Document:

Exhibit 10.1

 

PURCHASE
AND SALE AGREEMENT

(Cubic Override)

 

THIS PURCHASE AND SALE
AGREEMENT (the “Agreement”) is made and
entered into this 24th day of November, 2009, by and between Cubic
Energy, Inc., a Texas corporation (“Cubic”),
and Tauren Exploration, Inc., a Texas corporation (“Tauren”),
upon and subject to the following terms and conditions:

 

1.             Defined Terms.  For purposes of this Assignment, the terms
defined in this paragraph shall have the meanings herein assigned to them and
capitalized terms defined in the opening paragraph of this Assignment and
subsequent paragraphs by inclusion in quotation marks and parentheses shall
have the meanings so assigned to them:

 

“Closing” has the meaning assigned to that term in Paragraph 4
of this Agreement.

 

“Deep Rights” means all intervals, formations, strata and depths
below the base of the stratigraphic equivalent of the Cotton Valley sands,
being defined as 10,055 (electric log measurements) in the Chesapeake Operating, Inc.
- SRLT 29 No. 1 Well located in Section 29, Township 16 North, Range
15 West, Caddo Parish, Louisiana.

 

“Exco Drilling Credits” means the $30,952,810 of Deferred
Purchase Price payable to or on behalf of Tauren at the time of each New Cash
Call (as those terms are defined in the Exco PSA) as more particularly
described in Paragraph 2(c) of the Exco PSA.

 

“Exco PSA” means the Purchase and Sale Agreement by and between
Tauren Exploration, Inc. and EXCO Operating Company, L.P., dated October 30,
2009.

 

“Existing Burdens” means all royalties, overriding royalties,
production payments, net profits interests, and all similar non-expense bearing
interests burdening the Subject Leases, or production therefrom, which are
evidenced by an instrument or instruments filed of record in Caddo or DeSoto Parish
on or prior to the date of execution of this Agreement by Assignor.

 

“Net Revenue Interest” means the share of production of oil, gas
or other minerals produced from the Subject Leases, or lands pooled or unitized
therewith, that the owner of the Subject Leases is entitled to receive by
virtue of its ownership thereof after deducting Existing Burdens.

 

“Subject Leases” means those oil, gas and mineral leases set
forth and described in Exhibit A to this Agreement.

 

2.             Purchase and Sale of Subject Override Being Sold.  Subject to the terms and conditions of this
Agreement, Cubic agrees to sell and convey and Tauren agrees to purchase and
accept the Subject Override (as hereinafter defined) for the Purchase Price as
set out in Paragraph 3 hereof.  The term “Subject Override” means an
overriding royalty interest in and to all of Cubic’s interest in the Deep
Rights in each of the Subject Leases equal to 95.24% of the positive
difference, if any, between the Net Revenue Interest in such Subject Leases and
a 75% Net Revenue Interest (out of 8/8ths), proportionately reduced, as more
particularly described and 

 

 

set out in the form of Assignment of
Overriding Royalty Interest attached hereto as Exhibit B (the “Override Conveyance”).

 

3.             Purchase Price for the Subject Override.  The purchase price for the Subject Override
shall be payable by Tauren to Cubic by Tauren irrevocably assigning or causing
to be assigned to Cubic the Exco Drilling Credits pursuant to the form of
Assignment of Drilling Credits attached hereto as Exhibit C.

 

4.             Effective Date and Closing.  The conveyance of the Subject Override to
Tauren shall be effective as of October 1, 2009 at 7:00 a.m. where
the Subject Leases are located (the “Effective Date”),
but titles thereof shall be delivered at the Closing which shall take place at
the time and place set out in Section 8(a) hereof (the “Closing” or “Closing
Time”).

 

5.             Representations, Warranties and Covenants of Cubic.  Cubic represents and warrants to Tauren as of
the date hereof and will represent and warrant to Tauren at the Closing as
follows:

 

(a)               Authority.  Cubic is duly organized, validly existing and
in good standing under the laws of the State of Texas, and is duly qualified
and in good standing to carry on its business in the State of Louisiana and has
all requisite power and authority to enter into, deliver and perform this
Agreement and to carry out the transactions contemplated by this Agreement.

 

(b)               Valid Agreement.  This Agreement constitutes the legal, valid
and binding agreement of Cubic, and at Closing, all instruments required
hereunder to be executed and delivered by Cubic shall constitute legal, valid
and binding obligations of Cubic, subject to the effects of bankruptcy,
insolvency, reorganization, moratorium and similar laws from time to time in
effect, as well as general principles of equity.

 

(c)               Brokers.  Cubic has incurred no obligation or
liability, contingent or otherwise, for brokers or finders fees with respect to
this transaction for which Tauren shall have any obligation or liability.

 

(d)               Obligation to Close.  Cubic covenants to use its commercially
reasonable efforts to take or cause to be taken all actions reasonably
necessary or advisable to consummate the transactions contemplated by this
Agreement and to insure that as of the Closing Time, it will not be under any
material corporate, legal, governmental or contractual restriction that would
prohibit or delay the timely consummation of such transaction.

 

6.             Representations, Warranties and Covenants of Tauren.  Tauren represents and warrants to Cubic as of
the date hereof and will represent and warrant to Cubic at the Closing as
follows:

 

(a)               Authority.  Tauren is duly organized, validly existing
and in good standing under the laws of the State of Texas, and is duly
qualified and in good standing to carry on its business in the State of
Louisiana and has all requisite power and authority to enter into, deliver and
perform this Agreement and to carry out the transactions contemplated by this
Agreement.

 

2

 

(b)               Valid
Agreement.  This
Agreement constitutes the legal, valid and binding agreement of Tauren, and at
Closing, all instruments required hereunder to be executed and delivered by
Tauren shall constitute legal, valid and binding obligations of Tauren, subject
to the effects of bankruptcy, insolvency, reorganization, moratorium and
similar laws from time to time in effect, as well as general principles of
equity.

 

(c)               Brokers.  Tauren has incurred no obligation or
liability, contingent or otherwise, for brokers or finders fees with respect to
this transaction for which Cubic shall have any obligation or liability.

 

(d)               Obligation
to Close.  Tauren
covenants to use its commercially reasonable efforts to take or cause to be
taken all actions reasonably necessary or advisable to consummate the
transactions contemplated by this Agreement and to insure that as of the
Closing Time, it will not be under any material corporate, legal, governmental
or contractual restriction that would prohibit or delay the timely consummation
of such transaction.

 

7.             Conditions to
Closing.

 

(a)               Cubic’s
Conditions to Closing.  The
obligations of Cubic under this Agreement are subject to each of the following
conditions being met:

 

(i)            Representations True and Correct.  Each and every representation and warranty of
Tauren under this Agreement shall be true and accurate in all material respects
(except that those representations and warranties of Tauren that are qualified
by materiality shall be true and correct in all respects) as of the date when
made and shall be deemed to have been made again at and as of the time of
Closing and shall at and as of such time of Closing be true and accurate in all
material respects, except as to changes specifically contemplated by this
Agreement or consented to by Cubic.

 

(ii)           Prior Closing Under Exco PSA.  The Closing under the Exco PSA shall have
occurred.

 

(iii)          Legal Process.  No order, decree, ruling or other legal
process shall have been entered by any court or governmental agency having
jurisdiction over the Parties or the subject matter of this Agreement that
seeks to enjoin or prohibit this transaction and that remains in effect at the
time of Closing.

 

(b)               Tauren’s
Conditions to Closing.  The
obligations of Tauren under this Agreement are subject to each of the following
conditions being met:

 

(i)            Representations True and Correct.  Each and every representation and warranty of
Cubic under this Agreement shall be true and accurate in all material respects
(except that those representations and warranties of Cubic that are qualified
by materiality shall be true and correct in all respects) as of the date when
made and shall be deemed to have been made again at and as of the time of
Closing and shall at and as of such time of Closing be true and accurate in all
material respects, except as to changes specifically contemplated by this
Agreement or consented to by Tauren.

 

3

 

(ii)           Prior Closing Under Exco PSA.  The Closing under the Exco PSA shall have
occurred.

 

(iii)          Legal Process. 
No order, decree, ruling or other legal process shall have been entered
by any court or governmental agency having jurisdiction over the Parties or the
subject matter of this Agreement that seeks to enjoin or prohibit this
transaction and that remains in effect at the time of Closing.

 

(iv)          Lien Releases. 
Cubic shall provide duly signed copies of all mortgage, deed of trust
and other lien releases, in a form acceptable to Tauren, associated with the
Subject Override.

 

(c)               Negative
Covenants.  Until
Closing, Cubic shall not do any of the following with regard to the Subject
Leases without Buyer’s consent:

 

(i)            Release all or any portion of a Subject Lease.

 

(ii)           Create any new lien, security interest or other
encumbrance on any of the Subject Leases.

 

(iii)          Dispose of the Subject Leases or any part thereof.

 

8.             Closing.

 

(a)               Time
and Place.  The Closing
shall be held at the offices of Sonnenschein Nath & Rosenthal LLP,
2000 McKinney, Suite 1900, Dallas, Texas 
75201 at 1:30 p.m. CST, November 24, 2009, or at such other
time and place as the Parties shall mutually agree.

 

(b)               Cubic’s
Deliveries.  At the
Closing, Cubic shall deliver the following:

 

(i)            Cubic shall deliver a duly signed and acknowledged
Override Conveyance in the form attached hereto as Exhibit B  (the “Override Assignment”);
and

 

(ii)           Cubic shall deliver duly signed releases of all mortgages,
deeds of trust and other liens burdening the Subject Override in forms reasonably
acceptable to Tauren.

 

(c)               Tauren’s
Deliveries.  At the
Closing, Tauren shall deliver the following:

 

(i)            Tauren shall deliver or cause to be delivered a duly
signed Assignment of Drilling Credits in the form attached hereto as Exhibit C.

 

9.             Miscellaneous.

 

(a)           Further
Assurances.  The Parties
agree to execute any documents, whether before or after the Closing, as may be
reasonably requested, to aid the other Party in fulfilling the purpose of this
Agreement.

 

(b)           Entire
Agreement.  This
Agreement, together with the Exhibits attached hereto and the Override
Assignment and other documents to be delivered pursuant to the terms hereof,
shall constitute the complete agreement between the Parties hereto and shall
supersede all 

 

4

 

prior agreements, whether
written or oral, and any representations or conversations with respect to the
subject matter of this Agreement.

 

(c)           Notices.  All communications required or permitted
under this Agreement shall be in writing and may be sent by facsimile.  Such communication shall be deemed made when
actually received, or if mailed by registered or certified mail, postage
prepaid, addressed as set forth below, shall be deemed made three days after
such mailing.  Faxes will be deemed to be
received at the time and day reflected in the fax confirmation sheet.  Either party may, by written notice to the
other, change the address for mailing such notices.

 

	
  Notices
  to Cubic:

  	
   

  	
  Cubic
  Energy, Inc.

  
	
   

  	
   

  	
  9870
  Plano Road

  
	
   

  	
   

  	
  Dallas,
  Texas 75232

  
	
   

  	
   

  	
  Attn:
  Jon Ross

  
	
   

  	
   

  	
  Telephone:
  972-681-8047

  
	
   

  	
   

  	
  Facsimile:
  972-681-9687

  
	
   

  	
   

  	
   

  
	
  Notices
  to Tauren:

  	
   

  	
  Tauren
  Exploration, Inc.

  
	
   

  	
   

  	
  9870
  Plano Road

  
	
   

  	
   

  	
  Dallas,
  Texas 75232

  
	
   

  	
   

  	
  Attn:
  Calvin A. Wallen, III

  
	
   

  	
   

  	
  Telephone:
  972-681-8047

  
	
   

  	
   

  	
  Facsimile:
  972-681-9687

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Barry
  F. Cannaday

  
	
   

  	
   

  	
  Sonnenschein
  Nath & Rosenthal LLP

  
	
   

  	
   

  	
  2000
  McKinney Ave., Suite 1900

  
	
   

  	
   

  	
  Dallas,
  Texas 75201

  
	
   

  	
   

  	
  Telephone:
  214-259-1855

  
	
   

  	
   

  	
  Facsimile:
  214-259-0910

  

 

(d)           Binding Effect.  This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto, and their successors and
assigns.  No assignment of this Agreement
by either Party shall be made without the prior, written consent of the other
Party, which consent in the case of Cubic shall not be unreasonably withheld.

 

(e)           Law Applicable;
Jurisdiction and Venue. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas, without regard to its choice of law
principles.  ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST THE PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY
OBLIGATIONS HEREUNDER, SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS. BY EXECUTING AND DELIVERING
THIS AGREEMENT, THE PARTIES IRREVOCABLY (I) ACCEPT GENERALLY AND
UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF THESE COURTS; (II) WAIVE
ANY OBJECTIONS WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (I) ABOVE AND
HEREBY 

 

5

 

FURTHER IRREVOCABLY WAIVE
AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM;
(III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH
COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO SUCH PARTY AT THEIR RESPECTIVE ADDRESSES PROVIDED IN ACCORDANCE
WITH SECTION 9(c); AND (IV) AGREE THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
SUCH PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.

 

(f)            Headings.  The headings of the articles and sections of
this Agreement are for guidance and convenience of reference only and shall not
limit or otherwise affect any of the terms and provisions of this Agreement.

 

(g)           Timing.  Time is of the essence in this Agreement.

 

(h)           Expenses.  All fees, costs and expenses incurred by the
Parties in negotiating this Agreement and in consummating the transactions
contemplated by this Agreement shall be paid by the Party that incurred such
fees, costs and expenses.

 

(i)            Amendment and Waiver.  This Agreement may be altered, amended or
waived only by a written agreement executed by Cubic and Tauren.  No waiver of any provision of this Agreement
shall be construed as a continuing waiver of the provision.

 

(j)            Announcements.  Except as Cubic reasonably believes to be
required by applicable law, no Party shall publicly announce or otherwise
publicize the existence of this Agreement, its terms and conditions or the
transactions contemplated hereby without first providing the other Party the
opportunity to review the proposed announcement and obtaining the other Party’s
prior, written consent to such proposed announcement, which consent shall not
be unreasonably withheld or delayed.

 

(k)           Parties in Interest.  This Agreement is binding upon and shall
inure to the benefit of the Parties and, except where prohibited, their
successors, representatives or assigns.

 

(l)            Third-Party Beneficiaries.  Unless expressly stated to the contrary, no
third party is intended to have any rights, benefits or remedies under this
Agreement.

 

(m)          Severance.  If any provision of this Agreement is found
to be illegal or unenforceable, the other terms of this Agreement shall remain
in effect and this Agreement shall be construed as if the illegal or
unenforceable provision had not been included.

 

(n)           No Special Damages.  Notwithstanding anything herein to the
contrary, neither party shall have any obligations with respect to this
Agreement, or otherwise in connection herewith, for any special, consequential
or punitive damages.

 

(o)           Counterpart Execution.  This Agreement may be executed in
counterparts, all of which are identical and all of which constitute one and
the same instrument.  It shall not be
necessary for Cubic and Tauren to sign the same counterpart. This Agreement may
be 

 

6

 

executed with signature pages exchanged
via facsimile or electronic transmission, which shall be as effective as
originals.

 

(p)           Tax Free Exchange.  Tauren, at its option and its sole cost
and expense, may elect to participate in a tax-deferred exchange under Section 1031
of the Internal Revenue Code in connection with this transaction.  Cubic agrees to cooperate with Tauren in
achieving such exchange.  Cubic agrees that
Tauren may assign its interest in this Agreement to a “qualified intermediary”
for the purpose of facilitating the exchange. 
Tauren agrees to indemnify, defend and hold harmless Cubic from any and
all liabilities, losses, damages, claims, causes of action, costs and/or
expenses (including without limitation, reasonable attorney fees) incurred by
or asserted against Cubic arising out of Cubic’s participation in Tauren’s
exchange transaction.  Cubic, at its
option and sole cost and expense, may elect to participate in a tax-deferred
exchange under Section 1031 of the Internal Revenue Code in connection
with this transaction.  Tauren agrees to
cooperate with Cubic in achieving such exchange.  Tauren agrees that Cubic may assign its
interest in this Agreement to a “qualified intermediary” for the purpose of
facilitating the exchange.  Cubic agrees
to indemnify, defend and hold harmless Tauren from any and all liabilities,
losses, damages, claims, causes of action, costs and/or expenses (including without
limitation, reasonable attorney fees) incurred by or asserted against Tauren
arising out of Tauren’s participation in Cubic’s exchange transaction.

 

[Signatures on following page]

 

7

 

IN WITNESS WHEREOF the undersigned Parties have
executed this Agreement as of the date hereinabove first written.

 

 

	
   

  	
  CUBIC
  ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jon S. Ross

  
	
   

  	
   

  	
  Jon
  S. Ross

  
	
   

  	
   

  	
  Secretary

  

 

S-1

 

	
   

  	
  TAUREN
  EXPLORATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Calvin A. Wallen, III

  
	
   

  	
   

  	
  Calvin
  A. Wallen, III,

  
	
   

  	
   

  	
  President

  

 

S-2Exhibit 10.2

 

PURCHASE
AND SALE AGREEMENT

(Langtry
Override)

 

THIS PURCHASE AND SALE
AGREEMENT (the “Agreement”) is made and
entered into this 24th day of November, 2009, by and between Cubic
Energy, Inc., a Texas corporation (“Cubic”),
and Langtry Mineral & Development, LLC, a Texas limited liability
company (“Langtry”), upon and subject
to the following terms and conditions:

 

1.                                      Defined
Terms.  For purposes
of this Assignment, the terms defined in this paragraph shall have the meanings
herein assigned to them and capitalized terms defined in the opening paragraph
of this Assignment and subsequent paragraphs by inclusion in quotation marks
and parentheses shall have the meanings so assigned to them:

 

“Closing” has the meaning assigned to that term in Paragraph 4
of this Agreement.

 

“Cubic Common Stock” means the common stock of Cubic Energy, Inc.,
a Texas corporation, par value $0.05 per share.

 

“Cubic Preferred Stock” means the five year 8% convertible
preferred stock of Cubic Energy, Inc. convertible into Cubic Common Stock
at a price of $1.20 per share, which Cubic Preferred Stock is more particularly
described in the Subscription and Convertible Preferred Stock Purchase
Agreement to be entered into by and between Cubic and Langtry at Closing in the
form attached hereto as Exhibit D.

 

“Deep Rights” means all intervals, formations, strata and depths
below the base of the stratigraphic equivalent of the Cotton Valley sands,
being defined as 10,055 (electric log measurements) in the Chesapeake Operating, Inc.
- SRLT 29 No. 1 Well located in Section 29, Township 16 North, Range
15 West, Caddo Parish, Louisiana.

 

“Cubic/Tauren PSA” means the Purchase and Sale Agreement by and
between Cubic Energy, Inc. and Tauren Exploration, Inc. dated November 24,
2009.

 

“Existing Burdens” means all royalties, overriding royalties,
production payments, net profits interests, and all similar non-expense bearing
interests burdening the Subject Leases, or production therefrom, which are
evidenced by an instrument or instruments filed of record in Caddo or DeSoto
Parish on or prior to the date of execution of this Agreement by Assignor.

 

“Net Revenue Interest” means the share of production of oil, gas
or other minerals produced from the Subject Leases, or lands pooled or unitized
therewith, that the owner of the Subject Leases is entitled to receive by
virtue of its ownership thereof after deducting Existing Burdens.

 

“Subject Leases” means those oil, gas and mineral leases set
forth and described in Exhibit A to this Agreement.

 

“Tauren” means Tauren Exploration, Inc., a Texas
corporation.

 

1

 

“Tauren/Langtry Overriding Royalty Conveyance” means that
certain Assignment of Overriding Royalty Interest from Tauren to Langtry dated
effective August 1, 2009 pursuant to which Tauren conveyed to Langtry an
overriding royalty interest in and to all of Tauren’s interest in the Deep
Rights in each of the Subject Leases equal to the positive difference, if any,
between the Net Revenue Interest in such Subject Leases and a 78% Net Revenue
Interest (out of 8/8ths), proportionately reduced, as more particularly
described and set out in said Tauren/Langtry Overriding Royalty Conveyance.

 

2.                                      Purchase
and Sale.

 

(a)                                 Subject
Override Being Sold. 
Subject to the terms and conditions of this Agreement, Langtry agrees to
sell and convey and Cubic agrees to purchase and accept the Subject Override
(as hereinafter defined) for the Purchase Price as set out in Paragraph 3
hereof.  The term “Subject
Override” means the overriding royalty interest Langtry has
previously acquired from Tauren under the terms of the Tauren/Langtry
Overriding Royalty Conveyance.

 

(b)                                 Cubic
Stock Being Sold.  Subject to
the terms and conditions of this Agreement, Cubic agrees to issue and sell to
Langtry $20,700,000 in Cubic equity as follows:

 

(i)                                     Cubic agrees to
issue and sell to Langtry 10,350,000 shares of Cubic Common Stock at a purchase
price equal to $1.00 per share.  Such
Cubic Common Stock will be issued and sold to Langtry pursuant to the terms of
the Subscription and Common Stock Purchase Agreement attached hereto as Exhibit C.

 

(ii)                                  Cubic agrees to
issue and sell to Langtry 103,500 shares of Cubic Preferred Stock at a purchase
price equal to $100.00 per share.  Such
Cubic Preferred Stock will be issued and sold to Langtry pursuant to the terms
of the Subscription and Convertible Preferred Stock Purchase Agreement attached
hereto as Exhibit D.

 

3.                                      Purchase
Price.

 

(a)                                 Purchase
Price for the Subject Override.  The purchase price for the Subject Override
shall be payable by Cubic to Langtry by Cubic issuing to Langtry 10,350,000
shares of Cubic Common Stock and 103,500 shares of Cubic Preferred Stock
pursuant to the terms of the Subscription Agreements attached hereto as Exhibits
“C” and “D”.

 

(b)                                 Purchase
Price for the Cubic Stock.  The purchase price for the Cubic Common Stock
and the Cubic Preferred Stock shall be payable by Langtry to Cubic by Langtry
assigning and conveying the Subject Override to Cubic pursuant to the form of
Assignment of Overriding Royalty Interest attached hereto as Exhibit “B”.

 

4.                                      Effective
Date and Closing.  The
conveyance of the Subject Override to Cubic shall be effective as of October 1,
2009 at 7:00 a.m. where the Subject Leases are located (the “Effective Date”), but titles thereof
shall be delivered at the Closing which shall take place at the time and place
set out in Section 8(a) hereof (the “Closing”
or “Closing Time”).

 

5.                                      Representations,
Warranties and Covenants of Cubic.  Cubic represents and warrants to Langtry as
of the date hereof and will represent and warrant to Langtry at the Closing as
follows:

 

2

 

(a)                                 Authority.  Cubic is duly organized, validly existing and
in good standing under the laws of the State of Texas, and is duly qualified
and in good standing to carry on its business in the State of Louisiana and has
all requisite power and authority to enter into, deliver and perform this
Agreement and to carry out the transactions contemplated by this Agreement.

 

(b)                                 Valid
Agreement.  This
Agreement constitutes the legal, valid and binding agreement of Cubic, and at
Closing, all instruments required hereunder to be executed and delivered by
Cubic shall constitute legal, valid and binding obligations of Cubic, subject
to the effects of bankruptcy, insolvency, reorganization, moratorium and
similar laws from time to time in effect, as well as general principles of
equity.

 

(c)                                  Brokers.  Cubic has incurred no obligation or
liability, contingent or otherwise, for brokers or finders fees with respect to
this transaction for which Langtry shall have any obligation or liability.

 

(d)                                 Obligation
to Close.  Cubic
covenants to use its commercially reasonable efforts to take or cause to be
taken all actions reasonably necessary or advisable to consummate the
transactions contemplated by this Agreement and to insure that as of the
Closing Time, it will not be under any material corporate, legal, governmental
or contractual restriction that would prohibit or delay the timely consummation
of such transaction.

 

6.                                      Representations,
Warranties and Covenants of Langtry.  Langtry represents and warrants to Cubic as
of the date hereof and will represent and warrant to Cubic at the Closing as
follows:

 

(a)                                 Authority.  Langtry is duly organized, validly existing
and in good standing under the laws of the State of Texas and has all requisite
power and authority to enter into, deliver and perform this Agreement and to
carry out the transactions contemplated by this Agreement.

 

(b)                                 Valid
Agreement.  This
Agreement constitutes the legal, valid and binding agreement of Langtry, and at
Closing, all instruments required hereunder to be executed and delivered by
Langtry shall constitute legal, valid and binding obligations of Langtry,
subject to the effects of bankruptcy, insolvency, reorganization, moratorium
and similar laws from time to time in effect, as well as general principles of
equity.

 

(c)                                  Brokers.  Langtry has incurred no obligation or
liability, contingent or otherwise, for brokers or finders fees with respect to
this transaction for which Cubic shall have any obligation or liability.

 

(d)                                 No
Encumbrances.  Langtry has
not previously encumbered, assigned or conveyed the Subject Override or any
interest therein.

 

(e)                                  Obligation
to Close.  Langtry
covenants to use its commercially reasonable efforts to take or cause to be
taken all actions reasonably necessary or advisable to consummate the
transactions contemplated by this Agreement and to insure that as of the
Closing Time, it will not be under any material corporate, legal, governmental
or contractual restriction that would prohibit or delay the timely consummation
of such transaction.

 

3

 

7.                                      Conditions
to Closing.

 

(a)                                 Cubic’s
Conditions to Closing.  The
obligations of Cubic under this Agreement are subject to each of the following
conditions being met:

 

(i)                                     Representations
True and Correct.  Each and
every representation and warranty of Langtry under this Agreement shall be true
and accurate in all material respects (except that those representations and
warranties of Langtry that are qualified by materiality shall be true and
correct in all respects) as of the date when made and shall be deemed to have
been made again at and as of the time of Closing and shall at and as of such
time of Closing be true and accurate in all material respects, except as to
changes specifically contemplated by this Agreement or consented to by Cubic.

 

(ii)                                  Contemporaneous
Closing Under Cubic/Tauren PSA.  The contemporaneous closing under the
Cubic/Tauren PSA shall have occurred.

 

(iii)                               Legal Process.  No order, decree, ruling or other legal
process shall have been entered by any court or governmental agency having
jurisdiction over the Parties or the subject matter of this Agreement that
seeks to enjoin or prohibit this transaction and that remains in effect at the
time of Closing.

 

(b)                                 Langtry’s
Conditions to Closing.  The
obligations of Langtry under this Agreement are subject to each of the following
conditions being met:

 

(i)                                     Representations
True and Correct.  Each and
every representation and warranty of Cubic under this Agreement shall be true
and accurate in all material respects (except that those representations and
warranties of Cubic that are qualified by materiality shall be true and correct
in all respects) as of the date when made and shall be deemed to have been made
again at and as of the time of Closing and shall at and as of such time of
Closing be true and accurate in all material respects, except as to changes
specifically contemplated by this Agreement or consented to by Langtry.

 

(ii)                                  Contemporaneous
Closing Under Cubic/Tauren PSA.  The contemporaneous closing under the
Cubic/Tauren PSA shall have occurred.

 

(iii)                               Legal Process.  No order, decree, ruling or other legal
process shall have been entered by any court or governmental agency having
jurisdiction over the Parties or the subject matter of this Agreement that
seeks to enjoin or prohibit this transaction and that remains in effect at the
time of Closing.

 

(c)                                  Negative
Covenants.  Until
Closing, Langtry shall not do any of the following with regard to the Subject
Override without Cubic’s consent:

 

(i)                                     Release all or
any portion of the Subject Override.

 

(ii)                                  Create any
lien, security interest or other encumbrance on the Subject Override.

 

(iii)                               Dispose of the
Subject Override or any part thereof.

 

4

 

8.                                      Closing.

 

(a)                                 Time
and Place.  The Closing
shall be held at the offices of Sonnenschein Nath & Rosenthal LLP,
2000 McKinney Ave., Suite 1900, Dallas, Texas 75201, at 1:30 p.m.
CST, November 24, 2009 or at such other time and place as the Parties
shall mutually agree.

 

(b)                                 Cubic’s
Deliveries.  At the
Closing, Cubic shall deliver the following:

 

(i)                                     Cubic shall
deliver a duly signed Subscription and Common Stock Purchase Agreement in the
form attached hereto as Exhibit “C”; and

 

(ii)                                  Cubic shall
deliver a duly signed Subscription and Convertible Preferred Stock Purchase
Agreement in the form attached hereto as Exhibit “D”.

 

(c)                                  Langtry’s
Deliveries.  At the
Closing, Langtry shall deliver the following:

 

(i)                                     Langtry shall
deliver or cause to be delivered a duly signed and acknowledged Assignment of
Overriding Royalty Interest in the form attached hereto as Exhibit “B”;

 

(ii)                                  Langtry shall
deliver a duly signed Subscription and Common Stock Purchase Agreement in the
form attached hereto as Exhibit “C”; and

 

(iii)                               Langtry shall
deliver a duly signed Subscription and Convertible Preferred Stock Purchase
Agreement in the form attached hereto as Exhibit D.

 

9.                                      Miscellaneous.

 

(a)                                 Further
Assurances.  The Parties
agree to execute any documents, whether before or after the Closing, as may be
reasonably requested, to aid the other Party in fulfilling the purpose of this
Agreement.

 

(b)                                 Entire
Agreement.  This
Agreement, together with the Exhibits attached hereto and the Override
Assignment and other documents to be delivered pursuant to the terms hereof,
shall constitute the complete agreement between the Parties hereto and shall
supersede all prior agreements, whether written or oral, and any
representations or conversations with respect to the subject matter of this
Agreement.

 

(c)                                  Notices.  All communications required or permitted
under this Agreement shall be in writing and may be sent by facsimile.  Such communication shall be deemed made when
actually received, or if mailed by registered or certified mail, postage
prepaid, addressed as set forth below, shall be deemed made three days after
such mailing.  Faxes will be deemed to be
received at the time and day reflected in the fax confirmation sheet.  Either party may, by written notice to the
other, change the address for mailing such notices.

 

5

 

	
  Notices
  to Cubic:

  	
  Cubic Energy, Inc.

  
	
   

  	
  9870 Plano Road

  
	
   

  	
  Dallas, Texas 75232

  
	
   

  	
  Attn: Jon Ross

  
	
   

  	
  Telephone: 972-681-8047

  
	
   

  	
  Facsimile: 972-681-9687

  
	
   

  	
   

  
	
  Notices
  to Langtry:

  	
  Langtry
  Mineral & Development, LLC

  
	
   

  	
  9870 Plano Road

  
	
   

  	
  Dallas, Texas 75232

  
	
   

  	
  Attn: Calvin A.
  Wallen, III

  
	
   

  	
  Telephone: 972-681-8047

  
	
   

  	
  Facsimile: 972-681-9687

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  Barry F. Cannaday

  
	
   

  	
  Sonnenschein
  Nath & Rosenthal LLP

  
	
   

  	
  2000 McKinney Ave.,
  Suite 1900

  
	
   

  	
  Dallas, Texas 75201

  
	
   

  	
  Telephone: 214-259-1855

  
	
   

  	
  Facsimile: 214-259-0910

  

 

(d)                                 Binding
Effect.  This
Agreement shall be binding upon and shall inure to the benefit of the Parties
hereto, and their successors and assigns. 
No assignment of this Agreement by either Party shall be made without
the prior, written consent of the other Party, which consent in the case of
Cubic shall not be unreasonably withheld.

 

(e)                                  Law
Applicable; Jurisdiction and Venue.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
its choice of law principles.  ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST THE PARTIES ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, SHALL BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS. BY EXECUTING
AND DELIVERING THIS AGREEMENT, THE PARTIES IRREVOCABLY (I) ACCEPT
GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF THESE
COURTS; (II) WAIVE ANY OBJECTIONS WHICH SUCH PARTY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTIONS OR PROCEEDINGS ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (I) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVE AND AGREE NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM; (III) AGREE THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH PARTY
AT THEIR RESPECTIVE ADDRESSES PROVIDED IN ACCORDANCE WITH SECTION 9(c);
AND (IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND 

 

6

 

OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.

 

(f)                                   Headings.  The headings of the articles and sections of
this Agreement are for guidance and convenience of reference only and shall not
limit or otherwise affect any of the terms and provisions of this Agreement.

 

(g)                                  Timing.  Time is of the essence in this Agreement.

 

(h)                                 Expenses.  All fees, costs and expenses incurred by the
Parties in negotiating this Agreement and in consummating the transactions
contemplated by this Agreement shall be paid by the Party that incurred such
fees, costs and expenses.

 

(i)                                     Amendment
and Waiver.  This
Agreement may be altered, amended or waived only by a written agreement
executed by Cubic and Langtry.  No waiver
of any provision of this Agreement shall be construed as a continuing waiver of
the provision.

 

(j)                                    Announcements.  Except as Cubic reasonably believes to be
required by applicable law, no Party shall publicly announce or otherwise
publicize the existence of this Agreement, its terms and conditions or the
transactions contemplated hereby without first providing the other Party the
opportunity to review the proposed announcement and obtaining the other Party’s
prior, written consent to such proposed announcement, which consent shall not
be unreasonably withheld or delayed.

 

(k)                                 Parties
in Interest.  This
Agreement is binding upon and shall inure to the benefit of the Parties and,
except where prohibited, their successors, representatives or assigns.

 

(l)                                     Third-Party
Beneficiaries.  Unless expressly
stated to the contrary, no third party is intended to have any rights, benefits
or remedies under this Agreement.

 

(m)                             Severance.  If any provision of this Agreement is found
to be illegal or unenforceable, the other terms of this Agreement shall remain
in effect and this Agreement shall be construed as if the illegal or
unenforceable provision had not been included.

 

(n)                                 No
Special Damages.  Notwithstanding
anything herein to the contrary, neither party shall have any obligations with
respect to this Agreement, or otherwise in connection herewith, for any
special, consequential or punitive damages.

 

(o)                                 Counterpart
Execution.  This
Agreement may be executed in counterparts, all of which are identical and all
of which constitute one and the same instrument.  It shall not be necessary for Cubic and
Langtry to sign the same counterpart. This Agreement may be executed with
signature pages exchanged via facsimile or electronic transmission, which
shall be as effective as originals.

 

7

 

IN WITNESS WHEREOF the
undersigned Parties have executed this Agreement as of the date hereinabove
first written.

 

	
   

  	
  CUBIC
  ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jon Ross

  
	
   

  	
   

  	
  Jon
  Ross

  
	
   

  	
   

  	
  Secretary

  

 

S-1

 

	
   

  	
  LANGTRY
  MINERAL & DEVELOPMENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Calvin A. Wallen, III

  
	
   

  	
   

  	
  Calvin
  A. Wallen, III,

  
	
   

  	
   

  	
  President

  

 

S-2

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