Document:

Exhibit
10.1

 

CAUSE NO. 08-4526

 

	
  CARL DICK, 

   

  Plaintiff,
  

   

  v.
  

   

  HEELYS, INC., et al. 

   

  Defendants.

  	
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  §

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  §

  §

  §

  §

  	
  IN
  THE COUNTY COURT 

   

   

   

  AT
  LAW NO. 1 

   

   

   

   

  DALLAS
  COUNTY, TEXAS

  

 

COMPROMISE AND SETTLEMENT AGREEMENT

 

ON THIS DAY, Plaintiff Carl
Dick has agreed with Defendants Heelys, Inc. (“Heelys”), Michael G.
Staffaroni, Michael W. Hessong, Patrick F. Hamner, Roger R. Adams, Richard E.
Middlekauff, Samuel B. Ligon, the estate of William R. Thomas, James T.
Kindley, Jeffrey G. Peterson, Capital Southwest Corporation, Capital Southwest
Venture Corporation, Bear, Stearns & Co., Inc. n/k/a J.P Morgan
Securities Inc., Wachovia Capital Markets, L.L.C. n/k/a Wells Fargo Securities,
LLC, J.P. Morgan Securities, Inc., and CIBC World Markets Corp
(collectively, “Defendants;” Dick and Defendants are collectively the “Parties”)
for the compromise and settlement of all disputes and claims between them, as
follows:

 

1.             Carl Dick and Defendants hereby compromise and
settle all disputes and claims between them, including without limitation the
claims asserted in the above-titled lawsuit (the “Lawsuit”), on the terms and
conditions set out in this Compromise and Settlement Agreement (the “Agreement”).

 

2.             The releases and covenants not to sue contained in
this Agreement shall, on behalf of each party to this Agreement, include its,
or his, respective past, present, and former directors, officers, shareholders,
agents, employees, attorneys, servants, parents, subsidiaries, partners,
managers, owners, affiliates, investors, interest owners, other
representatives, successors, 

 

1

 

assigns, and all other persons and entities acting on behalf of or by,
through, or under one or more of them.

 

3.             Defendants shall, within seven days of the execution
of this Compromise and Settlement Agreement, pay to Carl Dick the sum of
$2,500,000 by wire transfer to the designated trust account of Hutchinson Law
Firm LLC.

 

4.             On or before December 1, 2009, Defendants shall
pay to Carl Dick the sum of $2,750,000 by the delivery of such sum by wire
transfer to the designated trust account of Hutchinson Law Firm LLC.

 

5.             As consideration for the payment described in
Paragraphs 3 and 4 above, Carl Dick releases all claims that were asserted or
could have been asserted against Defendants in the above-titled suit and all
claims or causes of action (known or unknown) based upon federal or state or
any other applicable law arising in any way out of the purchase, sale, or
holding of any Heelys stock or Heelys security by Carl Dick.  All litigation between Carl Dick and
Defendants, including claims that have been brought or could have been brought,
will be dismissed with prejudice.  Within
three days of receipt of the payment set forth in paragraph 3 above, Carl Dick
shall file with the Court the appropriate papers to dismiss the Lawsuit with
prejudice.

 

6.             Each party to this Agreement hereby covenants,
represents and warrants to each other party that:

 

(a)           Such party is correctly
described and named in this Agreement.

 

(b)           Before executing this
Agreement, such party became fully informed of the terms, contents, provision,
and effect of this Agreement and any exhibits to either or both of them.

 

2

 

(c)           The signatory to this
Agreement signing on behalf of a party is fully authorized and legally
competent to execute this Agreement as the legal, valid and binding act and
deed of such party.

 

(d)           This Agreement is fully and
forever binding on and enforceable against, such party in accordance with its
terms.

 

(e)           The execution and delivery
of this Agreement and any other documents, agreements or instruments executed
or delivered by such Party pursuant hereto and the consummation of the
transactions herein or therein contemplated does not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default under,
any material agreement or instrument to which such party is a party or any
provision of law, statute, rule or regulation applicable to such party or
any judicial or administrative order or decree by which such party is bound.

 

(f)            Such party has made an
investigation to such party’s satisfaction of all facts and reasons why such
party should enter into this Agreement and agrees, based upon such party’s
knowledge, experience, investigation, and consultation with counsel that this
Agreement is fair and just.

 

(g)           Such party represents that
he, or it, as the case may be, has not relied upon and will not rely upon, any
statements, acts or omissions by any other party, other than as set out in this
Agreement in making its decision to enter into this Agreement.

 

(h)           Such party acknowledges that
its aforesaid representations are a material inducement to every other party to
enter into this Agreement.

 

(i)            Each party, and each person
signing this Agreement, owns and controls all claims released in this Agreement
and has not assigned or hypothecated any of such claims.

 

7.             Carl Dick and Defendants shall each be individually
responsible for their own fees and expenses incurred in connection with this
and all other actions and claims being released.

 

8.             Carl Dick and Defendants agree to execute such
further instruments and documents as may be reasonably necessary to carry out
and effectuate the terms, conditions and intention of this Agreement.

 

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9.             This Agreement constitutes the entire agreement
between the Parties and supersedes all prior arrangements, agreements and
understandings with respect to this Compromise and Settlement Agreement,
whether written or oral.

 

10.           The Parties acknowledge that bona fide disputes and
controversies exist between them, and it is understood and agreed that this
Agreement is a compromise of disputed claims, and that nothing contained herein
shall be construed as an admission of liability by or on behalf of any party,
all such liability being expressly denied. 
In this regard, the Parties understand and agree that the facts with
respect to which this Agreement is given may hereafter prove to be different
from the facts now known or believed by them and they hereby accept and assume
the risk thereof and agree that this Agreement shall remain in all respects
effective and not subject to termination or rescission by reason of any such
differences in facts.  Defendants
expressly deny that the settlement consideration represents or, in any way,
reflects the value of the claims against it, and rather state that they are
settling to avoid the expense and inconvenience of ongoing litigation.

 

11.           This Agreement binds and inures to the benefit of
each Party to this Agreement, including its, or his, respective past, present,
and former directors, officers, shareholders, agents, employees, servants,
parents, subsidiaries, partners, managers, owners, affiliates, investors,
interest owners, other representatives, successors, assigns, and all other
persons and entities acting on behalf of or by, through, or under one or more
of them.

 

12.           This Agreement may be executed in any number of
counterparts, each of which is an original for all purposes, and all of which
together constitute one agreement.  Faxed
copies bearing signatures of the parties shall be regarded as original
counterparts.

 

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13.           The
Parties acknowledge that disbursement of the Settlement Proceeds, as described
above, and the covenants and recitals in this Agreement, provide good and
sufficient consideration for every promise, duty, release, obligation, and
right contained in this Agreement.

 

14.           Neither
this Agreement, nor any of its terms, may be changed, waived, discharged, or
terminated orally, but only by written agreement signed by all of the Parties
hereto.

 

15.           The
Parties agree that this Agreement has been mutually drafted and authored by all
the Parties and that it shall not be construed against any one Party.

 

16.           This
Agreement has been duly authorized and constitutes a legal, valid and binding
obligation of each party hereto, and is enforceable against each of them in
accordance with its terms.  To the extent
that any part of this Agreement is subsequently declared by any court of
competent jurisdiction, or by any other body having authority to do so, to be
void or otherwise unenforceable, the remaining provisions of this Agreement
shall continue in full force and effect.

 

17.           The
Parties shall keep this Agreement, its terms, and the negotiation thereof
confidential except that (a) Carl Dick may disclose the Agreement and its
terms to his lawyers, accountants and/or investment advisors to the extent
necessary for tax or investment purposes; (b) Carl Dick may disclose the
Agreement and its terms to any third party other than a public media so long as
that disclosure includes only the facts, terms, and details of any Defendant’s  public filings with the Securities and
Exchange Commission; and (c) Defendants may disclose the Agreement and its
terms, to the extent Defendants deem such disclosure necessary, (i) to
their insurers, lawyers, accountants and advisors, (ii) to their
shareholders, (iii) in public filings with the Securities and Exchange
Commission, and (iv) in response to inquiries by any court of 

 

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law.  Carl Dick agrees not to
discuss the Lawsuit or this Agreement with, through, or by any public
media.  The names of any insurers funding
any portion of this settlement shall not be publicly disclosed.

 

18.           Carl
Dick shall timely file the appropriate papers to opt out of any settlement
class and shall not participate or file any claim form in any other litigation
concerning Heelys securities, including without limitation Rines v.
Heelys, Inc., et al., Civil Action No. 3:07-cv-01468-K;  in the United States District Court for the
Northern District of Texas, Dallas Division.

 

19.           This
Agreement shall be interpreted, construed and enforced under the laws of the
State of Texas.  Exclusive jurisdiction
and venue of any dispute regarding, concerning, or in any way arising out of,
this Agreement shall be within the courts of the State of Texas for Dallas
County, Texas or courts for the United States of America located in the
Northern District of Texas.

 

20.           This
agreement is effective as of August 21, 2009.

 

[signatures appear on following page]

 

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DATED:  August 21, 2009.

 

	
   

  	
  /s/ CARL DICK

  
	
   

  	
  CARL DICK

  
	
   

  	
   

   

  
	
   

  	
  HEELYS, INC,

  
	
   

  	
   

  /s/ LISA PETERSON

  
	
   

  	
  By: LISA PETERSON

  
	
   

  	
  Title: CHIEF
  FINANCIAL OFFICER

  
	
   

  	
   

  
	
   

  	
  /s/ ROGER ADAMS

  
	
   

  	
  ROGER ADAMS

  
	
   

  	
   

  /s/ PATRICK F. HAMNER

  
	
   

  	
  PATRICK F. HAMNER

  
	
   

  	
   

  /s/ MICHAEL W. HESSONG

  
	
   

  	
  MICHAEL W. HESSONG

  
	
   

  	
   

  /s/ RICHARD E. MIDDLEKAUFF

  
	
   

  	
  RICHARD E. MIDDLEKAUFF

  
	
   

  	
   

  /s/ MICHAEL G. STAFFARONI

  
	
   

  	
  MICHAEL G. STAFFARONI

  
	
   

  	
   

  /s/ SAMUEL B. LIGON

  
	
   

  	
  SAMUEL B. LIGON

  
	
   

  	
   

  /s/ WILLIAM R. THOMAS II,
  EXECUTOR

  
	
   

  	
  THE ESTATE OF WILLIAM R. THOMAS

  
	
   

  	
   

  /s/ JAMES T. KINDLEY

  
	
   

  	
  JAMES T. KINDLEY

  

 

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  /s/ JEFFREY G.
  PETERSON

  
	
   

  	
  JEFFREY G. PETERSON

  
	
   

  	
   

   

  
	
   

  	
  CAPITAL
  SOUTHWEST VENTURE CORPORATION

  
	
   

  	
   

  
	
   

  	
  /s/ GARY L. MARTIN

  
	
   

  	
  By:
  GARY L. MARTIN

  
	
   

  	
  Title:
  PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CAPITAL
  SOUTHEST CORPORATION

  
	
   

  	
   

  
	
   

  	
  /s/ GARY L. MARTIN

  
	
   

  	
  By:
  GARY L. MARTIN

  
	
   

  	
  Title:
  PRESIDENT

  
	
   

  	
   

   

  
	
   

  	
  BEAR STEARNS &
  CO., INC., n/k/a

  
	
   

  	
  J.P. MORGAN SECURITIES
  INC.

  
	
   

  	
   

  /s/ ORMAN ANDERSON

  
	
   

  	
  By: ORMAN ANDERSON

  
	
   

  	
  Title: EXECUTIVE DIRECTOR

  
	
   

  	
   

   

  
	
   

  	
  WACHOVIA CAPITAL MARKETS,
  L.L.C.

  
	
   

  	
  n/k/a WELLS FARGO
  SECURITIES, LLC

  
	
   

  	
   

  
	
   

  	
  /s/ DAVID RICE

  
	
   

  	
  By: DAVID RICE

  
	
   

  	
  Title: VICE PRESIDENT
  ASSISTANT GENERAL COUNSEL

  
	
   

  	
   

   

  
	
   

  	
  J.P. MORGAN SECURITIES
  INC.

  
	
   

  	
   

  /s/ ORMAN ANDERSON

  
	
   

  	
  By: ORMAN ANDERSON

  
	
   

  	
  Title: Executive Director

  

 

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  CIBC WORLD MARKETS CORP.

  
	
   

  	
   

  /s/ IAN D. KATZ

  
	
   

  	
  By:
  IAN D. KATZ

  
	
   

  	
  Title:
  EXECUTIVE DIRECTOR/SENIOR COUNSEL

  

 

9Exhibit 10.1

 

CUBIC
ENERGY, INC.

 

SUBSCRIPTION
AND REGISTRATION RIGHTS AGREEMENT

 

This Subscription and
Registration Rights Agreement (this “Agreement”), dated as of August         ,
2009, by and between Cubic Energy, Inc. (the “Company”) and
                    
                                                
(the “Subscriber”), is intended to set forth certain representations,
covenants and agreements between the Company and the Subscriber, with respect
to the offering (the “Offering”) for sale by the Company of units (the “Units”),
each of which consists of one share of Common Stock, par value $0.05 per share
(the “Common Stock”), together with a warrant to purchase one-half of a
share of Common Stock at an initial exercise price per share of Common Stock
equal to the Offering Price (as defined below), the terms of which are set
forth in the form of Warrant Agreement attached hereto as Exhibit D
hereto.  The shares of Common Stock
included in Units purchased hereby are referred to herein as the “Shares,”
the warrants included in the Units purchased hereby are referred to herein as
the “Warrants” and the shares of Common Stock issuable upon exercise of
the Warrants are referred to herein as the “Exercise Shares.”  The Shares, the Warrants and the Exercise Shares
are collectively referred to herein as the “Securities.”  The Shares and Warrants are immediately
separable and may be transferred separately in compliance with the restrictions
on transfer set forth herein and in the terms of the Warrant, as applicable.

 

1.                                       Subscription.  Subject to the terms and conditions hereof,
the Subscriber hereby irrevocably subscribes for and agrees to purchase from
the Company the number of Units set forth under the Subscriber’s name on the
signature page hereto at a purchase price of $0.85 per Unit (the “Offering
Price”), and the Company agrees to sell such Units to the Subscriber at the
Offering Price, subject to the Company’s right to sell to the Subscriber such
lesser number of Units as the Company may, in its sole discretion, deem
necessary or desirable.

 

2.                                       Delivery of
Subscription Amount; Acceptance of Subscription; Delivery of Units.  Subscriber understands and agrees that this
subscription is made subject to the following terms and conditions:

 

(a)                                  Subscriber
understands that separate subscription agreements may be executed with other
investors for the remainder of the Units to be sold in the Offering;

 

(b)                                 Contemporaneously
with the execution and delivery of this Agreement, Subscriber shall execute and
deliver the Certificate of Accredited Investor Status attached hereto as Exhibit B,
and shall wire to the Company immediately available funds in the amount equal
to the Offering Price multiplied by the number of Units for which the
Subscriber has subscribed (the “Subscription Amount”) in accordance with
the instructions set forth on Exhibit A hereto.  The subscription for Units shall be deemed to
be accepted only when this Agreement has been signed by an authorized officer
of the Company;

 

(c)                                  The Company
shall have the right to reject this subscription, in whole or in part, and
shall have the right to allocate Units among subscribers in any manner it may
desire; provided, that no subscriber shall be obligated to purchase more than
the number of Units set forth under its name on the signature page hereto
without its prior written consent;

 

 

(d)                                 The payment of
the Subscription Amount (or, in the case of rejection of a portion of the
Subscriber’s subscription, the part of the payment relating to such rejected
portion) will be returned, without interest, (1) if Subscriber’s
subscription is rejected in whole or in part, or (2) if the Offering is
withdrawn or canceled;

 

(e)                                  Certificates
representing the Shares and the Warrants will be issued in the name of each
Subscriber at Closing as set forth under Section 3 hereof; and

 

(f)                                    The
representations and warranties of the Company and Subscriber set forth herein
shall be true and correct as of the date that the Company accepts this
subscription.

 

3.                                       Terms of
Subscription.

 

(a)                                  The purchase
and sale of the Units (the “Closing”), and funding thereof, shall occur
as soon as practicable after the execution of this Agreement by the Company and
each of the Subscribers in the Offering, if any, at a time and location (the “Closing
Date”) agreed upon by the Company and the Subscribers, and in no event
later than 4:59 p.m., Eastern time, on August         ,
2009.  Immediately after the Closing
Date, the Company will deliver or cause to be delivered, one or more physical
certificates representing the Shares purchased by each Subscriber.

 

(b)                                 As compensation
for advisory services, to the extent that such services were provided, the
Company will pay to such advisor (the “Placement Agent”) aggregate fees
equal to seven percent (7%) of the aggregate purchase price of the Units
sold.  The Company will also pay all
reasonable and documented expenses of the Placement Agent in connection with
the Offering, up to $1,000.00.

 

(c)                                  If the
Subscriber is not a United States person, the Subscriber hereby represents that
it has satisfied itself as to the full observance of the laws of its
jurisdiction in connection with any invitation to subscribe for the Units or
any use of this Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Units, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other
tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale or transfer of the Securities. 
The Subscriber’s subscription and payment for, and his or her continued
beneficial ownership of any of the Securities, will not violate any applicable
securities or other laws of the Subscriber’s jurisdiction.

 

4.                                       Registration
Rights.

 

(a)                                  Subscriber
acknowledges that it is acquiring the Units for its own account and for the
purpose of investment and not with a view to any distribution or resale thereof
within the meaning of the Securities Act of 1933, as amended, (the “Securities
Act”).  The Subscriber further agrees
that it will not sell, assign or transfer any Security at any time in violation
of the Securities Act and acknowledges that, in taking unregistered securities,
it must continue to bear the economic risk of its investment for an indefinite
period of time because of the fact that Securities have not been registered
under the Securities Act, and further realizes that none of the Securities can
be sold unless subsequently registered under the Securities Act or an exemption
from such registration is available.  The
Subscriber further recognizes that the Company is not 

 

2

 

assuming any obligation to
register any Security except as expressly set forth herein.  The Subscriber also acknowledges that
appropriate legends reflecting the status of the Securities under the
Securities Act may be placed on the face of the certificates for each such
Security at the time of their transfer and delivery to the holder thereof.

 

(b)                                 No Security may
be transferred except in a transaction which is in compliance with the
Securities Act.  Except as provided
hereafter with respect to registration of the Shares and the Exercise Shares,
it shall be a condition to any such transfer that the Company shall be
furnished with an opinion of counsel to the holder of such Security, reasonably
satisfactory to the Company, to the effect that the proposed transfer would be
in compliance with the Securities Act.

 

(c)                                  Within 45 days after
the Closing (the “Filing Date”), the Company shall use its best efforts
to prepare and file with the Securities and Exchange Commission (the “SEC”),
one or more registration statements and such other documents as may be
necessary in the opinion of counsel for the Company, and use its commercially
reasonable efforts to have such registration statement declared effective
within 120 days after the Filing Date in order to comply with the provisions of
the Securities Act so as to permit the registered resale of the Shares, for a
period of two (2) years following the Closing Date, and the registered
resale of the Exercise Shares, for so long as the Warrants are
outstanding.  The Shares and Exercise
Shares that are registered for resale under such registration statement are
referred to herein as the “Offering Securities,” and the Subscriber,
together with its affiliates and transferees, are hereafter referred to as “Offering
Holders.”  The Company will include
in such registration statement (i) the information required under the
Securities Act to be so included concerning the Offering Holders, as provided
by the Offering Holders at the reasonable request of the Company, including any
changes in such information, or information provided by new Offering Holders, that
may be provided by the Offering Holders in writing to the Company from time to
time, and (ii) a section entitled “Plan of Distribution,” substantially in
the form of Exhibit C hereto, that describes the various procedures
that may be used by the Offering Holders in the sale of Shares or Exercise
Shares; provided, however, that no holder of Shares or Exercise Shares (other
than a Subscriber) shall be entitled to have the securities held by it covered
by such registration statement unless such holder agrees in writing to be bound
by all the provisions of this Agreement applicable to such holder.

 

(d)                                 If the
registration statement referred to in Section 4(c) above has not been
declared effective by the SEC within 120 days after the Closing Date, the
Company shall pay liquidated damages of 1% of the Offering Price per share for
every Share.  In addition, the Company
shall pay liquidated damages of an additional 1% of the Offering Price per
share for every Share for each 30-day period of delay following such initial
120-day period.  The payment of
liquidated damages may be made, at the option of the Company, in additional
shares of Common Stock valued at the average market price of such shares for
the five trading days preceding the date of payment.  The foregoing payment shall constitute the
sole monetary remedy available to the Subscriber in the event that the Company
does not comply with the deadlines set forth in Section 4(c) with
respect to the filing and effectiveness of the registration statement referred
to therein.

 

3

 

(e)                                  Notwithstanding
the foregoing provisions of this Section 4, the Company may voluntarily
suspend the use of any such registration statement for a limited time, which in
no event shall be longer than 30 days in any three month period and no longer
than 90 days in any twelve month period, if the Company has been advised in
writing by counsel or underwriters to the Company that the offering of any
Offering Securities pursuant to the registration statement would materially
adversely affect, or would be improper in view of (or improper without
disclosure in a prospectus), a proposed financing, a reorganization,
recapitalization, merger, consolidation, or similar transaction involving the
Company.  In addition, the Company may
suspend the use of such registration statement for the 15 calendar days
following the filing of any Form 8-K, Form 10-Q or Form 10-K, or
other comparable form for purposes of filing a post-effective amendment to the
registration statement, to the extent that such filings are not automatically
incorporated by reference into the registration statement.  If any event occurs that would cause any such
registration statement to contain a material misstatement or omission or not to
be effective and usable during the period that such registration statement is
required to be effective and usable, subject to the time periods set forth
above, the Company shall promptly file an amendment to the registration
statement and use its commercially reasonable efforts to cause such amendment
to be declared effective as soon as practicable thereafter.  Notwithstanding any provision contained
herein to the contrary, the Company’s obligation to include, or continue to
include, Offering Securities in any such registration statement under this Section 4
shall terminate to the extent such securities are eligible for resale without
limitation on the amount of securities sold under Rule 144(e) promulgated
under the Securities Act.

 

(f)                                    If and whenever
the Company is required by the provisions of this Agreement to use its
commercially reasonable efforts to effect the registration of the Offering
Securities under the Securities Act for the account of an Offering Holder, the
Company will, as promptly as possible:

 

(i)                                     prepare and file with the
SEC a registration statement with respect to such securities and use its
commercially reasonable efforts to cause such registration statement to become
and remain effective, subject to the Company’s obligations to file post-effective
amendments to such registration statement;

 

(ii)                                  prepare and file with the
SEC such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the requirements of the
Securities Act and the rules and regulations promulgated by the SEC
thereunder relating to the sale or other disposition of the securities covered
by such registration statement;

 

(iii)                               include in each such
document the names of each Subscriber who continues to hold Offering
Securities, except for those Subscribers who designate on the signature page hereto
that they do not wish to have their securities included in the registration
statement, and the names of any new Offering Holders who have delivered written
notice to the Company at least three business days prior to the filing thereof
that they propose to sell Offering Securities pursuant to the registration
statement as selling securityholders;

 

4

 

(iv)                              file pursuant to Rule 424(b) under
the Securities Act an amendment to the registration statement or amend, if
required, the registration statement and prospectus, in each case, to cover new
Offering Holders upon at least seven business days’ prior written notice by
such new Offering Holders to such effect; provided, however, that (A) in
no event shall the Company be required to file pursuant to Rule 424(b) under
the Securities Act a supplement to the registration statement to cover new
Offering Holders other than on the third Thursday of each calendar month
following the calendar month in which the registration statement is declared
effective and (B) in the case where a post-effective amendment is required,
in no event shall the Company be required to file a post-effective amendment to
cover new Offering Holders other than on the third Thursday of the third full
calendar month following the calendar month in which the registration statement
is declared effective and the third Thursday of each subsequent third month
thereafter; any delay in effectiveness as a result of the foregoing shall be
excluded from the periods set forth in subsection (e) above; and

 

(v)                                 furnish to each Offering
Holder such numbers of copies of a prospectus, including a preliminary
prospectus, complying with the requirements of the Securities Act, and such
other documents as such Offering Holder may reasonably request in order to
facilitate the public sale or other disposition of the Offering Securities
owned by such Offering Holder, but such Offering Holder shall not be entitled
to use any selling materials other than a prospectus and such other materials
as may be approved by the Company, which approval will not be unreasonably
withheld.

 

(g)                                 Except as
provided below in this Section 4, the expenses incurred by the Company in
connection with action taken by the Company to comply with this Section 4,
including, without limitation, all registration and filing fees, printing and
delivery expenses, accounting fees, fees and disbursements of counsel to the
Company, consultant and expert fees, premiums for liability insurance, if the
Company chooses to obtain such insurance, obtained in connection with a
registration statement filed to effect such compliance and all expenses,
including counsel fees, of complying with any state securities laws (“State
Acts”), shall be paid by the Company. 
All fees and disbursements of any counsel, experts, or consultants
employed by any Offering Holder shall be borne by such Offering Holder.  The Company shall not be obligated in any way
in connection with any registration pursuant to this Section 4 for any
selling commissions or discounts payable by any Offering Holder to any
underwriter or broker of securities to be sold by such Offering Holder.  Subscriber agrees to pay all expenses
required to be borne by such Offering Holder.

 

(h)                                 In the event of
any registration of Offering Securities pursuant to this Section 4, the
Company will indemnify and hold harmless each Offering Holder, its officers,
directors, investment advisors and each underwriter of such securities, and any
person who controls such Offering Holder or underwriter within the meaning of Section 15
of the Securities Act, against all claims, actions, losses, damages,
liabilities and expenses, joint or several, to which any of such persons may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the 

 

5

 

omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Offering Holder, its officers,
directors and each underwriter of such securities, and each such controlling
person or entity for any legal and any other expenses reasonably incurred by
such Offering Holder, such underwriter, or such controlling person or entity in
connection with investigating or defending any such loss, action, claim,
damage, liability, or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises directly out of or is based primarily upon an untrue
statement or omission made in said registration statement, said preliminary
prospectus or said prospectus, or said amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Offering Holder or such underwriter specifically for use in the preparation
thereof.

 

(i)                                     At any time
when a prospectus relating to the Offering Securities is required to be
delivered under the Securities Act, the Company will notify the Offering Holder
of the happening of any event, upon the notification or awareness of such event
by an executive officer of the Company, as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing.

 

(j)                                     In the event of
any registration of any Offering Securities under the Securities Act pursuant
to this Section 4, the Offering Holder agrees to indemnify and hold
harmless the Company, its officers, directors and any person who controls the
Company within the meaning of Section 15 of the Securities Act, against
any losses, claims, damages, liabilities, or actions, joint or several, to
which the Company, its officers, directors, or such controlling person or
entity may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages, liabilities, or actions arise out of or are based
upon any untrue statement of any material fact contained in any registration
statement under which such Offering Securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent and only to the extent that any such loss, claim, damage,
liability, or action arises out of or is based upon an untrue statement or
omission made in said registration statement, said preliminary prospectus or
said prospectus or said amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Offering
Holder or any affiliate (as defined in the Securities Act) of such Offering
Holder specifically for use in the preparation thereof.

 

(k)                                  If a claim for
indemnification under Section 4 is unavailable to an indemnified party
because of a failure or refusal of a governmental authority to enforce such
indemnification in accordance with its terms (by reason of public policy or
otherwise), then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and indemnified
party in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations.  The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other things,
whether any action in 

 

6

 

question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission.  The amount paid or payable by a party as a
result of any such contribution shall be deemed to include any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in
connection with the defense of any Losses to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for
under Section 4(h) or 4(j) was available to such party in
accordance with its terms. 
Notwithstanding anything to the contrary contained herein, no Offering
Holder shall be liable or required to contribute under this Section 4(k) for
any amount that exceeds the net proceeds to such Offering Holder as a result of
the sale of Shares or Exercise Shares pursuant to the registration statement
provided by this Section 4.  The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4(k) were determined by pro rata allocation
or by any other method of allocation that does not take into account the
equitable considerations referred to in this paragraph.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
The indemnity and contribution agreements contained in this Section 4
are in addition to any liability that the indemnifying parties may have to the
indemnified parties.

 

(l)                                     Any party
entitled to indemnification hereunder will (i) give prompt written notice
to the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties exists with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party.  If such defense is
assumed, the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (which consent may
not be unreasonably withheld).  An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest exists between such indemnified party and any other of
such indemnified parties with respect to such claim.

 

(m)                               With a view to
making available to the Offering Holder the benefits of Rule 144
promulgated under the Securities Act, the Company agrees that it will use its
commercially reasonable efforts to maintain registration of its Common Stock
under Section 12 or 15 of the Securities Exchange Act of 1934, as amended,
(the “Exchange Act”), and to file with the SEC in a timely manner all
reports and other documents required to be filed by an issuer of securities
registered under the Exchange Act so as to maintain the availability of Rule 144.  Upon the request of any record owner, the
Company will deliver to such owner a written statement as to whether it has
complied with the reporting requirements of Rule 144.  At any time when the Company is not subject
to Section 13 or 15(d) of the Exchange Act, the Company will promptly
furnish or cause to be furnished to the Offering Holders, upon request, copies
of the information required to be delivered to holders and prospective
purchasers of the Securities pursuant to Rule 144A(d)(4) under the Securities
Act (or any successor provision thereto) in 

 

7

 

order to permit compliance
with Rule 144A in connection with resales by such holders of the
Securities.

 

5.                                       Representations
and Warranties of the Subscriber.  Subscriber hereby represents and warrants to
the Company as follows:

 

(a)                                  Subscriber is
acquiring the Units for its own account, for investment and not with a view to,
or for resale in connection with, any distribution or public offering thereof within
the meaning of the Securities Act, and applicable state securities laws.

 

(b)                                 The Subscriber
understands that (A) the Units (1) have not been registered under the
Securities Act or any state securities laws, (2) will be issued in
reliance upon an exemption from the registration and prospectus delivery
requirements of the Securities Act pursuant to Section 4(2) and/or
Regulation D thereof and (3) will be issued in reliance upon
exemptions from the registration and prospectus delivery requirements of state
securities laws which relate to private offerings, and (B) the Subscriber
must therefore bear the economic risk of such investment indefinitely unless a
subsequent disposition thereof is registered under the Securities Act and
applicable state securities laws or is exempt therefrom.  Subscriber further understands that such
exemptions depend upon, among other things, the bona fide nature of the
investment intent of the Subscriber expressed herein.  Pursuant to the foregoing, the Subscriber
acknowledges that the certificates representing each of the Shares, the
Warrants and the Exercise Shares shall bear a restrictive legend substantially
as follows:

 

“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR
SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I) REGISTERED
UNDER THE APPLICABLE SECURITIES LAWS OR (II) AN OPINION OF COUNSEL, WHICH
OPINION AND COUNSEL ARE BOTH REASONABLY SATISFACTORY TO THE COMPANY, HAS BEEN
DELIVERED TO THE COMPANY AND SUCH OPINION STATES THAT THE SECURITIES MAY BE
TRANSFERRED WITHOUT SUCH REGISTRATION.”

 

(c)                                  The Subscriber
has knowledge, skill and experience in financial, business and investment
matters relating to an investment of this type and is capable of evaluating the
merits and risks of such investment and protecting the Subscriber’s interest in
connection with the acquisition of the Units. 
The Subscriber understands that the acquisition of the Units is a
speculative investment and involves substantial risks and that the Subscriber
could lose the Subscriber’s entire investment in the Units.  To the extent deemed necessary by the
Subscriber, the Subscriber has retained, at its own expense, and relied upon,
appropriate professional advice regarding the investment, tax and legal merits
and consequences of purchasing and owning the Share, the Warrants and the
Exercise Shares.  The Subscriber has the
ability to bear the economic risks of the Subscriber’s investment in the
Company, including a complete loss of the investment, and the Subscriber has no
need for liquidity in such investment.

 

8

 

(d)                                 The Subscriber
has been furnished by the Company all information (or provided access to all
information) regarding the business and financial condition of the Company, its
expected plans for future business activities, the attributes of the Securities
and the merits and risks of an investment in the Securities which the
Subscriber has requested or otherwise needs to evaluate the investment in the
Company.

 

(e)                                  Subscriber is
in receipt of and has carefully read and understands the following items:

 

(i)                                     Annual Report on Form 10-K
for the period ended June 30, 2008 filed by the Company with the SEC;

 

(ii)                                  Quarterly Reports on Form 10-Q
for the periods ended September 30, 2008, December 31, 2008 and March 31,
2009 filed by the Company with the SEC; and

 

(iii)                               Current Reports on Form 8-K
filed by the Company with the SEC on August 6, 2008, October 9, 2008,
October 15, 2008, December 19, 2008 and June 30, 2009 (together
with the exhibits thereto, collectively, items (i) through (iii), the “Disclosure
Documents”).

 

(f)                                    In making the
proposed investment decision, the Subscriber is relying solely on
investigations made by the Subscriber and the Subscriber’s
representatives.  The Subscriber
acknowledges that documents listed in Section 5(e) are the only
information provided to the Subscriber by the Company and that the Subscriber
is not relying on any other information in making the proposed investment
decision.  The offer to sell the Units
was communicated to the Subscriber in such a manner that the Subscriber was
able to ask questions of and receive answers from the management of the Company
concerning the terms and conditions of the proposed transaction and that at no
time was the Subscriber presented with or solicited by or through any leaflet,
public promotional meeting, television advertisement or any other form of
general or public advertising or solicitation.

 

(g)                                 The Subscriber
acknowledges that the Subscriber has been advised that:

 

(i)                                     The Units, and the
Securities that comprise the Units, offered hereby have not been approved or
disapproved by the SEC or any state securities commission nor has the SEC or
any state securities commission passed upon the accuracy or adequacy of any
representations by the Company.  Any
representation to the contrary is a criminal offense.

 

(ii)                                  In making an investment
decision, the Subscriber must rely on its own examination of the Company and
the terms of the Offering, including the merits and risks involved.  The Units, and the Securities that comprise
the Units, have not been recommended by any federal or state securities
commission or regulatory authority. 
Furthermore, the foregoing authorities have not confirmed the accuracy
or determined the adequacy of any representation.  Any representation to the contrary is a
criminal offense.

 

9

 

(iii)                               The Shares and the Warrants
are and, when issued, the Exercise Shares will be, “Restricted Securities”
within the meaning of Rule 144 under the Securities Act, are subject to
restrictions on transferability and resale and may not be transferred or resold
except as permitted under the Securities Act and applicable state securities
laws, pursuant to registration or exemption therefrom.  The Subscriber is aware that the Subscriber
may be required to bear the financial risks of this investment for an
indefinite period of time.

 

(h)                                 The Subscriber
acknowledges and is aware that there has never been any representation,
guarantee or warranty made by the Company or any officer, director, employee or
agent or representative of the Company, expressly or by implication, as to (i) the
approximate or exact length of time that the Subscriber will be required to
remain an owner of any Security; (ii) the percentage of profit and/or
amount of or type of consideration, profit or loss to be realized, if any, as a
result of this investment; or (iii) that the limited past performance or
experience on the part of the Company, or any future expectations will in any
way indicate the predictable results of the ownership of any Security or of the
overall financial performance of the Company.

 

(i)                                     The Subscriber
agrees to furnish the Company such other information as the Company may
reasonably request in order to verify the accuracy of the information contained
herein and agrees to notify the Company immediately of any material change in
the information provided herein that occurs prior to the Company’s acceptance
of this Agreement.

 

(j)                                     The Subscriber
further represents and warrants that the Subscriber is an “accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities
Act, and Subscriber has executed the Certificate of Accredited Investor Status,
attached hereto as Exhibit B.

 

(k)                                  As of the date
of this Agreement the Subscriber and its affiliates do not have, and during the
30-day period prior to the date of this Agreement the Subscriber and its
affiliates have not entered into, any “put equivalent position” as such term is
defined in Rule 16a-1 under the Exchange Act or short sale positions with
respect to the Common Stock of the Company. 
Until the registration statement referred to in Section 4(c) is
declared effective, the Subscriber hereby agrees not to, and will cause its
affiliates not to, enter into any such “put equivalent position” or short sale
position.

 

The foregoing representations
and warranties and undertakings are made by the Subscriber with the intent that
they be relied upon in determining its suitability as an investor and the
Subscriber hereby agrees that such representations and warranties shall survive
its purchase of the Units.

 

6.                                       Representations
and Warranties of the Company.  The Company hereby represents and warrants to
the Subscriber as follows:

 

(a)                                  Each of the
Company and its subsidiaries is duly incorporated, validly existing and in good
standing under the laws of its state of incorporation, and is duly qualified to
do business as a foreign corporation in all jurisdictions in which the failure
to be so qualified would materially and adversely affect the business or
financial condition, properties or

 

10

 

operations of the
Company.  Each of the Company and its
subsidiaries has all requisite corporate power and authority (i) to own
and lease the properties and assets it currently owns and leases (if any) and
it contemplates owning and leasing and (ii) to conduct its activities as
such activities (if any) are currently conducted and as currently contemplated
to be conducted.

 

(b)           The authorized capital of the Company
immediately prior to the Closing will consist of 100,000,000 shares of common
stock, par value $0.05 and 10,000,000 shares of preferred stock, par value
$0.01.

 

(c)           The Company has duly authorized the
issuance and sale of the Shares, the Warrants and the Exercise Shares in
accordance with the terms of this Agreement (as described herein) by all requisite
corporate action, including the authorization of the Company’s Board of
Directors of the issuance and sale of the Shares and the Warrants in accordance
herewith, the authorization and reservation of the Exercise Shares for issuance
upon exercise of the Warrants, the issuance and sale of the Exercise Shares
upon exercise of the Warrants and the execution, delivery and performance of
any other agreements and instruments executed in connection herewith.  This Agreement constitutes a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) to the extent the indemnification
provisions contained herein may be limited by applicable federal or state
securities laws.

 

(d)           The Shares, when issued and paid for
in accordance with this Agreement, and the Exercise Shares, when issued and
paid for in accordance with the terms of the Warrants, will represent validly
authorized, duly issued and fully paid and nonassessable shares of Common Stock
of the Company, and the issuance thereof will not conflict with the articles of
incorporation or bylaws of the Company and, subject to the accuracy of the
representations and warranties of Subscriber herein, will be in full compliance
with all federal and state securities laws applicable to such issuance and
sale.

 

(e)           The execution and delivery of this
Agreement, the fulfillment of the terms set forth herein and the consummation
of the transactions contemplated hereby will not conflict with, or constitute a
breach of or default under, any agreement, indenture or instrument by which the
Company is bound or any law, administrative rule, regulation or decree of any
court or any governmental body or administrative agency applicable to the
Company.

 

(f)            As of the date of this Agreement,
the Disclosure Documents do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

(g)           The Disclosure Documents that have
been filed with the SEC, at the time they were filed with the SEC, complied in
all material respects with the requirements of the Exchange Act, and, when read
together and with the other information in the Disclosure Documents, do not
contain an untrue statement of a material fact or omit to state a material fact

 

11

 

required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

 

(h)           Subsequent to the dates as of which
information is given in the Disclosure Documents, except as described therein,
there has not been any material adverse change with regard to the assets or
properties, results of operations or financial condition of the Company.

 

(i)            The Company will to use the proceeds
of this offering to fund its obligations in wells drilled in the Haynesville
Shale.

 

7.             Survival; Indemnification.  All representations, warranties and covenants
contained in this Agreement and the indemnification contained in this Section 7
shall survive (i) the acceptance of this Agreement by the Company, (ii) changes
in the transactions, documents and instruments described herein which are not
material or which are to the benefit of Subscriber, and (iii) the death or
disability of Subscriber.  Subscriber
acknowledges the meaning and legal consequences of the representations,
warranties and covenants in Section 5 hereof and that the Company has
relied upon such representations, warranties and covenants in determining
Subscriber’s qualification and suitability to purchase the Units.  Subscriber hereby agrees to indemnify, defend
and hold harmless the Company, its officers, directors, employees, agents and
controlling persons, from and against any and all losses, claims, damages,
liabilities, expenses (including attorneys’ fees and disbursements), judgments
or amounts paid in settlement of actions arising out of or resulting from the
untruth of any representation of Subscriber herein or the breach of any
warranty or covenant herein by Subscriber. 
Notwithstanding the foregoing, however, no representation, warranty,
covenant or acknowledgment made herein by Subscriber shall in any manner be
deemed to constitute a waiver of any rights granted to it under the Securities
Act or state securities laws.

 

8.             Notices.  All notices and other communications provided
for herein shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid:

 

(a)           if to the Company,
to the following address:

 

Cubic Energy, Inc.

9870 Plano Road

Dallas, Texas 75238

Attn: Mr. Jon S.
Ross

Telephone: (972) 681-8047

 

(b)           if to Subscriber, to the address set
forth on the signature page hereto.

 

(c)           or at such other address as any party
shall have specified by notice in writing to the others.

 

9.             Notification of Changes.  Subscriber agrees and covenants to notify the
Company immediately upon the occurrence of any event prior to the consummation
of this Offering that would cause any representation, warranty, covenant or
other statement contained in this 

 

12

 

Agreement to be false or
incorrect or of any change in any statement made herein occurring prior to the
consummation of this Offering.

 

10.           Assignability.  This Agreement is not assignable by the
Subscriber, and may not be modified, waived or terminated except by an
instrument in writing signed by the party against whom enforcement of such
modification, waiver or termination is sought.

 

11.           Binding Effect.  Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
permitted assigns, and the agreements, representations, warranties and
acknowledgments contained herein shall be deemed to be made by and be binding
upon such heirs, executors, administrators, successors, legal representatives
and permitted assigns.

 

12.           Obligations Irrevocable.  The obligations of the Subscriber shall be
irrevocable, except with the consent of the Company, until the consummation or
termination of the Offering.

 

13.           Entire Agreement.  This Agreement constitutes the entire
agreement of the Subscriber and the Company relating to the matters contained
herein, superseding all prior contracts or agreements, whether oral or written.

 

14.           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
the principles of conflicts of law thereof that would require the application
of the laws of any jurisdiction other than Texas.

 

15.           Severability.  If any provision of this Agreement or the
application thereof to Subscriber or any circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other subscriptions or circumstances shall not
be affected thereby and shall be enforced to the greatest extent permitted by
law.

 

16.           Headings.  The headings in this Agreement are inserted
for convenience and identification only and are not intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or any
provision hereof.

 

17.           Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which together shall be deemed to be one and the
same agreement.

 

[Signature Page to follow]

 

13

 

IN WITNESS WHEREOF,
Subscriber has executed this Subscription and Registration Rights Agreement as
of August         , 2009.

 

	
   

  	
  SUBSCRIBER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Number of Units:

  
	
   

  	
  Offering Price per Unit: $0.85

  
	
   

  	
  Subscription Amount: US $

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
				

 

The Company hereby accepts
the foregoing subscription subject to the terms and conditions hereof as of August         ,
2009.

 

	
   

  	
  CUBIC ENERGY, INC.

  
	
   

  	
  a Texas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Calvin Wallen

  
	
   

  	
  Title:

  	
  President & CEO

  
				

 

14

 

Exhibit A

 

HOW
TO SUBSCRIBE

 

(1)                                  If you are subscribing
for the purchase of Units, please date and sign the signature page to this
Subscription and Registration Rights Agreement in the applicable spaces.  Please signify the amount of Units you are
purchasing by inserting such amount in the space provided for on the signature page to
the Agreement.

 

(2)                                  Complete and
sign the accompanying Certificate of Accredited Investor Status.

 

(3)                                  Send all
completed documents to:

 

Cubic Energy, Inc.

9870 Plano Rd.

Dallas, Texas 75238

Attn: Gary Harding

Telephone: 972-686-0369

 

 

ATTENTION SUBSCRIBERS:  NO SUBSCRIPTION WILL BE ACCEPTED UNLESS ALL
DOCUMENTATION PRESCRIBED HEREIN IS FULLY COMPLETED AND EXECUTED.  ANY MATERIALS RECEIVED THAT ARE INCOMPLETE IN
ANY RESPECT WILL BE RETURNED BY THE COMPANY.

 

A-1

 

Exhibit B

 

CERTIFICATE
OF ACCREDITED INVESTOR STATUS

 

Except as may be indicated
by the undersigned below, the undersigned is an individual “accredited
investor,” as that term is defined in Regulation D under the Securities
Act of 1933, as amended (the “Securities Act”).  The undersigned has checked the box below
indicating the basis on which he is representing his status as an “accredited
investor”:

 

·                                          a bank as
defined in Section 3(a)(2) of the Securities Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of
the Securities Act whether acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended (the “Securities Exchange Act”); an
insurance company as defined in Section 2(13) of the Securities Act; an
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act; a
small business investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, and such plan has
total assets in excess of $5,000,000; an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in Section 3(21)
of such Act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are “accredited investors”;

 

·                                          a private
business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;

 

·                                          an organization
described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;

 

·                                          a natural
person whose individual net worth, or joint net worth with the undersigned’s
spouse, at the time of this purchase exceeds $1,000,000;

 

·                                          a natural
person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with the undersigned’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year;

 

·                                          a trust with
total assets in excess of $5,000,000, not formed for the specific purpose of
acquiring the securities offered, whose purchase is directed by a person who
has such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective investment; or

 

B-1

 

·                                          an entity in
which all of the equity holders are “accredited investors” by virtue of their
meeting one or more of the above standards.

 

·                                          an individual
who is a director or executive officer of CUBIC ENERGY, INC.

 

IN WITNESS WHEREOF, the
undersigned has executed this Certificate of Accredited Investor Status
effective as of August         ,
2009.

 

	
   

  	
   

  
	
   

  	
  Name of Subscriber

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
				

 

B-2

 

Exhibit C

 

PLAN
OF DISTRIBUTION

 

As of the date of this
prospectus, we have not been advised by the selling stockholders as to any plan
of distribution.  Distributions of the
shares by the selling stockholders, or by their partners, pledgees, donees
(including charitable organizations), transferees or other successors in
interest, may from time to time be offered for sale either directly by such
individual, or through underwriters, dealers or agents or on any exchange on
which the shares may from time to time be traded, in the over-the-counter
market, or in independently negotiated transactions or otherwise.  The methods by which the shares may be sold
include:

 

·                                          a block trade
(which may involve crosses) in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction;

 

·                                          purchases by a
broker or dealer as principal and resale by such broker or dealer for its own
account pursuant to this prospectus;

 

·                                          exchange
distributions and/or secondary distributions;

 

·                                          sales in the
over-the-counter market;

 

·                                          underwritten
transactions;

 

·                                          ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; and

 

·                                          privately
negotiated transactions.

 

Such transactions may be
effected by the selling stockholders at market prices prevailing at the time of
sale or at negotiated prices.  The
selling stockholders may effect such transactions by selling the Common Stock
to underwriters or to or through broker-dealers, and such underwriters or
broker-dealers may receive compensations in the form of discounts or
commissions from the selling stockholders and may receive commissions from the
purchasers of the Common Stock for whom they may act as agent.  The selling stockholders may agree to
indemnify any underwriter, broker-dealer or agent that participates in
transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act.  We have agreed to register the shares for
sale under the Securities Act and to indemnify the selling stockholders and
each person who participates as an underwriter in the offering of the shares
against certain civil liabilities, including certain liabilities under the
Securities Act.

 

In connection with sales of
the Common Stock under this prospectus, the selling stockholders may enter into
hedging transactions with broker-dealers, who may in turn engage in short sales
of the Common Stock in the course of hedging the positions they assume.  The selling stockholders also may sell shares
of Common Stock short and deliver them to close out the short 

 

C-1

 

positions,
or loan or pledge the shares of Common Stock to broker-dealers that in turn may
sell them.

 

The selling stockholders and
any underwriters, dealers or agents that participate in distribution of the
shares may be deemed to be underwriters, and any profit on sale of the shares
by them and any discounts, commissions or concessions received by any
underwriter, dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.

 

There can be no assurances
that the selling stockholders will sell any or all of the shares offered under
this prospectus.

 

C-2

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