TXU Corp. Exhibit 10.k


    
    

    
      	Execution
              Copy	 	 	CONFIDENTIAL
              TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN
              REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
              COMMISSION.


    

     

    Exhibit
      10.k

    TXU
      Generation Development Company LLC

    1601
      Bryan Street

    Dallas,
      TX 75201-3411

    


    June
      6,
      2006

    


    ***

    


    Re:  
Transaction
      Confirmation

                
Our
      Ref:_____________  Fax: 
      _______________ 

     

        
      ***
      Ref:
      _____________ 

     

    Dear
      Sirs:

    


    The
      purpose of this letter agreement (this “Confirmation”)
      is to
      confirm the terms and conditions of the transaction entered into between
***
      (“Party
      A”)
      and
      TXU Generation Development Company LLC, a Delaware limited liability company
      (“Party
      B”)
      on the
      Trade Date specified below (this “Transaction”).

    


    The
      definitions and provisions contained in the 2000 ISDA Definitions published
      by
      the International Swaps and Derivatives Association, Inc. (“ISDA”),
      as
      supplemented from time to time, (collectively the “2000
      ISDA Definitions”)
      are
      incorporated into this Confirmation. Additionally, the 2005 Commodity
      Derivatives Definitions, as supplemented or modified from time to time
      (collectively, the “Commodity
      Definitions”)
      published by ISDA are hereby incorporated into this Confirmation by reference
      with respect to any “Transactions”
      (as
      defined by the Commodity Definitions) in commodities, except as otherwise
      specifically provided in this Confirmation. In the event of any inconsistency
      between the 2000 Definitions and the Commodity Definitions with respect to
      such
      Transactions, the Commodity Definitions will prevail.

    


    This
      Confirmation evidences a complete and binding agreement between Party A and
      Party B as to the terms of the Transaction to which this Confirmation relates.
      The Parties to this Confirmation shall in good faith attempt to negotiate and
      execute a 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the
“ISDA
      Form”
or,
      when executed, the “Agreement”)
      with
      such modifications as Party A and Party B will in good faith agree. Upon
      execution of the Agreement, this Confirmation will supplement, form a part
      of,
      and be subject to that Agreement. Until Party A and Party B execute and deliver
      the Agreement, if any, this Confirmation, together with all other documents
      referring to the ISDA Form (each a “Confirmation”)
      confirming transactions (each a “Transaction”)
      entered into between Party A and Party B (notwithstanding anything to the
      contrary in a Confirmation), shall supplement, form a part of, and be subject
      to
      an agreement (which shall survive the termination of this Transaction) in the
      form of the ISDA Form as if Party A and Party B had executed an agreement in
      such form effective as of the Trade Date of the first Transaction between Party
      A and Party B (but without any Schedule except for (i) the election of Loss
      and
      Second Method for the purposes of payments on early termination, (ii) New York
      law as the governing law, (iii) US Dollars (“USD”)
      as the
      Termination Currency, (iv) specifying that Section 2(c)(ii) of the ISDA Form
      will not apply, (v) Section 5(a)(vi) of the ISDA Form shall be amended by:
      (A)
      deleting the phrase “, or becoming capable at such time of being declared,”
therefrom, (B) the Threshold Amount with respect to Party B shall be $50,000,000
      up to and including December 31, 2007 and $100,000,000 on and after January
      1,
      2008, and (C) deleting clause (2) thereof with respect to Party B, and (vi)
      Party A is the Calculation Agent unless an Event of Default or a Potential
      Event
      of Default where Party A is the Defaulting Party shall occur, in which case
      Party B shall be the Calculation Agent).

    


    This
      Transaction and any future Transactions between the parties are entered into
      on
      the understanding that this Confirmation and any future Confirmations form
      a
      single agreement between the parties, and the parties would not otherwise enter
      into any Transaction(s).

    


    This
      Confirmation supersedes any prior oral or written agreement between the Parties
      regarding the subject matter hereof.
      This Confirmation, together with the ISDA Form, shall constitute the entire
      agreement between the Parties with respect to this
      Transaction.

     

     

    
      ***
        CONFIDENTIAL
        MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

       

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    


    


    Unless
      otherwise agreed, all money payable by one party (the “Payor”)
      to the
      other (the “Payee”)
      in
      respect of a Transaction shall be paid free and clear of, and without
      withholding or deduction for, any taxes or duties of whatsoever nature imposed,
      levied, collected, withheld or assessed by any authority having power to tax
      (a
“Tax”),
      unless the withholding or deduction of such Tax is required by law. In that
      event, unless otherwise agreed, Payor shall pay such additional amounts as
      will
      result in the net amounts receivable by Payee (after taking account of such
      withholding or deduction) being equal to such amounts as would have been
      received by Payee had no such Tax been required to be withheld or deducted;
      provided the term “Tax”
      shall
      not include any Tax that would not been imposed but for (i) the failure of
      Payee
      to timely deliver any tax form or document reasonably requested by Payor, or
      (ii) the existence of any present or former connection between Payee and the
      jurisdiction imposing such Tax other than the mere receipt of payment from
      Payor
      or the performance of Payee's obligations under a Transaction.

    


     

    1.    Transactions:

     

    The
      transactions, the terms of which are set forth in Schedule 1 (collectively,
      this
“Transaction”),
      are
      commodity swaps.

     

       

    2.    Collateral
      Requirements:

     

    Party
      A
      Credit Terms: 

     

    Credit
      Support Provider: ***.

    


    Credit
      Support Document: Guaranty of ***
      in
      the
      form attached as Annex A delivered within two (2) Business Days of the execution
      of this Transaction.

    


    The
      1994
      ISDA Credit Support Annex (New York law) shall apply to this Confirmation and
      is
      incorporated herein by reference. Paragraph 13 thereof is attached as Annex
      B;
      provided that the obligation of Party A to post Eligible Collateral thereunder
      shall not commence until the LC Termination Date. 

     

    Party
      B
      Credit Terms:

     

    Credit
      Support Provider: The issuer of any Acceptable Letter of Credit provided by
      Party B hereunder.

    Credit
      Support Document: (a) Any Acceptable Letter of Credit provided, or required
      to
      be provided, by Party B hereunder; and (b) any document evidencing or granting
      a
      lien in Big Brown Collateral or Alternate Physical Collateral provided, or
      required to be provided, by Party B hereunder.

    


    
      	
              (a)

            	
              Provision
                Controlling.
                Notwithstanding anything to the contrary in this Transaction, the
                ISDA
                Form or the Agreement, the provisions of this Section 2 shall govern
                all
                of the obligations of Party B with respect to the posting of collateral
                to
                Party A with respect to this Transaction, all Transactions under
                the
                Agreement and any Back to Back Documentation (as defined in Section
                9). In
                the event of any conflict between the terms and conditions of this
                Section
                2 and any other provision of the Agreement, any schedule, annex or
                exhibit
                to the Agreement, any Confirmation issued under the Agreement or
                any Back
                to Back Documentation, the terms of this Section 2 shall control
                and
                govern. The parties agree that this Section 2 shall be a part of
                the
                Agreement and any Back to Back Documentation as executed and shall
                serve
                as a collateral addendum for the Agreement and any Back to Back
                Documentation.

            


    

    


    
      	
              (b)

            	
              Trade
                Date to LC Termination Date (“Phase I”).
                

            


    

     

    
      	 	(i)	Phase I Collateral.
              No later than three (3) Business Days after the Trade Date, Party B
              shall,
              in order to secure Party B's obligations hereunder, deliver to Party
              A
              Acceptable Letters of Credit having a collective stated amount equal
              to
              $500 million. Party B shall maintain such Acceptable Letters of Credit
              in
              effect until the date (the “LC
              Termination Date”)
              when Party B (through its applicable Affiliate) provides to Party A
              or
              Party A’s designee, and Party A accepts, the first priority security
              interest in and lien on the Big Brown Collateral or otherwise provides
              to
              Party A or Party A’s designee, and Party A accepts, other Acceptable
              Collateral as described in clause (c)(ii)(A) or (B) as applicable.
              On the
              earlier of (i) the LC Termination Date or (ii) the date on which no
              obligations in respect of this Transaction remain outstanding (other
              than
              contingent and unasserted obligations in



    

    
      
        
        

      

      
        
        

        2

      

      
        
        

      

    

     

     

     

    
 

    
      	 	 	
              respect
                of indemnities and similar provisions), Party A shall return the
                Acceptable Letters of Credit referred to in this clause (b) to Party
                B;
                provided
                that Party A

              may
                continue to hold such
                Acceptable Letters of Credit notwithstanding the occurrence of the
                LC
                Termination Date where Party B has elected to increase the

              amount
                of such Acceptable Letters of Credit pursuant
                to clause (c)(ii)(B) below (and such Acceptable Letters of Credit
                shall be
                subject to return as specified in 

              clause
                (c)(iii) below).

            


    

     

    
      	 	
              (ii)

            	
              Phase
                I Due Diligence on Big Brown Collateral.
                From and after the Trade Date, Party B shall provide, or cause its
                Affiliates to provide, Party A and its representatives with commercially
                reasonable access and cooperation to enable Party A to perform due
                diligence review of the Big Brown Facility and/or the facilities
                making up
                any Alternative Physical Collateral, as applicable, which access
                and
                cooperation shall include (A) providing copies of relevant documents
                (including tax and operational but excluding, except as provided
                in
                subclause (B) following, environmental information), (B) a copy of
                the
                most recent Phase I environmental site assessment, and, if such Phase
                I
                environmental site assessment resulted in a Phase II environmental
                site
                assessment, a copy of such Phase II environmental site assessment,
                (C)
                access to the relevant power generation facility and associated
                interconnection, transportation, storage and other related facilities
                during normal working hours, and (D) good faith responses to customary
                requests for further relevant information (collectively “Due
                Diligence”).
                Party A agrees to complete its Due Diligence within twenty-one (21)
                days
                of receipt from Party B of all of the information in Party A’s Due
                Diligence requests.

            


    

    


    
      	
              (c)

            	
              LC
                Termination Date to Adjustment Date (“Phase II”).
                

            


    

    


    
      	 	
              (i)

            	
              Condition
                Precedent to the Delivery of the Phase II Physical
                Collateral.
                 It
                shall be a condition precedent to Party B’s ability to deliver the first
                priority lien on the Big Brown Collateral pursuant to Section 2(c)(ii)(A)
                or, solely in the event that the Big Brown Collateral has previously
                been
                released, Section 2(f) below, or the first priority lien on the
                Alternative Physical Collateral pursuant to Section 2(c)(ii)(B)(1)
                or,
                solely in the event that the Alternative Physical Collateral has
                previously been released, Section 2(f) below, that first Party A
                shall
                have delivered a notice to Party B that Party A has completed its
                Due
                Diligence review to its satisfaction (a “Diligence
                Completion Notice”)
                or waived the same. Unless and until Party A delivers such notice
                or
                waiver, from and after ninety (90) days after the Trade Date, Party
                B
                shall provide Party A with the Acceptable Letter(s) of Credit specified
                in
                Section 2(c)(ii)(B)(2); provided,
                however,
                that Party B shall be entitled to request in writing that Party A
                deliver
                the Diligence Completion Notice at any time on or after the date
                which is
                thirty (30) days following the Trade Date (or, in the case of any
                transaction under Section 2(f), fourteen (14) days following the
                date on
                which such transaction is proposed) and Party A shall, within ten
                (10)
                Business Days of the delivery of such request, either: (A) deliver
                to
                Party B the Diligence Completion Notice or (B) deliver to Party B
                a
                specific list of outstanding items that it requires in order to complete
                its Due Diligence; provided further
                that if Party A fails to provide either of the foregoing within said
                ten
                (10) Business Day period, it shall be deemed to have waived the condition
                that a Diligence Completion Notice be
                delivered.

            


    

    


    
      	 	
              (ii)

            	
              Delivery
                of Collateral.
                Party B shall, within ninety (90) days of the Trade Date, in order
                to
                secure its obligations to Party A hereunder,
                either:

            


    

     

    
      	 	 	(A)	if
              the condition in Section 2(c)(i) above has been satisfied or waived,
              cause
              to be delivered to Party A or Party A’s designee: (1) a first priority
              lien on and security interest in the Big Brown Collateral, subject
              to Big
              Brown Permitted Liens; provided
              that such first priority lien and security interest is and shall be
              applicable solely to Party B’s obligations under this Transaction, all
              Transactions under the Agreement and any other Back to Back Documentation
              in an amount not to exceed its Collateral Percentage of the value of
              the
              Big Brown Collateral, (2) if required by Party A, a mortgagee’s title
              policy on the real property interests in the Big Brown Collateral in
              a
              form reasonably acceptable to Party A and in an amount equal to
              $100,000,000, or such lesser amount as may be agreed between Party
              A and
              Party B as representing the value of the real property interests only
              with
              respect to the Big Brown Collateral, (3) evidence of property insurance
              covering the Big Brown Collateral consistent with customary utility
              standards, (4) an opinion of Texas counsel (which may be in-house
              counsel), and, with respect to enforceability of this Transaction,
              New
              York counsel to Party B (in each case subject to customary qualifications,
              assumptions and exceptions) as to the valid formation of Party B and
              Big
              Brown Company, the power and authority of Party B



    

     

     

     

    
      
        
        

      

      
        
        

        3

      

      
        
        

      

    

     

     

     

    
      	 	 	 	
              and
                Big Brown Company to execute, deliver, enter into, and perform its
                obligations under this Transaction and the collateral security documents,
                the enforceability of this Transaction, the creation and perfection
                of the
                security interests in the Big Brown Collateral in favor of Party
                A (or its
                designee) or its collateral agent and that this Transaction, the
                Agreement
                and the collateral security documents do not violate the provisions
                of
                Party B or Big Brown Company’s governing documents or material agreements
                (collectively, the “Opinions”);
                (5) a copy of a real property mortgage and fixture filing (the
                “Big
                Brown Mortgage”)
                granting the lien and security interest referred to in clause (1)
                above,
                (6) UCC-1 financing statements filed with the appropriate state and
                local
                authorities perfecting the lien and security interest on personal
                property
                referred to in clause (1) above, (7) a letter agreement, in a form
                reasonably acceptable to Party A, between Party B and Big Brown Company
                pursuant to which Party B pays Big Brown Company a fee of $500,000
                per
                annum (in advance) in consideration for Big Brown Company making
                its
                assets available for credit support for Party B’s obligations, and which
                provides that, for so long as the Big Brown Collateral is provided
                to
                Party A hereunder, such letter agreement shall not be materially
                modified
                or terminated nor any of its material provisions waived, without
                the prior
                written consent of Party A, (8) a letter from TXU Energy Company
                LLC to
                Party A pursuant to which TXU Energy Company LLC indemnifies Party
                A from
                and against any and all claims, losses, liabilities, suits, obligations,
                fines, damages, judgments, penalties, charges, costs and expenses
                (including reasonable attorneys' fees and disbursements), whether
                civil or
                criminal, arising under a theory of negligence or strict liability,
                or
                otherwise, which, directly or indirectly: (I) arise or relate to
                the
                period when an Affiliate of Party B was the owner or operator of
                the Big
                Brown Collateral, and (II) result from, or in connection with, any
                use,
                release or discharge of Hazardous Materials in violation of applicable
                law
                at, upon or under any property of Big Brown Company, and which provides
                that such indemnity letter will survive the transfer or novation
                of this
                Transaction, and (9) an
                opinion of a qualified investment bank or valuation consultant (mutually
                acceptable to Party A and Party B) that, after the delivery of the
                Big
                Brown Collateral hereunder, the Big Brown Company shall be solvent,
                provided that the cost of such opinion shall be for the account of
                Party A
                (in the amount agreed upon prior to the commencement of such bank
                or
                consultant's engagement) (and
                Big Brown Company shall, until the lien on the Big Brown Collateral
                is
                released in accordance with clause 2(c)(iii) below, be considered
                a
                “Credit
                Support Provider”
                hereunder); or

            


    

     

     

    
      	 	 	(B)	provide
              to Party A (or Party A's designee)
              either:


    

    
       

      
        	 	
                (1)
                  

              	
                if
                  the condition in Section 2(c)(i) above has been satisfied or waived,
                  collateral in the form of a first priority lien on and security
                  interest
                  in all or a portion of another coal and/or lignite-fired power
                  plant
                  (“Alternative
                  Physical Collateral”),
                  as mutually agreed between Party A and Party B and subject to Alternative
                  Physical Collateral Permitted Liens, which Alternative Physical
                  Collateral
                  shall be (a) of at least equivalent value to the Big Brown Collateral,
                  as
                  determined by reference to the written opinion of an accounting
                  or energy
                  consulting firm chosen by mutual agreement of the Parties and generally
                  known in the utility industry to have expertise in valuing power
                  generation facilities, (b) delivered together with the deliverables
                  identified in sub-clauses (2) through (9) of Section 2(c)(ii)(A)
                  of this
                  Confirmation, with such changes as are necessary to reflect the
                  substitution of the Alternative Physical Collateral for the Big
                  Brown
                  Collateral, and the owner of the Alternative Physical Collateral
                  for Big
                  Brown Company, and (c) documented to reflect such grant of collateral
                  as
                  the parties may agree. The value of Party A’s claim against the lien and
                  security interest shall be limited to an amount equal to the Collateral
                  Percentage of the value of the Alternative Physical Collateral;
                  or

              


      

      


      
        	 	
                (2)
                  

              	
                Acceptable
                  Letters of Credit having a collective stated amount of $1 billion;
                  provided
                  that if the Big Brown Collateral, Alternative Physical Collateral
                  or the
                  DevCo Collateral has not been provided prior to the date that is
                  three
                  hundred and sixty-five (365) days following the Trade Date (such
                  date, the
                  “Anniversary
                  Date”),
                  the aggregate amount of such Acceptable Letters of Credit shall
                  be
                  increased on the Anniversary Date to $2.0
                  billion;

              


      

    

     

    
      
        
        

      

      
        
        

        4

      

      
        
        

      

    

    


    (any
      such
      credit support as referred to in the foregoing clauses (1) and (2),
“Acceptable
      Collateral”);

    


     provided
      that:
      (x) if Party B is able to cause to be provided to Party A the Big Brown
      Collateral referred to in clause 2(c)(ii)(A), any Alternative Physical
      Collateral or the DevCo Collateral provided in Section 2(d) below at any time
      following the posting of Acceptable Letters of Credit, such Acceptable Letters
      of Credit shall promptly be returned to Party B by Party A and the provisions
      of
      clause (A) above (in the case of the Big Brown Collateral), clause (B)(1) above
      (in the case of Alternative Physical Collateral) or Section 2(d) (in the case
      of
      the DevCo Collateral) shall apply and (y) if Party B is able to cause to be
      provided to Party A the Big Brown Collateral referred to in the foregoing clause
      (A) or the DevCo Collateral provided in Section 2(d) below at any time following
      the posting of any Alternative Physical Collateral, Party A shall promptly
      release its lien on and security interest in such Alternative Physical
      Collateral (and Party A shall promptly execute such releases and other
      documentation as may be necessary or, in the reasonable opinion of Party B,
      desirable to effect such release) and the provisions of clause (A) above (in
      the
      case of the Big Brown Collateral) or Section 2(d) (in the case of the DevCo
      Collateral) shall apply.

     

    
      	 	
              (iii)

            	Release
              of Collateral.
              On the earlier of (A) the Five Plant Permit Date and (B) the date on
              which
              no obligations in respect of this Transaction remain outstanding (other
              than contingent and unasserted obligations in respect of indemnities
              and
              similar provisions), Party A shall, at Party B’s sole cost and expense,
              release its liens on and security interests in the Big Brown Collateral
              or
              other Acceptable Collateral (or, in the case of Acceptable Collateral
              consisting of an Acceptable Letters of Credit, return such Acceptable
              Letters of Credit to Party B) and promptly execute such releases and
              other
              documentation as may be necessary or, in the reasonable opinion of
              Party
              B, desirable to effect such release.


    

     

    
      	 	(iv)	Additional
              Liens.
              If, at any time, and subject to Section 2(c)(v) below, Party B or any
              of
              its affiliates desire to provide a lien on and security interest in
              the
              Big Brown Collateral or other Alternative Physical Collateral to any
              person other than Party A in order to secure obligations under any
              other
              indebtedness (including, without limitation, other commodity hedges,
              power
              purchase agreements or similar hedge obligations) of any person, Party
              A
              agrees that (A) to the extent that any mortgage or security interest
              has
              been granted in such collateral in Party A’s name or the name of its
              designee, it shall cause such collateral to be assigned or otherwise
              transferred to a collateral agent selected by Party B to act for the
              benefit of all persons that are to share in such collateral pursuant
              to
              such indebtedness and (B) it shall execute and deliver such collateral
              agency and intercreditor documentation as may be necessary or, in the
              opinion of Party B, desirable to: (1) appoint the collateral agent
              for
              purposes of holding the applicable collateral and exercising remedies
              in
              respect thereof, (2) reflect the sharing of the lien on such collateral
              on
              a pari passu basis with Party A’s interest equaling its Collateral
              Percentage (or Modified Percentage, as applicable) of the value of
              the Big
              Brown Collateral (or value of the Alternative Physical Collateral,
              as
              applicable) and (3) reflect that Party A shall only be entitled to
              vote
              its Collateral Percentage (or Modified Percentage, as applicable) in
              connection with any exercise of remedies against the Big Brown Collateral
              or other Alternative Physical Collateral. It
              is understood and agreed that in the event that any person other than
              Party A shall be granted a lien on the Big Brown Collateral or Alternative
              Physical Collateral as contemplated in this clause (iv), such person
              will
              have a "Collateral Percentage" and a "Modified Percentage" calculated
              in
              respect of it in the same manner as Party A's Collateral Percentage
              and
              Modified Percentage are calculated hereunder.  In addition, where
              this agreement refers to the aggregate Collateral Percentage or aggregate
              Modified Percentage, it is understood and agreed that this means the
              aggregate across all parties secured by liens on the Big Brown Collateral
              or Alternative Physical Collateral, as the case may
              be.


    

     

    
      	 	
              (v)

            	
              Limits
                on Additional Hedges.
                ***

            


    

     

    
      	 	
              (vi)

            	Restrictions on Further Liens in
              Phase I
              and Phase II.
              Prior to the Adjustment Date, to the extent that any mortgage or security
              interest has been granted in the Big Brown Collateral or Alternative
              Physical Collateral in Party A’s name or the name of its designee, Party B
              shall not, and shall cause Big Brown Company not to and/or if applicable
              the owner of any Alternative Physical Collateral not to, create, incur
              or
              suffer to exist any liens on Big Brown Collateral or Alternative Physical
              Collateral, as applicable, other than the liens granted herein and,
              in the
              case of Big Brown Collateral, any Big Brown



    

     

    
      
        
        

      

      
        
        

        5

      

      
        
        

      

    

     

    
      	 	 	Permitted
              Lien and in the case of Alternative Physical Collateral, any Alternative
              Physical Collateral Permitted Lien (including, without limitation,
              in the
              case of Big Brown Permitted Liens and Alternative Physical Collateral
              Permitted Liens, liens in favor of other counterparties on power purchase
              agreements and commodity or hedging agreements, as contemplated in
              Section
              2(c)(iv)).


    

     

    
      	 	(vii)	
              Shared
                Facilities at Big Brown.
                In connection with the development, construction and operation of
                Unit 3
                of the Big Brown Facility, Big Brown Company and Party B (or its
                affiliates) shall enter into one or more shared facilities agreements
                on
                commercially reasonable terms in order to assure that both parties
                have
                full use and enjoyment of shared facilities at the Big Brown facility,
                including but not limited to, coal storage and handling, rail access,
                fire
                suppression, electrical interconnection and water supply. Such agreements
                shall also contain customary non-exclusive reciprocal easements for
                access, egress, utilities, control systems and plant operations.
                Party A,
                if it is the sole mortgagee with respect to the Big Brown Collateral,
                shall have the right, upon enforcement of its remedies in accordance
                with
                the security interest under the Big Brown Mortgage, to have access
                to
                shared facilities and related easements so as to facilitate its full
                use
                and enjoyment of the Big Brown Collateral (“Step-In
                Rights”),
                and any intercreditor documentation subsequently entered into hereunder
                will grant Step-In Rights to the applicable collateral agent for
                the
                benefit of Party A and
                other creditors under the Big Brown Mortgage. The
                sharing agreements shall provide that Big Brown Company agrees and
                consents to the assignment of rights and delegation of duties under
                such
                shared facilities agreements pursuant to the Step-In Rights.
                

            


    

    
      	  	
               

            


    

    
      	 	
              (viii)

            	
              Further
                Due Diligence.
                Party A may, at any time and from time to time, conduct further follow-on
                Due Diligence and request regularly produced environmental reports
                (unless
                the furnishing of such reports would jeopardize claims of privilege)
                on
                any Big Brown Collateral or Alternate Physical Collateral that has
                been
                provided under this Confirmation.

            


    

     

    (d)    Following
      Adjustment Date (“Phase III”).

     

     

    
      	   	
              (i)

            	
              Delivery
                of Collateral; Intercreditor Terms.
                By no later than the Adjustment Date, in order to secure its obligations
                under this Transaction and the Agreement, Party B shall deliver to
                Party
                A:

            


    

     

    
      	 	 	
              (A)
                

            	
              (1)
                a first priority security interest in and lien on the DevCo Collateral,
                which security interest and lien are pari
                passu
                with the First Lien Credit Facilities, subject to DevCo Permitted
                Liens
                (which security interest shall be granted through the execution by
                Party A
                of an instrument which entitles Party A to share in the first priority
                lien granted in the DevCo Collateral to holders of obligations under
                the
                First Lien Credit Facilities and a collateral agency and intercreditor
                agreement executed in connection with the Senior Credit Facilities,
                which
                collateral agency and intercreditor agreement shall be on terms materially
                consistent with the last paragraph of this clause (d)(i) (the “Intercreditor
                Agreement”));
                provided
                that such first priority security interest and lien is and shall
                be
                applicable solely to Party B’s obligations under this Transaction and the
                Agreement in an amount not to exceed Party A’s Collateral Percentage of
                the Maximum Credit Amount, (2) a reliance letter permitting Party
                A to
                rely on the opinions given to the administrative agent for the lenders
                under the First Lien Credit Facilities by Texas counsel (which may
                be
                in-house counsel), and New York counsel in connection with the closing
                of
                the Senior Credit Facilities; and (3) a copy of a real property mortgage
                and fixture filing granting the lien and security interest referred
                to in
                clause (1) above together with copies of UCC-1 financing statements
                filed
                with the appropriate state and local authorities perfecting the lien
                and
                security interest on personal property referred to in clause (1)
                above;
                and

            


    

     

    
      	 	 	(B)	(1)
              a second priority security interest in and lien on the DevCo Collateral,
              which security interest and lien are pari
              passu
              with the Second Lien Credit Facilities, subject to DevCo Permitted
              Liens
              (which security interest shall be granted through the execution by
              Party A
              of (1) an instrument which entitles Party A to share in the second
              priority lien granted in the DevCo Collateral to holders of obligations
              under the Second Lien Credit Facilities and (2) the Intercreditor
              Agreement); provided
              that such second priority security interest and lien is and shall be
              applicable solely to DevCo’s obligations under this Transaction and the
              Agreement for any amount in excess of the amount secured by a first
              lien
              as provided in clause (A) above (and shall exclude, for the avoidance
              of
              doubt, any obligations novated or terminated as



    

     

     

    
      
        
        

      

      
        
        

        6

      

      
        
        

      

    

     

    
      	 	 	provided in Section 2 (f)(i), (ii) or
              (iv)
              below), (2) a reliance letter permitting Party A to rely on the opinions
              given to the administrative agent for the lenders under the Second
              Lien
              Credit Facilities by Texas counsel, or in-house counsel, as appropriate,
              and New York counsel in connection with the closing of the Senior Credit
              Facilities; and (3) a copy of a real property mortgage and fixture
              filing
              granting the lien and security interest referred to in clause (1) above
              together with copies of UCC-1 financing statements filed with the
              appropriate state and local authorities perfecting the lien and security
              interest on personal property referred to in clause (1)
              above.


    

       


    
      The
        salient terms of the Intercreditor Agreement shall provide that Party A:
        (x)
        with respect to its first lien described in clause (A), (I) such first lien
        shall be pari
        passu
        with the
        First Lien Credit Facilities as provided in clause (A)(1) above, (II) shall
        be
        entitled to share in the first lien on the DevCo Collateral as a secured
        party
        in the event of a liquidation of such collateral in an amount up to the Maximum
        Credit Amount and (III) so long as there are outstanding obligations under
        the
        First Lien Credit Facilities, shall have no voting rights with respect to
        any
        matters thereunder except (aa) that Party A shall have voting rights in
        connection with an exercise of remedies against the DevCo Collateral undertaken
        by the holders of indebtedness under the First Lien Credit Facilities after
        Party A shall have declared an Early Termination Date with respect to this
        Transaction, all other Transactions under the Agreement and under any Back
        to
        Back Documentation, and calculated the payment due in respect of such
        Transactions under Section 6(e) of the ISDA Form (or the Agreement if it
        has
        been executed), or in the case of Back to Back Documentation, the provision
        of
        such documentation analogous to Section 6(e), such that a net amount owing
        with
        respect to such Early Termination Date is determined (an “Aggregate
        Net Settlement Amount”)
        with
        respect to this Transaction, all Transactions under the Agreement and all
        other
        Back to Back Documentation (and such voting rights shall be capped at an
        amount
        equal to the lesser of its Aggregate Net Settlement Amount and its Collateral
        Percentage of the Maximum Credit Amount ) and (bb) that Party A shall have
        voting rights in respect of changing any priority of payments provision set
        out
        in any First Lien Collateral Document where such change would have the effect
        of
        preferring accelerated principal payments under the First Lien Credit Facilities
        over any Early Termination Amount in respect of this Transaction, any other
        Transactions under the Agreement and any other Back to Back Documentation
        (subject to the Maximum Credit Amount) and (y) with respect to its second
        lien
        described in clause (B), (I) such second lien shall be pari passu with the
        Second Lien Credit Facilities as provided in clause (B)(1) above (II) shall
        be
        entitled to share in the second lien on the DevCo Collateral as a secured
        party
        in the event of a liquidation of such collateral and (III) shall have no
        voting
        rights with respect to any matters thereunder except (aa) in connection with
        an
        exercise of remedies against the DevCo Collateral undertaken by the holders
        of
        indebtedness under the Second Lien Credit Facilities after Party A shall
        have
        declared an Early Termination Date with respect to this Transaction, all
        Transactions under the Agreement and under Back to Back Documentation and
        determined an Aggregate Net Settlement Amount with respect to with respect
        to
        this Transaction, all Transactions under the Agreement and all other Back
        to
        Back Documentation (and such voting rights shall be capped at an amount equal
        to
        the Aggregate Net Settlement Amount and (bb) in respect of changing any priority
        of payments provision set out in any Second Lien Collateral Document where
        such
        change would have the effect of preferring accelerated principal payments
        under
        the Second Lien Credit Facilities over any Early Termination Amount in respect
        of this Transaction, any Transactions under the Agreement and any other Back
        to
        Back Documentation. Party A understands and agrees that the second lien will
        be
        structured as junior and subordinate to the liens of all indebtedness under
        the
        First Lien Credit Facilities (both before and after any bankruptcy of
        DevCo).


      


      
        	 	
                (ii)

              	
                Release
                  of Collateral.
                  Party A agrees that it shall, at Party B’s sole cost and expense, release
                  its first and second liens on and security interests in the DevCo
                  Collateral (and Party A shall promptly execute such releases and
                  other
                  documentation as may be necessary or, in the reasonable opinion
                  of Party
                  B, desirable to effect such release): (A) on the date on which
                  no
                  obligations in respect of this Transaction remain outstanding (other
                  than
                  contingent and unasserted obligations in respect of indemnities
                  and
                  similar provisions) and (B) in connection with any sale, lease,
                  transfer
                  or other disposition of such DevCo Collateral that is permitted
                  under the
                  Senior Credit Facilities and, in the case of such clause (B), all
                  other
                  creditors who are parties to the Intercreditor Agreement, have
                  simultaneously released all of their liens on such DevCo
                  Collateral.

              


      

    

    
      	 	 	 


    

     

    
      
        
        

      

      
        
        

        7

      

      
        
        

      

    

    

      
        	
                (e)

              	
                Additional
                  Terms.

              


      

      


      
        	 	
                (i)
                  

              	
                Incorporation
                  of First Lien Restrictive Covenants.
                  On and after the Adjustment Date and prior to release of Party
                  A’s first
                  lien on the DevCo Collateral as described hereunder, the covenants
                  of any
                  First Lien Credit Facilities which directly have the effect of
                  (A)
                  restricting Party B’s (or DevCo’s, as applicable) ability to grant or
                  suffer the existence of additional liens on the DevCo Collateral
                  and (B)
                  restricting Party B’s (or DevCo’s, as applicable) ability to incur
                  additional indebtedness for borrowed money, are hereby incorporated
                  by
                  reference in their entirety as the same may be amended, modified,
                  waived
                  or supplemented in accordance with the terms of the First Lien
                  Credit
                  Facilities. 

              


      

      


      
        	 	
                (ii)

              	
                Incorporation
                  of Second Lien Restrictive Covenants.
                  On
                  and after the Adjustment Date and prior to release of Party A’s second
                  lien on the DevCo Collateral as described hereunder, the covenants
                  of any
                  Second Lien Credit Facilities which directly have the effect of
                  (A)
                  restricting Party B’s (or DevCo’s, as applicable) ability to grant or
                  suffer the existence of additional liens on the DevCo Collateral
                  and (B)
                  restricting Party B’s (or DevCo’s, as applicable) ability to incur
                  additional indebtedness for borrowed money, are hereby incorporated
                  by
                  reference in their entirety as the same may be amended, modified,
                  waived
                  or supplemented in accordance with the terms of the Second Lien
                  Credit
                  Facilities.

              


      

      


      
        	 	
                (iii)

              	
                Refinancing.
                  In the event of a refinancing or replacement of all or a portion
                  of the
                  Senior Credit Facilities in accordance with the terms thereof,
                  upon the
                  request of Party B, Party A shall enter into or consent to substitute
                  First and Second Lien Collateral Documents and/or intercreditor
                  agreements
                  (as applicable). Party A shall not have any right to object to
                  (and shall
                  be deemed to have accepted) any provisions of such substitute agreement(s)
                  which are more favorable to Party A than the provisions contemplated
                  by
                  the original agreement being entered into on the Five Plant Permit
                  Date.
                  Party A shall also have no right to object to (and shall be deemed
                  to have
                  accepted) any provisions of such substitute agreement(s) which
                  (A) are
                  less favorable to it than the provisions contemplated by such original
                  agreement, if and to the extent the lenders under the applicable
                  Senior
                  Credit Facilities have accepted such provisions and such provisions
                  do not
                  materially and adversely affect Party A’s rights (taken as a whole) as a
                  secured counterparty or (B) are customary for intercreditor, security,
                  pledge or collateral agreements relating to similar transactions
                  (to the
                  extent not in conflict with the provisions of this Section 2).
                  Without
                  limiting the foregoing, Party A shall have no approval rights over
                  the
                  collateral agent, the depositary agent, or any consultant or advisor
                  referred to in such substitute
                  agreement(s).

              


      

      


      (iv)   Further
        Assurances, Sale of Collateral.
        

       

      
        	 	
                (A)

              	
                For
                  so long as Party B is required to provide Big Brown Collateral,
                  Alternative Physical Collateral or DevCo Collateral hereunder,
                  Party B
                  shall, and shall cause, as applicable, Big Brown Company, the owner
                  of any
                  Alternative Physical Collateral, and each Subsidiary Guarantor,
                  to
                  preserve, protect and defend the liens and security interests granted
                  on
                  such collateral, or in the case of DevCo Collateral, under the
                  applicable
                  First Lien Collateral Documents and Second Lien Collateral Documents,
                  and,
                  from time to time, take such actions as may be reasonably necessary
                  to
                  render fully valid and enforceable under all applicable laws the
                  rights,
                  liens and priorities of Party A with respect to such collateral
                  furnished
                  thereunder or intended to be so
                  furnished.

              


      

       

      
        	 	
                (B)

              	
                For
                  so long as Party B is required to provide Big Brown Collateral
                  or
                  Alternative Physical Collateral hereunder, Party B shall not, and
                  shall
                  not permit Big Brown Company or the owner of any Alternative Physical
                  Collateral to, sell, lease, transfer or otherwise dispose of any
                  material
                  portion of the Big Brown Collateral or Alternative Physical Collateral;
                  provided
                  that Party B, Big Brown Company and the owner of any Alternative
                  Physical
                  Collateral shall be permitted to (i) sell or otherwise dispose
                  of power,
                  capacity, ancillary services, coal, natural gas, fuel or inventory,
                  (ii)
                  sell, lease, transfer or otherwise dispose of assets that are obsolete,
                  damaged or not used or useful in its business, (iii) sell, lease,
                  transfer
                  or otherwise dispose of assets to any Subsidiary Guarantor, and
                  (iv) sell,
                  lease, transfer or otherwise dispose of assets for cash consideration
                  in
                  an aggregate amount not to exceed $25,000,000 in any calendar
                  year.

              


      

       

    

     

    
      
        
        

      

      
        
        

        8

      

      
        
        

      

    

     

     

    
      	(f)	Overhedging; Other
              Adjustments.	 


    

    
       

      
        	
                  

              	(i)	
                Overhedging.
                  On December 31, 2007 (the “Hedge
                  Calculation Date”)
                  Party B shall (A) calculate the gross capacity for all Subject
                  DevCo
                  Facilities (such capacity, the “Permitted
                  Capacity”);
                  (B) calculate the “Permitted
                  Hedge Capacity”
                  for each of calendar years 2009, 2010, 2011 and 2012 (each such
                  year, a
                  “Hedge
                  Year”),
                  which shall equal 51,000,000 MMBtus of natural gas hedge transactions
                  per
                  1,000 MW of Permitted Capacity scheduled to be commercially available
                  in
                  such calendar year per the EPC Contract as of December 31, 2007
                  (provided
                  that the
                  size of the maximum allowed hedge position (as above, 51,000,000
                  MMBtus
                  per 1,000 MW of Permitted Capacity) will be prorated to reflect
                  the
                  monthly production schedule in each such Hedge Year based on the
                  target
                  online dates as of December 31, 2007); and (C)
                  provide written notice of the Permitted Capacity and Permitted
                  Hedge
                  Capacity to Party A (the “Hedge
                  Capacity Notice”).
                  In
                  the event that notional amount of MMBtus hedged under this Transaction,
                  together with any other Transactions under the Agreement or any
                  other Back
                  to Back Documentation and any hedge documentation with third-party
                  hedge
                  providers (collectively, for any such year, the “Total
                  Notional Hedge”)
                  results in Party B having outstanding notional amounts in respect
                  in any
                  Hedge Year in excess of the Permitted Hedge Capacity as calculated
                  by
                  Party B hereunder for such year, Party A and Party B agree that,
                  within
                  five (5) Business Days after Party B provides the Hedge Capacity
                  Notice
                  (the “Hedge
                  Transfer Date”),
                  Party B shall novate or otherwise transfer to a Permitted Transferee
                  pursuant to a Novation Agreement Party B’s rights and obligations under a
                  pro rata portion of the Total Notional Hedge in excess of the Permitted
                  Hedge Capacity under this Transaction, Transactions under the Agreement
                  or
                  under any other Back to Back Documentation (in each case as may
                  be
                  outstanding with Party A), which results in Party B retaining a
                  basket of
                  hedge transactions that keeps the average hedged price for such
                  Hedge Year
                  approximately the same as it was prior to such novation or transfer.
                  On or
                  immediately prior to the Hedge Transfer Date and as a condition
                  precedent
                  to the effectiveness of the Novation Agreement, each of Party B
                  and the
                  Permitted Transferee shall represent to Party A that it is not
                  subject to
                  an event or circumstance set forth Section
                  5(a)(vii) of the ISDA Form (or the Agreement if then executed).
                  Provided that Party B has complied in full with its obligations
                  under this
                  Section 2(f)(i), Party A agrees to: (x) enter into such novation
                  or other
                  transfer to a Permitted Transferee without requiring any termination
                  payment or mark-to-market payment in connection therewith (i.e.,
                  the hedge will be transferred at the original contract price with
                  any
                  embedded gain or loss not being realized at transfer); (y) pay
                  to the
                  Permitted Transferee a fee***
                  transferred
                  as provided in this paragraph upon
                  the novation or transfer of the relevant hedge to the Permitted
                  Transferee; and (z) execute a Novation Agreement with Party B and
                  the
                  Permitted Transferee to give effect to such novation or transfer.
                  If the
                  Big Brown Collateral or Alternative Physical Collateral that serves
                  as the
                  collateral for the Permitted Transferee had previously been released
                  upon
                  the occurrence of the Five Plant Permit Date, then the liens on
                  such
                  collateral will be reconstituted thereon through the delivery of
                  the
                  documentation listed in Section 2(c)(i)(A) or 2(c)(i)(B)(1), as
                  applicable. Further, if the Big Brown Collateral or Alternative
                  Physical
                  Collateral serves as the collateral for the Permitted Transferee,
                  then
                  Party A’s interest in such collateral shall be limited solely to its
                  Modified Percentage of the value of such collateral. For the avoidance
                  of
                  doubt, after giving effect to this clause (f)(i), all portions
                  of this
                  Transaction, other Transactions under the Agreement and under Back
                  to Back
                  Documentation that (AA) are not subject to transfer or novation
                  pursuant
                  to this Section 2(f)(i) shall be secured solely by the DevCo Collateral
                  and shall have no claim against the Big Brown Collateral or the
                  Alternative Physical Collateral and (BB) are subject to transfer
                  or
                  novation pursuant to this Section 2(f)(i) shall be secured solely
                  by the
                  Big Brown Collateral or the Alternative Physical Collateral, as
                  applicable, and shall have no claim against the DevCo
                  Collateral.

              


      

      	 	
            


      
        	
                 

              	(ii)	Sale of Assets.
                In the event that DevCo shall sell or transfer any DevCo Facility
                (including, without limitation, through the sale of a Subsidiary
                Guarantor), Party B shall calculate the “Allowed
                Hedge Capacity”,
                which shall equal 51,000,000 MMBtus of natural gas hedge transactions
                per
                1,000 MW of gross capacity for each DevCo Facility still owned by
                DevCo or
                one of its subsidiaries (excluding the DevCo Facility to be sold)
                that is
                scheduled to be commercially available in such calendar year (provided
                that the
                size of the maximum allowed hedge position will be prorated to reflect
                the
                monthly production schedule in each such Hedge Year),
                and provide written notice of such Allowed Hedge Capacity to Party
                A, for
                each Hedge Year that has not theretofore commenced (the “Transfer
                Hedge Capacity Notice”).
                Party B shall notify Party A in the event that the outstanding notional
                amounts if any in respect of any Hedge Year would be in excess of
                the
                Allowed Hedged Capacity after such sale



      

      


       

      
        
          
          

        

        
          
          

          9

        

        
          
          

        

      

    

    
      	 	 


    

     

     

     

    
      	 	 	
              or
                transfer. Party A and Party B agree that at the closing of such sale
                or
                transfer,
                Party B shall, at its option: (A) terminate all or a portion of this
                Transaction, Transactions under the Agreement or under any other
                Back to
                Back Documentation (with the appropriate Party making the termination
                payment pursuant to Section 6(e) of the ISDA Form or the Agreement
                (as
                applicable)); or (B) novate or otherwise transfer to a Permitted
                Purchaser
                pursuant to a Novation Agreement Party B’s rights and obligations under
                all or a portion of this Transaction, Transactions under the Agreement
                or
                under any other Back to Back Documentation (in each case as may be
                outstanding with Party A), such that the outstanding notional amounts
                in
                respect of each Hedge Year are no longer in excess of the Allowed
                Hedged
                Capacity; provided, however, that such novation or transfer shall
                be
                subject to providing collateral to Party A of reasonably equivalent
                value
                (and in a dispute in respect thereof, such value will be determined
                by an
                experienced independent appraiser). In each case, such termination,
                transfer or novation must result in Party B retaining a basket of
                hedge
                transactions that keeps the average hedged price for each Hedge Year
                approximately the same as it was prior to such termination, transfer
                or
                novation. On or immediately prior to the date of a novation and as
                a
                condition precedent to the effectiveness of the Novation Agreement,
                each
                of Party B and the Permitted Purchaser shall represent to Party A
                that it
                is not subject to an event or circumstance set forth Section
                5(a)(vii) of the ISDA Form (or the Agreement if then executed).
                Provided that Party B has complied in full with its obligations under
                clause (B) of this Section 2(f)(ii), Party A agrees to (x) enter
                into such
                novation or other transfer to a Permitted Purchaser without requiring
                any
                termination payment or mark-to-market payment in connection therewith
                (i.e.,
                the hedge will be transferred at the original contract price with
                any
                embedded gain or loss not being realized at transfer); and (y) execute
                a
                Novation Agreement with Party B and the Permitted Purchaser to give
                effect
                to such novation or transfer.

            


    

     

    
      	 	
              (iii)

            	
              Pre-Completion
                Shortfall.
                In
                the event that any settlement date shall occur under this Transaction,
                other Transactions under the Agreement or any other Back to Back
                Documentation ***
                (the
                “Draw
                Window”)
                and Party B cannot make payment of any amount due to Party A in respect
                of
                this Transaction, other Transactions under the Agreement or any other
                Back
                to Back Documentation on such settlement date due to insufficient
                funding
                caused by construction delays beyond those mitigated by the novations
                in
                Section 2(f)(i) (a “Pre-Completion
                Shortfall”),
                Party B shall provide written notice to Party A of such Pre-Completion
                Shortfall (a “Pre-Completion
                Shortfall Notice”).
                Upon receipt of a Pre-Completion Shortfall Notice from Party B, Party
                A
                shall cause its Affiliate to advance funds to Party B in amounts
                necessary
                to pay such Pre-Completion Shortfall in accordance with the terms
                of the
                credit facility to be underwritten by an Affiliate of Party A and
                as
                further defined in Schedule 2 (“Credit
                Facility Terms” ).
                Provided that Party B makes any settlement payments estimated by
                Party A
                to be associated with such Pre-Completion Shortfall from such facility,
                Party A agrees not to assert or otherwise exercise any rights in
                respect
                of a Potential Event of Default, Event of Default or other “default”
                howsoever described in the related documentation arising directly
                in
                respect of such Pre-Completion Shortfall. 

            


    

    
      
        	 	
                 

              	
                 

              


      

    

    
      	 	
               (iv)

            	
              DevCo
                Facility Status Updates and Viability.
                Party B shall provide Party A with the same regular status updates
                concerning the construction of the DevCo Facilities that are provided
                to
                the holders of indebtedness under the First Lien Credit Facilities.
                If,
                after December 31, 2007, a “Permitted Abandonment” or “Permitted Removal”
                as such terms are defined in the Senior Credit Facilities shall occur
                with
                respect to a DevCo Facility, Party B shall calculate the “Remaining
                Hedge Capacity”,
                which shall equal 51,000,000 MMBtus of natural gas hedge transactions
                per
                1,000 MW of gross capacity for each DevCo Facility (excluding the
                DevCo
                Facilities subject of such Permitted Removal or Permitted Abandonment)
                that is scheduled to be commercially available in each Hedge Year
                (provided
                that the
                size of the maximum allowed hedge position will be prorated to reflect
                the
                monthly production schedule in each such Hedge Year),
                and provide written notice of such Remaining Hedge Capacity to Party
                A. In
                the event that the Total Notional Hedge then outstanding in any Hedge
                Year
                is in excess of the Remaining Hedge Capacity as calculated by Party
                B
                hereunder for such Hedge Year, Party B shall, at its option: (1)
                terminate
                (with the appropriate Party making the termination payment pursuant
                to
                Section 6(e) of the ISDA Form (or the Agreement, as applicable));
                or (2)
                novate or otherwise transfer to a Permitted Transferee, in each case
                the
                pro rata portion of this Transaction, Transactions under the Agreement
                or
                under any other Back to Back Documentation associated with such delayed
                DevCo Facility under the same terms and conditions as set forth in
                Section
                2(f)(i).

            


    

     

     

    
      
        
        

      

      
        
        

        10

      

      
        
        

      

    

     

    

      (g)    Definitions. As
        used
        in this Confirmation, the following terms shall have the following
        meanings:

      


      “Acceptable
        Letter of Credit”
shall
        mean an irrevocable, transferable, standby letter of credit, issued by a
        major
        U.S. commercial bank or a foreign bank with a U.S. branch office having a
        capital and surplus of at least $10 billion and with a credit rating of at
        least
        A- by S&P or A3 by Moody's (a “Qualified
        Issuer”),
        substantially in the form attached as Annex C, provided, however,
        that
        no
        Qualified Issuer may be the issuer of more than $500,000,000 in Acceptable
        Letters of Credit
        unless
        such Qualified Issuer has
        a
        credit rating from S&P equal to AA or better and a credit rating from
        Moody’s equal to Aa2 or better.

      


      “Adjustment
        Date”
        shall
        mean the earlier to occur of: (i) the Novation Date; and (ii) the Five Plant
        Permit Date.

      


      “Affiliate”
        shall
        mean, in relation to any person, any entity controlled, directly or indirectly,
        by the person, any entity that controls, directly or indirectly, the person
        or
        any entity directly or indirectly under common control with the person
        (excluding ***).
        For
        this purpose, “control” of any entity or person means ownership of a majority of
        the voting power of the entity or person.

      


      “Alternative
        Physical Collateral Permitted Liens”
shall
        mean:

      


      
        	
                (a)

              	
                liens
                  created under a mortgage for the benefit of Party A or its
                  designee;

              


      

       

      
        	
                (b)

              	
                liens
                  for any tax, assessment or other governmental charge to the extent
                  not yet
                  delinquent or being contested or reserved against in accordance
                  with
                  customary practice;

              


      

      


      
        	
                (c)

              	
                materialmen’s,
                  mechanics’, workers’, repairmen’s, employees’ or other like liens, arising
                  in the ordinary course of business;

              


      

      


      
        	
                (d)

              	
                liens
                  arising out of judgments or awards so long as an appeal or proceeding
                  for
                  review is being prosecuted in good faith and for the payment of
                  which
                  adequate reserves, bonds or other security have been provided or
                  are fully
                  covered by insurance;

              


      

      


      
        	
                (e)

              	
                liens
                  consisting of encumbrances set forth and described on the applicable
                  schedules to the applicable title commitments and/or title policies
                  delivered pursuant to Section
                  2(c)(i)(B)(1);

              


      

      


      
        	
                (f)

              	
                other
                  liens incident to the ordinary course of
                  business;

              


      

      


      
        	
                (g)

              	
                involuntary
                  liens (including,
                  without limitation, a lien of an attachment, judgment or
                  execution);

              


      

      


      
        	
                (h)

              	
                additional
                  liens in favor of counterparties under power purchase agreements
                  or
                  commodity or hedging agreements, subject to the aggregate Collateral
                  Percentage of all such persons, together with Party A, never exceeding
                  1.00 (i.e.,
                  100%); provided
                  that (i) where the Alternative Physical Collateral serves as collateral
                  for a Permitted Transferee after the Adjustment Date, the foregoing
                  reference to “Collateral Percentage” shall be deemed a reference to
                  Modified Percentage and (ii) prior to December 31, 2007, such liens
                  shall
                  only be permitted where the applicable power purchase agreements
                  or
                  commodity or hedging agreements relate to DevCo hedging activities;
                  and

              


      

      


      
        	
                (i)

              	
                liens
                  under purchase money loans or capital leases (to the extent such
                  liens
                  attach to Alternative Physical Collateral) or in respect of emissions
                  allowances in an amount not to exceed $50,000,000 in the
                  aggregate;

              


      

      


      provided,
        however, that the foregoing liens listed in clauses (b), (c), (d), (e), (f)
        and
        (g) do not in the aggregate materially impair the value of the Alternative
        Physical Collateral, provided, however, that the foregoing proviso shall
        only
        apply to clause (e) until delivery of the title policy referred to in Section
        2(c)(ii)(B)(1)(b).

      


      “Big
        Brown Company”
        means
        TXU Big Brown Company LP, a Texas LP.

      


      “Big
        Brown Facility”
        means
        the coal or lignite-fired electric generation facility located in Freestone
        County, Texas and owned by Big Brown Company.

      


      “Big
        Brown Collateral”
        shall
        mean: (a) the two
        generating units of the Big Brown Facility known as Unit 1 and Unit 2, and
        all
        associated fixtures, contracts, inventory, general intangibles, appurtenances
        and easements that are reasonably 

    

     

     

    
      
        
        

      

      
        
        

        11

      

      
        
        

      

    

     

    
      necessary
        to operate these generating units, subject to the provisions of Section
        2(c)(vii);
        and (b)
        all proceeds therefrom; provided
        that any
        facilities that are necessary or, in the opinion of Party B, desirable for
        the
        development, construction and operation of the planned development of Big
        Brown
        Unit 3 and that would otherwise be a part of the Big Brown Collateral shall
        be
        expressly excluded therefrom (and, to the extent a lien thereon or a security
        interest therein is granted to Party A in connection herewith, Party A shall
        promptly release such lien on and security interest in such property upon
        the
        request of Party B and shall execute such
        releases and other documentation as may be necessary or, in the reasonable
        opinion of Party B, desirable to effect such release). 

      


      “Big
        Brown Permitted Liens”
shall
        mean:

      


      
        	
                (a)

              	
                liens
                  created under the Big Brown
                  Mortgage;

              


      

      


      
        	
                (b)

              	
                liens
                  for any tax, assessment or other governmental charge to the extent
                  not yet
                  delinquent or being contested or reserved against in accordance
                  with
                  customary practice;

              


      

      


      
        	
                (c)

              	
                materialmen’s,
                  mechanics’, workers’, repairmen’s, employees’ or other like liens, arising
                  in the ordinary course of business;

              


      

      


      
        	
                (d)

              	
                liens
                  arising out of judgments or awards so long as an appeal or proceeding
                  for
                  review is being prosecuted in good faith and for the payment of
                  which
                  adequate reserves, bonds or other security have been provided or
                  are fully
                  covered by insurance;

              


      

      


      
        	
                (e)

              	
                liens
                  consisting of encumbrances set forth and described on the applicable
                  schedules to the applicable title commitments and/or title policies
                  delivered pursuant to Section
                  2(c)(i)(A)(2);

              


      

      


      
        	
                (f)

              	
                other
                  liens incident to the ordinary course of
                  business;

              


      

      


      
        	
                (g)

              	
                involuntary
                  liens (including,
                  without limitation, a lien of an attachment, judgment or
                  execution);

              


      

      


      
        	
                (h)

              	
                additional
                  liens in favor of counterparties under power purchase agreements
                  or
                  commodity or hedging agreements subject to the aggregate Collateral
                  Percentage of all such persons, together with Party A, never exceeding
                  1.00 (i.e.,
                  100%); provided
                  that (i) where the Big Brown Collateral serves as collateral for
                  a
                  Permitted Transferee after the Adjustment Date, the foregoing reference
                  to
                  “Collateral Percentage” shall be deemed a reference to Modified Percentage
                  and (ii) prior to December 31, 2007, such liens shall only be permitted
                  where the applicable power purchase agreements or commodity or
                  hedging
                  agreements relate to DevCo hedging activities;
                  and

              


      

      


      
        	
                (i)

              	
                liens
                  under purchase money loans or capital leases (to the extent such
                  liens
                  attach to Big Brown Collateral) or in respect of emissions allowances
                  in
                  an amount not to exceed $50,000,000 in the
                  aggregate;

              


      

      


      provided,
        however, that the foregoing liens listed in clauses (b), (c), (d), (e), (f)
        and
        (g) do not in the aggregate materially impair the value of the Big Brown
        Collateral, provided, however, that the foregoing proviso shall only apply
        to
        clause (e) until delivery of the title policy referred to in Section
        2(c)(ii)(A)(2).

      


      “Confidential
        Information”
means
        all data, reports, interpretations, plans, customer or supplier lists, contract
        terms and conditions, forecasts and records, whether in written, oral or
        electronic form, whether or not made, developed and/or conceived by Receiving
        Party (whether before, on or after the date of this Agreement) and containing
        or
        otherwise reflecting information concerning:

      


      
        	 	
                (A)

              	
                the
                  terms of the Agreement, this Confirmation, this Transaction, any
                  other
                  Transactions hereunder, and any Back to Back
                  Documentation;

              


      

      


      
        	 	
                (B)

              	
                the
                  content of any and all conversations, discussions or correspondence
                  to or
                  from the Providing Party regarding the above matters;
                  and

              


      

      


      
        	 	
                (C)

              	
                any
                  other information which is marked by the Providing Party or its
                  representatives as “confidential” or “proprietary” or similar
                  appellation.

              


      

      


      Notwithstanding
        the foregoing, the following will not constitute Confidential Information
        for
        purposes of this 

    

     

     

    
      
        
        

      

      
        
        

        12

      

      
        
        

      

    

    

      Agreement:

      


      
        	 	
                (W)

              	
                Information
                  which was already in Receiving Party’s possession prior to its receipt
                  from the Providing Party;

              


      

      


      
        	 	
                (X)

              	
                Information
                  which is obtained by Receiving Party from a third person who, insofar
                  as
                  is known to Receiving Party, is not prohibited from transmitting
                  the
                  information by a contractual, legal or fiduciary obligation to
                  the
                  Providing Party; and

              


      

      


      
        	 	
                (Y)

              	
                Information
                  which is or becomes publicly available other than as a result of
                  disclosure by Receiving Party in violation of this
                  Agreement.

              


      

      


      “Collateral
        Percentage”
shall
        mean a quotient, expressed as a percentage, equal to: (a) the aggregate notional
        amount of MMBtus that are subject of this Transaction divided by (b) the
        Full
        Hedge Amount; provided
        that the
        numerator of the Collateral Percentage may, with respect to Party A, be adjusted
        (i) pursuant to Section 9 hereof with respect to Party A in the event that
        Party
        A becomes obligated on NYMEX Contracts or OTC NG Hedges as described therein
        pursuant to any Back to Back Documentation, (ii) in accordance with additional
        Transactions executed under the Agreement, and (iii) in connection with
        novations and transfers executed under Section 2(f) hereof.

      


      “DevCo”
means
        TXU Generation Development Company LLC, a Delaware limited liability
        company.

      


      “DevCo
        Collateral”
means
        all of the outstanding direct membership interests of DevCo and substantially
        all the assets of DevCo and each Subsidiary Guarantor to the extent granted
        as
        collateral to the lenders under the Senior Credit Facilities; provided,
        that
        the “DevCo Collateral” shall not include any accounts receivable of DevCo or any
        Subsidiary Guarantor.

      


      “DevCo
        Facility”
means
        any of: (a) Oak Grove 1&2, an approximately 1600 MW lignite fired power
        plant located in Robertson County, Texas; (b) Sandow 5, an approximately
        600 MW
        lignite fired plant to be located in Miram County, Texas, (c) Big Brown 3,
        an
        approximately 850 MW PRB coal fired power plant to be located in Freestone
        County, Texas; (d) Lake Creek 3, an approximately 850 MW PRB coal fired power
        plant to be located in McLennan County, Texas; (e) Martin Lake 4, an
        approximately 850 MW PRB coal fired power plant to be located in Rusk County,
        Texas; (f) Monticello 4, an approximately 850 MW PRB coal fired power plant
        to
        be located in Titus County, Texas; (g) Morgan Creek 7, an approximately 850
        MW
        PRB coal fired power plant to be located in Mitchell County, Texas; (h)
        Tradinghouse 3, an approximately 850 MW PRB coal fired power plant to be
        located
        in McLennan County, Texas; (i) Tradinghouse 4, an approximately 850 MW PRB
        coal
        fired power plant to be located in McLennan County, Texas and (j) Valley
        4, an
        approximately 850 MW PRB coal fired power plant to be located in Fannin County,
        Texas.

      


      “DevCo
        Permitted Liens”
shall
        mean liens permitted under the Senior Credit Facilities.

      


      “Environmental
        Law”
        means
        any legally binding Federal, state or local statute, law, ordinance, rule,
        regulation, code, order, writ, judgment, injunction, decree or judicial or
        agency interpretation, policy or guidance relating to pollution or protection
        of
        the environment or the protection of health and safety of the public, including,
        without limitation, those relating to the use, handling, transportation,
        treatment, storage, disposal, release or discharge of Hazardous
        Materials.

      


      “First
        Lien Collateral Documents”
means
        those documents purporting to grant a first lien over membership interests
        in
        DevCo and certain assets of DevCo and its subsidiaries executed in connection
        with the First Lien Credit Facilities.

      


      “First
        Lien Credit Facilities”
means
        the senior secured first lien credit facilities obtained by DevCo in connection
        with the development of a portfolio of coal and lignite fired power plants
        in
        Texas (and any permitted refinancing, substitution, extension or replacement
        thereof).

      


      


      “Five
        Plant Permit Date”
means
        a
        date selected by Party B within thirty (30) days of the date on which the
        later
        to occur of the following clauses (a) and (b) shall have occurred: (a) DevCo
        or
        its subsidiaries have received their initial PSD Permits for (a) Oak Grove
        1&2, an approximately 1600 MW lignite fired power plant located in Robertson
        County, Texas; and (b) any four of: (i) Big Brown 3, an approximately 850
        MW PRB
        coal fired power plant to be located in Freestone County, Texas; (ii) Lake
        Creek
        3, an approximately 850 MW PRB coal fired power plant to be located in McLennan
        County, Texas; (iii) Martin Lake 4, an approximately 850 MW PRB coal fired
        power
        plant to be located in Rusk County, Texas; (iv) Monticello 4, an approximately
        850 MW PRB coal fired power plant to be located in Titus County, Texas; (v)
        Morgan Creek 7, an approximately 850 MW PRB coal fired power plant to be
        located
        in Mitchell 

    

     

    
      
        
        

      

      
        
        

        13

      

      
        
        

      

    

    

      County,
        Texas; (vi) Tradinghouse 3, an approximately 850 MW PRB coal fired power
        plant
        to be located in McLennan County, Texas; (vii) Tradinghouse 4, an approximately
        850 MW PRB coal fired power plant to be located in McLennan County, Texas
        and
        (viii) Valley 4, an approximately 850 MW PRB coal fired power plant to be
        located in Fannin County, Texas (it being understood that Tradinghouse 3
        and
        Tradinghouse 4 may have a single PSD Permit but shall be counted as separate
        facilities for the purpose of this definition) and (b) the initial drawing
        on
        DevCo’s Senior Credit Facilities has occurred.

      


      “Full
        Hedge Amount”
means
        1,200,000,000 MMBtus. 

      


      “Hazardous
        Materials”
        means
        (a) petroleum or petroleum products, by-products or breakdown products,
        radioactive materials, asbestos-containing materials, polychlorinated biphenyls,
        toxic mold and radon gas and (b) any other chemicals, materials or substances
        designated, classified or regulated as hazardous or toxic or as a pollutant
        or
        contaminant under any Environmental Law.

      


      “Hedge
        Capacity Notice”
        has the
        meaning specified in Section 2(f)(1).

      


      “Maximum
        Credit Amount” means
        one
        billion USD ($1,000,000,000). 

      


      Modified
        Percentage”
shall
        mean, on any date of determination, a quotient, expressed as a percentage,
        equal
        to: 

      


      
        	
                (a)
                  

              	
                where
                  the cumulative volume of all contracts (expressed in MMBtus) secured
                  by
                  the Big Brown Collateral or Alternative Physical Collateral exceeds
                  600,000,000 MMBtus on such date of determination: the volume of
                  transactions (expressed in MMBtus) novated by Party B to a Permitted
                  Transferee pursuant to Section 2(f) where Party A is the counterparty
                  that
                  are outstanding on the relevant date of determination divided by
                  the total
                  sum (expressed in MMBtus) of: (i) the volumes of all contracts
                  (expressed
                  in MMBtus) that are novated by all counterparties from Party B
                  to a
                  Permitted Transferee that are to be secured by the Big Brown Collateral
                  or
                  Alternative Physical Collateral, plus (ii) the volumes of all contracts
                  (expressed in MMBtus) that are otherwise secured by the Big Brown
                  Collateral or Alternative Physical Collateral on the date of any
                  such
                  novation; or

              


      

      


      
        	
                 (b)
                  

              	
                where
                  the cumulative volume of all contracts (expressed in MMBtus) secured
                  by
                  the Big Brown Collateral or Alternative Physical Collateral equals
                  or is
                  less than 600,000,000 MMBtus on such date of determination: the
                  volume of
                  transactions (expressed in MMBtus) novated by Party B to a Permitted
                  Transferee pursuant to Section 2(f) where Party A is the counterparty
                  that
                  are outstanding on the relevant date of determination divided by
                  600,000,000 MMBtus.

              


      

      


      “Novation
        Date”
        means,
        to
        the extent the Five Plant Permit Date has not yet occurred, December 31,
        2007.

      


      “Novation
        Commencement Date”
means
        the first date on which the following conditions have been satisfied: (a)
        Oak
        Grove 1 & 2 shall have received its PSD Permit, (b) DevCo shall have
        executed a commitment letter for the Senior Credit Facilities and (c) either
        (i)
        the LC Termination Date shall have occurred through the provision of the
        Big
        Brown Collateral or Alternative Physical Collateral or (ii) Party A shall
        have
        received its first lien on the DevCo Collateral.

      


      “NYMEX
        Contract”
means
        a
        futures contract of the type traded on the New York Mercantile Exchange for
        the
        delivery at a future date of 10,000 MMBtus of natural gas at the Henry Hub
        in
        Louisiana.

      


      “OTC
        NG Hedges”
means
        a
        standard swap, NYMEX look-a-like swap, financially-settled option or other
        derivative transaction which hedges exposure to the market price of natural
        gas
        or power that is eligible for clearing on NYMEX ClearPort as of the effective
        date of novation.

      


      “Permitted
        Purchaser”
        means a
        third-party purchaser of a DevCo Facility, who, directly or by operation
        of law,
        accepts or consents to the novation or transfer of the hedge transactions
        transferred pursuant to Section 2(f)(ii) of this Confirmation. 

      


      “Permitted
        Transferee”
        means
        TXU Energy Company LLC or one of its Affiliates, in each case with (a) an
        ISDA
        Master Agreement, including all schedules and annexes thereto, and (b) credit
        support consisting of, at the option of Party B, (i) the Big Brown Collateral
        or
        Alternative Physical Collateral and no other collateral or recourse of any
        kind
        or nature whatsoever in the case of any novations or transfers contemplated
        under Section 2(f)(i) or (iv), or (ii) other collateral in an amount and
        form
        reasonably acceptable to Party A.

    

     

     

    
      
        
        

      

      
        
        

        14

      

      
        
        

      

    

    

      “PSD
        Permit”
shall
        mean a Prevention of Significant Deterioration Permit issued by the Texas
        Commission on Environmental Quality under 30 TAC Ch. 116, Subch. B.

      


      “Second
        Lien Collateral Documents”
means
        those documents purporting to grant a second lien over membership interests
        in
        DevCo and certain assets of DevCo and its subsidiaries executed in connection
        with the Second Lien Credit Facilities.

      


      “Second
        Lien Credit Facilities”
means
        the senior secured second lien credit facilities obtained by DevCo in connection
        with the development of a portfolio of coal and lignite fired power plants
        in
        Texas (and any permitted refinancing, substitution, extension or replacement
        thereof).

      


      “Senior
        Credit Facilities”
means
        the First Lien Credit Facilities and the Second Lien Credit
        Facilities.

      


      “Subject
        DevCo Facility”
means
        a
        DevCo Facility that (a) has received PSD Permits and satisfied the conditions
        precedent in the Senior Credit Facilities for the occurrence of the “Initial
        Funding Date”
        (as
        defined in the Senior Credit Facilities) with respect to such DevCo Facility,
        and (b) has not been the subject of a “Permitted Abandonment” or “Permitted
        Removal” as such terms are defined in the Senior Credit Facilities.

      


      “Subsidiary
        Guarantors”
means
        each wholly-owned subsidiary of DevCo that is a guarantor of the Senior Credit
        Facilities.

       

      “Third
        Lien Collateral Documents”
means
        those documents purporting to grant a third lien over membership interests
        in
        DevCo and certain assets of DevCo and its subsidiaries as may be executed
        from
        time to time.

      


      “Transfer
        Hedge Capacity Notice” has
        the
        meaning specified in Section 2(f)(ii).

      


      3.    Payment
        Instructions:

      


      Payments
        shall be made according to instructions provided by the parties to each other
        in
        writing from time to time.

      


      4.    Additional
        Terms and Conditions:

      


      
        	
                (a)

              	
                Jurisdiction.
                  With respect to any suit, action or proceedings relating to this
                  Confirmation, each party irrevocably submits to the non-exclusive
                  jurisdiction of the courts of the State of New York located in
                  the Borough
                  of Manhattan in New York City and the United States District Court
                  located
                  in the Borough of Manhattan in New York
                  City.

              


      

      


      
        	
                (b)

              	
                Waiver
                  of Jury Trial.
                  Insofar as is permitted by law, each party irrevocably waives any
                  and all
                  rights to trial by jury in any legal proceeding in connection with
                  this
                  Agreement or any Transaction, and acknowledges that this waiver
                  is a
                  material inducement to the other party’s entering into this Agreement and
                  each Transaction hereunder.

              


      

       

      
        	(c)	
                Transfer
                  and Novation Rights.
                  Party B may assign its rights and delegate its obligations under
                  any
                  Transaction, in whole or in part, to any Affiliate (an “Assignee”)
                  of TXU Corp., effective (the “Assignment
                  Effective Date”)
                  upon delivery to Party A of an executed acceptance and assumption
                  by the
                  Assignee of the transferred obligations of Party B under the
                  Transaction(s) (the “Transferred
                  Obligations”).
                  On the Assignment Effective Date, (a) to the extent that the Assignee
                  has
                  provided credit support reasonably acceptable to Party A in lieu
                  of the
                  credit support provided as set out in “Party B Credit Terms” above
                  (provided that the Assignee may continue to provide the credit
                  support
                  outlined in Section 2 above, and, if so, Party A shall be obliged
                  to
                  accept such credit support), Party A shall release its lien on
                  such
                  collateral (or otherwise return any Applicable Letter of Credit)
                  and
                  promptly execute such releases and other documentation as may be
                  necessary
                  or, in the reasonable opinion of Party B, desirable to effect such
                  release, (b) Party B shall be released from all obligations and
                  liabilities arising under the Transferred Obligations; and (c)
                  the
                  Transferred Obligations shall cease to be Transaction(s) under
                  the
                  Agreement and shall be deemed to be Transaction(s) under the master
                  agreement between Assignee and Party A; provided that, if at such
                  time
                  Assignee and Party A have not entered into a master agreement,
                  Assignee
                  and Party A shall be deemed to have entered into a form of 1992
                  ISDA
                  Master Agreement (Multicurrency - Cross Border) without any Schedule
                  attached thereto, except for (i) the election of
                  

              


      

       

       

      
        
          
          

        

        
          
          

          15

        

        
          
          

        

      

    

     

    

            
         Loss and Second Method
        for the purposes of payments on early termination, (ii) New York law as the
        governing law, (iii) USD as the Termination Currency, (iv) specifying that
        Section 2(c)(ii) of the ISDA Form will not apply, and (v) Party A as the
        Calculation Agent unless an Event of Default or a Potential Event of Default
        where Party A is the Defaulting Party shall occur, in which case Assignee
        shall
        be the Calculation Agent.

      


      
        	
                (d)

              	
                Financing
                  Consent.
                  Party A also hereby consents to the assignment of this Agreement
                  (and the
                  rights and obligations of Party B hereunder) pursuant to the First
                  Lien
                  Collateral Documents, the Second Lien Collateral Documents and
                  the Third
                  Lien Collateral Documents to the agent of the holders of the related
                  secured obligations. If
                  requested by Party B, Party A shall execute and deliver on the
                  closing
                  date under the Senior Credit Facilities a consent agreement with
                  the
                  trustee or administrative agent of the lenders under the Senior
                  Credit
                  Facilities in commercially reasonable form in which Party A consents
                  to
                  the collateral assignment of the Agreement (the “Consent”);
                  provided, however, that in no event will the forebearance or standstill
                  period under such Consent (the period between (a) the effective
                  date of
                  notice from Party A to the trustee or administrative agent that
                  an Event
                  of Default, Termination Event or Additional Termination Event has
                  occurred
                  with respect to Party B or that Party A otherwise has the right
                  to
                  terminate the Agreement, and (b) the date on which an Early Termination
                  Date is designated) be greater than: (i) in the case of termination
                  due to
                  an event described in Section 5(a)(vii) of the ISDA Form (Party
                  B’s
                  bankruptcy), zero (-0-) days; (ii) in the case of a termination
                  due to an
                  event described in Section 5(a)(i) of the ISDA Form (Party B’s
                  non-payment), thirty (30) days; (iii) in the case of a termination
                  for any
                  other reason, one-hundred and eighty (180) days. 

              


      

       

      (e)    Commodity
        Definitions.

       

      
        	 	
                (i)

              	
                Market
                  Disruption Events. The following Market Disruption Events in Section
                  7.4
                  of the Commodity Definitions shall
                  apply:

              


      

       

      
        	 	
                (A)

              	
                Price
                  Source Disruption

              


      

       

      
        	 	
                (B)

              	
                Trading
                  Disruption

              


      

       

      
        	 	
                (C)

              	
                Disappearance
                  of Commodity Reference Price

              


      

       

      
        	 	
                (D)

              	
                Material
                  Change in Formula

              


      

       

      
        	 	
                (E)

              	
                Material
                  Change in Content

              


      

       

      
        	 	
                (ii)

              	
                Disruption
                  Fallbacks. The following Market Disruption Fallbacks in Section
                  7.5(c) of
                  the Commodity Definitions shall apply, in the following order,
                  except as
                  otherwise specifically provided in any
                  Confirmation:

              


      

       

      
        	 	
                (A)

              	
                Postponement
                  (with Maximum Days of Disruption equal to three Commodity Business
                  Days);
                  

              


      

      


      
        	 	
                (B)

              	
                Fallback
                  Reference Price (if the parties have specified an alternate Commodity
                  Reference Price in a Confirmation);

              


      

      


      
        	 	
                (C)

              	
                Negotiated
                  Fallback; and

              


      

      


      
        	 	
                (D)

              	
                Fallback
                  Reference Dealers.

              


      

       

      
        	(f)	Confidentiality. Each
                party that receives Confidential Information hereunder (the “Receiving
                Party”)
                agrees that all such Confidential Information will be held and treated
                by
                it and its representatives in confidence and will not, except as
                hereinafter provided, without the prior written consent of the party
                that
                provided such Confidential Information (the “Providing
                Party”),
                be disclosed, in any manner whatsoever, in whole or in part, and
                will not
                be used other than in connection with the purposes contemplated in
                this
                Confirmation; provided
                that either party may disclose such Confidential Information (i)
                to
                potential arrangers of financing and potential lenders (and their
                respective accountants, attorneys and advisors) (provided that disclosure
                will not be made to potential lenders until the arrangers of financing
                have launched a general syndication process as evidenced by the holding
                of
                a bank meeting), (ii) to credit rating agencies, (iii) as required
                by
                applicable securities laws, (iv) 


      

    

     

     

    
      
        
        

      

      
        
        

        16

      

      
        
        

      

    

     

    
      	 	to
              potential acquirers of any of the DevCo Facilities and (v) no earlier
              than
              thirty (30) days after the Trade Date, to counterparties with hedges
              and
              other trades that may be subject to novation as set forth in Section
              9
              (but, with respect to this clause (v), disclosure may be made only
              of such
              information as is necessary to consummate such novations and transfers
              under Section 9).
              Except as set forth in clauses (i) through (v), in the event that the
              Receiving Party is requested or required to disclose any Confidential
              Information, the Receiving Party shall provide the Providing Party
              with
              prompt written notice of any such request or requirement, if such notice
              is, in the determination of the Receiving Party’s counsel, permitted by
              law, so that the Providing Party may seek an appropriate protective
              order
              or waive compliance with the provisions of this Section. If, failing
              the
              entry of a protective order or the receipt of a waiver hereunder, the
              Receiving Party, in the determination of its counsel, is compelled
              to
              disclose Confidential Information, the Receiving Party may disclose
              that
              portion of the Confidential Information which the Receiving Party’s
              counsel advises that the Receiving Party is compelled to disclose.
              All
              right, title and interest in Confidential Information shall remain
              with
              the Providing Party and nothing contained herein shall be construed
              as
              granting or conferring any rights by license or otherwise in any
              Confidential Information. 


    

     

    
      5.    Non-reliance
        Representations:

      


      Each
        party will be deemed to represent to the other party on the date on which
        it
        enters into a Transaction that (absent a written agreement between the parties
        that expressly imposes affirmative obligations to the contrary for that
        Transaction):

       

      
        	(a) 	Non-Reliance. It
                is acting for its own account, and it has made its own independent
                decisions to enter into that Transaction and as to whether that
                Transaction is appropriate or proper for it is based upon its own
                judgment
                and upon advice from such advisors as it has deemed necessary. It
                is not
                relying on any communication (written or oral) of the other party
                as
                investment advice or as a recommendation to enter into that Transaction;
                it being understood that information and explanations related to
                the terms
                and conditions of a Transaction shall not be considered investment
                advice
                or a recommendation to enter into that Transaction. No communication
                (written or oral) received from the other party shall be deemed to
                be an
                assurance or guarantee as to the expected results of that
                Transaction.


      

       

      
        	(b) 	Assessment and Understanding.
It
                is capable of assessing the merits of and understanding (on its own
                behalf
                or through independent professional advice), and understands and
                accepts,
                the terms, conditions and risks of that Transaction. It is also capable
                of
                assuming, and, assumes, the risks of that
                Transaction.


      

      .

      (c)    
        Status
        of Parties. The
        other
        party is not acting as a fiduciary for or an adviser to it in respect of
        that
        Transaction.

      


      6.    Representations
        and Warranties:

       

      In
        connection with the negotiation of, the entering into, and the execution
        of a
        Confirmation, each party hereby represents and warrants to the other party
        that
        (a) it is both an (i) “Eligible
        Swap Participant”
within
        the meaning of Part 35.1(b)(2) of the General Regulations under the Commodity
        Exchange Act, as amended and (ii) “Eligible
        Contract Participant”
as
        defined in Sec. 1a.(12) of the Commodity Exchange Act, as amended (the
“CEA”),
        (b)
        the Agreement and each Transaction is subject to individual negotiation by
        each
        party, and (c) neither the Agreement nor any Transaction will be executed
        or
        traded on a “trading facility” within the meaning of Section 1a(33) of the CEA.


       

      Each
        party represents to the other that this agreement is its legal, valid and
        binding obligation, enforceable against it in accordance with its terms (subject
        to bankruptcy, insolvency and other similar laws relating to or affecting
        creditors’ rights generally); the execution and performance of this agreement
        will not cause it to violate any law, regulation or order by which it is
        bound
        or to which it is subject; and it has all necessary consents or approvals
        of any
        regulatory body to which it is subject.

       

      7.    Additional
        Representations:

       

      As
        of the
        date or dates, if any, that a security interest and lien is delivered in
        the Big
        Brown Collateral (pursuant to Section 2(c)(i)(A) or Section 2(f) of this
        Confirmation) or the Alternative Physical Collateral (pursuant to Section
        2(c)(i)(B)(1) or Section 2(f) of this Confirmation) or the DevCo Collateral
        (pursuant to Section 2(d)(i)(A) of this Confirmation), Party B represents
        and
        warrants to Party A that:

       

    

    
      	 	(a)	to the extent such collateral consists
              of
              equity interests of DevCo, the liens granted to Party A (or to the
              


    

     

     

     

    
      
        
        

      

      
        
        

        17

      

      
        
        

      

    

     

    
      applicable
        collateral agent for the benefit of Party A) are free
        and
        clear of all liens, restrictions on transfer or other encumbrances other
        than
        those (i) arising pursuant to the limited liability company agreements or
        other
        governing documents of DevCo or applicable securities laws, (ii)
        for
        taxes not yet due, real property taxes imposed by the State of Texas that
        are
        not yet delinquent, or taxes that are being contested  in good faith and
        for which reserves have been maintained in accordance with GAAP,
        (iii)
        that arise by operation of law and (iv) permitted pursuant to the Senior
        Credit
        Facilities; and

      


      (b)    with
        respect to all other assets, the liens granted to Party A (or to the applicable
        collateral agent for the benefit of Party A) (i) constitute valid and
        subsisting liens of record on such rights, title or interest in all such
        collateral consisting of real property, (ii) constitute perfected security
        interests in such rights, title or interest in all in all such collateral
        consisting of personal property, and (iii) are subject to no liens except
        Big
        Brown Permitted Liens, Alternative Physical Collateral Permitted Liens or
        DevCo
        Permitted Liens, as applicable.

      


      8.    Limitation
        of Liability:

       

      No
        party
        shall be required to pay special, exemplary, punitive, incidental, consequential
        or indirect damages whether or not arising from a party’s negligence) to the
        other party, nor shall any payments required under this agreement be deemed
        to
        be such damages.

      


      9.    Novation
        of NYMEX Contracts and Third-Party OTC NG Hedges: 

      


      Commencing
        on the Novation Commencement Date and subject to the requirements of this
        Section 9, Party A agrees that it shall (i) take by novation or assignment
        pursuant to the procedures and documentation set forth below outstanding
        NYMEX
        Contracts from time to time held by Affiliates of Party B and outstanding
        OTC NG
        Hedges from time to time held by Affiliates of Party B, in each case having
        a
        term that does not extend beyond ***, and having, in the aggregate, a notional
        amount up to the difference of (X) the Full Hedge Amount less (Y) the aggregate
        notional amount (in MMBtus) under this Transaction (subject always to the
        proviso that the total notional amount of natural gas hedges outstanding
        with
        respect to all counterparties shall not be permitted to exceed the Full Hedge
        Amount), each as requested in writing by Party B and (ii) contemporaneous
        with
        the closing of any such novation or assignment, enter into a “Transaction”
        under
        the Agreement or such other documentation reasonably acceptable to Party
        A (such
        Transaction or documentation, the “Back
        to Back Documentation”
)
        which
        provides to Party B identical
        economic flows in respect of ordinary course (including settlement) payments
        (i.e.
        Party A
        will assume the credit risk, risk of default and risk of early termination
        with
        respect to the counterparty under the OTC NG Hedge, Party B and its affiliates
        will be relieved of any initial and variation margin or other collateral
        posting
        obligations associated with NYMEX Contracts and OTC NG Hedges)
        that
        would have been provided to Party B had Party B (instead of Party B’s affiliate)
        originally been a party to the NYMEX Contracts and OTC NG Hedges that are
        the
        subject of such novation or assignment; provided
        that:


       

       

      
        	 	
                (A)

              	
                the
                  assignment of NYMEX Contracts and exchange cleared OTC NG Hedges
                  shall be
                  effected (i) by an assignment agreement substantially in all material
                  respects in the form attached as Exhibit A (the “Assignment
                  Agreement”);
                  (ii) by a book transfer between the respective futures commission
                  merchants (FCMs) that carry the accounts of Party A and Party B
                  or its
                  affiliates; (iii) with the approval of the NYMEX, Inc.; and (iv)
                  to the
                  extent permitted by Party A’s existing hedge exemption from position
                  limits on NYMEX Contracts and exchange cleared OTC NG Hedges; provided,
                  however,
                  that if accepting an assignment of NYMEX Contracts and exchange
                  cleared
                  OTC NG Hedges from affiliates of Party B would cause Party A to
                  exceed its
                  existing hedge exemption, Party A agrees to make a good faith effort
                  to
                  obtain from the NYMEX, Inc. an increase in Party A’s hedge exemption
                  sufficient to allow Party A to accept such NYMEX Contracts and
                  exchange
                  cleared OTC NG Hedges;
  


      

       

      
        	 	(B)	
                the
                  novation of OTC NG Hedges shall be effected pursuant to a novation
                  agreement substantially in all material respects in the form attached
                  hereto as Exhibit B (the “Novation
                  Agreement”);

              


      

       

      
        	 	(C)	the
                NYMEX Contracts and OTC NG Hedges to be transferred under this Section
                9
                shall be assigned, novated
                or otherwise transferred to Party A at the original contract price
                being
                applicable to the underlying
                NYMEX Contract or OTC NG Hedge (i.e.,
                the hedge will be transferred at the original contract
                price with any embedded gain or loss not being realized at transfer),
                as
                applicable; provided, however,
                ***


      

      	 	
            


    

     

    
      
        
        

      

      
        
        

        18

      

      
        
        

      

    

    
       

      
        	 	 	All
                transactions subject to the Back to Back Documentation that occur
                as a
                result of novated OTC NG Hedges that are not exchange-cleared at
                the time
                of novation will have a notional value equal to the notional value of such
                novated transactions.


      

       

      
        	 	
                (D)
                  

              	
                with
                  respect to OTC NG Hedges that are not exchange cleared OTC NG Hedges,
                  Party A’s obligation to take by novation Party B’s Affiliates’ positions
                  with respect to such OTC NG Hedges shall either have in place with
                  Party A
                  or agree to an ISDA Master Agreement and all schedules and annexes
                  thereto, including but not limited to a Credit Support Annex, reasonably
                  acceptable to Party A; provided that where Party A does not have
                  an ISDA
                  Master Agreement and Credit Support Annex in place, it will use
                  its
                  commercially reasonable efforts promptly to negotiate such documentation
                  with the counterparty to OTC NG Hedges to be novated by Party B’s
                  Affiliates to Party A with such documentation to reflect (1) the
                  election
                  of Loss and Second Method for the purposes of payments on early
                  termination, (2) New York law as the governing law, (3) USD
                  as the Termination Currency, (4) specifying that Section 2(c)(ii)
                  of the
                  ISDA Form will not apply, and (5) Party A is the Calculation Agent
                  unless
                  an Event of Default or a Potential Event of Default where Party
                  A is the
                  Defaulting Party shall occur, in which case the other party shall
                  be the
                  Calculation Agent);

              


      

       

      
        	 	
                (E)
                  

              	
                the
                  Back to Back Documentation shall provide that the sole collateral
                  for
                  Party B’s obligations in respect of the Back to Back Documentation will
                  be
                  as provided in Section 2 hereof,
                  with its Collateral Percentage being at all times equal to the
                  quotient
                  of: (a) the aggregate notional amount, in MMBtus, of all Transactions
                  with
                  Party A under the Agreement and, without duplication, other Back
                  to Back
                  Documentation with Party A, divided by (b) the Full Hedge
                  Amount;

              


      

       

      
        	 	(F)	
                within
                  five (5) Business Days of the execution of Back to Back Documentation
                  with
                  respect to each transferred NYMEX Contract and OTC NG Hedge, Party
                  B shall
                  pay a fee ***;  and

              


      

       

      
        	 	
                (G)

              	
                no
                  more than *** of NYMEX Contracts shall
                  be the subject of this Section 9.

              


      

      	 	
               

            


      
        	 	
                 

              	
                 

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        19

      

      
        
        

      

    

    

      Please
        provide your confirmation that the foregoing accurately reflects our agreement
        by signing in the space below and delivering a duly executed counterpart
        hereof
        (which delivery shall be deemed to have been made upon delivery thereof at
        our
        above address or upon our receipt of a facsimile transmission of a copy thereof
        to our facsimile (214-875-9050)). Your response should reflect the appropriate
        person within your organization who has authority to enter into this Agreement
        and should be received by Party B no later than 5:00 pm Central Time on the
        third Business Day following the date received by you. Furthermore, you agree
        to
        notify us of any bona fide error that would require revision in order to
        accurately reflect our agreement by such time. If Party B has not been notified
        of a bona fide error or received a fully executed confirmation in the manner
        set
        forth above, this Transaction shall be deemed binding on Party A and Party
        B as
        sent. Please direct and questions or concerns to Sara Herrlein at (214)
        875-9526.

      


       

       

       

      
        	 	 	 
	 	 Very
                truly yours
	 	
                 TXU
                  Generation Development Company LLC

                 

              
	 
 	 
 	 
 
	 	By:  	              
                /s/ David
                A. Campbell
	 	Name:   
                David
                A. Campbell
	 	Title:     
                Executive Vice
                President

          

      


                  


      


       

      ACCEPTED
        AND AGREED

      


      ***

      


      


      By___/s/
        ___________________________ ***

      Name:
        ***

      Title:***

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        20

      

      
        
        

      

    

     

    

      Schedule
        1

      


      Transaction
        Terms

      


      Schedule
        1

      ***

                                                                                                      Transaction
        Terms

      

        
          	
                  TRADE
                    DATE

                	
                  June
                    6, 2006

                
	 	 
	
                  FIXED
                    PRICE PAYOR

                	
                  Party
                    A

                
	 	 
	
                  FLOATING
                    PRICE PAYOR

                	
                  Party
                    B

                
	 	 
	
                  COMMODITY
                    TYPE

                	
                  Natural
                    Gas

                
	 	 
	
                  FIXED
                    PRICE

                	
                  ***

                
	 	 
	
                  FLOATING
                    PRICE

                	
                  The
                    New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                    last business trading day in the corresponding contract month
                    for NYMEX
                    natural gas future contract for delivery at Henry Hub

                
	 	 
	
                  QUANTITY
                    MEASUREMENT

                	
                  MMBTU
                    (One Million British Thermal Units)

                
	 	 
	
                  QUANTITY
                    PER CALCULATION PERIOD

                	
                  ***

                
	 	 
	
                  CALCULATION
                    PERIOD

                	
                  Each
                    calendar month beginning with ***
                    and
                    ending ***

                
	 	 
	
                  PAYMENT
                    DATE

                	
                  Amounts
                    owed shall be due and payable on or before 12:00 noon (Central
                    Time) on
                    the fifth Business Day succeeding the date on which the Floating
                    Price is
                    determined

                


        

      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          1

          
          

        

         

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

       

       

      

        
          	
                  TRADE
                    DATE

                	
                  June
                    6, 2006

                
	
                   

                	
                   

                
	
                  FIXED
                    PRICE PAYOR

                	
                  Party
                    A

                
	
                   

                	
                   

                
	
                  FLOATING
                    PRICE PAYOR

                	
                  Party
                    B

                
	
                   

                	
                   

                
	
                  COMMODITY
                    TYPE

                	
                  Natural
                    Gas

                
	
                   

                	
                   

                
	
                  FIXED
                    PRICE

                	
                  ***

                
	
                   

                	
                   

                
	
                  FLOATING
                    PRICE

                	
                  The
                    New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                    last business trading day in the corresponding contract month
                    for NYMEX
                    natural gas future contract for delivery at Henry Hub

                
	
                   

                	
                   

                
	
                  QUANTITY
                    MEASUREMENT

                	
                  MMBTU
                    (One Million British Thermal Units)

                
	
                   

                	
                   

                
	
                  QUANTITY
                    PER CALCULATION PERIOD

                	
                  ***

                
	
                   

                	
                   

                
	
                  CALCULATION
                    PERIOD

                	
                  Each
                    calendar month beginning with ***
                    and
                    ending ***

                
	
                   

                	
                   

                
	
                  PAYMENT
                    DATE

                	
                  Amounts
                    owed shall be due and payable on or before 12:00 noon (Central
                    Time) on
                    the fifth Business Day succeeding the date on which the Floating
                    Price is
                    determined

                


        

      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        2

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with
                  *** and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        3

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

     

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with
                  *** and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on 

                  which
                    the Floating Price is
                    determined

                

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        4

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with
                  *** and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        5

      

      
        
        

      

    

     

     

    

      Schedule
        1

      ***

      Transaction
        Terms

       

      

        
          	
                  TRADE
                    DATE

                	
                  June
                    6, 2006

                
	
                   

                	
                   

                
	
                  FIXED
                    PRICE PAYOR

                	
                  Party
                    A

                
	
                   

                	
                   

                
	
                  FLOATING
                    PRICE PAYOR

                	
                  Party
                    B

                
	
                   

                	
                   

                
	
                  COMMODITY
                    TYPE

                	
                  Natural
                    Gas

                
	
                   

                	
                   

                
	
                  FIXED
                    PRICE

                	
                  ***

                
	
                   

                	
                   

                
	
                  FLOATING
                    PRICE

                	
                  The
                    New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                    last business trading day in the corresponding contract month
                    for NYMEX
                    natural gas future contract for delivery at Henry Hub

                
	
                   

                	
                   

                
	
                  QUANTITY
                    MEASUREMENT

                	
                  MMBTU
                    (One Million British Thermal Units)

                
	
                   

                	
                   

                
	
                  QUANTITY
                    PER CALCULATION PERIOD

                	
                  ***

                
	
                   

                	
                   

                
	
                  CALCULATION
                    PERIOD

                	
                  Each
                    calendar month beginning with
                    *** and
                    ending ***

                
	
                   

                	
                   

                
	
                  PAYMENT
                    DATE

                	
                  Amounts
                    owed shall be due and payable on or before 12:00 noon (Central
                    Time) on
                    the fifth Business Day succeeding the date on which the Floating
                    Price is
                    determined

                


        

      

       

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        6

      

      
        
        

      

    

     

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with *** and ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        7

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        8

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

       

      

        
          	
                  TRADE
                    DATE

                	
                  June
                    6, 2006

                
	 	 
	
                  FIXED
                    PRICE PAYOR

                	
                  Party
                    A

                
	 	 
	
                  FLOATING
                    PRICE PAYOR

                	
                  Party
                    B

                
	 	 
	
                  COMMODITY
                    TYPE

                	
                  Natural
                    Gas

                
	 	 
	
                  FIXED
                    PRICE

                	
                  ***

                
	 	 
	
                  FLOATING
                    PRICE

                	
                  The
                    New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                    last business trading day in the corresponding contract month
                    for NYMEX
                    natural gas future contract for delivery at Henry Hub

                
	 	 
	
                  QUANTITY
                    MEASUREMENT

                	
                  MMBTU
                    (One Million British Thermal Units)

                
	 	 
	
                  QUANTITY
                    PER CALCULATION PERIOD

                	
                  ***

                
	 	 
	
                  CALCULATION
                    PERIOD

                	
                  Each
                    calendar month beginning with ***
                    and
                    ending ***

                
	 	 
	
                  PAYMENT
                    DATE

                	
                  Amounts
                    owed shall be due and payable on or before 12:00 noon (Central
                    Time) on
                    the fifth Business Day succeeding the date on which the Floating
                    Price is
                    determined

                


        

      

       

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        9

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with *** and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        10

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        11

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

      

        
          	
                  TRADE
                    DATE

                	
                  June
                    6, 2006

                
	 	 
	
                  FIXED
                    PRICE PAYOR

                	
                  Party
                    A

                
	 	 
	
                  FLOATING
                    PRICE PAYOR

                	
                  Party
                    B

                
	 	 
	
                  COMMODITY
                    TYPE

                	
                  Natural
                    Gas

                
	 	 
	
                  FIXED
                    PRICE

                	
                  ***

                
	 	 
	
                  FLOATING
                    PRICE

                	
                  The
                    New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                    last business trading day in the corresponding contract month
                    for NYMEX
                    natural gas future contract for delivery at Henry Hub

                
	 	 
	
                  QUANTITY
                    MEASUREMENT

                	
                  MMBTU
                    (One Million British Thermal Units)

                
	 	 
	
                  QUANTITY
                    PER CALCULATION PERIOD

                	
                  ***

                
	 	 
	
                  CALCULATION
                    PERIOD

                	
                  Each
                    calendar month beginning with ***
                    and
                    ending ***

                
	 	 
	
                  PAYMENT
                    DATE

                	
                  Amounts
                    owed shall be due and payable on or before 12:00 noon (Central
                    Time) on
                    the fifth Business Day succeeding the date on which the Floating
                    Price is
                    determined

                


        

      

       

       

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        12

      

      
        
        

      

    

     

     

    

      Schedule
        1

      ***

      Transaction
        Terms

       

    

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        13

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        14

      

      
        
        

      

    

    

      Schedule
        1

      ***

      Transaction
        Terms

      

        
          	
                  TRADE
                    DATE

                	
                  June
                    6, 2006

                
	
                   

                	
                   

                
	
                  FIXED
                    PRICE PAYOR

                	
                  Party
                    A

                
	
                   

                	
                   

                
	
                  FLOATING
                    PRICE PAYOR

                	
                  Party
                    B

                
	
                   

                	
                   

                
	
                  COMMODITY
                    TYPE

                	
                  Natural
                    Gas

                
	
                   

                	
                   

                
	
                  FIXED
                    PRICE

                	
                  ***

                
	
                   

                	
                   

                
	
                  FLOATING
                    PRICE

                	
                  The
                    New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                    last business trading day in the corresponding contract month
                    for NYMEX
                    natural gas future contract for delivery at Henry Hub

                
	
                   

                	
                   

                
	
                  QUANTITY
                    MEASUREMENT

                	
                  MMBTU
                    (One Million British Thermal Units)

                
	
                   

                	
                   

                
	
                  QUANTITY
                    PER CALCULATION PERIOD

                	
                  ***

                
	
                   

                	
                   

                
	
                  CALCULATION
                    PERIOD

                	
                  Each
                    calendar month beginning with *** and ending ***

                
	
                   

                	
                   

                
	
                  PAYMENT
                    DATE

                	
                  Amounts
                    owed shall be due and payable on or before 12:00 noon (Central
                    Time) on
                    the fifth Business Day succeeding the date on which the Floating
                    Price is
                    determined

                


        

      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        15

      

      
        
        

      

    

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        16

      

      
        
        

      

    

     

     

    

      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

    

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        17

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

     

    
      	
              TRADE
                DATE

            	
              June
                6, 2006

            
	 	 
	
              FIXED
                PRICE PAYOR

            	
              Party
                A

            
	 	 
	
              FLOATING
                PRICE PAYOR

            	
              Party
                B

            
	 	 
	
              COMMODITY
                TYPE

            	
              Natural
                Gas

            
	 	 
	
              FIXED
                PRICE

            	
              ***

            
	 	 
	
              FLOATING
                PRICE

            	
              The
                New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                last business trading day in the corresponding contract month for
                NYMEX
                natural gas future contract for delivery at Henry Hub

            
	 	 
	
              QUANTITY
                MEASUREMENT

            	
              MMBTU
                (One Million British Thermal Units)

            
	 	 
	
              QUANTITY
                PER CALCULATION PERIOD

            	
              ***

            
	 	 
	
              CALCULATION
                PERIOD

            	
              Each
                calendar month beginning with ***
                and
                ending ***

            
	 	 
	
              PAYMENT
                DATE

            	
              Amounts
                owed shall be due and payable on or before 12:00 noon (Central Time)
                on
                the fifth Business Day succeeding the date on which the Floating
                Price is
                determined

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        18

      

      
        
        

      

    

    
      Schedule
        1

      ***

      Transaction
        Terms

       

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          19

        

        
          
          

        

      

       

    

    
      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

     

    
      	
              TRADE
                DATE

            	
              June
                6, 2006

            
	 	 
	
              FIXED
                PRICE PAYOR

            	
              Party
                A

            
	 	 
	
              FLOATING
                PRICE PAYOR

            	
              Party
                B

            
	 	 
	
              COMMODITY
                TYPE

            	
              Natural
                Gas

            
	 	 
	
              FIXED
                PRICE

            	
              ***

            
	 	 
	
              FLOATING
                PRICE

            	
              The
                New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                last business trading day in the corresponding contract month for
                NYMEX
                natural gas future contract for delivery at Henry Hub

            
	 	 
	
              QUANTITY
                MEASUREMENT

            	
              MMBTU
                (One Million British Thermal Units)

            
	 	 
	
              QUANTITY
                PER CALCULATION PERIOD

            	
              ***

            
	 	 
	
              CALCULATION
                PERIOD

            	
              Each
                calendar month beginning with ***
                and
                ending ***

            
	 	 
	
              PAYMENT
                DATE

            	
              Amounts
                owed shall be due and payable on or before 12:00 noon (Central Time)
                on
                the fifth Business Day succeeding the date on which the Floating
                Price is
                determined

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        20

      

      
        
        

      

    

     

     

    
      Schedule
        1

      ***

      Transaction
        Terms

       

       

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        21

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

     

    
      	
              TRADE
                DATE

            	
              June
                6, 2006

            
	 	 
	
              FIXED
                PRICE PAYOR

            	
              Party
                A

            
	 	 
	
              FLOATING
                PRICE PAYOR

            	
              Party
                B

            
	 	 
	
              COMMODITY
                TYPE

            	
              Natural
                Gas

            
	 	 
	
              FIXED
                PRICE

            	
              ***

            
	 	 
	
              FLOATING
                PRICE

            	
              The
                New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                last business trading day in the corresponding contract month for
                NYMEX
                natural gas future contract for delivery at Henry Hub

            
	 	 
	
              QUANTITY
                MEASUREMENT

            	
              MMBTU
                (One Million British Thermal Units)

            
	 	 
	
              QUANTITY
                PER CALCULATION PERIOD

            	
              ***

            
	 	 
	
              CALCULATION
                PERIOD

            	
              Each
                calendar month beginning with ***
                and
                ending ***

            
	 	 
	
              PAYMENT
                DATE

            	
              Amounts
                owed shall be due and payable on or before 12:00 noon (Central Time)
                on
                the fifth Business Day succeeding the date on which the Floating
                Price is
                determined

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        22

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

       

       

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

       

    

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        23

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

    
      	
              TRADE
                DATE

            	
              June
                6, 2006

            
	 	 
	
              FIXED
                PRICE PAYOR

            	
              Party
                A

            
	 	 
	
              FLOATING
                PRICE PAYOR

            	
              Party
                B

            
	 	 
	
              COMMODITY
                TYPE

            	
              Natural
                Gas

            
	 	 
	
              FIXED
                PRICE

            	
              ***

            
	 	 
	
              FLOATING
                PRICE

            	
              The
                New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                last business trading day in the corresponding contract month for
                NYMEX
                natural gas future contract for delivery at Henry Hub

            
	 	 
	
              QUANTITY
                MEASUREMENT

            	
              MMBTU
                (One Million British Thermal Units)

            
	 	 
	
              QUANTITY
                PER CALCULATION PERIOD

            	
              ***

            
	 	 
	
              CALCULATION
                PERIOD

            	
              Each
                calendar month beginning with ***
                and
                ending ***

            
	 	 
	
              PAYMENT
                DATE

            	
              Amounts
                owed shall be due and payable on or before 12:00 noon (Central Time)
                on
                the fifth Business Day succeeding the date on which the Floating
                Price is
                determined

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        24

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

       

       

       

    

    
      	
              TRADE
                DATE

            	
              June
                6, 2006

            
	 	 
	
              FIXED
                PRICE PAYOR

            	
              Party
                A

            
	 	 
	
              FLOATING
                PRICE PAYOR

            	
              Party
                B

            
	 	 
	
              COMMODITY
                TYPE

            	
              Natural
                Gas

            
	 	 
	
              FIXED
                PRICE

            	
              ***

            
	 	 
	
              FLOATING
                PRICE

            	
              The
                New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                last business trading day in the corresponding contract month for
                NYMEX
                natural gas future contract for delivery at Henry Hub

            
	 	 
	
              QUANTITY
                MEASUREMENT

            	
              MMBTU
                (One Million British Thermal Units)

            
	 	 
	
              QUANTITY
                PER CALCULATION PERIOD

            	
              ***

            
	 	 
	
              CALCULATION
                PERIOD

            	
              Each
                calendar month beginning with ***
                and
                ending ***

            
	 	 
	
              PAYMENT
                DATE

            	
              Amounts
                owed shall be due and payable on or before 12:00 noon (Central Time)
                on
                the fifth Business Day succeeding the date on which the Floating
                Price is
                determined

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        25

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

     

    
      	
              TRADE
                DATE

            	
              June
                6, 2006

            
	 	 
	
              FIXED
                PRICE PAYOR

            	
              Party
                A

            
	 	 
	
              FLOATING
                PRICE PAYOR

            	
              Party
                B

            
	 	 
	
              COMMODITY
                TYPE

            	
              Natural
                Gas

            
	 	 
	
              FIXED
                PRICE

            	
              ***

            
	 	 
	
              FLOATING
                PRICE

            	
              The
                New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                last business trading day in the corresponding contract month for
                NYMEX
                natural gas future contract for delivery at Henry Hub

            
	 	 
	
              QUANTITY
                MEASUREMENT

            	
              MMBTU
                (One Million British Thermal Units)

            
	 	 
	
              QUANTITY
                PER CALCULATION PERIOD

            	
              ***

            
	 	 
	
              CALCULATION
                PERIOD

            	
              Each
                calendar month beginning with ***
                and
                ending ***

            
	 	 
	
              PAYMENT
                DATE

            	
              Amounts
                owed shall be due and payable on or before 12:00 noon (Central Time)
                on
                the fifth Business Day succeeding the date on which the Floating
                Price is
                determined

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        26

      

      
        
        

      

    

     

     

    
      Schedule
        1

      ***

      Transaction
        Terms

       

       

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        27

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

     

     

    
      	
              TRADE
                DATE

            	
              June
                6, 2006

            
	 	 
	
              FIXED
                PRICE PAYOR

            	
              Party
                A

            
	 	 
	
              FLOATING
                PRICE PAYOR

            	
              Party
                B

            
	 	 
	
              COMMODITY
                TYPE

            	
              Natural
                Gas

            
	 	 
	
              FIXED
                PRICE

            	
              ***

            
	 	 
	
              FLOATING
                PRICE

            	
              The
                New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                last business trading day in the corresponding contract month for
                NYMEX
                natural gas future contract for delivery at Henry Hub

            
	 	 
	
              QUANTITY
                MEASUREMENT

            	
              MMBTU
                (One Million British Thermal Units)

            
	 	 
	
              QUANTITY
                PER CALCULATION PERIOD

            	
              ***

            
	 	 
	
              CALCULATION
                PERIOD

            	
              Each
                calendar month beginning with ***
                and
                ending ***

            
	 	 
	
              PAYMENT
                DATE

            	
              Amounts
                owed shall be due and payable on or before 12:00 noon (Central Time)
                on
                the fifth Business Day succeeding the date on which the Floating
                Price is
                determined

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        28

      

      
        
        

      

    

     

     

    
      Schedule
        1

      ***

      Transaction
        Terms

       

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

       

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        29

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

    

     

     

     

    
      	
              TRADE
                DATE

            	
              June
                6, 2006

            
	 	 
	
              FIXED
                PRICE PAYOR

            	
              Party
                A

            
	 	 
	
              FLOATING
                PRICE PAYOR

            	
              Party
                B

            
	 	 
	
              COMMODITY
                TYPE

            	
              Natural
                Gas

            
	 	 
	
              FIXED
                PRICE

            	
              ***

            
	 	 
	
              FLOATING
                PRICE

            	
              The
                New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                last business trading day in the corresponding contract month for
                NYMEX
                natural gas future contract for delivery at Henry Hub

            
	 	 
	
              QUANTITY
                MEASUREMENT

            	
              MMBTU
                (One Million British Thermal Units)

            
	 	 
	
              QUANTITY
                PER CALCULATION PERIOD

            	
              ***

            
	 	 
	
              CALCULATION
                PERIOD

            	
              Each
                calendar month beginning with ***
                and
                ending ***

            
	 	 
	
              PAYMENT
                DATE

            	
              Amounts
                owed shall be due and payable on or before 12:00 noon (Central Time)
                on
                the fifth Business Day succeeding the date on which the Floating
                Price is
                determined

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        30

      

      
        
        

      

    

     

    
      Schedule
        1

      ***

      Transaction
        Terms

       

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          31

        

        
          
          

        

      

       

       

      
        Schedule
          1

        ***

        Transaction
          Terms

      

       

       

       

      
        	
                TRADE
                  DATE

              	
                June
                  6, 2006

              
	 	 
	
                FIXED
                  PRICE PAYOR

              	
                Party
                  A

              
	 	 
	
                FLOATING
                  PRICE PAYOR

              	
                Party
                  B

              
	 	 
	
                COMMODITY
                  TYPE

              	
                Natural
                  Gas

              
	 	 
	
                FIXED
                  PRICE

              	
                ***

              
	 	 
	
                FLOATING
                  PRICE

              	
                The
                  New York Mercantile Exchange’s (NYMEX) closing settlement prices for the
                  last business trading day in the corresponding contract month for
                  NYMEX
                  natural gas future contract for delivery at Henry Hub

              
	 	 
	
                QUANTITY
                  MEASUREMENT

              	
                MMBTU
                  (One Million British Thermal Units)

              
	 	 
	
                QUANTITY
                  PER CALCULATION PERIOD

              	
                ***

              
	 	 
	
                CALCULATION
                  PERIOD

              	
                Each
                  calendar month beginning with ***
                  and
                  ending ***

              
	 	 
	
                PAYMENT
                  DATE

              	
                Amounts
                  owed shall be due and payable on or before 12:00 noon (Central
                  Time) on
                  the fifth Business Day succeeding the date on which the Floating
                  Price is
                  determined

              


      

       

       

       

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        32

      

      
        
        

      

    

    

      Schedule
        2

      


      Credit
        Facility Terms

      


      $1.0
        Billion Senior Secured Second Lien Facility

      Summary
        of Principal Terms and Conditions

    

     

    

      
        	
                Borrower
                  

                 

              	
                TXU
                  Generation Development Company LLC, a Delaware limited liability
                  company
                  ("Borrower").
                  

                 

              
	
                Guarantors

                 

              	
                Each
                  Project Company. 

                 

              
	
                Lead
                  Arranger and Bookrunner

                 

              	
                ***

                 

              
	
                
                

                Administrative
                  Agent

                 

              	
                ***
                  (“Agent”).
                  

                 

              
	
                Collateral
                  Agent

                 

              	
                TBD

                 

              
	
                Lenders

                 

              	
                A
                  group of financial institutions arranged by ***
                  (the “Lenders”).
                  

                 

              
	
                Facility

                 

              	
                A
                  second lien secured credit facility to fund each “Pre-Completion
                  Shortfall”
                  under (and as defined in) the ISDA Confirmation between Borrower
                  and
                  ***
                  dated June __, 2006 (the “Confirmation”).
                  The Confirmation relates to the “Projects”
                  as
                  such term is defined in the Summary of Principal Terms and Conditions
                  for
                  the $11.0 billion Senior Secured Credit Facilities (the “Project
                  Finance Facilities”)
                  attached as Annex I to the Commitment Letter from ***
                  to
                  TXU Corp. (“Sponsor”)
                  and the Borrower dated June 5, 2006 (the “Project
                  Financing Term Sheet”).
                  Capitalized
                  terms used but not otherwise defined in this Summary of Principal
                  Terms
                  and Conditions have the meanings given to them in the Project Financing
                  Term Sheet. 

                 

              
	
                Use
                  of Proceeds

                 

              	
                The
                  Facility will be available solely to fund any Pre-Completion Shortfall
                  owed ***
                  and
                  interest accrued under the Facility. 

                 

              
	
                Facility
                  Amount

                 

              	
                $1
                  billion multiplied by the Collateral Percentage (as defined in
                  the
                  Confirmation) on the date of determination.

                 

              
	
                Availability

                 

              	
                ***
                  

                 

              
	
                Pricing

                 

              	
                ***
                  

                 

              
	
                Fees

                 

              	
                ***
                  

                 

              
	
                Tenor
                  and Terms

                 

              	
                Advances
                  under the Facility will be subject to the same terms and conditions
                  and
                  will mature on the same date the TLC Loans mature. 

                 

              
	
                Security

                 

              	
                Advances
                  under the Facility will be secured on a pari passu basis with the
                  TLC
                  Loans. 

                 

              
	Conditions
                Precedent to Closing	
                The
                  Facility shall become effective upon satisfaction of the following
                  conditions precedent as well as others reasonably specified by
                  the Agent
                  (the “Closing
                  Date”):
                  

                 

                   · 
Due
                  execution and
                  delivery of the definitive credit documentation

                         
                   for the Facility,
                  including a credit agreement, promissory notes, 

                          
security
                  documentation, intercreditor agreement, and other 

                           documents
                  customary for facilities of this type (the “Credit
                  

              


      

       

      
        
          
          

        

        
          1

          
          

        

        
          
          

        

      

       

       

      
        	 	
                         
                  Documents”);
                  and
           
                

                                ·       
                  The Closing Date (as defined in the Project Financing Term Sheet)
                  shall
                  have occurred. 

              


      

      
        	
                 

                Conditions
                  Precedent to each Advance

                 

              	
                 

                Conditions
                  precedent for each advance under the Facility will include the
                  following
                  as well as others reasonably specified by the Agent: 

                 

                 

                ·  For
                  any advance that is not solely to pay accrued interest under
                  the

                       
                   Facility, ***
                  shall
                  have received a     Pre-Completion Shortfall
                  Notice

                       
                   (as defined in the Confirmation) in an amount equal to the amount
                  of
                  

                        
                  the advance;

                 

                ·  No
                  default or event of default shall exist under the Facility; and
                  

                 

                ·  All
                  representations and warranties of Borrower shall be true and correct
                  in
                  all material respects. 

              
	
                 

                Construction
                  Delays

                 

              	
                 

                Notwithstanding
                  any other provision set forth herein, funding under the Facility
                  to cover
                  Pre-Completion Shortfalls owed ***
                  and
                  interest accrued under the Facility will not be conditioned by
                  events
                  related to construction delays; provided however that during the
                  occurrence and continuation of a Default or an Event of Default
                  under the
                  Project Finance Facilities, there shall be no draws under the
                  Facility.

                 

              
	
                 

                Representations
                  and Warranties 

                 

              	
                 

                Usual
                  for facilities of this type (subject to materiality and reasonableness
                  qualifiers and grace periods) and comparable to those in the Project
                  Financing Term Sheet. 

              
	
                 

                Affirmative
                  Covenants

                 

              	
                 

                Usual
                  for facilities of this type (subject to materiality and reasonableness
                  qualifiers, grace periods, carve-outs, etc.) and comparable to
                  those in
                  the Project Financing Term Sheet. 

              
	
                 

                Negative
                  Covenants

                 

              	
                 

                Usual
                  for facilities and transactions of this type (subject to materiality
                  and
                  reasonableness qualifiers, grace periods, carve-outs etc.) and
                  comparable
                  to those in the Project Financing Term Sheet. 

                 

              
	
                 

                Financial
                  Covenants

                 

              	
                Identical
                  to those included in the Project Financing Term Sheet.

              
	
                Events
                  of Default 

                 

              	
                Usual
                  for facilities and transactions of this type (subject to materiality
                  and
                  reasonableness qualifiers and grace periods) and including a cross-default
                  to TLC Loans. 

              
	
                 

                Non-Recourse

                 

              	
                 

                Other
                  than express obligations under the Facility documentation and Project
                  Documents, the obligations under the Facility documentation will
                  be
                  obligations solely of Borrower and the Project Companies, and the
                  Lenders
                  will not have recourse to Sponsor or any other affiliate of Borrower
                  and
                  the Project Companies.

                 

              
	
                 

                Lender
                  Assignment

                 

              	
                 

                The
                  Lenders will be permitted to assign loans and commitments with
                  the consent
                  of the Agent (unless such assignment is an assignment of a commitment
                  or
                  loan under a Facility to a Lender, an affiliate of a Lender or
                  an approved
                  fund). Each assignment (except to other Lenders or their affiliates)
                  will
                  be in a minimum amount of $1,000,000 in respect of loans and commitments
                  under the Facility. The Agent will receive a processing and recordation
                  fee of $3,500, payable by the assignor and/or the assignee, with
                  each
                  assignment. 

                 

              


      

       

       

      
        
          
          

        

        
          
          

          2

        

        
          
          

        

      

       

      
        	 	
                The Lenders will be permitted to participate
                  loans and
                  commitments without restriction. Voting rights of participants
                  shall be
                  limited to matters in respect of (a) increases in commitments,
                  (b) reductions of principal, interest or fees, (c) extensions of
                  scheduled amortization or final maturity and (d) certain releases of
                  Collateral or material Guarantees.

                 

              


      

      
        	
                 

                Intercreditor
                  Agreement

                 

              	
                 

                The
                  agreement to be executed in connection with the Project Finance
                  Facilities. 

                 

              
	
                 

                Customary
                  Provisions

                 

              	
                 

                The
                  Facility documentation will contain customary provisions regarding
                  indemnification, tax gross up, increased costs, illegality, capital
                  adequacy and breakage costs subject to mitigation obligations,
                  lender
                  removal provisions and tax credit provisions.

                 

              
	
                 

                Governing
                  Law

                 

              	
                 

                The
                  definitive documents (other than real property collateral documents,
                  which
                  will be governed by local law) will be governed by the laws of
                  the State
                  of New York.

                 

              
	
                 

                Counsel

                 

              	
                 

                Counsel
                  to the Lead Arranger and Agent is ***.
                  Milbank
                  Tweed Hadley & McCloy LLP is
                  counsel to Borrower, Sponsor and the Project Companies.


              
	
                 

                Local
                  Texas Counsel

                 

              	
                 

                TBD

                 

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        3

      

      
        
        

      

    

    

      TXU
        -
***
        Confirmation 

      Annex
        A - Form of Guaranty

    

     

     

     

    

      Annex
        A

      


      Form
        of Guaranty

      


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

      TXU
        -
***
        Confirmation 

      Annex
        A - Form of Guaranty

    

     

    

      


      
        	
                ***

              	
                ***

              


      

      June
        6,
        2006

      To:     TXU
        Generation Development Company LLC

      


      Ladies
        and Gentlemen: 

       

      From
        time
        to time, ***
        and
        TXU
        Generation Development Company LLC
        (“Counterparty”) may enter into one or more commodity transactions relating to
        the purchase, sale, exchange or similar physically-delivered and/or
        financially-settled transactions (or options thereon) with respect to crude
        oil,
        coal, natural gas, electricity or other energy commodity or energy related
        services, or emission allowances (each, a “Transaction”), based on prices of
        such commodities as the parties may agree, and the terms and conditions of
        which
        shall be set forth in individual confirmations issued by ***
        or
        exchanged between the parties (each, a “Confirmation”), including the
        Transaction evidenced by the long-form confirmation letter agreement entered
        into between ***
        and
        Counterparty on June 6, 2006 (the “Long-Form Confirmation”), which incorporates
        by reference the terms of the 1992 ISDA Master Agreement (collectively, the
        Transactions, together with each Confirmation, and the Long-Form Confirmation,
        together with each schedule, annex and exhibit thereto, are hereinafter the
        "Agreement"). 

      


      In
        consideration of Counterparty entering into such Transactions, ***
        hereby
        irrevocably and unconditionally guarantees, as primary obligor and not merely
        as
        surety, to Counterparty, with effect from the date of the first Transaction
        with
        the Counterparty, the due and punctual payment of all amounts payable by
        ***
        under
        each Transaction and the Agreement when the same shall become due and payable,
        whether on scheduled payment dates, upon demand, upon declaration of termination
        or otherwise, in accordance with the terms of the Agreement and giving effect
        to
        any applicable grace period. Upon failure of ***punctually
        to pay any such amounts, and upon written demand by Counterparty to ***
        at its
        address set forth in the signature block of this Guarantee (or to such other
        address as ***
        may
        specify in writing), ***
        agrees
        to pay or cause to be paid such amounts; provided that delay by Counterparty
        in
        giving such demand shall in no event affect ***
        obligations under this Guarantee.

       

      ***
        hereby
        agrees that its obligations hereunder shall be absolute and unconditional and
        will not be discharged except by complete payment of the amounts payable
        under
        the Agreement, irrespective of any claim as to the Agreement's validity,
        regularity or enforceability or the lack of authority of ***
        to
        execute or deliver the Agreement; or any change in or amendment to the
        Agreement; or any waiver or consent by Counterparty with respect to any
        provisions thereof; or the absence of any action to enforce the Agreement,
        or
        the recovery of any judgment against ***
        or of
        any action to enforce a judgment against ***
        under
        the Agreement; or any similar circumstance which might otherwise constitute
        a
        legal or equitable discharge or defense of a guarantor or surety generally.
        This
        is a guarantee of payment and not merely of collection.

      


      ***
        hereby
        waives diligence, presentment, demand on ***
        for
        payment or otherwise (except as provided hereinabove), filing of claims,
        requirement of a prior proceeding against ***
        and
        protest or notice, except for notice as provided for in the Agreement with
        respect to amounts payable by ***
        (to the
        extent that notice may be lawfully given). If at any time payment under the
        Agreement is rescinded or must be otherwise restored or returned by Counterparty
        upon the insolvency, bankruptcy or reorganization of ***
        or
***
        or
        otherwise, ***
        obligations hereunder with respect to such payment shall be reinstated upon
        such
        restoration or return being made by Counterparty.


      
        
          
            1
              

            


            ***
              CONFIDENTIAL
              MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

            


            


          

          
          

        

        
          
          

          
          

        

        
          
          

          
            TXU
              -
              *** Confirmation
               
              .

            Annex
              A - Form of Guaranty 

          

        

      



      


      ***
        represents to Counterparty as of the date hereof which representations will
        be
        deemed to be repeated by
        *** on
        each
        date on which a Transaction is entered into, that:

       

      1.    it
        is
        duly organized and validly existing under the laws of the jurisdiction of
        its
        incorporation and has full power and legal right to execute and deliver this
        Guarantee and to perform the provisions of this Guarantee on its part to
        be
        performed;

       

      2.    its
        execution, delivery and performance of this Guarantee have been and remain
        duly
        authorized by all necessary corporate action and do not contravene any provision
        of its certificate of incorporation or by-laws or any law, regulation or
        contractual restriction binding on it or its assets;

       

      3.    all
        consents, authorizations, approvals and clearances (including, without
        limitation, any necessary exchange control approval) and notifications, reports
        and registrations requisite for its due execution, delivery and performance
        of
        this Guarantee have been obtained from or, as the case may be, filed with
        the
        relevant governmental authorities having jurisdiction and remain in full
        force
        and effect and all conditions thereof have been duly complied with and no
        other
        action by, and no notice to or filing with, any governmental authority having
        jurisdiction is required for such execution, delivery or performance;
        and

       

      4.    this
        Guarantee is its legal, valid and binding obligation enforceable against
        it in
        accordance with its terms except as enforcement hereof may be limited by
        applicable bankruptcy, insolvency, reorganization or other similar laws
        affecting the enforcement of creditors' rights or by general equity
        principles.

       

      By
        accepting this Guarantee and entering into the Agreement, Counterparty agrees
        that ***
        shall be
        subrogated to all rights of Counterparty against ***
        in
        respect of any amounts paid by ***
        pursuant
        to this Guarantee, provided that ***
        shall
        be
        entitled to enforce or to receive any payment arising out of or based upon
        such
        right of subrogation only to the extent that it has paid all amounts payable
        by
***
        under
        the Agreement.

       

      This
        Guarantee may be terminated upon 15 days prior written notice to that effect
        actually received by Counterparty. Such termination shall not, however, affect
        or reduce ***
        obligation hereunder for any liability of ***
        incurred
        prior to such termination.

      


      ***
        hereby
        agrees that
        it
        shall pay all reasonable costs, fees and expenses (including reasonable
        attorneys' fees and disbursements) incurred by Counterparty in successfully
        enforcing ***
        obligations
        under this Guarantee.

       

      This
        Guarantee shall be governed by and construed in accordance with the laws
        of the
        State of New York, without reference to its choice of law doctrine. All
        capitalized terms not otherwise defined herein shall have the respective
        meanings assigned to them in the Agreement.

      ***

       

      By:       ___________________________

      Name:

      Title:

      Address:    ***

       

       

       

       

       

      
        
          
          

        

        
          
          

          2

        

        
          
          

        

      

    

    
      TXU
        -
        *** Confirmation
         
        .

      Annex B
        - Unilateral CSA Paragraph 13

    

    

      UNILATERAL
        CSA - PARAGRAPH 13

      


      PARTY
        A:   *** (the “Pledgor”)

      PARTY
        B:   TXU GENERATION DEVELOPMENT COMPANY LLC (the “Secured
        Party”)

      


      Paragraph
        13. 
Elections
        and Variables

      


      (a)    Security
        Interest for “Obligations”. The
        term
“Obligations”
        as
        used
        in this Annex includes the following additional obligations:

      


      With
        respect to Party A: None

      With
        respect to Party B: Inapplicable

      


      (b)    Credit
        Support Obligations.

      


      (i) Delivery
        Amount, Return Amount and Credit Support Amount.

      


      
        	 	
                (A)

              	
                “Delivery
                  Amount” has
                  the meaning specified in Paragraph
                  3(a).

              


      

      


      
        	 	
                (B)

              	
                “Return
                  Amount” has
                  the meaning specified in Paragraph
                  3(b).

              


      

      


      
        	 	
                (C)

              	
                “Credit
                  Support Amount”
                  has the meaning specified in Paragraph
                  3.

              


      

      


      (ii) Eligible
        Collateral.  The
        following items will qualify as “Eligible
        Collateral” for
        the
        party specified:

       

      
        
          	 	 	
                  Party
                    A

                	
                  Party
                    B

                	
                  Valuation

                  Percentage

                
	
                  (A)

                	
                  Cash

                	
                  [x]

                	
                  Inapplicable

                	
                  100%

                


        

         

        (iii)    Other
          Eligible Support. The
          following items will qualify as “Other
          Eligible Support” for
          the
          party specified: 

         

        With
          respect to Party A: None

        With
          respect to Party B: Inapplicable

         

        (iv)    Thresholds.

        
          


          
            	 	
                    (A)

                  	
                    “Independent
                      Amount” means
                      with respect to Party A: Zero

                  


          

          


          
            	 	 	
                    “Independent
                      Amount” means
                      with respect to Party B:
                      Inapplicable

                  


          

          


          
            	 	
                    (B)

                  	
                    “Threshold”
                      means
                      with respect to Party A shall correspond to the lower of the
                      S&P or
                      Moody’s credit rating for Party A or its Credit Support Provider
                      as
                      follows: 

                  


          

          


          
            	 	 	 


          

           

          
            
              	
                      S&P
                        Rating

                    	
                      Moody’s
                        Rating

                    	
                      Threshold

                    
	
                      A+
                        or higher

                    	
                      A1
                        or higher

                    	
                      ***

                    
	
                      A

                    	
                      A2

                    	
                      ***

                    
	
                      A-

                    	
                      A3

                    	
                      ***

                    
	
                      BBB+

                    	
                      Baa1

                    	
                      ***

                    
	
                      BBB

                    	
                      Baa2

                    	
                      ***

                    
	
                      BBB
                        - or lower

                    	
                      Baa3
                        or lower

                    	
                      ***

                    


            



           

          


                          Provided
            that in the
            event that an Event of Default has occurred and is continuing with respect
            

        

      

    

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    
      TXU
        -
        *** Confirmation
         
        .

      Annex B
        - Unilateral CSA Paragraph 13

       

    

    

      to
        Party
        A, Party A’s Threshold shall be zero.

      


      
        	 	 	
                “Threshold”
                  means
                  with respect to Party B:
                  Inapplicable

              


      

      


      
        	 	
                (C)

              	
                “Minimum
                  Transfer Amount” means
                  with respect to Party A: $100,000; provided, however, that the
                  Minimum
                  Transfer Amount for Party A shall be zero upon the occurrence and
                  during
                  the continuance of an Event of Default or Potential Event of Default,
                  or
                  Termination Event with respect to Party
                  A.

              


      

      


      
        	 	 	
                “Minimum
                  Transfer Amount” means
                  with respect to Party B: $100,000. 

              


      

      


      
        	 	
                (D)

              	
                Rounding.
                  The
                  Delivery Amount and the Return Amount will be rounded up and down
                  respectively to the nearest integral multiple of
                  $10,000.

              


      

      


      (c)    Valuation
        and Timing. 

      


      (i)    “Valuation
        Agent” means:
        Party A or its agent.

      


      
        	 	
                (ii)

              	
                “Valuation
                  Date” means:
                  At the request of either party, any Local Business Day which, if
                  treated
                  as a Valuation date, would result in a Delivery Amount or a Return
                  Amount.
                  

              


      

      


      (iii)    “Valuation
        Time” means:

      


      
        	 	
                [x]

              	
                the
                  close of business in the city of the Valuation Agent on the Valuation
                  Date
                  or date of calculation, as
                  applicable;

              


      

      


      
        	 	
                [x]

              	
                the
                  close of business on the Local Business Day before the Valuation
                  Date or
                  date of calculation, as applicable;

              


      

      


      provided
        that
        the
        calculations of Value and Exposure will be made as of approximately the same
        time on the same date.

      


      (iv)    “Notification
        Time” means
        5:00 p.m., New York time, on a Local Business Day.

      


      
        	 	
                (v)
                  

              	
                “Exposure”
                  has the meaning provided in Paragraph 12.


              


      

      


      
        	
                (d)

              	
                Conditions
                  Precedent and Secured Party's Rights and Remedies.
                  Each
                  Termination Event specified below with respect to a party will
                  be a
                  “Specified
                  Condition”
                  for that party (the specified party being the Affected Party if
                  a
                  Termination Event or Additional Termination Event occurs with respect
                  to
                  that party):

              


      

      


      
        	 	
                Party A

              	
                Party
                  B

              
	 	 	 
	
                Illegality

              	
                [X]

              	
                Inapplicable

              
	
                Tax
                  Event

              	
                [X]

              	
                Inapplicable

              
	
                Tax
                  Event Upon Merger

              	
                [X]

              	
                Inapplicable

              
	
                Credit
                  Event Upon Merger

              	
                [X]

              	
                Inapplicable

              


      

      


      
        	
                (e)

              	
                Substitution.

              


      

      


      (i)    “Substitution
        Date” has
        the
        meaning specified in Paragraph 4(d)(ii).

      


      
        	 	
                (ii)

              	
                Consent. 
                  The
                  Pledgor must obtain the Secured Party's consent for any substitution
                  pursuant to Paragraph 4(d).

              


      

      


      
        	
                (f)

              	
                Dispute
                  Resolution.

              


      

      


      
        	 	
                (i)

              	
                “Resolution
                  Time” means
                  5:00 p.m., New York time, on the Local Business Day following the
                  date on
                  which the notice is given that gives rise to a dispute under Paragraph
                  5.

              


      

      


      
        
          
          

        

        
          
          

          2

        

        
          
          

        

      

    

    
      TXU
        -
        *** Confirmation
         
        .

      Annex B
        - Unilateral CSA Paragraph 13

       

    

    

      
        	 	
                (ii)

              	
                Value.   For
                  the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of Posted
                  Credit
                  Support will be calculated in accordance with standard market
                  practice.

              


      

      


      (iii)   Alternative. 
        The
        provisions of Paragraph 5 will apply.

      


      
        	
                (g)

              	
                Holding
                  and Using Posted
                  Collateral.

              


      

      


      
        	 	
                (i)

              	
                Eligibility
                  to Hold Posted Collateral; Custodians. Party
                  B and the Custodian of Party B will be entitled to hold Posted
                  Collateral
                  pursuant to Paragraph 6(b).

              


      

      


      Initially,
        the Custodian
        for
        Party B is: as identified from Party B to Party A in writing.

      


      (ii)    Use
        of Posted Collateral. The
        provisions of Paragraph 6(c) will apply.

      


      (h)    Distributions
        and Interest Amount. 

      


      
        	 	
                (i)

              	
                Interest
                  Rate. The
                  “Interest
                  Rate” will
                  be, with respect to Eligible Collateral in the form of Cash, for
                  any day,
                  the rate opposite the caption “Federal Funds (Effective)” for such day as
                  published for such day in Federal Reserve Publication H.15(519)
                  or any
                  successor publication as published by the Board of Governors of
                  the
                  Federal Reserve System.

              


      

      


      
        	 	
                (ii)

              	
                Transfer
                  of Interest Amount. The
                  Transfer of the Interest Amount will be made on the first Local
                  Business
                  Day of each calendar month and on any Local Business Day that Posted
                  Collateral in the form of Cash is Transferred to the Pledgor pursuant
                  to
                  Paragraph 3(b).

              


      

      


      (iii)    Alternative
        to Interest Amount. The
        provisions of Paragraph 6(d)(ii) will apply.

      


      (i)    Other
        Eligible Support and Other Posted Support.

      


      (i)    “Value” with
        respect to Other Eligible Support and Other Posted Support means:
        Inapplicable

      


      
        	 	
                (ii)

              	
                “Transfer” with
                  respect to Other Eligible Support and Other Posted Support means:
                  Inapplicable

              


      

      


      
        	
                (j)

              	
                Demands
                  and Notices.  All
                  demands, specifications and notices under this Annex will be made
                  pursuant
                  to the Notices Section of this Agreement, unless otherwise specified
                  here:

              


      

      


      Party
        A:    As
        set
        forth in the Confirmation. 


      


      Party
        B:    As
        set
        forth in the Confirmation.

      


      (k)    Addresses
        for Transfers.

      


      Party
        A:    As
        set
        forth in demands and notices from time to time

       

      Party
        B:    As
        set
        forth in demands and notices from time to time

      


      (l)    Other
        Provisions.

      


      
        	 	
                (i)

              	
                Limit
                  on Secured Party’s Liability. The
                  Secured Party will not be liable for any losses or damages that
                  the
                  Pledgor may suffer as a result of any failure by the Secured Party
                  to
                  perform, or any delay by it in performing, any of its obligations
                  under
                  this Annex if the failure or delay results from circumstances beyond
                  the
                  reasonable control of the Secured Party or its Custodian, such
                  as
                  interruption or loss of computer or communication services, labor
                  disturbance, natural disaster or local or national
                  emergency.

              


      

       

      
        	 	
                (ii)

              	
                Further
                  Assurances; Power of Attorney.
                  The Pledgor shall execute and deliver to the Secured Party
                  

              


      

      
 

    

    
      
        
        

      

      
        
        

        3

      

      
        
        

      

    

    
      TXU
        -
        *** Confirmation
         
        .

      Annex B
        - Unilateral CSA Paragraph 13

    

     

     

    
             
        such financing statements, assignments, or other documents and do such other
        things relating to the Posted Collateral as the Secured Party may reasonably
        request in order to protect and maintain its security interest in the Posted
        Collateral and to protect, preserve, and realize upon the Posted Collateral,
        and
        if the Pledgor fails to do any such thing, then the Secured Party is hereby
        authorized by the Pledgor (but not required) to complete and execute such
        financing statements, assignments, and other documents and to take such actions
        as the Secured Party deems appropriate for such purposes. The Pledgor hereby
        appoints the Secured Party, during the term of this Agreement, as the Pledgor’s
        agent and attorney-in-fact to complete and execute such financing statements,
        assignments and other documents and to perform all other acts which the Secured
        Party may deem appropriate to protect and maintain its security interest
        in the
        Posted Collateral and to protect, preserve, and realize upon the Posted
        Collateral. The power-of-attorney granted herein to the Secured Party is
        coupled
        with an interest and is irrevocable during the term of this
        Agreement.

      


      
        	 	
                (iii)

              	
                Agreement
                  as to Single Secured Party and Pledgor. 
                  Party A and Party B agree that, notwithstanding anything to the
                  contrary
                  in the recital to this Annex, Paragraph 1(b) or Paragraph 2 or
                  the
                  definitions in Paragraph 12, (a) the term “Secured
                  Party”
                  as used in this Annex means only Party B, (b) the term “Pledgor”
                  as used in this Annex means only Party A, (c) only Party A makes
                  the
                  pledge and grant in Paragraph 2, the acknowledgment in the final
                  sentence
                  of Paragraph 8(a) and the representations in Paragraph 9, (d) only
                  Party A
                  will be required to make Transfers of Eligible Credit Support hereunder
                  and (e) Paragraph 7 shall apply to Party A only and shall not apply
                  to
                  Party B.

              


      

       

      
        	
              	
                
                  (iv)

                

              	
                Expenses
                  Related to Posting of Eligible Collateral.
                  Party A shall be liable for the costs and expenses incurred as
                  a result of
                  the delivery of Eligible Credit Support pursuant to this Annex.
                  

              


      

       

      
        	 	
                 

              	
              


      

       

    

    
      	 	 


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        4

      

      
        
        

      

    

     

    
      TXU
        -
        *** Confirmation
         
        .

      Annex B
        - Unilateral CSA Paragraph 13

       

       

    

     

    

      
        	
                ***

                 

                 

                 

              	
                TXU
                  GENERATION DEVELOPMENT COMPANY LLC

              
	
                By:   
                  ____________________________

                         
                  Name:

                         
                  Title:

              	
                By:     ____________________________

                          
                  Name:

                          
                  Title:

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        5

      

      
        
        

      

    

    
      TXU
        -
        ***
        Confirmation 

      Annex
        C - Form of Acceptable Letter of Credit

    

    

      Annex
        C

    

    

      


      Form
        of Acceptable Letter of Credit

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    TXU
      -
      ***
      Confirmation 

    Annex
      C - Form of Acceptable Letter of Credit

     

    


    IRREVOCABLE
      STANDBY LETTER OF CREDIT

     

    [Insert
      Issuing Bank Letterhead]

     

    [__],
      2006

     

    IRREVOCABLE
      STANDBY LETTER OF CREDIT NO.[__]

     

    ***

     

    Ladies
      and Gentlemen:

     

    At
      the
      request, on the instructions and for the account of TXU Generation Development
      Company, a limited liability company organized under the laws of the State
      of
      Delaware (the “Company”),
      we
      hereby establish this Irrevocable Standby Letter of Credit in your favor.


     

    We
      hereby
      irrevocably authorize you to draw on us in accordance with the terms and
      conditions hereinafter set forth in the stated amount equal to the amount
      specified on Schedule 1 hereto (the “Stated
      Amount”),
      effective immediately and expiring on [---]
      (the
“Expiration
      Date”).

     

    Subject
      to the foregoing and the further provisions of this Letter of Credit, a demand
      for payment may be made by you by presentation to us at [address
      of issuer],
      of
      your drawing certificate in the form of Annex
      A
      attached
      hereto. Such certificate, which forms an integral part of this Letter of Credit,
      shall have all blanks appropriately filled in and shall be purportedly signed
      by
      one of your officers (each an “Authorized
      Officer”),
      and
      shall be on the form of a letter or telecopy on your letterhead or authenticated
      swift. Any telecopy or tested telex pursuant to which a drawing is made
      hereunder shall be promptly confirmed to us in writing; provided,
      that
      the giving of such written confirmation shall not be a condition to drawing
      under this Letter of Credit or honor thereof.

     

    Demand
      for payment may be made by you under this Letter of Credit prior to the
      Expiration Date hereof at any time prior to 5:00 p.m., New York time, at our
      address set forth above on any Business Day. As used herein the term
“Business
      Day”
means
      (a) a day on which we (at our above address) are open for the purpose of
      conducting a commercial banking business and (b) a day on which banking
      institutions in New York, New York, generally are open for the purpose of
      conducting a commercial banking business. If demand for payment is made by
      you
      hereunder on a Business Day on or prior to 4:00 p.m., New York time, and your
      drawing certificate conforms to the terms and conditions hereof, payment shall
      be made to you on the next immediately succeeding Business Day. If demand for
      payment is made by you hereunder on a Business Day after 4:00 p.m., New York
      time, and your drawing certificate conforms to the terms and conditions hereof,
      payment shall be made to you on the second immediately succeeding Business
      Day.

     

     

    

      ***
        CONFIDENTIAL
        MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

    

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    TXU
      -
      ***
      Confirmation 

    Annex
      C - Form of Acceptable Letter of Credit

    

      Demands
        for payment hereunder honored by us shall not, in the aggregate, exceed the
        Stated Amount in effect at the time, and each such drawing shall reduce
pro tanto
        the
        Stated Amount of this Letter of Credit.

       

      Upon
        the
        earliest of (i) the honoring by us of the final drawing that reduces the
        then
        available amount to zero or (ii) the Expiration Date hereof, this Letter
        of
        Credit shall automatically terminate.

       

      This
        Letter of Credit sets forth in full the terms of our undertaking, and this
        undertaking shall not in any way be modified, amended, amplified or limited
        by
        reference to any document, instrument or agreement referred to herein or
        in
        which this Letter of Credit is referred to or to which this Letter of Credit
        relates, and any such reference shall not be deemed to incorporate herein
        by
        reference any document, instrument or agreement.

       

      This
        Letter of Credit is transferable in whole, but not in part, in connection
        with
        an assignment of your entire right, title and interest in and to, and all
        of
        your obligations under, 1992 ISDA Master Agreement (Multicurrency-Cross Border)
        (the “ISDA
        Form”
or,
        when executed, the “Agreement”),
        each
        Transaction thereunder, and each Confirmation thereof, including the
        Confirmation dated June [---]
        2006
        (the “Agreements”),
        upon
        delivery to us of this original Letter of Credit and the original amendments
        hereto, if any, accompanied by a properly completed Notice of Transfer in
        the
        form of Annex
        B
        attached
        hereto. This Letter of Credit will not be transferred to any entity or person
        who is subject to sanctions issued by the U.S. Department of Commerce or
        to whom
        such transfer is prohibited by the Foreign Assets Control Regulations or
        any
        other United States regulations or laws.

       

      Upon
        the
        payment to you or your account of the amount specified in the drawing
        certificate, we shall be fully discharged on our obligation under this Letter
        of
        Credit with respect to such drawing, and we shall not thereafter be obligated
        to
        make any further payments under this Letter of Credit in respect of such
        drawing
        to you or to any other person.

       

      All
        charges related to this Letter of Credit are for the Company’s
        account.

       

      This
        Letter of Credit shall be governed by, and construed in accordance with,
        the
        terms of the Uniform Customs and Practice for Documentary Credits (1993
        Revision), International Chamber of Commerce Publication No. 500 (the
“Uniform
        Customs”),
        including, but not limited to, any provisions relating to force majeure.
        As to
        matters not governed by the Uniform Customs, this Letter of Credit shall
        be
        governed by and construed in accordance with the laws of the State of New
        York,
        including, without limitation, the Uniform Commercial Code as in effect in
        the
        State of New York.

       

      Communications
        with respect to this Letter of Credit shall be in writing and be addressed
        to us
        at [---], specifically referring to the number of this Letter of
        Credit.

       

                              Very
        truly
        yours,

      


                                                              ___________________________

       

       

      
        
          
          

        

        
          
          

          2

        

        
          
          

        

      

    

    
      TXU
        -
        ***
        Confirmation 

      Annex
        C - Form of Acceptable Letter of Credit

    

     

     

    

      Schedule
        1

      


      


      The
        Stated Amount shall be:

       

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    TXU
      -
      ***
      Confirmation 

    Annex
      C - Form of Acceptable Letter of Credit

     

    

      Annex
        A

       

      DRAWING
        CERTIFICATE

       

      [Insert
        Name of Issuing Bank]

       

      [Insert
        Address of Issuing Bank]

       

      Ladies
        and Gentlemen:

       

      ***
        (the
“Beneficiary”)
        hereby
        certifies to [______________________] (the “Bank”),
        with
        reference to the Bank’s Irrevocable Standby Letter of Credit No. [___]) (the
“Letter
        of Credit”;
        capitalized terms used herein and not otherwise defined herein shall have
        the
        respective meanings given to such terms in the Letter of Credit)
        that:

       

      1.  The
        Beneficiary is making a demand for payment under the Letter of Credit of
        the sum
        of $[____], which amount does not exceed the current Stated Amount of the
        Letter
        of Credit.

       

      2.  [An
        Event
        of Default or an Additional Termination Event (each as defined in the
        Agreements) has occurred and is continuing with respect to the Company, in
        which
        case, the undersigned hereby confirms that the amount of this drawing does
        not
        exceed the amount currently due and payable under the Agreements.]
        [This
        Letter
        of Credit has fewer than twenty (20) days remaining prior to the date of
        expiration and the Beneficiary has not received a replacement letter of credit
        as and to the extent required by the Agreements, in which case, the undersigned
        hereby confirms that that the amount of this drawing does not exceed the
        undrawn
        face amount of the Letter of Credit.] [NOTE:
        Select applicable basis on which drawing is being made.]

       

      3.  The
        amount demanded hereby has been calculated in accordance with the terms of
        the
        Agreements.

       

      4.  You
        are
        hereby directed to pay the amount so demanded to: [Insert wire transfer
        instruction].

       

      IN
        WITNESS WHEREOF, the Beneficiary has executed and delivered this Certificate
        as
        of the [__] day of [month], [year].

       

              Very
        truly
        yours,

      


              [______________________]

          


              By:
        ____________________________________

              Name:

              Title:

    

     

     

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    TXU
      -
      ***
      Confirmation 

    Annex
      C - Form of Acceptable Letter of Credit

     

    

      Annex
        B

      


      NOTICE
        OF
        TRANSFER

       

      


       

      [Insert
        Name of Issuing Bank]

       

      [Insert
        Address of Issuing Bank]

       

      Attention:
        Letter of Credit Unit

       

      Ladies
        and Gentlemen:

       

      ***
        (the
“Transferor”)
        hereby
        provides this Notice of Transfer to [___________________] (the “Bank”),
        with
        reference to the Bank’s Irrevocable Standby Letter of Credit No. _______ (the
“Letter
        of Credit”;
        capitalized terms used herein and not otherwise defined herein shall have
        the
        respective meanings given to such terms in the Letter of Credit) that:
        Transferor has transferred its entire right, title and interest in and to
        the
        Letter of Credit, which is attached hereto, to [------] (the “Transferee”),
        and
        you are hereby instructed to reissue, amend or endorse the Letter of Credit
        and
        related Annex to reflect Transferee as the new Beneficiary thereof. Transferor,
        by execution and delivery of this Notice of Transfer, hereby certifies that
        the
        transfer of the Letter of Credit has been made in connection and coincident
        with
        the assignment to the Transferee by Transferor of Transferor’s entire right,
        title and interest in and to, and all of its obligations under, the Agreements
        and further certifies that (i) the Transferee is not subject to sanctions
        issued
        by the U.S. Department of Commerce or to whom such transfer is prohibited
        by the
        Foreign Assets Control Regulations or any other United States regulations
        or
        laws and (ii) the assignment to the Transferee by Transferor of Transferor’s
        entire right, title and interest in and to, and all of its obligations under,
        the Agreements has been made in accordance with the terms thereof.

       

                              _________________________

                      
        Authorized Signature

       

      Signature
        of Guaranteed by:

      (Name
        of
        Bank)

      


      


      Authorized
        Signatory

      


      Date:

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

    
      TXU
        -
        ***
        Confirmation 

      Exhibit
        A -
        Form of Assignment Agreement

      


      Exhibit
        A

      


      Form
        of Assignment Agreement

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    
      TXU
        -
        ***
        Confirmation 

      Exhibit
        A -
        Form of Assignment Agreement

       

      

        ASSIGNMENT
          AGREEMENT

         

        


         

        among

         

        


         

        [Insert
          Name of TXU Generation Development Company LLC’s Affiliate] 

         

        a
          [Insert type of entity] 
          organized under the laws of [●]

         

        (“Assignor”)

         

        and

         

        ***

         

        (“Assignee”)

         

        and

         

        [COMPANY],

         

        a
          [●] organized under the laws of [●]

         

        (“Counterparty”)

         

         

         

         

         

         

        
          
            
            

          

          
            
            

            
            

          

          
            
            

          

        

        
          TXU
            -
            ***
            Confirmation 

          Exhibit
            A -
            Form of Assignment Agreement


        

         

        

          ASSIGNMENT
            AGREEMENT

           

          


          This
            Assignment Agreement dated [●] [●], 200[●] (the “Agreement”)
            is
            among: [Insert
            Name of TXU Generation Development Company LLC’s Affiliate], a
            [Insert
            type of entity]
            organized under the laws of [●] (the “Assignor”),
            ***
            (the
“Assignee”),
            and
[COMPANY],
            a [●]
            organized under the laws of [●] (the “Counterparty”).
            Each
            of Assignor, Assignee and Counterparty are referred to as a “Party”
and
            collectively the “Parties”.

           

          
            	
                     [Use
                      this clause if there are no stand-alone confirmations and all
                      transactions
                      are under the COMPANY Contract] 

                     

                    
                      (I)
                        WHEREAS
                        the Assignor and the Counterparty are Parties to one or more
[master
                        agreements]
                        and/or general terms and conditions, each as described in
Schedule
                        “A”
                        attached hereto (collectively, the “COMPANY
                        Contract”)
                        and to those [power/ gas/ derivatives/ other] sale and purchase
                        transactions and certain financial derivative products related
                        thereto
                        (the “Transactions”)
                        entered into pursuant to the COMPANY Contract, copies of
                        the confirmations
                        evidencing such transactions are identified as “Assigned Transactions” on
                        Schedule
                        “B”
                        attached hereto (such Transactions being hereinafter referred
                        to as the
                        “Assigned
                        Transactions”);

                    

                  


          

           

          
            	
                     [Use
                      this clause if
                      there are also stand-alone confirmations not under the COMPANY
                      Contract] 

                     

                    
                      (I)
                        WHEREAS
                        the Assignor and the Counterparty are parties to: (i) one
                        or more master
                        agreements and/or general terms and conditions, each as described
                        in
                        Schedule
                        “A”
                        attached hereto (collectively, the “COMPANY
                        Contract”);
                        (ii) those [power/ gas/ derivatives/ other] sale and purchase
                        transactions
                        and certain financial derivative products related thereto
                        (the
                        “Transactions”)
                        entered into pursuant to the COMPANY Contract, copies of
                        the confirmations evidencing such transactions are identified
                        as
                        “Master Confirmations” on Schedule
                        “B”
                        attached hereto (such transactions being hereinafter referred
                        to as the
                        “Master
                        Confirmations”);
                        as well as (iii) certain other Transactions which were confirmed
                        by
                        individual written confirmations, copies of such confirmations
                        evidencing
                        such Transactions also being identified as Stand-Alone Confirmations
                        on
                        Schedule
                        “B”
                        attached hereto (such Transactions being hereinafter referred
                        to as the
                        “Stand-Alone
                        Confirmations”,
                        and together with the Master Confirmations, hereinafter referred
                        to as the
                        “AssignedTransactions”);


                    

                  


          

           

          (II)
            WHEREAS
            the
            Assignor has agreed to assign to the Assignee and the Assignee has agreed
            to
            accept the assignment of, all of the rights, liabilities, duties and
            obligations
            of the Assignor under and in respect of the Assigned Transactions but,
            for
            certainty, the Assignor will not otherwise assign to the Assignee the
            COMPANY
            Contract itself, nor any other Transaction(s) that may be outstanding
            pursuant
            to the terms of the COMPANY Contract or any of its rights, title, estate
            or
            interest therein;

          


          (III)
            WHEREAS
            according to that certain letter agreement between the Assignor and the
            Assignee
            dated as of [●] [●], 200[●] (the “Confirmation”),
            the
            Assignor will assign to Assignee all of Assignor’s rights, liabilities, duties
            and obligations with respect to the Assigned Transactions (the “Closing”),
            subject to the satisfaction of certain conditions precedent, which include
            obtaining the prior consent of the Counterparty to the transfer by assignment
            of
            certain Transactions (including the Assigned Transactions);

          


          (IV)
            WHEREAS
            the
            Counterparty is willing to consent to such assignment and to recognize
            and
            accept the Assignee as its counterparty with respect to the Assigned
            Transactions in the place and stead of the Assignor pursuant to the terms
            of
            this Agreement; 

           

           

           

           

           

          
            
              
              

            

            
              
              

              1

            

            
              
              

            

          

        

        
          
            TXU
              -
              ***
              Confirmation 

            Exhibit
              A -
              Form of Assignment Agreement


             

             

            
              	
                       Use
                        this clause because there is an existing *** Master Agreement
                        under which
                        the Assigned Transactions will be transferred. The Assigned
                        Transactions
                        shall not be governed by the COMPANY Contracts.]
                        

                       

                      
                        (V)
                          AND WHEREAS
                          the Assignee and the Counterparty have agreed that: (i)
                          the Assigned
                          Transactions shall be and be deemed to be severed from
                          the COMPANY
                          Contract and made subject to and form part of the *** master
                          agreement
                          with the counterparty] dated [●] [●], 200[●], [as amended,] between the
                          Assignee and the Counterparty (the “*** Master
                          Agreement”
                          and identified on Schedule
                          “C”
                          hereto);

                      

                    


            

             

            NOW
              THEREFORE,
              for
              good and valuable consideration (receipt and sufficiency of which are
              hereby
              acknowledged), the Parties hereto mutually covenant and agree as
              follows:

            


            
              	1.  	
                      Assignment.
                        The Assignor hereby irrevocably assigns and transfers to
                        the Assignee
                        effective from and including [●] [●], 200[●] (the “Assignment
                        Date”)
                        its entire right, title, estate and interest in and to, and
                        its rights,
                        liabilities, duties and obligations under, such Assigned
                        Transaction, for
                        the Assignee’s sole use and benefit absolutely, subject nevertheless to
                        the terms and conditions of the Assigned
                        Transaction.

                    


            

             

            
              	2.  	
                      Acceptance
                        by Assignee.
                        The Assignee hereby accepts the aforesaid Assigned Transactions
                        effective
                        as of and from the Assignment Date for each such Assigned
                        Transaction, and
                        covenants and agrees with the Assignor and the Counterparty
                        that from and
                        after the Assignment Date it will be bound by, observe and
                        perform, carry
                        out and fulfill all covenants and agreements, duties and
                        obligations
                        required to be observed and performed by the Assignor under
                        the terms of
                        the Assigned Transactions arising from and after the Assignment
                        Date.

                    


            

             

            
              	3.  	
                      Acceptance
                        by Counterparty.
                        Effective as of and from the Assignment Date, the Counterparty
                        hereby
                        consents to assignment and transfer of the Assigned Transactions
                        and
                        accepts the Assignee as the party to perform the obligations
                        of Assignor
                        under the Assigned Transactions pursuant to the terms and
                        conditions of
                        the ***
                        Master Agreement and the Counterparty agrees that it shall
                        not make any
                        claim against the Assignee (including by way of set-off,
                        book-out or
                        termination of the Assigned Transactions) as a consequence
                        of or relating
                        to: (i) any default, breach or non-performance attributable to the
                        Assignor under any Assigned Transaction, the COMPANY Contract
                        or any other
                        transaction entered into pursuant to the COMPANY Contract
                        which default,
                        breach or non-performance arises or has arisen prior to the
                        Assignment
                        Date; or (ii) the observance and performance of the covenants,
                        representations and agreements under any Assigned Transaction,
                        the COMPANY
                        Contract, or any other transaction entered into pursuant
                        to the COMPANY
                        Contract or otherwise prior to the Assignment
                        Date.

                    


            

             

            
              	4.  	
                      Release
                        

                    


            

             

            
              	 	(a)	
                      Effective
                        as of and from the Assignment Date, the Counterparty hereby
                        releases and
                        forever discharges the Assignor from further obligations
                        to the
                        Counterparty with respect to the Assigned Transactions identified
                        on
                        Schedule
                        “B”
                        and of and from any and all liability as a consequence of
                        or relating
                        to all manner of action and actions, cause or causes of action,
                        suits, debts, dues, sums of money, claims and demands whatsoever
                        at law or
                        in equity arising out of, or which are in any way related
                        to the Assigned
                        Transactions identified on Schedule
                        “B”
                        after and including the Assignment Date; provided
                        that,
                        for certainty, the foregoing shall not release or discharge
                        the Assignor
                        in respect of the settlement, payment or performance of any
                        liabilities or
                        obligations: (i) arising or accruing prior to the Assignment
                        Date, but
                        which have not been settled, paid or performed as of the
                        Assignment Date;
                        or (ii) due and payable or due to be performed after the
                        Assignment Date,
                        but which accrued with respect to or otherwise related to
                        a
                        

                    


            

          

           

           

           

          
            


            
              
                
                

              

              
                
                

                2

              

              
                
                

              

            

            
              TXU
                -
                ***
                Confirmation 

              Exhibit
                A -
                Form of Assignment Agreement




            

              	  	
                      calculation
                        period or delivery period (however defined) ending prior
                        to the Assignment
                        Date (for avoidance of doubt, (i) and (ii) collectively constitute
                        the
                        “Assignor
                        Retained Liabilities”),
                        and all such Assignor Retained Liabilities shall be paid
                        or performed by
                        the Assignor in accordance with the terms of the Assigned
                        Transaction.

                    


              


              	(b)  	
                      Effective
                        as of and from the Assignment Date, the Assignor hereby releases
                        and
                        forever discharges the Counterparty from further obligations
                        to the
                        Assignor with respect to the corresponding Assigned Transaction
                        and of and
                        from any and all liability as a consequence of or relating
                        to all manner
                        of action and actions, cause or causes of action, suits,
                        debts, dues, sums
                        of money, claims and demands whatsoever at law or in equity,
                        arising out
                        of or which are in any way related to, the Assigned Transactions
                        after and
                        including the Assignment Date; provided
                        that,
                        for certainty, the foregoing shall not release or discharge
                        the
                        Counterparty in respect of the settlement, payment or performance
                        of any
                        liabilities or obligations: (i) arising or accruing prior
                        to the
                        Assignment Date, but which have not been settled, paid or
                        performed as of
                        the Assignment Date; or (ii) due and payable or due to be
                        performed after
                        the Assignment Date, but which accrued with respect to or
                        otherwise
                        related to a calculation period or delivery period (however
                        defined)
                        ending prior to the Assignment Date (for avoidance of doubt,
                        (i) and (ii)
                        collectively constitute the “Counterparty
                        Retained Liabilities”),
                        and all such Counterparty Retained Liabilities shall be paid
                        or performed
                        by the Counterparty in accordance with the terms of each
                        Assigned
                        Transaction.

                    


              


              	(c)  	
                      The
                        Counterparty and the Assignee each undertake liabilities
                        and obligations
                        towards the other and acquire rights against each other identical
                        in their
                        terms to each Assigned Transaction (and, for the avoidance
                        of doubt, as if
                        the Assignee were the Assignor and with the Counterparty
                        remaining the
                        Counterparty, save for any rights, liabilities or obligations
                        of the
                        Counterparty with respect to any Counterparty Retained Liabilities
                        or the
                        Assignor with respect to any Assignor Retained
                        Liabilities).

                    


              


              	5.  	
                      Further
                        Assurances.The
                        Assignor agrees that it shall, from time to time and at all
                        times
                        hereafter, execute such further assurances and do all such
                        acts and things
                        as may be reasonably required for the purpose of vesting
                        in the Assignee
                        the rights and obligations of the Assignor in the Assigned
                        Transactions.

                    


               

              	6.  	
                      Confirmation
                        Under *** Master
                        Agreement.
                        Effective immediately as of the Assignment Date, the Assignee
                        and the
                        Counterparty agree that the Assigned Transactions, for all
                        purposes
                        whatsoever, are and are deemed to be subject to, form part
                        of, and
                        confirmed pursuant to the terms and conditions of the ***
                        Master Agreement on the same basis as if these Assigned Transactions
                        between the Assignor and the Counterparty under the COMPANY
                        Contract had,
                        with effect from and after the Assignment Date, been entered
                        into between
                        the Assignee and the Counterparty under the ***
                        Master Agreement.

                    


               

              	7.  	
                      No
                        Assignment of COMPANY Contract.
                        The Assignor and the Counterparty confirm and agree that
                        neither the
                        COMPANY Contract nor any right, title, estate or interest
                        therein (other
                        than the Assigned Transactions) are assigned to the Assignee
                        and such
                        COMPANY Contract, other than the Assigned Transactions, remains
                        in full
                        force and effect between the Assignor and the Counterparty,
                        unaffected by
                        this Agreement.

                    


               

            

             

            
              
                
                

              

              
                
                

                3

              

              
                
                

              

            

          

        

      

      
         

        
          	 TXU
                  -
                  ***Confirmation
                  
                  Exhibit
                    A - Form of Assignment
                    Agreement

                


        

        

          	8.  	
                  Address
                    for Notices.

                


           

        

        
          
            	 	The
                    address for the Assignee for notices under the Assigned Transactions
                    shall
                    be:


          

           

          
            	
                    Address:

                  	 
	
                    Facsimile
                      No.:

                  	 
	
                    Telephone
                      No.:

                  	 
	
                    Attention:

                  	 


          

           

          
            	 	The
                    address for the Counterparty for purposes of receiving any notice
                    under
                    this Section 9 shall be:


          

           

          
            	
                    Address:

                  	 
	
                    Facsimile
                      No.:

                  	 
	
                    Telephone
                      No.:

                  	 
	
                    Attention:

                  	 


          

          


          
            	 	The
                    address for the Assignor for purposes of receiving any notice
                    under this
                    Section 9 shall be:


          

           

          
            	
                    Address:

                  	 
	
                    Facsimile
                      No.:

                  	 
	
                    Telephone
                      No.:

                  	 
	
                    Attention:

                  	 


          

           

          	9.  	
                  Enurement.
                    This Agreement shall enure to the benefit of and be binding upon
                    the
                    Parties hereto and their respective successors and
                    assigns.

                


           

          	10.  	
                  Counterpart
                    Execution.
                    This Agreement may be executed in separate counterparts and delivered
                    by
                    facsimile, each of which when so executed and delivered shall
                    constitute
                    the one and the same original document.

                


           

          	11.  	
                  Governing
                    Law.
                    This Agreement will be governed by and construed in accordance
                    with the
                    laws of the State of New York, without giving effect to principles
                    of
                    conflicts of laws. Any judicial action arising out of, resulting
                    from, or
                    in any way relating to this Agreement shall be brought only in
                    a state or
                    federal court of competent jurisdiction located in the state,
                    county and
                    city of New York, and all parties to this Agreement waive any
                    right to
                    trial by jury in such action. In the event such judicial proceedings
                    are
                    instituted by any party hereto, the prevailing party or parties
                    shall be
                    entitled to award of costs and attorneys' fees incurred in connection
                    with
                    such proceedings.

                


           

          	12.  	
                  Representations,
                    Warranties and Covenants.

                


           

          
            	 	(a)	Assignor
                    hereby represents and warrants that it has the power and authority
                    to
                    effect the sale, assignment and transfer of the Assigned Transactions
                    and
                    to execute this Agreement.


          

           

          
            	 	(b)	Assignee hereby: (i) represents
                    and warrants
                    that it has the power and authority to accept the sale, assignment
                    and
                    transfer of the Assigned Transactions and to execute this Agreement;
                    and
                    (ii) agrees to be bound by the terms of each Assigned Transaction
                    and to
                    


          

        

      

    

     

     

     

    
      
        
        

      

      
        
        

        4

      

      
        
        

      

    

    TXU
      -
      ***
      Confirmation 

    Exhibit
      A -
      Form of Assignment Agreement


    

      perform
        all of the obligations thereunder in accordance with the terms thereof and
        of
        the ***
        Master
        Agreement.

      


      
        	 	
                (c)

              	
                Counterparty
                  hereby: (i) consents to the foregoing assignment and transfer to
                  Assignee;
                  and (ii) agrees to be bound by the terms of each Assigned Transaction
                  and
                  to perform all of the obligations thereunder in accordance with
                  the terms
                  thereof and of the ***
                  Master Agreement. 

              


      

      


      
        	 	
                (d)

              	
                Each
                  Party hereto represents to the others that: (i) this Agreement
                  and, as to
                  Counterparty and Assignee, the Assigned Transactions, do not and
                  will not
                  violate or conflict with its charter or by-laws (or comparable
                  constitutive documents), any statute, law, rule, regulation or
                  ordinance,
                  or any judgment, order, consent order, stipulated agreement, writ,
                  injunction, or decree of, any court, governmental agency or any
                  other
                  regulated entity applicable to it or any agreement to which it
                  is a party
                  or by which it or any of its property is bound; (ii) its obligations
                  hereunder and, as to Counterparty and Assignee, under the Assigned
                  Transactions are legal, valid and binding on it, and enforceable
                  in
                  accordance with their terms; (iii) the execution, delivery and
                  performance
                  of this Agreement, any Assigned Transactions or the performance
                  by
                  Assignor of its obligations thereunder or hereunder does not and
                  will not
                  require any consent, approval, authorization or other order of,
                  action by,
                  filing with or notification to, any court or administrative or
                  governmental body; and (iv) the person signing this Agreement for
                  such
                  Party is an officer, director, and/or partner of such Party and
                  is
                  authorized and duly empowered to do
                  so.

              


      

      


      
        	 	
                (e)

              	
                Each
                  Party hereto represents to the others that it: (i) is not relying
                  upon any
                  representations or warranties of other Parties to this Agreement
                  other
                  than those expressly set forth in this Agreement; (ii) has entered
                  into
                  this Agreement with a full understanding of the material terms
                  and risks
                  of the same; and (iii) has made its decisions (including regarding
                  the
                  suitability thereof) based upon its own judgment and any advice
                  from such
                  advisors as it deemed necessary and not in reliance upon any view
                  expressed by other Parties to this
                  Agreement.

              


      

      


      	13.  	
              Contingency. 
                In
                the event that the Closing with respect to the Assigned Transactions
                does
                not occur for any reason within [●] [(●)]days of the date of this
                Agreement, this Agreement shall terminate as of that date with respect
                to
                such Assigned Transaction, and in the event of such termination and
                with
                respect to any such Assigned Transaction; (i) this Agreement shall
                be null
                and void and of no force and effect; (ii) the Assignor’s interests in the
                Assigned Transaction shall not be assigned to the Assignee; (iii)
                any
                credit support posted by the Assignee or the Counterparty for the
                benefit
                of the other party with respect to the Assigned Transaction shall
                automatically terminate and be of no force and effect (and any guaranty
                shall be returned to the entity providing such); and (iv) the Assignee
                and
                the Counterparty shall have no further obligations to each other
                with
                respect to this Agreement or the Assigned Transaction.
                

            


       

      [THE
        REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

       

       

       

      
        
          
          

        

        
          
          

          5

        

        
          
          

        

      

    

    
      TXU
        -
        ***
        Confirmation 

      Exhibit
        A -
        Form of Assignment Agreement

    

     

    
      

        THIS
          AGREEMENT executed
          effective as of the day and year first above written.

        


         

                    ASSIGNOR:

        


                    [COMPANY
          Entity]

        


        


                    By:    ____________________________________

                    Name:     
           ____________________________________

                    Title:        
          ____________________________________

        


        


                    ASSIGNEE:

        


                    ***

        


        


                    By:    ___________________________________

                    Name:      
          ___________________________________

                    Title:        
          ___________________________________

        


        


                    COUNTERPARTY:

        


                    [Insert
          Name of TXU
          Generation Development  Company
          LLC’s Affiliate]

        


                    By:    __________________________________

                    Name:      
          __________________________________ 

                    Title:        
          __________________________________       


        


         

         

         

         

         

         

                


        
          
            
            

          

          
            
            

            6

          

          
            
            

          

        

      

    

    
      
        TXU
          -
          ***
          Confirmation 

        Exhibit
          A -
          Form of Assignment Agreement

      

       

    

     

    

      SCHEDULE
        A

      


       

      “COMPANY
        Contract”

       

      


      [See [master
        agreements] between
        [Counterparty] and [COMPANY] dated [●] [●], [●]]

      
 

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          7

        

        
          
          

        

      

    

    TXU
      -
      ***
      Confirmation 

    Exhibit
      A -
      Form of Assignment Agreement

     

    

      SCHEDULE
        B

      


      “Assigned
        Transactions”

      


      


      [See
        Attached
        summary and copies of Assigned Transactions]

       

       

       

      
 

      
        	 

                “Master
                  Confirmations”

                


                


                [See
                  Attached summary and copies of Master Confirmations]

                


                


                “Stand-Alone
                  Confirmations”

                


                


                [See
                  Attached summary and copies of Stand-Alone
                  Confirmations]

              


      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        8

      

      
        
        

      

    

    
      TXU
        -
        ***
        Confirmation 

      Exhibit
        A -
        Form of Assignment Agreement

      

        SCHEDULE
          C

        


        “***Master
          Agreement”

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
            
            

          

          
            
            

            9

          

          
            
            

          

        

      

      
        TXU
          -
          ***
          Confirmation 

        Exhibit
          B - Form of Novation Agreement

         

        

          Exhibit
            B

          


          Form
            of Novation Agreement

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

          
            
              
              

            

            
              
              

              
              

            

            
              
              

            

          

        

        
          TXU
            -
            ***
            Confirmation 

          Exhibit
            B - Form of Novation Agreement

        

        

          NOVATION
            AGREEMENT

          


          dated
            as
            of [●] [●], 200[●] (the “Effective
            Date”)

          


          AMONG:

          [Company]
            (the “Remaining
            Party”),
            [Insert Name of TXU Generation Development Company LLC’s Affiliate] (the
“Transferor”)
            

          


          AND

          ***
            (the
“Transferee”).

          


          


          The
            Transferor and the Remaining Party have entered into one or more Transactions
            as
            identified in the attached Annex
            1
            (each an
“Old
            Transaction”),
            each
            evidenced by one or more Confirmations (each an “Old
            Confirmation”)
            attached hereto as Annex
            1
            subject
            to one or more [master
            agreements] between
            the Remaining Party and the Transferor (each an “Old
            Agreements”)
            as
            identified in the attached hereto Annex
            2.
            

          


          The
            Remaining Party and the Transferee have entered into one or more [master
            agreements]
            (each a
“New
            Agreement”)
            identified in the attached Annex
            3.
            

          


          With
            effect from and including [●] [●], 200[●] (the “Novation
            Date”)
            the
            Transferor wishes to transfer by novation to the Transferee, and the
            Transferee
            wishes to accept the transfer by novation of, all the rights, liabilities,
            duties and obligations of the Transferor under and in respect of each
            Old
            Transaction, with the effect that the Remaining Party and the Transferee
            enter
            into one or more new transactions (each a “New
            Transaction”)
            between them having terms identical to those of each Old Transaction,
            as more
            particularly described below and as identified in the attached hereto
            Annex
            4.

          


          The
            Remaining Party wishes to accept the Transferee as its sole counterparty
            with
            respect to the New Transactions.

          


          The
            Transferor and the Remaining Party wish to have released and discharged,
            as a
            result and to the extent of the transfer described above, their respective
            obligations under and in respect of the Old Transactions.

          


          Accordingly,
            the parties agree as follows: ---

          


          1.    Definitions.

          


          Terms
            defined in the Old Agreements are used herein as so defined, unless otherwise
            provided herein.

          


          2.    Transfer,
            Release, Discharge and Undertakings. 

           

          With
            effect from and including the Novation Date and in consideration of the
            mutual
            representations, warranties and covenants contained in this Novation
            Agreement
            and other good and valuable consideration (the receipt and sufficiency
            of which
            are hereby acknowledged by each of the parties):

           

          
            	 	(a)	the
                    Remaining Party and the Transferor are each released and discharged
                    from
                    further obligations to each other with respect to each Old Transaction
                    and
                    their respective rights against
                    each other thereunder are cancelled, provided that such release
                    and
                    discharge shall 


          

           

        

        

          ***
            CONFIDENTIAL
            MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

          


          
            
              
              

            

            
              1

              
              

            

            
              
              

            

          

          TXU
            -
            ***
            Confirmation 

          Exhibit
            B - Form of Novation Agreement

        

         

         

        
          	 	 	not affect any rights, liabilities
                  or
                  obligations of the Remaining Party or the Transferor with respect
                  to
                  payments or other obligations due and payable or due to beperformed
                  on or
                  prior to the Novation Date, and all such payments and obligations
                  shall be
                  paid or performed by the Remaining Party or the Transferor in accordance
                  with the terms of the Old Transaction;


        

         

        
          	 	(b)	in
                  respect of each New Transaction, the Remaining Party and the Transferee
                  each undertake liabilities and obligations towards the other and
                  acquire
                  rights against each other identical in their terms to each corresponding
                  Old Transaction (and, for the avoidance of doubt, as if the Transferee
                  were the Transferor and with the Remaining Party remaining the
                  Remaining
                  Party, save for any rights, liabilities or obligations of the Remaining
                  Party or the Transferor with respect to payments or other obligations
                  due
                  and payable or due to be performed on or prior to the Novation
                  Date);


        

         

        
          	 	(c)	each New Transaction shall be governed
                  by and
                  form part of the applicable New Agreement and the Transferee and
                  the
                  Remaining Party shall enter into a New   Confirmation specifying
                  the terms of each New Transaction pursuant to the Applicable New
                  Agreement; provided,
                  however,
                  that any failure of either the Transferee or the Remaining Party
                  to enter
                  into such Confirmations shall not affect the rights and obligations
                  of the
                  Transferor pursuant to this Novation Agreement. Each New Transaction
                  shall
                  be deemed confirmed by this Novation Agreement, all applicable
                  Annexes and
                  New Confirmations, and, accordingly, this Novation Agreement, including
                  each Annex, Schedule and Attachment shall be deemed to constitute
                  a
                  “Confirmation”
                  within the meaning of each New Agreement that supplements, form
                  a part of
                  and is subject to the New
                  Agreement;


        

         

      

      
        
          	 	(d)	the offices of the Remaining Party
                  and the
                  Transferee for purposes of each New Transaction shall be as specified
                  in
                  Annex
                  5
                  and the offices of the Transferor for purposes of the Old Transaction
                  shall have been as also specified in Annex
                  5
                  attached hereto; the account details of the Transferee and the
                  Remaining
                  Party for each New Transaction will be as set forth on Annex
                  6
                  hereto; and


        

          

        
          
            	 	(e) 	after the Novation Date, the Remaining
                    Party
                    and the Transferee may issue or exchange Confirmations (each
                    a “Reconfirming
                    Confirmation”)
                    reconfirming each New Transaction confirmed hereby containing
                    terms as set
                    forth or referred to in this Section 2, it being understood and
                    agreed
                    that the failure by either the Transferee or the Remaining Party
                    to issue,
                    exchange or enter into such Reconfirming Confirmation shall not
                    affect
                    either: (A) the respective rights and obligations of the Remaining
                    Party
                    and the Transferee under this Agreement or each New Transaction;
                    or (B)
                    the rights and obligations of the Transferor under this Novation
                    Agreement.


          
   

        
           

          3.  Representations
            and Warranties

           

            
            (a)          
On
            the
            date of the Novation Agreement:

           

          
            	 	 	(i)	Transferee hereby: (A) represents
                    and
                    warrants that it has the power and authority to accept the sale,
                    novation
                    and transfer of each Old Transaction and to execute this Novation
                    Agreement; (B) agrees to be bound by the terms of each New Transaction
                    and
                    to perform all of the obligations thereunder in accordance with
                    the terms
                    thereof on and from the Novation Date; and (C) represents and
                    warrants
                    that the execution, delivery and performance of this Novation
                    Agreement,
                    each New Transaction or the performance by Transferee of its
                    obligations
                    thereunder or hereunder does not and 


          

            

        

         

         

        
          
            
            

          

          
            
            

            2

          

          
            
            

          

        

         TXU
          -
          ***
          Confirmation 
          Exhibit
            B - Form of Novation Agreement

        

         

         

        
          	 	 	 	will not require any consent, approval,
                  authorization or other order of, action by, filing with or notification
                  to, any court or administrative or
                  governmental body.


        

         

        
          	 	 	(ii)	Remaining Party hereby: (A) consents
                  to the
                  foregoing novation and transfer to Transferee; (B) agrees to be
                  bound by
                  the terms of each New Transaction and to perform all of the obligations
                  thereunder in accordance with the terms hereof and thereof on and
                  from the
                  Novation Date; and (C) the execution, delivery and performance
                  of this
                  Novation Agreement, each New Transaction or the performance by
                  the
                  Remaining Party of its obligations thereunder or hereunder does
                  not and
                  will not require any consent, approval, authorization or other
                  order of,
                  action by, filing with or notification to, any court or administrative
                  or
                  governmental body.


        

         

        
          	 	 	(iii)	Transferor hereby represents and
                  warrants:
                  (A) it has the power and authority to effect the sale, novation
                  and
                  transfer of each Old Transaction and to execute this Novation Agreement;
                  and (B) the execution, delivery and performance of this Novation
                  Agreement
                  or the performance by Transferor of its obligations hereunder does
                  not and
                  will not require any further consent, approval, authorization or
                  other
                  order of, action by, filing with or notification to, any court
                  or
                  administrative or governmental body, that has not been
                  obtained.


        

         

        
          	 	
                  (b)

                	The
                  Transferor makes no representation or warranty and does not assume
                  any
                  responsibility with respect to the legality, validity, effectiveness,
                  adequacy or enforceability of any New Transaction or the New Agreement
                  or
                  any documents relating thereto and assumes no responsibility for
                  the
                  condition, financial or otherwise, of the Remaining Party, the
                  Transferee
                  or any other person or for the performance and observance by the
                  Remaining
                  Party, the Transferee or any other person of any of its obligations
                  under
                  any New Transaction or the New Agreement or any document relating
                  thereto
                  and any and all such conditions and warranties, whether express
                  or implied
                  by law or otherwise, are hereby excluded.


        

         

        
          	 	(c)	Each of the Remaining Party and
                  the
                  Transferee represents for itself to the other as of the date that
                  it
                  enters into this Novation Agreement that:



        

         

        
          	 	 	(i)	
                  Non-Reliance.
                    It is acting for its own account, and it has made its own independent
                    decisions to enter into this Novation Agreement and the transactions
                    contemplated hereby (the “Novation
                    Transactions”)
                    and as to whether the Novation Transactions are appropriate or
                    proper for
                    it based upon its own judgment and upon advice from such advisers
                    as it
                    has deemed necessary. It is not relying on any communication
                    (written or
                    oral) of the other party as investment advice or as a recommendation
                    to
                    enter into the Novation Transactions, it being understood that
                    information
                    and explanations related to the terms and conditions of the Novation
                    Transactions shall not be considered to be investment advice
                    or a
                    recommendation to enter into the Novation Transactions. No communication
                    (written or oral) received from the other party shall be deemed
                    to be an
                    assurance or guarantee as to the expected results of the Novation
                    Transactions.

                   

                


        

         

        
          	 	 	(ii)	Assessment and
                  Understanding.
                  It is capable of assessing the merits of and understanding (on
                  its own
                  behalf or through independent professional advice), and understands
                  and
                  accepts the terms and conditions and risks of the Novation Transactions.
                  It is also capable of assuming, and assumes, the risks of the Novation
                  Transactions.


        

         

         

         

        
          
            
            

          

          
            
            

            3

          

          
            
            

          

        

         TXU
-
          ***
          Confirmation 
          Exhibit
            B - Form of Novation Agreement

        

      

      
        


        
          	 	 	(iii) 	Status
                  of the Parties.
                  Neither party hereto is acting as a fiduciary for or adviser to
                  any other
                  party hereto in respect of the Novation Transactions; and each
                  party
                  hereto represents to the others that: (A) this Novation Agreement
                  and, on
                  and from the Novation Date, the New Transactions, do not and will
                  not
                  violate or conflict with its charter or by-laws (or comparable
                  constitutive documents), any statute, law, rule, regulation or
                  ordinance,
                  or any judgment, order, consent order, stipulated agreement, writ,
                  injunction, or decree of, any court, governmental agency or any
                  other
                  regulated entity applicable to it or any agreement to which it
                  is a party
                  or by which it or any of its property is bound; (B) its obligations
                  hereunder and, on and from the Novation Date, under the New Transaction
                  are legal, valid and binding on it, and enforceable in accordance
                  with
                  their terms; and (C) the person signing this Novation Agreement
                  for such
                  party is an officer, director, and/or partner of such party and
                  is
                  authorized and duly empowered to do so.


        

         

         

        
          	 4.	Counterparts.


        

         

        
          	 	This
                  Novation Agreement (and each amendment, modification and waiver
                  in respect
                  of it) may be executed and delivered in counterparts (including
                  by
                  facsimile transmission), each of which will be deemed an
                  original. 


        

         

         

        
          	 5.	Costs
                  and Expenses.


        

         

        
          	 	The
                  parties will each pay their own costs and expenses (including legal
                  fees)
                  incurred in connection with this Novation Agreement and as a result
                  of the
                  negotiation, preparation and execution of this Novation
                  Agreement.


        

         

         

        
          	6.	
                  Amendments.

                


        

         

        
          	 	No
                  amendment, modification or waiver in respect of this Novation Agreement
                  will be effective unless in writing (including a writing evidenced
                  by a
                  facsimile transmission) and executed by each of the parties or
                  confirmed
                  by an exchange of telexes or electronic messages on an electronic
                  messaging system.


        

         

         

        
          	
                  
                    7.

                  

                	(a)	Governing
                  Law and Jurisdiction.


        

        
           

        

        
          	 	 	This
                  Novation Agreement will be governed by and construed in accordance
                  with
                  the laws of the State of New York without reference to the conflict
                  of
                  laws provisions thereof. Any judicial action arising out of, resulting
                  from, or in any way relating to this Novation Agreement may be
                  brought in
                  a state or federal court of competent jurisdiction located in the
                  state,
                  county and city of New York.


        

         

        
          	 	
                  (b)

                	Waiver
                  of Jury Trial.


        

         

        
          	 	 	Each
                  party waives, to the fullest extent permitted by applicable law,
                  any right
                  it may have to a trial by jury in respect of any suit, action or
                  proceeding relating to this Novation Agreement. Each party certifies
                  that
                  no representative, agent or attorney of the other party has represented,
                  expressly or otherwise, that such other party would not, in the
                  event of
                  such a suit action or proceeding, seek to enforce the foregoing
                  waiver.

                   

                


        

         

        


         

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          REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

        


         

         

        
          
            
            

          

          
            
            

            4

          

          
            
            

          

          TXU -
            ***
            Confirmation 
            Exhibit
              B - Form of Novation Agreement

          

        

         

        

          IN
            WITNESS WHEREOF the parties have executed this Novation Agreement on
            the
            respective dates specified below with effect from and including the Effective
            Date.

          


          


          


          


          


          
            	 	 	 
	(Name
                    of Remaining Party)	 	 (Name
                    of Transferor)


          

           

           

          
            	By:
                    	 	By:
	Name:	 	Name:
	Title:	 	Title:
	Date:	 	Date:


          

          
 

           

          
            	 	 

Name
            of
            Transferee


          


          


           

          


          


          
            	By:	 
	Name:	 
	Title:	 
	Date:	 


          

           
 

         

         

         

         

         

         

         

        
          
            
            

          

          
            
            

            5

          

          
            
            

          

        

         TXU
-
          ***
          Confirmation 
          Exhibit
            B - Form of Novation Agreement

           

           

          

            ANNEX
              1

            


            [Old
              Transactions to be discharged - listed; and

            Old
              Confirmations in Parts A-Z (if not listed, then actually
              attached)]

            


            


            ------------------------------------------

            ANNEX
              2

            


            [Old
              Agreements - listed]

            


            


            --------------------------------------------

            ANNEX
              3

            


            New
              Agreements 

            Between
              

            Transferee
              and [Remaining Party] 

            


            


            


            --------------------------------------------

            ANNEX
              4

            


            


            [New
              Transactions (Confirmations in Parts A - Z)]

            


            ------------------------------------------

            


            ANNEX
              5

            


            [Offices
              of Transferor; Remaining Party and the Transferee]

            


            -------------------------------------

            


            ANNEX
              6

            


            [Transferee
              account details

            Remaining
              Party account details]

             

             

             

             

             

            
              
                
                

              

              
                
                

                6

              

              
                
                

              

            

            
              TXU
                -
                ***
                Confirmation 

              Exhibit
                A -
                Form of Assignment Agreement

               

              

                


                


                


                


                


                 

                ASSIGNMENT
                  AGREEMENT

                 

                


                 

                among

                 

                


                 

                [Insert
                  Name of TXU Generation Development Company LLC’s Affiliate] 

                 

                a
                  [Insert type of entity] 
                  organized under the laws of [●]

                 

                (“Assignor”)

                 

                and

                 

                ***

                 

                (“Assignee”)

                 

                and

                 

                [COMPANY],

                 

                a
                  [●] organized under the laws of [●]

                 

                (“Counterparty”)

                 

                


                 

                


                 

                Dated
                  as of [●] [●], [●]

                 

              

            

          

        

        
          


            ***
              CONFIDENTIAL
              MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

          

           

          
            
              
              

            

            
              
              

              1