Unassociated Document


    


    Mr.
      Michael C Shores

    Chief
      Executive Officer

    TXP
      Corporation

    1299
      Commerce Drive

    Richardson,
      TX 75081

    


    


    August
      20, 2008

    


    


    Mr.
      Mark
      Angelo

    Yorkville
      Advisors, LLC

    101
      Hudson Street, Suite 3700

    Jersey
      City, NJ 07302

    


    


    Dear
      Mark:

    


    


    This
      letter agreement (“Agreement”) confirms the understanding and agreement between
      TXP Corporation (“TXP”), a Nevada Corporation, Yorkville Advisors, LLC and YA
      Global Investments, LP (collectively, “Yorkville”).

    


    Pursuant
      to our discussions at your offices on July 23, 2008, TXP is in advanced
      negotiations to consummate a merger with Cambridge Industries Group (“CIG”), a
      Cayman Islands and Hong Kong private concern with primary operations in
      Shanghai, China. As discussed, a merger with CIG may allow TXP to realize
      operational cost savings sufficient to take its loss-making ONT business to
      break-even, and potentially achieve long-term profitability. As a precondition
      to any merger, CIG has made it clear that TXP’s balance sheet must be
“cleaned-up” and has specifically required that TXP redeem its outstanding
      convertible notes and debentures which have been issued by TXP to Yorkville
      and
      other term loans which have been issued by Yorkville to TXP (collectively,
      the
“Debt”) and remove some or all of the dilutive overhang on its shares from
      Yorkville’s warrant position in TXP. 

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Upon
      the
      terms and conditions of this Agreement, TXP desires to repay a significant
      portion of the Debt and amend Yorkville’s warrants and Yorkville desires to
      accept such repayment and amendments to its warrants. TXP has negotiated an
      agreement to raise $15,000,000 in equity capital at a fixed valuation of not
      less than $0.10 per share, with a one-time reset based on an EBITDA milestone
      in
      the 4rth quarter of 2009 (the “Financing”), subject to consummation of the
      agreements with Yorkville set forth in this Agreement. Yorkville hereby consents
      to TXP’s consummating the Financing on terms substantially the same as described
      above provided that such Financing is closed within 100 days from the date
      hereof. Simultaneously upon the consummation of the Financing in accordance
      with
      the terms and time frame set forth above, the parties shall agree as follows:
      

    


    1.
      The
      Transaction shall consist of six parts:

    


    
      	 	
              a.

            	
              TXP
                will redeem all outstanding Debt issued by Yorkville to TXP at par
                plus
                accrued interest as of the date of redemption, without a redemption
                premium, in two traunches as described
                below:

            


    

    


    
      	 	
              i.

            	
              TXP
                shall pay to Yorkville $7.5 million upon the closing of the Financing
                (the
                “Partial Redemption”).

            


    

    


    
      	 	
              ii.

            	
              The
                remaining principal plus accrued interest shall be exchange for a
                non-convertible 2-year term note with a 10% coupon; which shall be
                subordinate to the working capital financing describe in iv
                below.

            


    

    


    
      	 	
              iii.

            	
              Yorkville
                agrees to relinquish all warrant issuance rights tied to the redemption
                or
                retirement of any of its Debt
                instruments.

            


    

    


    
      	 	
              iv.

            	
              Yorkville
                agrees to accept the company’s continued use of its senior, secured
                working capital finance (A/R, A/P and Inventory).
                

            


    

     

    
      	 	
              b.

            	
              Yorkville
                will retain its existing 9,616,681 shares of TXP common stock (the
                “Existing Shares”) and accepts restriction on the future sale of the
                Existing Shares, effective upon receipt by Yorkville of the Partial
                Redemption, as follows:

            


    

     

    
      	 	
              i.

            	
              Yorkville
                agrees to limit its sales of the Existing Shares on a daily basis
                to no
                more than the number of shares equal to the trailing 60 day average
                daily
                volume of TXP’s common stock. 

            


    

     

    
      	 	
              ii.

            	
              Notwithstanding
                the forgoing, Yorkville may sell portions of the Existing Shares
                in block
                trades of 500,000 shares or larger.

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    
      	 	
              c.

            	
              Effective
                upon receipt by Yorkville of the Partial Redemption, Yorkville will
                relinquish 10,850,000 of its 20,850,000 warrants to purchase shares
                of TXP
                common stock for $0.20, which forfeited warrants will be cancelled
                by TXP
                upon their return. TXP will re-price the remaining 10,000,000 warrants
                to
                the lower of (i) $0.10 or (ii) same price as the lowest conversion
                price,
                conversion ratio, or exercise price of the securities issued in the
                Financing. Yorkville will permanently waive all remaining anti-dilution
                provisions on the remaining warrants, except that it shall be entitled
                to
                anti-dilution and reset provisions consistent with those contained
                in the
                securities issued in the Financing (such as a reset based on a
                4th
                quarter 2009 EBITDA milestone) pursuant to which the exercise price
                of the
                warrants shall be reduced if the effective conversion price of such
                securities is reduced. 

            


    

     

    
      	 	
              d.

            	
              Yorkville
                will relinquish all of its rights of first refusal on future financing
                transactions of TXP for any transactions or borrowing needs of TXP.
                Yorkville will retain a right of participation proportionate with
                its
                equity position in TXP on future financing rounds but will waive
                this
                right in the current round.

            


    

     

    
      	 	
              e.

            	
              Yorkville
                will relinquish all of its registration rights and rights to liquidated
                damages.

            


    

     

    
      	 	
              f.

            	
              Yorkville
                will vote any residual equity position in TXP following this agreement
                in
                support of the merger with CIG if recommended by management, unless
                Yorkville determines that voting in accordance with management’s
                recommendation would adversely affect the investment merits of owning
                the
                stock.

            


    

     

    
      	 	
              2.

            	
              In
                connection with that certain Common Stock Purchase Option (the “Option”)
                granted by Michael Shores to Yorkville, Yorkville agrees that, provided
                no
                event of default has occurred under the financing arrangements provided
                by
                Yorkville to TXP, Yorkville will refrain from exercising any shares
                underlying the Option for a period of 100 days from the date hereof
                (the
                “Expiration Date”). Provided that TXP completes the Financing on the terms
                set forth herein on or before the Expiration Date and repays at least
                $7,500,000 of its obligations owed to Yorkville, Yorkville shall
                return
                the Option to Mr. Shores, which Option will be cancelled, and
                simultaneously TXP shall issue to Yorkville 11,000,000 restricted
                shares
                of its common stock.

            


    

     

    
      	 	
              3.

            	
              Each
                party will pay its own costs and expenses incurred in carrying out
                the
                agreements set forth herein and Yorkville will not assess any fees
                on any
                of the individual elements of the agreements described in Paragraph
                1(a)
                through 1(f).

            


    

     

    
      	 	
              4.

            	
              Effective
                upon the payment in full of all the Debt, the parties will release
                and
                hold harmless each other and all of their respective officers, directors
                and stockholders, from all claims, causes of action, demands, costs,
                expenses or other obligations (collectively, “Claims”)
                that any they may individually or collectively have as of the date
                hereof
                against each other and/or their respective officers, directors or
                stockholders. 

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    
      	 	
              5.

            	
              Yorkville
                and TXP agree to keep confidential all information whether oral or
                written
                pertaining to the agreements contemplated herein except for such
                information (a) that is already or becomes public through no breach
                of
                this provision, (b) that either company is required to disclose by
                applicable law, regulation, or legal process, or (c) that TXP and
                Yorkville mutually agree may be disclosed, provided however, TXP
                agrees
                that nothing herein shall limit the ability of Yorkville managed
                investment vehicles to engage in purchases and sales of TXP so long
                as the
                portfolio managers making the investment decisions for such investment
                vehicles have not received or been privy to the confidential information
                and Yorkville
                complies with its internal policies and procedures regarding the
                handling
                of confidential information in the normal course of its
                business.

            


    

     

    
      	 	
              6.

            	
              Yorkville
                has not waived, and except as set forth herein, is not by this Agreement
                waiving, any of its rights under the Debt and related documents and
                all
                agreements and obligations contained in such documents constitute
                binding
                obligations of TXP and are enforceable in accordance with their terms.
                

            


    

     

    
      	 	
              7.

            	
              The
                invalidity or unenforceability of any provision of this Agreement
                shall
                not invalidate this entire
                agreement.

            


    

     

    
      	 	
              8.

            	
              This
                Agreement may not be amended or modified except in writing signed
                by each
                of the parties.

            


    

     

    
      	 	
              9.

            	
              This
                agreement shall be governed by and construed and enforced in accordance
                with the laws of the State of New Jersey without giving effect to
                principles of conflicts of law. TXP and Yorkville hereby irrevocably
                and
                unconditionally consent to submit to the exclusive jurisdiction of
                the
                courts of the State of New Jersey and of the United States District
                Courts
                located within the boarders of the State of New Jersey for any lawsuits,
                claims or other proceedings arising out of or relating to this agreement
                and agree not to commence any such lawsuit, claim or other proceeding
                arising out of or relating to this agreement except in such courts.
                

            


    

     

    TXP
      and
      Yorkville hereby irrevocably and unconditionally waive any objection to the
      laying of venue of any lawsuit, claim or other proceeding arising out of or
      relating to this agreement in the courts of the State of New Jersey or the
      United States District Courts located within the boarders of the State of New
      Jersey, and hereby further irrevocably and unconditionally waive and agree
      not
      to plead or claim in any such court that any such lawsuit, claim or other
      proceeding brought in any such court has been brought in an inconvenient forum.
      

     

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    Please
      confirm that the foregoing is in accordance with our understanding by signing
      and returning to us the enclosed duplicate of this letter.

    


    


    


    AGREED
      AND ACCEPTED: 

     

    
      	 	 	 
	 	TXP
              CORPORATION 
	 
 	 
 	 
 
	 	By:  	/s/ Michael
              C. Shores
	 	
              
Michael
              C. Shores, CEO
	 	
               

              Date: August 20,
                2008 

            


    

     

     

    


    


     

    
      	
              YORKVILLE
                ADVISORS, LLC

              
                On
                  behalf of itself and as Investment Manager 

                for
                  YA Global Investments, L.P.

                 

              

            	 	 	 
	/s/ Mark
              Angelo	 	 	 
	
              
Mark
              Angelo, Portfolio Manager	 	 	
            
	
               

              Date:
                August 20, 2008