SEPARATION AND NON-DISPARAGEMENT AGREEMENT

Exhibit 10.1

SEPARATION AND NON-DISPARAGEMENT AGREEMENT

This Separation and Non-Disparagement Agreement is entered into this 1st day of April, 2011, by and between Xxxx Xxxxxx (“Xxxxxx”) and Dune Energy, Inc. (“Company”):

Recitals:

Xxxxxx and the Company are parties to that certain Employment Agreement effective as of February 16, 2010, the Term of which concludes on April 16, 2011; and

On April 1, 2011, Xxxxxx submitted a notice of termination of his Employment Agreement and resignation as Chairman of the Board of Directors of the Company (the “Resignation”).

In connection with the Resignation, Xxxxxx and the Company agree as follows:

Covenants:

1. Company will pay Xxxxxx his salary through April 15, 2011, in addition to the cash equivalent of Xxxxxx’ six weeks unused vacation, payable at the base rate of pay Xxxxxx was earning as of the date of his resignation.

2. Xxxxxx acknowledges, agrees, and reaffirms that Xxxxxx continues to be bound by the provisions of Paragraphs 21-25 (regarding noncompetition; nondisclosure; company property; trademarks, trade names, and copyright; and injunctive relief) which remain in full force and effect following Xxxxxx’ resignation.

3. For and in consideration of the foregoing and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Company, on behalf of its officers, directors and shareholders, on the one hand, and Xxxxxx, on behalf of his spouse, heirs, personal representatives, successors and assigns, on the other, each release the other from any and all debts, suits, claims, causes of action, controversies, demands, rights, damages, losses, expenses, attorney’s fees, compensation, liabilities, and obligations whatsoever, suspected or unsuspected, known or unknown, foreseen or unforeseen, fixed or contingent, relating to Xxxxxx’ employment with and service as a director for the Company, arising prior to the date of this agreement, except for the covenants contained within this agreement and the continuing contractual obligations of Xxxxxx referenced above.

It is understood and agreed that this is a full and general release covering all unknown, undisclosed and unanticipated losses, wrongs, injuries, debts, claims or damages which may have arisen, or may arise, from any act or omission prior to the date of the complete execution of this release.

4. Xxxxxx and the Company agree that neither party shall make or cause to be made any statements, observations, or opinions, or communicate any information (whether oral or written), that disparages or is likely in any way to harm the reputation of Xxxxxx or the Company. For purposes of this provision, “Company” includes Dune Energy, Inc., the members of its Board of Directors, and its Chief Executive Officer.

				Company: DUNE ENERGY, INC.
				By:		/s/ Xxxxx X. Xxxx
						Name: Xxxxx X. Xxxx
						Title:   President & CEO
				Executive: XXXX XXXXXX
				By:		/s/ Xxxx Xxxxxx
						Xxxx Xxxxxx