1012-00003 · Stonefield Logistics Group · Settlement

settlement-agreement-and-mutual-release.docx DOCUMENT Litigation

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EXECUTION VERSION

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

Effective Date: August 12, 2024

This SETTLEMENT AGREEMENT AND MUTUAL RELEASE (this "Agreement") is entered into as of August 12, 2024 (the "Effective Date"), by and between:

STONEFIELD LOGISTICS GROUP INC., a corporation organized and existing under the laws of the State of Texas, with its principal office located at 2900 Petroleum Tower Boulevard, Suite 400, Midland, Texas 79701, Federal Employer Identification Number 84-3291057 (hereinafter referred to as "Stonefield" or "SLG");

and

MERIDIAN SURETY & INDEMNITY COMPANY, a stock insurance company organized and domiciled under the laws of the State of Ohio, NAIC Company Code No. 28471, with its principal office located at 600 Scioto Crossing, Suite 1200, Columbus, Ohio 43215 (hereinafter referred to as "Meridian" or "MSIC").

SLG and Meridian are each individually referred to herein as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS:

A. The Policy. Meridian issued to SLG Inland Marine Cargo Legal Liability Policy No. IML-TX-0039821-2023, effective April 1, 2023 through March 31, 2024 (the "Policy"). The Policy provides all-risk coverage for direct physical loss of or damage to cargo in SLG's care, custody, or control arising out of SLG's transportation, warehousing, or transloading operations. The Policy provides a per-occurrence limit of liability of Five Million Dollars ($5,000,000), an annual aggregate limit of liability of Ten Million Dollars ($10,000,000), and a self-insured retention ("SIR") of Two Hundred Fifty Thousand Dollars ($250,000) per occurrence. The annual premium for the Policy is One Hundred Seventy-Four Thousand Six Hundred Dollars ($174,600).

B. The Loss Event. On November 17, 2023, at approximately 2:14 a.m. Central Standard Time, a fire occurred at SLG's transload facility located at Warehouse Building C, 4501 East County Road 130, Midland, Texas 79706 (the "Midland Facility"), resulting in the destruction of customer freight stored in the Midland Facility (the "Loss"). The total value of cargo destroyed in the Loss has been determined to be Four Million Seven Hundred Eighty Thousand Dollars ($4,780,000), comprising freight belonging to Permian Wellhead Services LLC in the amount of One Million Eight Hundred Forty-Two Thousand Dollars ($1,842,000), Cantera Chemical Supply Co. in the amount of One Million One Hundred Twenty-Six Thousand Five Hundred Dollars ($1,126,500), Triton Subsurface Technologies Inc. in the amount of Nine Hundred Eighty-Seven Thousand Dollars ($987,000), and miscellaneous shippers in the aggregate amount of Eight Hundred Twenty-Four Thousand Five Hundred Dollars ($824,500), all as set forth in the sworn proof of loss prepared by Whitlock & Associates, Certified Public Accountants, P.C. and submitted to Meridian on February 1, 2024.

C. The Claim and Denial. SLG timely reported the Loss to Meridian in accordance with the notice provisions of the Policy and submitted a sworn proof of loss in support of its claim. On December 4, 2023, Meridian issued a reservation of rights letter to SLG, reserving its rights under the Policy with respect to coverage for the Loss. Thereafter, on January 22, 2024, Meridian issued a written denial of coverage for the Loss, asserting that the Loss was excluded under Exclusion 4(f) (Improper Storage) and Exclusion 4(k) (Failure to Maintain) of the Policy (the "Denial").

D. The Dispute. SLG disputes the Denial and contends that neither Exclusion 4(f) nor Exclusion 4(k) applies to the Loss. SLG has asserted claims against Meridian for breach of contract and for violations of the Texas Insurance Code, including Chapter 541 (Unfair Methods of Competition and Unfair or Deceptive Acts or Practices) and Chapter 542 (Prompt Payment of Claims), including but not limited to claims for statutory penalty interest under Texas Insurance Code Section 542.060 (collectively, the "Disputed Claims"). Meridian disputes SLG's characterization of the Denial and the Disputed Claims, and contends that the Denial was properly issued in accordance with the terms and conditions of the Policy. SLG is represented by Calderwood & Harkness LLP, 700 Louisiana Street, Suite 4500, Houston, Texas 77002. Meridian is represented by Kessler, Brandt & Howe LLP, 1401 McKinney Street, Suite 2800, Houston, Texas 77010.

E. Mediation and Negotiation. On June 20, 2024, the Parties participated in a mediation before the Honorable Margaret Colquitt (Ret.) at JAMS Houston, JAMS Case No. 1440-02917-2024, which ended in impasse. On July 1, 2024, SLG served a pre-suit statutory notice upon Meridian pursuant to Texas Insurance Code Section 541.154. Following the mediation and service of pre-suit notice, the Parties continued to negotiate in good faith through their respective counsel and now desire to resolve fully and finally all disputes, claims, and controversies between them arising from or related to the Loss, the Policy, and the Denial, upon the terms and conditions set forth herein.

F. Consideration and Intent. The Parties wish to avoid the uncertainty, expense, burden, and distraction of litigation. The Parties enter into this Agreement for good and valuable consideration, the sufficiency and receipt of which are hereby mutually acknowledged.

NOW, THEREFORE, in consideration of the foregoing Recitals (which are incorporated herein by reference and made a part of this Agreement), the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms not otherwise defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement, including in the Recitals.

1.1 "Agreement" means this Settlement Agreement and Mutual Release, including all Recitals and any exhibits attached hereto or incorporated herein by reference.

1.2 "Denial" means Meridian's written coverage denial letter dated January 22, 2024, in which Meridian denied coverage for the Loss under the Policy, asserting Exclusion 4(f) (Improper Storage) and Exclusion 4(k) (Failure to Maintain).

1.3 "Disputed Claims" means all claims, counterclaims, demands, causes of action, and rights of SLG against Meridian arising from or related to the Loss, the Policy, and the Denial, including but not limited to claims for breach of contract, breach of the duty of good faith and fair dealing, and all claims under the Texas Insurance Code, Chapters 541 and 542, including claims for statutory penalty interest, treble damages, and attorneys' fees.

1.4 "Effective Date" means August 12, 2024, the date set forth in the preamble of this Agreement.

1.5 "Loss" means the fire and resulting cargo loss that occurred at SLG's Midland Facility on November 17, 2023, as more fully described in Recital B.

1.6 "Midland Facility" means Warehouse Building C, located at 4501 East County Road 130, Midland, Texas 79706.

1.7 "Payment" means the Settlement Payment as defined in Section 2.1 of this Agreement.

1.8 "Policy" means Inland Marine Cargo Legal Liability Policy No. IML-TX-0039821-2023, issued by Meridian to SLG, effective April 1, 2023 through March 31, 2024.

1.9 "Released Parties" means, as applicable, the "Meridian Released Parties" as defined in Section 3.1 and the "SLG Released Parties" as defined in Section 3.2 of this Agreement.

1.10 "SIR" means the Two Hundred Fifty Thousand Dollar ($250,000) per-occurrence self-insured retention applicable under the Policy.

1.11 "Subrogation Claims" has the meaning set forth in Section 3.2 of this Agreement.

ARTICLE II — SETTLEMENT PAYMENT

Section 2.1 — Amount. In consideration of the releases and other covenants set forth herein, Meridian shall pay to SLG the total sum of Four Million Five Hundred Thousand Dollars ($4,500,000) (the "Settlement Payment"). The Settlement Payment is inclusive of: (a) indemnity for the Loss under the Policy, net of the Two Hundred Fifty Thousand Dollar ($250,000) SIR already satisfied by SLG; and (b) full and final resolution of all Disputed Claims, including all claims for statutory penalty interest under Texas Insurance Code Section 542.060, damages under Texas Insurance Code Section 541.060, attorneys' fees, costs of suit, and any and all other statutory or extra-contractual remedies of any kind or nature whatsoever. For the avoidance of doubt, the Settlement Payment represents a Thirty Thousand Dollar ($30,000) discount from the net claim amount of Four Million Five Hundred Thirty Thousand Dollars ($4,530,000) (calculated as the total cargo loss of $4,780,000 less the $250,000 SIR), with SLG's waiver of all claims under Chapters 541 and 542 of the Texas Insurance Code, including statutory penalty interest, treble damages, and attorneys' fees, constituting additional and independent consideration flowing from SLG to Meridian in exchange for Meridian's agreement to make the Settlement Payment on the terms set forth herein.

Section 2.2 — Method and Timing of Payment. Meridian shall pay the Settlement Payment by wire transfer of immediately available United States funds within five (5) business days following the Effective Date. Such wire transfer shall be directed to SLG's designated operating account at Pinnacle National Bank, Midland, Texas, in accordance with the following wire instructions:

Bank Name: Pinnacle National Bank

ABA Routing Number: To be provided by SLG at execution

Account Name: Stonefield Logistics Group Inc.

Account Number: To be provided by SLG at execution

Reference: Settlement — Policy No. IML-TX-0039821-2023

SLG shall provide complete wire transfer instructions to Meridian's counsel, Kessler, Brandt & Howe LLP, no later than one (1) business day following the full execution of this Agreement. Meridian shall provide SLG with written confirmation of the wire transfer upon completion thereof.

Section 2.3 — Tax Treatment. Each Party shall be solely responsible for the tax consequences, if any, of the Settlement Payment to that Party, including without limitation any federal, state, or local income tax liability arising therefrom. Neither Party makes any representation or warranty to the other Party regarding the taxability or tax characterization of the Settlement Payment or any portion thereof. No Party shall issue an Internal Revenue Service Form 1099 or any other information return with respect to the Settlement Payment unless required to do so by applicable law or regulation, and each Party agrees to cooperate with the other in good faith with respect to any tax reporting obligations that may arise in connection with the Settlement Payment.

Section 2.4 — Default in Payment. In the event that Meridian fails to make the Settlement Payment in full within the time period specified in Section 2.2, interest shall accrue on the unpaid amount at the rate of eighteen percent (18%) per annum, simple interest, from the date upon which the Settlement Payment was due until the date upon which the Settlement Payment is received by SLG in full, consistent with the statutory penalty interest rate set forth in Texas Insurance Code Section 542.060. The accrual of such interest shall be in addition to, and not in lieu of, any other remedies available to SLG for Meridian's breach of this Agreement.

ARTICLE III — RELEASES

Section 3.1 — Release by SLG. Effective upon SLG's receipt of the Settlement Payment in full, SLG, on behalf of itself and its past, present, and future affiliates, parents, subsidiaries, successors, assigns, officers, directors, members, managers, employees, agents, representatives, attorneys, insurers, and all persons and entities claiming by, through, or under SLG (including, without limitation, Irongate Capital Partners, LP, and Irongate Industrial Partners Fund IV, LP, to the extent of any claims held derivatively through or on behalf of SLG), hereby fully, finally, unconditionally, and irrevocably releases, acquits, and forever discharges Meridian and its past, present, and future affiliates, parents, subsidiaries, successors, assigns, officers, directors, members, managers, employees, agents, representatives, attorneys (including, without limitation, Kessler, Brandt & Howe LLP and its partners, associates, and staff), reinsurers, and all persons and entities claiming by, through, or under Meridian (collectively, the "Meridian Released Parties") from any and all claims, demands, actions, causes of action, suits, debts, liens, contracts, agreements, obligations, liabilities, costs, expenses, attorneys' fees, damages, judgments, orders, and losses of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or non-contingent, liquidated or unliquidated, at law or in equity, arising from, relating to, or in connection with:

(a) the Loss;

(b) the Policy, including without limitation any and all coverage disputes, interpretations, or determinations relating thereto;

(d) any and all claims under the Texas Insurance Code, including without limitation Chapters 541 and 542, and any claims for statutory penalty interest, treble damages, attorneys' fees, or other statutory remedies arising thereunder;

(e) any and all claims for breach of contract, breach of the duty of good faith and fair dealing, fraud, misrepresentation, negligence, gross negligence, or any other cause of action whatsoever, whether arising under statute, common law, or otherwise, relating to any of the matters described in subsections (a) through (d) above.

Section 3.2 — Release by Meridian / Waiver of Subrogation. Effective upon the Effective Date, Meridian, on behalf of itself and its past, present, and future affiliates, parents, subsidiaries, successors, assigns, officers, directors, members, managers, employees, agents, representatives, attorneys, and reinsurers (collectively, the "Meridian Releasing Parties"), hereby fully, finally, unconditionally, and irrevocably releases, acquits, and forever discharges SLG and its past, present, and future affiliates, parents, subsidiaries, successors, assigns, officers, directors, members, managers, employees, agents, representatives, attorneys (including, without limitation, Calderwood & Harkness LLP and its partners, associates, and staff), and all persons and entities claiming by, through, or under SLG (collectively, the "SLG Released Parties") from any and all claims, demands, actions, causes of action, and rights of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or non-contingent, liquidated or unliquidated, at law or in equity, arising from, relating to, or in connection with:

(a) the Loss;

(b) the Policy;

(c) any and all rights of subrogation, contribution, indemnification, or reimbursement arising from or related to the Loss or the Payment, whether arising by contract, by operation of law, or otherwise (collectively, "Subrogation Claims").

For the avoidance of doubt, Meridian's release of Subrogation Claims under this Section 3.2 shall extend to any and all claims or rights that Meridian or the Meridian Releasing Parties might otherwise assert against any of the SLG Released Parties arising from or in connection with the payment of the Settlement Payment, including any claim for the return, recoupment, or reimbursement of any portion of the Settlement Payment.

Section 3.3 — Waiver of Unknown Claims. Each Party expressly acknowledges and agrees that this Agreement is intended to include in its effect, without limitation, all claims and causes of action that each Party does not know of or suspect to exist in its favor at the time of executing this Agreement, and that this Agreement contemplates the extinguishment of any and all such claims and causes of action. Each Party has been advised by its legal counsel regarding the significance of this provision and has been given the opportunity to fully consider its implications. Each Party hereby expressly waives and relinquishes any and all rights and benefits conferred by any statute or principle of common law of any jurisdiction, including without limitation any rights analogous to those provided by Section 1542 of the California Civil Code, that provides that a general release does not extend to claims that the releasing party does not know of or suspect to exist in his, her, or its favor at the time of executing the release, which if known by him, her, or it would have materially affected his, her, or its settlement. Each Party understands and acknowledges the significance and consequence of this specific waiver.

Section 3.4 — Scope of Release — Carve-Outs. Notwithstanding anything to the contrary in this Article III, nothing in this Agreement shall release or be construed to release:

(a) any obligation of either Party arising under this Agreement itself, including without limitation Meridian's obligation to make the Settlement Payment and each Party's confidentiality obligations under Article VI; or

(b) any coverage for any loss or occurrence under the Policy other than the Loss. For the avoidance of doubt, coverage for any other claim arising during the April 1, 2023 through March 31, 2024 policy period that is unrelated to the November 17, 2023 fire at the Midland Facility is expressly preserved and shall not be affected, impaired, or prejudiced by this Agreement.

ARTICLE IV — REPRESENTATIONS AND WARRANTIES

Section 4.1 — Mutual Representations. Each Party represents and warrants to the other Party as of the Effective Date that:

(a) it is duly organized, validly existing, and in good standing under the laws of its state of organization, and has full corporate power and authority to enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby;

(b) the execution and delivery of this Agreement and the performance by such Party of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on the part of such Party, and no further corporate or organizational action or approval is required in connection therewith;

(c) this Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and to general principles of equity;

(d) the person executing this Agreement on behalf of such Party has the full power and authority to do so and to bind such Party to the terms and conditions hereof; and

(e) the execution, delivery, and performance of this Agreement do not and will not violate, conflict with, or constitute a default under any provision of such Party's organizational documents, any applicable law or regulation, or any agreement, instrument, order, judgment, or decree to which such Party is a party or by which such Party or its assets may be bound.

Section 4.2 — SLG Representations. SLG further represents and warrants to Meridian as of the Effective Date that:

(a) SLG has not assigned, transferred, conveyed, encumbered, or otherwise disposed of, whether voluntarily or by operation of law, any claim, demand, right, or cause of action released by SLG under this Agreement, and no other person or entity has any interest in any such claim, demand, right, or cause of action;

(b) Marcus D. Stonefield, in his capacity as Chief Executive Officer of SLG, is authorized to execute this Agreement on behalf of SLG; and

Section 4.3 — Meridian Representations. Meridian further represents and warrants to SLG as of the Effective Date that:

(a) Patricia Ng, in her capacity as Vice President of Claims of Meridian, is authorized to execute this Agreement on behalf of Meridian; and

(b) the Settlement Payment will be made from Meridian's own funds and is not conditioned upon, and will not be funded from, any reinsurance recovery or other third-party source that is conditioned upon SLG's execution of any additional documents, agreements, or instruments beyond this Agreement.

ARTICLE V — NO ADMISSION OF LIABILITY

Section 5.1 — No Admission. This Agreement is entered into solely for the purpose of compromising and settling disputed claims and avoiding the uncertainty, expense, burden, and distraction of litigation. Neither the execution of this Agreement nor the payment of the Settlement Payment constitutes, nor shall be deemed or construed as, an admission of liability, wrongdoing, fault, or coverage by either Party, or as an admission of the validity or invalidity of any claim, defense, or position asserted by either Party. Meridian specifically does not admit that coverage exists under the Policy for the Loss and does not withdraw, retract, or modify the Denial. SLG specifically does not admit the validity or applicability of Exclusion 4(f) (Improper Storage), Exclusion 4(k) (Failure to Maintain), or any other exclusion, condition, or defense asserted by Meridian under the Policy.

Section 5.2 — Inadmissibility. This Agreement and all negotiations, communications, settlement proposals, counter-proposals, mediation briefs, discussions, correspondence, and proceedings leading to the execution hereof shall be inadmissible in any judicial, arbitral, administrative, or other proceeding for any purpose, including as evidence of liability, wrongdoing, fault, or coverage, except in a proceeding to enforce the terms and conditions of this Agreement. The protections afforded by Texas Rule of Evidence 408, Federal Rule of Evidence 408, and any analogous rule or statute of any other jurisdiction are expressly invoked and preserved.

ARTICLE VI — CONFIDENTIALITY

Section 6.1 — Confidential Treatment. The terms and conditions of this Agreement, including without limitation the Settlement Payment amount, the substance of the Parties' negotiations, and the existence and content of any communications exchanged in connection with the negotiation and execution hereof, shall be kept strictly confidential by each Party and shall not be disclosed by either Party to any third party, except as follows:

(a) to the Parties' respective legal counsel, accountants, tax advisors, auditors, and insurers or reinsurers, in each case on a need-to-know basis and subject to appropriate confidentiality obligations;

(b) to SLG's private equity sponsor, Irongate Capital Partners, LP, and its affiliates, including without limitation Irongate Industrial Partners Fund IV, LP, and their respective officers, directors, members, managers, advisors, and limited partners, as reasonably necessary for portfolio management, fund reporting, investor communications, or similar purposes;

(c) to Calvert & Strauss Insurance Brokers, Inc., SLG's insurance broker of record, to the extent reasonably necessary for future insurance policy placement, renewal, or broker-of-record functions;

(d) as required by applicable law, statute, regulation, legal process, or order of a court or regulatory body of competent jurisdiction, provided that the disclosing Party shall, to the extent legally permissible and practicable, provide the other Party with prompt written notice of such requirement prior to disclosure so as to afford the other Party a reasonable opportunity to seek a protective order or other appropriate remedy;

(e) as required in connection with regulatory filings, financial reporting, tax returns, or audit obligations of either Party; and

(f) in any proceeding to enforce the terms of this Agreement.

Section 6.2 — Public Statements. Neither Party shall issue, authorize, or cause to be issued any press release, public statement, social media post, or other public communication regarding this Agreement, the Settlement Payment, or the settlement of the Disputed Claims without the prior written consent of the other Party, which consent may be withheld in such Party's sole and absolute discretion. In the event that either Party receives a request for comment from any media outlet, trade publication, industry group, or other third party regarding this Agreement, the settlement of the Disputed Claims, or any matters relating thereto, such Party shall respond only with the following statement: "The matter has been resolved to the satisfaction of both parties." No additional comment shall be made without the prior written consent of the other Party.

ARTICLE VII — MISCELLANEOUS PROVISIONS

Section 7.1 — Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Texas, without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas.

Section 7.2 — Jurisdiction and Venue. Any action, suit, or proceeding arising under, out of, or in connection with this Agreement, including any action to enforce the terms hereof or any dispute regarding the interpretation, validity, or enforceability of this Agreement, shall be subject to the exclusive jurisdiction of the state and federal courts located in Midland County, Texas. Each Party hereby irrevocably and unconditionally consents and submits to the personal jurisdiction of such courts, waives any objection to venue in such courts, and waives any claim that any such action, suit, or proceeding has been brought in an inconvenient forum.

Section 7.3 — Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, commitments, and communications, whether oral or written, between the Parties relating to the subject matter hereof. Each Party acknowledges that it has not relied upon any representation, warranty, or statement made by the other Party or any agent, representative, or attorney of the other Party that is not set forth expressly in this Agreement.

Section 7.4 — Amendments. This Agreement may not be amended, modified, supplemented, restated, or otherwise changed except by a written instrument duly executed by both Parties. No oral agreement, course of dealing, or course of performance shall operate to amend or modify this Agreement.

Section 7.5 — Waiver. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the Party against whom enforcement of such waiver is sought. No waiver of any breach or default hereunder shall constitute a continuing waiver of such provision or a waiver of any other provision or any subsequent breach or default. The failure of either Party to enforce any right or remedy under this Agreement shall not be deemed a waiver of such right or remedy.

Section 7.6 — Severability. If any provision of this Agreement, or the application thereof to any person, entity, or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and such remaining provisions shall continue in full force and effect. In the event that any provision is held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to replace such provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the economic, business, and other purposes of the invalid, illegal, or unenforceable provision.

Section 7.7 — Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by electronic transmission, including by exchange of portable document format (PDF) copies or by use of electronic signature platforms, shall be deemed effective and valid as original execution and delivery for all purposes.

Section 7.8 — Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns. Neither Party may assign, delegate, or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party, and any purported assignment, delegation, or transfer in violation of this Section 7.8 shall be null and void and of no force or effect.

Section 7.9 — Notices. All notices, requests, demands, consents, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed duly given and received: (i) when delivered personally; (ii) one (1) business day after deposit with a nationally recognized overnight courier service, with delivery charges prepaid or billed to the sender; or (iii) three (3) business days after being sent by United States certified mail, return receipt requested, postage prepaid, in each case addressed as follows:

If to SLG:

Stonefield Logistics Group Inc.

Attn: Dale Engstrom, Vice President of Risk Management

2900 Petroleum Tower Boulevard, Suite 400 Midland, Texas 79701

With a copy (which shall not constitute notice) to:

Calderwood & Harkness LLP

Attn: Howard Bellamy, Partner

700 Louisiana Street, Suite 4500 Houston, Texas 77002

If to Meridian:

Meridian Surety & Indemnity Company

Attn: Patricia Ng, Vice President of Claims

600 Scioto Crossing, Suite 1200 Columbus, Ohio 43215

With a copy (which shall not constitute notice) to:

Kessler, Brandt & Howe LLP

Attn: Victoria Kessler, Partner

1401 McKinney Street, Suite 2800 Houston, Texas 77010

Either Party may change its address for notice purposes by providing written notice to the other Party in accordance with the provisions of this Section 7.9.

Section 7.10 — Construction. This Agreement has been negotiated at arm's length by the Parties, each of which has been represented by independent legal counsel of its own choosing, and shall not be construed more strictly against either Party as the drafter or preparer of this Agreement or any particular provision hereof. The language of this Agreement shall be construed in all cases according to its fair meaning and not strictly for or against either Party. The headings and captions contained in this Agreement are for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision hereof. As used in this Agreement, the words "include," "including," and "includes" shall be deemed to be followed by the phrase "without limitation."

Section 7.11 — Further Assurances. Each Party agrees to execute, acknowledge, and deliver such additional documents, instruments, conveyances, and assurances, and to take such further actions, as may be reasonably required or requested by the other Party to carry out the purposes and intent of this Agreement and to give full effect to the transactions contemplated hereby.

Section 7.12 — Attorneys' Fees. In any action, suit, or proceeding brought to enforce any provision of this Agreement or to obtain any remedy for breach hereof, the prevailing Party shall be entitled to recover its reasonable attorneys' fees, costs, and expenses incurred in connection therewith, in addition to any other relief to which such prevailing Party may be entitled.

[Remainder of this page intentionally left blank. Signature pages follow.]

SIGNATURE PAGE TO SETTLEMENT AGREEMENT AND MUTUAL RELEASE

IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement and Mutual Release to be duly executed by their respective authorized representatives as of the date first written above.

STONEFIELD LOGISTICS GROUP INC.

By: ________

Name: Marcus D. Stonefield

Title: Chief Executive Officer

Date: August 12, 2024

MERIDIAN SURETY & INDEMNITY COMPANY

By: ________

Name: Patricia Ng

Title: Vice President, Claims

Date: August 12, 2024

ACKNOWLEDGED AND APPROVED AS TO FORM

For Stonefield Logistics Group Inc.:

CALDERWOOD & HARKNESS LLP

By: ________

Name: Howard Bellamy

Title: Partner

For Meridian Surety & Indemnity Company:

KESSLER, BRANDT & HOWE LLP

By: ________

Name: Victoria Kessler

Title: Partner

EXECUTION VERSION
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
Effective Date: August 12, 2024
This SETTLEMENT AGREEMENT AND MUTUAL RELEASE (this "Agreement") is entered into as of August 12, 2024 (the "Effective Date"), by and between:
STONEFIELD LOGISTICS GROUP INC., a corporation organized and existing under the laws of the State of Texas, with its principal office located at 2900 Petroleum Tower Boulevard, Suite 400, Midland, Texas 79701, Federal Employer Identification Number 84-3291057 (hereinafter referred to as "Stonefield" or "SLG");
and
MERIDIAN SURETY & INDEMNITY COMPANY, a stock insurance company organized and domiciled under the laws of the State of Ohio, NAIC Company Code No. 28471, with its principal office located at 600 Scioto Crossing, Suite 1200, Columbus, Ohio 43215 (hereinafter referred to as "Meridian" or "MSIC").
SLG and Meridian are each individually referred to herein as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. The Policy. Meridian issued to SLG Inland Marine Cargo Legal Liability Policy No. IML-TX-0039821-2023, effective April 1, 2023 through March 31, 2024 (the "Policy"). The Policy provides all-risk coverage for direct physical loss of or damage to cargo in SLG's care, custody, or control arising out of SLG's transportation, warehousing, or transloading operations. The Policy provides a per-occurrence limit of liability of Five Million Dollars ($5,000,000), an annual aggregate limit of liability of Ten Million Dollars ($10,000,000), and a self-insured retention ("SIR") of Two Hundred Fifty Thousand Dollars ($250,000) per occurrence. The annual premium for the Policy is One Hundred Seventy-Four Thousand Six Hundred Dollars ($174,600).
B. The Loss Event. On November 17, 2023, at approximately 2:14 a.m. Central Standard Time, a fire occurred at SLG's transload facility located at Warehouse Building C, 4501 East County Road 130, Midland, Texas 79706 (the "Midland Facility"), resulting in the destruction of customer freight stored in the Midland Facility (the "Loss"). The total value of cargo destroyed in the Loss has been determined to be Four Million Seven Hundred Eighty Thousand Dollars ($4,780,000), comprising freight belonging to Permian Wellhead Services LLC in the amount of One Million Eight Hundred Forty-Two Thousand Dollars ($1,842,000), Cantera Chemical Supply Co. in the amount of One Million One Hundred Twenty-Six Thousand Five Hundred Dollars ($1,126,500), Triton Subsurface Technologies Inc. in the amount of Nine Hundred Eighty-Seven Thousand Dollars ($987,000), and miscellaneous shippers in the aggregate amount of Eight Hundred Twenty-Four Thousand Five Hundred Dollars ($824,500), all as set forth in the sworn proof of loss prepared by Whitlock & Associates, Certified Public Accountants, P.C. and submitted to Meridian on February 1, 2024.
C. The Claim and Denial. SLG timely reported the Loss to Meridian in accordance with the notice provisions of the Policy and submitted a sworn proof of loss in support of its claim. On December 4, 2023, Meridian issued a reservation of rights letter to SLG, reserving its rights under the Policy with respect to coverage for the Loss. Thereafter, on January 22, 2024, Meridian issued a written denial of coverage for the Loss, asserting that the Loss was excluded under Exclusion 4(f) (Improper Storage) and Exclusion 4(k) (Failure to Maintain) of the Policy (the "Denial").
D. The Dispute. SLG disputes the Denial and contends that neither Exclusion 4(f) nor Exclusion 4(k) applies to the Loss. SLG has asserted claims against Meridian for breach of contract and for violations of the Texas Insurance Code, including Chapter 541 (Unfair Methods of Competition and Unfair or Deceptive Acts or Practices) and Chapter 542 (Prompt Payment of Claims), including but not limited to claims for statutory penalty interest under Texas Insurance Code Section 542.060 (collectively, the "Disputed Claims"). Meridian disputes SLG's characterization of the Denial and the Disputed Claims, and contends that the Denial was properly issued in accordance with the terms and conditions of the Policy. SLG is represented by Calderwood & Harkness LLP, 700 Louisiana Street, Suite 4500, Houston, Texas 77002. Meridian is represented by Kessler, Brandt & Howe LLP, 1401 McKinney Street, Suite 2800, Houston, Texas 77010.
E. Mediation and Negotiation. On June 20, 2024, the Parties participated in a mediation before the Honorable Margaret Colquitt (Ret.) at JAMS Houston, JAMS Case No. 1440-02917-2024, which ended in impasse. On July 1, 2024, SLG served a pre-suit statutory notice upon Meridian pursuant to Texas Insurance Code Section 541.154. Following the mediation and service of pre-suit notice, the Parties continued to negotiate in good faith through their respective counsel and now desire to resolve fully and finally all disputes, claims, and controversies between them arising from or related to the Loss, the Policy, and the Denial, upon the terms and conditions set forth herein.
F. Consideration and Intent. The Parties wish to avoid the uncertainty, expense, burden, and distraction of litigation. The Parties enter into this Agreement for good and valuable consideration, the sufficiency and receipt of which are hereby mutually acknowledged.
NOW, THEREFORE, in consideration of the foregoing Recitals (which are incorporated herein by reference and made a part of this Agreement), the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms not otherwise defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement, including in the Recitals.
1.1 "Agreement" means this Settlement Agreement and Mutual Release, including all Recitals and any exhibits attached hereto or incorporated herein by reference.
1.2 "Denial" means Meridian's written coverage denial letter dated January 22, 2024, in which Meridian denied coverage for the Loss under the Policy, asserting Exclusion 4(f) (Improper Storage) and Exclusion 4(k) (Failure to Maintain).
1.3 "Disputed Claims" means all claims, counterclaims, demands, causes of action, and rights of SLG against Meridian arising from or related to the Loss, the Policy, and the Denial, including but not limited to claims for breach of contract, breach of the duty of good faith and fair dealing, and all claims under the Texas Insurance Code, Chapters 541 and 542, including claims for statutory penalty interest, treble damages, and attorneys' fees.
1.4 "Effective Date" means August 12, 2024, the date set forth in the preamble of this Agreement.
1.5 "Loss" means the fire and resulting cargo loss that occurred at SLG's Midland Facility on November 17, 2023, as more fully described in Recital B.
1.6 "Midland Facility" means Warehouse Building C, located at 4501 East County Road 130, Midland, Texas 79706.
1.7 "Payment" means the Settlement Payment as defined in Section 2.1 of this Agreement.
1.8 "Policy" means Inland Marine Cargo Legal Liability Policy No. IML-TX-0039821-2023, issued by Meridian to SLG, effective April 1, 2023 through March 31, 2024.
1.9 "Released Parties" means, as applicable, the "Meridian Released Parties" as defined in Section 3.1 and the "SLG Released Parties" as defined in Section 3.2 of this Agreement.
1.10 "SIR" means the Two Hundred Fifty Thousand Dollar ($250,000) per-occurrence self-insured retention applicable under the Policy.
1.11 "Subrogation Claims" has the meaning set forth in Section 3.2 of this Agreement.
ARTICLE II — SETTLEMENT PAYMENT
Section 2.1 — Amount. In consideration of the releases and other covenants set forth herein, Meridian shall pay to SLG the total sum of Four Million Five Hundred Thousand Dollars ($4,500,000) (the "Settlement Payment"). The Settlement Payment is inclusive of: (a) indemnity for the Loss under the Policy, net of the Two Hundred Fifty Thousand Dollar ($250,000) SIR already satisfied by SLG; and (b) full and final resolution of all Disputed Claims, including all claims for statutory penalty interest under Texas Insurance Code Section 542.060, damages under Texas Insurance Code Section 541.060, attorneys' fees, costs of suit, and any and all other statutory or extra-contractual remedies of any kind or nature whatsoever. For the avoidance of doubt, the Settlement Payment represents a Thirty Thousand Dollar ($30,000) discount from the net claim amount of Four Million Five Hundred Thirty Thousand Dollars ($4,530,000) (calculated as the total cargo loss of $4,780,000 less the $250,000 SIR), with SLG's waiver of all claims under Chapters 541 and 542 of the Texas Insurance Code, including statutory penalty interest, treble damages, and attorneys' fees, constituting additional and independent consideration flowing from SLG to Meridian in exchange for Meridian's agreement to make the Settlement Payment on the terms set forth herein.
Section 2.2 — Method and Timing of Payment. Meridian shall pay the Settlement Payment by wire transfer of immediately available United States funds within five (5) business days following the Effective Date. Such wire transfer shall be directed to SLG's designated operating account at Pinnacle National Bank, Midland, Texas, in accordance with the following wire instructions:
Bank Name: Pinnacle National Bank
ABA Routing Number: To be provided by SLG at execution
Account Name: Stonefield Logistics Group Inc.
Account Number: To be provided by SLG at execution
Reference: Settlement — Policy No. IML-TX-0039821-2023
SLG shall provide complete wire transfer instructions to Meridian's counsel, Kessler, Brandt & Howe LLP, no later than one (1) business day following the full execution of this Agreement. Meridian shall provide SLG with written confirmation of the wire transfer upon completion thereof.
Section 2.3 — Tax Treatment. Each Party shall be solely responsible for the tax consequences, if any, of the Settlement Payment to that Party, including without limitation any federal, state, or local income tax liability arising therefrom. Neither Party makes any representation or warranty to the other Party regarding the taxability or tax characterization of the Settlement Payment or any portion thereof. No Party shall issue an Internal Revenue Service Form 1099 or any other information return with respect to the Settlement Payment unless required to do so by applicable law or regulation, and each Party agrees to cooperate with the other in good faith with respect to any tax reporting obligations that may arise in connection with the Settlement Payment.
Section 2.4 — Default in Payment. In the event that Meridian fails to make the Settlement Payment in full within the time period specified in Section 2.2, interest shall accrue on the unpaid amount at the rate of eighteen percent (18%) per annum, simple interest, from the date upon which the Settlement Payment was due until the date upon which the Settlement Payment is received by SLG in full, consistent with the statutory penalty interest rate set forth in Texas Insurance Code Section 542.060. The accrual of such interest shall be in addition to, and not in lieu of, any other remedies available to SLG for Meridian's breach of this Agreement.
ARTICLE III — RELEASES
Section 3.1 — Release by SLG. Effective upon SLG's receipt of the Settlement Payment in full, SLG, on behalf of itself and its past, present, and future affiliates, parents, subsidiaries, successors, assigns, officers, directors, members, managers, employees, agents, representatives, attorneys, insurers, and all persons and entities claiming by, through, or under SLG (including, without limitation, Irongate Capital Partners, LP, and Irongate Industrial Partners Fund IV, LP, to the extent of any claims held derivatively through or on behalf of SLG), hereby fully, finally, unconditionally, and irrevocably releases, acquits, and forever discharges Meridian and its past, present, and future affiliates, parents, subsidiaries, successors, assigns, officers, directors, members, managers, employees, agents, representatives, attorneys (including, without limitation, Kessler, Brandt & Howe LLP and its partners, associates, and staff), reinsurers, and all persons and entities claiming by, through, or under Meridian (collectively, the "Meridian Released Parties") from any and all claims, demands, actions, causes of action, suits, debts, liens, contracts, agreements, obligations, liabilities, costs, expenses, attorneys' fees, damages, judgments, orders, and losses of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or non-contingent, liquidated or unliquidated, at law or in equity, arising from, relating to, or in connection with:
(a) the Loss;
(b) the Policy, including without limitation any and all coverage disputes, interpretations, or determinations relating thereto;
(c) the Denial;
(d) any and all claims under the Texas Insurance Code, including without limitation Chapters 541 and 542, and any claims for statutory penalty interest, treble damages, attorneys' fees, or other statutory remedies arising thereunder;
(e) any and all claims for breach of contract, breach of the duty of good faith and fair dealing, fraud, misrepresentation, negligence, gross negligence, or any other cause of action whatsoever, whether arising under statute, common law, or otherwise, relating to any of the matters described in subsections (a) through (d) above.
Section 3.2 — Release by Meridian / Waiver of Subrogation. Effective upon the Effective Date, Meridian, on behalf of itself and its past, present, and future affiliates, parents, subsidiaries, successors, assigns, officers, directors, members, managers, employees, agents, representatives, attorneys, and reinsurers (collectively, the "Meridian Releasing Parties"), hereby fully, finally, unconditionally, and irrevocably releases, acquits, and forever discharges SLG and its past, present, and future affiliates, parents, subsidiaries, successors, assigns, officers, directors, members, managers, employees, agents, representatives, attorneys (including, without limitation, Calderwood & Harkness LLP and its partners, associates, and staff), and all persons and entities claiming by, through, or under SLG (collectively, the "SLG Released Parties") from any and all claims, demands, actions, causes of action, and rights of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or non-contingent, liquidated or unliquidated, at law or in equity, arising from, relating to, or in connection with:
(a) the Loss;
(b) the Policy;
(c) any and all rights of subrogation, contribution, indemnification, or reimbursement arising from or related to the Loss or the Payment, whether arising by contract, by operation of law, or otherwise (collectively, "Subrogation Claims").
For the avoidance of doubt, Meridian's release of Subrogation Claims under this Section 3.2 shall extend to any and all claims or rights that Meridian or the Meridian Releasing Parties might otherwise assert against any of the SLG Released Parties arising from or in connection with the payment of the Settlement Payment, including any claim for the return, recoupment, or reimbursement of any portion of the Settlement Payment.
Section 3.3 — Waiver of Unknown Claims. Each Party expressly acknowledges and agrees that this Agreement is intended to include in its effect, without limitation, all claims and causes of action that each Party does not know of or suspect to exist in its favor at the time of executing this Agreement, and that this Agreement contemplates the extinguishment of any and all such claims and causes of action. Each Party has been advised by its legal counsel regarding the significance of this provision and has been given the opportunity to fully consider its implications. Each Party hereby expressly waives and relinquishes any and all rights and benefits conferred by any statute or principle of common law of any jurisdiction, including without limitation any rights analogous to those provided by Section 1542 of the California Civil Code, that provides that a general release does not extend to claims that the releasing party does not know of or suspect to exist in his, her, or its favor at the time of executing the release, which if known by him, her, or it would have materially affected his, her, or its settlement. Each Party understands and acknowledges the significance and consequence of this specific waiver.
Section 3.4 — Scope of Release — Carve-Outs. Notwithstanding anything to the contrary in this Article III, nothing in this Agreement shall release or be construed to release:
(a) any obligation of either Party arising under this Agreement itself, including without limitation Meridian's obligation to make the Settlement Payment and each Party's confidentiality obligations under Article VI; or
(b) any coverage for any loss or occurrence under the Policy other than the Loss. For the avoidance of doubt, coverage for any other claim arising during the April 1, 2023 through March 31, 2024 policy period that is unrelated to the November 17, 2023 fire at the Midland Facility is expressly preserved and shall not be affected, impaired, or prejudiced by this Agreement.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES
Section 4.1 — Mutual Representations. Each Party represents and warrants to the other Party as of the Effective Date that:
(a) it is duly organized, validly existing, and in good standing under the laws of its state of organization, and has full corporate power and authority to enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby;
(b) the execution and delivery of this Agreement and the performance by such Party of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on the part of such Party, and no further corporate or organizational action or approval is required in connection therewith;
(c) this Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and to general principles of equity;
(d) the person executing this Agreement on behalf of such Party has the full power and authority to do so and to bind such Party to the terms and conditions hereof; and
(e) the execution, delivery, and performance of this Agreement do not and will not violate, conflict with, or constitute a default under any provision of such Party's organizational documents, any applicable law or regulation, or any agreement, instrument, order, judgment, or decree to which such Party is a party or by which such Party or its assets may be bound.
Section 4.2 — SLG Representations. SLG further represents and warrants to Meridian as of the Effective Date that:
(a) SLG has not assigned, transferred, conveyed, encumbered, or otherwise disposed of, whether voluntarily or by operation of law, any claim, demand, right, or cause of action released by SLG under this Agreement, and no other person or entity has any interest in any such claim, demand, right, or cause of action;
(b) Marcus D. Stonefield, in his capacity as Chief Executive Officer of SLG, is authorized to execute this Agreement on behalf of SLG; and
(c) the execution and delivery of this Agreement have been duly approved by the Board of Directors of SLG.
Section 4.3 — Meridian Representations. Meridian further represents and warrants to SLG as of the Effective Date that:
(a) Patricia Ng, in her capacity as Vice President of Claims of Meridian, is authorized to execute this Agreement on behalf of Meridian; and
(b) the Settlement Payment will be made from Meridian's own funds and is not conditioned upon, and will not be funded from, any reinsurance recovery or other third-party source that is conditioned upon SLG's execution of any additional documents, agreements, or instruments beyond this Agreement.
ARTICLE V — NO ADMISSION OF LIABILITY
Section 5.1 — No Admission. This Agreement is entered into solely for the purpose of compromising and settling disputed claims and avoiding the uncertainty, expense, burden, and distraction of litigation. Neither the execution of this Agreement nor the payment of the Settlement Payment constitutes, nor shall be deemed or construed as, an admission of liability, wrongdoing, fault, or coverage by either Party, or as an admission of the validity or invalidity of any claim, defense, or position asserted by either Party. Meridian specifically does not admit that coverage exists under the Policy for the Loss and does not withdraw, retract, or modify the Denial. SLG specifically does not admit the validity or applicability of Exclusion 4(f) (Improper Storage), Exclusion 4(k) (Failure to Maintain), or any other exclusion, condition, or defense asserted by Meridian under the Policy.
Section 5.2 — Inadmissibility. This Agreement and all negotiations, communications, settlement proposals, counter-proposals, mediation briefs, discussions, correspondence, and proceedings leading to the execution hereof shall be inadmissible in any judicial, arbitral, administrative, or other proceeding for any purpose, including as evidence of liability, wrongdoing, fault, or coverage, except in a proceeding to enforce the terms and conditions of this Agreement. The protections afforded by Texas Rule of Evidence 408, Federal Rule of Evidence 408, and any analogous rule or statute of any other jurisdiction are expressly invoked and preserved.
ARTICLE VI — CONFIDENTIALITY
Section 6.1 — Confidential Treatment. The terms and conditions of this Agreement, including without limitation the Settlement Payment amount, the substance of the Parties' negotiations, and the existence and content of any communications exchanged in connection with the negotiation and execution hereof, shall be kept strictly confidential by each Party and shall not be disclosed by either Party to any third party, except as follows:
(a) to the Parties' respective legal counsel, accountants, tax advisors, auditors, and insurers or reinsurers, in each case on a need-to-know basis and subject to appropriate confidentiality obligations;
(b) to SLG's private equity sponsor, Irongate Capital Partners, LP, and its affiliates, including without limitation Irongate Industrial Partners Fund IV, LP, and their respective officers, directors, members, managers, advisors, and limited partners, as reasonably necessary for portfolio management, fund reporting, investor communications, or similar purposes;
(c) to Calvert & Strauss Insurance Brokers, Inc., SLG's insurance broker of record, to the extent reasonably necessary for future insurance policy placement, renewal, or broker-of-record functions;
(d) as required by applicable law, statute, regulation, legal process, or order of a court or regulatory body of competent jurisdiction, provided that the disclosing Party shall, to the extent legally permissible and practicable, provide the other Party with prompt written notice of such requirement prior to disclosure so as to afford the other Party a reasonable opportunity to seek a protective order or other appropriate remedy;
(e) as required in connection with regulatory filings, financial reporting, tax returns, or audit obligations of either Party; and
(f) in any proceeding to enforce the terms of this Agreement.
Section 6.2 — Public Statements. Neither Party shall issue, authorize, or cause to be issued any press release, public statement, social media post, or other public communication regarding this Agreement, the Settlement Payment, or the settlement of the Disputed Claims without the prior written consent of the other Party, which consent may be withheld in such Party's sole and absolute discretion. In the event that either Party receives a request for comment from any media outlet, trade publication, industry group, or other third party regarding this Agreement, the settlement of the Disputed Claims, or any matters relating thereto, such Party shall respond only with the following statement: "The matter has been resolved to the satisfaction of both parties." No additional comment shall be made without the prior written consent of the other Party.
ARTICLE VII — MISCELLANEOUS PROVISIONS
Section 7.1 — Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Texas, without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas.
Section 7.2 — Jurisdiction and Venue. Any action, suit, or proceeding arising under, out of, or in connection with this Agreement, including any action to enforce the terms hereof or any dispute regarding the interpretation, validity, or enforceability of this Agreement, shall be subject to the exclusive jurisdiction of the state and federal courts located in Midland County, Texas. Each Party hereby irrevocably and unconditionally consents and submits to the personal jurisdiction of such courts, waives any objection to venue in such courts, and waives any claim that any such action, suit, or proceeding has been brought in an inconvenient forum.
Section 7.3 — Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, commitments, and communications, whether oral or written, between the Parties relating to the subject matter hereof. Each Party acknowledges that it has not relied upon any representation, warranty, or statement made by the other Party or any agent, representative, or attorney of the other Party that is not set forth expressly in this Agreement.
Section 7.4 — Amendments. This Agreement may not be amended, modified, supplemented, restated, or otherwise changed except by a written instrument duly executed by both Parties. No oral agreement, course of dealing, or course of performance shall operate to amend or modify this Agreement.
Section 7.5 — Waiver. No waiver of any provision of this Agreement shall be effective unless made in writing and signed by the Party against whom enforcement of such waiver is sought. No waiver of any breach or default hereunder shall constitute a continuing waiver of such provision or a waiver of any other provision or any subsequent breach or default. The failure of either Party to enforce any right or remedy under this Agreement shall not be deemed a waiver of such right or remedy.
Section 7.6 — Severability. If any provision of this Agreement, or the application thereof to any person, entity, or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and such remaining provisions shall continue in full force and effect. In the event that any provision is held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to replace such provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the economic, business, and other purposes of the invalid, illegal, or unenforceable provision.
Section 7.7 — Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by electronic transmission, including by exchange of portable document format (PDF) copies or by use of electronic signature platforms, shall be deemed effective and valid as original execution and delivery for all purposes.
Section 7.8 — Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns. Neither Party may assign, delegate, or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party, and any purported assignment, delegation, or transfer in violation of this Section 7.8 shall be null and void and of no force or effect.
Section 7.9 — Notices. All notices, requests, demands, consents, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed duly given and received: (i) when delivered personally; (ii) one (1) business day after deposit with a nationally recognized overnight courier service, with delivery charges prepaid or billed to the sender; or (iii) three (3) business days after being sent by United States certified mail, return receipt requested, postage prepaid, in each case addressed as follows:
If to SLG:
Stonefield Logistics Group Inc.
Attn: Dale Engstrom, Vice President of Risk Management
2900 Petroleum Tower Boulevard, Suite 400 Midland, Texas 79701
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP
Attn: Howard Bellamy, Partner
700 Louisiana Street, Suite 4500 Houston, Texas 77002
If to Meridian:
Meridian Surety & Indemnity Company
Attn: Patricia Ng, Vice President of Claims
600 Scioto Crossing, Suite 1200 Columbus, Ohio 43215
With a copy (which shall not constitute notice) to:
Kessler, Brandt & Howe LLP
Attn: Victoria Kessler, Partner
1401 McKinney Street, Suite 2800 Houston, Texas 77010
Either Party may change its address for notice purposes by providing written notice to the other Party in accordance with the provisions of this Section 7.9.
Section 7.10 — Construction. This Agreement has been negotiated at arm's length by the Parties, each of which has been represented by independent legal counsel of its own choosing, and shall not be construed more strictly against either Party as the drafter or preparer of this Agreement or any particular provision hereof. The language of this Agreement shall be construed in all cases according to its fair meaning and not strictly for or against either Party. The headings and captions contained in this Agreement are for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision hereof. As used in this Agreement, the words "include," "including," and "includes" shall be deemed to be followed by the phrase "without limitation."
Section 7.11 — Further Assurances. Each Party agrees to execute, acknowledge, and deliver such additional documents, instruments, conveyances, and assurances, and to take such further actions, as may be reasonably required or requested by the other Party to carry out the purposes and intent of this Agreement and to give full effect to the transactions contemplated hereby.
Section 7.12 — Attorneys' Fees. In any action, suit, or proceeding brought to enforce any provision of this Agreement or to obtain any remedy for breach hereof, the prevailing Party shall be entitled to recover its reasonable attorneys' fees, costs, and expenses incurred in connection therewith, in addition to any other relief to which such prevailing Party may be entitled.
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SIGNATURE PAGE TO SETTLEMENT AGREEMENT AND MUTUAL RELEASE
IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement and Mutual Release to be duly executed by their respective authorized representatives as of the date first written above.
STONEFIELD LOGISTICS GROUP INC.
By: ________
Name: Marcus D. Stonefield
Title: Chief Executive Officer
Date: August 12, 2024
MERIDIAN SURETY & INDEMNITY COMPANY
By: ________
Name: Patricia Ng
Title: Vice President, Claims
Date: August 12, 2024
ACKNOWLEDGED AND APPROVED AS TO FORM
For Stonefield Logistics Group Inc.:
CALDERWOOD & HARKNESS LLP
By: ________
Name: Howard Bellamy
Title: Partner
For Meridian Surety & Indemnity Company:
KESSLER, BRANDT & HOWE LLP
By: ________
Name: Victoria Kessler
Title: Partner

EXECUTION VERSION

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

RECITALS

WHEREAS:

SIGNATURE PAGE TO SETTLEMENT AGREEMENT AND MUTUAL RELEASE

STONEFIELD LOGISTICS GROUP INC.

MERIDIAN SURETY & INDEMNITY COMPANY

ACKNOWLEDGED AND APPROVED AS TO FORM

CALDERWOOD & HARKNESS LLP

KESSLER, BRANDT & HOWE LLP

Record

Parties

Dates

Amounts