Debt Settlement Agreement between Baron Energy, Inc. and Lavaca Energy LLC

Summary

Baron Energy, Inc. and Lavaca Energy LLC have agreed to settle a debt originally owed by Esconde Resources LP, for which Baron Energy is now responsible. As of February 28, 2011, the outstanding amount is $4,173. Instead of cash payment, Lavaca Energy will accept 59,615 restricted common shares of Baron Energy as full payment for the debt. This agreement is binding on both parties and their successors.

EX-10.1 2 ex10-1.txt DEBT SETTLEMENT Exhibit 10.1 Baron Energy, Inc. 392 W. Mill St. New Braunfels, TX 78130 Ph/Fax ###-###-#### February 28, 2011 Lavaca Energy LLC 712 Willow Ridge Dr. San Marcos, TX 78666 Re: Debt Settlement On December 20, 2005, Esconde Resources LP ("Esconde") executed a promissory note (the "Note') in the amount of $7,500 payable to Lavaca Energy LLC ("Creditor"). The Note was payable on April 1, 2006, with interest at the rate of 4.0% per annum. As of February 28, 2011, the remaining principal amount plus accrued interest on the Note is $4,173. Effective February 22, 2010, Baron Energy, Inc. ("Debtor") became successor in interest to Esconde. Creditor and Debtor agree to settle the debt under the following terms and conditions. The Creditor and Debtor agree that the outstanding amount owed on the debt is $4,173. Both parties agree that the Creditor will accept 59,615 restricted common shares of Debtor as payment in full of all outstanding principal and interest on the Note. This agreement shall be binding upon the Creditor, Debtor, and their successors and assignees. Sincerely, /s/ Lisa P. Hamilton -------------------------------- Lisa P. Hamilton Executive Vice President and CFO Agreed: Lavaca Energy LLC Baron Energy, Inc. Signed: Signed: /s/ Ronnie L. Steinocher /s/ Lisa P. Hamilton, Executive -------------------------------- --------------------------------- Ronnie L. Steinocher Lisa P. Hamilton, Executive Title: Vice President and CFO Date: Date: