Exhibit 10.1
                                                                    ------------

                                PROMISSORY NOTE
                                ---------------

U.S. $500,000.00                                         Los Angeles, California
Five Hundred Thousand Dollars                             November 29, 2004

     FOR VALUE  RECEIVED,  the  receipt  and  sufficiency  of which  are  hereby
acknowledged,  the undersigned,  GEXA CORP.  ("Maker"),  hereby  irrevocably and
unconditionally  promises  to pay to the  order  of  CAPPELLO  CAPITAL  CORP,  a
California corporation ("Holder"), the principal amount of Five Hundred Thousand
Dollars  ($500,000.00)  with no interest,  as hereinafter set forth. Maker shall
pay the outstanding  principal  balance of this Promissory Note (this "Note") to
Holder in ten (10) equal monthly payments of Fifty Thousand Dollars ($50,000.00)
with the first such payment due on January 3, 2005 and continuing  thereafter on
the first of each month consecutively through and including October 1, 2005.

     If any installment is not paid by the first of each month, then Maker shall
have  three (3)  business  days in the form of a grace  period  within  which to
perform its obligations under this Note.  Except as payment  instructions may be
changed by written  notice  delivered to Maker at least ten (10) days in advance
of a payment due date,  Maker shall make all payments to Holder by wire transfer
in lawful  money of the United  States of America to Holder's  Bank  address set
forth below without any deduction whatsoever,  including but not limited to, any
deduction for any set-off, recoupment or counterclaim:

                  Bank Name:        First Regional Bank
                                    501 Santa Monica Blvd.
                                    Santa Monica, CA 90401
                  ABA #:            122037760
                  Account Name:     Cappello Capital Corp.
                  Account #:        776007870

     In the event of Maker's  failure to pay any installment due under this Note
when and as due, or within the three  business  day grace period set forth above
(a  "Default"),  Holder  shall give Maker and its  attorneys  of record  written
notice of Default via priority  overnight  Federal  Express to the addresses set
forth  below (the  "Notice of  Reinstating").  The Notice of  Reinstating  shall
specify  the date and amount of any  claimed  Default  under this Note and shall
provide Maker with an additional three (3) business days from Maker's receipt of
the Notice of Reinstating within which to cure the claimed Default by paying the
past due installment.

GEXA Corporation                             Lisa L. Coplen, Esq.
c/o Neil Leibman                             Anderson, McPharlin & Conners LLP
20 Greenway Plaza, Suite 600 Houston, TX     444 South Flower Street, 31st Floor
77046                                        Los Angeles, CA 90071-2901
(713) 470-0400                               (213) 688-0080
(713) 961-7997 (fax)                         (213) 622-7594 (fax)

<PAGE>

     Upon Maker's  failure to cure the claimed Default within three (3) business
days from Maker's receipt of the Notice of Reinstating,  Holder becomes entitled
to enforce  all of  Maker's  obligations  under  this  Note,  and all of Maker's
remaining obligations hereunder shall be immediately accelerated.  Additionally,
should Holder  enforce any of its  reinstatement  remedies  given under a Mutual
Release and Settlement  Agreement  between Maker and Holder dated as of the date
hereof  ("Settlement  Agreement")  and pursue  claims that had arisen before the
time of the parties' entry into the  Settlement  Agreement by filing suit in Los
Angeles County Superior Court, then no additional amounts shall be due under the
Note and the Note shall  expire.  In the event of the  expiration  of this Note,
Holder  shall be under no  obligation  to refund  payments  made under this Note
prior  to its  expiration,  however  any  recovery  by  Holder  pursuant  to its
reinstatement  remedies  under the  Settlement  Agreement  will be offset by the
amount of these payments.

     Maker may prepay all or any part of the unpaid balance of this Note without
notice, penalty or premium.

     The  debt  evidenced  by this  Note  and the  provisions  hereof  shall  be
construed,  interpreted and enforced in accordance with the laws of the State of
California  without  reference to choice of law  principles.  This Note shall be
binding on, and shall  inure to the  benefit  of, the  parties  hereto and their
respective  heirs,  legal  representatives,  successors  and assigns;  provided,
however,  that Maker  shall not assign its rights or  delegate  its  obligations
hereunder  without the express  prior written  consent of Holder,  which consent
shall not be withheld unreasonably by Holder.

     All notices  concerning this Note, other than as described above concerning
the Notice of  Reinstating,  must be in writing  and will be deemed to have been
duly given when (a)  delivered by hand (with written  confirmation  of receipt),
(b)  sent by  facsimile  (with  written  confirmation  of  successful  facsimile
transmission), provided that a copy is mailed by registered mail, return receipt
requested,   or  (c)   when   received   by  the   addressee,   if   sent  by  a
nationally-recognized   overnight   delivery  service,   in  each  case  to  the
appropriate  address  and  facsimile  number  set forth  below (or to such other
addresses  and  facsimile  numbers as each party may  designate  to the other by
notice pursuant to this Note).

     Except as set forth in this Note, Maker (a) waives presentment,  demand for
payment,  protest, notice of demand, dishonor, and all other notices and demands
in connection  with the  delivery,  acceptance,  performance,  default under and
enforcement  of this  Note;  (b)  waives  the right to  assert  any  statute  of
limitations  as a defense to the  enforcement of this Note to the fullest extent
permitted by law; and (c) consents to any  forbearance  by Holder without in any
way affecting the liability for payment of this Note.

<PAGE>

     IN WITNESS WHEREOF, Maker has executed this Note as of the day and year set
forth below.
                                       "Maker,"

                                       GEXA ENERGY CORP., a Texas Company




                                       By  /s/ Neil Leibman
                                           -------------------------------------
                                           Neil Leibman, Chief Executive Officer
                                           GEXA ENERGY CORP.,
                                           a Texas corporation




Holder Address:                        Maker Address:

Cappello Capital Corp.                 Gexa Energy Corp.
100 Wilshire Boulevard, Suite 1200     20 Greenway Plaza, Suite 600
Santa Monica, CA 90401-1195.           Houston, Texas 77046
Attention: Robert M. Deutschman,       Attention: Neil Leibman, Chief
Managing Director                      Executive Officer
Facsimile: (310) 393-4838              Facsimile: (713) 961-7997

                                       With copy to:
                                       Lisa L. Coplen, Esq.
                                       Anderson, McPharlin & Conners LLP
                                       444 South Flower Street, 31st Floor
                                       Los Angeles, CA 90071-2901
                                       (213) 688-0080
                                       (213) 622-7594 (fax)