---

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE
  NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE 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.

COMMON STOCK PURCHASE WARRANT

|Warrant No. A-[  **]** | [ ] shares
|---------------------- | ----------

Original Issue Date: August 8, 2005

THIS CERTIFIES THAT, FOR VALUE RECEIVED, [ ]
  or its registered assigns ("Holder") is entitled to purchase, on the terms and
  conditions hereinafter set forth, up to [ ] ([ ]) shares of the Common
  Stock, $.001 par value (the "Common Stock"), of Terax Energy, Inc., a Nevada
  corporation (the "Issuer"), at a price of ONE DOLLAR AND SEVENTY-FIVE CENTS
  ($1.75)per share (the "Exercise Price"), such number of shares and
  Exercise Price being subject to adjustment upon the occurrence of the contingencies
  set forth in this Warrant. Each share of Common Stock as to which this Warrant
  is exercisable is a "Warrant Share" and all such shares are collectively referred
  to as the "Warrant Shares."

THIS WARRANT MAY BE EXERCISED at any time or from time
  to time from the date hereof until 5:00 p.m., Central Time, on the date which
  is eighteen (18) month following the Original Issue Date set forth above, or
  if such date is not a day on which the Issuer (as hereinafter defined) is open
  for business, then the next succeeding day on which the Issuer is open for business,
  subject to acceleration as provide for in Section 3 hereof (such date being
  the "Expiration Date"), but not thereafter. THIS WARRANT IS VOID AND WILL
  HAVE NO FURTHER FORCE OR EFFECT AFTER THE EXPIRATION DATE.

---

- 2 -

Section 1. Exercise of Warrant; Conversion of Warrant.

| | (a) | This Warrant may, at the option of Holder, be exercised
        in whole or in part from time to time by delivery to the Issuer at its
        principal office, Attention: President, on or before 5:00 p.m., Central
        Time, on the Expiration Date, (i) a written notice of such Holder's election
        to exercise this Warrant (the "Exercise Notice"), which notice may be
        in the form of the Notice of Exercise attached hereto, properly executed
        and completed by Holder or an authorized officer thereof, (ii) a certified
        check or money order payable to the order of the Issuer, in an amount
        equal to the product of the Exercise Price multiplied by the number of
        Warrant Shares specified in the Exercise Notice, and (iii) this Warrant
        (the items specified in (i), (ii), and (iii) are collectively the "Exercise
        Materials").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | As promptly as practicable, and in any event within
        five (5) business days after its receipt of the Exercise Materials, Issuer
        shall execute or cause to be executed and delivered to Holder a certificate
        or certificates representing the number of Warrant Shares specified in
        the Exercise Notice, together with cash in lieu of any fraction of a share,
        and if this Warrant is partially exercised, a new warrant on the same
        terms for the unexercised balance of the Warrant Shares. The stock certificate
        or certificates shall be registered in the name of Holder or such other
        name or names as shall be designated in the Exercise Notice. The date
        on which the Warrant shall be deemed to have been exercised (the "Effective
        Date"), and the date the person in whose name any certificate evidencing
        the Common Stock issued upon the exercise hereof is issued shall be deemed
        to have become the holder of record of such shares, shall be the date
        the Issuer receives the Exercise Materials, irrespective of the date of
        delivery of a certificate or certificates evidencing the Common Stock
        issued upon the exercise or conversion hereof, provided, however, that
        if the Exercise Materials are received by the Issuer on a date on which
        the stock transfer books of the Issuer are closed, the Effective Date
        shall be the next succeeding date on which the stock transfer books are
        open. All shares of Common Stock issued upon the exercise or conversion
        of this Warrant will, upon issuance, be fully paid and nonassessable and
        free from all taxes, liens, and charges with respect thereto.

Section 2. Adjustments to Warrant Shares.

The
  number of Warrant Shares issuable upon the exercise hereof shall be subject
  to adjustment as follows:

| | (a) | In the event the Issuer is a party to a consolidation,
        share exchange, or merger, or the sale of all or substantially all of
        the assets of the Issuer to, any person, or in the case of any consolidation
        or merger of another corporation into the Issuer in which the Issuer is
        the surviving corporation, and in which there is a reclassification or
        change of the shares of Common Stock of the Issuer, this Warrant shall
        after such consolidation, share exchange, merger, or sale be exercisable
        for the kind and number of securities or amount and kind of
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---

- 3 -

| |     | property of the Issuer or the corporation or other
        entity resulting from such share exchange, merger, or consolidation, or
        to which such sale shall be made, as the case may be (the "Successor Issuer"),
        to which a holder of the number of shares of Common Stock deliverable
        upon the exercise (immediately prior to the time of such consolidation,
        share exchange, merger, or sale) of this Warrant would have been entitled
        upon such consolidation, share exchange, merger, or sale; and in any such
        case appropriate adjustments shall be made in the application of the provisions
        set forth herein with respect to the rights and interests of Holder, such
        that the provisions set forth herein shall thereafter correspondingly
        be made applicable, as nearly as may reasonably be, in relation to the
        number and kind of securities or the type and amount of property thereafter
        deliverable upon the exercise of this Warrant. The above provisions shall
        similarly apply to successive consolidations, share exchanges, mergers,
        and sales. Any adjustment required by this Section 2 (a) because of a
        consolidation, share exchange, merger, or sale shall be set forth in an
        undertaking delivered to Holder and executed by the Successor Issuer which
        provides that Holder shall have the right to exercise this Warrant for
        the kind and number of securities or amount and kind of property of the
        Successor Issuer or to which the holder of a number of shares of Common
        Stock deliverable upon exercise (immediately prior to the time of such
        consolidation, share exchange, merger, or sale) of this Warrant would
        have been entitled upon such consolidation, share exchange, merger, or
        sale. Such undertaking shall also provide for future adjustments to the
        number of Warrant Shares and the Exercise Price in accordance with the
        provisions set forth in Section 2 hereof.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | In the event the Issuer should at any time, or from
        time to time after the Original Issue Date, fix a record date for the
        effectuation of a stock split or subdivision of the outstanding shares
        of Common Stock or the determination of holders of Common Stock entitled
        to receive a dividend or other distribution payable in additional shares
        of Common Stock, or securities or rights convertible into, or entitling
        the holder thereof to receive directly or indirectly, additional shares
        of Common Stock (hereinafter referred to as "Common Stock Equivalents")
        without payment of any consideration by such holder for the additional
        shares of Common Stock or the Common Stock Equivalents (including the
        additional shares of Common Stock issuable upon exercise or exercise thereof),
        then, as of such record date (or the date of such dividend, distribution,
        split, or subdivision if no record date is fixed), the number of Warrant
        Shares issuable upon the exercise hereof shall be proportionately increased
        and the Exercise Price shall be appropriately decreased by the same proportion
        as the increase in the number of outstanding Common Stock Equivalents
        of the Issuer resulting from the dividend, distribution, split, or subdivision.
        Notwithstanding the preceding sentence, no adjustment shall be made to
        decrease the Exercise Price below $.001 per Share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (c) | In the event the Issuer should at any time or from
        time to time after the Original Issue Date, fix a record date for the
        effectuation of a reverse stock split, or a                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---

- 4 -

| |     | transaction having a similar effect on the number
        of outstanding shares of Common Stock of the Issuer, then, as of such
        record date (or the date of such reverse stock split or similar transaction
        if no record date is fixed), the number of Warrant Shares issuable upon
        the exercise hereof shall be proportionately decreased and the Exercise
        Price shall be appropriately increased by the same proportion as the decrease
        of the number of outstanding Common Stock Equivalents resulting from the
        reverse stock split or similar transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) | In the event the Issuer should at any time or from
        time to time after the Original Issue Date, fix a record date for a reclassification
        of its Common Stock, then, as of such record date (or the date of the
        reclassification if no record date is set), this Warrant shall thereafter
        be convertible into such number and kind of securities as would have been
        issuable as the result of such reclassification to a holder of a number
        of shares of Common Stock equal to the number of Warrant Shares issuable
        upon exercise of this Warrant immediately prior to such reclassification,
        and the Exercise Price shall be unchanged.                                                                                                                                                                                                                                                                                                                                                                  
|
| | (e) | The Issuer will not, by amendment of its Certificate
        of Incorporation or through reorganization, consolidation, merger, dissolution,
        issue, or sale of securities, sale of assets or any other voluntary action,
        void or seek to avoid the observance or performance of any of the terms
        of the Warrant, but will at all times in good faith assist in the carrying
        out of all such terms and in the taking of all such actions as may be
        necessary or appropriate in order to protect the rights of Holder against
        dilution or other impairment. Without limiting the generality of the foregoing,
        the Issuer (x) will not create a par value of any share of stock receivable
        upon the exercise of the Warrant above the amount payable therefor upon
        such exercise, and (y) will take all such action as may be necessary or
        appropriate in order that the Issuer may validly and legally issue fully
        paid and non-assessable shares upon the exercise of the Warrant.
|
| | (f) | When any adjustment is required to be made in the
        number or kind of shares purchasable upon exercise of the Warrant, or
        in the Exercise Price, the Issuer shall promptly notify Holder of such
        event and of the number of shares of Common Stock or other securities
        or property thereafter purchasable upon exercise of the Warrants and of
        the Exercise Price, together with the computation resulting in such adjustment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (g) | The Issuer covenants and agrees that all Warrant
        Shares which may be issued will, upon issuance, be validly issued, fully
        paid, and non-assessable. The Issuer further covenants and agrees that
        the Issuer will at all times have authorized and reserved, free from preemptive
        rights, a sufficient number of shares of its Common Stock to provide for
        the exercise of the Warrant in full.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---

- 5 -

Section 3. Acceleration of Expiry Date.

| | (a) | In the event that the average closing price of the
        shares of the Issuer’s Common Stock on the OTCBB 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 (the “Acceleration Notice”), accelerate the Expiry
        Date of the Warrants (the “Accelerated Expiry Date”) to thirty
        (30) days after the date of such Acceleration Notice.                                                                                                                                       
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Acceleration Notices shall be sent to each of the
        registered Holders of the Warrants by first class mail, postage prepaid,
        not later than the thirtieth (30th) day before the Accelerated Expiry
        Date, at their last address as shall appear on the records of the Issuer.
        Any notice mailed in the manner provided herein shall be conclusively
        presumed to have been duly given whether or not the Holder receives such
        notice.                                                                                                                                                                                                                                    
|
| | (c) | The Acceleration Notice shall specify (i) the average
        closing price of the shares of the Issuer’s Common Stock for the
        twenty trading days preceding the date of the Acceleration Notice, and
        (ii) the Accelerated Expiry Date. No failure to mail such notice nor any
        defect therein or in the mailing thereof shall affect the validity of
        the Acceleration Notice except as to a Holder (a) to whom notice was not
        mailed or (b) whose notice was defective. An affidavit of the Secretary
        or other officer of the Issuer that Acceleration Notice was mailed shall,
        in the absence of fraud, be prima facie evidence of the facts stated therein.
|
| | (d) | On and after the Accelerated Expiry Date, this Warrant
        will be of no further force or effect and Holders of unexercised Warrants
        shall have no further rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Section 4. No Stockholder Rights.

This
  Warrant shall not entitle Holder hereof to any voting rights or other rights
  as a stockholder of the Issuer.

Section 5. Transfer of Securities.

| | (a) | This Warrant and the Warrant Shares and any shares
        of capital stock received in respect thereof, whether by reason of a stock
        split or share reclassification thereof, a stock dividend thereon, or
        otherwise, shall not be transferable except upon compliance with the provisions
        of the Securities Act of 1933, as amended (the "Securities Act") and applicable
        state securities laws with respect to the transfer of such securities.
        The Holder, by acceptance of this Warrant, agrees to be bound by the provisions
        of this Section 5 and to indemnify and hold harmless the Issuer against
        any loss or liability arising from the disposition of this Warrant or
        the Warrant Shares issuable upon exercise hereof or any interest in either
        thereof in violation of the provisions of this Warrant.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---

- 6 -

| | (b) | Each certificate for the Warrant Shares and any
        shares of capital stock received in respect thereof, whether by reason
        of a stock split or share reclassification thereof, a stock dividend thereon
        or otherwise, and each certificate for any such securities issued to subsequent
        transferees of any such certificate shall (unless otherwise permitted
        by the provisions hereof) be stamped or otherwise imprinted with a legend
        in substantially the following form:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> 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.

Section 6. Registration.

All
  Warrant Shares are subject to the rights and privileges granted to the participants
  in the private placement offering pursuant to which this Warrant was issued.

Section 7. Miscellaneous.

| | (a) | The terms of this Warrant shall be binding upon
        and shall inure to the benefit of any successors or permitted assigns
        of the Issuer and Holder.                                                                                                                                                                                                                                                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Except as otherwise provided herein, this Warrant
        and all rights hereunder are transferable by the registered holder hereof
        in person or by duly authorized attorney on the books of the Issuer upon
        surrender of this Warrant, properly endorsed, to the Issuer. The Issuer
        may deem and treat the registered holder of this Warrant at any time as
        the absolute owner hereof for all purposes and shall not be affected by
        any notice to the contrary.
|
| | (c) | Notwithstanding any provision herein to the contrary,
        Holder may not exercise, sell, transfer, or otherwise assign this Warrant
        unless the Issuer is provided with an opinion of counsel satisfactory
        in form and substance to the Issuer, to the                                                                                                                                                                                                                               

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---

- 7 -

| |     | effect that such exercise, sale, transfer, or assignment
        would not violate the Securities Act or applicable state securities laws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) | This Warrant may be divided into separate warrants
        covering one share of Common Stock or any whole multiple thereof, for
        the total number of shares of Common Stock then subject to this Warrant
        at any time, or from time to time, upon the request of the registered
        holder of this Warrant and the surrender of the same to the Issuer for
        such purpose. Such subdivided Warrants shall be issued promptly by the
        Issuer following any such request and shall be of the same form and tenor
        as this Warrant, except for any requested change in the name of the registered
        holder stated herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (e) | Unless otherwise provided for herein, any notices,
        consents, waivers, or other communications required or permitted to be
        given under the terms of this Warrant must be in writing and will be deemed
        to have been delivered (a) upon receipt, when delivered personally, (b)
        upon receipt, when sent by facsimile, provided a copy is mailed by U.S.
        certified mail, return receipt requested, (c) three (3) days after being
        sent by U.S. certified mail, return receipt requested, or (d) one (1)
        day after deposit with a nationally recognized overnight delivery service,
        in each case properly addressed to the party to receive the same. If to
        Holder, to the registered address of Holder appearing on the books of
        the Issuer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |     | Each party shall provide five (5) days prior written
        notice to the other party of any change in address, which change shall
        not be effective until actual receipt thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (f) | The corporate laws of the State of Nevada shall
        govern all issues concerning the relative rights of the Issuer and its
        stockholders. All other questions concerning the construction, validity,
        enforcement and interpretation of this Warrant shall be governed by the
        internal laws of the State of Texas, without giving effect to any choice
        of law or conflict of law provision or rule (whether of the State of Texas
        or any other jurisdictions) that would cause the application of the laws
        of any jurisdictions other than the State of Texas. Each party hereby
        irrevocably submits to the non-exclusive jurisdiction of the state and
        federal courts sitting in the City of Austin, for the adjudication of
        any dispute hereunder or in connection herewith or with any transaction
        contemplated hereby or discussed herein, and hereby irrevocably waives,
        and agrees not to assert in any suit, action or proceeding, any claim
        that it is not personally subject to the jurisdiction of any such court,
        that such suit, action or proceeding is brought in an inconvenient forum
        or that the venue of such suit, action or proceeding is improper. Each
        party hereby irrevocably waives personal service of process and consents
        to process being served in any such suit, action or proceeding by mailing
        a copy thereof to such party at the address for such notices to it under
        this Warrant and agrees that such service shall constitute good and sufficient
        service of process and notice thereof. Nothing contained herein shall
        be deemed to limit in any way any right to serve process in any manner
        permitted by law.
|
| |     | If any provision of this Warrant shall be invalid
        or unenforceable in any                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---

- 8 -

| |  | jurisdiction, such invalidity or unenforceability
        shall not affect the validity or enforceability of the remainder of this
        Warrant in that jurisdiction or the validity or enforceability of any
        provision of this Warrant in any other jurisdiction.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Issuer, has caused this Warrant
  to be executed in its name by its duly authorized officer under seal, and to
  be dated as of the date first above written.

TERAX ENERGY, INC.



|By: |                         |    
|--- | ----------------------- | ---
|    | J. William Rhea, IV     |    
|    | Chief Executive Officer |    
|    |                         | c/s

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---



ASSIGNMENT

(To be Executed by the Registered Holder to effect a
  
  Transfer of the foregoing Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, and
  assigns and transfers unto__________________________________________

____________________________________________________________________________________________________________[Name of Assignee]

of ___________________________________________________________________________________________________________
  [Address of Assignee]

the attached Warrant and the rights represented thereto to
  purchase shares of Common Stock of TERAX ENERGY, INC. in accordance with
  terms and conditions thereof, and does hereby irrevocably constitute and appoint
  ______________________________________________
                                                                                                                                                                
                         
  [Name of Attorney]

Attorney to transfer the said Warrant on the books of the Issuer,
  with full power of substitution.

Holder acknowledges that the Issuer may request a written
  opinion of counsel to the effect that the assignment of the Warrant is exempt
  from registration requirements of the U.S. Securities Act.

Signature of Holder: ____________________________________________________________

Address: ____________________________________________________________________

NOTICE: The signature above must correspond to the name as
  written upon the face of the within Warrant in every particular, without alteration
  or enlargement or any change whatsoever.

Dated: __________________ , 20__.

(The Issuer may require that the signature above be guaranteed
  by an acceptable financial institution, in which event the following must be
  completed.)

|Signature of Warrant holder guaranteed by: |                              
|------------------------------------------ | -----------------------------
|                                           | (Signature)                  
|                                           |                              
|                                           |                              
|                                           | Name:                        
|                                           |                              
|                                           |                              
|                                           | (Authorized Signature Number)

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---



EXERCISE NOTICE

[To be signed only upon exercise of Warrant]

TO: TERAX ENERGY, INC.

The undersigned Holder of the attached Warrant hereby irrevocably
  elects to exercise the Warrant for, and to purchase thereunder, _____________________________________________
  shares of Common Stock of TERAX ENERGY, INC., issuable upon exercise
  of said Warrant and hereby surrenders said Warrant, together with a certified
  check or money order payable to the order of the Issuer on account of the exercise
  price. In connection with the exercise of the attached Warrant, the undersigned
  Holder represents as follows: (Please check the ONE box applicable):

| ̈ | 1.              The
        representations and warranties made to the Issuer in connection with the
        acquisition of the Warrants remain true and correct on the date of this
        Exercise Notice.                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| ̈ | 2.              The
        undersigned is delivering a written opinion of counsel to the effect that
        the Common Stock to be delivered upon exercise hereof is exempt from registration
        requirements of the U.S. Securities Act.

The undersigned herewith requests that the certificates for
  such shares be issued in the name of, and delivered to the undersigned, whose
  address is

|                     |  |           | 
|-------------------- |  | --------- | 
|                     |  | [Address] | 
|                     |  |           | 
|                     |  |           | 
|Signature of Holder: |  |          
|                     |  |           | 
|Address:             |  |           | 

NOTICE: The signature above must correspond to the name as
  written upon the face of the within Warrant in every particular, without alteration
  or enlargement or any change whatsoever.

Dated: __________________ , 20__.

(The Issuer may require that the signature above be guaranteed
  by an acceptable financial institution, in which event the following must be
  completed.)

|Signature of Warrant holder guaranteed by: |                              
|------------------------------------------ | -----------------------------
|                                           | (Signature)                  
|                                           |                              
|                                           |                              
|                                           | Name:                        
|                                           |                              
|                                           |                              
|                                           | (Authorized Signature Number)

|Warrant No. A-[ ]  August
      8, 2005 | 
|--------------------------------------- | 

---