Exhibit 10.2

                                                                  Execution Copy

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                          REGISTRATION RIGHTS AGREEMENT

                                  by and among


                               Cubic Energy, Inc.


                                       and


                      Certain Purchasers Identified Herein















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                          Dated as of December 12, 2005


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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I. DEFINITIONS.........................................................1

ARTICLE II. REGISTRATION.......................................................2
Section 2.1    Mandatory Registration..........................................2
Section 2.2    Underwritten Offering...........................................2
Section 2.3    Payments by the Company.........................................2
Section 2.4    Piggy-Back Registrations........................................3
Section 2.5    Eligibility for Form S-3, SB-2 or S-1; Conversion to Form S-3...4

ARTICLE III. OBLIGATIONS OF THE COMPANY........................................4
Section 3.1    Registration Procedures.........................................4

ARTICLE IV. OBLIGATIONS OF THE PURCHASERS......................................9
Section 4.1    Purchasers Obligations..........................................9

ARTICLE V. EXPENSES OF REGISTRATION...........................................10
Section 5.1    Expenses.......................................................10

ARTICLE VI. INDEMNIFICATION...................................................11
Section 6.1    Indemnity......................................................11

ARTICLE VII. CONTRIBUTION.....................................................13
Section 7.1    Contribution...................................................13

ARTICLE VIII. REPORTS UNDER THE 1934 ACT......................................13
Section 8.1    1934 Act Reports...............................................13

ARTICLE IX. ASSIGNMENT OF REGISTRATION RIGHTS.................................14
Section 9.1    Assignment.....................................................14

ARTICLE X. AMENDMENT OF REGISTRATION RIGHTS...................................14
Section 10.1   Amendment, Termination or Waiver...............................14

ARTICLE XI. MISCELLANEOUS.....................................................14
Section 11.1   Holder.  14
Section 11.2   Notices. 14
Section 11.3   No Waiver......................................................15
Section 11.4   Governing Law..................................................15
Section 11.5   Severability...................................................16
Section 11.6   Entire Agreement...............................................16
Section 11.7   Assigns. 16
Section 11.8   Headings.......................................................16
Section 11.9   Counterparts...................................................16
Section 11.10  Further Assurances.............................................16



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Section 11.11  Purchasers' Actions............................................16
Section 11.12  Specific Performances..........................................16
Section 11.13  No Strict Construction.........................................17
























<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

         This REGISTRATION RIGHTS AGREEMENT (this  "Agreement"),  is dated as of
December 12, 2005, and is entered into by and among Cubic Energy,  Inc., a Texas
corporation (the "Company"),  and the parties  identified on the signature pages
to this Agreement and their respective affiliates and any assignee or transferee
of their respective rights hereunder (the "Purchasers").

                                    WHEREAS:

         Pursuant to that certain Securities Purchase Agreement by and among the
Company  and the  Purchasers,  dated as of December  12,  2005 (the  "Securities
Purchase  Agreement"),  the Company issued and sold to the Purchasers  2,500,000
shares (the "Purchased  Shares") of its common stock,  $0.05 par value per share
("Common  Stock"),  and warrants  (the  "Warrants")  to purchase an aggregate of
1,000,000 shares of Common Stock; and

         To induce the Purchasers to execute and deliver the Securities Purchase
Agreement,  the Company agreed to provide certain  registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar  successor  statute  (collectively,  the "1933 Act"), and applicable
state securities laws.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and sufficiency of which are hereby  acknowledged,  the Company and each
of the Purchasers hereby agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

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

         "Purchasers"  has the meaning set forth in the first  paragraph of this
Agreement  and also  includes  any  transferee  or assignee who agrees to become
bound by the provisions of this Agreement in accordance with Section 9 hereof.

         "register,"  "registered," and  "registration"  refer to a registration
effected by  preparing  and filing a  Registration  Statement or  Statements  in
compliance  with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor  rule providing for offering  securities on a continuous  basis ("Rule
415"),  and the declaration or ordering of  effectiveness  of such  Registration
Statement by the United States Securities and Exchange Commission (the "SEC").

         "Registrable  Securities"  means  (i) the  Purchased  Shares,  (ii) the
Warrant Shares (as that term is defined in the Warrants) issuable, upon exercise
or otherwise pursuant to the Warrants, (iii) the shares of Common Stock or other
securities  issuable upon exercise of the Default  Warrants,  (iv) the shares of
Common Stock or other securities issuable upon exercise of the Default Warrants,
and (v) any shares of capital  stock  issued or  issuable as a dividend on or in
exchange for or otherwise with respect to any of the foregoing.



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         "Registration Statement" means a registration statement of the Company
under the 1933 Act.

         Capitalized  terms used herein and not otherwise  defined  herein shall
have  the  respective  meanings  ascribed  to  them in the  Securities  Purchase
Agreement or the Warrants.

                                   ARTICLE II.
                                  REGISTRATION

         Section 2.1 Mandatory Registration.  The Company shall prepare, and, on
or prior to March  9,  2006  (the  "Filing  Date"),  shall  file a  Registration
Statement that shall cover the resale of all of the  Registrable  Securities and
any other  securities  of the Company as the Company  may  determine  to include
therein,  which Registration  Statement,  to the extent allowable under the 1933
Act and the rules and regulations  promulgated  thereunder (including Rule 416),
shall state that such  Registration  Statement  also  covers such  indeterminate
number  of  additional  shares  of  Common  Stock as may  become  issuable  upon
conversion  of or  otherwise  pursuant  to the Notes  and  Warrants  to  prevent
dilution resulting from stock splits,  stock dividends or similar  transactions.
The  Company  acknowledges  that the  number  of shares  to be  included  in the
Registration Statement represents a good faith estimate of the maximum number of
shares issuable upon exercise of the Warrants.

         Section  2.2  Underwritten  Offering.  If any  offering  pursuant  to a
Registration  Statement  pursuant to Section 2.1 hereof involves an underwritten
offering,  the  Purchasers  who hold a majority in  interest of the  Registrable
Securities subject to such underwritten  offering shall have the right to select
one legal counsel and an investment banker or bankers and manager or managers to
administer  the  offering,  which  investment  banker or  bankers  or manager or
managers shall be reasonably satisfactory to the Company.

         Section 2.3  Payments by the  Company.  The Company  shall use its best
efforts  to  obtain  effectiveness  of the  Registration  Statement  as  soon as
practicable.   If  (i)  the  Registration  Statement  covering  the  Registrable
Securities required to be filed by the Company pursuant to Section 2.1 hereof is
not filed by the  Filing  Date or the  Registration  Statement  is not  declared
effective by the SEC on or prior to one hundred  thirty-five  days from the date
of the Securities Purchase Agreement,  or (ii) after the Registration  Statement
has been declared  effective by the SEC, the  Registration  Statement ceases for
any reason to remain continuously effective as to all Registrable Securities for
which it is required to be  effective,  or the  Purchasers  are not permitted to
resell their Registrable  Securities for more than 15 consecutive calendar days,
but no more than an  aggregate of 30 calendar  days during any  12-month  period
(which need not be consecutive  calendar days, provided that such number of days
shall not  include the 15 calendar  days  following  the filing of any Form 8-K,
Form 10-QSB or Form 10-KSB,  or other  comparable form, for purposes of filing a
post-effective  amendment to the  Registration  Statement),  or (iii) the Common
Stock is not listed or included  for  quotation  on the Nasdaq  National  Market
("Nasdaq"),  the  Nasdaq  SmallCap  Market,  the New York  Stock  Exchange,  the
American  Stock  Exchange or the  Over-the-Counter  Bulletin Board (the "OTCBB")
after being so listed or included for quotation, or (iv) the Common Stock ceases





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to be traded on the  OTCBB or any  equivalent  replacement  exchange,  then,  in
addition to any rights that a Purchaser  may have as a holder of a Warrant,  the
Company will issue  warrants to purchase  Common Stock to the Purchasers in such
amounts and at such times as shall be determined pursuant to this Section 2.3 as
partial  relief for the damages to the Purchasers by reason of any such delay in
or reduction of their ability to sell the Registrable  Securities  (which remedy
shall not be exclusive of any other remedies available at law or in equity).

         Upon and after any failure by the Company  described in the immediately
preceding sentence (a "Default"),  the Company shall be required to issue to the
holders of  Registrable  Securities,  warrants to purchase a number of shares of
Common  Stock  equal to  100,000  shares of Common  Stock for each month or part
thereof  (appropriately  prorated),  during which a default exists (the "Default
Warrants").  The  Default  Warrants  shall  be in the form of  Exhibit  C to the
Securities  Purchase  Agreement,  shall have an  exercise  price of $1.00 and an
expiration date five years from the date of the issuance. Such warrants shall be
issued on the last day of each month (or part  thereof)  during  which a Default
occurred or was  continuing.  Each  Holder of  Registrable  Securities  shall be
issued  Default  Warrants  on the  last  day of  each  month  equal  to  100,000
(appropriately  prorated  for partial  months)  multiplied  by a  fraction,  the
numerator of which is the number of Registrable  Securities owned by such Holder
and the  denominator  of which is the total  number of  Registrable  Securities,
which shall be rounded up to the next whole  share.  All shares of Common  Stock
issuable pursuant to such Default Warrants shall be duly authorized,  fully paid
and non-assumable shares of Common Stock.

         Section 2.4 Piggy-Back  Registrations.  Subject to the last sentence of
this Section  2.4, if at any time prior to the  expiration  of the  Registration
Period (as hereinafter defined) the Company shall determine to file with the SEC
a  Registration  Statement  relating to an  offering  for its own account or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-4 or Form S-8 or their then equivalents  relating to equity securities
to be issued solely in connection with any acquisition of any entity or business
or equity  securities  issuable in  connection  with stock  option or other bona
fide,  employee benefit plans),  the Company shall send to each Purchaser who is
entitled to  registration  rights under this  Agreement  written  notice of such
determination  and,  if within  fifteen  days after the  effective  date of such
notice, such Purchaser shall so request in writing, the Company shall include in
such Registration  Statement all or any part of the Registrable  Securities such
Purchaser  requests to be  registered,  except that if, in  connection  with any
underwritten  public  offering  for the  account  of the  Company  the  managing
underwriter(s)  thereof  shall  impose a  limitation  on the number of shares of
Common Stock which may be included in the  Registration  Statement  because,  in
such  underwriter(s)'   judgment,   marketing  or  other  factors  dictate  such
limitation  is necessary to  facilitate  public  distribution,  then the Company
shall be obligated to include in such  Registration  Statement only such limited
portion of the  Registrable  Securities with respect to which such Purchaser has
requested  inclusion hereunder as the underwriter shall permit. Any exclusion of
Registrable  Securities  shall be made pro rata among the Purchasers  seeking to
include  Registrable  Securities  in  proportion  to the  number of  Registrable
Securities sought to be included by such Purchasers; provided, however, that the
Company  shall not exclude  any  Registrable  Securities  unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to  inclusion  of such  securities  in such  Registration  Statement  or are not
entitled to pro rata inclusion with the  Registrable  Securities;  and provided,
further,  however,  that,  after  giving  effect  to the  immediately  preceding
proviso,  any exclusion of  Registrable  Securities  shall be made pro rata with
holders of other  securities  having the right to include such securities in the
Registration Statement other than holders of securities entitled to inclusion of
their securities in such Registration Statement by reason of demand registration



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rights.  No right to registration of Registrable  Securities  under this Section
2.4 shall be  construed to limit any  registration  required  under  Section 2.1
hereof.  If an offering  in  connection  with which a  Purchaser  is entitled to
registration  under this  Section  2.4 is an  underwritten  offering,  then each
Purchaser  whose  Registrable  Securities  are  included  in  such  Registration
Statement shall,  unless  otherwise  agreed by the Company,  offer and sell such
Registrable Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same terms
and  conditions  as other shares of Common Stock  included in such  underwritten
offering.  Notwithstanding  anything  to the  contrary  set  forth  herein,  the
registration rights of the Purchasers pursuant to this Section 2.4 shall only be
available in the event the Company fails to timely file, obtain effectiveness or
maintain  effectiveness  of any  Registration  Statement to be filed pursuant to
Section 2.1 in accordance with the terms of this Agreement.

         Section 2.5 Eligibility  for Form S-3, SB-2 or S-1;  Conversion to Form
S-3. The Company  represents and warrants that it meets the requirements for the
use of Form S-3, SB-2 or S-1 for the  registration of the sale by the Purchasers
of the Registrable  Securities.  The Company agrees to file all reports required
to be filed by the  Company  with the SEC in a  timely  manner  so as to  remain
eligible or become eligible,  as the case may be, and thereafter to maintain its
eligibility,  for the use of Form S-3. If the Company is not currently  eligible
to use Form S-3, not later than five (5) business  days after the Company  first
meets the registration  eligibility and transaction  requirements for the use of
Form S-3 (or any successor  form) for  registration of the offer and sale by the
Purchasers of the Registrable Securities,  the Company shall file a Registration
Statement on Form S-3 (or such successor  form) with respect to the  Registrable
Securities  covered  by the  Registration  Statement  on Form  SB-2 or Form S-1,
whichever  is  applicable,  filed  pursuant to Section 2.1 (and  include in such
Registration  Statement on Form S-3 the  information  required by Rule 429 under
the Securities Act) or convert the  Registration  Statement on Form SB-2 or Form
S-1,  whichever  is  applicable,  filed  pursuant  to Section  2.1 to a Form S-3
pursuant  to Rule 429  under the  Securities  Act and  cause  such  Registration
Statement (or such amendment) to be declared effective no later than thirty (30)
days after filing.  In the event of a breach by the Company of the provisions of
this  Section 2.5,  the Company  will be required to make  payments  pursuant to
Section 2.3 hereof.

                                  ARTICLE III.
                           OBLIGATIONS OF THE COMPANY

         Section  3.1   Registration   Procedures.   In   connection   with  the
registration of the Registrable Securities, the Company shall have the following
obligations:

         (a) The Company shall prepare promptly, and file with the SEC not later
than  the  Filing  Date,  a  Registration  Statement  that  covers  all  of  the
Registrable Securities,  as provided in Section 2.1, and thereafter use its best
efforts to cause such Registration  Statement relating to Registrable Securities
to become  effective as soon as possible after such filing but in no event later
than one hundred thirty-five days from the date of this Agreement,  and keep the
Registration  Statement  effective  pursuant to Rule 415 at all times until such
date  as is  the  earlier  of (i)  the  date  on  which  all of the  Registrable
Securities have been sold and (ii) the date on which the Registrable  Securities
(in the opinion of counsel to the  Purchasers)  may be  immediately  sold to the
public without registration or restriction (including, without limitation, as to



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volume by each holder thereof) under the 1933 Act (the  "Registration  Period"),
which Registration  Statement  (including any amendments or supplements  thereto
and prospectuses  contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading.

         (b) The Company  shall  prepare  and file with the SEC such  amendments
(including  post-effective  amendments)  and  supplements  to  the  Registration
Statements  and  the  prospectus  used  in  connection  with  the   Registration
Statements as may be necessary to keep the Registration  Statements effective at
all times during the Registration  Period, and, during such period,  comply with
the  provisions  of  the  1933  Act  with  respect  to  the  disposition  of all
Registrable  Securities of the Company  covered by the  Registration  Statements
until such time as all of such  Registrable  Securities have been disposed of in
accordance  with the intended  methods of  disposition  by the seller or sellers
thereof as set forth in the Registration Statements.  In the event the number of
shares available under a Registration Statement filed pursuant to this Agreement
is insufficient to cover all of the  Registrable  Securities,  the Company shall
amend the Registration  Statement,  or file a new Registration Statement (on the
short form available  therefor,  if applicable),  or both, so as to cover all of
the Registrable  Securities,  in each case, as soon as  practicable,  but in any
event within fifteen (15) days after the necessity  therefor arises. The Company
shall use its best  efforts to cause  such  amendment  and/or  new  Registration
Statement  to become  effective  as soon as  practicable  following  the  filing
thereof,  but in any event  within  thirty (30) days after the date on which the
Company  reasonably first determines (or reasonably  should have determined) the
need therefor.

         (c) The  Company  shall  furnish to each  Purchaser  whose  Registrable
Securities  are included in a  Registration  Statement and its legal counsel (i)
promptly  (but in no event more than two (2)  business  days)  after the same is
prepared  and  publicly  distributed,  filed with the SEC,  or  received  by the
Company, one copy of each Registration Statement and any amendment thereto, each
preliminary  prospectus and prospectus and each amendment or supplement thereto,
and, in the case of the Registration  Statement referred to in Section 2.1, each
letter  written  by or on behalf of the  Company  to the SEC or the staff of the
SEC,  and each item of  correspondence  from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment),  and (ii) promptly (but in no event more than two (2) business days)
after the Registration  Statement is declared  effective by the SEC, such number
of  copies  of  a  prospectus,  including  a  preliminary  prospectus,  and  all
amendments and  supplements  thereto and such other  documents as such Purchaser
may reasonably request in order to facilitate the disposition of the Registrable
Securities  owned by such Purchaser.  The Company will  immediately  notify each
Purchaser by facsimile of the  effectiveness of each  Registration  Statement or
any  post-effective  amendment.  The Company will promptly (but in no event more
than ten (10) business  days) respond to any and all comments  received from the
SEC (which  comments shall  promptly be made  available to the  Purchasers  upon
request),  with  a view  towards  causing  each  Registration  Statement  or any
amendment  thereto to be declared  effective by the SEC as soon as  practicable,
shall promptly file an  acceleration  request as soon as practicable  (but in no



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event more than two (2) business days)  following the resolution or clearance of
all SEC comments or, if applicable,  following  notification by the SEC that any
such  Registration  Statement  or any  amendment  thereto will not be subject to
review  and  shall  promptly  file  with the SEC a final  prospectus  as soon as
practicable (but in no event more than two (2) business days) following  receipt
by the Company from the SEC of an order  declaring  the  Registration  Statement
effective.  In the event of a breach by the  Company of the  provisions  of this
Section  3.1(c),  the  Company  will be required  to make  payments  pursuant to
Section 2.3 hereof.

         (d) The Company  shall use its best efforts to (i) register and qualify
the Registrable  Securities  covered by the  Registration  Statements under such
other  securities or "blue sky" laws of such  jurisdictions in the United States
as the Purchasers who hold a majority-in-interest  of the Registrable Securities
being offered reasonably  request,  (ii) prepare and file in those jurisdictions
such amendments  (including  post-effective  amendments) and supplements to such
registrations   and   qualifications   as  may  be  necessary  to  maintain  the
effectiveness  thereof  during the  Registration  Period,  (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times  during  the  Registration  Period,  and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable  Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection  therewith or as a condition thereto to (a) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3.1(d),  (b) subject itself to general taxation in any such
jurisdiction,  (c) file a general  consent  to  service  of  process in any such
jurisdiction,  (d) provide any undertakings that cause the Company undue expense
or burden,  or (e) make any change in its charter or bylaws,  which in each case
the Board of  Directors  of the  Company  determines  to be contrary to the best
interests of the Company and its shareholders.

         (e) In the  event  Purchasers  who hold a  majority-in-interest  of the
Registrable Securities being offered in the offering select underwriters for the
offering,  the Company  shall enter into and  perform its  obligations  under an
underwriting  agreement,  in  usual  and  customary  form,  including,   without
limitation,  customary  indemnification and contribution  obligations,  with the
underwriters of such offering.

         (f) As promptly as practicable  after becoming aware of such event, the
Company shall notify each Purchaser of the happening of any event,  of which the
Company  has  knowledge,  as a result of which the  prospectus  included  in any
Registration  Statement,  as then in effect,  includes an untrue  statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the  statements  therein not  misleading,  and use its best
efforts  promptly  to prepare a  supplement  or  amendment  to any  Registration
Statement to correct such untrue statement or omission,  and deliver such number
of copies of such  supplement or amendment to each  Purchaser as such  Purchaser
may  reasonably  request;   provided  that,  for  not  more  than  fifteen  (15)
consecutive  trading  days (or a total of not more than thirty (30) trading days
in any twelve  (12) month  period),  the  Company  may delay the  disclosure  of
material non-public information concerning the Company (as well as prospectus or
Registration  Statement updating) the disclosure of which at the time is not, in
the good faith opinion of the Company,  in the best interests of the Company (an
"Allowed  Delay");  provided,  that such number of days shall not include the 15
calendar days  following the filing of any Form 8-K, Form 10-QSB or Form 10-KSB,
or other comparable  form, for purposes of filing a post-effective  amendment to
the Registration Statement;  provided,  further, that the Company shall promptly
(i) notify the  Purchasers  in  writing  of the  existence  of (but in no event,
without the prior written consent of a Purchaser,  shall the Company disclose to
such Purchaser any of the facts or circumstances  regarding) material non-public
information  giving rise to an Allowed  Delay and (ii) advise the  Purchasers in



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writing to cease all sales under such  Registration  Statement  until the end of
the Allowed Delay. Upon expiration of the Allowed Delay, the Company shall again
be bound by the first  sentence  of this  Section  3.1(f)  with  respect  to the
information giving rise thereto.

         (g) The Company  shall use its best  efforts to prevent the issuance of
any  stop  order  or  other  suspension  of  effectiveness  of any  Registration
Statement,  and, if such an order is issued,  to obtain the  withdrawal  of such
order at the earliest  possible  moment and to notify each  Purchaser  who holds
Registrable Securities being sold (or, in the event of an underwritten offering,
the  managing  underwriters)  of the  issuance of such order and the  resolution
thereof.

         (h) The Company shall permit a single firm of counsel designated by the
Purchasers (the "Purchaser  Counsel") to review such Registration  Statement and
all amendments and supplements thereto (as well as all requests for acceleration
or effectiveness thereof) a reasonable period of time prior to their filing with
the  SEC,  and not  file  any  document  in a form to  which  Purchaser  Counsel
reasonably  objects  and  will not  request  acceleration  of such  Registration
Statement  without  prior  notice to  Purchaser  Counsel.  The  sections of such
Registration Statement covering information with respect to the Purchasers,  the
Purchaser's  beneficial ownership of securities of the Company or the Purchasers
intended  method of disposition of Registrable  Securities  shall conform to the
information provided to the Company by each of the Purchasers.

         (i) The Company shall make generally  available to its security holders
as soon as  practicable,  but not later than  ninety days after the close of the
period  covered  thereby,  an earnings  statement  (in form  complying  with the
provisions  of Rule 158 under  the 1933  Act)  covering  a  twelve-month  period
beginning  not later than the first day of the  Company's  fiscal  quarter  next
following the effective date of the Registration Statement.

         (j) At the request of any Purchaser,  the Company shall furnish, on the
date that  Registrable  Securities are delivered to an underwriter,  if any, for
sale in connection  with any  Registration  Statement or, if such securities are
not being sold by an underwriter,  on the date of  effectiveness  thereof (i) an
opinion,  dated as of such date,  from  counsel  representing  the  Company  for
purposes of such  Registration  Statement,  in form,  scope and  substance as is
customarily  given  in  an  underwritten  public  offering,   addressed  to  the
underwriters,  if any, and the  Purchasers  and (ii) a letter,  dated such date,
from  the  Company's  independent  certified  public  accountants  in  form  and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering,  addressed to the underwriters,
if any, and the Purchasers.

         (k)  The  Company  shall  make  available  for  inspection  by (i)  any
Purchaser,  (ii) any underwriter  participating in any disposition pursuant to a
Registration Statement,  (iii) one firm of attorneys and one firm of accountants
or other  agents  retained  by the  Purchasers,  and (iv) one firm of  attorneys
retained by all such underwriters (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company,  including  without  limitation,  records of  conversions  by other
holders of  convertible  securities  issued by the Company  and the  issuance of
stock to such holders pursuant to the conversions (collectively, the "Records"),
as shall be  reasonably  deemed  necessary  by each  Inspector  to  enable  each
Inspector to exercise its due diligence responsibility,  and cause the Company's



                                       7
<PAGE>

officers,  directors and employees to supply all information which any Inspector
may reasonably  request for purposes of such due diligence;  provided,  however,
that each  Inspector  shall hold in confidence and shall not make any disclosure
(except to a  Purchaser)  of any Record or other  information  which the Company
determines  in good faith to be  confidential,  and of which  determination  the
Inspectors  are so  notified,  unless  (a) the  disclosure  of such  Records  is
necessary  to avoid or correct a  misstatement  or omission in any  Registration
Statement,  (b) the release of such Records is ordered pursuant to a subpoena or
other order from a court or government  body of competent  jurisdiction,  or (c)
the information in such Records has been made generally  available to the public
other  than by  disclosure  in  violation  of this or any other  agreement.  The
Company shall not be required to disclose any  confidential  information in such
Records to any Inspector until and unless such Inspector shall have entered into
confidentiality  agreements (in form and substance  satisfactory to the Company)
with the Company with respect thereto, substantially in the form of this Section
3.1(k).  Each Purchaser  agrees that it shall,  upon learning that disclosure of
such  Records  is  sought  in or by a court or  governmental  body of  competent
jurisdiction or through other means, give prompt notice to the Company and allow
the  Company,  at its  expense,  to  undertake  appropriate  action  to  prevent
disclosure  of,  or to  obtain  a  protective  order  for,  the  Records  deemed
confidential.  Nothing herein (or in any other confidentiality agreement between
the Company and any Purchaser) shall be deemed to limit the Purchaser's  ability
to sell  Registrable  Securities in a manner which is otherwise  consistent with
applicable laws and regulations.

         (l) The Company shall hold in confidence and not make any disclosure of
information concerning a Purchaser provided to the Company unless (i) disclosure
of such  information  is necessary  to comply with  federal or state  securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement  or omission in any  Registration  Statement,  (iii) the release of
such  information is ordered  pursuant to a subpoena or other order from a court
or governmental  body of competent  jurisdiction,  or (iv) such  information has
been  made  generally  available  to the  public  other  than by  disclosure  in
violation of this or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning a Purchaser is sought in
or by a court or  governmental  body of competent  jurisdiction or through other
means, give prompt notice to such Purchaser prior to making such disclosure, and
allow the Purchaser,  at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.

         (m) The Company shall (i) cause all the Registrable  Securities covered
by the Registration  Statement to be listed on each national securities exchange
on which  securities  of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable  Securities is then permitted
under the rules of such  exchange,  or (ii) to the extent the  securities of the
same class or series  are not then  listed on a  national  securities  exchange,
secure the designation and quotation,  of all the Registrable Securities covered
by the  Registration  Statement  on Nasdaq or, if not  eligible  for Nasdaq,  on
Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq SmallCap,  on the OTCBB
and, without  limiting the generality of the foregoing,  to use its commercially
reasonable  efforts to arrange for at least two market  makers to register  with
the National  Association  of  Securities  Dealers,  Inc.  ("NASD") as such with
respect to such Registrable Securities.




                                       8
<PAGE>

         (n) The Company shall provide a transfer agent and registrar, which may
be a single entity, for the Registrable  Securities not later than the effective
date of the Registration Statement.

         (o)  The  Company  shall   cooperate   with  the  Purchasers  who  hold
Registrable   Securities   being  offered  and  the  managing   underwriter   or
underwriters,  if any, to  facilitate  the timely  preparation  and  delivery of
certificates  (not bearing any  restrictive  legends)  representing  Registrable
Securities to be offered  pursuant to a  Registration  Statement and enable such
certificates to be in such denominations or amounts,  as the case may be, as the
managing  underwriter or underwriters,  if any, or the Purchasers may reasonably
request  and   registered  in  such  names  as  the  managing   underwriter   or
underwriters, if any, or the Purchasers may request.

         (p) At the  request  of the  holders of a  majority-in-interest  of the
Registrable  Securities,  the Company  shall  prepare and file with the SEC such
amendments   (including   post-effective   amendments)   and  supplements  to  a
Registration   Statement  and  any  prospectus   used  in  connection  with  the
Registration  Statement  as may be  necessary  in  order to  change  the plan of
distribution set forth in such Registration Statement.

         (q) Other  than  those  security  holders  to be  included  as  selling
security holders in the Registration  Statement pursuant to registration  rights
disclosed in the Company's Disclosure Schedule,  if any, from and after the date
of this  Agreement,  the Company  shall not,  and shall not agree to,  allow the
holders of any  securities of the Company to include any of their  securities in
any  Registration  Statement  under  Section  2.1  hereof  or any  amendment  or
supplement  thereto  under  Section  3.1(b)  hereof  without  the consent of the
holders  of a  majority-in-interest  of the  Registrable  Securities;  provided,
however,  that such  consent  shall  automatically  be deemed to be granted by a
majority-in-interest  of the  Registrable  Securities at any time  following the
repayment in full of all outstanding obligations of the Company under the Notes.

         (r) The Company shall take all other  reasonable  actions  necessary to
expedite and facilitate  disposition by the Purchasers of Registrable Securities
pursuant to a Registration Statement.

                                   ARTICLE IV.
                          OBLIGATIONS OF THE PURCHASERS

         Section 4.1 Purchasers Obligations. In connection with the registration
of  the  Registrable  Securities,   the  Purchasers  shall  have  the  following
obligations:

         (a) It shall be a condition precedent to the obligations of the Company
to complete  the  registration  pursuant to this  Agreement  with respect to the
Registrable  Securities  of a particular  Purchaser  that such  Purchaser  shall
furnish to the  Company  such  information  regarding  itself,  the  Registrable
Securities  held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such  Registrable  Securities  and shall execute such documents in connection
with such  registration  as the Company may reasonably  request.  At least three



                                       9
<PAGE>

business  days prior to the first  anticipated  Filing Date of the  Registration
Statement (and any other amendments), the Company shall notify each Purchaser of
the information the Company requires from each such Purchaser.

         (b) Each Purchaser,  by such Purchaser's  acceptance of the Registrable
Securities,  agrees to cooperate with the Company as reasonably requested by the
Company  in  connection  with the  preparation  and  filing of any  Registration
Statements hereunder,  unless such Purchaser has notified the Company in writing
of such  Purchaser's  election  to exclude all of such  Purchaser's  Registrable
Securities from such Registration Statements.

         (c) In the  event  Purchasers  holding  a  majority-in-interest  of the
Registrable  Securities being registered  determine to engage the services of an
underwriter,  each Purchaser  agrees to enter into and perform such  Purchaser's
obligations  under an  underwriting  agreement,  in usual  and  customary  form,
including,  without  limitation,   customary  indemnification  and  contribution
obligations,  with the managing underwriter of such offering and take such other
actions as are  reasonably  required  in order to  expedite  or  facilitate  the
disposition of the  Registrable  Securities,  unless such Purchaser has notified
the  Company in  writing of such  Purchaser's  election  to exclude  all of such
Purchaser's Registrable Securities from such Registration Statement.

         (d) Each  Purchaser  agrees  that,  upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3.1(f) or
Section  3.1(g),  such Purchaser  will  immediately  discontinue  disposition of
Registrable  Securities  pursuant to the  Registration  Statement  covering such
Registrable  Securities  until  such  Purchaser's  receipt  of the copies of the
supplemented  or amended  prospectus  contemplated  by Section 3.1(f) or Section
3.1(g) and, if so directed by the Company,  such Purchaser  shall deliver to the
Company (at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction)  all copies in such Purchaser's  possession,  of the
prospectus  covering such Registrable  Securities current at the time of receipt
of such notice.

         (e) No  Purchaser  may  participate  in any  underwritten  registration
hereunder unless such Purchaser (i) agrees to sell such Purchaser's  Registrable
Securities on the basis provided in any  underwriting  arrangements in usual and
customary  form  entered into by the Company,  (ii)  completes  and executes all
questionnaires,  powers of attorney,  indemnities,  underwriting  agreements and
other  documents  reasonably  required  under  the  terms  of such  underwriting
arrangements,  and (iii)  agrees to pay its pro rata  share of all  underwriting
discounts  and  commissions  and any expenses in excess of those  payable by the
Company pursuant to Section 5.1 below.

                                   ARTICLE V.
                            EXPENSES OF REGISTRATION

         Section 5.1 Expenses.  All reasonable  expenses  incurred in connection
with  registrations,  filings or  qualifications  pursuant  to Sections 2 and 3,
including, without limitation, all registration, listing and qualification fees,
printers and  accounting  fees,  the fees and  disbursements  of counsel for the
Company,  and the reasonable fees and  disbursements  of one counsel selected by
the  Purchasers  pursuant to Sections  2.2 and 3(h) hereof shall be borne by the
Company.




                                       10
<PAGE>

                                   ARTICLE VI.
                                 INDEMNIFICATION

         Section 6.1  Indemnity.  In the event any  Registrable  Securities  are
included in a Registration Statement under this Agreement:

         (a) To the extent  permitted by law, the Company will  indemnify,  hold
harmless and defend (i) each  Purchaser who holds such  Registrable  Securities,
(ii) the directors,  officers,  partners,  employees, agents and each person who
controls  any  Purchaser  within the  meaning of the 1933 Act or the  Securities
Exchange Act of 1934, as amended (the "1934 Act"), if any, (iii) any underwriter
(as  defined  in the 1933  Act)  for the  Purchasers,  and  (iv) the  directors,
officers,  partners, employees and each person who controls any such underwriter
within  the  meaning  of the  1933  Act or  the  1934  Act,  if  any  (each,  an
"Indemnified  Person"),  against any joint or several losses,  claims,  damages,
liabilities  or expenses  (collectively,  together with actions,  proceedings or
inquiries by any regulatory or self-regulatory  organization,  whether commenced
or  threatened,  in respect  thereof,  "Claims") to which any of them may become
subject  insofar as such Claims  arise out of or are based upon:  (i) any untrue
statement  or alleged  untrue  statement  of a material  fact in a  Registration
Statement or the omission or alleged  omission to state  therein a material fact
required  to  be  stated  or  necessary  to  make  the  statements  therein  not
misleading;  (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final prospectus (as amended
or  supplemented,  if the  Company  files any  amendment  thereof or  supplement
thereto with the SEC) or the omission or alleged  omission to state  therein any
material fact  necessary to make the  statements  made therein,  in light of the
circumstances  under which the statements therein were made, not misleading;  or
(iii) any  violation  or alleged  violation  by the Company of the 1933 Act, the
1934 Act, any other law,  including,  without  limitation,  any state securities
law, or any rule or regulation  thereunder  relating to the offer or sale of the
Registrable  Securities (the matters in the foregoing  clauses (i) through (iii)
being,  collectively,  "Violations").  Subject to the  restrictions set forth in
Section 6(c) with respect to legal  counsel,  the Company  shall  reimburse  the
Indemnified  Person,  promptly as such  expenses  are  incurred  and are due and
payable,  for any reasonable legal fees or other reasonable expenses incurred by
them  in   connection   with   investigating   or  defending   any  such  Claim.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained  in this  Section  6.1(a):  (i)  shall not apply to a Claim
arising out of or based upon a Violation  which  occurs in reliance  upon and in
conformity  with  information  furnished  in  writing  to  the  Company  by  any
Indemnified  Person or underwriter for such Indemnified Person expressly for use
in connection  with the preparation of such  Registration  Statement or any such
amendment  thereof or supplement  thereto,  if such  prospectus  was timely made
available by the Company pursuant to Section 3.1(c) hereof; (ii) shall not apply
to  amounts  paid in  settlement  of any Claim if such  settlement  is  effected
without the prior  written  consent of the Company,  which  consent shall not be
unreasonably  withheld;  and (iii) with respect to any  preliminary  prospectus,
shall not inure to the benefit of any Indemnified Person if the untrue statement
or  omission  of material  fact  contained  in the  preliminary  prospectus  was
corrected on a timely basis in the prospectus,  as then amended or supplemented,
such corrected  prospectus was timely made available by the Company  pursuant to



                                       11
<PAGE>

Section  3.1(c)  hereof,  and the  Indemnified  Person was  promptly  advised in
writing not to use the  incorrect  prospectus  prior to the use giving rise to a
Violation and such Indemnified  Person,  notwithstanding  such advice,  used it.
Such  indemnity  shall  remain  in  full  force  and  effect  regardless  of any
investigation  made by or on behalf of the Indemnified  Person and shall survive
the transfer of the Registrable Securities by the Purchasers pursuant to Section
9.1.

         (b) In connection with any Registration  Statement in which a Purchaser
is  participating,  each such  Purchaser  agrees  severally  and not  jointly to
indemnify,  hold harmless and defend,  to the same extent and in the same manner
set forth in Section  6.1(a),  the Company,  each of its directors,  each of its
officers who signs the Registration Statement, each person, if any, who controls
the Company within the meaning of the 1933 Act or the 1934 Act, any  underwriter
and any  other  shareholder  selling  securities  pursuant  to the  Registration
Statement or any of its  directors  or officers or any person who controls  such
shareholder  or  underwriter  within the meaning of the 1933 Act or the 1934 Act
(collectively and together with an Indemnified Person, an "Indemnified  Party"),
against any Claim to which any of them may become  subject,  under the 1933 Act,
the 1934 Act or otherwise,  insofar as such Claim arises out of or is based upon
any  Violation  by such  Purchaser,  in each case to the extent (and only to the
extent)  that such  Violation  occurs in reliance  upon and in  conformity  with
written information furnished to the Company by such Purchaser expressly for use
in connection with such  Registration  Statement;  and subject to Section 6.1(c)
such  Purchaser  will  reimburse any legal or other  expenses  (promptly as such
expenses are incurred  and are due and payable)  reasonably  incurred by them in
connection with  investigating or defending any such Claim;  provided,  however,
that the indemnity agreement contained in this Section 6.1(b) shall not apply to
amounts paid in settlement of any Claim if such  settlement is effected  without
the  prior  written  consent  of such  Purchaser,  which  consent  shall  not be
unreasonably withheld;  provided,  further, however, that the Purchaser shall be
liable under this Agreement  (including this Section 6.1(b) and Section 7.1) for
only that  amount as does not exceed the net  proceeds  to such  Purchaser  as a
result  of the sale of  Registrable  Securities  pursuant  to such  Registration
Statement.  Such indemnity  shall remain in full force and effect  regardless of
any  investigation  made by or on  behalf  of such  Indemnified  Party and shall
survive the transfer of the Registrable Securities by the Purchasers pursuant to
Section 9.1.  Notwithstanding  anything to the contrary  contained  herein,  the
indemnification  agreement  contained in this Section 6.1(b) with respect to any
preliminary  prospectus shall not inure to the benefit of any Indemnified  Party
if  the  untrue  statement  or  omission  of  material  fact  contained  in  the
preliminary  prospectus  was corrected on a timely basis in the  prospectus,  as
then amended or supplemented.

         (c) Promptly  after  receipt by an  Indemnified  Person or  Indemnified
Party  under  this  Section  6.1 of notice  of the  commencement  of any  action
(including any  governmental  action),  such  Indemnified  Person or Indemnified
Party  shall,  if a  Claim  in  respect  thereof  is  to  be  made  against  any
indemnifying  party under this Section 6.1, deliver to the indemnifying  party a
written notice of the commencement  thereof,  and the  indemnifying  party shall
have the right to participate in, and, to the extent the  indemnifying  party so
desires,  jointly with any other indemnifying party similarly noticed, to assume
control  of the  defense  thereof  with  counsel  mutually  satisfactory  to the



                                       12
<PAGE>

indemnifying  party and the Indemnified  Person or the Indemnified Party, as the
case may be; provided,  however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel  with the fees and expenses to be
paid by the  indemnifying  party,  if,  in the  reasonable  opinion  of  counsel
retained by the indemnifying  party, the  representation  by such counsel of the
Indemnified  Person or  Indemnified  Party and the  indemnifying  party would be
inappropriate  due to actual  or  potential  differing  interests  between  such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel  in such  proceeding.  The  indemnifying  party  shall  pay for only one
separate legal counsel for the Indemnified  Persons or the Indemnified  Parties,
as applicable,  and such legal counsel shall be selected by Purchasers holding a
majority-in-interest  of the Registrable Securities included in the Registration
Statement  to which  the  Claim  relates,  if the  Purchasers  are  entitled  to
indemnification  hereunder,  or the  Company,  if the  Company  is  entitled  to
indemnification  hereunder, as applicable. The failure to deliver written notice
to the  indemnifying  party within a reasonable time of the  commencement of any
such action shall not relieve such  indemnifying  party of any  liability to the
Indemnified  Person or Indemnified  Party under this Section 6.1,  except to the
extent  that the  indemnifying  party is actually  prejudiced  in its ability to
defend such action.  The  indemnification  required by this Section 6.1 shall be
made by  periodic  payments  of the  amount  thereof  during  the  course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

                                  ARTICLE VII.
                                  CONTRIBUTION

         Section  7.1  Contribution.  To the  extent any  indemnification  by an
indemnifying  party is  prohibited  or limited by law,  the  indemnifying  party
agrees to make the maximum contribution with respect to any amounts for which it
would  otherwise be liable under  Section 6 to the fullest  extent  permitted by
law;  provided,   however,   that  (i)  no  contribution  shall  be  made  under
circumstances  where the maker  would not have been  liable for  indemnification
under the fault  standards set forth in Section 6, (ii) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act)  shall be  entitled  to  contribution  from any seller of
Registrable Securities who was not guilty of such fraudulent  misrepresentation,
and (iii) contribution  (together with any  indemnification or other obligations
under this Agreement) by any seller of Registrable  Securities  shall be limited
in amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities.

                                  ARTICLE VIII.
                           REPORTS UNDER THE 1934 ACT

         Section 8.1 1934 Act Reports.  Whether, with a view to making available
to the Purchasers the benefits of Rule 144 promulgated under the 1933 Act or any
other  similar  rule or  regulation  of the SEC that may at any time  permit the
Purchasers to sell securities of the Company to the public without  registration
("Rule 144") or otherwise, the Company agrees to:

         (a) make and keep  public  information  available,  as those  terms are
understood and defined in Rule 144;

         (b)  file  with  the SEC in a  timely  manner  all  reports  and  other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such  requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and

         (c)  furnish  to  each   Purchaser  so  long  as  such  Purchaser  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company that it has complied  with the reporting  requirements  of Rule 144, the



                                       13
<PAGE>

1933 Act and the 1934 Act,  (ii) a copy of the most recent  annual or  quarterly
report of the  Company  and such other  reports  and  documents  so filed by the
Company,  and (iii) such other  information  as may be  reasonably  requested to
permit the  Purchasers  to sell such  securities  pursuant  to Rule 144  without
registration.

                                   ARTICLE IX.
                        ASSIGNMENT OF REGISTRATION RIGHTS

         Section  9.1  Assignment.  The  rights  under this  Agreement  shall be
automatically  assignable  by the  Purchasers  to any  transferee  of all or any
portion of Registrable  Securities if: (i) the Purchaser  agrees in writing with
the  transferee or assignee to assign such rights,  and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (ii)
the Company is,  within a  reasonable  time after such  transfer or  assignment,
furnished with written notice of (a) the name and address of such  transferee or
assignee,  and (b) the securities with respect to which such registration rights
are being transferred or assigned,  (iii) following such transfer or assignment,
the further  disposition  of such  securities  by the  transferee or assignee is
restricted  under the 1933 Act and applicable  state securities laws, (iv) at or
before the time the Company  receives the written notice  contemplated by clause
(ii) of this  sentence,  the  transferee or assignee  agrees in writing with the
Company to be bound by all of the provisions contained herein, (v) such transfer
shall  have been made in  accordance  with the  applicable  requirements  of the
Securities Purchase Agreement,  and (vi) such transferee shall be an "accredited
investor" as that term defined in Rule 501 of Regulation D promulgated under the
1933 Act.

                                   ARTICLE X.
                        AMENDMENT OF REGISTRATION RIGHTS

         Section  10.1  Amendment,  Termination  or  Waiver.  Any  term  of this
Agreement may be  terminated  or amended and the  observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the  holders  of a  majority-in-interest  of  the  Registrable  Securities.  Any
termination,  amendment or waiver  effected in  accordance  with this  paragraph
shall be binding  upon each holder of the  Registrable  Securities,  each future
holder of the  Registrable  Securities,  their  successors and assigns,  and the
Company.

                                   ARTICLE XI.
                                  MISCELLANEOUS

         Section  11.1  Holder.  A person  or entity is deemed to be a holder of
Registrable  Securities  whenever  such  person  or entity  owns of record  such
Registrable  Securities.  If  the  Company  receives  conflicting  instructions,
notices or elections  from two or more  persons or entities  with respect to the
same  Registrable   Securities,   the  Company  shall  act  upon  the  basis  of
instructions,  notice or election  received  from the  registered  owner of such
Registrable Securities.

         Section  11.2  Notices.  Any notices  required or permitted to be given
under the terms hereof shall be sent by  certified  or  registered  mail (return
receipt requested) or delivered personally or by courier (including a recognized



                                       14
<PAGE>

overnight  delivery  service) or by facsimile  and shall be effective  five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery  service)  or by  facsimile,  in each case  addressed  to a party.  The
addresses for such communications shall be:

         If to the Company:
         ------------------

         Cubic Energy, Inc.
         9870 Plano Road
         Dallas, Texas 75238
         Facsimile: (972) 681-9687

         If to a Purchaser:
         ------------------

         to the address set forth  immediately  below such  Purchaser's  name on
Exhibit A to the Securities Purchase Agreement.

         With a copy to:

         Haynes and Boone, LLP
         1221 McKinney St., Suite 2100
         Houston, Texas 77010
         Attn:
         Facsimile: (713) 236-5699

         Section  11.3 No Waiver.  Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.

         Section 11.4 Governing Law. This Agreement shall be enforced,  governed
by and construed in accordance with the laws of the State of Texas applicable to
agreements made and to be performed  entirely within such state,  without regard
to the  principles of conflict of laws.  The parties hereto hereby submit to the
exclusive jurisdiction of the United States Federal Courts located Dallas, Texas
with respect to any dispute arising under this Agreement, the agreements entered
into in connection herewith or the transactions  contemplated hereby or thereby.
All  parties  irrevocably  waive the  defense  of an  inconvenient  forum to the
maintenance of such suit or proceeding.  The parties  further agree that service
of  process  upon a party  mailed by first  class  mail shall be deemed in every
respect  effective  service  of  process  upon the  party  in any  such  suit or
proceeding.  Nothing  herein shall affect any party's  right to serve process in
any other manner permitted by law. The parties agree that a final non-appealable
judgment in any such suit or proceeding  shall be conclusive and may be enforced
in other  jurisdictions  by suit on such judgment or in any other lawful manner.
The party  which does not prevail in any dispute  arising  under this  Agreement
shall be  responsible  for all fees and  expenses,  including  attorneys'  fees,
incurred by the prevailing party in connection with such dispute.




                                       15
<PAGE>

         Section  11.5  Severability.  In the event that any  provision  of this
Agreement is invalid or  unenforceable  under any applicable  statute or rule of
law, then such provision  shall be deemed  inoperative to the extent that it may
conflict  therewith  and shall be deemed  modified to conform to such statute or
rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or  enforceability  of any other provision
hereof.

         Section 11.6 Entire  Agreement.  This Agreement  constitutes the entire
agreement  among the parties  hereto with respect to the subject  matter hereof.
There are no  restrictions,  promises,  warranties or  undertakings,  other than
those set forth or referred to herein.  This  Agreement  supersedes the Original
Agreement and all other prior  agreements and  understandings  among the parties
hereto with respect to the subject matter hereof.

         Section  11.7  Assigns.  Subject to the  requirements  of  Section  9.1
hereof,  this  Agreement  shall be binding  upon and inure to the benefit of the
parties and their successors and assigns.

         Section  11.8  Headings.   The  headings  in  this  Agreement  are  for
convenience  of  reference  only and  shall  not form  part of,  or  affect  the
interpretation of, this Agreement.

         Section 11.9  Counterparts.  This  Agreement  may be executed in two or
more  counterparts,  each of which shall be deemed an original  but all of which
shall  constitute  one and the same  agreement and shall become  effective  when
counterparts  have been signed by each party and  delivered  to the other party.
This  Agreement,  once executed by a party,  may be delivered to the other party
hereto  by  facsimile  transmission  of a copy of  this  Agreement  bearing  the
signature of the party so delivering this Agreement.

         Section 11.10 Further  Assurances.  Each party shall do and perform, or
cause to be done and  performed,  all such  further  acts and things,  and shall
execute and deliver all such other  agreements,  certificates,  instruments  and
documents,  as the other party may reasonably  request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

         Section 11.11 Purchasers' Actions. Except as otherwise provided herein,
all consents and other  determinations to be made by the Purchasers  pursuant to
this Agreement shall be made by Purchasers holding a majority-in-interest of the
Registrable  Securities,  determined  as  if  all  of  the  Notes  and  Warrants
outstanding have been converted into or exercised for Registrable Securities.

         Section 11.12 Specific  Performances.  The Company  acknowledges that a
breach by it of its obligations  hereunder will cause  irreparable  harm to each
Purchaser by vitiating the intent and purpose of the  transactions  contemplated
hereby. Accordingly,  the Company acknowledges that the remedy at law for breach
of its  obligations  under this Agreement will be inadequate and agrees,  in the
event of a breach or threatened  breach by the Company of any of the  provisions
under this Agreement,  that each Purchaser shall be entitled, in addition to all
other available  remedies in law or in equity,  and in addition to the penalties
assessable  herein, to an injunction or injunctions  restraining,  preventing or



                                       16
<PAGE>

curing any breach of this  Agreement and to enforce  specifically  the terms and
provisions  hereof,  without the necessity of showing  economic loss and without
any bond or other security being required.

         Section  11.13  No  Strict  Construction.  The  language  used  in this
Agreement  will be deemed to be the  language  chosen by the  parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

                                    * * * * *























                                       17
<PAGE>

         IN WITNESS  WHEREOF,  the Company and the  undersigned  Purchasers have
caused this Agreement to be duly executed as of the date first above written.



                                                 CUBIC ENERGY, INC.



                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________





















                                      S-1
<PAGE>

                                                 PURCHASERS:


                                                 LEVY FAMILY PARTNERS, LLC

                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________



                                                 _______________________________
                                                 PATRICK PARKER


                                                 BARGUS PARTNERSHIP


                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________



                                                 _______________________________
                                                 EDWIN J. HAGERTY



                                                 _______________________________
                                                 ALBERT ADRIANI


                                                 PETRO CAPITAL HOLDINGS, LLC



                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________




                                      S-2
<PAGE>

                                                  X-MEN, LLC


                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________


                                                 BARRY S. COHN IRREVOCABLE TRUST


                                                 By:____________________________
                                                 Name:__________________________
                                                 Title:_________________________



                                                 _______________________________
                                                 BRUCE GOLDSTEIN





                                      S-3