PROMISSORY
      NOTE

     

    
      	
              $125,000.00

            	
              August
                9, 2006

            
	 	 


    

    FOR
      VALUE
      RECEIVED,
      the
      undersigned, Trulite, Inc., a Delaware corporation (“Debtor”),
      for
      good and valuable consideration, promises to pay to the order of Contango
      Venture Capital Corporation, LLC, a Texas limited liability company
      (“Lender”),
      at
      3700 Buffalo Speedway, Suite 960, Houston, Texas 77098, or at such other place
      as Lender may designate, the principal sum of One Hundred Twenty Five Thousand
      and No/100 Dollars ($125,000.00), in lawful currency of the United States of
      America, together with interest accrued monthly thereon at a rate of eleven
      and
      one-quarter percent (11.25%) per annum ,
      which
      is the current prime rate plus three percentage points, from the date hereof
      until February 9, 2007; and at a rate per annum of the prime rate as reported
      in
      the Wall
      Street Journal
      as of
      February 9, 2007 plus three percentage points from February 9, 2007 until this
      promissory note (“Note”)
      is
      paid in full.

     

    1.  Maturity.
      This
      Note together with all accrued but unpaid interest on the outstanding principal
      balance of this Note shall be due and payable on May 1, 2007.

     

    2.  Optional
      Prepayment.
      Debtor
      may at its sole option prepay all or any part of the principal of this Note
      before maturity without penalty or premium, together with all accrued but unpaid
      interest on the principal prepaid. 

     

    3.  Events
      of Default and Remedies.
      At the
      option of Lender the entire principal balance of this Note, together with all
      accrued but unpaid interest on the outstanding balance of the Note, shall at
      once become due and payable, without further notice or demand, upon the
      occurrence at any time of any of the following events of default (“Events
      of Default”):

     

    (a)  failure
      of Debtor to make any payment of interest or principal when due hereunder;
      or

     

    (b)  Debtor
      shall (i) voluntarily seek, consent to, acquiesce in the benefit or benefits
      of
      any Debtor Relief Law (as hereinafter defined) or (ii) become party to (or
      be
      made the subject of) any proceeding provided by any Debtor Relief Law, other
      than as a creditor or claimant, that could suspend or otherwise adversely affect
      the rights of Lender granted hereunder (unless in the event such proceeding
      is
      involuntary, the petition instituting the same is dismissed within sixty (60)
      days of the filing of same). As used herein, the term “Debtor
      Relief Law”
means
      the Bankruptcy Code of the United States of America and all other applicable
      liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
      receivership, insolvency, reorganization or similar debtor relief laws from
      time
      to time in effect affecting the rights of creditors generally.

     

    In
      the
      event any one or more of the Events of Default specified above shall have
      happened, the holder of this Note may (y) enforce its rights, if any, under
      this
      Note and (z) proceed to protect and enforce its rights either by suit in equity
      and by action at law, or by other appropriate proceedings, whether for the
      specific performance of any covenant or agreement contained in this Note or
      in
      aid of the exercise of any power or right granted by this Note, or to enforce
      any other legal and equitable right of the holder of this Note.

     

    
      
         

      

      
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    4.  Cumulative
      Rights.
      No
      delay on the part of the holder of this Note in the exercise of any power or
      right under this Note shall operate as a waiver thereof, nor shall a single
      or
      partial exercise of any other power or right. 

     

    5.  Notices.
      Any
      notice or demand given hereunder by the holder hereof shall be deemed to have
      been given and received (i) when actually received by Debtor, if delivered
      in
      person or by facsimile transmission, or (ii) if mailed, on the earlier of the
      date actually received or (whether received or not) three (3) Business Days
      (as
      hereinafter defined) after a letter containing such notice, certified or
      registered, with postage prepaid, addressed to Debtor, is deposited in the
      United States mail. Debtor’s mailing address for purposes of this Section 5 is
      Three Riverway, Suite 1050

     

    Houston,
      Texas 77056, or such other address as Debtor shall advise the holder hereof
      by
      certified or registered letter by this same procedure. “Business
      Day”
means
      every day which is not a Saturday, Sunday or legal holiday.

     

    6.  Choice
      of Law, Venue and Forum.
      This
      Note, the entire relationship of the parties hereto, and any litigation between
      the parties (whether grounded in contract, tort, statute, law or equity) shall
      be governed by, construed in accordance with, and interpreted pursuant to the
      laws of the State of Texas, without giving effect to its choice of laws
      principles. Exclusive venue for any litigation between the parties hereto shall
      be in Harris County, Texas, and shall be brought in the State District Courts
      of
      Harris County, Texas, or in the United States District Court for the Southern
      District of Texas, Houston Division. The parties hereto waive any challenge
      to
      personal jurisdiction or venue (including without limitation a challenge based
      on inconvenience) in Harris County, Texas, and specifically consent to the
      jurisdiction of the State District Courts of Harris County and the United States
      District Court for the Southern District of Texas, Houston
      Division.

     

    7.  Usury
      Savings Clause.
      Any
      provision in this Note or in any other document executed in connection herewith,
      or in any other agreement or commitment, whether written or oral, express or
      implied, to the contrary notwithstanding, Lender shall not in any event be
      entitled to receive or collect, nor shall or may amounts received hereunder
      be
      credited, so that Lender shall be paid, as interest, a sum greater than the
      maximum rate of interest permitted by applicable law. If any construction of
      this Note, or any and all other papers, agreements or commitments, indicates
      a
      different right given to Lender to ask for, demand or receive any larger sum
      as
      interest, such is a mistake in calculation or wording, which this clause shall
      override and control; it being the intention of the parties that this Note
      and
      all other instruments relating to this Note shall in all things comply with
      applicable law, and proper adjustment shall automatically be made accordingly.
      In the event Lender ever receives, collects or applies as interest, any sum
      in
      excess of the maximum rate of interest permitted by applicable law, such excess
      amount shall be applied to the reduction of the unpaid principal balance of
      this
      Note in the inverse order of maturity, and if this Note is paid in full, any
      remaining excess shall be paid to Debtor. In determining whether or not the
      interest paid or payable, under any specific contingency, exceeds the maximum
      rate of interest permitted by applicable law, Debtor and Lender shall, to the
      maximum extent permitted under applicable law (a) characterize any nonprincipal
      payment as an expense, fee or premium rather than as interest, (b) exclude
      voluntary prepayments and the effects thereof, and (c) “spread” the total amount
      of interest throughout the entire term of this Note so that the interest rate
      is
      uniform throughout the entire term hereof.

     

    
      
         

      

      
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    8.  Modification.
      None of
      the terms or provisions of this Note may be excluded, modified or amended except
      by a written instrument duly executed on behalf of Debtor and Lender expressly
      referring to this Note and setting forth the provision so excluded, modified,
      or
      amended. 

     

    9.  Headings.
      The
      headings of the sections of this Note are inserted for convenience only and
      shall not be deemed to constitute a part hereof.

     

    10.  Waiver.
      Debtor
      expressly waives any presentment, demand, protest or notice in connection with
      this Note, now or hereafter, required by applicable law.

     

    11.  Collection
      Costs.
      Debtor
      agrees to pay the fees and expenses, including fees and expenses of an attorney,
      of Lender in connection with any action for collection, payment or compromise
      of
      this Note.

     

    12.  Counterparts.
       This Note may be executed in one or more counterparts, all of which shall
      constitute one and the same agreement. Signature pages to any counterpart may
      be
      detached, executed and attached to a single counterpart with the same force
      and
      effect as if all parties had executed a single signature page
      hereof.

     

    EXECUTED
      to be effective as of the day and year first above written.

    
      	 	 	 
	 	
              DEBTOR:

               

              Trulite,
                Inc.

              (a
                Delaware corporation)

            
	 
 	 
 	 
 
	 	By:  	/s/ Jonathan
              Godshall
	 	
              
Jonathan
              Godshall, President
	 	 


    

     

    
      	
              AGREED
                AND ACCEPTED BY LENDER:

              contango
                capital venture corporation, llc

              (a
                Delaware limited liability company)

               

              By: /s/
                Kenneth R. Peak

              Kenneth
                R. Peak

            


    

    
       

    

    
      
         

      

      
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