Doral Energy Corp.: Exhibit 10.1 - Filed by newsfilecorp.com






THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") OR ANY APPLICABLE STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR BY ANY STATE SECURITIES ADMINISTRATION OR REGULATORY
AUTHORITY.

DEBT SETTLEMENT AGREEMENT

THIS AGREEMENT is made effective as of the 24th
day of November, 2010.

	BETWEEN: 	
	 	W.S. OIL & GAS , a Texas
      limited 
	 	partnership, with an address at 2002 Bedford,
      Midland, 
	 	TX 79701 
	 	  
	 	(the "Creditor") 
	 	OF THE FIRST PART 
	 	  
	AND: 	
	 	DORAL ENERGY CORP., a Nevada
      corporation, with 
	 	a corporate office at 3300 N. “A” Street, Bldg
      2, Suite 
	 	218, Midland TX 79705 
	 	  
	 	(the “Corporation") 
	 	OF THE SECOND PART 


WHEREAS:

A. On or about August 24, 2009, the Corporation issued a
convertible promissory note, as amended, (the “Convertible Note”) to the
Creditor pursuant to which the Corporation agreed to pay the Creditor an
aggregate of $500,000 on account of principal and interest in accordance with
the terms of the Convertible Note;

B. The Corporation was not able to make the scheduled payments
to the Creditor under the terms of the Convertible Note and is in default of its
obligations under the terms of the Convertible Note;

C. As of the date of this Agreement, the Corporation has
settled $100,000 of the aggregate amounts payable to the Creditor under the
Convertible Note, leaving an aggregate of $400,000 payable to the Creditor on
account of principal and interest under the terms of the Convertible Note (the
“Indebtedness”); and

D. The Creditor and the Corporation have, on the terms and
conditions set out in this Agreement, agreed to settle the Indebtedness by the
issuance to the Creditor of shares of the Corporation’s common stock at a price
of $0.02 per share, equal to the average closing price of the Corporation’s
common stock as quoted by the OTC Bulletin Board for the 20 trading days prior
to the date of this Agreement.




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THE PARTIES HEREBY AGREE AS FOLLOWS:

1. DEFINITIONS

1.1 The following terms will have the following meanings for
all purposes of this Agreement:

	 	(a) 	
      "Agreement" means this Agreement, and all appendices,
      schedules and amendments to the Agreement.

	 	 	 
	 	(b) 	
      “Common Stock” means the common stock of the Corporation,
      par value $0.001 per share.

	 	 	 
	 	(c) 	
      "Exchange Act" means the United States Securities
      Exchange Act of 1934, as amended.

	 	 	 
	 	(d) 	
      “Indebtedness” means the total of the amounts owed by the
      Corporation to the Creditor, including all principal amounts and interest
      thereon, under the Convertible Note.

	 	 	 
	 	(e) 	
      “Offering" means the offering of the Shares by the
      Corporation.

	 	 	 
	 	(f) 	
      “Purchase Price” means the purchase price for the Shares
      as set out in Section 2.1 of this Agreement.

	 	 	 
	 	(g) 	
      "SEC" means the United States Securities and Exchange
      Commission.

	 	 	 
	 	(h) 	
      "Securities Act" means the United States Securities Act
      of 1933, as amended.

	 	 	 
	 	(i) 	
      "Shares" means those shares of Common Stock to be issued
      by the Corporation to the Creditor subject to the terms and conditions of
      this Agreement.



1.2 All dollar amounts referred to in this agreement are in
United States Dollars, unless expressly stated otherwise.

2. PURCHASE AND SALE OF SHARES

2.1 Subject to the terms and conditions of this Agreement, the
Creditor hereby subscribes for and agrees to purchase from the Corporation
20,000,000 Shares at a price equal to $0.02 per Share, or $400,000 in the
aggregate. Upon execution of this Agreement by the Creditor, the subscription by
the Creditor for the Shares set out above will be irrevocable.

2.2 Notwithstanding any other provision of this Agreement, the
Corporation’s obligation to issue Shares to the Creditor under the terms of this
Agreement is conditional upon the Offering and the sale of the Shares to the
Creditor complying with all securities laws and other applicable laws of the
jurisdiction in which the Creditor is resident. The Creditor agrees to deliver
to the Corporation all other documentation, agreements, representations and
requisite government forms required by the lawyers for the Corporation as
required to comply with all securities laws and other applicable laws of the
jurisdiction of the Creditor.

2.3 The Creditor hereby authorizes and directs the Corporation
to deliver the securities to be issued to such Creditor pursuant to this
Agreement to the Creditor’s address indicated on the first page of this
Agreement.




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3. SETTLEMENT OF INDEBTEDNESS

3.1 The Corporation and the Creditor agree to offset the full
amount of the Purchase Price against the full amount of the Indebtedness.

3.2 Forthwith upon the execution of this Agreement by the
Creditor and the Corporation, the Corporation agrees to deliver to the Creditor
a share certificate representing the Shares issuable under this Agreement.

3.3 Upon the delivery by the Corporation of the share
certificate representing the Shares issuable under this Agreement, the Creditor
agrees to remise, release and forever discharge the Corporation and its
directors, officers, servants and agents (collectively the “Releasees”) from any
and all debts, obligations, claims, demands, dues, actions and causes of action
whatsoever, at law or in equity, and whether known or unknown, suspected or
unsuspected which the Creditor has or may in the future have against the
Releasees or any of them with respect to any matter relating to the Indebtedness
and the Convertible Note.

4. RESTRICTED SHARE AGREEMENTS OF THE CREDITOR

4.1 The Creditor acknowledges that the Shares are “restricted
securities” within the meaning of the Securities Act and will be issued to the
Creditor in accordance with an exemption from the registration requirements of
the Securities Act based on the representations and warranties of the Creditor
in this Agreement.

4.2 The Creditor agrees not to reoffer, resell, transfer or
otherwise dispose of the Shares unless such reoffer, resale, transfer or
disposition is made pursuant to an effective registration statement under the
Securities Act or pursuant to an available exemption from the registration
statement requirements of the Securities Act and any applicable state securities
laws. The Creditor further agrees that the Corporation may refuse to register
any resale or transfer of the Shares not made pursuant to an effective
registration statement under the Securities Act or pursuant to an available
exemption from the registration requirements of the Securities Act and any
applicable state securities laws.

4.3 The Creditor acknowledges and agrees that all certificates
representing the Shares will be “restricted securities” under the Securities Act
and will be endorsed with the following legend in accordance with the Securities
Act or such similar legend as deemed advisable by the lawyers for the Company to
ensure compliance with the Securities Act and any applicable state securities
laws:


  
    “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE BEEN
      OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
      OF THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE
      TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE APPLICABLE PROVISIONS OF THE
      ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
      THE ACT.”

  



5. REPRESENTATIONS AND WARRANTIES OF THE CREDITOR

The Creditor, represents and warrants to the Corporation as
follows, and acknowledges that the Corporation is relying upon such
representations and warranties in entering into this Agreement:




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5.1 The Creditor is an investor in securities of companies in
the development stage and acknowledges that it is able to fend for itself, can
bear the economic risk of its investment, and has such knowledge and experience
in financial or business matters such that it is capable of evaluating the
merits and risks of the investment in the Shares. The Creditor can bear the
economic risk of this investment, and was not organized for the purpose of
acquiring the Shares.

5.2 The Creditor has had full opportunity to review the
Corporation’s periodic filings with the SEC pursuant to the Securities Act and
the Exchange Act, including the Corporation’s Annual Reports, Quarterly Reports
and Current Reports and additional information regarding the business and
financial condition of the Corporation. The Creditor believes it has received
all the information it considers necessary or appropriate for deciding whether
to purchase the Shares. The Creditor further represents that it has had an
opportunity to ask questions and receive answers from the Corporation regarding
the terms and conditions of the Offering and the business, properties, prospects
and financial condition of the Corporation. The Creditor has had full
opportunity to discuss this information with the Creditor’s legal and financial
advisers prior to execution of this Agreement.

5.3 The Creditor acknowledges that the offering of the Shares
by the Corporation has not been reviewed by the SEC or any state securities
administration or regulatory authorities and that the Shares are being issued by
the Corporation pursuant to an exemption from registration under the Securities
Act and applicable state securities laws.

5.4 The Creditors understands that the Shares it is purchasing
are characterized as "restricted securities" under the Securities Act inasmuch
as they are being acquired from the Corporation in a transaction not involving a
public offering and that under such laws and applicable regulations such
securities may be resold without registration under the Securities Act only in
certain limited circumstances. The Creditor represents that it is familiar with
SEC Rule 144, as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act.

5.5 The Shares will be acquired by the Creditor for investment
purposes, for the Creditor's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and that the
Creditor has no present intention of selling, granting any participation in, or
otherwise distributing the same. The Creditor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Shares.

5.6 The Creditor is not aware of any advertisement or general
solicitation regarding the offer or sale of the Shares or any of the
Corporation’s securities.

5.7 This Agreement has been duly authorized, validly executed
and delivered by the Creditor.

5.8 Everett Willard Gray II, the CEO and a director of the
Corporation, is the general partner of the Creditor, and the Creditor has
received all information it considers necessary or appropriate for deciding
whether to purchase the Shares.

5.9 The Creditor has satisfied itself as to the full observance
of the laws of his or her jurisdiction in connection with any invitation to
subscribe for the Shares or any use of this Agreement, including (i) the legal
requirements within his jurisdiction for the purchase of the Shares; (ii) any
foreign exchange restrictions applicable to such purchase; (iii) any
governmental or other consents that may need to be obtained; (iv) the income tax
and other tax consequences, if any, that may be relevant to an investment in the
Shares; and (v) any restrictions on transfer applicable to any disposition of
the Shares imposed by the jurisdiction in which the Creditor is resident.




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6. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

The Corporation, represents and warrants to the Creditor as
follows, and acknowledges that the Creditor is relying upon such representations
and warranties in entering into this Agreement:

6.1 The Corporation has the right and authority to enter into
this Agreement and to issue the Shares to the Creditor, both on the terms and
conditions set out herein.

6.2 The Shares, when issued in accordance with the terms and
conditions set out in this Agreement, and upon the Creditor granting the release
set out in Section 3.3, will be validly issued, fully paid and non-assessable
shares in the Common Stock of the Corporation.

7. MISCELLANEOUS

7.1 Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the Corporation and to the Creditor at their
addresses indicated on the first page of this Agreement. Notices shall be deemed
to have been given on the date of mailing, except notices of change of address,
which shall be deemed to have been given when received.

7.2 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement.

7.3 This Agreement supersedes any prior written or oral
agreements or understandings between the parties relating to the subject matter
hereof.

7.4 Notwithstanding the place where this Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of the State of Nevada.

7.5 This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors and permitted assigns.

7.6 Time shall be of the essence of this Agreement.

7.7 This Agreement is intended to be performed in accordance
with, and only to the extent permitted by, all applicable laws, ordinances,
rules and regulations. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall, for any reason and to any extent,
be held illegal, invalid or unenforceable, such provision shall be severed
herefrom and be ineffective to the extent of such illegality, invalidity and
unenforceability, and such illegality, invalidity and unenforceability shall not
affect or impair the remaining provisions hereof and the application of such
provisions to other persons or circumstances, all of which shall be enforced to
the greatest extent permitted by law.

7.8 All covenants, agreements, representations on the part of
each of the parties, notwithstanding any investigations or enquiries made by any
of the parties prior to closing or the waiver of any condition by any of the
parties, shall survive the date hereof.

7.9 This Agreement has been prepared by O’Neill Law Group PLLC
as legal counsel for the Corporation and the Creditor acknowledges and agrees
that it has been advised to seek independent legal counsel with respect to the
matters contained in this Agreement, and that the Creditor had had full
opportunity to seek and obtain the advise of such independent legal counsel.




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7.10 This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each
party and delivered to the other party, it being understood that all parties
need not sign the same counterpart

IN WITNESS WHEREOF, this Agreement is executed as of the
day and year first written above.

WS OIL & GAS LIMITED,

a Texas limited partnership,
  

by its authorized signatory:

	 	/s/ Everett W. Gray, II 	 
	 	  	 
	 	General Partner 	 
	 	  	 
	 	DORAL ENERGY CORP. 	 
	 	  	 
	 	/s/ Brad E. Heidelberg 	 
	By:		 
	 	Brad E. Heidelberg 	 
	 	Director