**TXP
      CORPORATION**


**AUDIT
      COMMITTEE CHARTER**




**I.
      Purpose**





The
      primary functions of the Audit Committee of the Board of Directors (the
“ **Committee** ”)
      of TXP
      Corporation (the “ **Corporation** ”)
      are to
      assist the Board of Directors in fulfilling its oversight responsibilities
      with
      respect to: (i) the Corporation’s systems of internal controls regarding
      finance, accounting, legal compliance and ethical behavior; (ii) the
      Corporation’s auditing, accounting and financial reporting processes generally;
      (iii) the selection and review of independent auditors’ qualifications and
      independence; (iv) the Corporation’s financial statements and other
      financial information provided by the Corporation to its stockholders, the
      public and others; (v) the Corporation’s compliance with legal and
      regulatory requirements; (vi) the performance of the Corporation’s internal
      audit department and independent auditors and (vii) the oversight of the
      preparation of the Corporation’s financial reports, proxy statements,
      information statements or offering documents that contain financial information.
      Consistent with these functions, the Committee will encourage continuous
      improvement of, and foster adherence to, the Corporation’s policies, procedures
      and practices at all levels.





Although
      the Committee has the powers and responsibilities set forth in this Audit
      Committee Charter (the “ **Charter** ”),
      the
      role of the Committee is oversight and ensuring the adequate flow of clear
      information to and from the auditors as more fully provided for herein. The
      members of the Committee may or may not be accountants or auditors by profession
      or experts in the fields of accounting or auditing and, in any event, do not
      serve in such capacity. Consequently, it is not the duty of the Committee to
      conduct or finalize audits or to determine that the Corporation’s financial
      statements and disclosures are complete and accurate and are in accordance
      with
      generally accepted accounting principles and applicable rules and regulations.
      These are the responsibilities of management, the Board of Directors, the
      independent auditors, and the internal auditors.





**II.
      Organization and Authority**





The
      Committee shall be governed in accordance with the following rules each to
      the
      extent of the authority of the full Board:




(a)  The
      Committee shall consist of at least two Board members, all of whom shall be
      generally familiar with reading, understanding and interpreting financial
      statements and related materials, and at least one of whom possesses accounting
      or financial management expertise and must otherwise meet the financial
      sophistication standards of the American Stock Exchange (the “ **AMEX** ”). ****




(b)  No
      Board
      member shall serve on the Committee at any time that said Board member, or
      his/her affiliate, is receiving any compensation, directly or indirectly, for
      consulting or other services provided to the Corporation other than as a Board
      member, or as permitted by exemptions to such independence requirements as
      provided in the AMEX Company Guide.







(c)  The
      members of the Committee and its Chairperson shall be elected by the Board
      and
      may be removed from time to time in accordance with the Amended and Restated
      Memorandum and Articles of Association of the Corporation or this Charter,
      as
      may be revised from time to time.




(d)  The
      Committee shall be responsible for oversight of the Corporation’s audit,
      relations with auditors, and establishing procedures for receiving,
      investigating and resolving “whistle-blower” or other similar complaints
      concerning the Corporation’s financial and accounting practices.




(e)  The
      Committee shall have full and complete access to all aspects of the Corporation,
      its personnel and records as necessary.




(f)  The
      Corporation’s Chief Financial Officer shall generally be expected to attend all
      Committee meetings as a non-voting observer. If the Chief Financial Officer
      is
      unable to attend a meeting, the Chief Executive Officer shall have the right
      to
      designate a non-voting observer from among other senior management of the
      Company to attend Committee meetings.




(g)  The
      Committee shall have such additional rights, duties, responsibilities,
      resources, obligations, authority, and limitations and shall otherwise be
      governed in all respects as more fully set forth in this Charter or in the
      Amended and Restated Memorandum and Articles of Association of the Corporation
      of the Corporation, or as otherwise expanded by the Board, from time to
      time.




Committee
      members shall be elected by the Board at the annual or special meeting of the
      Board of Directors; members shall serve until their successors shall be duly
      elected and qualified. The Board may remove any Committee member at any time
      with or without cause. The Committee’s chairperson shall be designated by the
      full Board or, if it does not do so, the Committee members shall elect a
      chairperson by vote of a majority of the full Committee. The Committee Chairman,
      as a representative of the Committee, is authorized to consult directly with
      the
      Chief Executive Officer and the Board of Directors. The Committee shall have
      all
      authority to meet on behalf of the Corporation to take all actions necessary
      to
      perform its duties as set forth herein, and as otherwise vested with it by
      the
      Board from time to time. Nothing herein shall be deemed to restrict or prevent
      other Board members, officers, agents or employees of the Corporation from
      communicating with auditors. The Committee, acting on a majority of the
      Committee members, may form and delegate authority to subcommittees or
      individual independent members of this Committee when appropriate.




**III.
      Meetings**





The
      Committee shall meet at least quarterly per Amex Company Guide Section 121B(3)
      or more often as circumstances require. The Committee shall be governed with
      the
      same rules regarding meetings (including meetings by conference telephone or
      similar equipment), action without meetings, notice, Waiver of Notice, quorum
      and voting requirements as are applicable to the Board of Directors. The
      Committee shall have the power to and shall require members of management,
      the
      Corporation’s audit department, the independent auditors and others to attend
      meetings and to provide pertinent information, as necessary. As part of its
      job
      to foster open communications, the Committee may meet in separate executive
      sessions during each of its regularly scheduled meetings with management, the
      Chief Financial Officer and/or the Corporation’s independent auditors to discuss
      any matters that the Committee (or any of the foregoing) believes should be
      discussed privately.








Copies
      of
      all minutes of meetings, written consents, resolutions or actions approved
      by
      the Committee shall be signed by the secretary of the meeting (or appropriate
      Committee members if an action by written consent) and placed in the minute
      books of the Corporation; provided however, that the Committee may redact,
      or
      exclude specific names of persons or descriptions of events to the extent deemed
      appropriate by the Committee in order to protect persons who alert the Committee
      or Board of possible accounting disputes, embezzlement, misstatements or other
      discrepancies.





**IV.
      Responsibilities and Duties**





In
      recognition of the fact that the Corporation’s independent auditors are
      ultimately accountable to the Committee, the Committee shall have the sole
      authority and responsibility to select, evaluate, and, where appropriate,
      terminate and recommend the replacement of the independent auditors or nominate
      the independent auditors for shareholder approval. The Committee may request
      that the Board ratify their appointments, the failure of such ratification
      to be
      non-binding as the Committee’s decision on selection of an auditor shall be
      final. The Committee shall approve all audit engagement fees and terms and
      all
      non-audit engagements with the independent auditors. The Committee shall consult
      with management but shall not delegate these responsibilities.





To
      fulfill its responsibilities and duties, the Committee shall:





***With
      respect to the independent auditors:***





(a)  Be
      directly responsible for the appointment, compensation and general oversight
      of
      the work of the independent auditors (including resolution of disagreements
      between management and the independent auditors regarding financial reporting)
      for the purpose of preparing its audit report, review or related work. In this
      regard, the auditors shall report directly to the Committee.





(b)  Have
      the
      sole authority to review in advance, and grant any appropriate pre-approvals
      of,
      (i) all auditing services to be provided by the independent auditors and
      (ii) all non-audit services to be provided by the independent auditors as
      permitted by Section 10A of the Exchange Act of 1934, as amended (the
“ **Exchange
      Act** ”),
      and
      (iii) in connection therewith to approve all fees and other terms of
      engagement, each of which shall be disclosed to the Board and shall be approved
      in accordance with this Charter. The Committee shall also review and approve
      disclosures required to be included in financial statements and reports, proxy
      statements, information statements and offering documents as well as Securities
      and Exchange Commission periodic reports filed under Section 13(a) or 15(d)
      of
      the Exchange Act, if any, as amended with respect to non-audit services, if
      applicable.








(c)  Review
      the performance of the Corporation’s independent auditors on at least an annual
      basis.





(d)  On
      an
      annual basis, review and engage in active dialogue with the independent auditors
      all relationships the independent auditors have with the Corporation in order
      to
      evaluate the independent auditors’ continued independence. The Committee:
      (1) shall ensure that the independent auditors submit to the Committee on
      an annual basis a written statement delineating all relationships and services
      that may impact the objectivity and independence of the independent auditors;
      (2) shall discuss with the independent auditors any disclosed relationship
      or services that may impact the objectivity and independence of the independent
      auditors; and (3) shall satisfy itself as to the independent auditors’
independence.





(e)  At
      least
      annually, obtain and review an annual report from the independent auditors
      describing (1) the independent auditors’ internal quality control
      procedures and (2) any material issues raised by the most recent internal
      quality control review, or peer review, of the independent auditors, or by
      any
      inquiry or investigation by governmental or professional authorities, within
      the
      preceding five years, respecting one or more independent audits carried out
      by
      the independent auditors, and (3) any steps taken to deal with any such
      issues.





(f)  Confirm
      that the lead audit partner, or the lead audit partner responsible for reviewing
      the audit, for the Corporation’s independent auditors has not performed audit
      services for the Corporation for each of the five previous fiscal
      years.





(g)  Review
      all reports, if any, required to be submitted by the independent auditors to
      the
      Committee under Section 10A of the Exchange Act, or otherwise.





(h)  Review,
      based upon the recommendation of the independent auditors and the corporate
      audit department, and the principal financial officer, the scope and plan of
      the
      work to be done by the independent auditors for each fiscal year.





***With
      respect to financial statements*** ***:***





(i)  Review
      and discuss with management, the corporate audit department and the independent
      auditors (1) the Corporation’s financial statements (including disclosures
      made in “Management’s Discussion and Analysis of Financial Condition and Results
      of Operations,”), and (2) any disclosure made on Form 8-K or in press
      releases that make material financial disclosure, in each case prior to
      submission to stockholders or investors, any state or federal governmental
      body,
      any stock exchange or market or the public.





(j)  Discuss
      with the independent auditors the matters required to be discussed by Statement
      on Auditing Standards No. 61 or similar standards as amended, relating to
      the conduct of the audit.





(k)  Recommend
      to the Board of Directors, if appropriate and if the Corporation is requested
      to
      file such reports, that the Corporation’s annual audited financial statements be
      included in the Corporation’s annual report on Form 10-KSB (or Form 10-K as
      applicable and any Registration Statement or other filing requiring submission
      of audited financial statements) for filing with the Securities and Exchange
      Commission.








(l)  Prepare
      the report if and as required by the Securities and Exchange Commission to
      be
      included in the Corporation’s annual proxy statement and any other Committee
      reports required by applicable securities laws or stock exchange listing
      requirements or rules.




***Periodic
      and Annual Reviews*** ***:***





(m)  Periodically
      review separately with each of management, the independent auditors, and the
      corporate audit department (1) any significant disagreement between
      management and the independent auditors or the corporate audit department in
      connection with the preparation of the financial statements, (2) any
      difficulties encountered during the course of the audit (including any
      restrictions on the scope of work or access to required information), and (3)
      management’s response to each.





(n)  Periodically
      discuss with the independent auditors, without management being present, (1)
      their judgments about the quality, appropriateness, and acceptability of the
      Corporation’s accounting principles and financial disclosure practices, as
      applied in its financial reporting, and (2) the completeness and accuracy
      of the Corporation’s financial statements.





(o)  Consider
      and approve, if appropriate, significant changes to the Corporation’s accounting
      principles and financial disclosure practices as suggested by the independent
      auditors, management or the corporate audit department. Review with the
      independent auditors, management and the corporate audit department, at
      appropriate intervals, the extent to which any changes or improvements in
      accounting or financial practices, as approved by the Committee, have been
      implemented.





(p)  Review
      with management, the independent auditors, the corporate audit department and
      the Corporation’s counsel, as appropriate, any legal, regulatory or compliance
      matters that could have a significant impact on the Corporation’s financial
      statements, including significant changes in accounting standards or rules
      as
      promulgated by the Financial Accounting Standards Board, the Securities and
      Exchange Commission or other regulatory authorities with relevant
      jurisdiction.





(q)  Obtain
      and review an annual report from management relating to the accounting
      principles used in preparation of the Corporation’s financial statements
      (including those policies for which management is required to exercise
      discretion or judgments regarding the implementation thereof).





***Discussions
      with Management*** ***:***





(r)  Review
      and discuss with management the Corporation’s earnings press releases and other
      disclosure documents (including the use of “pro forma” or “adjusted” non-GAAP
      information) as well as financial information and earnings guidance provided
      to
      analysts, rating agencies or in connection with credit or financing
      transactions.








(s)  Review
      and discuss with management all material off-balance sheet transactions,
      arrangements, obligations (including contingent obligations) and other
      relationships of the Corporation with unconsolidated entities or other persons,
      that may have a material current or future effect on financial condition,
      changes in financial condition, results of operations, liquidity, capital
      resources, capital reserves or significant components of revenues or
      expenses.





(t)  Inquire
      about the application of the Corporation’s accounting policies and its
      consistency from period to period, and the compatibility of these accounting
      policies with generally accepted accounting principles, and (where appropriate)
      the Corporation’s provisions for future occurrences which may have a material
      impact on the financial statements of the Corporation.





(u)  Review
      and discuss with management (1) the Corporation’s major financial risk
      exposures and the steps management has taken to monitor and control such
      exposures (including management’s risk assessment and risk management policies),
      and (2) the program that management has established to monitor compliance
      with its code of business ethics and conduct for directors, officers and
      employees.





(v)  Review
      and discuss with management all disclosures made by the Corporation concerning
      any material changes in the financial condition or operations of the
      Corporation.





(w)  Obtain
      explanations from management for unusual variances in the Corporation’s annual
      financial statements from year to year, and review annually the independent
      auditors’ letter of recommendations to management and management’s
      response.





***With
      respect to internal controls*** ***:***





(x)  In
      consultation with the independent auditors and the corporate audit department,
      (1) review the adequacy of the Corporation’s internal control structure and
      system, and the procedures designed to insure compliance with laws and
      regulations and (2) discuss the responsibilities, budget and staffing needs
      of the corporate audit department.





(y)
      Establish procedures for (1) the receipt, retention and treatment of
      complaints received by the Corporation regarding accounting, internal accounting
      controls or auditing matters, and (2) the confidential, anonymous
      submission by employees of the Corporation of concerns regarding questionable
      accounting or auditing matters.




***Other:***





(z)  Review
      and approve all related-party transactions.








(aa)  Establish
      the policy for the Corporation’s hiring of employees or former employees of the
      independent auditors who were engaged on the Corporation’s account, and
      reviewing the scope of all audit and /or non audit services provided by the
      auditors.





(bb)  Review
      any management decision to seek a second opinion from independent auditors
      other
      than the Corporation’s regular independent auditors with respect to any
      significant accounting issue.





(cc)  Review
      with management and the independent auditors the sufficiency and quality of
      the
      corporate audit department staff and other financial and accounting personnel
      of
      the Corporation.





(dd)  Review
      and reassess the adequacy of this Charter annually and recommend to the Board
      any changes the Committee deems appropriate.





(ee)  The
      Committee shall conduct an annual performance evaluation of itself.





(ff)  Perform
      any other activities consistent with this Charter, the Corporation’s Amended and
      Restated Memorandum and Articles of Association and governing law as the
      Committee or the Board deems necessary or appropriate.





***Duties
      Not Within Scope Of The Committee***





While
      the
      Committee has the responsibilities and powers set forth in this Charter, it
      is
      not the duty of the Committee to plan or conduct audits, to determine that
      the
      Corporation’s financial statements are or are not complete and accurate, and are
      in accordance with GAAP or to design or implement an effective system of
      internal controls. Such matters are the responsibility of management, the
      internal auditors, the principal financial officer(s) and the independent
      auditors as the case may be. It is also not the duty of the Committee to conduct
      investigations, to resolve disagreements, if any, between management and the
      independent auditors or to assure compliance with applicable accounting
      standards, laws and regulations.





**V.
      Resources**





The
      Committee shall have the sole authority to retain and terminate independent
      legal expert, accounting and other consultants to advise the Committee with
      the
      sole authority to approve the compensation therefore. The Corporation shall
      provide all appropriate funding as requested by the Committee therefore. The
      Committee may request any officer or employee of the Corporation or the
      Corporation’s outside counsel or independent auditors to attend a meeting of the
      Committee or to meet with any members of, or consultants to, the Committee.





The
      Committee shall determine the extent of funding necessary for payment of
      compensation to the independent auditors for the purpose of rendering or issuing
      the annual audit report and to any independent legal, accounting and other
      consultants retained to advise the Committee.