Exhibit 10.7

 

EXECUTION VERSION

 

 

WARRANT AND PREFERRED STOCK AGREEMENT

 

 

Between

 

 

CUBIC ENERGY, INC.,

 

and

 

ANCHORAGE ILLIQUID OPPORTUNITIES OFFSHORE MASTER III, L.P.

 

ANCHORAGE ILLIQUID OPPORTUNITIES III (B), L.P.

 

AIO III AIV, L.P.

 

and

 

CORBIN OPPORTUNITY FUND, L.P.

 

O-CAP PARTNERS, L.P.

 

O-CAP OFFSHORE MASTER FUND, L.P.

 

 

Dated as of October 2, 2013

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

1.

DEFINITIONS

2

 

 

 

 

2.

ORIGINAL ISSUE OF WARRANTS

7

 

 

 

 

 

2.1

Forms of Warrant Certificates

7

 

 

 

 

 

2.2

Execution and Delivery of Warrant Certificates

8

 

 

 

 

3.

EXERCISE PRICE; EXERCISE OF WARRANTS AND EXPIRATION OF WARRANTS

8

 

 

 

 

 

3.1

Exercise Price

8

 

 

 

 

 

3.2

Exercise of Warrants

8

 

 

 

 

 

3.3

Expiration of Warrants

8

 

 

 

 

 

3.4

Method of Exercise; Payment of Exercise Price

8

 

 

 

 

 

3.5

Compliance with the Securities Act

10

 

 

 

 

 

3.6

Lock-Up

13

 

 

 

 

4.

REGISTRATION RIGHTS

13

 

 

 

 

 

4.1

Registration Rights Agreement

13

 

 

 

 

 

4.2

Rule 144 Reporting

13

 

 

 

 

5.

ADJUSTMENTS

14

 

 

 

 

 

5.1

Adjustments upon Certain Transactions

14

 

 

 

 

 

5.2

Dividends and Distributions

14

 

 

 

 

 

5.3

Tender Offers

16

 

 

 

 

 

5.4

Consolidation, Merger or Sale

17

 

 

 

 

 

5.5

Securities Issuances

17

 

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5.6

Full-Ratchet Adjustment for Lower Revaluations

18

 

 

 

 

 

5.7

Other Adjustments

19

 

 

 

 

 

5.8

Affiliate Transactions

19

 

 

 

 

 

5.9

Notice of Adjustment

19

 

 

 

 

6.

REDEMPTION UPON A CHANGE OF CONTROL

19

 

 

 

 

 

6.1

Mandatory Redemption

19

 

 

 

 

 

6.2

Public Stock Merger

20

 

 

 

 

7.

WARRANT TRANSFER BOOKS

21

 

 

 

 

8.

WARRANT HOLDERS

22

 

 

 

 

 

8.1

No Voting Rights

22

 

 

 

 

 

8.2

Right of Action

22

 

 

 

 

9.

VOTING PREFERRED STOCK

22

 

 

 

 

 

9.1

Voting Preferred Stock

22

 

 

 

 

10.

REPRESENTATIONS AND WARRANTIES

22

 

 

 

 

 

10.1

Existence

22

 

 

 

 

 

10.2

Authorization

22

 

 

 

 

 

10.3

No Conflicts

22

 

 

 

 

 

10.4

Consents

23

 

 

 

 

 

10.5

Enforceable Obligations

23

 

 

 

 

 

10.6

Capitalization

23

 

 

 

 

11.

COVENANTS

24

 

 

 

 

 

11.1

Reservation of Common Stock for Issuance on Exercise of Warrants

24

 

 

 

 

 

11.2

Notice of Dividends

24

 

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11.3

HSR Act

24

 

 

 

 

12.

MISCELLANEOUS

25

 

 

 

 

 

12.1

Payment of Taxes

25

 

 

 

 

 

12.2

Company Indemnification

25

 

 

 

 

 

12.3

Surrender of Certificates

25

 

 

 

 

 

12.4

Mutilated, Destroyed, Lost and Stolen Warrant Certificates

25

 

 

 

 

 

12.5

Removal of Legends

26

 

 

 

 

 

12.6

Notices

26

 

 

 

 

 

12.7

Applicable Law

28

 

 

 

 

 

12.8

Waiver of Jury Trial

28

 

 

 

 

 

12.9

Persons Benefiting

28

 

 

 

 

 

12.10

Counterparts

28

 

 

 

 

 

12.11

Amendments

29

 

 

 

 

 

12.12

Headings

29

 

 

 

 

 

12.13

Entire Agreement

29

 

EXHIBIT A — Form of Class A Warrant Certificate

A

EXHIBIT B — Form of Class B Warrant Certificate

B

EXHIBIT C — Form of Assignment

C

EXHIBIT D — Form of Certificate of Designations Establishing Series C Voting
Preferred Stock

D

 

 

SCHEDULE I — Allocations of Warrants and Series C Voting Preferred Stock to
Investors

I

 

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WARRANT AND PREFERRED STOCK AGREEMENT

 

WARRANT AND PREFERRED STOCK AGREEMENT, dated as of October 2, 2013 (this
“Agreement”), between Cubic Energy, Inc., a Texas corporation (the “Company”),
and Anchorage Illiquid Opportunities Offshore Master III, L.P., a Cayman Islands
exempted limited partnership, Anchorage Illiquid Opportunities III (B), L.P., a
Delaware limited partnership, AIO III AIV, L.P., a Delaware limited partnership,
Corbin Opportunity Fund, L.P., a Delaware limited partnership, O-CAP Partners,
L.P., a Delaware limited partnership and O-CAP Offshore Master Fund, L.P., a
Cayman Islands limited partnership (together with their successors and assigns,
the “Investors”).

 

WITNESSETH:

 

WHEREAS, the Company is issuing and delivering Warrant Certificates (as defined
herein) evidencing Warrants (as defined herein) to purchase up to an aggregate
of 98,751,823 shares of its Common Stock (as defined herein), subject to
adjustment, including (a) Class A Warrants (as defined herein) to purchase an
aggregate of 65,834,549 shares of its Common Stock, subject to adjustment, and
(b) Class B Warrants (as defined herein) to purchase an aggregate of 32,917,274
shares of its Common Stock, subject to adjustment, and issuing and delivering an
aggregate of 98,751.823 shares of Series C Voting Preferred Stock (as defined
herein), in connection with (i) the execution and delivery of a Note Purchase
Agreement, dated as of the date hereof (the “Note Purchase Agreement”), by and
among the Company and AIO III CE L.P., a Cayman Islands limited partnership,
Corbin Opportunity Fund, L.P., O-CAP Partners, L.P., and O-CAP Offshore Master
Fund, L.P. (the “Purchasers”), pursuant to which the Purchasers are purchasing
certain senior secured notes of the Company, (ii) the execution and delivery of
a Security Agreement, dated as of the date hereof (the “Security Agreement”), by
and between the Company and the collateral agent party thereto, (iii) the
execution and delivery of an Investment Agreement, dated as of the date hereof
(the “Investment Agreement”), by and between the Company and the Investors, (iv)
the execution and delivery of a Registration Rights Agreement, dated as of the
date hereof (the “Registration Rights Agreement”), by and between the Company
and the Investors and (v) the execution and delivery of a Voting Agreement,
dated as of the date hereof (the “Voting Agreement”), by and among the Investors
and Calvin A. Wallen, III; and

 

WHEREAS, subject to certain adjustments and limitations provided herein, the
Warrants are exercisable for shares of Common Stock;

 

NOW, THEREFORE, in consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the shares of Series C
Voting Preferred Stock and the respective rights and obligations thereunder of
the Company and the record holders of the Warrants and the shares of Series C
Voting Preferred Stock, the Company and the Investors each hereby agree as
follows:

 

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1.                                      DEFINITIONS.

 

As used in this Agreement, the following terms shall have the following
meanings:

 

Affiliate:  with respect to any Person, a Person that directly or indirectly
controls, is controlled by or is under direct or indirect common control with
such Person.  For purposes of this definition, “control” when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.  For purposes of this
Agreement, Anchorage Capital Group, L.L.C., Corbin Capital Partners Management,
LLC and O-CAP Capital Management, L.P. and any of their respective employees,
partners, officers, directors, funds or affiliates shall not be deemed
Affiliates of the Company or any of its subsidiaries for any purpose hereunder.

 

Board:  the board of directors of the Company.

 

Business Day:  any day that is not Saturday, Sunday, or a day on which banking
institutions are authorized or required to be closed in the city in which the
principal place of business of the Company is located.

 

Cash Redemption Value:  the meaning set forth in Section 6.1.

 

Certificate of Formation:  the Company’s Amended and Restated Certificate of
Formation, as amended to date and as further amended from time to time.

 

Change of Control Event:  an event or series of events by which (i) any Person
or group of Persons (other than the Investors, or any Persons who are deemed to
be a group by virtue of the Voting Agreement) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the SEC under the
Exchange Act), directly or indirectly, of thirty-five percent (35%) or more (by
voting power) of the outstanding shares of Voting Securities, (ii) all or
substantially all of the consolidated assets of the Company are sold, leased,
exchanged or transferred to any Person or group of Persons other than to one or
more subsidiaries of the Company, (iii) the Company is consolidated, merged,
amalgamated, reorganized or otherwise enters into a similar transaction in which
it is combined with another Person, unless the Persons who beneficially own the
outstanding Voting Securities of the Company immediately before consummation of
the transaction beneficially own a majority (by voting power) of the outstanding
Voting Securities of the combined or surviving entity immediately thereafter,
(iv) the majority of the seats (other than vacant seats) on the Board (or
similar governing body) ceases to be occupied by Persons who either (a) were
members of the Board on the date hereof, after giving effect to the transactions
contemplated on the date hereof, or (b) were nominated for election by the
Board, a majority of whom were directors on the date

 

2

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hereof or whose election or nomination for election was previously approved by a
majority of such directors or (v) the holders of capital stock of the Company
approve of any plan or proposal for the liquidation or dissolution of the
Company; provided that, with respect to an election by any Holder pursuant to
Section 6.1, no event or series of events shall constitute a Change of Control
Event prior to a Public Stock Merger if (x) such event or series of events is
not approved by a majority of the disinterested directors of the Company and (y)
such Holder or any of its Affiliates is the acquirer or part of the acquiring
group for purposes of clause (i) or (ii), is combined with the Company for
purposes of clause (iii), or has individually or as part of a group participated
in the solicitation of proxies or consents that caused the applicable changes in
membership of the Board for purposes of clause (iv).  For purposes of this
definition, a “group” means a group of Persons within the meaning of Section
13(d) of the Exchange Act.

 

Class A Warrants:  the Class A Warrants issued by the Company from time to time
pursuant to this Agreement.

 

Class B Warrants:  the Class B Warrants issued by the Company from time to time
pursuant to this Agreement.

 

Closing Sale Price:  as of any date of determination, the last reported per
share sales price of a share of Common Stock or the applicable security on such
date (or, if no last reported sale price is reported, the average of the bid and
ask prices or, if more than one in either case, the average of the average bid
price and the average ask price on such date) as reported on the New York Stock
Exchange, or if the Common Stock or such other security is not listed on the New
York Stock Exchange, as reported by the principal U.S. national or regional
securities exchange or quotation system (including an over-the-counter market)
on which the Common Stock or such other security is then listed or quoted;
provided, however, that if there shall be no such listing or quotation with
respect to the Common Stock or such other security or if the average daily
trading volume of shares of Common Stock or such other security on such exchange
or quotation system (including an over-the-counter market) for the twenty
consecutive trading days immediately preceding the date of determination shall
be less than 19,000,000 shares, then in either case the Closing Sale Price shall
be the price for such date as determined by an Independent Financial Expert
appointed for such purpose, using one or more valuation methods that the
Independent Financial Expert in its best professional judgment determines to be
most appropriate, assuming such Common Stock or securities are fully distributed
and are to be sold in an arm’s-length transaction and there was no compulsion on
the part of any party to such sale to buy or sell and taking into account all
relevant factors.

 

Common Stock:  the common stock, par value $0.05 per share, of the Company.

 

3

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Company:  the meaning set forth in the preamble to this Agreement and its
successors and assigns.

 

Damages: the meaning set forth in Section 12.2.

 

Effective Issuance Price:  the meaning set forth in Section 5.6.

 

Ex-date:  the meaning set forth in Section 5.2.

 

Excess Tender Amount:  the meaning set forth in Section 5.3.

 

Exchange Act:  the Securities Exchange Act of 1934, as amended.

 

Exercise Date:  the meaning set forth in Section 3.2.

 

Exercise Price:  means (i) with respect to each Class A Warrant, $0.01 per
share, and (ii) with respect to each Class B Warrant, $0.50 per share, in each
case subject to all adjustments made on or prior to the date of exercise thereof
as herein provided.

 

Expiration Date:  the meaning set forth in Section 3.3.

 

Fair Market Value:

 

(i)                                     in the case of shares or securities, the
average of the daily volume weighted average prices per share of such shares or
securities for the ten consecutive trading days immediately preceding the day as
of which Fair Market Value is being determined, as reported on the New York
Stock Exchange, or if such shares or securities are not listed on the New York
Stock Exchange, as reported by the principal U.S. national or regional
securities exchange or quotation system (including an over-the-counter market)
on which such shares or securities are then listed or quoted; provided, however,
if (x) there shall be no such listing or quotation with respect to such shares
or securities or the average daily trading volume of such shares or securities
on such exchange or quotation system (including an over-the-counter market) for
the twenty consecutive trading days immediately preceding the date of
determination shall be less than 19,000,000 shares or securities, or (y) a
transaction impacting such shares or securities makes it unjust or inequitable
to value such shares or securities in the manner provided above, then the Fair
Market Value of such shares or securities shall be the fair market value per
share or unit of such shares or securities as determined by an Independent
Financial Expert appointed for such purpose, using one or more valuation methods
that the Independent Financial Expert in its best professional judgment
determines to be most appropriate, assuming such shares or other securities are
fully distributed and are to be sold in an arm’s-length transaction and there
was no compulsion on the part of any party to such sale to buy or sell and
taking into account all relevant factors.

 

(ii)                                  in the case of cash, the amount thereof.

 

4

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(iii)                               in the case of other property, the Fair
Market Value of such property shall be determined by an Independent Financial
Expert appointed for such purpose, using one or more valuation methods that the
Independent Financial Expert in its best professional judgment determines to be
most appropriate, assuming such property is to be sold in an arm’s-length
transaction and there was no compulsion on the part of any party to such sale to
buy or sell and taking into account all relevant factors.

 

Full Physical Settlement:  the settlement method with respect to the Warrants
pursuant to which an exercising Holder shall be entitled to receive from the
Company, for each Warrant exercised, a number of shares of Common Stock equal to
the Full Physical Share Amount in exchange for payment by the Holder of the
aggregate Exercise Price applicable to such Warrant.

 

Full Physical Share Amount:  the meaning set forth in Section 3.4.

 

Fully Diluted Basis:  a basis for determining an amount of Voting Securities
that includes all such securities that would be outstanding after giving effect
to the conversion, exchange or exercise of all the Warrants and all other
outstanding securities of the Company that are convertible into or exchangeable
for Voting Securities, and the exercise of all outstanding Rights to Purchase
Voting Securities, in each case, whether or not presently convertible,
exchangeable or exercisable.

 

Holders:  from time to time, the holders of the Warrants and, unless otherwise
provided or indicated herein, the holders of the Underlying Common Stock, solely
in their capacity as such.

 

HSR Act:  the meaning set forth in Section 10.4.

 

Indemnitees: the meaning set forth in Section 12.2.

 

Independent Financial Expert:  a nationally recognized investment banking firm
mutually agreed by the Company and the Person holding the greatest number of
Warrants, which firm does not have a material financial interest or other
material economic relationship with either the Company or the Person holding the
greatest number of Warrants or their respective Affiliates.  If the Company and
the Person holding the greatest number of Warrants are unable to agree on an
Independent Financial Expert for a valuation contemplated herein, each of them
shall choose promptly a separate Independent Financial Expert and these two
Independent Financial Experts shall choose promptly a third Independent
Financial Expert to conduct such valuation.

 

Investment Agreement: the meaning set forth in the recitals.

 

Investors:  the meaning set forth in the preamble to this Agreement.

 

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Net Share Amount:  the meaning set forth in Section 3.4.

 

Net Share Settlement:  the settlement method for the Warrants, if elected in
accordance with Section 3.4, pursuant to which an exercising Holder shall be
entitled to receive from the Company, for each Warrant exercised, a number of
shares of Common Stock equal to the Net Share Amount without any payment
therefor.

 

Note Purchase Agreement: the meaning set forth in the recitals.

 

Person:  any individual, corporation, partnership, joint venture, association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

 

Premium Per Pro Forma Share:  the meaning set forth in Section 5.3.

 

Public Stock Merger:   a merger, consolidation, amalgamation, reorganization or
other transaction pursuant to which all of the outstanding shares of Common
Stock of the Company are exchanged for, converted into or constitute solely
(except to the extent of applicable appraisal rights or cash received in lieu of
fractional shares) the right to receive common stock listed on a recognized
national securities exchange, and with respect to which the Warrants will be
exercisable into such common stock.

 

Purchasers:  the meaning set forth in the preamble to this Agreement.

 

Qualifying Employee Stock:  the meaning set forth in Section 5.5.

 

Redemption Exercise Date:  the meaning set forth in Section 6.1.

 

Registration Rights Agreement: the meaning set forth in the recitals.

 

Reorganization Event:  the meaning set forth in Section 5.4.

 

Required Number:  with respect to the exercise by a Holder of a Warrant as of
any date, a number of shares of Series C Voting Preferred Stock such that, after
giving effect to such exercise of the Warrant and the redemption of such number
of shares of Series C Voting Preferred Stock, the percentage of the total
outstanding Warrants held of record by such Holder will be at least equal to the
percentage of the total outstanding shares of Series C Voting Preferred Stock
held of record by such Holder.

 

Rights to Purchase Voting Securities:  options, warrants and rights issued by
the Company (whether presently exercisable or not) to purchase Voting Securities
or securities of the Company that are convertible or exchangeable (whether
presently convertible or exchangeable or not) into or exercisable (whether
presently exercisable or

 

6

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not) for Voting Securities but, for the avoidance of doubt, not including a
shareholders rights plan.

 

Rule 144:  Rule 144 promulgated by the SEC under the Securities Act (or any
successor provision), as the same shall be amended from time to time.

 

Sale:  for purposes of Section 3.5, the meaning set forth in Section 3.5.

 

SEC:  the Securities and Exchange Commission.

 

Security Agreement: the meaning set forth in the recitals.

 

Securities Act:  the Securities Act of 1933, as amended.

 

Series B Convertible Preferred Stock:  the Series B Convertible Preferred Stock,
par value $0.01 per share, with a stated value of $1,000 per share, of the
Company.

 

Series C Voting Preferred Stock:  the Series C Voting Preferred Stock, par value
$0.01 per share, with a stated value of $0.01 per share, of the Company.

 

Settlement Date:  in respect of a Warrant that is exercised hereunder, the third
Business Day immediately following the Exercise Date for such Warrant.

 

Underlying Common Stock:  the shares of Common Stock issuable or issued upon the
exercise of the Warrants.

 

Voting Agreement: the meaning set forth in the recitals.

 

Voting Securities:  the Common Stock and any other securities of the Company of
any kind or class having power generally to vote in the election of directors.

 

Warrant Certificates:  the Warrant Certificates issued in substantially the form
attached hereto as Exhibit A, with respect to Class A Warrants, or Exhibit B,
with respect to Class B Warrants.

 

Warrants:  the warrants issued by the Company from time to time pursuant to this
Agreement.

 

Certain terms, used in Articles 4, 5 and 6, are defined in those Sections.

 

2.                                      ORIGINAL ISSUE OF WARRANTS.

 

2.1                               Forms of Warrant Certificates.  The Warrant
Certificates shall be in registered form only and substantially in the form
attached hereto as Exhibit A, with respect to Class A Warrants, or Exhibit B,
with respect to Class B Warrants, shall be

 

7

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dated the date on which signed by the Company and may have such legends and
endorsements typed, stamped, printed, lithographed or engraved thereon as
provided in Section 3.5(f) and as required by the Certificate of Formation or as
may be required to comply with any law or with any rule or regulation pursuant
thereto or with any rule or regulation of any securities exchange on which the
Warrants may be listed.

 

2.2                               Execution and Delivery of Warrant
Certificates.

 

(a)                                 Simultaneously with the execution of this
Agreement, Warrant Certificates evidencing such total number of Warrants to be
delivered to each Investor as set forth on Schedule I shall be executed by the
Company and delivered by the Company to each Investor.

 

(b)                                 From time to time, the Company shall sign
and deliver Warrant Certificates in required denominations to Persons entitled
thereto in connection with any transfer or exchange permitted under this
Agreement.  The Warrant Certificates shall be executed on behalf of the Company
by its President and Chief Executive Officer or its Vice President, either
manually or by facsimile signature printed thereon.  In case any officer of the
Company whose signature shall have been placed upon any of the Warrant
Certificates shall cease to be such officer of the Company before issue and
delivery thereof, such Warrant Certificates may, nevertheless, be delivered with
the same force and effect as though such person had not ceased to be such
officer of the Company.

 

3.                                      EXERCISE PRICE; EXERCISE OF WARRANTS AND
EXPIRATION OF WARRANTS.

 

3.1                               Exercise Price.  Each Warrant Certificate
shall entitle the Holder thereof, subject to the provisions of this Agreement,
to purchase, except as provided in Section 3.4 hereof, one share of Common Stock
for each Warrant represented thereby, subject to all adjustments made on or
prior to the date of exercise thereof, at the applicable Exercise Price.

 

3.2                               Exercise of Warrants.  The Warrants shall be
exercisable in whole or in part, at any time and from time to time, on any
Business Day (each, an “Exercise Date”) beginning on April 2, 2014 and ending on
the Expiration Date (as defined herein), in the manner provided for herein.

 

3.3                               Expiration of Warrants.  Any unexercised
Warrants shall expire and the rights of the Holders of such Warrants to purchase
Underlying Common Stock shall terminate at 5:00 p.m., Dallas, Texas time on
October 2, 2019 (the “Expiration Date”).

 

3.4                               Method of Exercise; Payment of Exercise
Price.  In order to exercise a Warrant, the Holder thereof must (i) surrender to
the Company the Warrant Certificate evidencing such Warrant, with the form on
the reverse of or attached to the Warrant

 

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Certificate duly executed, and surrender to the Company the Required Number (if
any) of shares of Series C Voting Preferred Stock then held by the Holder for
redemption pursuant to the terms of such shares (ii) with respect to any
Warrants for which Net Share Settlement is not elected, deliver to the Company
any required payment in full of the aggregate Exercise Price then in effect for
the shares of Underlying Common Stock as to which a Warrant Certificate is
submitted for such exercise, not later than the Settlement Date as more fully
set forth herein.  Full Physical Settlement shall apply to each Warrant unless
the Holder elects for Net Share Settlement to apply upon exercise of such
Warrant.  The election of Net Share Settlement shall be made in the form on the
reverse of or attached to the Warrant Certificate for each Warrant.

 

(a)                                 If Full Physical Settlement applies to the
exercise of a Warrant, then, for each Warrant exercised hereunder (i) prior to
11:00 a.m., New York City time, on the Settlement Date for such Warrant, the
Holder shall pay the applicable Exercise Price then in effect (determined as of
such Exercise Date) for the number of shares of Common Stock obtainable upon
exercise of such Warrant at such time by federal wire or other immediately
available funds payable to the order of the Company to the account maintained by
the Company and notified to the Holder upon request of the Holder, and (ii) on
the Settlement Date, following receipt by the Company of such Exercise Price,
the Company shall cause to be delivered to the Holder the number of shares of
Common Stock obtainable upon exercise of each Warrant at such time (the “Full
Physical Share Amount”), together with cash in respect of any fractional shares
of Common Stock as provided in Section 3.4(e).

 

(b)                                 If Net Share Settlement applies to the
exercise of a Warrant, then, for each Warrant exercised hereunder, on the
Settlement Date for such Warrant, the Company shall cause to be delivered to the
Holder a number of shares of Common Stock (which in no event will be less than
zero) (the “Net Share Amount”) equal to (i) the number of shares of Common Stock
issuable upon exercise of such Warrant at such time, multiplied by (ii) the
Closing Sale Price on the relevant Exercise Date, minus the applicable Exercise
Price then in effect (determined as of such Exercise Date), divided by (iii)
such Closing Sale Price, together with cash in respect of any fractional shares
of Common Stock as provided in Section 3.4(e).

 

(c)                                  Upon surrender of a Warrant Certificate,
and surrender of the Required Number of shares of Series C Voting Preferred
Stock for redemption pursuant to the terms of such shares, in conformity with
the foregoing provisions and, in the event of Full Physical Settlement of a
Warrant, receipt by the Company of the Exercise Price therefor, the Company
shall instruct the transfer agent for the Common Stock to transfer to the Holder
of such Warrant Certificate appropriate evidence of ownership of any shares of
Underlying Common Stock or other securities or property to which the Holder is
entitled, registered or otherwise placed in, or payable to the order of, such
name or names as may be directed in writing by the Holder, and shall deliver
such evidence of ownership to the Person or Persons entitled to receive the
same, together with cash in

 

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respect of any fractional shares of Common Stock as provided in Section 3.4(e);
provided that if the Holder shall direct that such securities be registered in a
name other than that of the Holder, such direction shall be tendered in
conjunction with a signature guarantee by a participant in a Medallion Signature
Guarantee Program at a guarantee level acceptable to the Company’s transfer
agent.  Upon surrender of a Warrant Certificate in conformity with subsection
(a) above and, in the event of Full Physical Settlement of a Warrant, receipt by
the Company of the Exercise Price therefor, a Holder shall be deemed to own and
have all of the rights associated with any Underlying Common Stock or other
securities or property to which such Holder is entitled pursuant to this
Agreement upon the surrender of a Warrant Certificate in accordance with this
Agreement.

 

(d)                                 If fewer than all the Warrants represented
by a Warrant Certificate are surrendered, such Warrant Certificate shall be
surrendered and a new Warrant Certificate of the same tenor and for the number
of Warrants that were not surrendered shall promptly be executed and delivered
by the Company to the Person or Persons entitled to receive the new Warrant
Certificate.

 

(e)                                  The Company shall not be required to issue
any fraction of a share of Common Stock upon exercise of any Warrants; provided
that, if more than one Warrant shall be exercised hereunder at one time by the
same Holder, the number of full shares of Common Stock which shall be issuable
upon exercise thereof shall be computed on the basis of all Warrants so
exercised, and shall include the aggregation of all fractional shares of Common
Stock issuable upon exercise of such Warrants.  If after giving effect to the
aggregation of all shares of Common Stock (and fractions thereof) issuable upon
exercise of Warrants by the same Holder at one time as set forth in the previous
sentence, any fraction of a share of Common Stock would, except for the
provisions of this Section 3.4(e), be issuable on the exercise of any Warrant or
Warrants, the Company shall pay the Holder cash in lieu of such fractional share
valued at the Closing Sale Price on the Exercise Date.

 

(f)                                   The Required Number of shares of Series C
Voting Preferred Stock surrendered by the Holder for redemption pursuant to the
terms of such shares in conformity with the foregoing provisions shall be
canceled by or on behalf of the Company upon its books and shall no longer be
deemed outstanding.

 

3.5                               Compliance with the Securities Act.  (a) No
Warrant may be exercised, and no Underlying Common Stock may be sold,
transferred or otherwise disposed of (any such sale, transfer or other
disposition, a “sale”), except in compliance with this Section 3.5.

 

(b)                                 A Holder may exercise its Warrants if it is
an “accredited investor” or a “qualified institutional buyer”, as defined in
Regulation D and Rule 144A under the Securities Act, respectively, and a Holder
may sell its Underlying Common Stock to a transferee that is an “accredited
investor” or a “qualified institutional buyer”, as such

 

10

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terms are defined in such Regulation and such Rule, respectively; provided that
each of the following conditions is satisfied:

 

(i)                                     with respect to any “accredited
investor” that is not an institution, such Holder or transferee, as the case may
be, provides certification establishing to the reasonable satisfaction of the
Company that it is an “accredited investor”;

 

(ii)                                  such Holder or transferee represents that
it is acquiring the Underlying Common Stock for its own account and that it is
not acquiring such Underlying Common Stock with a view to, or for offer or sale
in connection with, any distribution thereof (within the meaning of the
Securities Act) that would be in violation of the securities laws of the United
States or any applicable state or jurisdiction thereof, but subject,
nevertheless, to the disposition of its property being at all times within its
control; and

 

(iii)                               such Holder or transferee agrees to be bound
by the provisions of this Section 3.5 with respect to any exercise of the
Warrants and any sale of the Underlying Common Stock.

 

(c)                                  A Holder may exercise its Warrants and may
sell its Underlying Common Stock in accordance with Regulation S under the
Securities Act.

 

(d)                                 A Holder may exercise its Warrants or sell
its Underlying Common Stock if:

 

(i)                                     such Holder gives written notice to the
Company of its intention to exercise or effect such sale, which notice shall
describe the manner and circumstances of the proposed transaction in reasonable
detail;

 

(ii)                                  such notice includes a certification by
the Holder, to the effect that such proposed exercise or sale may be effected
without registration under the Securities Act or under applicable Blue Sky laws;
and

 

(iii)                               such Holder or transferee complies with
Sections 3.5(b)(ii) and 3.5(b)(iii).

 

(e)                                  Subject to Section 12.5, all stock
certificates issued pursuant to the exercise of the Warrants shall bear the
following legend:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS.  SUCH SHARES MAY

 

11

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BE OFFERED, SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH
ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF
THE WARRANT AND PREFERRED STOCK AGREEMENT, DATED AS OF OCTOBER 2, 2013, BETWEEN
CUBIC ENERGY, INC. (THE “COMPANY”), AND ANCHORAGE ILLIQUID OPPORTUNITIES
OFFSHORE MASTER III, L.P., ANCHORAGE ILLIQUID OPPORTUNITIES III (B), L.P., AIO
III AIV, L.P., CORBIN OPPORTUNITY FUND, L.P., O-CAP PARTNERS, L.P. AND O-CAP
OFFSHORE MASTER FUND, L.P. AND THE VOTING AGREEMENT, DATED AS OF OCTOBER 2,
2013, BY AND AMONG CERTAIN SHAREHOLDERS OF THE COMPANY PARTY THERETO.  COPIES OF
SUCH WARRANT AND PREFERRED STOCK AGREEMENT AND SUCH VOTING AGREEMENT ARE
AVAILABLE AT THE OFFICES OF THE COMPANY.

 

(f)                                   Subject to Section 12.5, each certificate
representing the Warrants shall bear the following legend:

 

THESE WARRANTS AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS.  THESE WARRANTS AND SUCH SECURITIES MAY BE
OFFERED, SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH
ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF
THE WARRANT AND PREFERRED STOCK AGREEMENT, DATED AS OF OCTOBER 2, 2013, BETWEEN
CUBIC ENERGY, INC. (THE “COMPANY”) AND ANCHORAGE ILLIQUID OPPORTUNITIES OFFSHORE
MASTER III, L.P., ANCHORAGE ILLIQUID OPPORTUNITIES III (B), L.P., AIO III AIV,
L.P., CORBIN OPPORTUNITY FUND, L.P., O-CAP PARTNERS, L.P. AND O-CAP OFFSHORE
MASTER FUND, L.P.  A COPY OF

 

12

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SUCH WARRANT AND PREFERRED STOCK AGREEMENT IS AVAILABLE AT THE OFFICES OF THE
COMPANY.

 

(g)                                  The provisions of Section 3.5(a) shall not
apply to:

 

(i)                                     any exercise of a Warrant in connection
with a sale of the Underlying Common Stock issued upon such exercise in a
transaction that is registered under the Securities Act; or

 

(ii)                                  any sale of  Underlying Common Stock in a
transaction that is registered under the Securities Act.

 

3.6                               Lock-Up.  No Investor shall, at any time
during a period beginning on the date hereof and ending on April 2, 2014,
without the prior written consent of the Company, (i) lend, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any Warrants now or
hereafter owned or held by such Investor or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any such Warrants, whether any such transaction
described in clauses (i) or (ii) is to be settled by delivery of securities, in
cash or otherwise; provided, however, that, notwithstanding the restrictions set
forth in the preceding sentence, each Investor may assign any Warrants now or
hereafter owned or held by such Investor to one or more of its Affiliates.

 

4.                                      REGISTRATION RIGHTS.

 

4.1                               Registration Rights Agreement.  The Holders
are entitled to certain registration and other rights set forth in the
Registration Rights Agreement, subject to the terms and conditions thereof.

 

4.2                               Rule 144 Reporting.  With a view to making
available to the Holders the benefits of certain rules and regulations of the
SEC which may permit the sale of the Underlying Common Stock to the public
without registration, the Company agrees, so long as it is subject to the
periodic reporting requirements of the Exchange Act, to use its commercially
reasonable efforts to:

 

(a)                                 make and keep public information available,
as those terms are understood and defined in Rule 144(c)(1) or any similar or
analogous rule promulgated under the Securities Act, at all times after the
effective date of this Agreement;

 

(b)                                 file with the SEC, in a timely manner, all
reports and other documents required of the Company under the Exchange Act; and

 

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(c)                                  so long as the Holders own any Underlying
Common Stock, furnish to such Holders forthwith upon request: a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144 and of the Exchange Act; a copy of the most recent annual or quarterly
report of the Company; and such other reports and documents as any Investor or
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.

 

5.                                      ADJUSTMENTS.

 

5.1                               Adjustments upon Certain Transactions.  The
Exercise Price and the number of shares of Common Stock issuable upon exercise
of each Warrant shall be adjusted in the event the Company (i) pays a dividend
or makes any other distribution with respect to its Common Stock solely in
shares of its Common Stock, (ii) subdivides its outstanding Common Stock and
(iii) combines its outstanding Common Stock into a smaller number of shares.  In
such event, the number of shares of Common Stock issuable upon exercise of each
Warrant immediately prior to the record date for such dividend or distribution
or the effective date of such subdivision or combination shall be adjusted so
that the Holder of each Warrant shall thereafter be entitled to receive the
number of shares of Common Stock (calculated to the nearest hundredth) that such
Holder would have owned or have been entitled to receive after the happening of
any of the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect thereto. In
addition, upon an adjustment pursuant to this Section 5.1, the Exercise Price
for each share of Common Stock payable upon exercise of such Warrant shall be
adjusted (calculated to the nearest $0.0001) so that it shall equal the product
of the Exercise Price immediately prior to such adjustment multiplied by a
fraction, the numerator of which shall be the number of shares of Common Stock
issuable upon the exercise of each Warrant immediately prior to such adjustment
and the denominator of which shall be the number of shares of Common Stock so
issuable immediately thereafter. Such adjustment shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.  For the avoidance of doubt, the adjustment
contemplated by this section can be expressed by formula as follows:

 

Ub = shares underlying each Warrant before the adjustment
Ua = shares underlying each Warrant after the adjustment
Pb = exercise price per share before the adjustment
Pa = exercise price per share after the adjustment
Ob = shares outstanding before the transaction in question
Oa = shares outstanding after the transaction in question
Ua = Ub x Oa / Ob
Pa = Pb x Ob / Oa

 

5.2                               Dividends and Distributions.  (a) If the
Company shall fix a record date for the payment of a dividend or the making of a
distribution with respect to the Common

 

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Stock (other than one covered by Section 5.1), including without limitation in
connection with a Recapitalization Event (it being understood that if there is a
distribution in connection with a Recapitalization Event and no record date is
set for such distribution, the effective date of such Recapitalization Event
shall for purposes of this Section 5.2 be deemed to be the record date fixed by
the Company for such distribution), the Exercise Price to be in effect after the
record date (or deemed record date) for such dividend or distribution shall be
determined by multiplying (x) the Exercise Price in effect immediately prior to
such record date by (y) a fraction, the numerator of which shall be (i) the Fair
Market Value per share of Common Stock as of the last trading day before the
date (the “ex-date”) on which the Common Stock first trades without the right to
receive such dividend or distribution less (ii) the Fair Market Value of the
cash, securities (excluding common stock that is the same class of securities
for which the Warrants would be exercisable immediately after such distribution
or dividend taking into account the adjustments pursuant to this Article 5) or
other property paid per share in such dividend or distribution, and the
denominator of which shall be the Fair Market Value per share of Common Stock as
of the last trading day before the ex-date.  As used in this Section 5.2,
“Recapitalization Event” means any consolidation, merger or similar
extraordinary transaction, or any recapitalization or reclassification of the
Common Stock, which in any such event does not constitute a Change of Control
Event. Upon any adjustment of the Exercise Price pursuant to this Section 5.2,
the total number of shares of Common Stock purchasable upon the exercise of each
Warrant shall be such number of shares (calculated to the nearest hundredth)
purchasable per Warrant immediately prior to such adjustment multiplied by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately before such adjustment and the denominator of which shall be the
Exercise Price in effect immediately after such adjustment.

 

(b)                                 For the avoidance of doubt, the adjustment
contemplated by Section 5.2(a) can be expressed by formula as follows:

 

Ub = shares underlying each Warrant before the adjustment
Ua = shares underlying each Warrant after the adjustment
Pb = exercise price per share before the adjustment
Pa = exercise price per share after the adjustment
M = Fair Market Value per share as of the last trading day before ex-date
D = Fair Market Value of the dividend or distribution made per share
Ua = Ub x M / (M – D)
Pa = Pb x (M – D) / M

 

(c)                                  In the case of a Recapitalization Event
where outstanding shares of Common Stock are converted either solely or
partially into shares of common stock of another company, each Warrant shall
become a Warrant to purchase a number of shares of common stock of the other
company for an Exercise Price per share calculated by (x) first, applying the
rules in Section 5.2(a) to determine an initially adjusted Exercise Price per
share and number of shares of Common Stock purchasable upon the exercise of each

 

15

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Warrant, (y) second, multiplying the initially adjusted number of shares by the
number of shares of common stock of the other company into which each share of
Common Stock of the Company shall be converted in the Recapitalization Event to
arrive at the final adjusted number of shares of common stock of the other
company purchasable upon exercise of each Warrant and (z) third, dividing the
initially adjusted Exercise Price per share by the number of shares of common
stock of the other company into which each share of Common Stock of the Company
shall be converted in the Recapitalization Event to arrive at the final adjusted
Exercise Price per share of common stock of the other company.  In any such
case, the provisions of Section 5.4 (other than the first sentence thereof)
shall apply to the Recapitalization Event as though it were a Reorganization
Event.

 

5.3                               Tender Offers.  If a publicly-announced tender
offer made by the Company or any of its subsidiaries for all or any portion of
the Common Stock shall expire and tendering holders of Common Stock are paid
aggregate consideration having a Fair Market Value when paid that exceeds the
aggregate Fair Market Value of the Common Stock acquired in such tender offer as
of the last trading date before the date on which such tender offer is first
publicly announced (such excess, the “Excess Tender Amount”), then the Exercise
Price to be in effect after the tender offer expires shall be determined by
multiplying (x) the Exercise Price in effect immediately prior to such
adjustment by (y) a fraction, the numerator of which shall be (i) the Fair
Market Value per share of the Common Stock as of the last trading day before the
date on which such tender offer is first publicly announced less (ii) the
Premium Per Pro Forma Share, and the denominator of which shall be the Fair
Market Value per share of Common Stock as of the last trading day before the
date on which such tender offer is first publicly announced.  As used herein,
“Premium Per Pro Forma Share” means (x) the Excess Tender Amount divided by (y)
the number of shares of Common Stock outstanding at expiration of the tender
offer after giving pro forma effect to the purchase of shares in the tender
offer.  Upon any adjustment of the Exercise Price pursuant to this Section 5.3,
the total number of shares of Common Stock purchasable upon the exercise of each
Warrant shall be such number of shares (calculated to the nearest hundredth)
purchasable per Warrant immediately prior to such adjustment multiplied by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately before such adjustment and the denominator of which shall be the
Exercise Price in effect immediately after such adjustment.  For the avoidance
of doubt, the adjustment contemplated by this section can be expressed by
formula as follows:

 

Ub = shares underlying each Warrant before the adjustment
Ua = shares underlying each Warrant after the adjustment

Pb = exercise price per share before the adjustment
Pa = exercise price per share after the adjustment
M = Fair Market Value per share as of the last trading day before date tender
offer is announced
E = Excess Tender Amount (the aggregate premium paid in the tender offer)

 

16

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Pr = Premium Per Pro Forma Share
Oa = Shares outstanding after giving effect to tender offer
Pr = E / Oa
Ua = Ub x M / (M – Pr)
Pa = Pb x (M – Pr) / M

 

5.4                               Consolidation, Merger or Sale.  Subject to
Article 6 hereof, if any consolidation, merger or similar extraordinary
transaction of the Company with another entity, or the sale of all or
substantially all of its assets, other than in any such case a Recapitalization
Event, shall be effected (a “Reorganization Event”), and in connection with such
Reorganization Event, the Common Stock shall be converted into or exchanged for
or become the right to receive cash, securities or other property, then, as a
condition of such Reorganization Event, lawful and adequate provisions shall be
made by the Company whereby the Holder of each Warrant shall thereafter have the
right to purchase and receive on exercise of such Warrant, for an aggregate
price equal to the aggregate Exercise Price for all of the shares underlying the
Warrant as in effect immediately before such transaction (subject to adjustment
thereafter as contemplated by the succeeding sentence), the same kind and amount
of cash, securities or other property as it would have had the right to receive
if it had exercised such Warrant immediately before such transaction and been
entitled to participate therein. In the event of any such Reorganization Event,
the Company shall make appropriate provision to ensure that applicable
provisions of this Agreement (including, without limitation, the provisions of
Article 4, this Article 5 and Article 6) and of the Registration Rights
Agreement shall thereafter be binding on the other party to such transaction (or
the successor in such transaction) and applicable to any securities thereafter
deliverable upon the exercise of Warrants. The Company will not effect any such
Reorganization Event unless, prior to the consummation thereof, the successor
entity (if other than the Company) resulting from such Reorganization Event or
the entity purchasing such assets shall assume, by written instrument reasonably
satisfactory in form and substance to the Holders of a majority of the Warrants
then outstanding, executed and mailed or delivered to the Holder of each Warrant
at the last address of such Holder appearing on the books of the Company, the
obligation to deliver to the Holder of each Warrant the cash, securities or
property deliverable upon exercise of Warrants (or the cash payment under
Section 6.1). The Company shall notify the Holder of each Warrant of any such
proposed Reorganization Event reasonably prior to the consummation thereof so as
to provide such Holder with a reasonable opportunity prior to such consummation
to exercise each Warrant in accordance with the terms and conditions hereof;
provided, however, that in the case of a transaction which requires notice to be
given to the holders of Common Stock of the Company, the Holder of each Warrant
shall be provided the same notice given to the holders of Common Stock of the
Company.

 

5.5                               Securities Issuances.  (a) Upon any issuance
of any shares of Common Stock, rights or options to acquire Common Stock or
securities convertible into or exchangeable for Common Stock (other than
Qualifying Employee Stock but including,

 

17

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for the avoidance of doubt, any such shares, rights, options or securities
issued as dividends in respect of any securities of the Company, whether or not
in lieu of cash dividends) or the amendment to or change in the number of shares
of Common Stock deliverable upon the exercise, conversion or exchange of such
securities (in each case, other than issuances, amendments or changes covered by
Sections 5.1, 5.2, 5.3 or 5.4), the Company shall issue to Holders of Class A
Warrants and Class B Warrants, on a pro rata basis in each case, such additional
Warrants having the same terms as the then-outstanding Warrants as may be
necessary in order that the aggregate percentage of Voting Securities on a Fully
Diluted Basis issuable upon exercise of all the outstanding Warrants shall not
be diminished on account of such issuance.

 

(b)                                 For purposes of this Agreement, “Qualifying
Employee Stock” means (i) up to 1,651,972 shares of Common Stock (as adjusted
for stock splits, reverse stock splits and stock dividends effective after the
date hereof) or options to acquire such shares of Common Stock that remain
available for issuance or grant as of the date hereof as equity-based
compensation to certain of the Company’s directors, executive officers or
employees under the Company’s 2005 Stock Option Plan, as amended, and (ii) up to
1,500,000 shares of Common Stock (as adjusted for stock splits, reverse stock
splits and stock dividends) or options to acquire such shares of Common Stock
for issuance or grant as equity-based compensation under a stock option or
similar plan duly adopted by the Company (and duly approved pursuant to any
applicable provisions of the Note Purchase Agreement or the Investment
Agreement) after the date hereof.

 

5.6                               Full-Ratchet Adjustment for Lower
Revaluations.  In the case of (a) any issuance of shares of Common Stock, rights
or options to acquire Common Stock or securities convertible into or
exchangeable for Common Stock (other than Qualifying Employee Stock but
including, for the avoidance of doubt, any such shares, rights, options or
securities issued as dividends in respect of any securities of the Company,
whether or not in lieu of cash dividends), or (b) the amendment to or change in
the exercise, conversion or exchange price of such securities, in each case, for
an Effective Issuance Price that is lower than the applicable Exercise Price
then in effect (in each case, other than issuances, amendments or changes
covered by Sections 5.1, 5.2, 5.3 or 5.4), the Exercise Price for all
corresponding Warrants shall be further reduced to an amount equal to the
Effective Issuance Price. The “Effective Issuance Price” will be:

 

(i)                                     with respect to Common Stock issued for
cash, the per share amount of the net cash proceeds received by the Company for
such Common Stock;

 

(ii)                                  with respect to Common Stock issued for
other consideration, the Fair Market Value of the net consideration per share;

 

(iii)                               with respect to any option, warrant or other
right to acquire Common Stock, whether direct or indirect and whether or not
conditional or contingent, the sum of (a) the Fair Market Value of the aggregate
consideration, if any, received by

 

18

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the Company for the issuance of such option, warrant or right, divided by the
number of shares of Common Stock for which such option, warrant or right is
exercisable at the time of such issuance, plus (b) the per share amount of the
exercise price to the extent paid in cash and per share Fair Market Value of the
exercise price if paid in other consideration;

 

(iv)                              with respect to securities convertible into or
exchangeable for Common Stock, the sum of the net cash consideration per
security paid for such securities plus the net Fair Market Value of any noncash
consideration per security paid for such securities, as of the date of their
issuance, divided by the number of shares of Common Stock into or for which such
securities are convertible or exchangeable.

 

For the avoidance of doubt, the Exercise Price shall in no event be increased
pursuant to this Section 5.6.

 

5.7                               Other Adjustments.  If any event occurs as to
which the provisions of Article 5 are not strictly applicable or, if strictly
applicable, would not fairly protect the rights of the Holders in accordance
with the essential intent and principles of such provisions, then the Board
shall make such adjustments in the application of such provisions, in accordance
with such essential intent and principles, as shall be reasonably necessary, in
the good faith judgment of the disinterested members of the Board, to protect
such rights of the Holders as aforesaid.

 

5.8                               Affiliate Transactions.  In the event that the
Company shall issue any shares of Common Stock to, or repurchase any shares of
Common Stock from, any Affiliate, other than Qualifying Employee Stock, such
issuance or repurchase shall be on terms no less favorable to the Company than
those obtainable by a party who is not such an Affiliate.

 

5.9                               Notice of Adjustment.  Whenever the number of
shares of Common Stock or other stock or property issuable upon the exercise of
each Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by first class mail, postage prepaid, to each Holder notice
of such adjustment or adjustments and shall deliver to each Holder a certificate
of a firm of independent public accountants selected by the Board (who may be
the regular accountants employed by the Company) setting forth the number of
shares of Common Stock or other stock or property issuable upon the exercise of
each Warrant and the Exercise Price after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.

 

6.                                      REDEMPTION UPON A CHANGE OF CONTROL.

 

6.1                               Mandatory Redemption.  Upon the occurrence of
a Change of Control Event (other than a Public Stock Merger), at the election of
each Holder in its sole discretion exercised by written notice to the Company or
the successor to the Company

 

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on or prior to the Redemption Exercise Date, the Company shall pay to such
Holder of outstanding Warrants as of the date of such Change of Control Event,
an amount in cash in immediately available funds equal to the Cash Redemption
Value for such Warrants, not later than the date which is 10 Business Days after
such Change of Control Event and the Warrants shall thereafter be extinguished. 
For purposes of this Section 6.1, the Redemption Exercise Date shall mean (a) if
the Company entered into a definitive agreement with respect to a Change of
Control Event and has provided to the Holders notice of the Change of Control
Event at least 20 Business Days prior to the effectiveness of such event, the
10th Business Day prior to such event and (b) otherwise, the fifth Business Day
following the effectiveness of the Change of Control Event.  The “Cash
Redemption Value” for any Warrant will equal the fair value of the Warrant as of
the date of such Change of Control Event as determined by an Independent
Financial Expert plus interest thereon from such date to the payment date at the
rate of 5.0% per annum.  The Independent Financial Expert will determine the
Cash Redemption Value using standard option pricing models for American style
options, such as the Cox-Rubinstein binomial model, assuming for this purpose
that the Change of Control Event had not occurred and making sure to take into
account the intrinsic and option value of the Warrants, but assuming annualized
volatility of 110% over the Warrant’s remaining term.  The Cash Redemption Value
of the Warrants shall be due and payable not later than the tenth Business Day
after the date of the applicable Change of Control Event (or, if later, the date
the Cash Redemption Value is determined by the Independent Financial Expert)
and, if not then paid, shall bear interest thereafter at a default interest rate
equal to 5.0% compounded monthly and payable upon demand.  If a Holder of
Warrants does not exercise the right provided by this Section 6.1, such Warrants
will remain outstanding as adjusted pursuant to the provisions of Article 5
hereof.

 

6.2                               Public Stock Merger.  (a) In the case of a
Public Stock Merger, the Company may by written notice to the Holders of
Warrants not more than 60 nor less than 30 days prior to the effective date of
such Public Stock Merger elect to have all the unexercised Warrants remain
outstanding after such Public Stock Merger, in which case the Warrants will
remain outstanding as adjusted pursuant to Section 5.4 and the other provisions
of Article 5 hereof.

 

(b)                                 In the case of any Public Stock Merger with
respect to which the Company does not make a timely election as contemplated by
Section 6.2(a) above, the Company shall pay on the effective date of such Public
Stock Merger, to each Holder of outstanding Warrants as of the effective date of
such Public Stock Merger, an amount in cash in immediately available funds equal
to the Cash Redemption Value for such Warrants determined in accordance with
Section 6.1 and the Warrants shall thereafter be extinguished.

 

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7.                                      WARRANT TRANSFER BOOKS.

 

(a)                                 Subject to Section 3.5:

 

(i)                                     The Company shall keep at its principal
place of business a register in which the Company shall provide for the
registration of Warrant Certificates and transfers or exchanges of Warrant
Certificates as herein provided.

 

(ii)                                  At the option of the Holder, Warrant
Certificates may be exchanged at such office and upon payment of the charges
hereinafter provided. Whenever any Warrant Certificates are so surrendered for
exchange, the Company shall execute and deliver the Warrant Certificates that
the Holder making the exchange is entitled to receive.

 

(iii)                               All Warrant Certificates issued upon any
registration of transfer or exchange of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to the
same benefits under this Agreement, as the Warrant Certificates surrendered for
such registration of transfer or exchange.

 

(iv)                              Every Warrant Certificate surrendered for
registration of transfer or exchange shall (if so required by the Company) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company, duly executed by the Holder thereof or his attorney
duly authorized in writing.

 

(v)                                 No service charge shall be made to a Holder
for any registration of transfer or exchange of Warrant Certificates, and the
Company shall pay any taxes or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Warrant
Certificates.

 

(vi)                              Any Warrant Certificate when duly endorsed in
blank shall be deemed negotiable and when a Warrant Certificate shall have been
so endorsed, the Holder thereof may be treated by the Company and all other
Persons dealing therewith as the absolute owner thereof for any purpose and as
the Person entitled to exercise the rights represented thereby, or to the
transfer thereof on the register of the Company, any notice to the contrary
notwithstanding; but until such transfer on such register, the Company shall
treat the registered Holder thereof as the owner for all purposes.

 

(vii)                           Notwithstanding anything to the contrary in this
Section 7, no Warrant Certificate may be transferred to any Person unless,
simultaneously with such transfer, the Holder of such Warrant Certificate
seeking such transfer transfers to such Person a number of shares of Series C
Voting Preferred Stock then held of record by the Holder that equals the product
of (x) a quotient obtained by dividing (i) the total number of shares of Series
C Voting Preferred Stock then outstanding by (ii) the total number of Warrants
then outstanding, and (y) the total number of Warrants represented by such
Warrant Certificate to be transferred to such Person.

 

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8.                                      WARRANT HOLDERS.

 

8.1                               No Voting Rights.  Prior to the exercise of
the Warrants, no Holder of a Warrant Certificate, as such, shall be entitled to
any rights of a shareholder of the Company, including, without limitation, the
right to vote, to consent, to receive any notice of meetings of shareholders for
the election of directors of the Company or any other matter or to receive any
notice of any proceedings of the Company.

 

8.2                               Right of Action.  All rights of action in
respect of this Agreement are vested in the Holders of the Warrants, and any
Holder of the Warrants, without the consent of the Holder of any other Warrant,
may, on such Holder’s own behalf and for such Holder’s own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder’s right to exercise
or exchange such Holder’s Warrants in the manner provided in this Agreement or
any other obligation of the Company under this Agreement.

 

9.                                      VOTING PREFERRED STOCK.

 

9.1                               Voting Preferred Stock.  Concurrently with the
issuance of the Warrants to each Investor on the date hereof, such Investor
shall be entitled to receive from the Company, and the Company shall issue to
each such Investor in the amounts set forth on Schedule I, shares of Series C
Voting Preferred Stock having such designations, preferences, limitations, and
relative rights, including voting rights, as shall be stated and expressed in a
resolution providing for the issue of such Series C Voting Preferred Stock
adopted by the Board and filed with the Secretary of State of the State of Texas
in a certificate of designations, substantially in the form of Exhibit D hereto.

 

10.                               REPRESENTATIONS AND WARRANTIES.

 

The Company hereby represents and warrants that, as of the date hereof:

 

10.1                        Existence.  It is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas.

 

10.2                        Authorization.  It has the corporate power and
authority to enter into this Agreement and to perform its obligations under, and
consummate the transactions contemplated by, this Agreement and has by proper
action duly authorized the execution and delivery of this Agreement.

 

10.3                        No Conflicts.  Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated herein,
nor the performance of and compliance with the terms and provisions hereof will:
(i) violate or conflict with any provision of the Company’s Certificate of
Formation or by-laws; (ii) violate any law, regulation (including without
limitation Regulation G, T, U or X), order, writ, judgment, injunction, decree
or permit applicable to the Company; (iii) violate or materially conflict

 

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with any contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage, deed of trust, contract or other agreement
or instrument to which the Company is a party or by which it or any of its
properties may be bound; or (iv) result in or require the creation of any lien,
security interest or other charge or encumbrance (other than those contemplated
in or in connection with this Agreement or the Security Agreement) upon or with
respect to the Company’s properties.

 

10.4                        Consents.  Subject to, in the case of the exercise
of the Warrants, any applicable requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder
(the “HSR Act”), no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or other
Person is required in connection with the execution, delivery or performance of
this Agreement or the Warrants.

 

10.5                        Enforceable Obligations.  This Agreement has been
duly executed and delivered by the Company and assuming due authorization,
execution and delivery hereof by the Investors, constitutes a legal, valid and
binding obligation of the Company, enforceable in accordance with its terms
subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors’ rights and to general equity principles.

 

10.6                        Capitalization.  As of the date hereof, and after
giving effect to the transaction contemplated hereby, the Company’s authorized
capital stock consists of 200,000,000 shares of Common Stock, of which
77,433,408 shares of Common Stock are issued and outstanding, and 10,000,000
shares of preferred stock, par value $0.01 per share, of which 16,162 shares of
Series B Convertible Preferred Stock and 98,751.823 shares of Series C Voting
Preferred Stock are issued and outstanding.  As of the date hereof, no shares of
Common Stock are held in treasury, 32,324,000 shares of Common Stock are
reserved for issuance upon conversion of outstanding shares of Series B
Convertible Preferred Stock, 288,667 shares of Common Stock are reserved for
issuance upon exercise of outstanding employee stock options and an additional
1,363,305 shares of Common Stock are reserved for issuance under the Company’s
2005 Stock Option Plan, as amended.  There are no Voting Securities authorized
or outstanding other than the Common Stock and the Series C Voting Preferred
Stock.  There is no class of capital stock of the Company authorized or
outstanding other than the Common Stock and the preferred stock referred to
above.  The outstanding shares of Common Stock and all shares of Series B
Convertible Preferred Stock and Series C Voting Preferred Stock issued on the
date hereof are duly authorized, validly issued, fully paid and non-assessable. 
There are no preemptive rights (other than as set forth in the Investment
Agreement) nor, except for (i) Qualifying Employee Stock, (ii) outstanding
warrants held by Wells Fargo Energy Capital, Inc. and other investors to
purchase an aggregate of 9,287,294 shares of Common Stock, (iii) outstanding
shares of Series B Convertible Preferred Stock convertible into an aggregate of
32,324,000 shares of Common Stock, and (iv) the outstanding Warrants, any other
outstanding rights, options, warrants,

 

23

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conversion rights or agreements or commitments of any character relating to the
Company’s authorized and issued, unissued or treasury shares of capital stock,
and the Company has not issued any other securities, rights or obligations that
are currently outstanding and convertible into or exchangeable for, or giving
any Person a right to subscribe for or acquire, capital stock of the Company.

 

11.                               COVENANTS.

 

11.1                        Reservation of Common Stock for Issuance on Exercise
of Warrants.  The Company covenants that it will at all times reserve and keep
available, free from pre-emptive rights, out of its authorized but unissued
Common Stock, solely for the purpose of issue upon exercise of the Warrants as
herein provided, such number of shares of Common Stock as shall then be issuable
upon the exercise of all Warrants issuable hereunder plus such number of shares
of Common Stock as shall then be issuable upon the exercise of other outstanding
warrants, options and rights (whether or not vested), the settlement of any
forward sale, swap or other derivative contract, and the conversion of all
outstanding convertible securities or other instruments convertible into Common
Stock or rights to acquire Common Stock.   The Company covenants that all shares
of Common Stock which shall be issuable upon the exercise of Warrants shall,
upon such issue, be duly and validly issued and fully paid and non-assessable.

 

11.2                        Notice of Dividends.  At any time when the Company
declares any dividend on its Common Stock, it shall give notice to the Holders
of all the then outstanding Warrants of any such declaration not less than 15
days prior to the related record date for payment of the dividend so declared.

 

11.3                        HSR Act Compliance.  If any Holder determines that a
notification under the HSR Act is required in connection with the exercise of
any Warrants by such Holder, the Company shall reasonably cooperate with such
Holder by (i) promptly effecting all necessary notifications and other filings
under the HSR Act that are required to be made by the Company and (ii)
responding as promptly as reasonably practicable to all inquiries or requests
received from the United States Federal Trade Commission, the Department of
Justice or any other governmental authority in connection with such
notifications and other filings. For the avoidance of doubt, nothing in this
Section 11.3 shall require that the Company commit to any divestiture, license,
or hold separate or similar arrangement with respect to the business, assets or
properties of the Company. Any such notifications and responses by the Company
will be in full compliance with the requirements of the HSR Act. The Company
shall, to the extent legally permissible, keep such Holder reasonably apprised
of the status of any communications with, and any inquiries or requests for
additional information from, the United States Federal Trade Commission, the
Department of Justice or any other governmental authority. The Company and such
Holder shall share equally the filing fees in connection with the above filings
and shall otherwise each bear their respective costs and expenses in connection
with the preparation of such filings and responses to inquiries or requests.

 

24

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12.                               MISCELLANEOUS.

 

12.1                        Payment of Taxes.  The Company shall pay all
transfer, stamp and other similar taxes that may be imposed in respect of the
issuance or delivery of the Warrants or in respect of the issuance or delivery
by the Company of any securities upon exercise of the Warrants with respect
thereto.

 

12.2                        Company Indemnification.  The Company shall
indemnify and hold harmless each Holder and its officers, directors, employees,
agents, representatives and Affiliates (collectively, “Indemnitees”) from and
against any and all expenses, claims, charges, losses, damages, fines or
penalties, including without limitation reasonable attorneys’ fees incurred in
defending or resisting any claims, actions or proceedings or in enforcing this
indemnity (the “Damages”), that an Indemnitee may suffer, sustain, incur or
become subject to, whether directly or indirectly, arising out of, based upon,
or resulting from any violation or inaccuracy of any representations,
warranties, obligations or covenants of the Company set forth in this Agreement
or any Warrant issued hereunder (other than with respect to any Damages
resulting from such Holder’s own gross negligence or willful misconduct).

 

12.3                        Surrender of Certificates.  Any Warrant Certificate
surrendered for exercise or purchase shall be promptly cancelled by the Company
and shall not be reissued by the Company. The Company shall destroy such
cancelled Warrant Certificates.

 

12.4                        Mutilated, Destroyed, Lost and Stolen Warrant
Certificates.  If (a) any mutilated Warrant Certificate is surrendered to the
Company or (b) the Company receives evidence to its satisfaction of the
destruction, loss or theft of any Warrant Certificate, and there is delivered to
the Company such appropriate affidavit of loss, applicable processing fee and a
corporate bond of indemnity as may be required by it to save it harmless, then,
in the absence of notice to the Company that such Warrant Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver, in
exchange for any such mutilated Warrant Certificate or in lieu of any such
destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of like
tenor and for a like aggregate number of Warrants.

 

Upon the issuance of any new Warrant Certificate under this Section 12.4, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
in connection therewith.

 

Every new Warrant Certificate executed and delivered pursuant to this Section
12.4 in lieu of any destroyed, lost or stolen Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
destroyed, lost or stolen Warrant Certificate shall be at any time enforceable
by anyone, and shall be

 

25

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entitled to the benefits of this Agreement equally and proportionately with any
and all other Warrant Certificates duly executed and delivered hereunder.

 

The provisions of this Section 12.4 are exclusive and shall preclude (to the
extent lawful) all other rights or remedies with respect to the replacement of
mutilated, destroyed lost, stolen or Warrant Certificates.

 

12.5                        Removal of Legends.  A Holder may surrender its
Warrant Certificates or certificates evidencing Underlying Common Stock to the
Company who shall exchange such certificates for certificates without the
legends referred to in Sections 2.1, 3.5(e) and 3.5(f); provided that the
Certificate of Formation no longer requires such legend and the Holder has
delivered an opinion of counsel reasonably acceptable to the Company to the
effect that Warrants or Underlying Common Stock, as the case may be, represented
by such certificates are freely transferable under the Securities Act; provided,
further, that, to the extent such Underlying Common Stock remains subject to the
Voting Agreement at the time of such exchange, new certificates representing
such Underlying Common Stock shall contain any legend that may be required for
compliance with applicable laws governing the Voting Agreement.

 

12.6                        Notices.    Any notice, demand or delivery to the
Company or the Investors authorized by this Agreement shall be sufficiently
given or made when mailed if sent by first class mail, postage prepaid,
addressed to the Company or the respective Investors, as applicable, as follows:

 

If to the Company:

Cubic Energy, Inc.
9870 Plano Road

Dallas, Texas 75238

Fax: (972) 681-9687

Attention: Larry Badgley,

Chief Financial Officer

 

With a copy to:

 

Dentons

2000 McKinney Avenue

Suite 1900

Dallas, Texas 75201-1858

United States

Fax: (214) 259-0910

Attention:  Barry F. Cannaday

 

26

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If to the Investors (as applicable):

If to Anchorage:

 

Anchorage Capital Group, L.L.C.

610 Broadway, 6th Floor

New York, NY 10012

Attention:  Jessica Fainman

 

If to Corbin Opportunity Fund, L.P.:

 

Corbin Capital Partners Management, LLC

590 Madison Avenue, 31st Fl

New York, NY 10022

Attention: Daniel Friedman

 

If to O-CAP Partners, L.P. or O-CAP Offshore Master Fund, L.P.:

 

O-CAP Advisors, LLC

600 Madison Avenue, 14th FL

New York, NY 10022

Attention:  Lloyd Jagai

 

In each case, with a copy to:

 

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Attention: Robert S. Risoleo

Ari B. Blaut

 

or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery.

 

Any notice required to be given by the Company to the Holders pursuant to this
Agreement, shall be made by mailing by registered mail, return receipt
requested, to the Holders at their respective addresses shown on the register of
the Company.  Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given when mailed, whether or not the
Holder receives the notice.

 

27

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12.7                        Applicable Law.  This Agreement and each Warrant
issued hereunder and the rights and obligations of the parties hereunder
(including, without limitation, any claims sounding in contract law or tort law
arising out of the subject matter hereof and any determinations with respect to
post-judgment interest) shall be governed by, and shall be construed and
enforced in accordance with, the laws of the State of New York without regard to
conflict of laws principles thereof that would result in the application of any
law other than the laws of the State of New York. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined
exclusively in any New York state or federal court, in each case sitting in the
Borough of Manhattan. The parties hereto hereby (a) submit to the exclusive
jurisdiction of any New York state or federal court, in each case sitting in the
Borough of Manhattan, for the purpose of any action or proceeding arising out of
or relating to this Agreement brought by any party hereto, and (b) irrevocably
waive, and agree not to assert by way of motion, defense, or otherwise, in any
such action or proceeding, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that its property is exempt or immune
from attachment or execution, that the action or proceeding is brought in an
inconvenient forum, that the venue of the action or proceeding is improper, or
that this Agreement or the transactions contemplated hereby may not be enforced
in or by any of the above-named courts.

 

12.8                        Waiver of Jury Trial.  Each of the parties hereto
hereby waives to the fullest extent permitted by applicable Law any right it may
have to a trial by jury with respect to any litigation directly or indirectly
arising out of, under or in connection with this Agreement or the transactions
contemplated hereby. Each of the parties hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce that foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement and the
transactions contemplated hereby, as applicable, by, among other things, the
mutual waivers and certifications in this Section 12.8.

 

12.9                        Persons Benefiting.  This Agreement shall be binding
upon and inure to the benefit of the Company and the Investors, and their
respective successors, assigns, beneficiaries, executors and administrators, and
the Holders from time to time of the Warrants. The Holders of the Warrants are
express third-party beneficiaries of this Agreement and each such Holder of the
Warrants is hereby conferred the benefits, rights and remedies under or by
reason of the provisions of this Agreement as if a signatory hereto.  Nothing in
this Agreement is intended or shall be construed to confer upon any Person,
other than the Company, the Investors and the Holders of the Warrants, any
right, remedy or claim under or by reason of this Agreement or any part hereof.

 

12.10                 Counterparts.  This Agreement may be executed in any
number of counterparts, each or which shall be deemed an original, but all of
which together constitute one and the same instrument.

 

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12.11                 Amendments.   The Company and the Investors may from time
to time supplement or amend this Agreement without the approval of any Holder in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or to make any other provisions with regard to matters or questions arising
hereunder which the Company and the Investors may deem necessary or desirable
and, in each case, which shall not adversely affect the interests of any Holder.

 

In addition to the foregoing, with the consent of Holders of a majority of the
outstanding number of Warrants, the Company and the Investors may modify this
Agreement for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or modifying in any
manner the rights of the Holders hereunder; provided, however, that no
modification of the terms upon which the Warrants are exercisable, redeemable or
transferable, nor any reduction in the percentage required for consent to
modification of this Agreement, may be made without the consent of each Holder
affected thereby.

 

12.12                 Headings.  The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience and shall
not control or affect the meaning or construction of any of the provisions
hereof.

 

12.13                 Entire Agreement.  This Agreement constitutes the entire
agreement and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof.  In the
event of any conflict, discrepancy, or ambiguity between the terms and
conditions contained in this Agreement and any schedules or attachments hereto,
the terms and conditions contained in this Agreement shall take precedence.

 

[signature pages follow]

 

29

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.

 

 

CUBIC ENERGY, INC.

 

 

 

 

By:

/s/ Calvin A. Wallen, III

 

Name: Calvin A. Wallen, III

 

Title: President

 

Signature Page to Warrant and Preferred Stock Agreement

 

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ANCHORAGE ILLIQUID OPPORTUNITIES OFFSHORE MASTER III, L.P.

 

 

 

 

By:

Anchorage Capital Group, L.L.C., its

 

 

Investment Manager.

 

 

 

 

By:

/s/ Michael Aglialoro

 

 

Name: Michael Aglialoro

 

 

Title: Executive Vice President

 

Signature Page to Warrant and Preferred Stock Agreement

 

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ANCHORAGE ILLIQUID OPPORTUNITIES III (B), L.P.

 

 

 

 

By:

Anchorage Capital Group, L.L.C., its

 

 

Investment Manager

 

 

 

 

By:

/s/ Michael Aglialoro

 

 

Name: Michael Aglialoro

 

 

Title: Executive Vice President

 

Signature Page to Warrant and Preferred Stock Agreement

 

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AIO III AIV, L.P.

 

 

 

 

By:

Anchorage Capital Group, L.L.C., its

 

 

Investment Manager

 

 

 

 

By:

/s/ Michael Aglialoro

 

 

Name: Michael Aglialoro

 

 

Title: Executive Vice President

 

Signature Page to Warrant and Preferred Stock Agreement

 

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CORBIN OPPORTUNITY FUND, L.P.

 

 

 

 

By:

Corbin Capital Partners Management, LLC,

 

 

Its General Partner

 

 

 

 

By:

/s/ Daniel Friedman

 

 

Name:

Daniel Friedman

 

 

Title:

General Counsel

 

Signature Page to Warrant and Preferred Stock Agreement

 

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O-CAP PARTNERS, L.P.

 

 

 

 

By:

O-CAP Advisors, LLC,

 

 

Its General Partner

 

 

 

 

By:

/s/ Jared Sturdivant

 

 

Name:

Jared Sturdivant

 

 

Title:

Manager

 

Signature Page to Warrant and Preferred Stock Agreement

 

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O-CAP OFFSHORE MASTER FUND, L.P.

 

 

 

 

By:

O-CAP Advisors, LLC,

 

 

Its General Partner

 

 

 

 

By:

/s/ Jared Sturdivant

 

 

Name:

Jared Sturdivant

 

 

Title:

Manager

 

II-1

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