Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Terax Energy, Inc. - Exhibit 10.6

Exhibit 10.6 

 EMPLOYMENT AGREEMENT

                THIS
  EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the 7th
  day of June, 2005 but effective the 1st day of June, 2005 (the “Effective
  Date”) by and between Terax Energy, Inc. (the "Company") and Bill Chester
  (the "Employee"). 

                WHEREAS,
  the Company desires to employ the Employee, and Employee desires to accept such
  employment, upon the terms, conditions and for the consideration hereinafter
  set forth. 

                NOW
  THEREFORE, in consideration of theses premises and the mutual covenants
  and obligations contained herein, the Company and the Employee agree as follows:

                1.
  Employment Period. The Company hereby agrees to employ the Employee,
  and the Employee hereby agrees to become an employee of the Company, subject
  to the terms and conditions of this Agreement, for the period commencing on
  the Effective Date and ending on the first anniversary of such date (the "Employment
  Period").

                2.
  Terms of Employment. (a) Position and Duties. (i) During the Employment
  Period, the Employee shall be employed as the senior officer of the Company,
  and hold the position of Vice President, Business Development of the Company,
  reporting to the Chief Executive Officer of the Company. The Employee will also
  hold such additional positions as determined by the Board of Directors of the
  Company (the “Board”), provided such determination is consistent
  with the Company’s then current financial situation.

                (ii)
  During the Employment Period, excluding any periods of vacation, sick leave
  and other time-off to which the Employee is entitled under this Agreement or
  applicable Company policies, the Employee agrees to devote substantially all
  of his attention and time to the business and affairs of the Company and, to
  the extent necessary to discharge the responsibilities of the Employee, use
  the Employee’s reasonable best efforts to perform faithfully and efficiently
  such responsibilities. It shall not be a violation of this Agreement during
  the Employment Period for the Employee, and the Employee is expressly permitted,
  to spend a reasonable amount of time during normal business hours of the Company
  (including out-of-town travel) (A) serving on or with corporate, civic or charitable
  boards, committees and groups, and (B) delivering lectures, accepting and fulfilling
  speaking engagements, teaching at educational institutions and seminars, and
  writing or publishing papers, articles or books, provided that such services
  are consistent with the interests of the Company and do not interfere with the
  Employee’s obligations to the Company hereunder. 

                (iii)
  During the Employment Period, except for out-of-town travel and meetings, the
  Employee's duties shall be performed primarily at the location of the Company’s
  principal corporate office which is to be located in Austin, Texas. 

                (b)
  Salary. During the Employment Period, the Employee shall receive an annual
  salary (the "Annual Salary"), which shall be paid in equal installments in accordance
  with the Company's standard policy regarding payment of compensation, but no
  less frequently than monthly. The amount of the Annual Salary shall be Ninety
  Thousand United States Dollars ($90,000). 

                (c)
  Bonuses. In addition to Annual Salary, the Employee may be awarded for
  each fiscal year of the Employment Period an annual bonus (the "Annual Bonus")
  as determined by the consent of a 

	
Terax Energy, Inc. 
		
Bill Chester 
	
	 

		
Employment Agreement 
	

 majority of the Board. The Annual Bonus shall be determined
  and awarded each year within thirty (30) days of the filing of the Company’s
  Annual Report with the Securities and Exchange Commission. 

                (d)
  Benefits. During the Employment Period, the Employee and/or the Employee's
  family, as the case may be, shall be eligible for participation in and shall
  receive all benefits and privileges under any benefit, welfare, savings and
  retirement, plans, practices, policies and programs provided by the Company
  and its affiliated companies (including, without limitation, medical, prescription,
  dental, disability, salary continuance, employee life, group life, accidental
  death and travel accident insurance, 401k and other plans and programs). 

                (e)
  Expenses. During the Employment Period the Employee shall be entitled
  to receive prompt reimbursement for all reasonable expenses and costs incurred
  by the Employee in accordance with the Company’s standard policies, practices
  and procedures.

                (f)
  Vacation. During the Employment Period the Employee shall be entitled
  to paid vacation (“Vacation”) each calendar year of twenty (20)
  days beginning with the year of the Effective Date. 

                3.
  Termination of Employment. (a) Death. The Employee’s employment
  shall terminate automatically upon the Death of the Employee during the Employment
  Period. For purposes of this Agreement, “Death” shall be deemed
  to have occurred on the date the Employee is certified to be dead by the government
  agency or person having competent jurisdiction over such certification, unless
  the Employee’s legal representative shall contest the certification through
  a court proceeding, in which case the court’s determination shall control.

                (b)
  Disability. If the Company determines in good faith that the Disability
  of the Employee has occurred during the Employment Period (pursuant to the definition
  of Disability set forth below), it may give to the Employee written notice of
  its intention to terminate the Employee's employment. In such event, the Employee's
  employment with the Company shall terminate effective on the 30th day after
  receipt of such notice by the Employee or his legal representative (the "Disability
  Effective Date"), unless within the 30 days after such receipt, the Employee
  shall have begun performance of the Employee's duties. For purposes of this
  Agreement, “Disability” shall mean the Employee has discontinued
  performing his duties for 60 consecutive business days due to incapacity due
  to mental or physical illness. 

                (c)
  Cause. The Company may terminate the Employee's employment during the
  Employment Period for Cause. "Cause" shall include: 

                (i)
  the Employee becoming charged with a felony offence; 

                (ii)
  the Board being presented with substantive evidence of drug, alcohol or substance
  abuse by the Employee; and 

                (iii)
  any breach by the Employee of his duties or obligations hereunder, provided
  that if such breach is “cureable” the Company shall be required
  to give the Employee notice of such breach and the Employee shall be required,
  within fourteen (14) days following delivery of such notice, to cure such breach
  or commence proceedings to cure such breach by appropriate performance and the
  breach must be cured without undue delay. 

	
Terax Energy, Inc. 
		 2	
Bill Chester 
	
	 

		 

		
Employment Agreement 
	

 For the purposes of this Section 3(b) a “cureable”
  breach shall not include any breach of this Agreement resulting from: 

                (i)
  fraud by the Employee against the Company; 

                (ii)
  a breach by the Employee of the provisions of Section 6 of this Agreement; 

                (iii)
  the intentional misappropriation of a corporate opportunity of the Company by
  the Employee for his direct or indirect personal benefit; or 

                (iv)
  willful or intentional failure to obey the instructions of the Board consistent
  with his duties hereunder. 

                (d)
  Good Reason. The Employee's employment may be terminated by the Employee
  for Good Reason. For the sole and exclusive purposes of this Agreement, "Good
  Reason" shall mean a failure by the Company to pay the amounts required under
  or otherwise comply with any of the provisions of Sections 2(b) or 2(e) of this
  Agreement (provided that the Company has sufficient funds available to make
  such payments), other than an isolated, insubstantial or inadvertent failure
  which is remedied by the Company promptly after receipt of notice thereof given
  by the Employee. 

                (e)
  Expiration. The Employee's employment shall terminate at the end of the
  Employment Period. 

                (f)
  Notice of Termination. Any termination of employment by the Company or
  by the Employee shall be communicated by Notice of Termination to the other
  party hereto. For purposes of this Agreement, a "Notice of Termination" means
  a written notice which (i) indicates the specific termination provision in this
  Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
  detail the facts and circumstances claimed to provide a basis for termination
  of the Employee's employment under the provision so indicated, and (iii) if
  the Date of Termination (as defined below) is other than the date of receipt
  of such notice, specifies the termination date (which date shall be not more
  than thirty days after the giving of such notice). The failure by the Employee
  or the Company to set forth in the Notice of Termination any fact or circumstance
  which contributes to a showing of Good Reason or Cause shall not waive any rights
  of the Employee or the Company, respectively, hereunder or preclude the Employee
  or the Company, respectively, from asserting such fact or circumstance in enforcing
  the Employee's or the Company's rights hereunder. 

                (g)
  Date of Termination. For purposes of this Agreement, “Date of Termination”
  means (i) if the Employee’s employment is terminated by the Company or
  by the Employee, the date of receipt of the Notice of Termination or any later
  date specified therein, as the case may be, (ii) if the Employee's employment
  is terminated by reason of Death or Disability, the Date of Termination shall
  be the date of Death of the Employee or the Disability Effective Date, as the
  case may be, and (iii) if the Employee's employment is terminated by reason
  of the expiration of the Employment Period, the Date of Termination shall be
  the last day of the Employment Period. 

                4.
  Obligations Upon Termination. (a) Good Reason; Other Than for Cause,
  Death, Disability or Expiration. If, during the Employment Period,
  the Company shall terminate the Employee's employment other than for: (i) Cause,
  (ii) Death, (iii) Disability, or (iv) the expiration of the Employment Period;
  or if the Employee shall terminate his employment for Good Reason, the Company
  shall pay to the Employee the following amounts: 

	 Terax Energy, Inc.  	 3	 Bill Chester  
	  	  	 Employment Agreement  

                (i)
  the sum of (1) the Annual Salary through the Date of Termination to the extent
  not theretofore paid, (2) any compensation previously deferred by the Employee
  (together with any accrued interest or earnings thereon), and (3) the prorata
  amount of the Annual Salary applied to any accrued but unused Vacation days
  of the Employee through the Date of Termination; in each case to the extent
  not theretofore paid (the sum of the amounts described in the foregoing clauses
  (1), (2), and (3) shall be hereinafter referred to as the “Accrued Obligations”);
  and 

                (ii)
  the lesser of (X) the Annual Salary, prorated for a one (1) month period, and
  (Y) the amount of the Annual Salary from the Date of Termination to the end
  of the Employment Period; 

                (iii)
  all unvested contributions to any savings, retirement or other plans or programs
  benefiting the Employee and/or his family shall immediately become 100% vested,
  and all such plans and programs applicable to the Employee shall be automatically
  amended and reformed as, and the Company shall take all actions which are, necessary,
  appropriate or reasonable to accommodate and give effect to this clause; and

                (iv)
  to the extent applicable and not theretofore paid or provided, the Company shall
  timely pay or provide to the Employee any other amounts or benefits that have
  accrued or which are required to be paid or provided or which the Employee and/or
  his family is eligible to receive under Section 2(e) hereof, or any applicable
  plan, program, policy or practice or contract or agreement of the Company and
  its affiliated companies (such benefits shall be hereinafter referred to as
  the “Other Benefits”); 

                (b)
  Death or Disability. If the Employee's employment is terminated by reason
  of the Employee's Death or Disability during the Employment Period, this Agreement
  shall terminate without further obligations to the Employee's estate or legal
  representatives under this Agreement, except that (i) the Company shall pay
  all Accrued Obligations in a lump sum in cash within 30 days of the Date of
  Termination, (ii) the Company shall timely pay and provide the Other Benefits
  to the extent applicable or theretofore unpaid. 

                (c)
  Cause or Other than for Good Reason. If the Employee's employment shall
  be terminated for Cause during the Employment Period, or if the Employee resigns
  or voluntarily terminates his employment during the Employment Period, excluding
  a termination for Good Reason: (I) this Agreement shall terminate without further
  obligations to the Employee, except that the Company shall pay to the Employee
  the following amounts: 

                (i)
  the Accrued Obligations through the Date of Termination to the extent not theretofore
  paid; and 

                (ii)
  the Company shall timely pay and provide the Other Benefits to the extent applicable
  or theretofore unpaid. 

                (d)
  Expiration of the Employment Period. If the Employee's employment is
  terminated by reason of the expiration of the Employment Period, this Agreement
  shall terminate without further obligations to the Employee.

                5.
  Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
  limit the Employee's continuing or future participation in any plan, program,
  policy or practice provided by the Company or any of its affiliated companies
  for which the Employee may qualify, nor shall anything herein limit or otherwise
  affect such rights as the Employee may have under any contract or agreement

	 Terax Energy, Inc.  	 4	 Bill Chester  
	  	  	 Employment Agreement  

 with the Company or any of its affiliated companies. Amounts
  which are vested benefits or which the Employee is otherwise entitled to receive
  under any plan, policy, practice or program of or any contract or agreement
  with the Company or any of its affiliated companies at or subsequent to the
  Date of Termination shall be payable in accordance with such plan, policy, practice
  or program or contract or agreement except as explicitly modified by this Agreement.

                6.
  Confidential Information. The Employee shall hold in a fiduciary capacity
  for the benefit of the Company all secret or confidential information, knowledge
  or data relating to the Company or any of its affiliated companies, and their
  respective businesses, which shall have been obtained by the Employee during
  the Employee's employment by the Company or any of its affiliated companies
  and which shall not be or become public knowledge (other than by acts by the
  Employee or representatives of the Employee in violation of this Agreement).
  After termination of the Employee's employment with the Company, the Employee
  shall not, without the prior written consent of the Company or as may otherwise
  be required by law or legal process, communicate or divulge any such information,
  knowledge or data to anyone other than the Company and those designated by it.

                7.
  Successors. (a) This Agreement is personal to the Employee and without
  the prior written consent of the Company shall not be assignable by the Employee
  otherwise than by will or the laws of descent and distribution. This Agreement
  shall inure to the benefit of and be enforceable by the Employee’s estate,
  heirs, beneficiaries and legal representatives. 

                (b)
  This Agreement shall inure to the benefit of and be binding upon the Company
  and its successors and assigns. 

                8.
  Miscellaneous. (a) This Agreement shall be governed by and construed
  in accordance with the laws of the State of Texas, without reference to principles
  of conflict of laws. The captions of this Agreement are not part of the provisions
  hereof and shall have no force or effect. This Agreement contains the complete
  and entire agreement between the parties hereto with respect to the matters
  contained herein, and may not be amended or modified otherwise than by a written
  agreement executed by the parties hereto or their respective successors and
  legal representatives expressly written and executed for such purpose. 

                (b)
  All notices and other communications required hereunder to be in writing shall
  be given by two or more of the following methods: (i) hand delivery to the other
  party, (ii) commercial courier or mail service, or (iii) registered or certified
  US mail, return receipt requested, postage prepaid; and in the case of the Company
  shall be addressed to the Company’s Registered Agent and the Company’s
  Secretary at the Company’s principal corporate office, and in the case
  of the Employee shall be addressed to the Employee’s office at the Company
  and the Employee’s latest primary residence as identified in the records
  of the Company, or to such other address as either party shall have furnished
  to the other in writing in accordance herewith. Notice and communications hereunder
  shall be effective, when delivered on a businesses day on the date of delivery,
  and when delivered on a day other than a business day on the next following
  business day. 

                (c)
  The invalidity or unenforceability of any provision of this Agreement shall
  not affect the validity or enforceability of any other provision of this Agreement.

                (d)
  The Company may withhold from any amounts payable under this Agreement such
  Federal, state, local or foreign taxes as shall be required to be withheld pursuant
  to any applicable law or regulation. 

	 Terax Energy, Inc.  	 5	 Bill Chester  
	  	  	 Employment Agreement  

                (e)
  The Employee's or the Company's failure to insist upon strict compliance with
  any provision hereof or any other provision of this Agreement or the failure
  to assert any right the Employee or the Company may have hereunder shall not
  be deemed to be a waiver of such provision or right or any other provision or
  right of this Agreement. 

                IN
  WITNESS WHEREOF, the parties have executed this Agreement to be effective
  as of the 1st day of June, 2005. 

TERAX ENERGY, INC. 

	By: 	 /s/ J. William Rhea, IV  	 /s/ Bill Chester  
	 	  J. William Rhea, IV, Chief Executive Officer 
    	 Bill Chester  

 Execution Date: June 7, 2005 

 

 

 

	 Terax Energy, Inc.  	 6	 Bill Chester  
	  	  	 Employment AgreementFiled by Automated Filing Services Inc. (604) 609-0244 - Terax Energy, Inc. - Exhibit 10.8

	 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.      	 COMPLETE the information required on Page
        1 of the Subscription. 

	 
	 2.      	 IF YOU ARE A NATURAL PERSON complete the
        Signature Page for Individual Subscribers on page 13 of the Subscription
      

	 
	 	 - OR - 

	 
	 	 IF YOU ARE NOT A NATURAL PERSON complete
        the Signature Page for Entities on page 13 of the Subscription. 

	 
	 3.      	 COMPLETE the Registration and Delivery Instructions
        on page 14 of the Subscription. 

	 
	 4.      	 WIRE the Subscription Funds to Snell Wylie
        & Tibbals, counsel to the Issuer, pursuant to the wire instructions
        provided on page 2 of the Subscription. 

	 
	 5.      	 FAX a 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.      	 COURIER the 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

 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

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 2 

  REPRESENTATIONS 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

 

	 	 (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

 

	 	 	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)
	that any person will resell or repurchase
        the Securities,  

	 	 	 	 
	 	 	(ii)
	that any person will refund the purchase
        price of the Securities, or  

	 	 	 	 
	 	 	(iii)
	as to the future price or value of the
        Securities;  

	 	 	 	 
	 	(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)
	he or she has made due inquiry to determine
        the truthfulness of the representations and warranties made pursuant to
        this Subscription, and

	 	 	 	 
	 	 	(ii)
	he or she is duly authorized (and if
        the undersigned is a trust, by the trust agreement) to make this investment
        and to enter into and execute this Subscription on behalf of such entity;

	 	 	 	 
	 	(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

 

	 	 (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

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 3 

  REPRESENTATIONS AND WARRANTIES OF THE ISSUER 

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

		Page 8

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

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 4 

  COVENANTS 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

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 

		Page 11

 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 

		Page 12

 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 6 

  ISSUANCE 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. 

		Page 13

 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]

		Page 14

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.

		Page 15

                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.

		Page 16

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. 

		Page 17

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