Exhibit 1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of the 6th day of February, 2006 by and among Cubic Energy, Inc. ("Cubic") on
one hand ("Cubic"), and the both of ▇▇▇▇▇▇ ▇▇▇▇▇▇ III and Tauren Exploration,
Inc. (collectively, "Tauren") on the other hand.
WHEREAS, Tauren maintains mineral leaseholds, with working interests
and net revenue interests derived therefrom, in (i). Township 14N, Range 15W,
Sections 5, 6, 7 and 8 in Caddo Parish / Desoto Parish, Louisiana (the "4
SECTIONS") and in (ii). other areas in Northwest Louisiana as defined by the
Area Of Mutual Interest Map attached hereto and incorporated herein as Exhibit
"A";
WHEREAS, on or about October 1, 2004, Cubic and Tauren previously
effectuated a transaction involving mineral leaseholds, with working interests
and net revenue interests derived therefrom, in Northwest Louisiana in Township
14N, Range 16W, Sections 24, 25, 26, Caddo Parish, Louisiana and in Township
14N, Range 15W, Sections 18, 19, 20, 29, 30, Caddo Parish, Louisiana (the "8
SECTIONS");
WHEREAS, Cubic and Tauren agree to the Area Of Mutual Interest Map
attached hereto as Exhibit "A", and understand that such Area Of Mutual Interest
Map shall specifically carve out the 4 SECTIONS, the 8 SECTIONS, and all
leaseholds in Township 16 North, Range 16 West (hereinafter, excluding the 4
SECTIONS; the 8 SECTIONS; and all leaseholds in Township 16 North, Range 16
West; to be understood to be the "AMI PROPERTY")
WHEREAS, Tauren is willing to transfer, sell and assign to Cubic (i). a
Thirty-Five Percent (35%) working interest in the 4 SECTIONS, (ii). a Forty-Nine
Percent (49%) working interest in the AMI PROPERTY currently under mineral lease
to Tauren and (iii). an option to acquire, at "cost", a Seventy Percent (70%)
working interest in all mineral leases obtained by Tauren in the AMI PROPERTY
subsequent to the date of this Agreement; in exchange for (v). US$3,500,000.00,
(w). 2,500,000 authorized, non-registered/restricted Cubic common shares, (x). a
promissory note in the amount of US$1,300,000.00 payable in sixty (60) days;
(y). a carried interest for Tauren, for Tauren's share, for all ▇▇▇▇▇ drilled
and completed in any of the 4 SECTIONS, 8 SECTIONS and the AMI PROPERTY in which
Tauren maintains a working interest, in the amount of $2,100,000.00, and (z).
granting a sixty (60) day exclusive option to transfer a Fifteen Percent (15%)
working interest in the 4 SECTIONS and an additional Twenty-One Percent (21%)
working interest in the AMI PROPERTY in exchange for an additional carried
interest in the amount of $2,400,000.00 [on the same terms as described in
1.1(y) herein] and a sixty (60) month promissory note in the amount of
$1,500,000.00; and WHEREAS, Cubic is willing to consummate such a transaction;
AND, WHEREAS, it is expressly understood that this contemplated
transaction is subject to (a) Cubic obtaining the necessary financing, in
Cubic's sole judgment, to close the transaction; (b) the Cubic Special Committee
approving this transaction, and (c) the Special Committee's receipt of a written
opinion from its financial advisor as to the fairness, from a financial point of
view, of the transactions to Cubic's common stockholders.
NOW, THEREFORE, for and in consideration of the premises and of the
mutual representations, warranties and agreements contained herein, and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and upon the terms and subject to the conditions hereinafter set
forth, Tauren and Cubic do hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Tauren and Cubic agree that Tauren hereby sells, transfers and
assign to Cubic (i). a Thirty-Five Percent (35%) working interest in the 4
SECTIONS, (ii). a Forty-Nine Percent (49%) working interest in the AMI PROPERTY
currently under mineral lease to Tauren, and (iii). an option to acquire, at
"cost", a Seventy Percent (70%) working interest in all mineral leases obtained
by Tauren in the AMI PROPERTY subsequent to the date of this Agreement [as
described in Section 1.4 below]; in exchange for Cubic (v). paying unto Tauren
US$3,500,000.00 at the time of Closing, (w). issuing to Tauren 2,500,000
authorized, non-registered/restricted Cubic common shares at the time of
Closing, (x). a carried interest for Tauren, for Tauren's share, for all ▇▇▇▇▇
drilled and completed in any of the 4 SECTIONS, 8 SECTIONS and the AMI PROPERTY
in which Tauren maintains a working interest, in the amount of $2,100,000.00,
(y). executing a promissory note in the amount of US$1,300,000.00 payable in
sixty (60) days, and (z). granting a sixty (60) day exclusive option to transfer
a Fifteen Percent (15%) working interest in the 4 SECTIONS and an additional
Twenty-One Percent (21%) working interest in the AMI PROPERTY in exchange for an
additional carried interest in the amount of $2,400,000.00 [on the same terms as
described in 1.1(y) herein] and a sixty (60) month promissory note in the amount
of $1,500,000.00. TAUREN ACKNOWLEDGES THAT NONE OF THE COMMON SHARES ISSUED TO
TAUREN FROM CUBIC HEREIN HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW; AND NONE OF THE
SHARES MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE SAME ARE
REGISTERED AND QUALIFIED IN ACCORDANCE WITH THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO CUBIC, SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
FURTHER, TAUREN ACKOWLEDGES THAT AS AN AFFILIATE OF CUBIC, IT MAY HAVE
ADDITIONAL RESTRICTIONS AS TO ITS RIGHTS AND PRIVILEGES WITH RESPECT TO CUBIC
SHARES ISSUED HEREUNDER.
1.2 Cubic and Tauren agree that the promissory note in the amount of
$1,300,000.00 (the "PROMISSORY NOTE") shall be in the form attached hereto and
incorporated herein as Exhibit "B". Such PROMISSORY NOTE shall accrue interest
at a rate of Twelve and One-Half Percent [12 1/2%] per annum on all unpaid
2
balances, and be due and payable in sixty (60) days from the date of this
Agreement. Tauren hereby waives any and all liens that may arise because a
portion of the purchase price is not being paid in full at the time of Closing.
1.3 To expressly survive Closing, Tauren shall ensure that Cubic
obtains and maintains all the same rights and privileges Tauren has contracted
for with Fossil Operating, Inc., with respect to the Joint Operating Agreement
covering the 8 SECTIONS and the AMI PROPERTY.
1.4 For the good and valuable consideration of US$100.00, the receipt
of which is hereby acknowledged by Tauren, for a period not to exceed ten (10)
years from the date of the execution of this Agreement, Tauren gives unto Cubic
an option to acquire, at "cost", a Seventy Percent (70%) working interest in all
mineral leases, and only mineral leases, obtained by Tauren in the AMI PROPERTY
subsequent to the date of this Agreement; with "cost" defined as the actual
out-of-pocket costs plus the general and administrative costs incurred by Tauren
to obtain all rights in such mineral leases. Such option shall expressly survive
Closing.
1.5 For the good and valuable consideration of US$100.00, the receipt
of which is hereby acknowledged by Tauren, Tauren gives unto Cubic a sixty (60)
day exclusive option to acquire an additional Fifteen Percent (15%) working
interest in the 4 SECTIONS and an additional Twenty-One Percent (21%) working
interest in the AMI PROPERTY in exchange for an additional carried interest in
the amount of $2,400,000.00 [on the same terms as described in 1.1(y) herein]
and a sixty (60) month promissory note in the amount of $1,500,000.00. In order
to exercise such option, Cubic will have been required to raise an additional
$5,000,000.00 in debt or in equity to satisfy the obligations as found in this
paragraph [which aggregate of $5,000,000.00 shall include the monies raised to
satisfy the PROMISSORY NOTE described in Section 1.2].
1.6 With respect to the extent of the carried interest as described in
Section 1.1(y) above, Cubic agrees to pay for Tauren's share of drilling and
completion costs for all ▇▇▇▇▇ drilled or completed in any of the 4 SECTIONS, 8
SECTIONS and the AMI PROPERTY in which Tauren maintains a working interest, all
the while Tauren maintains its right to it's share of the production and its
working interest in that well.
Should a balance remain regarding the US$2,100,000.00 carry interest
provided to Tauren from Cubic, and should a material liquidating event occur
with respect to the 4 SECTIONS, the 8 SECTIONS and/or the AMI PROPERTY, this
balance shall be due and payable in cash from Cubic to Tauren at the time of
closing of such material transaction.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CUBIC
Cubic represents and warrants to Tauren as follows:
3
2.1 Authorization. Subject to Director and Special Committee approval,
Cubic has the full power, capacity and authority to execute this Agreement and
all other agreements and documents contemplated hereby, and to sell 2,500,000
shares of restricted common stock to Tauren.
2.2 Organization, Qualification, Outstanding Company Stock. Cubic is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas. The Company has full corporate power and authority to own
and lease all of the properties and assets it now owns and leases and to carry
on its business as now being conducted, and is duly qualified to do business in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary. Cubic agrees to
maintain the necessary authorized common shares to satisfy all of its
obligations to Tauren hereunder.
2.3 Compliance with Laws. Cubic (a) is in compliance with all
applicable laws, regulations (including federal, state and local procurement
regulations), orders, judgments and decrees except where the failure to so
comply would not have a material adverse effect on the business, prospects,
financial condition or results of operation or prospects of Cubic and (b) to the
knowledge of Cubic, possesses all necessary licenses, franchises, permits and
governmental authorizations to conduct its business in the manner in which and
in the jurisdictions and places where such business is now conducted.
2.4 Availability of Documents. Cubic has made available for inspection
by Tauren and their representatives true, correct, and complete copies of the
Articles Of Incorporation of Cubic and By-Laws of Cubic, and the corporate
minute books of Cubic. Such corporate minute books contain the minutes of all of
the meetings of shareholders, board of directors, and any committees of Cubic
that have been held preceding the date hereof and all written consents to action
executed in lieu thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TAUREN
Tauren represents and warrants to Cubic as follows:
3.1 Organization and Authorization. Tauren has all requisite power,
capacity and authority to execute and deliver this Agreement and all other
agreements and documents contemplated hereby. The execution and delivery of this
Agreement and such other agreements and documents by Tauren and the consummation
by Tauren of the transactions contemplated hereby have been duly authorized by
Tauren and no other action on the part of Tauren is necessary to authorize the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Tauren and constitutes the valid and binding obligation of Tauren,
enforceable in accordance with its terms except that (i) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, (ii) the remedy of specific performance
4
and injunctive relief are subject to certain equitable defenses and to the
discretion of the court before which any proceedings may be brought, and (iii)
rights to indemnification hereunder may be limited under applicable securities
laws.
3.2 8 SECTIONS, AMI PROPERTY Leases. Tauren possesses good and
indefeasible title to the working interests and the mineral leaseholds being
transferred to Cubic hereunder. Tauren has not sold, pledged, encumbered,
gifted, devised, demised, granted, exchanged, leased, or otherwise assigned any
of the mineral leaseholds and/or working interests being transferred to Cubic
herein, with respect to both the 8 SECTIONS and the AMI PROPERTY; and, other
than as listed on Schedule 3.2 herein, nor is Tauren aware [explicitly,
constructively or otherwise] as to any adverse or competing claim to the mineral
leaseholds and/or the working interests in any of the 8 SECTIONS, or in any of
the AMI PROPERTY interests transferred hereunder.
3.3 JOA. Tauren shall ensure that Cubic obtains and maintains all the
same rights and privileges Tauren has contracted for with Fossil Operating,
Inc., with respect to the Joint Operating Agreement covering the 8 SECTIONS and
the AMI PROPERTY.
ARTICLE IV
CONDITIONS TO OBLIGATIONS OF TAUREN
The obligation of Tauren to trade the working mineral hereunder, shall
be subject to the satisfaction of each of the following conditions at or prior
to the Closing:
4.1 Representations and Warranties. Each representation and warranty of
Cubic contained in this Agreement and in any Schedule or other disclosure in
writing from Cubic shall be true and correct when made, and shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representation and warranty had been made on and as of the
Closing Date.
4.2 Covenants of Cubic. All of the covenants and agreements herein on
the part or the Cubic to be complied with or performed on or before the Closing
Date shall have been fully complied with and performed.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF CUBIC
The obligation of Cubic hereunder, shall be subject to the satisfaction
of each of the following conditions at or prior to the Closing:
5.1 Representations and Warranties. Each representation and warranty of
Tauren contained in this Agreement and in any Schedule or other disclosure in
writing from Tauren shall be true and correct when made, and shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as though such representation and warranty had been made on and as of the
Closing Date.
5
5.2 Covenants of Tauren. All of the covenants and agreements herein on
the part or the Tauren to be complied with or performed on or before the Closing
Date shall have been fully complied with and performed.
5.3 Miscellaneous Conditions. Cubic obtaining the necessary financing,
in Cubic's sole judgment, to close the transaction; the Cubic Special Committee
approving this transaction; and the Special Committee's receipt of a written
opinion from its financial advisor as to the fairness, from a financial point of
view, of the transactions to Cubic's common stockholders.
ARTICLE VI
CLOSING
6.1 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Cubic's counsel or such other
location as is agreed to by Tauren and Cubic, on or before February 8, 2006 (the
"Closing Date").
6.2 Delivery At Closing. At Closing, or at any agreed time thereafter,
Cubic shall deliver to Tauren: (i). US$3,500,000.00, (ii). a share certificate
for 2,500,000 shares of Cubic restricted common stock and (iii). an executed
copy of the PROMISSORY NOTE, in the form of Exhibit "B" hereto. At Closing,
Tauren shall deliver to Cubic all indicia of all rights to the stated working
interest in the 8 SECTIONS and the AMI PROPERTY.
ARTICLE VII
INDEMNIFICATION OF CUBIC
7.1 Cubic's Losses.
(a) Tauren agrees to indemnify and hold harmless Cubic from, against
and in respect of any and all Cubic's Losses (as defined below) suffered,
sustained, incurred by or required to be paid by reason of any material
representation or warranty made by Tauren or pursuant to this Agreement being
breached.
(b) "Cubic's Losses" shall mean all damages (including, without
limitation, reasonable amounts paid in settlement with Tauren's consent, which
consent may not be unreasonably withheld), losses, obligations, liabilities,
liens, deficiencies, costs (including, without limitation, reasonable attorneys'
fees), penalties, fines, interest, monetary sanctions and expenses, including,
without limitation, reasonable attorneys' fees and costs incurred to comply with
injunctions and other court and agency orders, and other costs and expenses
incident to any suit, action, investigation, claim or proceeding or to establish
or enforce Cubic's right to indemnification hereunder.
7.2 Notice of Loss. Tauren will not have any liability under the
indemnity provisions of this Agreement with respect to a particular matter
unless a notice setting forth in reasonable detail the breach or other matter
which is asserted has been given to the Indemnifying Party (as defined below),
6
within the survival period as set forth in Section 8.10 herein, and, in
addition, if such matter arises out of a suit, action, investigation, proceeding
or claim, such notice is given promptly, but in any event within ten business
days after the Indemnified Party (as defined below) is given notice of the claim
or the commencement of the suit, action, investigation or proceeding. With
respect to Cubic's Losses, Tauren shall be the Indemnifying Party, and Cubic
shall be the Indemnified Parties.
7.3 Right to Defend. Upon receipt of notice of any suit, action,
investigation, claim or proceeding for which indemnification might be claimed by
an Indemnified Party, the Indemnifying Party shall be entitled to defend,
contest or otherwise protect against any such suit, action, investigation, claim
or proceeding at its own cost and expense, and the Indemnified Party must
cooperate in any such defense or other action. The Indemnified Party shall have
the right, but not the obligation, to participate at its own expense in defense
thereof by counsel of its own choosing, but the Indemnifying Party shall be
entitled to control the defense unless the Indemnified Party has relieved the
Indemnifying Party from liability with respect to the particular matter or the
Indemnifying Party fails to assume defense of the matter. In the event the
Indemnifying Party shall fail to defend, contest or otherwise protect in a
timely manner against any such suit, action, investigation, claim or proceeding,
the Indemnified Party shall have the right, but not the obligation, thereafter
to defend, contest or otherwise protect against the same and make any compromise
or settlement thereof and recover the entire cost thereof from the Indemnifying
Party including, without limitation, reasonable attorneys' fees, disbursements
and all amounts paid as a result of such suit, action, investigation, claim or
proceeding or the compromise or settlement thereof; provided, however, that the
Indemnified Party must send a written notice to the Indemnifying Party of any
such proposed settlement or compromise, which settlement or compromise the
Indemnifying Party may reject, in its reasonable judgment, within thirty (30)
days of receipt of such notice. Failure to reject such notice within such thirty
(30) day period shall be deemed an acceptance of such settlement or compromise.
Notwithstanding the above, if (i) the Indemnifying Party is contesting such
claim in good faith or (ii) the Indemnifying Party has assumed the defense from
the Indemnified Party, the Indemnified Party may effect a settlement or
compromise over the objection of the Indemnifying party by delivery to the
Indemnifying party of a written waiver of the right to indemnification for those
matters specifically at issue. If the Indemnifying Party undertakes the defense
of such matters, the Indemnified Party shall not, so long as the Indemnifying
Party does not abandon the defense thereof, be entitled to recover from the
Indemnifying Party any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than the
reasonable costs of investigation undertaken by the Indemnified Party with the
prior written consent of the Indemnifying Party.
7.4 Cooperation. Tauren, Cubic, and each of their affiliates,
successors and assigns shall cooperate with each other in the defense of any
suit, action, investigation, proceeding or claim by a third party and, during
normal business hours, shall afford each other access to their books and records
7
and employees relating to such suit, action, investigation, proceeding or claim
and shall furnish each other all such further information that they have the
right and power to furnish as may reasonably be necessary to defend such suit,
action, investigation, proceeding or claim.
ARTICLE VIII
MISCELLANEOUS
8.1 Entire Agreement. This Agreement (including the exhibits and
schedules hereto), in conjunction with that agreement on or about October 1,
2004, constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between Cubic and Tauren hereto with
respect to the subject matter hereof, and no party shall be liable or bound to
the other in any manner by any representations or warranties not set forth
herein.
8.2 Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
rights, interests, or obligations hereunder may be assigned by any party hereto
without the prior written consent of all other parties hereto, and any purported
assignment in violation of this Section 8.2 shall be null and void.
8.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
8.4 Headings. The headings of the articles and sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
8.5 Construction. As used in this Agreement, the words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular article, section, paragraph or
other subdivision.
8.6 Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof, and this Agreement may be modified or amended by a written
instrument executed by Tauren and Cubic. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by all
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
8.7 Schedules, Etc. All exhibits and schedules annexed hereto are
expressly made a part of this Agreement as though fully set forth herein.
8.8 Notices. Any notice, request, instruction, document or other
communication to be given hereunder by any party hereto to any other party
hereto shall be in writing and validly given if (i) delivered personally, (ii)
8
sent by telecopy with electronic confirmation of receipt, (iii) delivered by
overnight express, or (iv) sent by registered or certified mail, postage
prepaid, as follows:
If to Cubic, to:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ facsimile
If to Tauren and/or ▇▇▇▇▇▇ ▇▇▇▇▇▇ III, to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ III
▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ facsimile
or at such other address for a party as shall be specified by like notice. Any
notice that is delivered personally, or sent by telecopy or overnight express in
the manner provided herein shall be deemed to have been duly given to the party
to whom it is directed upon actual receipt by such party. Any notice that is
addressed and mailed in the manner herein provided shall be conclusively
presumed to have been given to the party to whom it is addressed at the close of
business, local time of the recipient, on the fourth day after the day it is so
placed in the mail.
8.9 GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE CONSTRUED, ENFORCED,
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO ITS
CHOICE OF LAW PRINCIPLES). VENUE SHALL LIE EXCLUSIVELY IN THE COURTS OF DALLAS
COUNTY, TEXAS.
8.10 Survival of Representations and Warranties. Unless otherwise
explicitly so stated, all representations and warranties contained herein shall
survive the Closing and shall continue in full force and effect thereafter for a
period of three years following the Closing, except that the representations and
warranties contained in Sections 2.1 and in Section 3.1 shall survive
indefinitely.
8.11 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws, such
provision shall be deemed modified to the minimum extent necessary to alleviate
such illegality, invalidity, or unenforceability, with such modified provision
treated as if originally contained herein, and the remaining provisions of this
Agreement shall remain in full force and effect.
8.12 Expenses. Tauren and Cubic shall each be solely responsible for
their respective costs and expenses incurred in connection with the transactions
contemplated hereby.
9
8.13 Number and Gender of Words. Whenever the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
8.14 Further Assurances. From time to time after the Closing, at the
request of any other party but at the expense of the requesting party, Cubic and
Tauren agree to execute and deliver any such other instruments of conveyance,
assignment and transfer, and take such other action as the other party may
reasonably request in order to consummate or evidence the transactions
contemplated hereby.
8.15 1031 Like-Kind Exchange. Each party consents to the other party's
assignment of its rights and obligations under this Agreement to its Qualified
Intermediary (as that term is defined in Section 1.1031-1(g)(4)(v) of the
Treasury Regulations), or its Qualified Exchange Accommodation Titleholder (as
that term is defined in Rev. Proc. 2007-37), in connection with effectuation of
a like-kind exchange. However, Seller and Purchaser acknowledge and agree that
any assignment of this Agreement to a Qualified Intermediary or a Qualified
Exchange Accommodation Titleholder does not release either party from any of
their respective liabilities and obligations to each other under the Agreement.
Each party agrees to cooperate with the other to attempt to structure the
transaction as a like-kind exchange.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
Cubic Energy, Inc.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, III
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, III
Chief Executive Officer
Tauren Exploration, Inc.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, III
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, III
President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇, III
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, III
10
Exhibits and Schedules
Exhibit A AMI Property
Exhibit B Promissory Note
Exhibit C Joint Operating Agreement
Schedule 3.2 Competing Or Adverse Claims