Burroughs, et. al. v. Swift Transportation Co, et. al. v. Cano
Petroleum, Inc., et al.; In the 49th Judicial District Court of Webb County, Texas, transferred to the 223rd Judicial District Court of Gray
County, Texas. 




        WHEREAS,
CANO PETROLEUM, INC., W.O. ENERGY OF NEVADA, INC., W.O.
OPERATING COMPANY, LTD. and WO ENERGY, INC. tendered the Underlying Lawsuits to  MID-CONTINENT for defense and indemnity;



        WHEREAS,
a dispute arose between MID-CONTINENT and CANO concerning the
coverage under the Primary Policy and the Excess Policy for claims and lawsuits associated with the Wildfires (the "Dispute"); 


        WHEREAS,
on June 20, 2006, MID-CONTINENT filed a declaratory judgment action against  CANO styled C.A. No. 4:06-cv-434-A; Mid-Continent Casualty Company v.
Cano Petroleum, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., and W.O. Energy, Inc.; In the United States District Court for the
Northern District of Texas, Fort Worth Division, and on October 16, 2006, Cano Petroleum, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd. and WO
Energy, Inc. filed Defendants' Answer to Plaintiff's First Amended Complaint and Request for Declaratory Judgment and Original Counterclaim (the "Litigation"). 


 
 

II. AGREEMENT    
    


        MID-CONTINENT and CANO desire to enter into this
Agreement in order to reach a full and final settlement of any and all claims and disputes between the parties, upon the terms and conditions set forth herein. 


2







 



        MID-CONTINENT and CANO for the good and valuable consideration set forth in
this Agreement, agree to release, settle and compromise any and all claims and disputes of any nature and kind whatsoever against one another as set forth in the terms and conditions of this
Agreement. 


 
 

III. PAYMENTS    
    


        Mid-Continent agrees to the consideration set forth as follows: 



	(a)
	MID-CONTINENT agrees to pay CANO PETROLEUM, INC. on behalf of all
named insureds the $1,000,000 policy limits of the Primary Policy.



	(b)
	MID-CONTINENT agrees to pay CANO PETROLEUM, INC. on behalf of all
named insureds the $5,000,000 policy limits of the Excess Policy.



	(c)
	MID-CONTINENT agrees to pay CANO PETROLEUM, INC. on behalf of all
named insureds $500,000 for future defense costs;



	(d)
	MID-CONTINENT agrees to pay CANO PETROLEUM, INC. on behalf of all
named insureds $144,000 in settlement of the $206,407.44 in unpaid invoices identified on the attached Schedule "A."



	(e)
	MID-CONTINENT agrees to pay directly to the vendors all reasonable and necessary litigation related expenses incurred
through December 21, 2006 that are or have been approved by David Chamberlain, and that do not appear on the attached Schedule "A."



	(f)
	MID-CONTINENT agrees to pay CANO PETROLEUM INC. on behalf of all named
insureds all reasonable and necessary attorneys fees and costs of Haynes and Boone, LLP and Sherwood and Sherwood through December 21, 2006 for work approved by David
Chamberlain at the rates previously applied by MID-CONTINENT, and that do not appear on the attached Schedule A", plus an additional $55,827
for disputed attorneys' fees during the first forty five days after March 12, 2006.



	(g)
	MID-CONTINENT agrees to pay directly to Chamberlain, McHaney all reasonable and necessary attorneys fees and costs of
Chamberlain, McHaney through December 21, 2006.



	(h)
	MID-CONTINENT agrees to be solely responsible for any amounts due to the Peterson, Farris, Pruitt and Parker law firm. 




MID-CONTINENT shall make and deliver payment of these amounts in good and payable U.S. funds to CANO PETROLEUM, INC. on behalf of all named insureds within
twenty business days of CANO's execution and delivery of this Agreement to MID-CONTINENT.


 
 

IV. GENERAL RELEASE    
    


        CANO hereby acknowledges and agrees that the Release set forth in this Agreement is a release of  MID-CONTINENT from any and all obligations it has under the Primary Policy and the Excess Policy for any and all claims or litigation
related to the Wildfires. Except as provided in this Agreement, by entering into this Agreement, CANO agrees that  MID-CONTINENT is relieved of any and all
responsibility under the Primary Policy and the Excess Policy for the Wildfires. 


3







 



        CANO further releases MID-CONTINENT from any and all obligations, claims,
liens, demands, controversies, actions or causes of action, of whatever kind and nature, known or unknown, for or relating to attorney's fees relating to the Wildfires, except as specifically stated
in paragraph III of this Agreement, including, but not limited to, any claims of Haynes and Boone for unpaid attorney's fees. CANO hereby
acknowledges and agrees that any and all obligations, claims, liens, demands, controversies, actions or causes of action, of whatever kind and nature, known or unknown, for or relating to attorney's
fees relating to the Wildfires, except as specifically stated in paragraph III of this Agreement, are hereby extinguished and/or satisfied. 


 
 

V. MUTUAL RELEASE AND MUTUAL INDEMNITY    
    


        Except as provided in this Agreement, MID-CONTINENT and  CANO mutually and fully release,
settle with, and forever discharge each other from and against any and all claims, demands, controversies, actions, or
causes of action of whatever kind or nature, whether known or unknown, whether joint or several, and whether or not within the contemplation of the parties, which the parties may have had, may now
have, or may hereinafter have or claim to have against each other arising from the Primary Policy, the Excess Policy, the Wildfires, the Burnett Ranches
Lawsuit, the Underlying Lawsuits, the Dispute and/or the Litigation. 


        CANO AGREES TO DEFEND AND INDEMNIFY MID-CONTINENT OF AND FROM ANY AND ALL ACTIONS OF ANY KIND AND NATURE WHATSOEVER, PURSUED BY ANYONE OR ANY ENTITY
RELATING TO OR ARISING FROM THE PRIMARY POLICY, THE EXCESS POLICY, THE BURNETT RANCHES LAWSUIT, THE UNDERLYING LAWSUITS, OR ANY FUTURE CLAIMS OR
LAWSUITS AGAINST CANO ATTRIBUTABLE TO THE WILDFIRES, THE DISPUTE AND/OR THE LITIGATION, EXCEPT AS SPECIFICALLY SET FORTH IN PARAGRAPH III OF THIS AGREEMENT. CANO AGREES TO DEFEND AND INDEMNIFY
MID-CONTINENT OF AND FROM ANY AND ALL ACTIONS OF ANY KIND AND NATURE WHATSOEVER PURSUED BY ANY VENDOR, EXPERT, CONSULTANT, LAWYER, LAW FIRM OR THIRD-PARTY LITIGATION SUPPORT PROVIDER OF
ANY KIND, INCLUDING HAYNES AND BOONE, LLP, FOR FEES, INVOICES OR AMOUNTS DUE OR CLAIMED TO BE DUE, NOW OR IN THE FUTURE, ARISING FROM THE PRIMARY POLICY, THE EXCESS POLICY, THE  BURNETT RANCHESLAWSUIT, THE UNDERLYING LAWSUITS, OR ANY FUTURE CLAIMS OR LAWSUITS AGAINST CANO ATTRIBUTABLE TO THE WILDFIRES, THE DISPUTE AND/OR THE
LITIGATION EXCEPT AS SPECIFICALLY SET FORTH IN PARAGRAPH III OF THIS AGREEMENT. THIS INDEMNITY IS SUBJECT TO A WARRANTY BY MID-CONTINENT THAT SCHEDULE "A" REFLECTS ALL UNPAID AMOUNTS
RELATING TO THE BURNETT RANCHES LAWSUIT AND/OR THE UNDERLYING LAWSUITS OF WHICH MID-CONTINENT IS AWARE, BASED UPON THE INFORMATION PROVIDED
TO MID-CONTINENT BY CANO AND/OR ITS LAWYERS, THAT ARE ATTRIBUTABLE TO SERVICES PERFORMED ON OR BEFORE DECEMBER 21, 2006 BY ALL VENDORS, EXPERTS, CONSULTANTS, LAWYERS, LAW FIRMS OR
THIRD-PARTY PROVIDERS OF ANY KIND, OTHER THAN HAYNES AND BOONE, LLP. THIS INDEMNITY DOES NOT APPLY TO ANY DISPUTE THAT HAS ARISEN OR MAY ARISE BETWEEN MID-CONTINENT AND ANY OF ITS
REINSURERS.


        MID-CONTINENT AGREES TO DEFEND AND INDEMNIFY CANO OF AND FROM ANY AND ALL ACTIONS OF ANY KIND AND NATURE WHATSOEVER AGAINST CANO PURSUED BY ANYONE OR
ANY ENTITY RELATING TO OR ARISING OUT OF (1) MID-CONTINENT'S FAILURE TO PAY THE AMOUNTS SPECIFIED IN PARAGRAPH III OF THIS AGREEMENT OR (2) ATTORNEY'S FEES OF ANY LAWYER OR
LAW FIRM (OTHER THAN HAYNES AND BOONE, LLP OR SHERWOOD AND SHERWOOD) THAT ARE ATTRIBUTABLE TO SERVICES PERFORMED ON OR BEFORE DECEMBER 21, 2006 RELATING TO THE BURNETT RANCHES LAWSUIT AND/OR THE
UNDERLYING LAWSUITS.


4







 


 
 

VI. RELEASE FROM HAYNES AND BOONE    
    



        Haynes and Boone, LLP releases MID-CONTINENT from any
and all obligations, claims, liens, demands, controversies, actions or causes of action, of whatever kind and nature, known or unknown, for or relating to attorney's fees relating to or arising from
the Wildfires, the Burnett Ranches Lawsuit, the Underlying Lawsuits, or any future claims or lawsuits against CANO relating to
the Wildfires, except as specifically stated in paragraph III of this Agreement, the Dispute and/or the Litigation. Haynes and Boone,
LLP hereby acknowledges and agrees that any and all obligations, claims, liens, demands, controversies, actions or causes of action, of whatever kind and nature, known or
unknown, for or relating to attorney's fees against MID-CONTINENT relating to the Wildfires, except as specifically stated in
paragraph III of this Agreement, are hereby extinguished and/or satisfied. 


 
 

VII. WARRANTY OF CAPACITY TO EXECUTE THIS AGREEMENT    
    


        MID-CONTINENT and CANO represent and warrant that no
other person or entity has any interest in the claims, demands, obligations, or rights referred to in this Agreement, and it has the sole right and exclusive authority to execute this Agreement.  CANO
has requested that MID-CONTINENT enter into this Agreement, and it understands the
implications on its right to receive defense and indemnity benefits under the Primary Policy and the Excess Policy, and it understands the implications of this Agreement.  CANO and MID-CONTINENT have had the opportunity to have counsel of their choice to review
this Agreement. CANO and MID-CONTINENT are entering into this Agreement voluntarily and
willingly. 


 
 

VIII. NO ADMISSION OF LIABILITY    
    



        It is understood and agreed that this Settlement Agreement is a compromise of disputed claims, and that payments made and consideration given in connection with
this settlement are not intended, nor are they to be construed, as an admission of liability on the part of any party. 


 
 

IX. ENTIRE AGREEMENT AND SUCCESSORS IN INTEREST    
    


        This Agreement, and the attached Schedule "A" contains the entire agreement between MID-CONTINENT and  CANO with regard to the matters set forth herein and shall be binding upon and inure to the benefit of the executors, administrators, personal
representatives, heirs, successors, and assigns of each. There are no oral agreements. 


 
 

X. REPRESENTATION OF COMPREHENSION OF DOCUMENT    
    


        In entering into this Agreement, CANO and  MID-CONTINENT represent that they have completely
read this Agreement, and that they fully understand it and voluntarily accept it.  CANO and MID-CONTINENT further represent that they have had the
opportunity to revise any
aspect of this Agreement and that they have not been coerced or induced into executing this Agreement in any way by any person. 


 
 

XI. GOVERNING LAW    
    


        This Agreement shall be enforced, governed, construed and interpreted in accordance with the laws of the State of Texas. 


5







 


 
 

XII. ADDITIONAL DOCUMENTS    
    


        All Parties agree to cooperate fully and execute, acknowledge and deliver any and all supplementary documents, and to take all additional actions which may be
necessary or appropriate to give full force and effect to the basic terms and intent of this Agreement. This includes, but is not limited to, the necessary documentation to dismiss the Litigation with
prejudice. MID-CONTINENT agrees to file the necessary paperwork to dismiss the Litigation with prejudice within ten business days after  CANO executes and
delivers the Agreement to MID-CONTINENT. CANO agrees to file the necessary
paperwork to dismiss its Counter-Claims in the Litigation with prejudice within ten business days after actual receipt of the executed Agreement by  MID-CONTINENT and full payment to CANO PETROLEUM, INC. on behalf of all named
insureds of all amounts specified herein. The parties agree to send an executed copy of the Agreement to the other's counsel via facsimile the same day as execution. The parties agree that successful
transmission of an executed copy of the Agreement by facsimile will constitute actual delivery. 


 
 

XIII. SEVERABILITY    
    



        In the event that any one or more of the provisions contained in this Settlement Agreement shall, for any reason, be held to be invalid, illegal or unenforceable,
in any respect, such invalidity, illegality or unenforceability shall not affect any of the remaining provisions hereof, and this Settlement Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. 


 
 

XIV. JOINT EFFORT TO PREPARE    
    



        This Settlement Agreement has been negotiated and prepared by the joint efforts of the attorneys of the Parties, and the Parties themselves, and shall not be
construed against any particular party. 


 
 

XV. EFFECTIVENESS    
    


        This Settlement Agreement shall become effective following execution and delivery by CANO.


 
 

XVI. CONFIDENTIALITY    
    



        The Parties hereby agree that the terms of this Agreement shall, unless otherwise required under applicable law or the rules of any applicable stock exchange,
remain confidential. This confidentiality provision also does not prohibit disclosure by the parties to their lawyers, auditors, tax advisors or other professionals as necessary to obtain professional
services or advice, or to those entities to which the parties are contractually obligated, or as required by applicable law. 


        Agreed
this            day of                        , 2007. 


6







 

f




	

 	
 	
 APPROVED:
	

 	
 	

CANO PETROLEUM, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	Chairman and Chief Executive Officer






	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§





        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of CANO PETROLEUM, INC., known to me to be the person whose name
is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 


        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 



	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007




7







 


	

 	
 	
 W.O. ENERGY OF NEVADA, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President






	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§





        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of W.O. ENERGY OF NEVADA, INC., known to me to be the
person whose name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 


        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 



	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007




8







 


	

 	
 	
 W.O. OPERATING COMPANY, LTD.,

By: WO ENERGY, INC., its general partner
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President






	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§





        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of WO ENERGY, INC. in its capacity as general partner of
W.O. OPERATING COMPANY, LTD. known to me to be the person whose name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the
purposes and consideration therein expressed. 


        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 



	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007




9







 


	

 	
 	
 WO ENERGY, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President






	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§





        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of WO ENERGY, INC., known to me to be the person whose name is
subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 


        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 



	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007




10







 


	

 	
 	
 LADDER ENERGY COMPANIES, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President






	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§





        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of LADDER ENERGY COMPANIES, INC. known to me to be the person
whose name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 


        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 



	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007




11







 


	

 	
 	
 SQUARE ONE ENERGY, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President






	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§





        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of SQUARE ONE ENERGY, INC., known to me to be the person whose
name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF
OFFICE this 9th day of February, 2007. 



	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007




12







 


	

 	
 	
 MID-CONTINENT CASUALTY COMPANY
	

 	
 	
 By:	

/s/ Raymond H. Corley

	 	 	Print Name:	Raymond H. Corley

	 	 	Title:	Vice President Claim Operations






	STATE OF OKLAHOMA	 	§
	 	 	§
	COUNTY OF TULSA	 	§





        BEFORE
ME, the undersigned authority, on this day appeared Raymond H. Corley, an authorized representative of MID-CONTINENT CASUALTY COMPANY, known to me to be the
person whose name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND
SEAL OF OFFICE this 7th day of February, 2007. 



	

 	
 	

/s/ Phyllis L. Mann
 NOTARY PUBLIC in and for the State of Oklahoma
	

 	
 	

My Commission Expires: 9-22-07




13







 


	

 	
 	
 HAYNES AND BOONE, LLP
	

 	
 	
 By:	

/s/ Erika L. Blomquist

	 	 	Print Name:	Erika L. Blomquist

	 	 	Title:	Partner






	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF DALLAS	 	§





        BEFORE
ME, the undersigned authority, on this day appeared Erika L. Blomquist, an authorized representative of HAYNES AND BOONE, LLP, known to me to be the person whose name is
subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 


        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 6th day of February, 2007. 



	

 	
 	

/s/ Emily Swift Crews
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: June 30, 2007




14








   
SCHEDULE A 



	
Vendor
 
	
 	

Invoice

No.
	
 	

Inv Date
	
 	

Dates of

Service
	
 	

Amount of Bill

	Britton, Ph.D., Carlton	 	 	 	07/27/06	 	 	 	$	6,820.00
	Britton, Ph.D., Carlton	 	 	 	08/25/06	 	 	 	$	6,297.00
	EED	 	10053	 	08/03/06	 	4/1/06-6/30/06	 	$	8,064.31
	EED	 	10292	 	09/12/06	 	8/1/06-8/31/06	 	$	94.08
	Flap-Air Helicopter Service, Inc.	 	217	 	08/02/06	 	Unknown	 	$	2,750.00
	ImageNet	 	1017622	 	05/02/06	 	Unknown	 	$	51,292.15
	ImageNet	 	1017631	 	05/02/06	 	Unknown	 	$	66.03
	ImageNet	 	1017792	 	05/12/06	 	Unknown	 	$	41.03
	ImageNet	 	1017814	 	05/12/06	 	Unknown	 	$	666.17
	ImageNet	 	1018454	 	06/28/06	 	Unknown	 	$	267.20
	ImageNet	 	1018500	 	06/30/06	 	Unknown	 	$	4,691.99
	ImageNet	 	1018571	 	07/10/06	 	Unknown	 	$	1,588.24
	Invetech	 	13472	 	08/31/06	 	07/01/06	 	$	852.47
	Invetech	 	13505	 	09/30/06	 	08/01/06	 	$	14,102.70
	Legal Network	 	866-2006	 	04/18/06	 	Unknown	 	$	332.50
	Legal Network	 	867-2006	 	04/18/06	 	Unknown	 	$	180.80
	Legal Network	 	885-2006	 	04/25/06	 	Unknown	 	$	17.95
	Legal Network	 	953-2006	 	05/30/06	 	Unknown	 	$	6,103.70
	Legal Network	 	966-2006	 	06/06/06	 	Unknown	 	$	2,041.20
	Legal Network	 	1028-2006	 	06/27/06	 	Unknown	 	$	9,050.35
	Legal Network	 	1039-2006	 	07/05/06	 	Unknown	 	$	12,643.60
	Legal Network	 	1046-2006	 	07/11/06	 	Unknown	 	$	4,813.60
	Legal Network	 	1061-2006	 	07/18/06	 	Unknown	 	$	3,556.95
	Legal Network	 	1062-2006	 	07/18/06	 	Unknown	 	$	825.78
	Legal Network	 	1074-2006	 	07/25/06	 	Unknown	 	$	142.85
	Legal Network	 	11124-2006	 	08/15/06	 	Unknown	 	$	661.85
	Legal Network	 	1143-2006	 	08/22/06	 	Unknown	 	$	1,205.15
	LeMaster Group, Ltd.	 	63546	 	05/16/06	 	 	 	$	8,087.50
	Litigation Solution Incorporated	 	65935	 	04/04/06	 	Unknown	 	$	51.31
	Litigation Solution Incorporated	 	66569	 	05/18/06	 	Unknown	 	$	489.83
	Litigation Solution Incorporated	 	66582	 	05/19/06	 	Unknown	 	$	43.30
	Litigation Solution Incorporated	 	66594	 	05/19/06	 	Unknown	 	$	291.73
	Litigation Solution Incorporated	 	66612	 	05/22/06	 	Unknown	 	$	12.99
	Litigation Solution Incorporated	 	66703	 	05/31/06	 	Unknown	 	$	2,615.32
	Litigation Solution Incorporated	 	66827	 	06/07/06	 	Unknown	 	$	2,201.75
	Litigation Solution Incorporated	 	67432	 	07/27/06	 	Unknown	 	$	504.39
	Litigation Solution Incorporated	 	67472	 	07/30/06	 	Unknown	 	$	210.01
	Litigation Solution Incorporated	 	67561	 	08/07/06	 	Unknown	 	$	87.68
	Litigation Solution Incorporated	 	67662	 	08/16/06	 	Unknown	 	$	207.03
	Litigation Solution Incorporated	 	67687	 	08/18/06	 	Unknown	 	$	105.75
	Litigation Solution Incorporated	 	67791	 	08/25/06	 	Unknown	 	$	545.31
	Litigation Solution Incorporated	 	68481	 	10/19/06	 	Unknown	 	$	167.79
	Litigation Solution Incorporated	 	68526	 	10/23/06	 	Unknown	 	$	531.77
	Litigation Solution Incorporated	 	68616	 	10/30/06	 	Unknown	 	$	431.31
	Litigation Solution Incorporated	 	68659	 	11/01/06	 	Unknown	 	$	108.25
	Litigation Solution Incorporated	 	68766	 	11/09/06	 	Unknown	 	$	267.92
	M/S Media Productions	 	13982	 	08/15/06	 	Unknown	 	$	258.00
	M/S Media Productions	 	14003	 	08/22/06	 	Unknown	 	$	108.00
	Magic Media, L.L.C.	 	1833	 	10/17/06	 	10/11/06	 	$	258.38
	Navigant Consulting, Inc.	 	126253-07-06	 	07/28/06	 	4/25/06-6/23/06	 	$	16,671.24
	Owens Forensic Engineering, Inc.	 	14315	 	08/01/06	 	7/17/06-7/27/06	 	$	9,173.33
	Raines, Lisa	 	 	 	09/27/06	 	9/7/06-9/22/06	 	$	2,037.25
	Raines, Lisa	 	 	 	09/27/06	 	9/5/06-9/22/06	 	$	5,604.75
	Raines, Lisa	 	 	 	10/16/06	 	9/25/06-10/09/06	 	$	2,530.50
	Raines, Lisa	 	 	 	10/16/06	 	9/25/06-10/13/06	 	$	511.00
	Raines, Lisa	 	 	 	10/12/06	 	Unknown	 	$	1,615.90
	Raines, Lisa	 	 	 	11/20/06	 	11/15/06-11/19/06	 	$	723.50
	Raines, Lisa	 	 	 	11/20/06	 	10/17/06-11/4/06	 	$	6,798.50
	Raines, Lisa	 	 	 	11/20/06	 	10/16/06-11/19/06	 	$	818.00
	Sir Speedy	 	63238	 	09/22/06	 	 	 	$	1,164.45
	Slick Corporation	 	 	 	04/21/06	 	 	 	$	1,600.00
	United American Reporting	 	90016	 	10/25/06	 	10/11/06	 	$	404.05
	 	 	 	 	 	 	 	 	$	206,407.44




15











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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION

SETTLEMENT AGREEMENT AND RELEASE

I. RECITALS

II. AGREEMENT

III. PAYMENTS

IV. GENERAL RELEASE

V. MUTUAL RELEASE AND MUTUAL INDEMNITY

VI. RELEASE FROM HAYNES AND BOONE

VII. WARRANTY OF CAPACITY TO EXECUTE THIS AGREEMENT

VIII. NO ADMISSION OF LIABILITY

IX. ENTIRE AGREEMENT AND SUCCESSORS IN INTEREST

X. REPRESENTATION OF COMPREHENSION OF DOCUMENT

XI. GOVERNING LAW

XII. ADDITIONAL DOCUMENTS

XIII. SEVERABILITY

XIV. JOINT EFFORT TO PREPARE

XV. EFFECTIVENESS

XVI. CONFIDENTIALITY