8.0% CONVERTIBLE NOTE

NEITHER THIS PROMISSORY NOTE NOR ANY OF THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. NO SALE, TRANSFER, PLEDGE OR ASSIGNMENT OF THIS NOTE OR OF THE SECURITIES ISSUABLE UPON CONVERSION HEREOF SHALL BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW, OR (B) SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND OF ANY APPLICABLE STATE SECURITIES LAW .

CROSSPOINT ENERGY COMPANY, a Delaware limited liability company (the “ Company ”), for value received, hereby promises to pay to _____________ or its registered transferees or assigns (the “ Holder ”), the principal amount of _____________ DOLLARS ($___________), together with interest on the amount of such principal from time to time outstanding, in accordance with the terms set forth below.

As used herein, the following terms shall have the following meanings:

“ Affiliate ” means any Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, another Person, where “control” means (i) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise, or (ii) the ability of a Person to consolidate the financial statements of another Person with its own in accordance with generally accepted accounting principles.

“ Board of Directors ” means the board of directors of the Company as elected from time to time.

“ Certificate of Adjustment ” has the meaning set forth in Section 4.9(a) .

“ Common Equity ” means (i) before the Merger Date, the common interests of the Company and (ii) on and after the Merger Date, the Common Stock.

“ Common Stock ” means the common stock of the Public Company.

“ Company ” means CrossPoint Energy Company and any successor by merger.

“ Conversion Equity ” has the meaning set forth in Section 3.1(a) .

“ Conversion Price ” has the meaning set forth in Section 3.3 .

“ Dilution Multiple ” means the result of the following formula:

(E1 x P1) + (DI x DP)

     E2 x P1

E2 = the fully-diluted Common Equity outstanding after the Dilutive Issuance.

DI = the Common Equity issued pursuant to the Dilutive Issuance.

P1 = the Conversion Price in effect prior to the Dilutive Issuance.

DP = the price of the Common Equity issued pursuant to the Dilutive Issuance

“ Dilutive Issuance ” has the meaning set forth in Section 4.1 .

“ EBITDA Multiple ” means an amount equal to the product of (a) 3.5 multiplied by (b) the annualized earnings before interest, taxes, depreciation, amortization and exploration expenses of the Company for the most recently completed calendar quarter.

“ Event of Bankruptcy ” means any of (i) the filing by a Person of a voluntary petition in bankruptcy under any provision of any bankruptcy law or a petition to take advantage of any insolvency act, (ii) the admission in writing by a Person or by any subsidiaries of such Person of an inability to pay debts generally as they become due, (iii) the appointment of a receiver or receivers for all or a material part of a Person’s assets with the consent of such Person, (iv) the filing of any bankruptcy, arrangement or reorganization petition by or, with the consent of a Person, against such Person under any provision of any bankruptcy law, (v) the filing or granting of any order by a court of competent jurisdiction appointing a receiver, liquidator or trustee for or of a Person or a substantial part of such Person’s assets, which order shall not be dismissed or stayed within thirty (30) days, or (vi) the filing of any involuntary petition to reorganize or to liquidate a Person, which petition shall not be dismissed or stayed within thirty (30) days.

“ Event of Default ” has the meaning specified in Section 6.1 .

“ Excess Interest ” has the meaning specified in Section 2.6 .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Holder ” has the meaning set forth in the Preamble to this Note.

“ Limited Liability Company Agreement ” means the Operating Agreement of the Company.

“ Mandatory Conversion Event ” means the first Trading Day after (a) the Closing Price equals or exceeds $2.25 (subject to adjustment for any stock splits and similar events occurring after June 30, 2006) for 20 consecutive Trading Days during which an aggregate of not less than 1,000,000 shares were traded on most senior Stock Exchange on which the Common Stock is then traded; and (b) the resale of all the shares of Common Stock issued upon conversion is covered by an effective registration statement under the Securities Act.

“ Maturity Date ” means June 30, 2009, the date upon which this Note becomes due and payable pursuant to Section 2.3 .

“ Maximum Rate ” has the meaning specified in Section 2.6 .

“ Merger ” means the merger of the Company with a corporation that is wholly-owned by the Public Company.

“ Merger Date ” means the date upon which the Merger is consummated.

“ Note ” means this 8.0% Convertible Note.

“ Obligations ” means any and all indebtedness and/or liabilities of the Company to Holder arising in connection with the issuance of this Note, together with all renewals, modifications, extensions and increases thereof and all substitutions or replacements therefor.

“ PIK Payment ” means the delivery of a number of shares of Registered Common Stock equal to the quotient of (i) the amount of interest then due and payable to the Holder, divided by (ii) the PIK Price, rounded up to the next full share.

“ PIK Period ” means the period during which the Common Stock is traded on a Stock Exchange beginning on the Merger Date and ending on the third business day after December 31, 2007.

“ PIK Price ” means the amount that is equal to 90% of the average of the VWAPs of the Common Stock for the ten Trading Days immediately prior to the last day of the most recent calendar quarter.

“ Payment Address ” has the meaning specified in Section 2.4 .

“ Person ” means any natural person or any corporation, partnership, limited liability company, joint venture or other business entity.

“ Prepayment Date ” has the meaning specified in Section 2.5 .

“ Prepayment Notice ” has the meaning specified in Section 2.5 .

“ Public Company ” means the corporation that is (a) a reporting company pursuant to the Exchange Act and (b) the sole stockholder of a corporation with which the Company merges pursuant to the Merger.

“ Registered Common Stock ” means shares of Common Stock, the resale of which is covered by an effective registration statement under the Securities Act.

“ Reorganization Event ” has the meaning specified in Section 4.6 .

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Senior Debt ” means (a) any indebtedness of the Company or its affiliates held by D.B. Zwirn Special Opportunities Fund, L.P. and Drawbridge Special Opportunities Fund, L.P. and its affiliates under (i) that certain Credit Agreement, dated September 2, 2005 (the “ Credit Agreement ”), by and between the CrossPoint Energy Holdings, LLC and the Lenders named therein, (ii) any of the Loan Documents (as defined in such Credit Agreement) or (iii) any rearrangement, refinancing or assignment of such indebtedness as evidenced by such Credit Agreement or related Loan Documents; (b) any funded indebtedness secured by a general lien on the assets of the Company, or (c) any funded indebtedness that, by its terms, ranks superior to this Note with respect to payment of principal.

“ Stock Exchange ” means, in declining order of seniority, the New York Stock Exchange, the American Stock Exchange, the Nasdaq Stock Market, the OTC Bulletin Board System or the Pink Sheets Quotation Service.

“ Trading Day ” means any day upon which trades are processed on the New York Stock Exchange.

“ Warrants ” means those certain Warrants to purchase Common Stock issued pursuant to the Securities Purchase Agreement among the Company and the investors set forth therein dated ________, 2006.

“ VWAP ” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Stock Exchange, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Stock Exchange on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. New York City time to 4:02 p.m. New York City time); or (b) in all other cases, the fair market value of one share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

2.1   Advance . Subject to the terms and conditions set forth herein, the Company hereby acknowledges and agrees that, as of the date hereof, Holder has advanced to the Company a sum equal to the aggregate principal amount of this Note.

2.2   Interest . From the date of this Note through the Maturity Date, interest shall accrue hereunder on the outstanding principal amount of this Note at a rate equal to eight percent (8.0%) per annum calculated on the basis of the actual number of days elapsed over a 360-day year.

2.3   Payment of Principal and Interest .

(a)   The outstanding principal amount of this Note shall be due and payable in full on the Maturity Date.

(b)   Interest on this Note shall be payable (i) on the third business day after December 31, 2006 and (ii) thereafter on the third business day after the last day of each calendar quarter. During the PIK Period, at the option of the Company, interest may be paid by delivery of a number of shares of Common Stock equal to the PIK Payment upon 10 business days’ prior notice to the Holder.

2.4   Manner of Payment . Payments of principal and interest on this Note may be made to Holder at the address for such Holder set forth on the signature page hereof or as otherwise directed in writing by Holder (the “Payment Address”). PIK Payments shall be made using the Deposit Withdrawal Agent Commission system operated by the Depository Trust Company to the account specified in writing by the Holder.

2.5   Prepayment . At any time prior to the Maturity Date if the Common Equity is registered for resale by the Holder, the Company may prepay this Note, in whole and not in part, by payment of 110.0% of the principal amount then outstanding. Such prepayment shall be effected by mailing an irrevocable written notice of such prepayment (the “Prepayment Notice”) to the Holder at least 30 days prior to the date of such prepayment designated in the Prepayment Notice (the “Prepayment Date”). The Company shall prepay any principal amount of this Note that has not been converted into Common Equity pursuant to Article III upon or promptly after the Prepayment Date. From and after the Prepayment Date and the payment of the funds necessary to effect such prepayment to the Holder, notwithstanding that this Note so called for prepayment shall not have been surrendered to the Company, this Note shall no longer be deemed outstanding and the Holder of this Note shall have no rights under or with respect to this Note.

2.6   Interest Laws . Notwithstanding any provision to the contrary contained in this Note, the Company shall not be required to pay, and Holder shall not be permitted to contract for, take, reserve, charge or receive, any compensation that constitutes interest under applicable laws in excess of the maximum amount of interest permitted by law. For purposes of this Note, the term “ Excess Interest ” shall mean any compensation that constitutes interest under applicable laws in excess of the maximum amount of interest permitted by such applicable laws. If any Excess Interest is provided for or determined by a court of competent jurisdiction to have been provided for in this Note or otherwise contracted for, taken, reserved, charged or received by Holder, then (i) the provisions of this Section 2.6 shall govern and control, (ii) the Company shall not be obligated to pay any Excess Interest, (iii) any Excess Interest that Holder may have contracted for, taken, reserved, charged or received hereunder shall be credited to unpaid principal, (iv) the interest provided herein shall be automatically reduced to the maximum lawful rate allowed from time to time under applicable laws (the “ Maximum Rate ”) and this Note shall be deemed to have been, and shall be, reformed and modified to reflect such reduction, and (v) the Company shall have no action against Holder for any damages arising due to any Excess Interest. All sums paid or agreed to be paid hereunder for the use, forbearance or detention of sums due shall, to the extent permitted by applicable law, be amortized, pro-rated, allocated and spread throughout the full term of the Obligations until payment in full so that the rate and/or amount of interest charged in connection with the Obligations does not exceed the Maximum Rate.

3.1   Mandatory Conversion . After the Merger Date, all of the outstanding principal amount of this Note, and all accrued and unpaid interest thereon, shall automatically, and without any further action on the part of Holder, be converted into Common Stock upon the occurrence of a Mandatory Conversion Event.

3.2   Optional Conversion . At the option of the Holder, all or any part of the outstanding principal amount of this Note, and any accrued and unpaid interest thereon, may be converted into Common Equity upon the date (the “Optional Conversion Date”) specified in a written notice of conversion delivered to the Company. Such optional conversion shall be effective upon the Optional Conversion Date.

3.3   Conversion Price . The Conversion Price upon the issuance date of this Note is $1.75.

3.4   Conversion