NEITHER
      THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE
      HAVE
      BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES
      ACT”),
      AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
      EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS.

     

    TXP
      CORPORATION

     

    Secured
      Convertible Debenture

    

      
        	
                Issuance
                  Date: May 29, 2008

              	
                Original
                  Principal Amount:     $3,000,000

              
	
                No.
                  TXPO 3-1

              	 


      

    

     

    FOR
      VALUE RECEIVED,
      TXP
      CORPORATION, a Nevada corporation (the "Company"),
      hereby promises to pay to the order of YA GLOBAL INVESTMENTS, L.P. or registered
      assigns (the "Holder"),
      the
      amount set out above as the Original Principal Amount (as reduced pursuant
      to
      the terms hereof pursuant to redemption, conversion or otherwise, the
      "Principal")
      when
      due, whether upon the Maturity Date (as defined below), on any Installment
      Date
      with respect to the Installment Amount due on such Installment Date (each,
      as
      defined herein), acceleration, redemption or otherwise (in each case in
      accordance with the terms hereof) and to pay interest ("Interest")
      on any
      outstanding Principal at the applicable Interest Rate from the date set out
      above as the Issuance Date (the "Issuance
      Date")
      until
      the same becomes due and payable, whether upon an Interest Date (as defined
      below), any Installment Date or the Maturity Date or acceleration, conversion,
      redemption or otherwise (in each case in accordance with the terms hereof).
      This
      Secured Convertible Debenture (including all Secured Convertible Debentures
      issued in exchange, transfer or replacement hereof, this "Debenture")
      is one
      of an issue of Secured Convertible Debentures issued pursuant to the Securities
      Purchase Agreement (as defined herein) (collectively, the "Debentures"
      and
      such other Senior Convertible Debentures, the "Other
      Debentures").
      Certain capitalized terms used herein are defined in Section 17.

     

    (1) GENERAL
      TERMS

     

    (a) Payment
      of Principal.
      On each
      Installment Date, the Company shall pay to the Holder an amount equal to the
      Installment Amount due on such Installment Date in accordance with Section
      3. On
      the Maturity Date, the Company shall pay to the Holder an amount in cash
      representing all outstanding Principal, and accrued and unpaid Interest. The
      "Maturity
      Date"
      shall
      be May 29, 2011, as may be extended at the option of the Holder (i) in the
      event
      that, and for so long as, an Event of Default (as defined below) shall have
      occurred and be continuing on the Maturity Date (as may be extended pursuant
      to
      this Section 1). Other than as specifically permitted by this Debenture, the
      Company may not prepay or redeem any portion of the outstanding Principal
      without the prior written consent of the Holder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Interest.
      Interest shall accrue on the outstanding principal balance hereof at an annual
      rate equal to twelve percent (12%) (“Interest
      Rate”).
      Interest shall be calculated on the basis of a 365-day year and the actual
      number of days elapsed, to the extent permitted by applicable law. Interest
      hereunder shall be paid on each Installment Date and on the Maturity Date (or
      sooner as provided herein) to the Holder or its assignee in whose name this
      Debenture is registered on the records of the Company regarding registration
      and
      transfers of Debentures at the option of the Company in cash, or, provided
      that
      the Equity Conditions are then satisfied, converted into Common Stock at the
      Closing Bid Price on the Trading Day immediately prior to the date
      paid.

     

    (c) Security.
      The
      Debenture is
      secured by a security interest in certain assets of the Company, including
      intellectual property and rights to intellectual property, as evidenced by
      the
      Security Agreements of even date herewith (the “Security
      Documents”).

     

    (2) EVENTS
      OF DEFAULT. 

     

    (a) An
      “Event
      of Default”,
      wherever used herein, means any one of the following events (whatever the reason
      and whether it shall be voluntary or involuntary or effected by operation of
      law
      or pursuant to any judgment, decree or order of any court, or any order, rule
      or
      regulation of any administrative or governmental body:

     

    (i) the
      Company's failure to pay to the Holder any amount of Principal, Interest, or
      other amounts when and as due under this Debenture (including, without
      limitation, the Company's failure to pay any redemption payments or amounts
      hereunder) ) or any other Transaction Document, which is not cured by the
      Company within ten (10) days;

     

    (ii) The
      Company or any subsidiary of the Company shall commence, or there shall be
      commenced against the Company or any subsidiary of the Company under any
      applicable bankruptcy or insolvency laws as now or hereafter in effect or any
      successor thereto, or the Company or any subsidiary of the Company commences
      any
      other proceeding under any reorganization, arrangement, adjustment of debt,
      relief of debtors, dissolution, insolvency or liquidation or similar law of
      any
      jurisdiction whether now or hereafter in effect relating to the Company or
      any
      subsidiary of the Company or there is commenced against the Company or any
      subsidiary of the Company any such bankruptcy, insolvency or other proceeding
      which remains undismissed for a period of 90 days; or the Company or any
      subsidiary of the Company is adjudicated insolvent or bankrupt; or any order
      of
      relief or other order approving any such case or proceeding is entered; or
      the
      Company or any subsidiary of the Company suffers any appointment of any
      custodian, private or court appointed receiver or the like for it or any
      substantial part of its property which continues undischarged or unstayed for
      a
      period of ninety (90) days; or the Company or any subsidiary of the Company
      makes a general assignment for the benefit of creditors; or the Company or
      any
      subsidiary of the Company shall fail to pay, or shall state that it is unable
      to
      pay, or shall be unable to pay, its debts generally as they become due; or
      the
      Company or any subsidiary of the Company shall call a meeting of its creditors
      with a view to arranging a composition, adjustment or restructuring of its
      debts; or the Company or any subsidiary of the Company shall by any act or
      failure to act expressly indicate its consent to, approval of or acquiescence
      in
      any of the foregoing; or any corporate or other action is taken by the Company
      or any subsidiary of the Company for the purpose of effecting any of the
      foregoing;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (iii) The
      Company or any subsidiary of the Company shall default in any of its obligations
      under any other debenture or any mortgage, credit agreement or other facility,
      indenture agreement, factoring agreement or other instrument under which there
      may be issued, or by which there may be secured or evidenced any indebtedness
      for borrowed money or money due under any long term leasing or factoring
      arrangement of the Company or any subsidiary of the Company in an amount
      exceeding $250,000, whether such indebtedness now exists or shall hereafter
      be
      created and such default shall result in such indebtedness becoming or being
      declared due and payable prior to the date on which it would otherwise become
      due and payable, which is not cured by the Company within ten (10)
      days;

     

    (iv) If
      the
      Common Stock is quoted or listed for trading on any of the following and it
      ceases to be so quoted or listed for trading and shall not again be quoted
      or
      listed for trading on any Primary Market within five (5) Trading Days of such
      delisting: (a) the American Stock Exchange, (b) New York Stock Exchange, (c)
      the
      Nasdaq Global Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC
      Bulletin Board (“OTCBB”) (each, a “Primary Market”);

     

    (v) The
      Company or any subsidiary of the Company shall be a party to any Change of
      Control Transaction (as defined in Section 6) unless in connection with such
      Change of Control Transaction this Debenture is retired; 

     

    (vi) the
      Company's (A) failure to cure a Conversion Failure by delivery of the required
      number of shares of Common Stock within five (5) Business Days after the
      applicable Conversion Failure or (B) notice, written or oral, to any holder
      of
      the Debentures, including by way of public announcement, at any time, of its
      intention not to comply with a request for conversion of any Debentures into
      shares of Common Stock that is tendered in accordance with the provisions of
      the
      Debentures, other than pursuant to Section 4(c);

     

    (vii) The
      Company shall fail for any reason to deliver the payment in cash pursuant to
      a
      Buy-In (as defined herein) within five (5) Business Days after such payment
      is
      due; and

     

    (viii) The
      Company shall fail to observe or perform any other covenant, agreement or
      warranty contained in, or otherwise commit any breach or default of any
      provision of this Debenture (except as may be covered by Section 2(a)(i) through
      2(a)(vii) hereof) or any Transaction Document (as defined in Section 17) which
      is not cured within the time prescribed.

     

    (ix) Any
      default occurs with respect to any Other Debentures or the Prior Notes.


     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b) During
      the time that any portion of this Debenture is outstanding, if any Event of
      Default has occurred, the full unpaid Principal amount of this Debenture,
      together with interest and other amounts owing in respect thereof, to the date
      of acceleration shall become at the Holder's election, immediately due and
      payable in cash; provided however, the Holder may request (but shall have no
      obligation to request) payment of such amounts in Common Stock of the Company.
      If an Event of Default occurs and for so long as such Event of Default remains
      uncured, the Interest Rate on this Debenture shall immediately become twenty
      percent (20%) per annum and shall remain at such increased interest rate until
      the applicable Event of Default is cured. Furthermore, in addition to any other
      remedies, the Holder shall have the right (but not the obligation) to convert
      this Debenture at any time after (x) an Event of Default or (y) the Maturity
      Date at the lower of the Conversion Price or the Company Conversion Price.
      The
      Holder need not provide and the Company hereby waives any presentment, demand,
      protest or other notice of any kind, (other than required notice of conversion)
      and the Holder may immediately and without expiration of any grace period
      enforce any and all of its rights and remedies hereunder and all other remedies
      available to it under applicable law. Such declaration may be rescinded and
      annulled by Holder at any time prior to payment hereunder. No such rescission
      or
      annulment shall affect any subsequent Event of Default or impair any right
      consequent thereon. 

     

    (3) COMPANY
      INSTALLMENT CONVERSION OR REDEMPTION.
      

     

    (a) General.
      On each
      applicable Installment Date, the Company shall pay to the Holder of this
      Debenture the Installment Amount due on such date by converting such Installment
      Amount into shares of Common Stock of the Company, provided that there is not
      then an Equity Conditions Failure, in accordance with this Section 3 (a
      "Company
      Conversion");
      provided, however, that the Company may, at its option following notice to
      the
      Holder, redeem such Installment Amount in cash (a "Company
      Redemption")
      or by
      any combination of a Company Conversion and a Company Redemption so long as
      all
      of the outstanding applicable Installment Amount shall be converted and/or
      redeemed by the Company on the applicable Installment Date, subject to the
      provisions of this Section 3. On or prior to the date which is the fifth
      (5th)
      Trading
      Day prior to each Installment Date (each, an "Installment
      Notice Due Date"),
      the
      Company shall deliver written notice (each, a "Company
      Installment Notice"),
      to
      the Holder which Company Installment Notice shall (i) either (A) confirm that
      the applicable Installment Amount of the Holder’s Debenture shall be converted
      in whole pursuant to a Company Conversion or (B) (1) state that the Company
      elects to redeem, or is required to redeem in accordance with the provisions
      of
      the Debenture, in whole or in part, the applicable Installment Amount pursuant
      to a Company Redemption and (2) specify the portion (including Interest) which
      the Company elects or is required to redeem pursuant to a Company Redemption
      (such amount to be redeemed, the "Company
      Redemption Amount")
      and
      the portion (including Interest), if any, that the Company elects to convert
      pursuant to a Company Conversion (such amount a "Company
      Conversion Amount")
      which
      amounts when added together, must equal the applicable Installment Amount and
      (ii) if the Installment Amount is to be paid, in whole or in part, pursuant
      to a
      Company Conversion, certify that there is not then an Equity Conditions Failure
      as of the date of the Company Installment Notice. If the Company does not timely
      deliver a Company Installment Notice in accordance with this Section 3, then
      the
      Company shall be deemed to have delivered an irrevocable Company Installment
      Notice confirming a Company Conversion, and shall thereafter certify that there
      is not then an Equity Conditions Failure in connection with any such conversion.
      The Company Conversion Amount (whether set forth in the Company Installment
      Notice or by operation of this Section 3) shall be converted in accordance
      with
      Section 3(b) and the Company Redemption Amount shall be paid in accordance
      with
      Section 3(c).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b) Mechanics
      of Company Conversion.
      Subject
      to Section 3(d), if the Company delivers a Company Installment Notice and
      elects, or is deemed to have elected, in whole or in part, a Company Conversion
      in accordance with Section 3(a), then the applicable Company Conversion Amount,
      if any, which remains outstanding as of the applicable Installment Date shall
      be
      converted as of the applicable Installment Date by converting on such
      Installment Date such Company Conversion Amount at the Company Conversion Price;
      provided that the Equity Conditions are then satisfied (or waived in writing
      by
      the Holder) on such Installment Date and that the Holder Pro Rata Amount of
      the
      Installment Volume Limitation is not exceeded. If the Equity Conditions are
      not
      satisfied (or waived in writing by the Holder) on such Installment Date or
      the
      Holder Pro Rata Amount of the Installment Volume Limitation is exceeded, then
      at
      the option of the Holder designated in writing to the Company, the Holder may
      require the Company to do any one or more of the following: (i) the Company
      shall redeem all or any part of the unconverted Company Conversion Amount
      designated by the Holder (such designated amount is referred to as the
      "Unconverted
      Redemption Amount")
      and
      the Company shall pay to the Holder within five (5) days of such Installment
      Date, by wire transfer of immediately available funds, an amount in cash equal
      to such Unconverted Redemption Amount, and/or (ii) the Company Conversion shall
      be null and void with respect to all or any part of the unconverted Company
      Conversion Amount designated by the Holder and the Holder shall be entitled
      to
      all the rights of a holder of this Debenture with respect to such designated
      amount of the Company Conversion Amount. If the Company fails to redeem any
      Unconverted Redemption Amount by the fifth (5th)
      day
      following the applicable Installment Date, then the Holder shall have all rights
      under this Debenture (including, without limitation, such failure constituting
      an Event of Default). Notwithstanding anything to the contrary in this Section
      3(b), but subject to Section 4(c)(i), until the Company delivers Common Stock
      representing the Company Conversion Amount to the Holder, the Company Conversion
      Amount may be converted by the Holder into Common Stock pursuant to Section
      4.
      In the event that the Holder elects to convert the Company Conversion Amount
      prior to the applicable Installment Date as set forth in the immediately
      preceding sentence, the Company Conversion Amount so converted shall be deducted
      from the Installment Amounts relating to the applicable Installment Dates as
      set
      forth in the applicable Conversion Notice.

     

    (c) Mechanics
      of Company Redemption.
      If the
      Company elects a Company Redemption in accordance with Section 3(a), then the
      Company Redemption Amount, if any, which is to be paid to the Holder on the
      applicable Installment Date shall be redeemed by the Company on such Installment
      Date, and the Company shall pay to the Holder on such Installment Date, by
      wire
      transfer of immediately available funds, in an amount in cash (the "Company
      Installment Redemption Price")
      equal
      to 120% of the Principal portion of the Company Redemption Amount plus accrued
      and unpaid Interest. If the Company fails to redeem the Company Redemption
      Amount on the applicable Installment Date by payment of the Company Installment
      Redemption Price on such date, then at the option of the Holder designated
      in
      writing to the Company (any such designation, "Conversion
      Notice"
      for
      purposes of this Debenture), the Holder may require the Company to convert
      all
      or any part of the Company Redemption Amount into shares of Common Stock of
      the
      Company at the Company Conversion Price. Conversions required by this Section
      3(c) shall be made in accordance with the provisions of Section 4(b).
      Notwithstanding anything to the contrary in this Section 3(c), but subject
      to
      Section 4(c)(i), until the Company Installment Redemption Price (together with
      any interest thereon) is paid in full, the Company Redemption Amount (together
      with any interest thereon) may be converted, in whole or in part, by the Holder
      into Common Stock pursuant to Section 4. In the event the Holder elects to
      convert all or any portion of the Company Redemption Amount prior to the
      applicable Installment Date as set forth in the immediately preceding sentence,
      the Company Redemption Amount so converted shall be deducted from the
      Installment Amounts relating to the applicable Installment Dates as set forth
      in
      the applicable Conversion Notice.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (d) Deferred
      Installment Amount.
      Notwithstanding any provision of this Section 3 to the contrary, the Holder
      may,
      at its option and in its sole discretion, deliver a written notice to the
      Company at least two (2) days prior to any Installment Notice Due Date electing
      to have the payment of all or any portion of an Installment Amount payable
      on
      the next Installment Date deferred to the Maturity Date. Any amount deferred
      to
      the Maturity Date pursuant to this Section 3(d) shall continue to accrue
      Interest through the Maturity Date.

     

    (e) Company’s
      Additional Cash Redemption.
      The
      Company at its option shall have the right to redeem (“Optional
      Redemption”)
      a
      portion or all amounts outstanding under this Debenture in addition to any
      Installment Amount prior to the Maturity Date provided that as of the date
      of
      the Holder’s receipt of a Redemption Notice (as defined herein) there is no
      Event of Default. The Company shall pay an amount equal to the principal amount
      being redeemed plus a redemption premium (“Redemption
      Premium”)
      equal
      to twenty percent (20%) of the Principal amount being redeemed, and accrued
      Interest, (collectively referred to as the “Company
      Additional Redemption Amount”).
      In
      order to make a redemption pursuant to this Section, the Company shall first
      provide written notice to the Holder of its intention to make a redemption
      (the
“Redemption
      Notice”)
      setting forth the amount of Principal it desires to redeem. After receipt of
      the
      Redemption Notice the Holder shall have twenty (20) Business Days to elect
      to
      convert all or any portion of this Debenture, subject to the limitations set
      forth in Section 4(b). On the twenty first (21st) Business Day after the
      Redemption Notice, the Company shall deliver to the Holder the Company
      Additional Redemption Amount with respect to the Principal amount redeemed
      after
      giving effect to conversions effected during the three (3) Business Day period.
      In addition, the Company shall issue to the Holder a warrant (“Redemption
      Warrant”)
      in
      connection with any Option Redemption. The Redemption Warrant, which shall
      be in
      the form of the Warrant attached as Exhibit B to the Securities Purchase
      Agreement, shall be for such number of shares equal to the Company Optional
      Redemption Amount divided by the Conversion Price then in effect, expire 5
      years
      from its issuance date, and have an exercise price equal to the Conversion
      Price
      then in effect. 

     

    (4) CONVERSION
      OF DEBENTURE. This
      Debenture shall be convertible into shares of the Company's Common Stock, on
      the
      terms and conditions set forth in this Section 4.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (a) Conversion
      Right.
      Subject
      to the provisions of Section 4(c), at any time or times on or after the Issuance
      Date, the Holder shall be entitled to convert any portion of the outstanding
      and
      unpaid Conversion Amount (as defined below) into fully paid and nonassessable
      shares of Common Stock in accordance with Section 4(b), at the Conversion Rate
      (as defined below). The number of shares of Common Stock issuable upon
      conversion of any Conversion Amount pursuant to this Section 4(a) shall be
      determined by dividing (x) such Conversion Amount by (y) the Conversion Price
      (the "Conversion
      Rate").
      The
      Company shall not issue any fraction of a share of Common Stock upon any
      conversion. If the issuance would result in the issuance of a fraction of a
      share of Common Stock, the Company shall round such fraction of a share of
      Common Stock up to the nearest whole share. The Company shall pay any and all
      transfer, stamp and similar taxes that may be payable with respect to the
      issuance and delivery of Common Stock upon conversion of any Conversion Amount.
      

     

    (i) "Conversion
      Amount"
      means
      the portion of the Principal and accrued Interest to be converted, redeemed
      or
      otherwise with respect to which this determination is being made.

     

    (ii) "Conversion
      Price"
      means,
      as of any Conversion Date (as defined below) or other date of determination,
      $0.20,
      subject
      to adjustment as provided herein. 

     

    (b) Mechanics
      of Conversion.

     

    (i) Optional
      Conversion.
      To
      convert any Conversion Amount into shares of Common Stock on any date (a
      "Conversion
      Date"),
      the
      Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt
      on or
      prior to 11:59 p.m., New York Time, on such date, a copy of an executed notice
      of conversion in the form attached hereto as Exhibit
      I
      (the
      "Conversion
      Notice")
      to the
      Company and (B) if required by Section 4(b)(iv), surrender this Debenture to
      a
      nationally recognized overnight delivery service for delivery to the Company
      (or
      an indemnification undertaking reasonably satisfactory to the Company with
      respect to this Debenture in the case of its loss, theft or destruction). On
      or
      before the fifth (5th)
      Business Day following the date of receipt of a Conversion Notice (the
      "Share
      Delivery Date"),
      the
      Company shall (X) if legends are not required to be placed on certificates
      of
      Common Stock pursuant to the Securities Purchase Agreement and provided that
      the
      Transfer Agent is participating in the Depository Trust Company's ("DTC")
      Fast
      Automated Securities Transfer Program, credit such aggregate number of shares
      of
      Common Stock to which the Holder shall be entitled to the Holder's or its
      designee's balance account with DTC through its Deposit Withdrawal Agent
      Commission system or (Y) if the Transfer Agent is not participating in the
      DTC
      Fast Automated Securities Transfer Program, issue and deliver to the address
      as
      specified in the Conversion Notice, a certificate, registered in the name of
      the
      Holder or its designee, for the number of shares of Common Stock to which the
      Holder shall be entitled which certificates shall not bear any restrictive
      legends unless required pursuant to Section 2(g) of the Securities Purchase
      Agreement. If this Debenture is physically surrendered for conversion and the
      outstanding Principal of this Debenture is greater than the Principal portion
      of
      the Conversion Amount being converted, then the Company shall as soon as
      practicable and in no event later than five (5) Business Days after receipt
      of
      this Debenture and at its own expense, issue and deliver to the holder a new
      Debenture representing the outstanding Principal not converted. The Person
      or
      Persons entitled to receive the shares of Common Stock issuable upon a
      conversion of this Debenture shall be treated for all purposes as the record
      holder or holders of such shares of Common Stock upon the transmission of a
      Conversion Notice. In the event of a partial conversion of this Debenture
      pursuant hereto, the principal amount converted shall be deducted from the
      Installment Amounts due on subsequent Installment Dates.

     

    
      
        
        

      

      
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    (ii) Company's
      Failure to Timely Convert.
      If
      within five (5) Trading Days after the Company's receipt of the facsimile copy
      of a Conversion Notice the Company shall fail to issue and deliver a certificate
      to the Holder or credit the Holder's balance account with DTC for the number
      of
      shares of Common Stock to which the Holder is entitled upon such holder's
      conversion of any Conversion Amount (a "Conversion
      Failure"),
      and
      if on or after such Trading Day the Holder purchases (in an open market
      transaction or otherwise) Common Stock to deliver in satisfaction of a sale
      by
      the Holder of Common Stock issuable upon such conversion that the Holder
      anticipated receiving from the Company (a "Buy-In"),
      then
      the Company shall, within five (5) Business Days after the Holder's request
      and
      in the Holder's discretion, either (i) pay cash to the Holder in an amount
      equal
      to the Holder's total purchase price (including brokerage commissions and other
      out of pocket expenses, if any) for the shares of Common Stock so purchased
      (the
"Buy-In
      Price"),
      at
      which point the Company's obligation to deliver such certificate (and to issue
      such Common Stock) shall terminate, or (ii) promptly honor its obligation to
      deliver to the Holder a certificate or certificates representing such Common
      Stock and pay cash to the Holder in an amount equal to the excess (if any)
      of
      the Buy-In Price over the product of (A) such number of shares of Common Stock,
      times (B) the Closing Bid Price on the Conversion Date.

     

    (iii) Book-Entry.
      Notwithstanding anything to the contrary set forth herein, upon conversion
      of
      any portion of this Debenture in accordance with the terms hereof, the Holder
      shall not be required to physically surrender this Debenture to the Company
      unless (A) the full Conversion Amount represented by this Debenture is being
      converted or (B) the Holder has provided the Company with prior written notice
      (which notice may be included in a Conversion Notice) requesting reissuance
      of
      this Debenture upon physical surrender of this Debenture. The Holder and the
      Company shall maintain records showing the Principal and Interest converted
      and
      the dates of such conversions or shall use such other method, reasonably
      satisfactory to the Holder and the Company, so as not to require physical
      surrender of this Debenture upon conversion.

     

    (c) Limitations
      on Conversions.

     

    (i) Beneficial
      Ownership.
      The
      Company shall not effect any conversions of this Debenture and the Holder shall
      not have the right to convert any portion of this Debenture or receive shares
      of
      Common Stock as payment of interest hereunder to the extent that after giving
      effect to such conversion or receipt of such interest payment, the Holder,
      together with any affiliate thereof, would beneficially own (as determined
      in
      accordance with Section 13(d) of the Exchange Act and the rules promulgated
      thereunder) in excess of 9.99% of the number of shares of Common Stock
      outstanding immediately after giving effect to such conversion or receipt of
      shares as payment of interest. Since the Holder will not be obligated to report
      to the Company the number of shares of Common Stock it may hold at the time
      of a
      conversion hereunder, unless the conversion at issue would result in the
      issuance of shares of Common Stock in excess of 9.99% of the then outstanding
      shares of Common Stock without regard to any other shares which may be
      beneficially owned by the Holder or an affiliate thereof, the Holder shall
      have
      the authority and obligation to determine whether the restriction contained in
      this Section will limit any particular conversion hereunder and to the extent
      that the Holder determines that the limitation contained in this Section
      applies, the determination of which portion of the principal amount of this
      Debenture is convertible shall be the responsibility and obligation of the
      Holder. If the Holder has delivered a Conversion Notice for a principal amount
      of this Debenture that, without regard to any other shares that the Holder
      or
      its affiliates may beneficially own, would result in the issuance in excess
      of
      the permitted amount hereunder, the Company shall notify the Holder of this
      fact
      and shall honor the conversion for the maximum principal amount permitted to
      be
      converted on such Conversion Date in accordance with Section 4(a) and, any
      principal amount tendered for conversion in excess of the permitted amount
      hereunder shall remain outstanding under this Debenture. The provisions of
      this
      Section may be waived by the Holder upon not less than 65 days prior notice
      to
      the Company. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (d) Other
      Provisions.

     

    (i) The
      Company shall at all times reserve and keep available out of its authorized
      Common Stock the full number of shares of Common Stock issuable upon conversion
      of all outstanding amounts under this Debenture; and within five (5) Business
      Days following the receipt by the Company of a Holder's notice that such minimum
      number of Underlying Shares is not so reserved, the Company shall promptly
      reserve a sufficient number of shares of Common Stock to comply with such
      requirement.

     

    (ii) All
      calculations under this Section 4 shall be rounded to the nearest $0.0001 or
      whole share.

     

    (iii) The
      Company covenants that it will at all times reserve and keep available out
      of
      its authorized and unissued shares of Common Stock solely for the purpose of
      issuance upon conversion of this Debenture and payment of interest on this
      Debenture, each as herein provided, free from preemptive rights or any other
      actual contingent purchase rights of persons other than the Holder, not less
      than such number of shares of the Common Stock as shall (subject to any
      additional requirements of the Company as to reservation of such shares set
      forth in this Debenture or in the Transaction Documents) be issuable (taking
      into account the adjustments and restrictions set forth herein) upon the
      conversion of the outstanding principal amount of this Debenture and payment
      of
      interest hereunder. The Company covenants that all shares of Common Stock that
      shall be so issuable shall, upon issue, be duly and validly authorized, issued
      and fully paid, nonassessable and, if the Underlying Shares Registration
      Statement has been declared effective under the Securities Act, registered
      for
      public sale in accordance with such Underlying Shares Registration
      Statement.

     

    (iv) Nothing
      herein shall limit a Holder's right to pursue actual damages or declare an
      Event
      of Default pursuant to Section 2 herein for the Company 's failure to deliver
      certificates representing shares of Common Stock upon conversion within the
      period specified herein and such Holder shall have the right to pursue all
      remedies available to it at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief, in each case without
      the need to post a bond or provide other security. The exercise of any such
      rights shall not prohibit the Holder from seeking to enforce damages pursuant
      to
      any other Section hereof or under applicable law. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (5) Adjustments
      to Conversion Price

     

    (a) Adjustment
      of Conversion Price upon Issuance of Common Stock.
      If the
      Company, at any time while this Debenture is outstanding, issues or sells,
      or in
      accordance with this Section 5(a) is deemed to have issued or sold, any shares
      of Common Stock, excluding shares of Common Stock deemed to have been issued
      or
      sold by the Company in connection with any Excluded Securities, for a
      consideration per share (the “New
      Issuance Price”)
      less
      than a price equal to the Conversion Price in effect immediately prior to such
      issue or sale (such price the "Applicable
      Price")
      (the
      foregoing a "Dilutive
      Issuance"),
      then
      immediately after such Dilutive Issuance the Conversion Price then in effect
      shall be reduced to an amount equal to the New Issuance Price. For purposes
      of
      determining the adjusted Conversion Price under this Section 5(a), the following
      shall be applicable:

     

    (i) Issuance
      of Options.
      If the
      Company in any manner grants or sells any Options and the lowest price per
      share
      for which one share of Common Stock is issuable upon the exercise of any such
      Option or upon conversion or exchange or exercise of any Convertible Securities
      issuable upon exercise of such Option is less than the Applicable Price, then
      such share of Common Stock shall be deemed to be outstanding and to have been
      issued and sold by the Company at the time of the granting or sale of such
      Option for such price per share. For purposes of this Section, the "lowest
      price
      per share for which one share of Common Stock is issuable upon the exercise
      of
      any such Option or upon conversion or exchange or exercise of any Convertible
      Securities issuable upon exercise of such Option" shall be equal to the sum
      of
      the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to any one share of Common Stock upon granting or sale
      of
      the Option, upon exercise of the Option and upon conversion or exchange or
      exercise of any Convertible Security issuable upon exercise of such Option.
      No
      further adjustment of the Conversion Price shall be made upon the actual
      issuance of such share of Common Stock or of such Convertible Securities upon
      the exercise of such Options or upon the actual issuance of such Common Stock
      upon conversion or exchange or exercise of such Convertible
      Securities.

     

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities and the lowest
      price per share for which one share of Common Stock is issuable upon such
      conversion or exchange or exercise thereof is less than the Applicable Price,
      then such share of Common Stock shall be deemed to be outstanding and to have
      been issued and sold by the Company at the time of the issuance or sale of
      such
      Convertible Securities for such price per share. For the purposes of this
      Section, the "lowest price per share for which one share of Common Stock is
      issuable upon such conversion or exchange or exercise" shall be equal to the
      sum
      of the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to any one share of Common Stock upon the issuance or
      sale
      of the Convertible Security and upon the conversion or exchange or exercise
      of
      such Convertible Security. No further adjustment of the Conversion Price shall
      be made upon the actual issuance of such share of Common Stock upon conversion
      or exchange or exercise of such Convertible Securities, and if any such issue
      or
      sale of such Convertible Securities is made upon exercise of any Options for
      which adjustment of the Conversion Price had been or are to be made pursuant
      to
      other provisions of this Section, no further adjustment of the Conversion Price
      shall be made by reason of such issue or sale.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion, exchange or exercise of any Convertible
      Securities, or the rate at which any Convertible Securities are convertible
      into
      or exchangeable or exercisable for Common Stock changes at any time, the
      Conversion Price in effect at the time of such change shall be adjusted to
      the
      Conversion Price which would have been in effect at such time had such Options
      or Convertible Securities provided for such changed purchase price, additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold. For purposes of this Section, if the terms
      of
      any Option or Convertible Security that was outstanding as of the Issuance
      Date
      are changed in the manner described in the immediately preceding sentence,
      then
      such Option or Convertible Security and the Common Stock deemed issuable upon
      exercise, conversion or exchange thereof shall be deemed to have been issued
      as
      of the date of such change. No adjustment shall be made if such adjustment
      would
      result in an increase of the Conversion Price then in effect.

     

    (iv) Calculation
      of Consideration Received.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for the difference of (x) the aggregate
      fair
      market value of such Options and other securities issued or sold in such
      integrated transaction, less (y) the fair market value of the securities other
      than such Option, issued or sold in such transaction and the other securities
      issued or sold in such integrated transaction will be deemed to have been issued
      or sold for the balance of the consideration received by the Company. If any
      Common Stock, Options or Convertible Securities are issued or sold or deemed
      to
      have been issued or sold for cash, the consideration received therefor will
      be
      deemed to be the gross amount raised by the Company; provided, however, that
      such gross amount is not greater than 110% of the net amount received by the
      Company therefor. If any Common Stock, Options or Convertible Securities are
      issued or sold for a consideration other than cash, the amount of the
      consideration other than cash received by the Company will be the fair value
      of
      such consideration, except where such consideration consists of securities,
      in
      which case the amount of consideration received by the Company will be the
      Closing Bid Price of such securities on the date of receipt. If any Common
      Stock, Options or Convertible Securities are issued to the owners of the
      non-surviving entity in connection with any merger in which the Company is
      the
      surviving entity, the amount of consideration therefor will be deemed to be
      the
      fair value of such portion of the net assets and business of the non-surviving
      entity as is attributable to such Common Stock, Options or Convertible
      Securities, as the case may be. The fair value of any consideration other than
      cash or securities will be determined jointly by the Company and the Holder.
      If
      such parties are unable to reach agreement within ten (10) days after the
      occurrence of an event requiring valuation (the "Valuation
      Event"),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth (10th)
      day
      following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the Holder. The determination of such appraiser
      shall be deemed binding upon all parties absent manifest error and the fees
      and
      expenses of such appraiser shall be borne by the Company.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (v) Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (A) to receive a dividend or other distribution payable in Common
      Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
      Common Stock, Options or Convertible Securities, then such record date will
      be
      deemed to be the date of the issue or sale of the Common Stock deemed to have
      been issued or sold upon the declaration of such dividend or the making of
      such
      other distribution or the date of the granting of such right of subscription
      or
      purchase, as the case may be.

     

    (b) Adjustment
      of Conversion Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company, at any time while this Debenture is outstanding, shall (a) pay a
      stock dividend or otherwise make a distribution or distributions on shares
      of
      its Common Stock or any other equity or equity equivalent securities payable
      in
      shares of Common Stock, (b) subdivide outstanding shares of Common Stock into
      a
      larger number of shares, (c) combine (including by way of reverse stock split)
      outstanding shares of Common Stock into a smaller number of shares, or (d)
      issue
      by reclassification of shares of the Common Stock any shares of capital stock
      of
      the Company, then the Conversion Price shall be multiplied by a fraction of
      which the numerator shall be the number of shares of Common Stock (excluding
      treasury shares, if any) outstanding before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding after
      such
      event. Any adjustment made pursuant to this Section shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution and shall become effective immediately
      after the effective date in the case of a subdivision, combination or
      re-classification.

     

    (c) Purchase
      Rights.
      If at
      any time the Company grants, issues or sells any Options, Convertible Securities
      or rights to purchase stock, warrants, securities or other property pro rata
      to
      the record holders of any class of Common Stock (the "Purchase
      Rights"),
      then
      the Holder will be entitled to acquire, upon the terms applicable to such
      Purchase Rights, the aggregate Purchase Rights which the Holder could have
      acquired if the Holder had held the number of shares of Common Stock acquirable
      upon complete conversion of this Debenture (without taking into account any
      limitations or restrictions on the convertibility of this Debenture) immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Stock are to be determined for the grant, issue or
      sale
      of such Purchase Rights.

     

    (d) Other
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 4 but
      not expressly provided for by such provisions (including, without limitation,
      the granting of stock appreciation rights, phantom stock rights or other rights
      with equity features), then the Company's Board of Directors will make an
      appropriate adjustment in the Conversion Price so as to protect the rights
      of
      the Holder under this Debenture; provided that no such adjustment will increase
      the Conversion Price as otherwise determined pursuant to this Section
      5.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (e) Other
      Corporate Events.
      In
      addition to and not in substitution for any other rights hereunder, prior to
      the
      consummation of any Fundamental Transaction pursuant to which holders of shares
      of Common Stock are entitled to receive securities or other assets with respect
      to or in exchange for shares of Common Stock (a "Corporate
      Event"),
      the
      Company shall make appropriate provision to insure that the Holder will
      thereafter have the right to receive upon a conversion of this Debenture, at
      the
      Holder's option, (i) in addition to the shares of Common Stock receivable upon
      such conversion, such securities or other assets to which the Holder would
      have
      been entitled with respect to such shares of Common Stock had such shares of
      Common Stock been held by the Holder upon the consummation of such Corporate
      Event (without taking into account any limitations or restrictions on the
      convertibility of this Debenture) or (ii) in lieu of the shares of Common Stock
      otherwise receivable upon such conversion, such securities or other assets
      received by the holders of shares of Common Stock in connection with the
      consummation of such Corporate Event in such amounts as the Holder would have
      been entitled to receive had this Debenture initially been issued with
      conversion rights for the form of such consideration (as opposed to shares
      of
      Common Stock) at a conversion rate for such consideration commensurate with
      the
      Conversion Rate. Provision made pursuant to the preceding sentence shall be
      in a
      form and substance satisfactory to the Required Holders. The provisions of
      this
      Section shall apply similarly and equally to successive Corporate Events and
      shall be applied without regard to any limitations on the conversion or
      redemption of this Debenture.

     

    (f) Whenever
      the Conversion Price is adjusted pursuant to Section 5 hereof, the Company
      shall
      promptly mail to the Holder a notice setting forth the Conversion Price after
      such adjustment and setting forth a brief statement of the facts requiring
      such
      adjustment.

     

    (g) In
      case
      of any (1) merger or consolidation of the Company or any subsidiary of the
      Company with or into another Person, or (2) sale by the Company or any
      subsidiary of the Company of more than one-half of the assets of the Company
      in
      one or a series of related transactions, a Holder shall have the right to (A)
      exercise any rights under Section 2(b), (B) convert the aggregate amount of
      this
      Debenture then outstanding into the shares of stock and other securities, cash
      and property receivable upon or deemed to be held by holders of Common Stock
      following such merger, consolidation or sale, and such Holder shall be entitled
      upon such event or series of related events to receive such amount of
      securities, cash and property as the shares of Common Stock into which such
      aggregate principal amount of this Debenture could have been converted
      immediately prior to such merger, consolidation or sales would have been
      entitled, or (C) in the case of a merger or consolidation, require the surviving
      entity to issue to the Holder a convertible Debenture with a principal amount
      equal to the aggregate principal amount of this Debenture then held by such
      Holder, plus all accrued and unpaid interest and other amounts owing thereon,
      which such newly issued convertible Debenture shall have terms identical
      (including with respect to conversion) to the terms of this Debenture, and
      shall
      be entitled to all of the rights and privileges of the Holder of this Debenture
      set forth herein and the agreements pursuant to which this Debentures were
      issued. In the case of clause (C), the conversion price applicable for the
      newly
      issued shares of convertible Debentures shall be based upon the amount of
      securities, cash and property that each share of Common Stock would receive
      in
      such transaction and the Conversion Price in effect immediately prior to the
      effectiveness or closing date for such transaction. The terms of any such
      merger, sale or consolidation shall include such terms so as to continue to
      give
      the Holder the right to receive the securities, cash and property set forth
      in
      this Section upon any conversion or redemption following such event. This
      provision shall similarly apply to successive such events.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (6) REISSUANCE
      OF THIS DEBENTURE.

     

    (a) Transfer.
      If this
      Debenture is to be transferred, the Holder shall surrender this Debenture to
      the
      Company, whereupon the Company will, subject to the satisfaction of the transfer
      provisions of the Securities Purchase Agreement, forthwith issue and deliver
      upon the order of the Holder a new Debenture (in accordance with Section 6(d)),
      registered in the name of the registered transferee or assignee, representing
      the outstanding Principal being transferred by the Holder and, if less then
      the
      entire outstanding Principal is being transferred, a new Debenture (in
      accordance with Section 6(d)) to the Holder representing the outstanding
      Principal not being transferred. The Holder and any assignee, by acceptance
      of
      this Debenture, acknowledge and agree that, by reason of the provisions of
      Section 4(b)(iii) following conversion or redemption of any portion of this
      Debenture, the outstanding Principal represented by this Debenture may be less
      than the Principal stated on the face of this Debenture.

     

    (b) Lost,
      Stolen or Mutilated Debenture.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Debenture, and, in the case
      of
      loss, theft or destruction, of any indemnification undertaking by the Holder
      to
      the Company in customary form and, in the case of mutilation, upon surrender
      and
      cancellation of this Debenture, the Company shall execute and deliver to the
      Holder a new Debenture (in accordance with Section 6(d)) representing the
      outstanding Principal.

     

    (c) Debenture
      Exchangeable for Different Denominations.
      This
      Debenture is exchangeable, upon the surrender hereof by the Holder at the
      principal office of the Company, for a new Debenture or Debentures (in
      accordance with Section 6(d)) representing in the aggregate the outstanding
      Principal of this Debenture, and each such new Debenture will represent such
      portion of such outstanding Principal as is designated by the Holder at the
      time
      of such surrender.

     

    (d) Issuance
      of New Debentures.
      Whenever the Company is required to issue a new Debenture pursuant to the terms
      of this Debenture, such new Debenture (i) shall be of like tenor with this
      Debenture, (ii) shall represent, as indicated on the face of such new Debenture,
      the Principal remaining outstanding (or in the case of a new Debenture being
      issued pursuant to Section 6(a) or Section 6(c), the Principal designated by
      the
      Holder which, when added to the principal represented by the other new
      Debentures issued in connection with such issuance, does not exceed the
      Principal remaining outstanding under this Debenture immediately prior to such
      issuance of new Debentures), (iii) shall have an issuance date, as indicated
      on
      the face of such new Debenture, which is the same as the Issuance Date of this
      Debenture, (iv) shall have the same rights and conditions as this Debenture,
      and
      (v) shall represent accrued and unpaid Interest from the Issuance
      Date.

     

    (7) NOTICES. Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms hereof must be in writing and will be deemed to have
      been
      delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
      when
      sent by facsimile (provided confirmation of transmission is mechanically or
      electronically generated and kept on file by the sending party); or (iii) one
      (1) Trading Day after deposit with a nationally recognized overnight delivery
      service, in each case properly addressed to the party to receive the same.
      The
      addresses and facsimile numbers for such communications shall be:

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to the Company, to:

            	
              TXP
                Corporation

            
	 	
              1299
                Commerce Drive

            
	 	
              Richardson,
                Texas 75081

            
	 	
              Attention:
                Michael Shores

            
	 	
              Telephone: 
                (214) 575-9300

            
	 	
              Facsimile: 
                 (214) 575-9314

            
	 	 
	
              With
                a copy to: 

            	
              Hodgson
                Russ LLP

            
	 	
              1540
                Broadway, 24th Floor

            
	 	
              New
                York, NY 10036

            
	 	
              Attention:
                Eric Pinero, Esq.

            
	 	
              Telephone:   
                (212) 751-4300

            
	 	
              Facsimile:     
                (212) 751-0928

            


    

    


    
      	
              If
                to the Holder:

            	
              YA
                Global Investments, LP

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07303

            
	 	
              Attention:    
                Mark Angelo

            
	 	
              Telephone:   
                (201) 985-8300

            
	 	 
	
              With
                a copy to:

            	
              David
                Gonzalez, Esq. 

            
	 	
              101
                Hudson Street – Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone:   
                (201) 985-8300

            
	 	
              Facsimile:     
                (201) 985-8266

            


    

    


    or
      at
      such other address and/or facsimile number and/or to the attention of such
      other
      person as the recipient party has specified by written notice given to each
      other party three (3) Business Days prior to the effectiveness of such change.
      Written confirmation of receipt (i) given by the recipient of such notice,
      consent, waiver or other communication, (ii) mechanically or electronically
      generated by the sender's facsimile machine containing the time, date, recipient
      facsimile number and an image of the first page of such transmission or (iii)
      provided by a nationally recognized overnight delivery service, shall be
      rebuttable evidence of personal service, receipt by facsimile or receipt from
      a
      nationally recognized overnight delivery service in accordance with clause
      (i),
      (ii) or (iii) above, respectively.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (8) Except
      as
      expressly provided herein, no provision of this Debenture shall alter or impair
      the obligations of the Company, which are absolute and unconditional, to pay
      the
      principal of, interest and other charges (if any) on, this Debenture at the
      time, place, and rate, and in the coin or currency, herein prescribed. This
      Debenture is a direct obligation of the Company. As long as this Debenture
      is
      outstanding, the Company shall not and shall cause their subsidiaries not to,
      without the consent of the Holder, (i) amend its certificate of incorporation,
      bylaws or other charter documents so as to adversely affect any rights of the
      Holder; (ii) repay, repurchase or offer to repay, repurchase or otherwise
      acquire shares of its Common Stock or other equity securities other than as
      to
      the Underlying Shares to the extent permitted or required under the Transaction
      Documents; or (iii) enter into any agreement with respect to any of the
      foregoing. 

     

    (9) This
      Debenture shall not entitle the Holder to any of the rights of a stockholder
      of
      the Company, including without limitation, the right to vote, to receive
      dividends and other distributions, or to receive any notice of, or to attend,
      meetings of stockholders or any other proceedings of the Company, unless and
      to
      the extent converted into shares of Common Stock in accordance with the terms
      hereof.

     

    (10) No
      indebtedness of the Company is senior to this Debenture in right of payment,
      whether with respect to interest, damages or upon liquidation or dissolution
      or
      otherwise. Without the Holder’s consent, the Company will not and will not
      permit any of their subsidiaries to, directly or indirectly, enter into, create,
      incur, assume or suffer to exist any indebtedness of any kind, on or with
      respect to any of its property or assets now owned or hereafter acquired or
      any
      interest therein or any income or profits there from that is senior in any
      respect to the obligations of the Company under this Debenture.

     

    (11) This
      Debenture shall be governed by and construed in accordance with the laws of
      the
      State of New Jersey, without giving effect to conflicts of laws thereof. Each
      of
      the parties consents to the jurisdiction of the Superior Courts of the State
      of
      New Jersey sitting in Hudson County, New Jersey and the U.S. District Court
      for the District of New Jersey sitting in Newark, New Jersey in connection
      with
      any dispute arising under this Debenture and hereby waives, to the maximum
      extent permitted by law, any objection, including any objection based on forum
      non conveniens to the bringing of any such proceeding in such jurisdictions.
      

     

    (12) If
      the
      Company fails to strictly comply with the terms of this Debenture, then the
      Company shall reimburse the Holder promptly for all fees, costs and expenses,
      including, without limitation, reasonable attorneys’ fees and expenses incurred
      by the Holder in any action in connection with this Debenture, including,
      without limitation, those incurred: (i) during any workout, attempted workout,
      and/or in connection with the rendering of legal advice as to the Holder’s
      rights, remedies and obligations, (ii) collecting any sums which become due
      to
      the Holder, (iii) defending or prosecuting any proceeding or any counterclaim
      to
      any proceeding or appeal; or (iv) the protection, preservation or enforcement
      of
      any rights or remedies of the Holder.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (13) Any
      waiver by the Holder of a breach of any provision of this Debenture shall not
      operate as or be construed to be a waiver of any other breach of such provision
      or of any breach of any other provision of this Debenture. The failure of the
      Holder to insist upon strict adherence to any term of this Debenture on one
      or
      more occasions shall not be considered a waiver or deprive that party of the
      right thereafter to insist upon strict adherence to that term or any other
      term
      of this Debenture. Any waiver must be in writing.

     

    (14) If
      any
      provision of this Debenture is invalid, illegal or unenforceable, the balance
      of
      this Debenture shall remain in effect, and if any provision is inapplicable
      to
      any person or circumstance, it shall nevertheless remain applicable to all
      other
      persons and circumstances. If it shall be found that any interest or other
      amount deemed interest due hereunder shall violate applicable laws governing
      usury, the applicable rate of interest due hereunder shall automatically be
      lowered to equal the maximum permitted rate of interest. The Company covenants
      (to the extent that it may lawfully do so) that it shall not at any time insist
      upon, plead, or in any manner whatsoever claim or take the benefit or advantage
      of, any stay, extension or usury law or other law which would prohibit or
      forgive the Company from paying all or any portion of the principal of or
      interest on this Debenture as contemplated herein, wherever enacted, now or
      at
      any time hereafter in force, or which may affect the covenants or the
      performance of this indenture, and the Company (to the extent it may lawfully
      do
      so) hereby expressly waives all benefits or advantage of any such law, and
      covenants that it will not, by resort to any such law, hinder, delay or impeded
      the execution of any power herein granted to the Holder, but will suffer and
      permit the execution of every such as though no such law has been
      enacted.

     

    (15) Whenever
      any payment or other obligation hereunder shall be due on a day other than
      a
      Business Day, such payment shall be made on the next succeeding Business
      Day.

     

    (16) THE
      PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY
      OF
      THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
      OR
      ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
      DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
      OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
      FOR
      THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

     

    (17) CERTAIN
      DEFINITIONS  For
      purposes of this Debenture, the following terms shall have the following
      meanings:

     

    (a) “Approved
      Stock Plan”
means
      the Company’s Amended and Restated 2006 stock incentive plan as in effect as of
      the date of the Securities Purchase Agreement.

     

    (b) "Bloomberg"
      means
      Bloomberg Financial Markets.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (c) “Business
      Day”
means
      any day except Saturday, Sunday and any day which shall be a federal legal
      holiday in the United States or a day on which banking institutions are
      authorized or required by law or other government action to close.

     

    (d) “Change
      of Control Transaction”
means
      the occurrence of (a) an acquisition after the date hereof by an individual
      or
      legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the
      Exchange Act) of effective control (whether through legal or beneficial
      ownership of capital stock of the Company, by contract or otherwise) of in
      excess of fifty percent (50%) of the voting securities of the Company (except
      that the acquisition of voting securities by the Holder or any other current
      holder of convertible securities of the Company shall not constitute a Change
      of
      Control Transaction for purposes hereof), (b) a replacement at one time or
      over
      time of more than one-half of the members of the board of directors of the
      Company which is not approved by a majority of those individuals who are members
      of the board of directors on the date hereof (or by those individuals who are
      serving as members of the board of directors on any date whose nomination to
      the
      board of directors was approved by a majority of the members of the board of
      directors who are members on the date hereof), (c) the merger, consolidation
      or
      sale of fifty percent (50%) or more of the assets of the Company or any
      subsidiary of the Company in one or a series of related transactions with or
      into another entity, or (d) the execution by the Company of an agreement to
      which the Company is a party or by which it is bound, providing for any of
      the
      events set forth above in (a), (b) or (c).

     

    (e) “Closing
      Bid Price”
means
      the price per share in the last reported trade of the Common Stock on a Primary
      Market or on the exchange which the Common Stock is then listed as quoted by
      Bloomberg.

     

    (f) “Convertible
      Securities”
means
      any stock or securities (other than Options) directly or indirectly convertible
      into or exercisable or exchangeable for Common Stock.

     

    (g) “Commission”
means
      the Securities and Exchange Commission.

     

    (h) “Common
      Stock”
means
      the common stock, par value $.001, of the Company and stock of any other class
      into which such shares may hereafter be changed or reclassified.

     

    (i) "Company
      Conversion Price"
      means,
      the lower of (i) the applicable Conversion Price and (ii) that price which
      shall
      be computed as seventy five percent (75%) of the lowest daily Volume Weighted
      Average Price of the Common Stock during the twenty (20) consecutive Trading
      Days immediately preceding the applicable Installment Date. All such
      determinations to be appropriately adjusted for any stock split, stock dividend,
      stock combination or other similar transaction.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (j) "Equity
      Conditions"
      means
      that each of the following conditions is satisfied: (i) on each day during
      the
      period beginning two (2) weeks prior to the applicable date of determination
      and
      ending on and including the applicable date of determination (the "Equity
      Conditions Measuring Period"), either (x) the Underlying Shares Registration
      Statement filed pursuant to the Registration Rights Agreement shall be effective
      and available for the resale of all applicable shares of Common Stock to be
      issued in connection with the event requiring determination or (y) all
      applicable shares of Common Stock to be issued in connection with the event
      requiring determination shall be eligible for sale without restriction and
      without the need for registration under any applicable federal or state
      securities laws; (ii) on each day during the Equity Conditions Measuring Period,
      the Common Stock is designated for quotation on the Principal Market and shall
      not have been suspended from trading on such exchange or market nor shall
      delisting or suspension by such exchange or market been threatened or pending
      either (A) in writing by such exchange or market or (B) by falling below the
      then effective minimum listing maintenance requirements of such exchange or
      market; (iii) during the Equity Conditions Measuring Period, the Company shall
      have delivered Conversion Shares upon conversion of the Debentures to the Holder
      on a timely basis as set forth in Section 4(b)(ii) hereof; (iv) any applicable
      shares of Common Stock to be issued in connection with the event requiring
      determination may be issued in full without violating Section 4(c) hereof and
      the rules or regulations of the Primary Market; (v) during the Equity Conditions
      Measuring Period, there shall not have occurred an Event of Default; and (vii)
      the Company shall have no knowledge of any fact that would cause (x) the
      Registration Statements required pursuant to the Registration Rights Agreement
      not to be effective and available for the resale of all applicable shares of
      Common Stock to be issued in connection with the event requiring determination
      or (y) any applicable shares of Common Stock to be issued in connection with
      the
      event requiring determination not to be eligible for sale without restriction
      and without the need for registration under any applicable federal or state
      securities laws.

     

    (k) "Equity
      Conditions Failure"
      means
      that on any applicable date the Equity Conditions have not been satisfied (or
      waived in writing by the Holder).

     

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

     

    (m) “Excluded
      Securities”
means,
      (a) shares issued or deemed to have been issued by the Company pursuant to
      an
      Approved Stock Plan (b) shares of Common Stock issued or deemed to be issued
      by
      the Company upon the conversion, exchange or exercise of any right, option,
      obligation or security outstanding on the date prior to date of the Securities
      Purchase Agreement, provided that the terms of such right, option, obligation
      or
      security are not amended or otherwise modified on or after the date of the
      Securities Purchase Agreement, and provided that the conversion price, exchange
      price, exercise price or other purchase price is not reduced, adjusted or
      otherwise modified and the number of shares of Common Stock issued or issuable
      is not increased (whether by operation of, or in accordance with, the relevant
      governing documents or otherwise) on or after the date of the Securities
      Purchase Agreement, (c) the shares of Common Stock issued or deemed to be
      issued by the Company upon conversion of this Debenture, the Prior Notes, or
      the
      Warrants (d) any
      issuance by the Company of securities in connection with a strategic partnership
      or a joint venture (the primary purpose of which is not to raise equity
      capital), or (e) any issuance by the Company of securities as consideration
      for
      a merger or consolidation or the acquisition of a business, product, license,
      or
      other assets of another person or entity. 

     

    (n) "Holder
      Pro Rata Amount"
      means a
      fraction (i) the numerator of which is the Original Principal Amount of this
      Debenture on the Issuance Date and (ii) the denominator of which is the
      aggregate Purchase Price (as defined in the Securities Purchase
      Agreement).

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (o) "Installment
      Amount"
      means
      with respect to any Installment Date, the lesser of (A) the product of (i)
      $167,777, multiplied by (ii) Holder Pro Rata Amount and (B) the Principal amount
      under this Debenture as of such Installment Date, as any such Installment Amount
      may be reduced pursuant to the terms of this Debenture, whether upon conversion,
      redemption or otherwise, together with, in each case the sum of any accrued
      and
      unpaid Interest with respect to such Principal amount. The Installment Amount
      on
      any Installment Date shall be reduced by the Principal Amount of any conversions
      made by the Holder of this Debenture during thirty days immediately preceding
      such Installment Date. In the event the Holder shall sell or otherwise transfer
      any portion of this Debenture, the transferee shall be allocated a pro rata
      portion of the each unpaid Installment Amount hereunder. In the event that
      the
      Holder is the holder of more than one Debenture of this series of Secured
      Convertible Debentures issued pursuant to the Securities Purchase Agreement,
      then the Holder shall have the right to allocate the total Installment Amount
      due to it among the Debentures as it sees fit and shall notify the Company
      of
      such allocation.

     

    (p) "Installment
      Date"
      means
      October 31, 2008, and the first Business Day of each successive calendar month
      thereafter. 

     

    (q) "Installment
      Volume Limitation"
      means
      15% of the aggregate dollar trading volume (as reported on Bloomberg) of the
      Common Stock on the Principal Market over the thirty (30) consecutive Trading
      Day period ending on the Trading Day immediately preceding the applicable
      Installment Notice Date.

     

    (r) “Options”
means
      any rights, warrants or options to subscribe for or purchase shares of Common
      Stock or Convertible Securities.

     

    (s) “Original
      Issue Date”
means
      the date of the first issuance of this Debenture regardless of the number of
      transfers and regardless of the number of instruments, which may be issued
      to
      evidence such Debenture.

     

    (t) “Person”
means
      a
      corporation, an association, a partnership, organization, a business, an
      individual, a government or political subdivision thereof or a governmental
      agency.

     

    (u) “Prior
      Notes”
shall
      mean the secured convertible notes issued to the Holder pursuant to the
      Securities Purchase Agreement dated March 30, 2007. 

     

    (v) “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    (w) “Securities
      Purchase Agreement”
means
      the Securities Purchase Agreement dated May 29, 2008 by and among the Company
      and the Buyers listed on Schedule I attached thereto. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (x) “Trading
      Day”
means
      a
      day on which the shares of Common Stock are quoted on the OTCBB or quoted or
      traded on such Primary Market on which the shares of Common Stock are then
      quoted or listed; provided, that in the event that the shares of Common Stock
      are not listed or quoted, then Trading Day shall mean a Business
      Day.

     

    (y) “Transaction
      Documents”
means
      the Securities Purchase Agreement or any other agreement delivered in connection
      with the Securities Purchase Agreement, including, without limitation, the
      Security Documents, the Irrevocable Transfer Agent Instructions, and the
      Registration Rights Agreement.

     

    (z) “Underlying
      Shares”
means
      the shares of Common Stock issuable upon conversion of this Debenture or as
      payment of interest in accordance with the terms hereof.

     

    (aa) “Underlying
      Shares Registration Statement”
means
      a
      registration statement meeting the requirements set forth in the Registration
      Rights Agreement, covering among other things the resale of the Underlying
      Shares and naming the Holder as a “selling stockholder” thereunder.

     

    (bb) "Volume
      Weighted Average Price"
      means,
      for any security as of any date, the daily dollar volume-weighted average price
      for such security as reported by Bloomberg through its “Historical Price Table
      Screen (HP)” with Market: Weighted Ave function selected, or, if no dollar
      volume-weighted average price is reported for such security by Bloomberg, the
      average of the highest closing bid price and the lowest closing ask price of
      any
      of the market makers for such security as reported in the "pink sheets" by
      Pink
      Sheets LLC. 

     

    (cc) "Warrants"
      has the
      meaning ascribed to such term in the Securities Purchase Agreement, and shall
      include all warrants issued in exchange therefor or replacement
      thereof.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      the
      Company has caused this Secured Convertible Debenture to be duly executed by
      a
      duly authorized officer as of the date set forth above.

     

    
      	 	
              COMPANY:

            
	 	
              TXP
                CORPORATION

            
	 	 
	 	
              By: 

            	
              /s/
                Michael C. Shores

            
	 	
              Name: 
                Michael C. Shores

            
	 	
              Title:   
                Chief Executive Officer

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        I

      CONVERSION
        NOTICE

       

      (To
        be executed by the Holder in order to Convert the
        Debenture)

       

      TO:

       

      The
        undersigned hereby irrevocably elects to convert $________________________
        of
        the principal amount of Debenture No.TXPO-3-1 into Shares of Common Stock
        of
TXP
        CORPORATION,
        according to the conditions stated therein, as of the Conversion Date written
        below.

       

      
        	
                Conversion
                  Date:

              	 	_____________________________________________________________ 
	
                Conversion
                  Amount to be converted:

              	 	
                $_____________________________________________________________

              
	
                Conversion
                  Price:

              	 	
                $_____________________________________________________________

              
	
                Number
                  of shares of Common Stock to be issued:

              	 	______________________________________________________________ 
	
                Amount
                  of Debenture Unconverted:

              	 	
                $

              
	 	 	 
	
                Please
                  issue the shares of Common Stock in the following name and to the
                  following address:

              
	 
	
                Issue
                  to:

              	 	 
	 	 	 
	
                Authorized
                  Signature:

              	 	______________________________________________________________
	
                Name:

              	 	______________________________________________________________
	
                Title:

              	 	______________________________________________________________ 
	
                Broker
                  DTC Participant Code:

              	 	 
	
                Account
                  Number: