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EXHIBIT 10.3

NEITHER THESE  SECURITIES  NOR THE  SECURITIES  INTO WHICH THESE  SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS  EVIDENCED BY A LEGAL  OPINION OF COUNSEL TO THE  TRANSFEROR
REASONABLY  ACCEPTABLE  TO THE COMPANY TO SUCH  EFFECT,  THE  SUBSTANCE OF WHICH
SHALL  BE  REASONABLY  ACCEPTABLE  TO THE  COMPANY.  THESE  SECURITIES  AND  THE
SECURITIES  ISSUABLE  UPON  EXERCISE  OF  THESE  SECURITIES  MAY BE  PLEDGED  IN
CONNECTION  WITH A BONA  FIDE  MARGIN  ACCOUNT  OR OTHER  LOAN  SECURED  BY SUCH
SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                               Cubic Energy, Inc.

         THIS COMMON STOCK PURCHASE WARRANT (the "Warrant")  certifies that, for
value received,  _____________ (the "Holder"),  is entitled,  upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the date hereof (the "Initial  Exercise Date") and on or
prior to the close of  business  on the five  year  anniversary  of the  Initial
Exercise Date (the "Termination Date") but not thereafter,  to subscribe for and
purchase from Cubic Energy,  Inc., a Texas  corporation (the  "Company"),  up to
______ shares (the "Warrant Shares") of Common Stock, par value $0.05 per share,
of the Company (the "Common  Stock").  The purchase price of one share of Common
Stock (the  "Exercise  Price")  under this  Warrant  shall be $1.00,  subject to
adjustment hereunder.

         Section  1.  Definitions.  Capitalized  terms  used  and not  otherwise
defined  herein shall have the  meanings  set forth in that  certain  Securities
Purchase Agreement (the "Purchase  Agreement"),  dated September 30, 2004, among
the Company and the purchasers signatory thereto.

         Section 2. Exercise.

                  a)  Exercise  of  Warrant.  Exercise  of the  purchase  rights
         represented  by this  Warrant  may be made at any  time or  times on or
         after the Initial  Exercise Date and on or before the Termination  Date
         by  delivery to the Company of a duly  executed  facsimile  copy of the
         Notice of Exercise Form annexed  hereto (or such other office or agency
         of  the  Company  as it may  designate  by  notice  in  writing  to the
         registered  Holder at the address of such Holder appearing on the books
         of the Company);  provided,  however, within 5 Trading Days of the date

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         said Notice of Exercise is delivered  to the Company,  the Holder shall
         have surrendered this Warrant to the Company and the Company shall have
         received payment of the aggregate  Exercise Price of the shares thereby
         purchased by wire transfer or cashier's  check drawn on a United States
         bank.

         Notwithstanding  the  foregoing,  the exercise of the  purchase  rights
         represented  by this  Warrant  shall  be  required  if,  following  the
         Effectiveness Date of the initial Registration Statement filed pursuant
         to the Registration Rights Agreement,  the closing price for any period
         of 30  consecutive  Trading  Days is equal to or in  excess  of  $2.00;
         provided that the average  daily  trading  volume during such period is
         not less than 50,000 shares.  The Company shall provide  written notice
         to the  Holders  of such  occurrence,  or  issue a press  release  with
         respect  thereto,  notifying  Holders  that they shall have 30 calendar
         days to exercise the Warrant as provided herein.  If the Warrant is not
         exercised  within such 30-day period,  any unexercised  purchase rights
         represented by this Warrant shall expire.

                  b) Exercise Price.  The Exercise Price of each share of Common
         Stock  under  this  Warrant  shall  be  $1.00,  subject  to  adjustment
         hereunder.

                  c) Cashless  Exercise.  If at any time after one year from the
         date of issuance of this  Warrant  there is no  effective  Registration
         Statement  registering  the resale of the Warrant Shares by the Holder,
         and the Company  has not  complied  with the terms of the  Registration
         Rights  Agreement with respect  thereto,  then this Warrant may also be
         exercised  at such time by means of a "cashless  exercise" in which the
         Holder  shall be  entitled to receive a  certificate  for the number of
         Warrant Shares equal to the quotient  obtained by dividing  [(A-B) (X)]
         by (A), where:

                  (A) =    the  Average  Price on the  Trading  Day  immediately
                           preceding the date of such election;

                  (B) =    the Exercise  Price of this  Warrant,  as adjusted;
                           and

                  (X) =    the number of Warrant Shares issuable upon exercise
                           of this Warrant in accordance  with the terms of this
                           Warrant  by means of a cash  exercise  rather  than a
                           cashless exercise.

                  d) Exercise  Limitations.  The Holder shall not have the right
         to exercise  any portion of this  Warrant,  pursuant to Section 2(c) or
         otherwise,  to the extent  that after  giving  effect to such  issuance
         after exercise, the Holder (together with the Holder's affiliates),  as
         set forth on the applicable Notice of Exercise,  would beneficially own
         in  excess  of  4.99% of the  number  of  shares  of the  Common  Stock
         outstanding  immediately  after  giving  effect to such  issuance.  For
         purposes  of the  foregoing  sentence,  the  number of shares of Common
         Stock beneficially owned by the Holder and its affiliates shall include
         the number of shares of Common  Stock  issuable  upon  exercise of this
         Warrant with  respect to which the  determination  of such  sentence is
         being  made,  but shall  exclude  the number of shares of Common  Stock
         which  would  be  issuable   upon  (A)   exercise  of  the   remaining,
         nonexercised  portion of this Warrant  beneficially owned by the Holder
         or any  of  its  affiliates  and  (B)  exercise  or  conversion  of the
         unexercised  or  nonconverted  portion of any other  securities  of the

                              Exhibit 10.3 - Page 2

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         Company  (including,   without  limitation,  any  other  Debentures  or
         Warrants)  subject to a limitation on conversion or exercise  analogous
         to the limitation  contained herein beneficially owned by the Holder or
         any of its affiliates.  Except as set forth in the preceding  sentence,
         for  purposes  of this  Section  2(d),  beneficial  ownership  shall be
         calculated  in  accordance  with Section  13(d) of the Exchange Act, it
         being  acknowledged  by Holder that the Company is not  representing to
         Holder that such calculation is in compliance with Section 13(d) of the
         Exchange  Act and  Holder  is  solely  responsible  for  any  schedules
         required to be filed in  accordance  therewith.  To the extent that the
         limitation contained in this Section 2(d) applies, the determination of
         whether this Warrant is  exercisable  (in relation to other  securities
         owned  by the  Holder)  and of  which  a  portion  of this  Warrant  is
         exercisable  shall be in the sole  discretion  of such Holder,  and the
         submission of a Notice of Exercise  shall be deemed to be such Holder's
         determination  of whether this Warrant is  exercisable  (in relation to
         other  securities  owned by such  Holder) and of which  portion of this
         Warrant  is  exercisable,  in  each  case  subject  to  such  aggregate
         percentage  limitation,  and the Company  shall have no  obligation  to
         verify or confirm the accuracy of such  determination.  For purposes of
         this Section 2(d), in determining  the number of outstanding  shares of
         Common Stock,  the Holder may rely on the number of outstanding  shares
         of Common  Stock as  reflected  in (x) the  Company's  most recent Form
         10-QSB or Form  10-KSB,  as the case may be, (y) a more  recent  public
         announcement  by the Company or (z) any other  notice by the Company or
         the  Company's  Transfer  Agent  setting  forth the number of shares of
         Common  Stock  outstanding.  Upon the  written  or oral  request of the
         Holder, the Company shall within two Trading Days confirm orally and in
         writing  to the  Holder  the  number of shares  of  Common  Stock  then
         outstanding.  In any case, the number of  outstanding  shares of Common
         Stock shall be  determined  after giving  effect to the  conversion  or
         exercise of securities of the Company,  including this Warrant,  by the
         Holder  or its  affiliates  since the date as of which  such  number of
         outstanding shares of Common Stock was reported.

                  e) Mechanics of Exercise.

                           i.  Authorization  of  Warrant  Shares.  The  Company
                  covenants that all Warrant Shares which may be issued upon the
                  exercise of the purchase  rights  represented  by this Warrant
                  will, upon exercise of the purchase rights represented by this
                  Warrant,  be duly authorized,  validly issued,  fully paid and
                  nonassessable  and free from all taxes,  liens and  charges in
                  respect of the issue  thereof  (other than taxes in respect of
                  any transfer occurring contemporaneously with such issue). The
                  Company  covenants  that  during  the  period  the  Warrant is
                  outstanding,  it will reserve from its authorized and unissued
                  Common Stock a sufficient  number of shares to provide for the
                  issuance  of the  Warrant  Shares  upon  the  exercise  of any
                  purchase  rights  under  this  Warrant.  The  Company  further
                  covenants  that its issuance of this Warrant shall  constitute
                  full  authority  to its officers who are charged with the duty
                  of  executing  stock  certificates  to  execute  and issue the
                  necessary   certificates  for  the  Warrant  Shares  upon  the

                              Exhibit 10.3 - Page 3

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                  exercise  of the  purchase  rights  under  this  Warrant.  The
                  Company  will  take  all  such  reasonable  action  as  may be
                  necessary to assure that such Warrant  Shares may be issued as
                  provided  herein  without  violation of any  applicable law or
                  regulation,  or of any requirements of the Trading Market upon
                  which the Common Stock may be listed.

                           ii.   Delivery   of   Certificates   Upon   Exercise.
                  Certificates for shares purchased hereunder shall be delivered
                  to the Holder  within 3 Trading  Days from the delivery to the
                  Company  of the  Notice of  Exercise  Form and the  receipt of
                  payment of the Exercise  Price,  surrender of this Warrant and
                  payment of the  aggregate  Exercise  Price as set forth  above
                  ("Warrant Share Delivery Date").  This Warrant shall be deemed
                  to have been  exercised on the date the last of the  foregoing
                  events occurs. The Warrant Shares shall be deemed to have been
                  issued,  and Holder or any other  person so  designated  to be
                  named  therein  shall be  deemed  to have  become a holder  of
                  record of such  shares  for all  purposes,  as of the date the
                  Warrant has been  exercised and all taxes  required to be paid
                  by the Holder,  if any, pursuant to Section 2(e)(vii) prior to
                  the issuance of such shares, have been paid.

                           iii. Delivery of New Warrants Upon Exercise.  If this
                  Warrant shall have been  exercised in part, the Company shall,
                  at the time of delivery  of the  certificate  or  certificates
                  representing  Warrant Shares,  deliver to Holder a new Warrant
                  evidencing  the rights of Holder to purchase  the  unpurchased
                  Warrant  Shares called for by this Warrant,  which new Warrant
                  shall in all other respects be identical with this Warrant.

                           iv.  Rescission  Rights.  If  the  Company  fails  to
                  deliver  to  the   Holder  a   certificate   or   certificates
                  representing  the Warrant Shares pursuant to this Section 2(e)
                  by the Warrant Share Delivery Date,  then the Holder will have
                  the right to rescind such exercise

                           v.  Buy-In  Compensation.  In  addition  to any other
                  rights  available  to the  Holder,  if the  Company  fails  to
                  deliver  to  the   Holder  a   certificate   or   certificates
                  representing  the Warrant Shares pursuant to an exercise on or
                  before the Warrant Share Delivery Date, and if after such date
                  the Holder is required  by its broker to purchase  (in an open
                  market  transaction  or  otherwise)  shares of Common Stock to
                  deliver in satisfaction of a sale by the Holder of the Warrant
                  Shares  which  the  Holder  anticipated  receiving  upon  such
                  exercise (a "Buy-In"),  then the Company shall (1) pay in cash
                  to the  Holder  the  amount  by which (x) the  Holder's  total
                  purchase price (including brokerage  commissions,  if any) for
                  the shares of Common Stock required to be so purchased exceeds
                  (y) the  amount  obtained  by  multiplying  (A) the  number of
                  Warrant Shares that the Company was required to deliver to the
                  Holder in connection  with the exercise at issue times (B) the
                  price per Share at which the sell  order  giving  rise to such
                  purchase obligation was executed, and (2) at the option of the
                  Holder,  either  reinstate  the  portion  of the  Warrant  and
                  equivalent  number of Warrant  Shares for which such  exercise

                              Exhibit 10.3 - Page 4

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                  was not  honored or deliver to the Holder the number of shares
                  of Common  Stock that would have been  issued had the  Company
                  timely  complied  with its exercise  and delivery  obligations
                  hereunder.  For example,  if the Holder purchases Common Stock
                  having a total  purchase  price of  $11,000  to cover a Buy-In
                  with  respect  to an  attempted  exercise  of shares of Common
                  Stock  with  an  aggregate  sale  price  giving  rise  to such
                  purchase  obligation  of  $10,000,  under  clause  (1)  of the
                  immediately  preceding  sentence the Company shall be required
                  to pay the Holder $1,000. The Holder shall provide the Company
                  written notice indicating the amounts payable to the Holder in
                  respect of the Buy-In, together with applicable  confirmations
                  and  other  evidence  reasonably  requested  by  the  Company.
                  Nothing  herein  shall  limit a  Holder's  right to pursue any
                  other remedies available to it hereunder,  at law or in equity
                  including,   without   limitation,   a  decree   of   specific
                  performance  and/or  injunctive  relief  with  respect  to the
                  Company's failure to timely deliver certificates  representing
                  shares  of  Common  Stock  upon  exercise  of the  Warrant  as
                  required pursuant to the terms hereof.

                           vi. No  Fractional  Shares or  Scrip.  No  fractional
                  shares or scrip representing fractional shares shall be issued
                  upon the  exercise of this  Warrant.  As to any  fraction of a
                  share which  Holder  would  otherwise  be entitled to purchase
                  upon such exercise, the Company shall pay a cash adjustment in
                  respect  of such  final  fraction  in an amount  equal to such
                  fraction multiplied by the Exercise Price.

                           vii.  Charges,   Taxes  and  Expenses.   Issuance  of
                  certificates  for Warrant  Shares shall be made without charge
                  to  the  Holder  for  any  issue  or  transfer  tax  or  other
                  incidental   expense  in  respect  of  the  issuance  of  such
                  certificate,  all of which taxes and expenses shall be paid by
                  the Company, and such certificates shall be issued in the name
                  of the Holder or in such name or names as may be  directed  by
                  the Holder; provided,  however, that in the event certificates
                  for  Warrant  Shares are to be issued in a name other than the
                  name of the Holder, this Warrant when surrendered for exercise
                  shall be accompanied by the  Assignment  Form attached  hereto
                  duly executed by the Holder; and the Company may require, as a
                  condition  thereto,   the  payment  of  a  sum  sufficient  to
                  reimburse it for any transfer tax  incidental  thereto.  viii.
                  Closing of Books.  The Company will not close its  stockholder
                  books or  records  in any  manner  which  prevents  the timely
                  exercise of this Warrant, pursuant to the terms hereof.

         Section 3. Certain Adjustments.

                  a) Stock  Dividends  and Splits.  If the Company,  at any time
         while  this  Warrant  is  outstanding:  (A)  pays a stock  dividend  or
         otherwise makes a distribution or distributions on shares of its Common
         Stock or any other equity or equity  equivalent  securities  payable in
         shares  of Common  Stock  (which,  for  avoidance  of doubt,  shall not
         include any shares of Common  Stock  issued by the Company  pursuant to

                              Exhibit 10.3 - Page 5

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         this Warrant), (B) subdivides outstanding shares of Common Stock into a
         larger  number of shares,  (C)  combines  (including  by way of reverse
         stock split)  outstanding  shares of Common Stock into a smaller number
         of shares,  or (D) issues by  reclassification  of shares of the Common
         Stock any shares of capital stock of the Company, then in each case the
         Exercise Price shall be multiplied by a fraction of which the numerator
         shall be the  number  of shares of  Common  Stock  (excluding  treasury
         shares,  if  any)  outstanding  before  such  event  and of  which  the
         denominator  shall be the number of shares of Common Stock  outstanding
         after such event.  Any  adjustment  made  pursuant to this Section 3(a)
         shall  become  effective  immediately  after  the  record  date for the
         determination  of  stockholders  entitled to receive  such  dividend or
         distribution and shall become effective immediately after the effective
         date in the case of a subdivision, combination or re-classification.

                  b) Pro Rata  Distributions.  If the Company, at any time prior
         to the  Termination  Date,  shall  distribute  to all holders of Common
         Stock  (and  not  to  Holders  of  the   Warrants)   evidences  of  its
         indebtedness  or  assets  or rights or  warrants  to  subscribe  for or
         purchase  any  security  other than the Common  Stock  (which  shall be
         subject to Section  3(b)),  then in each such case the  Exercise  Price
         shall  be  adjusted  by  multiplying   the  Exercise  Price  in  effect
         immediately  prior  to the  record  date  fixed  for  determination  of
         stockholders  entitled to receive  such  distribution  by a fraction of
         which the denominator  shall be the Average Price  determined as of the
         record date mentioned  above,  and of which the numerator shall be such
         Average  Price on such  record date less the then per share fair market
         value at such  record date of the portion of such assets or evidence of
         indebtedness so distributed  applicable to one outstanding share of the
         Common Stock as determined by the Board of Directors in good faith.  In
         either case the adjustments shall be described in a statement  provided
         to the Holders of the portion of assets or evidences of indebtedness so
         distributed  or such  subscription  rights  applicable  to one share of
         Common  Stock.   Such  adjustment  shall  be  made  whenever  any  such
         distribution is made and shall become effective  immediately  after the
         record date mentioned above.

                  c) Calculations.  All calculations  under this Section 3 shall
         be made to the nearest cent or the nearest  1/100th of a share,  as the
         case may be. For  purposes  of this  Section 3, the number of shares of
         Common  Stock  outstanding  as of a given  date shall be the sum of the
         number of shares of Common Stock (excluding  treasury  shares,  if any)
         outstanding.

                  d) Notice to Holders.

                           i.  Adjustment  to  Exercise   Price.   Whenever  the
                  Exercise  Price is adjusted  pursuant  to this  Section 3, the
                  Company shall  promptly  mail to each Holder a notice  setting
                  forth the  Exercise  Price after such  adjustment  and setting
                  forth  a  brief   statement  of  the  facts   requiring   such
                  adjustment.

                           ii.  Notice  of  Certain  Transactions.  If  (A)  the
                  Company shall  declare a dividend (or any other  distribution)
                  on the Common  Stock;  (B) the Company shall declare a special
                  nonrecurring  cash  dividend on or a redemption  of the Common

                              Exhibit 10.3 - Page 6

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                  Stock;  (C) the Company  shall  authorize  the granting to all
                  holders of the Common  Stock  rights or warrants to  subscribe
                  for or purchase any shares of capital stock of any class or of
                  any  rights;  (D)  the  approval  of any  stockholders  of the
                  Company   shall   be   required   in   connection   with   any
                  reclassification  of the Common Stock,  any  consolidation  or
                  merger to which the  Company is a party,  any sale or transfer
                  of all or substantially  all of the assets of the Company,  of
                  any  compulsory  share  exchange  whereby the Common  Stock is
                  converted  into other  securities,  cash or property;  (E) the
                  Company  shall   authorize   the   voluntary  or   involuntary
                  dissolution,  liquidation  or winding up of the affairs of the
                  Company;  then,  in each case,  the Company  shall cause to be
                  mailed to the Holder at its last  addresses as it shall appear
                  upon the Warrant Register of the Company, at least 20 calendar
                  days  prior  to  the  applicable   record  or  effective  date
                  hereinafter  specified, a notice stating (x) the date on which
                  a record  is to be taken  for the  purpose  of such  dividend,
                  distribution,  redemption,  rights or warrants, or if a record
                  is not to be taken,  the date as of which the  holders  of the
                  Common  Stock  of  record  to be  entitled  to such  dividend,
                  distributions,  redemption,  rights  or  warrants  are  to  be
                  determined  or (y) the  date on which  such  reclassification,
                  consolidation,  merger,  sale,  transfer or share  exchange is
                  expected  to become  effective  or  close,  and the date as of
                  which it is  expected  that  holders  of the  Common  Stock of
                  record  shall be  entitled  to  exchange  their  shares of the
                  Common   Stock  for   securities,   cash  or  other   property
                  deliverable upon such reclassification, consolidation, merger,
                  sale, transfer or share exchange;  provided,  that the failure
                  to mail such  notice or any defect  therein or in the  mailing
                  thereof shall not affect the validity of the corporate  action
                  required  to be  specified  in  such  notice.  The  Holder  is
                  entitled to exercise  this  Warrant  during the 20-day  period
                  commencing  the date of such notice to the  effective  date of
                  the event triggering such notice

                  e) Fundamental Transaction. If, at any time while this Warrant
         is outstanding,  (A) the Company effects any merger or consolidation of
         the Company with or into another Person,  and as a result,  the Company
         is not the surviving  entity in such transaction or (B) Company effects
         any  reclassification  of the  Common  Stock  or any  compulsory  share
         exchange  pursuant to which the Common Stock is  effectively  converted
         into or exchanged for other  securities,  cash or property (in any such
         case, a "Fundamental  Transaction"),  then upon any subsequent exercise
         of this Warrant,  the Holder shall have the right to receive,  for each
         Warrant Share that would have been  issuable upon such exercise  absent
         such Fundamental  Transaction,  the same kind and amount of securities,
         cash or  property as it would have been  entitled  to receive  upon the
         occurrence of such Fundamental  Transaction if it had been, immediately
         prior to such  Fundamental  Transaction,  the  holder  of one  share of
         Common Stock (the "Alternate Consideration").  For purposes of any such
         exercise,   the   determination   of  the   Exercise   Price  shall  be
         appropriately  adjusted to apply to such Alternate  Consideration based
         on the amount of  Alternate  Consideration  issuable  in respect of one
         share of Common Stock in such Fundamental Transaction,  and the Company
         shall apportion the Exercise Price among the Alternate Consideration in

                              Exhibit 10.3 - Page 7

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         a reasonable  manner  reflecting  the relative  value of any  different
         components of the Alternate  Consideration.  If holders of Common Stock
         are  given any  choice as to the  securities,  cash or  property  to be
         received in a Fundamental  Transaction,  then the Holder shall be given
         the same choice as to the Alternate  Consideration it receives upon any
         exercise of this Warrant following such Fundamental Transaction. To the
         extent necessary to effectuate the foregoing provisions,  any successor
         to the  Company or  surviving  entity in such  Fundamental  Transaction
         shall issue to the Holder a new Warrant  consistent  with the foregoing
         provisions  and  evidencing  the Holder's right to convert such Warrant
         into Alternate  Consideration.  The terms of any agreement  pursuant to
         which  a  Fundamental  Transaction  is  effected  shall  include  terms
         requiring  any such  successor or  surviving  entity to comply with the
         provisions of this paragraph (e) and insuring that this Warrant (or any
         such  replacement   security)  will  be  similarly  adjusted  upon  any
         subsequent transaction analogous to a Fundamental Transaction.

                  f)  Exempt  Issuance.   Notwithstanding   the  foregoing,   no
         adjustments, Alternate Consideration nor notices shall be made, paid or
         issued under this Section 3 in respect of an Exempt Issuance.

                  g)  Voluntary  Adjustment  By Company.  The Company may at any
         time during the term of this Warrant  reduce the then current  Exercise
         Price to any amount and for any period of time  deemed  appropriate  by
         the Board of Directors of the Company.

         Section 4. Transfer of Warrant.

                  a) Transferability.  Subject to compliance with any applicable
         securities  laws and the conditions set forth in Sections 5(a) and 4(d)
         hereof and to the provisions of Section 4.1 of the Purchase  Agreement,
         this Warrant and all rights hereunder are transferable,  in whole or in
         part,  upon  surrender of this Warrant at the  principal  office of the
         Company,   together   with  a  written   assignment   of  this  Warrant
         substantially  in the form attached  hereto duly executed by the Holder
         or its agent or attorney and funds sufficient to pay any transfer taxes
         payable upon the making of such  transfer.  Upon such surrender and, if
         required,  such  payment,  the Company  shall execute and deliver a new
         Warrant or Warrants in the name of the assignee or assignees and in the
         denomination   or   denominations   specified  in  such  instrument  of
         assignment,  and shall issue to the  assignor a new Warrant  evidencing
         the portion of this  Warrant not so assigned,  and this  Warrant  shall
         promptly  be  cancelled.  A  Warrant,  if  properly  assigned,  may  be
         exercised  by a new holder for the purchase of Warrant  Shares  without
         having a new Warrant issued.

                  b) New Warrants.  This Warrant may be divided or combined with
         other Warrants upon presentation  hereof at the aforesaid office of the
         Company,  together  with a  written  notice  specifying  the  names and
         denominations  in which new  Warrants  are to be issued,  signed by the
         Holder or its agent or  attorney.  Subject to  compliance  with Section
         4(a),  as to any  transfer  which may be involved  in such  division or
         combination,  the  Company  shall  execute and deliver a new Warrant or
         Warrants  in  exchange  for the  Warrant or  Warrants  to be divided or
         combined in accordance with such notice.

                              Exhibit 10.3 - Page 8

<PAGE>

                  c) Warrant Register.  The Company shall register this Warrant,
         upon  records to be  maintained  by the Company for that  purpose  (the
         "Warrant Register"),  in the name of the record Holder hereof from time
         to time. The Company may deem and treat the  registered  Holder of this
         Warrant as the  absolute  owner  hereof for the purpose of any exercise
         hereof or any  distribution to the Holder,  and for all other purposes,
         absent actual notice to the contrary.

                  d) Transfer Restrictions.  If, at the time of the surrender of
         this  Warrant in  connection  with any  transfer of this  Warrant,  the
         transfer  of  this  Warrant  shall  not be  registered  pursuant  to an
         effective  registration  statement  under the  Securities Act and under
         applicable  state securities or blue sky laws, the Company may require,
         as a  condition  of  allowing  such  transfer  (i) that the  Holder  or
         transferee of this Warrant,  as the case may be, furnish to the Company
         a written opinion of counsel (which opinion shall be in form, substance
         and scope customary for opinions of counsel in comparable transactions)
         to the effect that such transfer may be made without registration under
         the Securities Act and under  applicable  state  securities or blue sky
         laws,  (ii) that the holder or  transferee  execute  and deliver to the
         Company an investment  letter in form and  substance  acceptable to the
         Company and (iii) that the  transferee be an  "accredited  investor" as
         defined in Rule 501(a)(1),  (a)(2),  (a)(3), (a)(5), (a)(6), (a)(7), or
         (a)(8)   promulgated   under  the   Securities   Act  or  a   qualified
         institutional  buyer as defined in Rule  144A(a)  under the  Securities
         Act.

         Section 5. Miscellaneous.

                  a) Title to Warrant. Prior to the Termination Date and subject
         to compliance with applicable laws and Section 4 of this Warrant,  this
         Warrant and all rights hereunder are transferable, in whole or in part,
         at the  office or agency of the  Company  by the Holder in person or by
         duly authorized attorney,  upon surrender of this Warrant together with
         the Assignment  Form annexed hereto properly  endorsed.  The transferee
         shall  sign an  investment  letter  in form  and  substance  reasonably
         satisfactory to the Company.

                  b) No Rights as Shareholder Until Exercise.  This Warrant does
         not  entitle  the  Holder to any  voting  rights  or other  rights as a
         shareholder  of the  Company  prior to the  exercise  hereof.  Upon the
         surrender  of this  Warrant and the payment of the  aggregate  Exercise
         Price  (or by means of a  cashless  exercise),  the  Warrant  Shares so
         purchased  shall be and be deemed  to be  issued to such  Holder as the
         record owner of such shares as of the close of business on the later of
         the date of such surrender or payment.

                  c) Loss,  Theft,  Destruction  or Mutilation  of Warrant.  The
         Company  covenants  that  upon  receipt  by  the  Company  of  evidence
         reasonably  satisfactory  to it of  the  loss,  theft,  destruction  or
         mutilation  of this  Warrant or any stock  certificate  relating to the
         Warrant Shares, and in case of loss, theft or destruction, of indemnity
         or security  reasonably  satisfactory to it (which,  in the case of the
         Warrant, shall not include the posting of any bond), and upon surrender
         and  cancellation of such Warrant or stock  certificate,  if mutilated,
         the Company will make and deliver a new Warrant or stock certificate of
         like tenor and dated as of such  cancellation,  in lieu of such Warrant
         or stock certificate.

                              Exhibit 10.3 - Page 9

<PAGE>

                  d) Saturdays, Sundays, Holidays, etc. If the last or appointed
         day for  the  taking  of any  action  or the  expiration  of any  right
         required  or  granted  herein  shall be a  Saturday,  Sunday or a legal
         holiday,  then such action may be taken or such right may be  exercised
         on the next succeeding day not a Saturday, Sunday or legal holiday.

                  e) Authorized Shares.

                           The  Company  covenants  that  during  the period the
                  Warrant is  outstanding,  it will reserve from its  authorized
                  and unissued  Common  Stock a  sufficient  number of shares to
                  provide  for the  issuance  of the  Warrant  Shares  upon  the
                  exercise  of any  purchase  rights  under  this  Warrant.  The
                  Company  further  covenants  that its issuance of this Warrant
                  shall  constitute  full  authority  to its  officers  who  are
                  charged  with  the duty of  executing  stock  certificates  to
                  execute and issue the necessary  certificates  for the Warrant
                  Shares upon the  exercise of the  purchase  rights  under this
                  Warrant.  The Company will take all such reasonable  action as
                  may be  necessary  to assure that such  Warrant  Shares may be
                  issued as provided herein without  violation of any applicable
                  law or  regulation,  or of  any  requirements  of the  Trading
                  Market upon which the Common Stock may be listed.

                           Except and to the extent as waived or consented to by
                  the Holder,  the Company  shall not by any action,  including,
                  without limitation,  amending its certificate of incorporation
                  or   through   any   reorganization,   transfer   of   assets,
                  consolidation,   merger,   dissolution,   issue   or  sale  of
                  securities  or any other  voluntary  action,  avoid or seek to
                  avoid the  observance  or  performance  of any of the terms of
                  this  Warrant,  but will at all times in good faith  assist in
                  the  carrying  out of all such  terms and in the taking of all
                  such actions as may be necessary or appropriate to protect the
                  rights  of  Holder  as  set  forth  in  this  Warrant  against
                  impairment.  Without limiting the generality of the foregoing,
                  the Company will (a) not increase the par value of any Warrant
                  Shares above the amount  payable  therefor  upon such exercise
                  immediately  prior to such increase in par value, (b) take all
                  such action as may be necessary or  appropriate  in order that
                  the  Company  may  validly  and  legally  issue fully paid and
                  nonassessable   Warrant  Shares  upon  the  exercise  of  this
                  Warrant, and (c) use commercially reasonable efforts to obtain
                  all  such  authorizations,  exemptions  or  consents  from any
                  public regulatory body having  jurisdiction  thereof as may be
                  necessary  to enable the  Company to perform  its  obligations
                  under this Warrant.

                           Before  taking any action  which  would  result in an
                  adjustment  in the  number of  Warrant  Shares  for which this
                  Warrant is exercisable or in the Exercise  Price,  the Company
                  shall obtain all such authorizations or exemptions thereof, or
                  consents  thereto,   as  may  be  necessary  from  any  public
                  regulatory body or bodies having jurisdiction thereof.

                  f) Jurisdiction.  All questions  concerning the  construction,
         validity,  enforcement  and  interpretation  of this  Warrant  shall be
         determined in accordance with the provisions of the Purchase Agreement.

                              Exhibit 10.3 - Page 10

<PAGE>

                  g)  Restrictions.  The Holder  acknowledges  that the  Warrant
         Shares  acquired upon the exercise of this Warrant,  if not registered,
         will  have  restrictions  upon  resale  imposed  by state  and  federal
         securities laws.

                  h) Nonwaiver and  Expenses.  No course of dealing or any delay
         or failure to exercise any right  hereunder on the part of Holder shall
         operate  as a waiver  of such  right or  otherwise  prejudice  Holder's
         rights,  powers  or  remedies,  notwithstanding  all  rights  hereunder
         terminate  on the  Termination  Date.  If  the  Company  willfully  and
         knowingly  fails to comply with any  provision of this  Warrant,  which
         results in any material damages to the Holder, the Company shall pay to
         Holder  such  amounts  as shall be  sufficient  to cover  any costs and
         expenses  including,  but not limited to,  reasonable  attorneys' fees,
         including  those  of  appellate  proceedings,  incurred  by  Holder  in
         collecting  any amounts due pursuant  hereto or in otherwise  enforcing
         any of its rights, powers or remedies hereunder.

                  i) Notices. Any notice,  request or other document required or
         permitted to be given or  delivered to the Holder by the Company  shall
         be delivered in accordance  with the notice  provisions of the Purchase
         Agreement.

                  j)  Limitation  of  Liability.  No  provision  hereof,  in the
         absence of any affirmative action by Holder to exercise this Warrant or
         purchase  Warrant  Shares,  and no enumeration  herein of the rights or
         privileges  of Holder,  shall give rise to any  liability of Holder for
         the  purchase  price of any  Common  Stock or as a  stockholder  of the
         Company,  whether  such  liability  is  asserted  by the  Company or by
         creditors of the Company.

                  k) Remedies. Holder, in addition to being entitled to exercise
         all rights  granted by law,  including  recovery  of  damages,  will be
         entitled to specific  performance of its rights under this Warrant. The
         Company agrees that monetary damages would not be adequate compensation
         for any loss incurred by reason of a breach by it of the  provisions of
         this  Warrant and hereby  agrees to waive the defense in any action for
         specific performance that a remedy at law would be adequate.

                  l) Successors  and Assigns.  Subject to applicable  securities
         laws,  this  Warrant and the rights and  obligations  evidenced  hereby
         shall inure to the benefit of and be binding upon the successors of the
         Company  and the  successors  and  permitted  assigns  of  Holder.  The
         provisions  of this  Warrant are  intended to be for the benefit of all
         Holders from time to time of this Warrant and shall be  enforceable  by
         any such Holder or holder of Warrant Shares.

                  m)  Amendment.  This Warrant may be modified or amended or the
         provisions  hereof  waived with the written  consent of the Company and
         the Holder.

                  n)  Severability.  Wherever  possible,  each provision of this
         Warrant  shall be  interpreted  in such manner as to be  effective  and
         valid under  applicable law, but if any provision of this Warrant shall
         be prohibited by or invalid under  applicable law, such provision shall
         be ineffective to the extent of such prohibition or invalidity, without
         invalidating   the  remainder  of  such  provisions  or  the  remaining
         provisions of this Warrant.

                             Exhibit 10.3 - Page 11

<PAGE>

                  o)  Headings.  The  headings  used in this Warrant are for the
         convenience of reference only and shall not, for any purpose, be deemed
         a part of this Warrant.

                              ********************

                             Exhibit 10.3 - Page 12

<PAGE>

         IN WITNESS WHEREOF,  the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated:  September 30, 2004

                                   CUBIC ENERGY, INC.

                                   By:__________________________________________
                                      Name: Calvin A. Wallen III
                                      Title:  Chief Executive Officer

                             Exhibit 10.3 - Page 13

<PAGE>

                               NOTICE OF EXERCISE

To:      Cubic Energy, Inc.

         (1) The undersigned  hereby elects to purchase  ________ Warrant Shares
of the Company  pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders  herewith payment of the exercise price in full,  together
with all applicable transfer taxes, if any.

         (2) Payment shall take the form of (check applicable box):

                  [_] in lawful money of the United States; or

                  [_] the  cancellation  of such number of Warrant  Shares as is
                  necessary,  in  accordance  with  the  formula  set  forth  in
                  subsection  2(c), to exercise this Warrant with respect to the
                  maximum number of Warrant Shares  purchasable  pursuant to the
                  cashless exercise procedure set forth in subsection 2(c).

         (3)  Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

                  ____________________________

The Warrant Shares shall be delivered to the following:

                  ____________________________

                  ____________________________

                  ____________________________

         (4) Accredited Investor. The undersigned is an "accredited investor" as
defined  in  Regulation  D  promulgated  under the  Securities  Act of 1933,  as
amended.

                                                [PURCHASER]

                                                 By:____________________________
                                                    Name:
                                                   Title:

                                                 Dated:_________________________

                             Exhibit 10.3 - Page 14

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

         FOR VALUE  RECEIVED,  the  foregoing  Warrant and all rights  evidenced
thereby are hereby assigned to _____________ whose address is _________________.

                                            _________ Dated:______________, 2004

                  Holder's Signature:   ___________________________

                  Holder's Address:     ___________________________

                                        ___________________________

Signature Guaranteed:___________________________________________

NOTE:    The signature to this  Assignment Form must correspond with the name as
         it  appears  on  the  face  of  the  Warrant,   without  alteration  or
         enlargement or any change whatsoever,  and must be guaranteed by a bank
         or trust  company.  Officers  of  corporations  and  those  acting in a
         fiduciary or other representative  capacity should file proper evidence
         of authority to assign the foregoing Warrant.

                             Exhibit 10.3 - Page 15EXHIBIT 10.4

                          REGISTRATION RIGHTS AGREEMENT

         This  Registration  Rights  Agreement  (this  "Agreement")  is made and
entered  into as of  September  30,  2004,  among Cubic  Energy,  Inc.,  a Texas
corporation  (the  "Company"),  and the purchasers  signatory  hereto (each such
purchaser  is a  "Purchaser"  and all such  purchasers  are,  collectively,  the
"Purchasers").

         This Agreement is made pursuant to the Securities  Purchase  Agreement,
dated as of  September  30,  2004  among the  Company  and the  Purchasers  (the
"Purchase Agreement").

         The Company and the Purchasers hereby agree as follows:

1.       Definitions

         Capitalized  terms  used  and not  otherwise  defined  herein  that are
defined in the Purchase  Agreement  shall have the meanings  given such terms in
the Purchase  Agreement.  As used in this  Agreement,  the following terms shall
have the following meanings:

                  "Advice" shall have the meaning set forth in Section 6(d).

                  "Effectiveness  Date"  means,  with  respect  to  the  initial
         Registration  Statement  required  to be  filed  hereunder,  the  120th
         calendar  day  following  the date  hereof  and,  with  respect  to any
         additional  Registration  Statements which may be required  pursuant to
         Section  3(c),  the 120th  calendar day following the date on which the
         Company  first  knows,  or  reasonably  should  have  known,  that such
         additional  Registration  Statement  is required  hereunder;  provided,
         however,  in the event the Company is notified by the  Commission  that
         one of the above Registration  Statements will not be reviewed or is no
         longer subject to further review and comments,  the Effectiveness  Date
         as to such  Registration  Statement  shall  be the  tenth  Trading  Day
         following  the date on which the  Company is so  notified  if such date
         precedes the dates required above.

                  "Effectiveness  Period"  shall have the  meaning  set forth in
         Section 2(a).

                  "Event" shall have the meaning set forth in Section 2(b).

                  "Event Date" shall have the meaning set forth in Section 2(b).

                  "Filing Date" means, with respect to the initial  Registration
         Statement required hereunder,  the 45th calendar day following the date
         hereof and,  with  respect to any  additional  Registration  Statements
         which may be required  pursuant to Section 3(c), the 15th day following
         the date on which the Company first knows,  or  reasonably  should have
         known  that  such   additional   Registration   Statement  is  required
         hereunder.

                              Exhibit 10.4 - Page 1

<PAGE>
                  "Holder" or "Holders" means the holder or holders, as the case
         may be, from time to time of Registrable Securities.

                  "Indemnified  Party"  shall  have  the  meaning  set  forth in
         Section 5(c).

                  "Indemnifying  Party"  shall  have the  meaning  set  forth in
         Section 5(c).

                  "Losses" shall have the meaning set forth in Section 5(a).

                  "Proceeding" means an action,  claim,  suit,  investigation or
         proceeding (including,  without limitation, an investigation or partial
         proceeding, such as a deposition), whether commenced or threatened.

                  "Prospectus"  means the prospectus  included in a Registration
         Statement  (including,  without limitation,  a prospectus that includes
         any information  previously  omitted from a prospectus filed as part of
         an  effective   registration  statement  in  reliance  upon  Rule  430A
         promulgated  under the Securities  Act), as amended or  supplemented by
         any prospectus supplement, with respect to the terms of the offering of
         any portion of the  Registrable  Securities  covered by a  Registration
         Statement,  and all other amendments and supplements to the Prospectus,
         including post-effective  amendments,  and all material incorporated by
         reference or deemed to be incorporated by reference in such Prospectus.

                  "Registrable Securities" means (i) all of the shares of Common
         Stock  issuable  upon  conversion in full of the  Debentures,  (ii) all
         shares  issuable as interest on the  Debentures  assuming  all interest
         payments are made in shares of Common Stock and the Debentures are held
         until maturity, (iii) all Warrant Shares, (iv) any securities issued or
         issuable  upon  any  stock  split,   dividend  or  other  distribution,
         recapitalization or similar event with respect to the foregoing and (v)
         any additional  shares  issuable in connection  with any  anti-dilution
         provisions in the Debentures.

                  "Registration  Statement"  means the  registration  statements
         required  to  be  filed  hereunder  and  any  additional   registration
         statements  contemplated by Section 3(c),  including (in each case) the
         Prospectus,  amendments and supplements to such registration  statement
         or  Prospectus,  including  pre-  and  post-effective  amendments,  all
         exhibits thereto, and all material  incorporated by reference or deemed
         to be incorporated by reference in such registration statement.

                  "Rule  415"  means  Rule  415  promulgated  by the  Commission
         pursuant to the  Securities  Act, as such Rule may be amended from time
         to time,  or any similar rule or  regulation  hereafter  adopted by the
         Commission  having  substantially  the same  purpose and effect as such
         Rule.

                  "Rule  424"  means  Rule  424  promulgated  by the  Commission
         pursuant to the  Securities  Act, as such Rule may be amended from time
         to time,  or any similar rule or  regulation  hereafter  adopted by the
         Commission  having  substantially  the same  purpose and effect as such
         Rule.

                              Exhibit 10.4 - Page 2

<PAGE>

2.       Registration

         (a) On or prior to each Filing Date, the Company shall prepare and file
with the Commission a Registration  Statement covering the resale of 100% of the
Registrable  Securities  on such  Filing  Date for an  offering  to be made on a
continuous  basis pursuant to Rule 415. The  Registration  Statement shall be on
Form SB-2 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form SB-2, in which case such registration shall be on
another  appropriate  form in accordance  herewith)  and shall  contain  (unless
otherwise  directed by the  Holders)  substantially  the "Plan of  Distribution"
attached hereto as Annex A. Subject to the terms of this Agreement,  the Company
shall use its best  efforts to cause the  Registration  Statement to be declared
effective under the Securities Act prior to the applicable  Effectiveness  Date,
and shall use its best efforts to keep such Registration  Statement continuously
effective under the Securities Act until all Registrable  Securities  covered by
such  Registration  Statement  have  been  sold  or may be sold  without  volume
restrictions  pursuant  to Rule  144(k)  as  determined  by the  counsel  to the
Company,  but in any event not to exceed  five years from the date  hereof  (the
"Effectiveness  Period").  The Company shall immediately  notify the Holders via
facsimile of the  effectiveness  of the  Registration  Statement on the same day
that the Company receives notification of the effectiveness from the Commission.
Failure to so notify the Holder  within five Trading  Days of such  notification
shall be deemed an Event under Section 2(b).

         (b) If: (i) a  Registration  Statement  is not filed on or prior to its
Filing Date (if the Company files a Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(a),  the Company  shall not be deemed to have  satisfied  this clause (i)), or
(ii) the Company fails to file with the Commission a request for acceleration in
accordance  with Rule 461  promulgated  under the  Securities  Act,  within  ten
Trading  Days of the date that the  Company is  notified  (orally or in writing,
whichever is earlier) by the Commission  that a Registration  Statement will not
be  "reviewed,"  or not  subject  to  further  review,  or  (iii)  prior  to its
Effectiveness  Date,  the Company  fails to file a  pre-effective  amendment and
otherwise  respond in writing to comments  made by the  Commission in respect of
such  Registration  Statement  within 15  calendar  days  after the  receipt  of
comments by or notice from the  Commission  that such  amendment  is required in
order  for a  Registration  Statement  to  be  declared  effective,  or  (iv)  a
Registration  Statement  filed or required to be filed hereunder is not declared
effective  by the  Commission  by its  Effectiveness  Date,  or  (v)  after  the
Effectiveness  Date, a  Registration  Statement  ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is required
to be  effective,  or unless  approved  by  Holders  holding a  majority  of the
Registrable Securities,  the Holders are not permitted to utilize the Prospectus
therein  to resell  such  Registrable  Securities  for more than 15  consecutive
calendar  days but no more than an  aggregate  of 25  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) (any such
failure or breach  being  referred to as an "Event",  and for purposes of clause
(i) or (iv) the date on which such Event occurs,  or for purposes of clause (ii)
the date on which such ten Trading Day period is  exceeded,  or for  purposes of
clause  (iii) the date which such 15  calendar  day period is  exceeded,  or for

                              Exhibit 10.4 - Page 3

<PAGE>

purposes of clause (v) the date on which such 15 or 25 calendar  day period,  as
applicable,  is exceeded being referred to as "Event Date"), then in addition to
any other rights the Holders may have hereunder or under applicable law, on each
such Event Date and on each monthly  anniversary of each such Event Date (if the
applicable  Event shall not have been cured by such date)  until the  applicable
Event is cured,  the Company shall pay to each Holder an amount in cash, as full
liquidated damages and not as a penalty, equal to 1.0% (but not to exceed 6%, in
the aggregate  hereunder) of the  aggregate  purchase  price paid by such Holder
pursuant to the Purchase  Agreement for any Registrable  Securities then held by
such Holder. If the Company fails to pay any liquidated damages pursuant to this
Section in full within seven days after the date  payable,  the Company will pay
interest  thereon at a rate of 18% per annum (or such lesser maximum amount that
is permitted to be paid by applicable  law) to the Holder,  accruing  daily from
the date such partial  liquidated  damages are due until such amounts,  plus all
such interest thereon,  are paid in full. The liquidated damages pursuant to the
terms  hereof shall apply on a daily  pro-rata  basis for any portion of a month
prior to the cure of an Event.

3.       Registration Procedures

         In connection with the Company's  registration  obligations  hereunder,
the Company shall:

         (a) Not less  than  three  Trading  Days  prior to the  filing  of each
Registration  Statement or any related Prospectus or any amendment or supplement
thereto,  the  Company  shall,  (i)  furnish to each  Holder  copies of all such
documents  proposed  to be filed,  and (ii) cause its  officers  and  directors,
counsel  and  independent  certified  public  accountants  to  respond  to  such
inquiries as shall be necessary, in the reasonable opinion of respective counsel
to conduct a reasonable  investigation within the meaning of the Securities Act.
The Company shall not file the Registration  Statement or any such Prospectus or
any amendments or supplements  thereto to which the Holders of a majority of the
Registrable Securities shall reasonably object in good faith, provided that, the
Company is notified of such  objection  in writing no later than 3 Trading  Days
after the Holders have been so furnished  copies of such documents.  Each Holder
agrees to furnish to the Company a completed  Questionnaire in the form attached
to this Agreement as Annex B (a "Selling  Holder  Questionnaire")  not less than
two Trading  Days prior to the Filing  Date or by the end of the second  Trading
Day  following  the  date on which  such  Holder  receives  draft  materials  in
accordance with this Section.

         (b) (i) Prepare and file with the Commission such amendments, including
post-effective  amendments,  to a Registration Statement and the Prospectus used
in  connection  therewith as may be necessary to keep a  Registration  Statement
continuously  effective  as to the  applicable  Registrable  Securities  for the
Effectiveness  Period and prepare and file with the Commission  such  additional
Registration Statements in order to register for resale under the Securities Act
all of the  Registrable  Securities;  (ii) cause the  related  Prospectus  to be
amended or supplemented by any required  Prospectus  supplement  (subject to the
terms of this Agreement), and as so supplemented or amended to be filed pursuant
to Rule 424;  (iii) respond as promptly as  reasonably  possible to any comments
received from the  Commission  with respect to a  Registration  Statement or any
amendment thereto;  and (iv) comply in all material respects with the provisions
of the  Securities  Act and the  Exchange  Act  applicable  to the Company  with

                              Exhibit 10.4 - Page 4

<PAGE>

respect  to  the  disposition  of  all  Registrable   Securities  covered  by  a
Registration  Statement during the applicable  period in accordance  (subject to
the terms of this  Agreement)  with the intended  methods of  disposition by the
Holders  thereof set forth in such  Registration  Statement  as so amended or in
such Prospectus as so supplemented.

         (c) If during  the  Effectiveness  Period,  the  number of  Registrable
Securities  at any time exceeds 90% of the number of shares of Common Stock then
registered in a Registration  Statement,  then the Company shall file as soon as
reasonably  practicable but in any case prior to the applicable  Filing Date, an
additional Registration Statement covering the resale by the Holders of not less
than 100% of the number of such Registrable Securities.

         (d) Notify the  Holders of  Registrable  Securities  to be sold  (which
notice shall, pursuant to clauses (ii) through (vi) hereof, be accompanied by an
instruction  to suspend the use of the  Prospectus  until the requisite  changes
have been made) as promptly as reasonably  possible  (and, in the case of (i)(A)
below,  not less than five  Trading  Days prior to such filing) and confirm such
notice in writing no later than one Trading Day  following the day (i)(A) when a
Prospectus  or  any  Prospectus  supplement  or  post-effective  amendment  to a
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a "review" of such Registration  Statement and
whenever the Commission comments in writing on such Registration Statement;  and
(C) with respect to a Registration  Statement or any  post-effective  amendment,
when the same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission or any other federal or state governmental  authority
of any stop order  suspending  the  effectiveness  of a  Registration  Statement
covering  any or all of the  Registrable  Securities  or the  initiation  of any
Proceedings  for  that  purpose;  (iv)  of the  receipt  by the  Company  of any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction,  or the  initiation  or  threatening  of any  Proceeding  for such
purpose;  (v) of the  occurrence  of any event or passage of time that makes the
financial  statements  included  in  a  Registration  Statement  ineligible  for
inclusion  therein  or  any  statement  made  in  a  Registration  Statement  or
Prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any material  respect or that  requires any  revisions to a
Registration Statement,  Prospectus or other documents so that, in the case of a
Registration  Statement  or the  Prospectus,  as the  case  may be,  it will not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the  circumstances  under which they were made, not misleading;  and
(vi) the  occurrence  or existence  of any pending  corporate  development  with
respect to the Company  that the Company in good faith  believes may be material
and that, in the reasonable  determination  of the Company,  makes it not in the
best interest of the Company to allow continued availability of the Registration
Statement or  Prospectus;  provided that any and all of such  information  shall
remain  confidential  to each Holder until such  information  otherwise  becomes
public,  unless  disclosure by a Holder is required by law;  provided,  further,
notwithstanding  each Holder's agreement to keep such information  confidential,
the Holders  make no  acknowledgement  that any such  information  is  material,
non-public information.

                              Exhibit 10.4 - Page 5

<PAGE>

         (e) Use its best  efforts  to avoid the  issuance  of,  or, if  issued,
obtain  the  withdrawal  of (i) any  order  suspending  the  effectiveness  of a
Registration  Statement,  or  (ii)  any  suspension  of  the  qualification  (or
exemption from  qualification) of any of the Registrable  Securities for sale in
any jurisdiction, at the earliest practicable moment.

         (f) Furnish to each Holder, without charge, at least one conformed copy
of each  such  Registration  Statement  and each  amendment  thereto,  including
financial statements and schedules,  all documents  incorporated or deemed to be
incorporated  therein by reference to the extent  requested by such Person,  and
all exhibits to the extent requested by such Person  (including those previously
furnished  or  incorporated  by  reference)  promptly  after the  filing of such
documents with the Commission.

         (g) Promptly deliver to each Holder,  without charge, as many copies of
the Prospectus or  Prospectuses  (including  each form of  prospectus)  and each
amendment  or  supplement  thereto as such  Persons  may  reasonably  request in
connection with resales by the Holder of Registrable Securities.  Subject to the
terms  of  this  Agreement,  the  Company  hereby  consents  to the  use of such
Prospectus  and each  amendment  or  supplement  thereto by each of the  selling
Holders in connection with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving on any notice pursuant to Section 3(d).

         (h) Prior to any resale of Registrable  Securities by a Holder, use its
reasonable  best  efforts to register or qualify or  cooperate  with the selling
Holders in connection with the registration or qualification  (or exemption from
the Registration or qualification) of such Registrable Securities for the resale
by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United  States as any Holder  reasonably  requests in writing,  to keep each
registration or  qualification  (or exemption  therefrom)  effective  during the
Effectiveness  Period  and to do any and all  other  acts or  things  reasonably
necessary to enable the  disposition in such  jurisdictions  of the  Registrable
Securities covered by each Registration  Statement;  provided,  that the Company
shall not be required to qualify  generally  to do business in any  jurisdiction
where it is not then so  qualified,  subject the Company to any  material tax in
any such jurisdiction  where it is not then so subject or file a general consent
to service of process in any such jurisdiction.

         (i)  If  requested  by the  Holders,  cooperate  with  the  Holders  to
facilitate  the timely  preparation  and delivery of  certificates  representing
Registrable   Securities  to  be  delivered  to  a  transferee   pursuant  to  a
Registration  Statement,  which  certificates  shall  be  free,  to  the  extent
permitted by the  Purchase  Agreement  and  applicable  law, of all  restrictive
legends,  and to enable such Registrable  Securities to be in such denominations
and registered in such names as any such Holders may request.

         (j) Upon the occurrence of any event contemplated by this Section 3, as
promptly as reasonably possible under the circumstances  taking into account the
Company's good faith  assessment of any adverse  consequences to the Company and
its stockholders of the premature disclosure of such event, prepare a supplement
or amendment,  including a post-effective amendment, to a Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that,  as  thereafter  delivered,  neither  a  Registration  Statement  nor such

                              Exhibit 10.4 - Page 6

<PAGE>

Prospectus will contain an 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,  in light of the circumstances  under which they were made,
not misleading.  If the Company  notifies the Holders in accordance with clauses
(ii)  through  (vi) of Section  3(d) above to suspend the use of any  Prospectus
until the requisite  changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus.  Subject to the other  provisions  hereof,
the Company will use its best  efforts to ensure that the use of the  Prospectus
may be resumed as promptly as is  practicable.  The Company shall be entitled to
exercise  its right under this  Section  3(j) to suspend the  availability  of a
Registration  Statement  and  Prospectus,  subject  to the  payment  of  partial
liquidated  damages  pursuant  to  Section  2(b),  for a period not to exceed 25
calendar days (which need not be consecutive days) in any 12 month period.

         (k) Comply with all applicable  rules and regulations of the Commission
in all material respects.

         (l) The  Company  may  require  each  selling  Holder to furnish to the
Company a  certified  statement  as to the  number  of  shares  of Common  Stock
beneficially owned by such Holder and, if required by the Commission, the person
thereof  that has voting and  dispositive  control  over the Shares.  During any
periods  that the  Company  is unable  to meet its  obligations  hereunder  with
respect to the  registration  of the Registrable  Securities  solely because any
Holder  fails to furnish  such  information  within  three  Trading  Days of the
Company's  request,  any liquidated damages that are accruing at such time as to
such Holder only shall be tolled and any Event that may otherwise  occur because
of such delay shall be suspended as to such Holder only,  until such information
is delivered to the Company.

4. Registration  Expenses.  All fees and expenses incident to the performance of
or compliance  with this  Agreement by the Company shall be borne by the Company
whether or not any Registrable  Securities are sold pursuant to the Registration
Statement.  The fees and expenses  referred to in the foregoing  sentence  shall
include,  without  limitation,  (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the  Trading  Market  on which the  Common  Stock is then  listed  for
trading, and (B) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing  (including,  without limitation,
fees and  disbursements  of counsel for the Company in connection  with Blue Sky
qualifications or exemptions of the Registrable  Securities and determination of
the eligibility of the Registrable  Securities for investment  under the laws of
such  jurisdictions  as  requested  by  the  Holders),  (ii)  printing  expenses
(including,   without   limitation,   expenses  of  printing   certificates  for
Registrable   Securities  and  of  printing  prospectuses  if  the  printing  of
prospectuses  is  reasonably  requested  by the  holders  of a  majority  of the
Registrable Securities included in a Registration  Statement),  (iii) messenger,
telephone and delivery expenses,  (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance,  if the Company so desires such
insurance,  and (vi) fees and  expenses  of all other  Persons  retained  by the
Company in connection with the consummation of the transactions  contemplated by
this  Agreement.  In addition,  the Company shall be responsible  for all of its
internal   expenses   incurred  in  connection  with  the  consummation  of  the
transactions contemplated by this Agreement (including,  without limitation, all

                              Exhibit 10.4 - Page 7

<PAGE>

salaries  and  expenses  of its  officers  and  employees  performing  legal  or
accounting  duties),  the expense of any annual  audit and the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities  exchange  as  required  hereunder.  In no event shall the Company be
responsible  for any  broker or  similar  commissions  or,  except to the extent
provided for in the Transaction Documents,  any legal fees or other costs of the
Holders.

5.       Indemnification

         (a) Indemnification by the Company. The Company shall,  notwithstanding
any termination of this Agreement,  indemnify and hold harmless each Holder, the
officers,  directors,  agents,  brokers  (including  brokers  who offer and sell
Registrable  Securities  as  principal as a result of a pledge or any failure to
perform under a margin call of Common Stock),  investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the  Securities  Act or Section  20 of the  Exchange  Act) and the
officers,  directors,  agents and employees of each such controlling  Person, to
the fullest  extent  permitted by  applicable  law, from and against any and all
losses,  claims,  damages,  liabilities,  costs (including,  without limitation,
reasonable attorneys' fees) and expenses (collectively,  "Losses"), as incurred,
arising  out of or  relating  to any untrue or  alleged  untrue  statement  of a
material fact contained in a Registration Statement,  any Prospectus or any form
of prospectus or in any  amendment or supplement  thereto or in any  preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein  (in the case of any  Prospectus  or form of  prospectus  or
supplement  thereto,  in light of the circumstances  under which they were made)
not  misleading,  except to the extent,  but only to the  extent,  that (i) such
untrue statements or omissions are based solely upon information  regarding such
Holder  furnished  in writing to the  Company by such Holder  expressly  for use
therein,  or to the extent that such information  relates to such Holder or such
Holder's  proposed  method of  distribution  of  Registrable  Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in a
Registration  Statement,  such  Prospectus  or such form of Prospectus or in any
amendment  or  supplement  thereto  (it being  understood  that the  Holder  has
approved  Annex A hereto for this  purpose) or (ii) in the case of an occurrence
of an event of the type  specified  in  Section  3(d)(ii)-(vi),  the use by such
Holder of an outdated or  defective  Prospectus  after the Company has  notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the  receipt by such  Holder of the Advice  contemplated  in Section  6(d).  The
Company  shall  notify  the  Holders  promptly  of the  institution,  threat  or
assertion of any Proceeding  arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware.

         (b)  Indemnification by Holders.  Each Holder shall,  severally and not
jointly,  indemnify  and hold  harmless the Company,  its  directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents or employees of such controlling  Persons,  to the
fullest  extent  permitted by applicable  law,  from and against all Losses,  as
incurred,  to the extent  arising out of or based solely upon: (x) such Holder's
failure to comply with the prospectus  delivery  requirements  of the Securities
Act or (y) any untrue or alleged  untrue  statement of a material fact contained
in any Registration Statement, any Prospectus,  or any form of prospectus, or in
any amendment or supplement thereto or in any preliminary prospectus, or arising

                              Exhibit 10.4 - Page 8

<PAGE>

out of or  relating  to any  omission  or alleged  omission  of a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading (i) to the extent, but only to the extent, that such untrue statement
or omission is  contained  in any  information  so  furnished in writing by such
Holder to the Company specifically for inclusion in such Registration  Statement
or such  Prospectus  or (ii) to the extent  that (1) such untrue  statements  or
omissions are based solely upon  information  regarding such Holder furnished in
writing to the  Company by such  Holder  expressly  for use  therein,  or to the
extent that such  information  relates to such Holder or such Holder's  proposed
method of distribution of Registrable  Securities and was reviewed and expressly
approved  in  writing  by such  Holder  expressly  for  use in the  Registration
Statement (it being  understood  that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement  thereto or (2) in the case of an  occurrence of an event of the type
specified  in Section  3(d)(ii)-(vi),  the use by such  Holder of an outdated or
defective  Prospectus after the Company has notified such Holder in writing that
the  Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice  contemplated  in Section 6(d). In no event shall the liability of
any selling Holder  hereunder be greater in amount than the dollar amount of the
proceeds  received by such Holder  upon the sale of the  Registrable  Securities
giving rise to such indemnification obligation.

         (c) Conduct of Indemnification  Proceedings. If any Proceeding shall be
brought or asserted  against  any Person  entitled to  indemnity  hereunder  (an
"Indemnified  Party"),  such Indemnified  Party shall promptly notify the Person
from whom  indemnity is sought (the  "Indemnifying  Party") in writing,  and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel  reasonably  satisfactory to the Indemnified Party and
the  payment  of all fees and  expenses  incurred  in  connection  with  defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve  the  Indemnifying  Party of its  obligations  or  liabilities
pursuant to this  Agreement,  except to the extent that such failure  shall have
prejudiced the Indemnifying Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof,  but the fees and
expenses of such counsel  shall be at the expense of such  Indemnified  Party or
Parties  unless:  (1) the  Indemnifying  Party has agreed in writing to pay such
fees and  expenses;  (2) the  Indemnifying  Party shall have failed  promptly to
assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory to such Indemnified Party in any such Proceeding;  or (3) the named
parties to any such Proceeding  (including any impleaded  parties)  include both
such Indemnified  Party and the Indemnifying  Party, and such Indemnified  Party
shall reasonably believe that a material conflict of interest is likely to exist
if  the  same  counsel  were  to  represent  such  Indemnified   Party  and  the
Indemnifying  Party (in which  case,  if such  Indemnified  Party  notifies  the
Indemnifying  Party in writing that it elects to employ separate  counsel at the
expense of the Indemnifying  Party,  the  Indemnifying  Party shall not have the
right to assume the defense  thereof and the reasonable fees and expenses of one
separate  counsel  shall  be at the  expense  of the  Indemnifying  Party).  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected  without its written  consent,  which consent shall not be unreasonably

                              Exhibit 10.4 - Page 9

<PAGE>

withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any  Indemnified  Party is a party,  unless  such  settlement  includes an
unconditional  release of such  Indemnified  Party from all  liability on claims
that are the subject matter of such Proceeding.

         Subject  to the  terms  of this  Agreement,  all  reasonable  fees  and
expenses of the Indemnified Party (including reasonable fees and expenses to the
extent  incurred in connection  with  investigating  or preparing to defend such
Proceeding in a manner not inconsistent  with this Section) shall be paid to the
Indemnified  Party,  as  incurred,  within ten  Trading  Days of written  notice
thereof to the Indemnifying  Party;  provided,  that the Indemnified Party shall
promptly  reimburse  the  Indemnifying  Party for that  portion of such fees and
expenses  applicable  to such  actions for which such  Indemnified  Party is not
entitled to indemnification hereunder, determined based upon the relative faults
of the parties.

         (d) Contribution.  If a claim for indemnification under Section 5(a) or
5(b) is  unavailable  to an  Indemnified  Party (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 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 Losses shall be deemed to include, subject
to the  limitations set forth in this  Agreement,  any reasonable  attorneys' or
other reasonable fees or expenses  incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.

         The parties  hereto  agree that it would not be just and  equitable  if
contribution  pursuant  to  this  Section  5(d)  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 the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds  actually  received  by such  Holder  from the sale of the  Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has  otherwise  been  required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.

         The indemnity and contribution agreements contained in this Section are
in  addition  to any  liability  that the  Indemnifying  Parties may have to the
Indemnified Parties.

                             Exhibit 10.4 - Page 10

<PAGE>

6.       Miscellaneous

         (a)  Remedies.  In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific  performance of its rights under this  Agreement.  The Company and each
Holder agree that monetary damages would not provide  adequate  compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement  and  hereby  further  agrees  that,  in the event of any  action  for
specific  performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

         (b) No Piggyback on Registrations. Except as set forth on Schedule 6(b)
attached hereto, neither the Company nor any of its security holders (other than
the Holders in such  capacity  pursuant  hereto) may include  securities  of the
Company in the Registration Statement other than the Registrable Securities. The
Company  shall  not file any other  registration  statements  until the  initial
Registration   Statement   required  hereunder  is  declared  effective  by  the
Commission,  provided that this Section 6(b) shall not prohibit the Company from
filing amendments to registration statements already filed.

         (c)  Compliance.  Each Holder  covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it  in  connection  with  sales  of  Registrable   Securities  pursuant  to  the
Registration Statement.

         (d) Discontinued Disposition.  Each Holder agrees by its acquisition of
such  Registrable  Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind  described in Section 3(d),  such Holder
will forthwith  discontinue  disposition of such Registrable  Securities under a
Registration  Statement  until  such  Holder's  receipt  of  the  copies  of the
supplemented  Prospectus and/or amended Registration  Statement,  or until it is
advised in writing (the  "Advice") by the Company that the use of the applicable
Prospectus  may be resumed,  and, in either  case,  has  received  copies of any
additional  or  supplemental  filings  that are  incorporated  or  deemed  to be
incorporated by reference in such Prospectus or Registration Statement.  Subject
to the other provisions  hereof, the Company will use its best efforts to ensure
that the use of the Prospectus may be resumed as promptly as it practicable. The
Company  agrees and  acknowledges  that any periods  during  which the Holder is
required to discontinue the disposition of the Registrable  Securities hereunder
shall be subject to the  provisions of Section 2(b),  except for the 15 calendar
days  following  the filing of any Form 8-K,  Form 10-QSB or Form 10-K, or other
comparable form.

         (e) Piggy-Back  Registrations.  If at any time during the Effectiveness
Period  there is not an  effective  Registration  Statement  covering all of the
Registrable  Securities and the Company shall determine to prepare and file with
the  Commission  a  registration  statement  relating to an offering for its own
account or the account of others under the  Securities  Act of any of its equity
securities,  other than on Form S-4 or Form S-8 (each as  promulgated  under the
Securities Act) or their then  equivalents  relating to equity  securities to be
issued solely in connection  with any  acquisition  of any entity or business or

                             Exhibit 10.4 - Page 11

<PAGE>

equity securities issuable in connection with the stock option or other employee
benefit  plans,  then the Company shall send to each Holder a written  notice of
such  determination  and, if within  fifteen days after the date of such notice,
any such Holder shall so request in writing,  the Company  shall include in such
registration  statement  all or any  part of such  Registrable  Securities  such
holder  requests to be  registered;  provided,  that,  the Company  shall not be
required to register any  Registrable  Securities  pursuant to this Section 6(e)
that are  eligible  for resale  pursuant  to Rule 144(k)  promulgated  under the
Securities  Act  or  that  are  the  subject  of a then  effective  Registration
Statement.

         (f) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence,  may not be amended,  modified or supplemented,
and waivers or  consents to  departures  from the  provisions  hereof may not be
given,  unless the same shall be in writing  and signed by the  Company and each
Holder  of the then  outstanding  Registrable  Securities.  Notwithstanding  the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates  exclusively to the rights of Holders and that does not
directly  or  indirectly  affect  the  rights of other  Holders  may be given by
Holders of all of the  Registrable  Securities  to which such  waiver or consent
relates;  provided,  however,  that the  provisions  of this sentence may not be
amended,  modified,  or supplemented except in accordance with the provisions of
the immediately preceding sentence.

         (g) Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder  shall be delivered as set forth
in the Purchase Agreement.

         (h) Successors and Assigns.  This Agreement  shall inure to the benefit
of and be  binding  upon the  successors  and  permitted  assigns of each of the
parties  and shall  inure to the  benefit of each  Holder.  The  Company may not
assign its rights or obligations  hereunder without the prior written consent of
all of the Holders of the then-outstanding  Registrable Securities.  Each Holder
may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

         (i) No  Inconsistent  Agreements.  Neither  the  Company nor any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its  subsidiaries,  on or  after  the  date of this  Agreement,  enter  into any
agreement  with  respect  to its  securities,  that  would  have the  effect  of
impairing  the rights  granted to the  Holders in this  Agreement  or  otherwise
conflicts  with the  provisions  hereof.  Except as set forth on Schedule  6(b),
neither the Company nor any of its subsidiaries has previously  entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.

         (j) Execution and  Counterparts.  This Agreement may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original  and, all of which taken  together  shall  constitute  one and the same
Agreement.   In  the  event  that  any   signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

                             Exhibit 10.4 - Page 12

<PAGE>

         (k) Governing Law. All questions concerning the construction, validity,
enforcement  and  interpretation  of this Agreement shall be determined with the
provisions of the Purchase Agreement.

         (l) Cumulative  Remedies.  The remedies  provided herein are cumulative
and not exclusive of any remedies provided by law.

         (m) Severability.  If any term,  provision,  covenant or restriction of
this  Agreement  is held by a court of  competent  jurisdiction  to be  invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  commercially  reasonable  efforts to find and employ an
alternative  means to achieve the same or substantially  the same result as that
contemplated  by such term,  provision,  covenant or  restriction.  It is hereby
stipulated  and declared to be the intention of the parties that they would have
executed the remaining terms,  provisions,  covenants and  restrictions  without
including any of such that may be hereafter declared invalid,  illegal,  void or
unenforceable.

         (n) Headings.  The headings in this  Agreement are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

         (o)  Independent  Nature  of  Holders'   Obligations  and  Rights.  The
obligations  of each  Holder  hereunder  are  several  and not  joint  with  the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the  performance of the  obligations of any other Holder  hereunder.
Nothing contained herein or in any other agreement or document  delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto,  shall be
deemed to  constitute  the Holders as a  partnership,  an  association,  a joint
venture or any other kind of entity,  or create a  presumption  that the Holders
are in any way  acting  in  concert  with  respect  to such  obligations  or the
transactions  contemplated by this  Agreement.  Each Holder shall be entitled to
protect and enforce its rights,  including without limitation the rights arising
out of this Agreement,  and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.

                              ********************

                             Exhibit 10.4 - Page 13

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

cUBIC ENERGY, inc.

By:  /s/ Calvin A. Wallen III
     --------------------------------
     Name:  Calvin A. Wallen III
     Title:  Chief Executive Officer

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                              Exhibit 10.4 - Page 14

<PAGE>

Name of Investing Entity:  Jonathan J. Mendiola
                          ------------------------------------------------------
Signature of Authorized Signatory of Investing Entity: /s/ Jonathan J. Mendiola
                                                      --------------------------
Name of Authorized Signatory:   Jonathan J. Mendiola
                              --------------------------------------------------
Title of Authorized Signatory:     N/A
                               -------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                              Exhibit 10.4 - Page 15

<PAGE>

Name of Investing Entity:  Chris Cave
                          ------------------------------------------------------
Signature of Authorized Signatory of Investing Entity:   /s/ Chris Cave
                                                      --------------------------
Name of Authorized Signatory:   Chris Cave
                              --------------------------------------------------
Title of Authorized Signatory:     N/A
                               -------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                             Exhibit 10.4 - Page 16

<PAGE>

Name of Investing Entity:  Gary Brennglass
                          ------------------------------------------------------
Signature of Authorized Signatory of Investing Entity:   /s/ Gary Brennglass
                                                     ---------------------------
Name of Authorized Signatory:   Gary Brennglass
                              --------------------------------------------------
Title of Authorized Signatory:     N/A
                               -------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                             Exhibit 10.4 - Page 17

<PAGE>

Name of Investing Entity:  Frey Living Trust of 3-20-96
                          ------------------------------------------------------
Signature of Authorized Signatory of Investing Entity:   /s/ Philip Frey, Jr.
                                                     ---------------------------
Name of Authorized Signatory:   Philip Frey, Jr.
                              --------------------------------------------------
Title of Authorized Signatory:     Trustee
                               -------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                              Exhibit 10.4 - Page 18

<PAGE>

Name of Investing Entity:  Bushido Capital Master Fund, L.P.
                         -------------------------------------------------------
Signature of Authorized Signatory of Investing Entity:   /s/ Christopher Rossman
                                                      --------------------------
Name of Authorized Signatory:   Christopher Rossman
                              --------------------------------------------------
Title of Authorized Signatory: Managing Director, Bushido Capital Partners, Ltd.
                              --------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                             Exhibit 10.4 - Page 19

<PAGE>

Name of Investing Entity:  Gamma Opportunity Capital Partners LP
                          ------------------------------------------------------
Signature of Authorized Signatory of Investing Entity:   /s/ Jonathan P. Knight
                                                       -------------------------
Name of Authorized Signatory:   Jonathan P. Knight
                              --------------------------------------------------
Title of Authorized Signatory:     President/Director
                               -------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                             Exhibit 10.4 - Page 20

<PAGE>

Name of Investing Entity:  ABS SOS-Plus Partners Ltd
                          ------------------------------------------------------
Signature of Authorized Signatory of Investing Entity:   /s/ Jonathan P. Knight
                                                      --------------------------
Name of Authorized Signatory:   Jonathan P. Knight
                              --------------------------------------------------
Title of Authorized Signatory:     President/Director
                               -------------------------------------------------

                           [SIGNATURE PAGES CONTINUE]

                             Exhibit 10.4 - Page 21

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