Debt Settlement Agreement between Baron Energy, Inc. and SJM Family L.P.

Summary

Baron Energy, Inc. and SJM Family L.P. have agreed to settle a debt originally owed by Esconde Resources LP, for which Baron Energy is now responsible. The total outstanding amount of $3,165 will be paid by Baron Energy through the issuance of 45,215 restricted common shares to SJM Family L.P. This agreement fully satisfies the debt, and is binding on both parties and their successors.

EX-10.3 4 ex10-3.txt DEBT SETTLEMENT Exhibit 10.3 Baron Energy, Inc. 392 W. Mill St. New Braunfels, TX 78130 Ph/Fax ###-###-#### February 28, 2011 SJM Family L.P. 4016 Highlands West Drive Fort Collins, CO 80526 Re: Debt Settlement On December 20, 2005, Esconde Resources LP ("Esconde") executed a promissory note (the "Note') in the amount of $5,000 payable to SJM Family L.P. ("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 $3,165. 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 $3,165. Both parties agree that the Creditor will accept 45,215 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: SJM Family L.P. Baron Energy, Inc. by HH, Inc., its General Partner Signed: Signed: /s/ Steven J. McGoffin /s/ Ronnie L. Steinocher -------------------------------- -------------------------------- Steven J. McGoffin Ronnie L. Steinocher, President Title: and CEO Date: Date: