Document:

Exhibit 10.1

 

FORM OF SUBORDINATED NOTE DUES 2016

 

EAGLE BANCORP, INC.

 

SUBORDINATED NOTE DUE 2016

 

	
  Certificate
  No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $

  	
   

  	
  , 20   

  
	
  Initial
  Principal Amount

  	
   

  	
   

  

 

THIS
SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT OF ANY BANK OR OTHER INSURED
DEPOSITARY INSTITUTION, AND IT IS NOT INSURED BY THE UNITED STATES OR ANY
AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT
INSURANCE CORPORATION.

 

THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW.  NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.  THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (C) PURSUANT
TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO IT.

 

IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH CERTIFICATES
AND OTHER INFORMATION AS MAY BE REASONABLY REQUIRED TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

THIS
NOTE IS INELIGIBLE AS COLLATERAL FOR ANY LOAN OR OTHER EXTENSION OF CREDIT BY
THE COMPANY OR ANY OF ITS SUBSIDIARIES.

 

THE
HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

 

FOR
VALUE RECEIVED, Eagle Bancorp, Inc., a Maryland corporation (the “Company”
which term includes any successor to the Company), for value received promises
to pay to
                                                    ,
or registered assigns, the initial principal sum of
                                              
dollars and no cents
($                  .00),
or such lesser amount as shall result from the cancellation of all or a portion
of this Note at the Closing (as hereinafter defined), or partial redemption of
this Note, as shall be set forth on a duly executed Schedule A hereto, on September 30,
2016, and to pay interest on said outstanding principal sum from August 30,
2010, or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for, monthly in arrears on the 1st day of each month, or if such day is not a
Business Day (as hereinafter defined), then the next succeeding Business Day
(each such date, an “Interest Payment Date”) (it being understood that interest
accrues for any such non-Business Day), commencing on the Interest Payment Date
in September 2010, at a fixed annual rate equal to 10% (the “Interest Rate”)
applied to the principal amount hereof, until the principal hereof is paid or
duly provided for or made available for payment, and on any overdue principal
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the

 

 

Interest
Rate, compounded quarterly, from the dates such amounts are due until they are
paid or made available for payment.  The
amount of interest payable for any period will be computed on the basis of the
actual number of days in the Interest Payment Period concerned divided by
360.  The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will be paid to the person in whose name this Note is registered at the close
of business on the regular record date for such interest installment (the “Holder”),
which shall be fifteen days prior to the day on which the relevant Interest
Payment Date occurs.  Any such interest
installment not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such regular record date and may be paid to the
person in whose name this Note is registered at the close of business on a
special record date. “Business Day” means any day other than a Saturday, Sunday
or any other day on which banking institutions in New York City or Bethesda,
Maryland  are permitted or required by
any applicable law or executive order to close.

 

The
principal of and interest on this Note shall be payable in any coin or currency
of the United States of America that at the time of payment is legal tender for
payment of public and private debts, by check mailed to the registered holder
at such address as shall appear in the Note register maintained by the Company,
or by wire transfer to an account appropriately designated by the holder
hereof.

 

Total Issuance. This Note is part of, and ranks pari passu and equal in right of payment with other Notes
constituting a part of, the issuance of up to $9.3 million of Subordinated
Notes due 2016 authorized by the Board of Directors of the Company on July 28,
2010 (collectively, the “Notes”).

 

Subordination.  The
indebtedness evidenced by this Note is subordinate and junior in right of
payment to the prior payment in full of all claims of (i) general
creditors of the Company, (ii) holders of all secured indebtedness of the
Company, and (iii) holders of other claims which do not by their terms
expressly state that they are pari passu or
junior in right of payment to this Note, whether now existing or hereafter
incurred, except that this Note shall rank pari passu in
right of payment with the Company’s Subordinated Notes due September 30,
2014, authorized by the Board of Directors of the Company on August 18,
2008, and this Note is issued subject to the foregoing. Each holder of this
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Company on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Company his
or her attorney-in-fact for any and all such purposes. Each holder hereof, by
his or her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein by each holder of claims or
indebtedness to which this Note is subordinate, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.  Payments of interest and principal
on the Notes is senior to the payment of dividends or amounts paid in
liquidation on any class of capital stock of the Company. Payment of interest
and principal on the Notes is not an obligation or liability of any insured
depositary institution subsidiary of the Company.

 

Optional Redemption.  The Company
shall have the right to redeem the Notes, in whole or in part, but in all cases
in a principal amount with integral multiples of $1,000.00, on any Interest
Payment Date at a redemption price of 100% of the principal amount of the Note
to be redeemed on such date, plus interest accrued and unpaid to the date of
redemption. Any such redemption shall be subject to receipt of the prior
approval of the Federal Reserve Bank of Richmond, or other appropriate
regulatory authority, to the extent required.

 

If
all, or less than all, of the Notes are to be redeemed, the Company will give
the Holders notice not less than 30 nor more than 45 days prior to the
redemption date as to the aggregate principal amount of Notes to be
redeemed.  The Company shall select, in
such manner as in its sole discretion it shall deem appropriate and fair, the
Notes or portions thereof (in integral multiples of $1,000.00) to be redeemed.

 

Events of Default; Acceleration; Default.  In case an Acceleration
Event of Default, as hereafter defined, shall have occurred and be continuing,
upon demand of the holders of a majority of the aggregate principal amount of
the outstanding Notes, the principal of all of the Notes shall become due and
payable, subject to the receipt of any and all required regulatory
approvals.  For purposes hereof, and
subject to the provisions of “Capital Treatment; Interpretation” hereunder, “Acceleration
Event of Default” means:

 

(a)           a court of competent jurisdiction
shall enter a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) 

 

 

of
the Company or for any substantial part of its property, or ordering the
winding-up or liquidation of its affairs and such decree or order shall remain
unstayed and in effect for a period of 90 consecutive days; or

 

(b)           the Company shall commence a
voluntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due; or

 

(c)           a court or administrative or
governmental agency or body shall enter a decree or order for the appointment
of a receiver of a Major Bank Subsidiary (as hereafter defined) or all or
substantially all of its property in any liquidation, insolvency or similar
proceeding with respect to such Major Bank Subsidiary or all or substantially
all of its property; or

 

(d)           a Major Bank Subsidiary shall consent
to the appointment of a receiver for it or all or substantially all of its
property in any liquidation, insolvency or similar proceeding with respect to
it or all or substantially all of its property.

 

For purposes hereof, “Major
Bank Subsidiary” means any subsidiary of the Company that is a “major bank
subsidiary” as that term is used in SR 92-37 (FIS) promulgated by the Division
of Banking Supervision and Regulation of the Federal Reserve, and as such term
may subsequently be defined or interpreted in any rule, regulation, written
interpretation or other public issuance of the Federal Reserve.

 

For
purposes hereof, and subject to the provisions of “Capital Treatment;
Interpretation” hereunder, “Event of Default” means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):

 

(a)           an Acceleration Event of Default;

 

(b)           the Company defaults in the payment
of any interest upon any Notes, and the continuation of such default for a
period of thirty days; or

 

(c)           the Company defaults in the payment
of all or any part of the principal of (or premium, if any, on) any Notes as
and when the same shall become due and payable either at maturity, upon
redemption, by declaration of acceleration or otherwise; or

 

(d)           the Company defaults in the
performance of, or breaches, any of its covenants or agreements in the Notes
(other than a covenant or agreement a default in whose performance or whose
breach is elsewhere in this Note specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the holders of at least 25% in
aggregate principal amount of the outstanding Notes, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder.

 

If
there shall have occurred and be continuing any Event of Default, then the
Company shall not, and shall not allow any subsidiary of the Company to, (x) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Company’s capital stock or
its subsidiaries’ capital stock (other than payments of dividends or
distributions to the Company) or make any guarantee payments with respect to
the foregoing or (y) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company or any subsidiary that rank pari
passu in all respects with or junior in interest to the Notes (other
than, with respect to clauses (x) and (y) above: (1) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for 

 

 

such
capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Event of Default, if any, (2) as a result of any
exchange or conversion of any class or series of the Company’s capital stock
(or any capital stock of a subsidiary of the Company) for any class or series
of the Company’s capital stock or of any class or series of the Company’s
indebtedness for any class or series of the Company’s capital stock, (3) the
purchase of fractional interests in shares of the Company’s capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (4) any declaration of a dividend
in connection with any stockholders’ rights plan, or the issuance of rights,
stock or other property under any stockholders’ rights plan, or the redemption
or repurchase of rights pursuant thereto, or (5) any dividend in the form
of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock
and any cash payments in lieu of fractional shares issued in connection
therewith.

 

Certificates; Reliance on Register. 
The Notes are issuable only in registered, certificated form without
coupons and in minimum denominations of $50,000.00 and any multiple of
$1,000.00 in excess thereof.  Subject to
the provisions hereof, upon due presentment for registration of transfer of any
Note to the Company, the Company shall execute and register and make available
for delivery in the name of the transferee or transferees a new Note for a like
aggregate principal amount.  All Notes
presented for registration of transfer or for exchange or payment shall (if so
required by the Company) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to, the Company duly
executed by the holder or his attorney duly authorized in writing. No service
charge shall be made for any exchange or registration of transfer of Notes, but
the Company may require payment of a sum sufficient to cover any tax, fee or
other governmental charge that may be imposed in connection therewith, provided
that nothing shall preclude the Company from requiring the posting of a bond in
connection with the replacement of a Note certificate which has been lost,
destroyed or stolen.

 

Prior
to due presentment for registration of transfer of any Note, the Company, any
paying agent, any transfer agent and any Note registrar may deem the person in
whose name such Note shall be registered upon the Note register to be, and may
treat him as, the absolute owner of such Note (whether or not such Note shall
be overdue) for the purpose of receiving payment of or on account of the
principal of, premium, if any, and interest on such Note and for all other
purposes; and neither the Company nor any paying agent nor any transfer agent
nor any Note registrar shall be affected by any notice to the contrary.  All such payments so made to any holder for
the time being or upon his order shall be valid, and, to the extent of the sum
or sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Note.

 

No Recourse.  No recourse for
the payment of the principal of or premium, if any, or interest on any Note, or
for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company in any such
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, employee, officer or director, as
such, past, present or future, of the Company or of any successor of the
Company, either directly or through the Company or any successor of the
Company, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the issue of the Notes.

 

Capital Treatment;
Interpretation.  This Note is
intended to meet the criteria for qualification of outstanding principal as
Tier 2 capital under the regulatory guidelines of the Federal Reserve. The
terms of this Note shall be interpreted in a manner consistent with and
intended to satisfy such criteria and applicable regulatory requirements.  Not in limitation of the foregoing, in the
event that an Acceleration Event of Default in subparagraph (c) or (d) of
the definition of Acceleration Event of Default shall not be a permitted
acceleration event under the provisions of Section 171 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act, then such subparagraphs shall
be deemed, ab initio,  to be removed from such definition (and shall
not constitute an Acceleration Event of Default) and to be included as
subparagraphs (e) and (f), respectively, of the definition of Event of
Default

 

THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES
THEREOF.

 

[Signature appears on the
following page]

 

 

IN
WITNESS WHEREOF, the Company has duly executed this certificate.

 

	
   

  	
  EAGLE
  BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule A

 

The
initial principal amount of the obligation evidenced by the Note to which this
Schedule is attached is
                 
                 
            
Dollars
($                    ).  The notations in the following table evidence
decreases in the principal amount of the obligation evidenced by the Note.

 

	
  Decrease in Principal

  	
   

  	
  Principal after such

  Decrease

  	
   

  	
  Date

  	
   

  	
  Signatures of Authorized
  Officer

  of Company and HolderExhibit 10.1

 

THIRD AMENDMENT TO

CREDIT AGREEMENT

 

THIS
THIRD AMENDMENT TO CREDIT AGREEMENT (the “Third Amendment”) made and
entered into the 30th day of August, 2010, by and between CUBIC ENERGY, INC.,
a Texas corporation, and WELLS FARGO ENERGY CAPITAL, INC.,
a Texas corporation.

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS,
the above named parties did execute and exchange counterparts of that certain
Credit Agreement dated as of March 5, 2007 as amended by that certain
First Amendment to Credit Agreement dated May 8, 2008 and that certain
Second Amendment to Credit Agreement dated December 18, 2009 (collectively
the “Agreement”) to which reference is here made for all purposes;

 

WHEREAS,
the above named parties are desirous of amending the Agreement and certain
related agreements and instruments in the particulars hereinafter set forth;

 

NOW
THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as set forth in this Third Amendment, the parties hereto agree
as follows:

 

ARTICLE I

DEFINITIONS

 

As
used herein, each term defined in the Agreement shall have the meaning assigned
thereto in the Agreement and terms defined herein shall be incorporated into
the Agreement unless expressly provided to the contrary.

 

1

 

ARTICLE II

AMENDMENTS

 

2.01        The Agreement is hereby amended to add
the following defined terms to Section 1.1 of the Agreement:

 

“Second Amended and Restated Registration Rights Agreement”
means the Second Amended and Restated Registration Rights Agreement in the form
attached as Exhibit XXI, executed by the Borrower and the Lender
superseding the Amended and Restated Registration Rights Agreement.

 

“Third Warrant” means the Stock Purchase
Warrant issued by the Borrower to the Lender in the form attached as Exhibit XXII.

 

2.02        The Agreement is hereby amended to
substitute for the definition of “Loan Documents” the following:

 

“Loan Documents”
means this Agreement, the Notes, the Security Documents, the assignments of Net
Profits Interests, all agreements, documents and instruments governing or
related to Derivative Contracts entered into between the Borrower and the
Lender or any Affiliate of the Lender, the Warrant, the Supplemental Warrants,
the Registration Rights Agreement, the Amended and Restated Registration Rights
Agreement, the Second Amended and Restated Registration Rights Agreement, the
Amended and Restated Warrant, the Second Warrant, the Third Warrant and all
other notes, mortgages, deeds of trust, restatements, ratifications and
amendments of mortgages, deeds of trust, financing statements, guaranties,
security agreements, pledge agreements, documents, instruments and other
agreements now or hereafter delivered pursuant to the terms of, or in
connection with, this Agreement, the Obligations and/or the Collateral, and all
renewals, extensions and restatements of, and amendments and supplements to any
or all of the foregoing.

 

2.03        The Agreement is hereby amended to
substitute for Subsection 2.6(a) of the Agreement the following:

 

(a)  During the period from and after August 30, 2010 until
the next redetermination of the Borrowing Base scheduled for March 1, 2011

 

2

 

in
accordance with this Section 2.6, the amount of the Borrowing Base shall
be $30,000,000.00; provided, however, nothing in this Subsection 2.6(a) shall
be construed to limit the right of the Lender or the Borrower to cause an
interim redetermination of the Borrowing Base pursuant to Subsection 2.6(d).

 

2.04        The Agreement is hereby amended to add
the following paragraph to the end of Section 2.10 of the Agreement:

 

Notwithstanding anything to the contrary in this Section 2.10, for
the increase in the Borrowing Base from $25,000,000.00 to $30, 000,000.00
effective August 30, 2010 the Borrower shall pay to the Lender $100,000.00
as the fee for such increase in the Borrowing Base.

 

2.05        The Agreement is hereby amended to
substitute for Subsections 2.15 (d) and (e) of the Agreement the
following:

 

(d)  Registration Rights.  The shares of Common Stock issued to the
Lender pursuant to this Section 2.15, along with any shares of Common
Stock issued upon exercise of the Amended and Restated Warrant, the Second
Warrant or the Third Warrant, shall be entitled to the registration rights set
forth in the Second Amended and Restated Registration Rights Agreement.

 

(e)  Compliance with Other Provisions.  The Borrower shall comply with its covenants
and agreements contained in the Second Amended and Restated Registration Rights
Agreement, the Amended and Restated Warrant, the Second Warrant and the Third
Warrant, as if those provisions were included in this Agreement.  Notwithstanding anything herein to the
contrary, the obligation provided in this Subsection 2.15(e) and in
Subsection 2.15(f) shall remain in force and effect so long has the Lender
is holder of the Amended and Restated Warrant, the Second Warrant, the Third
Warrant or shares of Common Stock issued to it pursuant to this
Section 2.15 or shares of Common Stock issued upon exercise of the Amended
and Restated Warrant, the Second Warrant or the Third Warrant.

 

(f)   Listing of Shares
Issuable.  To the extent the Common
Stock is listed on the NYSE Amex LLC or other national securities exchange, the
Borrower shall at all times cause to be listed for trading on the NYSE Amex LLC
or any other national securities exchange that is the principal market for the
trading of the Common Stock (a) all of the shares of Common Stock issuable
if the Term Note is converted in full pursuant to 

 

3

 

Section 2.15
of the Agreement, as that number of shares may be adjusted from time to time
pursuant to the Antidilution Provisions, (b) all of the shares of Common
Stock to be issued if the Amended and Restated Warrant is exercised in full and
(c) all of the shares of Common Stock to be issued if the Second Warrant
is exercised in full. In addition, to the extent the Common Stock is listed on
the NYSE Amex LLC or other national securities exchange, within sixty (60) days
after the issuance of the Third Warrant, the Borrower shall cause all of the
shares issuable upon the exercise in full of the Third Warrant to be listed for
trading on the NYSE Amex LLC or such other national securities exchange that is
the principal market for the trading of the Common Stock.

 

2.06        The Agreement is hereby amended to
substitute for Section 2.16 of the Agreement the following:

 

2.16        Warrants.   As consideration for the Loans made
by the Lender pursuant to this Agreement, the Borrower (a) has previously
executed and delivered to the Lender the Amended and Restated Warrant and the
Second Warrant and (b) in connection with the execution and delivery of the
Third Amendment to Credit Agreement dated August 30, 2010 by and between
the Borrower and the Lender, shall execute and deliver to the Lender the Third
Warrant and the Second Amended and Restated Registration Rights Agreement.  The Borrower shall comply with the terms and
provisions of the Amended and Restated Warrant, the Second Warrant, the Third
Warrant and the Second Amended and Restated Registration Rights Agreement so
long as those instruments and that agreement remain in force and effect.

 

2.07        The Agreement is hereby amended to
substitute the second sentence of Section 5.24 of the Agreement the
following:

 

This
obligation shall be in addition to the Borrower’s obligation to reserve shares
of Common Stock for exercise of the Amended and Restated Warrant, the Second
Warrant and the Third Warrant as provided in those respective instruments.

 

2.08        The Agreement is hereby amended by the
addition of the following section to Article 5 of the Agreement:

 

5.25        Notice
of Price Adjustment.  At least two
Business Days prior to the occurrence, the Borrower shall give notice to the
Lender of any 

 

4

 

event
that would cause either (a) an adjustment to the Conversion Price pursuant
to the Antidilution Provisions, or (b) an adjustment to the exercise price
provided in the Amended and Restated Warrant, the Second Warrant or the Third
Warrant pursuant to Sections 4 or 5 of those instruments.

 

ARTICLE III

CONDITIONS

 

This
Third Amendment shall not be effective until the following conditions have been
satisfied, with all documents to be delivered to the Lender to be in form and
substance satisfactory to the Lender:

 

(a)       The Lender shall have received the
following documents, appropriately executed and acknowledged and in multiple
counterparts as requested by the Lender:

 

(1)                                 This Third Amendment
executed by each party hereto;

 

(2)                                 A copy of the certificate of
formation of the Borrower and all amendments thereto, accompanied by a
certificate issued by the secretary of the Borrower that such copies are
correct and complete;

 

(3)                                 A copy of the by-laws of the
Borrower and all amendments thereto, accompanied by a certificate issued by the
secretary of the Borrower that such copies are correct and complete;

 

(4)                                 A copy of the corporate
resolutions of the Borrower, approving this Third Amendment and the related Loan
Documents to which it is a party and authorizing the transactions contemplated
therein, duly adopted by its board of directors and accompanied by a
certificate of the secretary of the Borrower to the effect that such copy is a
true and correct copy of resolutions duly adopted by written consent or at a
meeting of the board of directors, that such resolutions constitute all the
resolutions adopted with respect to such transactions, and that 

 

5

 

such
resolutions have not been amended, modified or revoked in any respect, and are
in full force and effect as of the date of this Third Amendment;

 

(5)                             the Third Warrant executed
by the Borrower;

 

(6)                                 the Second Amended and
Restated Registration Rights Agreement executed by the Borrower and the Lender;
and

 

(7)                                 Such other agreements,
documents, instruments, opinions, certificates, waivers, consents, and evidence
as the Lender may reasonably request in compliance with or to accomplish the
terms and provisions of any of the Loan Documents; and

 

(b)       The Lender shall have received the fee
for the increase in the Borrowing Base pursuant to Section 2.10.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

The
Borrower hereby expressly remakes in favor of the Lender all of the representations
and warranties set forth in ARTICLE 4 of the Agreement, as amended hereby,
and represents and warrants that all such representations and warranties remain
true and unbreached, except as affected by the transactions contemplated in the
Agreement.

 

ARTICLE V

RATIFICATION

 

Each
of the parties hereto does hereby adopt, ratify and confirm the Agreement, in
all things in accordance with the terms and provisions thereof, as modified or
amended by this Third Amendment.

 

6

 

ARTICLE VI

MISCELLANEOUS

 

6.01        All references to the Agreement in any
document heretofore or hereafter executed in connection with the transactions
contemplated in the Agreement shall be deemed to refer to the Agreement as
amended by this Third Amendment.

 

6.02        This Third Amendment may be executed in
two or more counterparts and multiple originals of such counterparts, and it
shall not be necessary that the signatures of all parties hereto be contained
on any one counterpart hereof.  Any executed
Third Amendment or any counterpart thereof shall be deemed an original, but all
of which together shall constitute one and the same instrument.

 

6.03        THE CREDIT AGREEMENT (AS
AMENDED BY THIS THIRD AMENDMENT) AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

6.04        THIS THIRD AMENDMENT SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS.

 

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left blank]

 

7

 

IN
WITNESS WHEREOF, this Third Amendment to Credit Agreement is executed as of the
date first above written.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  CUBIC
  ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Calvin
  A. Wallen III

  
	
   

  	
   

  	
  Calvin
  A. Wallen III

  
	
   

  	
   

  	
  Chief
  Executive Officer and President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO ENERGY CAPITAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Chris
  Carter

  
	
   

  	
   

  	
  Chris
  Carter

  
	
   

  	
   

  	
  Director

  

 

8

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