Document:

Exhibit
10.2

 

PROMISSORY NOTE

 

	
  $40,000,000.00

  	
  Houston, Texas

  	
  December 18, 2009

  

 

FOR
VALUE RECEIVED and WITHOUT GRACE, on or before July 1, 2012, the
undersigned (“Maker”) promises to pay to the order of WELLS FARGO ENERGY CAPITAL, INC. (“Payee”)
the sum of FORTY MILLION AND NO/100 DOLLARS ($40,000,000.00), or so much
thereof as may be advanced to or for the benefit of Maker by Payee, which
amounts Maker is permitted to borrow, repay and reborrow, pursuant to that
certain Credit Agreement dated March 5, 2007 between Maker and Payee (as
may be amended from time to time, the “Credit Agreement”), together with
interest as set forth in the Credit Agreement.

 

All
payments of principal and interest are payable in lawful money of the United
States of America to Payee at its offices at 1000 Louisiana, 9th Floor, Houston, Harris County, Texas as set
forth in the Credit Agreement.

 

Each
advance by Payee to Maker and each payment of principal hereunder by Maker
shall be reflected by a notation made by Payee on its records and the aggregate
unpaid amount of advances reflected by said notations shall be deemed
rebuttably presumptive evidence of the principal amount owing under this Note.

 

This
Note is issued pursuant to the Credit Agreement, and reference is made to the
Credit Agreement for matters governed thereby, including, without limitation,
certain events which will entitle the holder hereof to accelerate the maturity
of all amounts due hereon. Capitalized terms used but not defined herein shall
have the same meanings as in the Credit Agreement.

 

It
is the intention of Maker and Payee to comply strictly with all applicable
usury laws as in effect from time to time; and there is no intention to
contract for, nor shall there ever be collected, charged or received on this
Note, interest in excess of that which would accrue and be payable on the basis
of the Highest Lawful Rate. To the extent that the interest rate Laws of the
State of Texas are applicable to this Note, for purposes of Chapter 303 of the
Texas Finance Code, as amended, Maker agrees that the maximum rate to be
charged shall be the “weekly rate ceiling” as defined in said Chapter 303;
provided that

 

	
   

  	
  Initialed for Identification

  

 

1

 

Payee may also rely on alternative
maximum rates of interest under other applicable laws, if greater.

 

If
under any circumstances the aggregate amounts paid on this Note include amounts
which by Law are deemed interest and which would exceed the maximum
non-usurious amount of interest which could lawfully have been collected on
this Note, Maker stipulates that such payment and collection will have been and
will be deemed to have been the result of mathematical error on the part of
Maker and Payee or the holder of this Note, and the party receiving such excess
payments shall promptly refund the amount of such excess (to the extent only of
such interest payments above the maximum non-usurious amount which could
lawfully have been collected and retained) upon discovery of such error by the
party receiving such payment or notice thereof from the party making such
payment.

 

The
principal indebtedness evidenced by this Note and all interest accrued thereon
shall be payable pursuant to the terms of the Credit Agreement, which provides
in part that all outstanding indebtedness evidenced by this Note on the
Termination Date shall be paid on the Termination Date. If any installment
provided for in the Credit Agreement, either of principal or interest, is not
paid when due, then Payee or the owner or holder hereof may, at its option,
without notice (including, without limitation, notice of intention to
accelerate maturity and/or notice of acceleration of maturity) or demand,
declare this Note at once matured, due and payable in full, and in such case
the entire amount of unpaid principal hereunder and accrued interest thereon
shall immediately become due and payable.

 

If
default is made in the payment of this Note and it is placed in the hands of an
attorney for collection, or collected through probate or bankruptcy
proceedings, or if suit is brought on the same, Maker agrees to pay reasonable
attorneys’ fees and other costs of collection.

 

Maker
and any and all endorsers, guarantors and sureties severally waive notice
(including, without limitation, notice of intention to accelerate maturity
and/or notice of acceleration of maturity), demand, presentment for payment,
protest and the filing of suit hereon for the purpose of fixing liability and
consent that the time of payment hereof may be extended and reextended from
time to time without notice to them or any of them. Maker acknowledges and
understands that under the Laws of the State of Texas, unless waived,

 

2

 

Maker has the right to
notice of Payee’s intent to accelerate the indebtedness evidenced by this Note,
the right to notice of the actual acceleration of the indebtedness evidenced by
this Note, and the right to presentment of this Note by Payee’s demand for
payment. Maker acknowledges that it understands that it can waive these rights
and by Maker’s execution of this Note it agrees to waive its right to notice of
intent to accelerate, its right to notice of acceleration, and its right to
presentment or other demand for payment.

 

Maker
may at any time pay the full amount or any part of this Note without the
payment of any premium or fee.

 

THIS
NOTE SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF
TEXAS.

 

Without
being limited thereto or thereby, this Note is secured by the Security
Documents more particularly described in the Credit Agreement.

 

This
Note represents in whole or in part a renewal and extension, but not a novation
or discharge, of the indebtedness of Maker evidenced by that certain Promissory
Note dated March 5, 2007 executed by Maker to the order of Payee in the
principal face amount of $20,000,000.00.

 

 

	
   

  	
  CUBIC
  ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Calvin A. Wallen III

  
	
   

  	
  President

  

 

3Exhibit 10.3

 

CONVERTIBLE PROMISSORY NOTE

 

	
  $5,000,000.00

  	
  Houston, Texas

  	
  December 18, 2009

  

 

FOR
VALUE RECEIVED and WITHOUT GRACE, in the installments hereinafter provided, the
undersigned (“Maker”) promises to pay to the order of WELLS FARGO ENERGY CAPITAL, INC. (““Payee”)
the sum of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00), together with
interest as set forth in that certain Credit Agreement dated March 5, 2007
between Maker and Payee (as may be amended from time to time, the “Credit
Agreement”).

 

All
payments of principal and interest are payable in lawful money of the United
States of America to Payee at its offices at 1000 Louisiana, 9th Floor, Houston, Harris County, Texas as set
forth in the Credit Agreement.

 

Each
advance by Payee to Maker and each payment of principal hereunder by Maker
shall be reflected by a notation made by Payee on its records and the aggregate
unpaid amount of advances reflected by said notations shall be deemed
rebuttably presumptive evidence of the principal amount owing under this Note.

 

This
Note is issued pursuant to the Credit Agreement, and reference is made to the
Credit Agreement for matters governed thereby, including, without limitation,
certain events which will entitle the holder hereof to accelerate the maturity
of all amounts due hereon. Capitalized terms used but not defined herein shall
have the same meanings as in the Credit Agreement.

 

It
is the intention of Maker and Payee to comply strictly with all applicable
usury laws as in effect from time to time; and there is no intention to
contract for, nor shall there ever be collected, charged or received on this
Note, interest in excess of that which would accrue and be payable on the basis
of the Highest Lawful Rate. To the extent that the interest rate Laws of the
State of Texas are applicable to this Note, for purposes of Chapter 303 of the
Texas Finance Code, as amended, Maker agrees that the maximum rate to be
charged shall be the “weekly rate ceiling” as defined in said Chapter 303;
provided that Payee may also rely on alternative maximum rates of interest
under other applicable laws, if greater.

 

	
   

  	
  Initialed for Identification

  

 

1

 

If
under any circumstances the aggregate amounts paid on this Note include amounts
which by Law are deemed interest and which would exceed the maximum
non-usurious amount of interest which could lawfully have been collected on
this Note, Maker stipulates that such payment and collection will have been and
will be deemed to have been the result of mathematical error on the part of
Maker and Payee or the holder of this Note, and the party receiving such excess
payments shall promptly refund the amount of such excess (to the extent only of
such interest payments above the maximum non-usurious amount which could
lawfully have been collected and retained) upon discovery of such error by the
party receiving such payment or notice thereof from the party making such
payment.

 

The
principal indebtedness evidenced by this Note is payable on July 1, 2012.
All interest accrued on the principal indebtedness shall be payable pursuant to
the terms of the Credit Agreement, with the last payment thereof due on or
before July 1, 2012. If any installment of interest provided for in the
Credit Agreement is not paid when due, then Payee or the owner or holder hereof
may, at its option, without notice (including, without limitation, notice of
intention to accelerate maturity and/or notice of acceleration of maturity) or
demand, declare this Note at once matured, due and payable in full, and in such
case the entire amount of unpaid principal hereunder and accrued interest
thereon shall immediately become due and payable.

 

If
default is made in the payment of this Note and it is placed in the hands of an
attorney for collection, or collected through probate or bankruptcy
proceedings, or if suit is brought on the same, Maker agrees to pay reasonable
attorneys’ fees and other costs of collection.

 

Maker
and any and all endorsers, guarantors and sureties severally waive notice
(including, without limitation, notice of intention to accelerate maturity
and/or notice of acceleration of maturity), demand, presentment for payment,
protest and the filing of suit hereon for the purpose of fixing liability and
consent that the time of payment hereof may be extended and reextended from
time to time without notice to them or any of them. Maker acknowledges and
understands that under the Laws of the State of Texas, unless waived, Maker has
the right to notice of Payee’s intent to accelerate the indebtedness evidenced
by this Note, the right to notice of the actual acceleration of the
indebtedness evidenced by this Note, and the right to presentment of this Note
by Payee’s demand for payment. Maker acknowledges that it understands that it
can waive these rights and by Maker’s execution of this Note it agrees to waive
its right to notice of intent to accelerate, its right to notice of
acceleration, and its right to presentment or other demand for payment.

 

2

 

Except
as set forth in the Credit Agreement, Maker may not prepay the principal
amounts evidenced by this Note.

 

This
Note is convertible into shares of the common stock of Maker in accordance with
Section 2.15 of the Credit Agreement

 

THIS
NOTE SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF
TEXAS.

 

Without
being limited thereto or thereby, this Note is secured by the Security
Documents more particularly described in the Credit Agreement.

 

This
Note represents in whole or in part a renewal and extension, but not a novation
or discharge, of the indebtedness of Maker evidenced by that certain
Convertible Promissory Note dated March 5, 2007 executed by Maker to the
order of Payee in the principal amount of $5,000,000.00.

 

 

	
   

  	
  CUBIC
  ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Calvin A. Wallen III

  
	
   

  	
  President

  

 

3

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