Exhibit 10.2
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
OF
CUBIC ENERGY, INC.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND
THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“ACT” ), NOR HAS IT BEEN APPROVED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
REGULATORY AUTHORITY OF ANY STATE. NEITHER THESE WARRANTS NOR
ANY INTEREST THEREIN MAY BE OFFERED FOR SALE, SOLD, MORTGAGED,
PLEDGED, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF WITHOUT
REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
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No. 2009-
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Warrant to Purchase
Shares
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August ,
2009
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of Common Stock, $0.05 Par Value Per
Share
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WARRANT TO PURCHASE COMMON STOCK
of
CUBIC ENERGY, INC.,
a Texas corporation
Void after the date set forth in the first paragraph
hereof
This certifies that, for value
received,
or his registered assigns ( “Holder” ) is
entitled, subject to the terms set forth below, to purchase from
Cubic Energy, Inc., a Texas corporation (the
“Company” ),
shares of Common Stock, $0.05 par value per share, of the Company
(such class of stock being referred to herein as
“Common Stock” ), as constituted on
August , 2009
(the “Issue Date” ), upon compliance with
the exercise provisions set forth in Section 1 hereof,
at the price of $0.85 per share (the “Exercise
Price” ). This Warrant must be exercised, if at
all, prior to the earlier to occur of 5:00 p.m., Dallas, Texas
time on July 31, 2014. The shares of Common Stock issued
or issuable upon exercise of this Warrant are sometimes referred to
as the “Warrant Shares . ”
The term “Warrants” as used herein
shall include this Warrant and any warrants delivered in
substitution or exchange therefor as provided herein.
Section 1.
Exercise of Warrant. This Warrant may be exercised at any time or
from time to time, on any business day, for all or part of the full
number of Warrant Shares during the period of time described above,
by (i) delivery of a written notice, in the form of the
subscription notice attached hereto or a reasonable facsimile
thereof (the “Exercise Notice” ), to the
Company, of Holder’s election to exercise all or a portion
of
this Warrant, which notice shall
specify the number of Warrant Shares to be purchased,
(ii) (A) payment to the Company of an amount equal to the
Exercise Price multiplied by the number of Warrant Shares as to
which this Warrant is being exercised (the “Aggregate
Exercise Price” ) in cash or delivery of a certified
check or bank draft payable to the order of the Company or wire
transfer of immediately available funds, and (iii) the
surrender of this Warrant to a common carrier for overnight
delivery to the Company on the date the Exercise Notice is
delivered to the Company (or evidence of lost Warrant, in
accordance with Section 7 ). No other form of
consideration shall be acceptable for the exercise of this
Warrant. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of delivery
of the Exercise Notice, this Warrant and Aggregate Exercise Price
referred to in clause (ii)(A) above, and the person entitled
to receive the shares of Common Stock issuable upon such exercise
shall be treated for all purposes as the record holder of such
shares as of the close of business on such date. As soon as
practicable on or after such date, and in any event within
10 days thereof, the Company shall issue and deliver to the
person or persons entitled to receive the same a certificate or
certificates for the number of shares of Common Stock issuable upon
such exercise. Upon any partial exercise, the Company will
issue and deliver to Holder a new Warrant with respect to the
Warrant Shares not previously purchased. No fractional shares
of Common Stock shall be issued upon exercise of a Warrant.
In lieu of any fractional share to which Holder would be entitled
upon exercise, the Company shall pay cash equal to the product of
such fraction multiplied by the then current fair market value of
one share of Common Stock, as determined in good faith by the
Company.
Section 2.
Payment of Taxes.
All shares of Common Stock
issued upon the exercise of a Warrant shall be duly authorized,
validly issued and outstanding, fully paid and
non-assessable. Holder shall pay all taxes and other
governmental charges that may be imposed in respect of the issue or
delivery thereof and any tax or other charge imposed in connection
with any transfer involved in the issue of any certificate for
shares of Common Stock in any name other than that of the
registered Holder of the Warrant surrendered in connection with the
purchase of such shares, and in such case the Company shall not be
required to issue or deliver any stock certificate until such tax
or other charge has been paid or it has been established to the
Company’s satisfaction that no tax or other charge is
due.
Section 3.
Transfer and Exchange.
Subject to the restrictions
set forth in Section 10(a)(iv) , this Warrant and all
rights hereunder are transferable, in whole or in part. This
Warrant is transferable only on the books of the Company maintained
for such purpose at its principal office by Holder in person or by
duly authorized attorney, upon surrender of this Warrant properly
endorsed and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer.
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Section 4.
Certain Adjustments.
(a)
In order to prevent dilution of the rights granted hereunder, the
Exercise Price shall be subject to adjustment from time to time in
accordance with this Section 4 . For purposes of
this Section 4 , the term “Number of Common
Shares Deemed Outstanding” at any given time shall
mean the number of shares of Common Stock outstanding at such time
on a fully diluted basis, including all options, warrants and
securities convertible into or exchangeable for shares of Common
Stock and, without duplication, the number of shares of the Common
Stock deemed to be outstanding under paragraphs 4(b)(1) to
(9), inclusive, at such time but excluding the issuance, from time
to time of shares of Common Stock issuable as equity-based
compensation to certain of the Company’s directors, executive
officers or employees under the Company’s equity incentive
plans that have been approved by the Company’s
stockholders.
(b)
Except as provided in Section 4(c), 4(d) or 4(e)
hereof, if and whenever after the date hereof the Company
shall issue or sell, or shall in accordance with paragraphs
4(b)(1) to (9), inclusive, be deemed to have issued or sold
any shares of its Common Stock for a consideration per share less
than the Current Market Price in effect immediately prior to the
time of such issue or sale, then forthwith upon such issue or sale
(the “Triggering Transaction” ), the
Exercise Price shall, subject to paragraphs (1) to (9) of
this Section 4(b) , be reduced to an adjusted Exercise
Price (calculated to the nearest hundredth of a cent) determined by
multiplying the Exercise Price immediately preceding the new share
issuance by a fraction:
(i)
the numerator of which shall be an amount equal to the sum of
(x) the Number of Common Shares Deemed Outstanding immediately
prior to such Triggering Transaction plus (y) the quotient of
the consideration, if any, received by the Company upon
consummation of the Triggering Transaction divided by the Current
Market Price immediately prior to the time of such issue or sale;
and
(ii)
the denominator of which shall be the Number of Common Shares
Deemed Outstanding immediately prior to such Triggering Transaction
plus (y) the number of shares of Common Stock issued (or
deemed to be issued in accordance with paragraphs 4(b)(1) to
(9)) in connection with the Triggering Transaction.
“Current Market
Price” on any
date specified herein, means the average daily Market Price during
the period of the most recent 20 consecutive business days, ending
on the business day immediately prior to such date, on which the
national securities exchanges were open for trading, except that if
no Common Stock is then listed or admitted to trading on any
national securities exchange or quoted in the over-the-counter
market, the Current Market Price shall be the Market Price on such
date. “Market Price” on any date
specified herein, means the amount per share of the Common Stock,
equal to (a) the last sale price of such Common Stock, regular
way, on such date or, if no such sale takes place on such date, the
average of the closing bid and asked prices thereof on such date,
in each case as officially reported on the principal national
securities exchange on which such Common Stock is then listed or
admitted to trading, or (b) if there shall have been no
trading on such date, the average of the closing bid and asked
prices of the Common Stock on such date as shown by the applicable
over-the-counter market, or (c) if
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such Common Stock is not then listed
or admitted to trading on any national exchange or quoted in the
over-the-counter market, the fair value thereof determined in good
faith by the Board of Directors of the Company as of a date which
is within 20 days of the date as of which the determination is to
be made.
For purposes of determining the
adjusted Exercise Price under this Section 4(b), the following
paragraphs (1) to (9), inclusive, shall be
applicable:
(1)
In case the Company at any time shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to
subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or other securities convertible into or
exchangeable for Common Stock other than options (and the
securities issued in exercise thereof) with respect to the
3,750,000 shares of Common Stock (as adjusted for stock splits,
reverse stock splits and stock dividends) issuable under the
Company’s 2005 Stock Option Plan so long as the option price
on the initial date of grant equals or exceeds the then Current
Market Price (such rights or options being herein called
“Options” and such convertible or
exchangeable stock or securities being herein called
“Convertible Securities” ), whether or
not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable and the price
per share for which the Common Stock is issuable upon exercise,
conversion or exchange (determined by dividing (x) the total
amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus the minimum
aggregate amount of additional consideration payable to the Company
upon the exercise of all such Options, plus, in the case of such
Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon
the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (y) the total maximum
number of shares of Common Stock issuable upon the exercise of such
Options or the conversion or exchange of such Convertible
Securities) shall be less than the Exercise Price in effect
immediately prior to the time of the granting of such Option, then
the total maximum amount of Common Stock issuable upon the exercise
of such Options or in the case of Options for Convertible
Securities, upon the conversion or exchange of such Convertible
Securities shall (as of the date of granting of such Options) be
deemed to be outstanding and to have been issued and sold by the
Company for such price per share. No adjustment of the
Exercise Price shall be made upon the actual issue of such shares
of Common Stock or such Convertible Securities upon the exercise of
such Options, except as otherwise provided in paragraph
(3) below.
(2)
In case the Company at any time shall in any manner issue (whether
directly or by assumption in a merger or otherwise) or sell any
Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per
share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (x) the total amount received
or receivable by the Company as consideration for the issue or sale
of such Convertible Securities, plus the
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minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (y) the total maximum
number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities) shall be less than the
Exercise Price in effect immediately prior to the time of such
issue or sale, then the total maximum number of shares of Common
Stock issuable upon conversion or exchange of all such Convertible
Securities shall (as of the date of the issue or sale of such
Convertible Securities) be deemed to be outstanding and to have
been issued and sold by the Company for such price per share.
No adjustment of the Exercise Price shall be made upon the actual
issue of such Common Stock upon exercise of the rights to exchange
or convert under such Convertible Securities, except as otherwise
provided in paragraph (3) below.
(3)
If the purchase price provided for in any Options referred to in
paragraph (1), the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities referred
to in paragraphs (1) or (2), or the rate at which any
Convertible Securities referred to in paragraphs (1) or
(2) are convertible into or exchangeable for Common Stock
shall change at any time (other than under or by reason of
provisions designed to protect against dilution of the type set
forth in Section 4(d) ), the Exercise Price in effect
at the time of such change shall forthwith be readjusted to the
Exercise Price which would have been in effect at such time had
such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or
conversion rate, as the case may be, at the time initially granted,
issued or sold.
(4)
On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Exercise Price
then in effect hereunder shall forthwith be increased to the
Exercise Price which would have been in effect at the time of such
expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued.
(5)
In case any Options shall be issued in connection with the issue or
sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options
shall be deemed to have been issued without
consideration.
(6)
In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or
sold for cash, the consideration received therefor shall be deemed
to be the amount received by the Company therefor. In case
any shares of Common Stock, Options or Convertible Securities shall
be issued or sold for a consideration other than cash, the amount
of
