---

|Exhibit 10.8 |                                | 
|------------ | ------------------------------ | 
|             | PRIVATE PLACEMENT SUBSCRIPTION | 



MAXIMUM 1,000,000 UNITS 
  USD 10,000,000

MINIMUM 500,000 UNITS 
  USD 5,000,000

INSTRUCTIONS TO SUBSCRIBER

|1. | COMPLETEthe information required on Page
        1 of the Subscription.                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | IF YOU ARE A NATURAL PERSONcomplete the
        Signature Page for Individual Subscribers on page 13 of the Subscription                                             
|  
|   | - OR -                                                                                                                                                               
|  
|   | IF YOU ARE NOT A NATURAL PERSONcomplete
        the Signature Page for Entities on page 13 of the Subscription.                                                      
|  
|3. | COMPLETEthe Registration and Delivery Instructions
        on page 14 of the Subscription.                                                                           
|  
|4. | WIREthe Subscription Funds to Snell Wylie
        & Tibbals, counsel to the Issuer, pursuant to the wire instructions
        provided on page 2 of the Subscription.
|  
|5. | FAXa copy of pages 1, 13 and 14 to Snell
        Wylie & Tibbals, counsel to the Issuer, attention Phillip A. Wylie,
        Esq. at 214-932-1747.                   
|  
|6. | COURIERthe originally executed copy of the
        Subscription to Snell Wylie & Tibbals, counsel to the Issuer as follows:                                          

Snell Wylie & Tibbals 
  8150 North Central Expressway 
  Suite 1800 
  Dallas, Texas 75206 
  Attention: Phillip A. Wylie, Esq.

---

If you have any questions please contact J. William Rhea,
  IV, Chief Executive Officer of the Issuer, at: (512) 231-8444









| | Page 2
| | ------

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THE SECURITIES OFFERED HEREIN HAVE NOT BEEN REGISTERED
  UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”)
  AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS THAT
  TERMS IS DEFINED IN THE 1933 ACT) UNLESS THE SECURITIES ARE REGISTERED UNDER
  THE 1933 ACT, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933
  ACT IS AVAILABLE. THIS SUBSCRIPTION IS EXECUTED IN RELIANCE UPON THE EXEMPTIONS
  PROVIDED BY RULE 903 OF REGULATION S UNDER THE 1933 ACT.

| |              | 
| | ------------ | 
| | SUBSCRIPTION | 

THIS SUBSCRIPTION(the “Subscription”)
  has been executed by the undersigned in connection with an offering (the “Offering”)
  of up to 1,000,000 units (the “Units”) by Terax Energy, Inc., a
  corporation organized under the laws of the State of Nevada (hereinafter referred
  to as the “Issuer”). Each Unit consists of 8 shares of the Issuer’s
  common stock, par value $0.001 (each a “Unit Share”) and 4 non-transferable
  share purchase warrants (each a “Unit Warrant”). Each Unit Warrant
  entitles the holder to acquire one additional share of the Issuer’s common
  stock, par value $0.001 (a “Warrant Share”) at a price of $1.75
  for a period of 18 months following the closing of the Offering, subject to
  acceleration as follows: in the event that the average closing price of the
  shares of the Issuer’s common stock on the OTC:BB or other, more senior
  exchange for the twenty previous trading days exceeds $2.25, and provided
  that an effective registration statement registering the resale of the Warrant
  Shares is then in effect, the Issuer may, by written notice, accelerate the
  expiry date of the Unit Warrants to thirty days after the date of such notice.
  The Offering is subject to the Issuer receiving subscriptions for a minimum
  of 500,000 Units. The Units being subscribed for pursuant to this Subscription
  have not been registered under the 1933 Act. The offer of the Units and, if
  this Subscription is accepted by the Issuer, the sale of Units, is being made
  in reliance upon Rule 903 of Regulation S promulgated under the 1933 Act. (All
  dollar amounts in this Subscription are expressed in U.S. Dollars).

The undersigned Subscriber:

| | NAME:    | 
| | -------- | 
| |          | 
| | ADDRESS: | 

if applicable, a [Corporate][Partnership][Trust] organized
  under the laws of___________________________ , (hereinafter referred to as the
  “Subscriber”) hereby represents, warrants and covenants to, and
  agrees with the Issuer as follows:

ARTICLE 1 
  SUBSCRIPTION

Subscription

1.1           The
  undersigned Subscriber, as principal, hereby subscribes to purchase __________________
  Units, having a purchase price of $10.00 per Unit, at an aggregate purchase
  price of $________________________ (the “Subscription Price”).



| | Page 3
| | ------

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Minimum Subscription

1.2           A minimum
  number of 5,000 Units must be purchased by the Subscriber.

Method of Payment

1.3           The
  Subscriber shall pay the Subscription Price by delivering good funds in United
  States Dollars by way of wire transfer of funds to Snell Wylie & Tibbals,
  counsel to the Issuer and concurrent with the execution and delivery of this
  Subscription. The wire transfer instructions are:

Wires from Correspondent Banks Worldwide:

| | Beneficiary Bank:      | Amegy Bank                     
| | ---------------------- | -------------------------------
| |                        | 6823 W. Northwest Highway      
| |                        | Dallas, TX 75225               
| |                        | Tel: 214-754-9400              
| | Beneficiary:           | Snell Wylie & Tibbals, In Trust
| | Trust Account Number:  | 8000137554                     
| | For Further Credit to: | 1179.0001                      
| | ABA Routing#:          | 113011258                      
| | SWIFT Code:            | SWBKUS44                       

On
  or before August 31, 2005 the Issuer shall take up the Subscription Funds (the
  “Closing”) and issue to the Subscriber a certificate or certificates
  representing the Unit Shares and the Unit Warrants (the “Certificates”)
  pursuant to Article 7 hereof. In the event that the date of Closing (the “Closing
  Date”) does not occur on or before August 31, 2005, the Issuer shall forthwith
  return the whole amount of the Subscription Funds to the Subscriber without
  interest. The Subscriber acknowledges that the subscription for Units hereunder
  may be rejected in whole or in part by the Issuer in its sole discretion.

ARTICLE 2REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER

Representations and Warranties

2.1           The
  Subscriber represents and warrants in all material respects to the Issuer, with
  the intent that the Issuer will rely thereon in accepting this Subscription,
  that:

| | (a) | Experience. The Subscriber is sufficiently
        experienced in financial and business matters to be capable of evaluating
        the merits and risks of its investments, and to make an informed decision
        relating thereto, and to protect its own interests in connection with
        the purchase of the Units;                                                                                                                                                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Own Account. The Subscriber is purchasing
        the Unit Shares and the Unit Warrants, and will be purchasing any Warrant
        Shares issued upon exercise of the Unit Warrants (collectively the “Securities”)
        as principal for its own account. The Subscriber is or will be purchasing
        the Securities for investment purposes only and not with an intent or
        view towards further sale thereof, and has not pre-arranged any sale with
        any other subscriber;

| | Page 4
| | ------

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| | (c) | Not Underwriter. The Subscriber is not an
        underwriter, or dealer in, the Securities, and the Subscriber is not participating,
        pursuant to a contractual agreement, in a distribution of the Securities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) | Importance of Representations. The Subscriber
        understands that the Units are being offered and sold to it in reliance
        on an exemption from the registration requirements of the 1933 Act, and
        that the Issuer is relying upon the truth and accuracy of the representations,
        warranties, agreements, acknowledgments and understandings of the Subscriber
        set forth herein in order to determine the applicability of such exemptions
        and the suitability of the Subscriber to acquire the Units;                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (e) | No Registration. The Units have not been
        registered under the 1933 Act and may not be transferred, sold, assigned,
        hypothecated or otherwise disposed of unless such transaction is the subject
        of a registration statement filed with and declared effective by the Securities
        and Exchange Commission (the “SEC”) or unless an exemption
        from the registration requirements under the 1933 Act, such as Rule 144,
        is available. The Subscriber represents and warrants and hereby agrees
        that all offers and sales of the Securities shall be made only pursuant
        to such registration or to such exemption from registration;                                                                                                                                                                                                                                                                                                          
|
| | (f) | Compliance with Securities Laws. The offer
        and sale of the Units under this Subscription does not contravene any
        of the applicable securities legislation in the jurisdiction in which
        the Subscriber (or any beneficial person for whom it is acting) resides
        and does not give rise to any obligation of the Issuer to prepare and
        file a prospectus or similar document or to register the Securities or
        to be registered with or to file any report or notice with any governmental
        or regulatory authority;                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (g) | Risk. The Subscriber acknowledges that the
        purchase of the Securities involves a high degree of risk, is aware of
        the risks and further acknowledges that it can bear the economic risk
        of the Securities, including the total loss of its investment;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (h) | Receipt and Review of Offering Memorandum.
        The Subscriber acknowledges receipt of the Offering Memorandum of the
        Issuer dated June 13, 2005 (the “Offering Memorandum”);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (i) | Current Information. The Subscriber has been
        furnished with or has acquired copies of all requested information concerning
        the Issuer, including copies of reports filed by the Issuer pursuant to
        the United States Securities Exchange Act of 1934, as amended (the “1934
        Act”);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (j) | Independent Investigation. The Subscriber,
        in making the decision to subscribe for the Units, has relied upon independent
        investigations made by it and its representatives or advisors, if any,
        has, together with its representatives or advisors, if any, reviewed the
        Offering Memorandum, and the Subscriber and such representatives or advisors,
        if any, have, prior to making this Subscription, been given access and
        the opportunity to examine all material contracts and documents relating
        to the Offering and an opportunity to ask questions of, and to receive
        answers from, the Issuer or any person acting on its behalf concerning
        the terms and conditions of the Offering. The Subscriber and its representatives
        or advisors, if any, have been furnished with access to all materials
        relating to the business, finances and operation of the Issuer and materials
        relating to the

| | Page 5
| | ------

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| |     | offer and sale of the Units
        which have been requested. The Subscriber, its representatives and advisors,
        if any, have received complete and satisfactory answers to any such inquiries;                                                                                                                                                                                                                                                                                                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (k) | No Written or Oral Representations.
        No person has made to the Subscriber any written or oral representations                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (l) | No Recommendation or
        Endorsement. The Subscriber understands that no federal or state agency
        has passed on or made any recommendation or endorsement of the Securities;                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (m) | Partnership, Corporation
        or Trust.If the Subscriber is a partnership, corporation or trust,
        the person executing this Subscription on its behalf represents and warrants
        that                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (n) | No Finders’ Fees.
        There is no person acting or purporting to act in connection with the
        transactions contemplated herein who is entitled to any brokerage or finder’s
        fee. If any person establishes a claim that any fee or other compensation
        is payable in connection with this Subscription for Units, the Subscriber
        covenants to indemnify and hold harmless the Issuer with respect thereto
        and with respect to all costs reasonably incurred in the defence thereof;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (o) | Filings. If required
        by any applicable securities laws or by the Issuer, the Subscriber will
        execute, deliver and file or assist the Issuer in filing such reports,
        undertakings and other documents with respect to the issue of the Securities
        as may be required by any securities commission, stock exchange or other
        regulatory authority;                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (p) | Non-Affiliate Status.
        The Subscriber is not an affiliate of the Issuer nor is any affiliate
        of the Subscriber an affiliate of the Issuer. In the event that the Subscriber
        is or becomes an affiliate of the Issuer the Subscriber acknowledges that
        the Securities held by it will be subject to additional resale restrictions
        under the 1933 Act;                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (q) | Other Subscribers.
        The Subscriber acknowledges that Units may be issued to other purchasers
        under the Offering concurrently with the Closing or thereafter (the last
        sale of Units being referred to as the “Final Closing Date”);                                                                                                                                                                                                                                                                  

| | Page 6
| | ------

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| | (r) | No Advertisement or General Solicitation.
        The sale of the Units has not been advertised through any article, notice
        or other communication published in any newspaper, magazine, or similar
        media or broadcast over television or radio; or through any seminar or
        meeting whose attendees have been invited by any general solicitation
        or general advertising;                                                                                                                                                                                                                                                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (s) | Offshore Transaction. The Subscriber represents
        that it is not a U.S. Person as defined in Rule 902(k) of Regulation S
        (a “U.S. Person”), that at the time of the acquisition of
        the Units it will not be a U.S. Person, that the Subscriber is not, and
        at the time of the acquisition of the Units will not be, acquiring the
        Units for the account or benefit of a U.S. Person, and that the Subscriber
        is normally resident at the address provided by the Subscriber on the
        first page hereof;                                                                                                                                                                                                 
|
| | (t) | Hedging Transactions. The Subscriber acknowledges
        and agrees that all offers and sales of the Securities, as applicable,
        by the Subscriber shall be made only in accordance with the provisions
        of Regulation S, pursuant to registration of the securities under the
        1933 Act, or pursuant to an available exemption from the registration
        requirements of the 1933 Act. The Subscriber acknowledges and agrees that
        it cannot engage in hedging transactions with regard to the Securities
        prior to the expiration of the one-year distribution compliance period
        specified in paragraph (b)(3) in Rule 903 promulgated under the 1933 Act
        unless in compliance with the 1933 Act;
|
| | (u) | Sole Beneficial Owner. Upon consummation
        of the transactions contemplated by this Subscription, the Subscriber
        will be the sole beneficial owner of the Units issued to it pursuant to
        this Subscription, and the Subscriber has not pre-arranged any sale with
        any person or persons in the United States;                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (v) | Outside United States. The Subscriber is
        outside the United States; provided, that delivery of the Units may be
        effected in the United States through the Subscriber’s agent as
        long as the Subscriber is outside the United States at the time of such
        delivery;                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (w) | No Present Intention to Sell. The Subscriber
        has no present intention to sell or otherwise transfer the Securities
        except in accordance with Regulation S, pursuant to registration under
        the 1933 Act, or pursuant to an available exemption from registration
        under the 1933 Act, in each case in accordance with all applicable securities
        laws;                                                                                                                                                                                                                                                                                                                                                                 
|
| | (x) | Refusal to Register. The Subscriber understands
        that the Issuer is required, under Rule 903 of Regulation S, to refuse
        to register the transfer of any of the Securities to be received by the
        Subscriber pursuant to this Subscription that are not transferred pursuant
        to a registration statement under the 1933 Act, in compliance with Regulation
        S, or otherwise pursuant to an available exemption from registration;                                                                                                                                                                                                                                                                                       
|
| | (y) | No Short Position. The Subscriber will not,
        directly or indirectly, or through one or more intermediaries, maintain
        any short position in the Securities during the applicable distribution
        compliance period;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (z) | Legend. The Subscriber understands and acknowledges
        that the Issuer will not allow any transfer or other disposition of the
        Securities unless the proposed transfer may be effected without any violation
        of the 1933 Act or any applicable state securities law. The                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| | Page 7
| | ------

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Certificate(s) representing the Unit
  Shares, Unit Warrants and any Warrant Shares issued upon due exercise of the
  Unit Warrants shall bear the following legend in addition to any other legend
  required under this Subscription:

> THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
>           NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
>           (THE “U.S. SECURITIES ACT”) OR OTHER APPLICABLE SECURITIES
>           LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH
>           A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED
>           OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS
>           OF REGULATIONS S, RULE 901 THROUGH RULE 905, AND PRELIMINARY NOTES UNDER
>           THE U.S. SECURITIES ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM
>           THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT OR (3) PURSUANT
>           TO AN EFFECTIVE REGISTRATION STATEMENT. HEDGING TRANSACTIONS INVOLVING
>           THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
>           U.S. SECURITIES ACT.

| | (aa) | Further Certification. As a condition to
        the exercise of any Unit Warrants, the Subscriber will give written certification
        to the Issuer confirming the representations, warranties and covenants
        made herein; and                                                                                                            
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (bb) | Legal and Tax Advice. The Subscriber, and
        each beneficial person for whom it is contracting hereunder, is responsible
        for obtaining such legal and tax advice as it considers appropriate in
        connection with the execution, delivery and performance of this Subscription
        and the transactions contemplated hereunder.

Non-Merger and Survival

2.2           The
  representations and warranties of the Subscriber contained herein will be true
  at the date of execution of this Subscription by the Subscriber and as of the
  Closing Date in all material respects as though such representations and warranties
  were made as of such times and shall survive the Closing Date and the delivery
  of the Certificates.

Indemnity

2.3          The
  Subscriber agrees to indemnify and hold harmless the Issuer from and against
  any and all claims, demands, actions, suits, proceedings, assessments, judgments,
  damages, costs, losses and expenses, including attorney’s fees incurred
  in contesting any such claim and any payment made in good faith in settlement
  of any claim (subject to the right of the Subscriber to defend any such claim),
  resulting from the breach of any representation or warranty of such party under
  this Subscription.

ARTICLE 3REPRESENTATIONS AND WARRANTIES OF THE ISSUER

3.1           The
  Issuer, upon taking up and accepting this Subscription, represents and warrants
  in all material

| | Page 8
| | ------

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respects to the Subscriber, with the intent that the Subscriber will rely thereon in making this Subscription, that:

| | (a) | Legality. The Issuer has the requisite corporate
        power and authority to accept this Subscription and to issue, sell and
        deliver the Units; this Subscription and the issuance, sale and delivery
        of the Units hereunder and the transactions contemplated hereby have been
        duly and validly authorized by all necessary corporate action by the Issuer;
        this Subscription and the Units have been duly and validly executed and
        delivered by and on behalf of the Issuer, and are valid and binding agreements
        of the Issuer, enforceable in accordance with their respective terms,
        except as enforceability may be limited by general equitable principles,
        bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
        or other laws affecting creditors’ rights generally;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Transfer Restrictions. Provided that a registration
        statement in respect of the Unit Shares and the Unit Warrants is in effect
        as required under all applicable securities laws, such Common Shares shall
        be freely transferable on the books and records of the Issuer, provided
        that the sale is made to a bona-fide purchaser and that the prospectus
        delivery requirements are met;                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (c) | Listed Company Status. The Issuer is required
        to make current filings with the SEC pursuant to Section 15(d) of the
        1934 Act, the Common Stock is presently quoted on the NASD “Bulletin
        Board” and the Issuer has received no notice, either oral or written,
        with respect to its continued eligibility for such listing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (d) | Proper Organization. The Issuer is a corporation
        duly organized, validly existing and in good standing under the laws of
        its jurisdiction of incorporation and is duly qualified as a foreign corporation
        in all jurisdictions where the failure to be so qualified would have a
        materially adverse effect on its business, taken as whole;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | (e) | No Legal Proceedings. There is no action,
        suit or proceeding before or by any court or any governmental agency or
        body, domestic or foreign, now pending or to the knowledge of the Issuer,
        threatened, against or affecting the Issuer, or any of its properties
        or assets, which might result in any material adverse change in the condition
        (financial or otherwise) or in the earnings, business affairs or business
        prospects of the Issuer, or which might materially and adversely affect
        the properties or assets thereof;                                                                                                                                                                                                                                                                                  
|
| | (f) | Non-Default. The Issuer is not in default
        in the performance or observance of any material obligation, agreement,
        covenant or condition contained in any indenture, mortgage, deed of trust
        or other material instrument or agreement to which it is a party or by
        which it or its property may be bound; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (g) | Non-Contravention. The execution and delivery
        of this Subscription and the consummation of the issuance of the Units
        and the transactions contemplated by this Agreement do not and will not
        conflict with or result in a breach by the Issuer of any of the terms
        or provisions of, or constitute a default under, the Articles of Incorporation
        or Bylaws of the Issuer, or any indenture, mortgage, deed of trust, or
        other material agreement or instrument to which the Issuer is a party
        or by which it or any of its properties or assets are bound, or any existing
        applicable decree, judgment or order of                                                                                                                                                                                          

| | Page 9
| | ------

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any court, federal or state regulatory
  body, administrative agency or other domestic governmental body having jurisdiction
  over the Issuer or any of its properties or assets.

Non-Merger and Survival

3.2           The
  representations and warranties of the Issuer contained herein will be true at
  the date of execution of this Subscription by the Issuer and as of the Closing
  Date in all material respects as though such representations and warranties
  were made as of such times and shall survive the Closing Date and the delivery
  of the Certificates.

Indemnity

3.3           The
  Issuer agrees to indemnify and save harmless the Subscriber from and against
  any and all claims, demands, actions, suits, proceedings, assessments, judgments,
  damages, costs, losses and expenses, including attorney’s fees incurred
  in contesting any such claim and any payment made in good faith in settlement
  of any claim (subject to the right of the Issuer to defend any such claim),
  resulting from the breach of any representation, warranty or covenant of such
  party under this Subscription.

ARTICLE 4COVENANTS OF THE ISSUER

Covenants of the Issuer

4.1           The
  Issuer covenants and agrees with the Subscriber that:

| | (a) | Reserved Common Stock. For so long as any
        Unit Warrants held by the Subscriber shall remain outstanding, the Issuer
        covenants and agrees with the Subscriber that it will at all times fully
        reserve from its authorized but unissued Common Stock such sufficient
        numbers of shares of Common Stock to permit the conversion in full of
        the Unit Warrants;                                                                                                                                                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Filings. The Issuer will make all necessary
        filings in connection with the sale of the Units as required by the laws
        and regulations of all appropriate jurisdictions;                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (c) | Section 13 Compliance. The Issuer shall,
        from and after the Closing Date, use its best efforts to comply with the
        requirements of Section 13 of the 1934 Act and maintain the quotation
        of the Common Stock on the NASD “Bulletin Board” or other
        quotation medium which is equal to or senior to the NASD “Bulletin
        Board”; and                                                                                                                                                                                                 
|
| | (d) | Rule 144 Opinion. The Issuer will, upon written
        request by the Subscriber, take such steps as are necessary to cause its
        counsel to issue an opinion to the Issuer’s transfer agent allowing
        the Subscriber to offer and sell any Common Shares issued upon conversion
        of the Units in reliance on the applicable provisions of Rule 144 provided
        that the holding period and other requirements of such Rule 144 are met,
        provided that the costs of obtaining such an opinion shall be borne by
        the Subscriber.

| | Page 10
| | -------

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Survival

4.2           The
  covenants set forth in this Article 4 shall survive the Closing for the benefit
  of the Subscriber.

ARTICLE 5
  REGISTRATION RIGHTS

Registration Statement

5.1          
  The Issuer shall use its best efforts to file a registration statement on Form
  SB-2 (or similar form) under the 1933 Act and under any applicable Blue Sky
  laws registering the resale of Unit Shares and the Warrant Shares on or before
  the date which is 180 days from the Final Closing Date and shall use its best
  efforts to cause such registration statement to be declared effective by the
  SEC as soon as practicable therafter, all at the Issuer’s sole cost and
  expense. Such best efforts shall include promptly responding to all comments
  received by the staff of the SEC, and promptly preparing and filing amendments
  to such registration statement which are responsive to the comments received
  from the staff of the SEC, and in no event later than sixty (60) days from receipt
  by the Issuer of the comments of the staff of the SEC. Such registration statement
  shall name the Subscriber as a selling shareholder and shall provide for the
  sale of the Unit Shares and the Warrant Shares by the Subscriber from time to
  time directly to purchasers or in the over-the-counter market or through or
  to securities brokers or dealers that may receive compensation in the form of
  discounts, concessions, or commissions. The Issuer shall provide the Subscriber
  with such number of copies of the prospectus as shall be reasonably requested
  to facilitate the sale of the Unit Shares and the Warrant Shares. None of the
  foregoing shall in any way limit the Subscriber’s rights to sell the Unit
  Shares and the Warrant Shares (if any) in reliance on an exemption from the
  registration requirements under the 1933 Act in connection with a particular
  transaction.

Currency of Registration Statement

5.2           The
  Issuer shall use its best efforts to maintain the currency of the registration
  statement filed with the SEC and under all applicable Blue Sky laws in respect
  of the Securities until (i) in the event that none of the Unit Warrants are
  exercised, the expiry date of the Unit Warrant, or (ii) in the event that any
  of the Unit Warrants are exercised prior to the expiry thereof, 12 months from
  the last date on which any Warrant Shares are issued on the due exercise of
  the Unit Warrants.

Indemnification of Subscriber by Issuer

5.3           To
  the extent permitted by law, the Issuer will indemnify the Subscriber, within
  the meaning of Section 15 of the 1933 Act, with respect to which registration,
  qualification or compliance has been effected pursuant to this Subscription
  Agreement, and each underwriter, if any, and each person who controls any underwriter
  within the meaning of Section 15 of the 1933 Act, against all expenses, claims,
  losses, damages or liabilities (or actions in respect thereof), including any
  of the foregoing incurred in settlement of any litigation, commenced or treated,
  to the extent such expenses, claims, losses, damages or liabilities arise out
  of or are based on any untrue statement (or alleged untrue statement) of a material
  fact contained in any registration statement, prospectus, offering circular
  or other document, or any amendment or supplement thereto, incident to any such
  registration, qualification or compliance, or based on any omission (or alleged
  omission) to state therein a material fact required to be stated therein or
  necessary to make the statements therein, in light of the circumstances in which
  they were made, not misleading, or any violation by the Issuer of the 1933 Act
  or any rule or regulation promulgated under the

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1933 Act applicable to the Issuer in connection with any such
  registration, qualification or compliance, and the Issuer will reimburse the
  Subscriber, each of its officers and directors and partners, and each person
  controlling the Subscriber, each such underwriter and each person who controls
  any such underwriter, for any legal and any other expense reasonably incurred
  in connection with investigation, preparing or defending any such claim, loss,
  damage, liability or action, provided, however, that the indemnity contained
  herein shall not apply to amounts paid in settlement of any claim, loss, damage,
  liability or expense if settlement is effected without the consent of the Issuer
  (which consent shall not unreasonably be withheld); provided, further, that
  the Issuer will not be liable in any such case to the extent that any such claim,
  loss, damage, liability or expense arises out of or is based on any untrue statement
  or omission or alleged untrue statement or omission, made in reliance upon and
  in conformity with written information furnished to the Issuer by the Subscriber,
  such controlling person or such underwriter specifically for use therein. Notwithstanding
  the foregoing, insofar as the foregoing indemnity relates to any such untrue
  statement (or alleged untrue statement) or omission (or alleged omission) made
  in the preliminary prospectus but eliminated or remedied in the amended prospectus
  on file with the SEC at the time the registration statement becomes effective
  or in the final prospectus filed with the SEC pursuant to Rule 424(b) of the
  SEC, the indemnity agreement herein shall not inure to the benefit of any underwriter
  or (if there is no underwriter) the Subscriber if a copy of the final prospectus
  filed pursuant to Rule 424(b) was not furnished to the person or entity asserting
  the loss, liability, claim or damage at or prior to the time such furnishing
  is required by the 1933 Act.

Indemnification of Issuer by Subscriber

5.4           To
  the extent permitted by law, the Subscriber will indemnify the Issuer, each
  of its directors and officers, affiliates, counsel, advisors, employees and,
  each underwriter, if any, of the Issuer's securities covered by such a registration
  statement, each person who controls the Issuer or such underwriter within the
  meaning of Section 15 of the 1933 Act, and each other person selling the Issuer's
  securities covered by such registration statement, each of such person's officers
  and directors and each person controlling such persons within the meaning of
  Section 15 of the 1933 Act, against all claims, losses, damages and liabilities
  (or actions in respect thereof), including attorneys fees and costs, arising
  out of or based on any untrue statement (or alleged untrue statement) of a material
  fact contained in any such registration statement, prospectus, offering circular
  or other document, or any omission (or alleged omission) to state therein or
  necessary to make the statements therein not misleading or any other violation
  by the Subscriber of any rule or regulation promulgated under the 1933 Act applicable
  to the Subscriber and relating to action or inaction required of the Subscriber
  in connection with any such registration, qualification or compliance, and will
  reimburse the Issuer, such other person, such directors, officers, persons,
  underwriters or control persons for any legal or other expenses reasonably incurred
  in connection with investigating or defending any such claim, loss, damage,
  liability or action; provided, however, that the indemnity contained herein
  shall not apply to amounts paid in settlement of any claim, loss, damage, liability
  or expense if settlement is effected without the consent of the Subscriber (which
  consent shall not be unreasonably withheld). Notwithstanding the foregoing,
  the liability of the Subscriber under this subsection (b) shall be limited in
  an amount equal to the net proceeds from the sale of the shares sold by the
  Subscriber, unless such liability arises out of or is based on willful conduct
  by the Subscriber.

Removal of Legend

5.5           After
  the registration statement referenced in Section 5.1 is declared effective by
  the SEC, the Subscriber may deliver to the Issuer the certificate representing
  the Unit Shares and the Warrant Shares (if any) issued to the Subscriber and
  the Issuer will, within three days after receipt by the Issuer of the

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foregoing, issue a new certificate representing and in exchange
  for the aforementioned certificate, which new certificate shall be legended
  as follows:

> THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
>           BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
>           MAY BE SOLD PURSUANT TO THE REGISTRATION STATEMENT PROVIDED THAT (I)
>           THE REGISTRATION STATEMENT IS CURRENT AND EFFECTIVE, (II) THE HOLDER
>           COMPLIES WITH THE PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES
>           ACT OF 1933, AS AMENDED, AND (III) THE SALE IS IN COMPLIANCE WITH THE
>           PLAN OF DISTRIBUTION SET FORTH IN THE PROSPECTUS. THE TRANSFER OF SUCH
>           SECURITIES IS RESTRICTED AS SET FORTH IN A SUBSCRIPTION AGREEMENT BETWEEN
>           THE ISSUER AND THE HOLDER, A COPY OF WHICH MAY BE OBTAINED FROM THE
>           ISSUER.

ARTICLE 6ISSUANCE OF CERTIFICATES

On
  or immediately following the Closing Date, the Issuer will prepare and issue
  one or more Certificates for the Unit Shares and the Unit Warrants registered
  in such name or names as specified by the Subscriber and cause the same to be
  delivered to the Subscriber pursuant to the delivery instructions provided by
  the Subscriber.

ARTICLE 7 
  CLOSING

Closing
  shall be effected through the acceptance of this Subscription by the Issuer,
  the taking up of the Subscription Funds by the Issuer, and the delivery of Certificates
  representing the Unit Shares and the Unit Warrants to the Subscriber (or the
  Subscriber’s Representative) by the Issuer.

ARTICLE 8 
  GENERAL PROVISIONS

Governing Law

8.1          
  This Subscription shall be governed by and construed under the law of the State
  of Texas without regard to its choice of law provision. Any disputes arising
  out of, in connection with, or with respect to this Subscription, the subject
  matter hereof, the performance or non-performance of any obligation hereunder,
  or any of the transactions contemplated hereby shall be adjudicated in a Court
  of competent civil jurisdiction sitting in the City of Austin, Texas and nowhere
  else.

Successors and Assigns

8.2          This
  Subscription shall inure to the benefit of and be binding on the respective
  successors and assigns of the parties hereto.

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Execution by Counterparts and Facsimile

8.3          
  This Subscription may be executed in counterparts and by facsimile, each of
  which when executed by any party will be deemed to be an original and all of
  which counterparts will together constitute one and the same Subscription.

Authorization

8.4           The
  Subscriber hereby authorizes the Issuer to correct any minor errors in, or complete
  any minor information missing from any part of this Subscription and any other
  schedules, forms, certificates or documents executed by the Subscriber and delivered
  to the Issuer in connection with the Offering.

Reference Date

8.5          The
  reference date of this Subscription is June 13, 2005.

[Remainder of page intentionally left blank]

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SIGNATURE PAGE FOR INDIVIDUAL SUBSCRIBERS

IN
  WITNESS WHEREOF, the undersigned represents that the foregoing statements
  are true and that he or she has executed this Subscription on this day of ,
  2005.

|             |  |          
|------------ |  | ---------
|             |  |          
|Printed Name |  | Signature
|             |  |          
|             |  |          
|             |  |          
|Printed Name |  | Signature

Agreed to this__________________ day of ____________________________, 2005:

TERAX ENERGY, INC.

Per: __________________________________________

Print Name: ____________________________________







This is page 13 to the Subscription by the above subscriber to Terax Energy,
  Inc. dated as stated above.

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IN
  WITNESS WHEREOF, the undersigned represents that the foregoing statements
  are true and that it caused this Subscription to be duly executed on its behalf
  on this day of , 2005.



|                  |  |          
|----------------- |  | ---------
|                  |  |          
|Name of Entity    |  | Signature
|                  |  |          
|                  |  |          
|                  |  |          
|Name of Signatory |  |          
|                  |  |          
|                  |  |          
|                  |  |          
|Printed Title     |  |          

Agreed to this__________________ day of ____________________________, 2005:

TERAX ENERGY, INC.

Per: __________________________________________

Print Name: ____________________________________





This is page 13 to the Subscription by the above subscriber to Terax Energy,
  Inc. dated as stated above.

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REGISTRATION AND DELIVERY INSTRUCTIONS

Full Name and Address of Subscriber for Registration Purposes:

NAME:           ________________________________________________________

ADDRESS:     ________________________________________________________

TEL.NO.:         _________________________

FAX NO.:        _________________________

EMAIL ADDRESS:         _________________________

CONTACT NAME:         _________________________

Delivery Instructions (if different from Registration Name):

NAME:           ________________________________________________________

ADDRESS:     ________________________________________________________

TEL.NO.:         _________________________

FAX NO.:        _________________________

CONTACT NAME:         _________________________

SPECIAL INSTRUCTIONS:           ________________________________________________________

________________________________________________________

________________________________________________________

This is page 14 to the Subscription by the above subscriber to Terax Energy,
  Inc.

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