Document:

exhibit.htm

    Exhibit
      4.1

     

    
      EXECUTION
        VERSION

       

      

       

      
        

         

        

      

      ________________________________________________________________________________

       

       

      TEXAS
        COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

       

      AND

       

      TCEH
        FINANCE, INC.

       

      AND
        EACH OF THE GUARANTORS PARTY HERETO

       

       

       

      
        ________________________________________________

         

        FIRST
          SUPPLEMENTAL INDENTURE

         

        
          Dated
            as of December 6, 2007

           

          
            To
              the Indenture dated as of  October 31, 2007

             

            ________________________________________________

             

            
              THE
                BANK OF NEW YORK

               

              
                TRUSTEE

                 

                __________________________________________________

                
                  
                    
                    

                  

                  
                    
                    

                    
                      

                    

                  

                  
                    
                    

                  

                

              

            

          

        

      

      First
        Supplemental Indenture (this “First Supplemental Indenture”), dated as of
        December 6, 2007, among Texas Competitive Electric Holdings Company
        LLC, a Delaware limited liability company, and TCEH Finance, Inc., a Delaware
        corporation (collectively, the “Issuer”), the Guarantors party hereto and
        The Bank of New York, as Trustee.

       

      W
        I T N E
        S S E T H

       

      WHEREAS,
        the Issuer, the Guarantors (as defined in the Existing Indenture referred
        to
        below) and the Trustee have entered into an Indenture, dated as of October
        31,
        2007 (the “Existing Indenture”), providing for the issuance of an
        unlimited amount of the Issuer’s 10.25% Senior Notes due 2015 (the “Existing
        Cash Pay Notes”), of which $3,000,000,000 aggregate principal amount was
        issued on October 31, 2007 (the “Initial Existing Cash Pay
        Notes”);

       

      WHEREAS,
        Section 9.01 of the Indenture provides, among other things, that the Issuer,
        the
        Guarantors and the Trustee may amend the Existing Indenture to provide for
        the
        issuance of additional Cash Pay Notes or additional series of debt of the
        Issuer
        constituting Required Debt in accordance with the Existing Indenture;
        and`

       

      WHEREAS,
        the Issuer has duly authorized
        the creation of an issue of $2,000,000,000 aggregate principal amount of
        10.25%
        Senior Notes due 2015, Series B (the “Initial Series B Cash Pay Notes”) and the
        Issuer has duly authorized the creation of an issue of $1,750,000,000 aggregate
        principal amount of 10.50%/11.25% Senior Toggle Notes due 2016 (the “Initial
        Toggle Notes”);

      

      WHEREAS,
        the Issuer and the Guarantors desire to amend the Existing Indenture to provide
        for the issuance of the Initial Series B Cash Pay Notes and to provide for
        the
        issuance of the Initial Toggle Notes;

       

      NOW
        THEREFORE, in consideration of the foregoing and for other good and valuable
        consideration, the receipt of which is hereby acknowledged, the parties mutually
        covenant and agree for the equal and ratable benefit of all Persons who are
        now
        or hereafter become Holders of Notes, hereby enter into this First Supplemental
        Indenture and agree as follows:

       

      Section
        1.  DEFINITIONS.

       

      1.1         Capitalized
        Terms.  Capitalized terms used herein without definition shall have
        the meanings assigned to them in the Existing Indenture.

       

      1.2         For
        all purposes of this First Supplemental Indenture, except as otherwise herein
        expressly provided or unless the context otherwise requires: (i) the words
        “herein,” “hereof” and “hereby” and other words of similar import used in this
        First Supplemental Indenture refer to this First Supplemental Indenture as
        a
        whole and not to any particular section hereof and (ii) the terms and
        expressions used herein shall have the same meanings as corresponding terms
        and
        expressions used in the Existing Indenture.

       

      1.3         The
        definition of “Definitive Note” shall be deleted and replaced with the
        following:

       

      
        	
                 

              	
                “Definitive
                  Note”
                  means a certificated Note
                  registered in
                  the
                  name of the Holder thereof and
issued
                  in accordance with
                  Section 2.06 hereof,
                  substantially
                  in the
                  form of Exhibit
                  A-1, Exhibit
                  A-2 or Exhibit
                  A-3, as
                  applicable, hereto, except
                  that such Note shall not bear the Global Note Legend and shall
                  not have
                  the “Schedule
                  of
                  Exchanges of Interests in the Global Note” attached
                  thereto.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
        2.  CHANGES TO CERTAIN PROVISIONS

       

      2.1         Amendments
        to Article 1.  The following paragraphs shall be added to Section 1.01
        and replace any existing definitions (as applicable) in the Existing Indenture
        prior to the date hereof:

       

      “144A
        Global Note” means a Global Note substantially in the form of
Exhibit A-1 (in the case of the Existing Cash Pay Notes), Exhibit
        A-2 (in the case of the Series B Cash Pay Notes) or Exhibit A-3
        (in the case of the Toggle Notes) hereto, as the case may be, bearing the
        Global
        Note Legend, the Private Placement Legend and the Tax Legend (if applicable)
        and
        deposited with or on behalf of, and registered in the name of, the Depositary
        or
        its nominee that will be issued in a denomination equal to the outstanding
        principal amount of the Senior Notes sold in reliance on Rule 144A.

       

      “Additional
        Existing Cash Pay Notes” means additional Existing Cash Pay Notes (other
        than Initial Existing Cash Pay Notes and Exchange Notes issued in exchange
        for
        such Initial Existing Cash Pay Notes) issued from time to time under this
        Indenture in accordance with Sections 2.01(d), 2.02 and 4.09 hereof, as part
        of
        the same series as the Initial Existing Cash Pay Notes.

       

      “Additional
        Notes” means Additional Existing Cash Pay Notes, Additional Series B Cash
        Pay Notes and Additional Toggle Notes.

       

      “Additional
        Series B Cash Pay Notes” means additional Series B Cash Pay Notes (other
        than Initial Series B Cash Pay Notes and Exchange Notes issued in exchange
        for
        such Initial Series B Cash Pay Notes) issued from time to time under this
        Indenture in accordance with Sections 2.01(d), 2.02 and 4.09 hereof, as part
        of
        the same series as the Initial Series B Cash Pay Notes.

       

      “Additional
        Toggle Notes” means additional Toggle Notes (other than the Initial Toggle
        Notes, any PIK Notes issued as a result of a PIK Payment on such Initial
        Toggle
        Notes and Exchange Notes issued in exchange for such Initial Toggle Notes
        and
        such PIK Notes) issued from time to time under this Indenture in accordance
        with
        Sections 2.01(d), 2.02 and 4.09 hereof, as part of the same series as the
        Initial Toggle Notes.

       

      “Applicable
        Premium” means, with respect to any Note on any Redemption Date, the greater
        of:

       

      (1)           1.0%
        of the principal amount of such Note; and

       

      (2)           (A)
        with respect to a Cash Pay Note, the excess, if any, of (a) the present
        value at such Redemption Date of (i) the redemption price of such Cash Pay
        Note at November 1, 2011 (such redemption price determined as set forth in
        the
        table appearing under Section 3.07(d) hereof), plus (ii) all required
        interest payments due on such Cash Pay Note through November 1, 2011 (excluding
        accrued but unpaid interest to the Redemption Date), computed using a discount
        rate equal to the Treasury Rate as of such Redemption Date plus 50 basis
        points;
        over (b) the principal amount of such Cash Pay Note, or

       

      (B)           with
        respect to a Toggle Note, the excess, if any, of (a) the present value at
        such
        Redemption Date of (i) the redemption price of such Toggle Note
        at  November 1, 2012 (such redemption price being set forth in the
        table appearing under Section 3.07(h) hereof), plus (ii) all required interest
        payments (calculated based on the cash interest rate payable on the Toggle
        Notes) due on such Toggle Note through November 1, 2012 (excluding accrued
        but
        unpaid interest to the Redemption Date), computed using a discount rate equal
        to
        the Treasury Rate as of such Redemption Date plus 50 basis points; over
        (b) the principal amount of such Toggle Note.

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      “Cash
        Interest” has the meaning set forth in Exhibit A-3
        hereto.

       

      “Cash
        Pay Notes” means, collectively, (1) the Initial Existing Cash Pay Notes and
        any Additional Existing Cash Pay Notes and (2) the Initial Series B Cash
        Pay
        Notes and any Additional Series B Cash Pay Notes.

       

      “Existing
        Cash Pay Notes” means the Initial Existing Cash Pay Notes and any Additional
        Existing Cash Pay Notes.

       

      “Global
        Notes” means, individually and collectively, each of the Restricted Global
        Notes and the Unrestricted Global Notes deposited with or on behalf of and
        registered in the name of the Depositary or its nominee, substantially in
        the
        form of Exhibit A-1 (in the case of the Existing Cash Pay Notes),
        Exhibit A-2 (in the case of the Series B Cash Pay Notes) or Exhibit A-3
        (in the case of the Toggle Notes) hereto, as the case may be, and that bears
        the
        Global Note Legend and that has the “Schedule of Exchanges of Interests in the
        Global Note” attached thereto, issued in accordance with Section 2.01,
        2.06(a), 2.06(b)(iii), 2.06(b)(iv), 2.06(d)(ii), 2.06(d)(iii) or 2.06(f)
        hereof.

       

      “Initial
        Existing Cash Pay Notes” has the meaning set forth in the recitals
        hereto.

       

      “Initial
        Notes” means the Initial Existing Cash Pay Notes, the Initial Series B Cash
        Pay Notes and the Initial Toggle Notes.

       

      “Initial
        Series B Cash Pay Notes” has the meaning set forth in the recitals
        hereto.

       

      “Initial
        Toggle Notes” has the meaning set forth in the recitals hereto.

       

      “Issue
        Date” means the first date on which any Notes are issued pursuant to this
        Indenture, which was October 31, 2007.

       

      “Notes”
        means the Initial Existing Cash Pay Notes, the Initial Series B Cash Pay
        Notes
        and the Initial Toggle Notes (including, in each case, any Exchange Notes
        issued
        in exchange therefor), and more particularly means any Note authenticated
        and
        delivered under this Indenture.  For all purposes of this Indenture,
        the term “Notes” shall also include any Additional Existing Cash Pay Notes,
        Additional Series B Cash Pay Notes and Additional Toggle Notes that may be
        issued under this Indenture.  The Existing Cash Pay Notes, the Series
        B Cash Pay Notes and the Toggle Notes (including, in each case, any Exchange
        Notes issued in exchange therefor) are separate series of Notes, but shall
        be
        treated as a single class for all purposes under this Indenture, except as
        set
        forth herein.  For purposes of this Indenture, all references to Notes
        to be issued or authenticated upon transfer, replacement or exchange shall
        be
        deemed to refer to Notes of the applicable series.

       

      “Offering
        Memorandum” means, as applicable, (1) the offering circular, dated October
        24, 2007, relating to the sale of the Initial Existing Cash Pay Notes and
        (2)
        the offering circular, dated November 29, 2007, relating to the sale of the
        Initial Series B Cash Pay Notes and Initial Toggle Notes.

       

      “Partial
        PIK Interest” has the meaning set forth in Exhibit A-3
        hereto.

       

      “PIK
        Interest” has the meaning set forth in Exhibit A-3
        hereto.

       

      “PIK
        Notes” means additional Toggle Notes issued under this Indenture on the same
        terms and conditions as the Toggle Notes in connection with a PIK
        Payment.  For purposes of this Indenture, all references to “PIK
        Notes” shall include the Related PIK Notes.

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      “PIK
        Payment” means an interest payment with respect to the Toggle Notes made by
        increasing the outstanding principal amount of the Toggle Notes or issuing
        PIK
        Notes.

       

      “Registration
        Rights Agreement” means, as applicable, (1) the Registration Rights
        Agreement relating to the Initial Existing Cash Pay Notes, dated as of the
        Issue
        Date among the Issuer, the Guarantors and the Initial Purchasers, (2) the
        Registration Rights Agreement relating to the Initial Series B Cash Pay Notes,
        dated as of the date of the First Supplemental Indenture, among the Issuer,
        and
        the other parties thereto, (3) the Registration Rights Agreement relating
        to the
        Initial Toggle Notes, dated as of the date of the First Supplemental Indenture,
        among the Issuer and the other parties thereto and (4) with respect to any
        Additional Notes, any registration rights agreement among the Issuer and
        the
        other parties thereto relating to the registration by the Issuer of such
        Additional Notes under the Securities Act.

       

      “Regulation S
        Permanent Global Note” means a permanent Global Note in the form of
Exhibit A-1  (in the case of the Existing Cash Pay Notes),
Exhibit A-2 hereto (in the case of the Series B Cash Pay Notes)
        or
        Exhibit A-3 hereto (in the case of the Toggle Notes) hereto, bearing the
        Global
        Note Legend, the Private Placement Legend and the Tax Legend (if applicable)
        and
        deposited with or on behalf of and registered in the name of the Depositary
        or
        its nominee, issued in a denomination equal to the outstanding principal
        amount
        of the Regulation S Temporary Global Note of the applicable series upon
        expiration of the Restricted Period.

       

      “Regulation S
        Temporary Global Note” means a temporary Global Note in the form of
Exhibit A-1 (in the case of the Existing Cash Pay Notes), Exhibit
        A-2 hereto (in the case of the Series B Cash Pay Notes) or Exhibit A-3
        hereto (in the case of the Toggle Notes) hereto, bearing the Global Note
        Legend,
        the Private Placement Legend, the Regulation S Temporary Global Note Legend
        and the Tax Legend (if applicable) and deposited with or on behalf of and
        registered in the name of the Depositary or its nominee, issued in a
        denomination equal to the outstanding principal amount of the Notes of the
        applicable series initially sold in reliance on Rule 903.

       

      “Related
        PIK Notes” means, with respect to a Toggle Note, (i) each PIK Note issued in
        connection with a PIK Payment on such Toggle Note and (ii) each additional
        PIK
        Note issued in connection with a PIK Payment on a Related PIK Note with respect
        to such Toggle Note.

       

      “Required
        Debt” means, with respect to any action, on any date, the outstanding
        principal amount of:

       

      (1)           the
        Notes (including any Additional Notes),

       

      (2)           the
        Senior Term Loans under the TCEH Senior Interim Facility (excluding any Senior
        Term Loans held by Defaulting Lenders (as defined in the TCEH Senior Interim
        Facility),

       

      (3)           the
        Senior Notes (as defined in the TCEH Senior Interim Facility), and

       

      (4)           any
        other senior unsecured securities issued by the Issuer to refinance or replace
        any of the items described in clauses (2) and (3) of this definition
        (including any additional securities of the same series)

       

      at
        such
        date, other than, in each case, any such debt beneficially owned by the Issuer
        or its Affiliates, voting as a single class, except to the extent prohibited
        by
        law; provided that (a) Required Debt shall only include debt
        described in clauses (2) through (4) of this definition, to the extent such
        debt would require the consent of the holders of the debt described in this
        definition voting as a single class to take such action, except to the extent
        described below in clause (b) and (c); (b) if any amendment, waiver or
        other 

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      action
        would disproportionately affect the holders of the Existing Cash Pay Notes,
        the
        Series B Cash Pay Notes or the Toggle Notes, Required Debt shall mean the
        Existing Cash Pay Notes, the Series B Cash Pay Notes or the Toggle Notes,
        as the
        case may be, voting as a single class and the debt described in clauses (1)
        through (4) voting as a single class, and (c) if any amendment, waiver or
        other action would affect (i) only the Notes, with equal effect on each series
        of the Cash Pay Notes and the Toggle Notes, (ii) only the Existing Cash Pay
        Notes, (iii) only the Series B Cash Pay Notes or (iv) only the Toggle Notes,
        Required Debt shall mean the Notes, the Existing Cash Pay Notes, the Series
        B
        Cash Pay Notes or the Toggle Notes, as the case may be, voting as a single
        class
        without the debt described in clauses (2) through (4).

       

      “Series
        B Cash Pay Notes” means the Initial Series B Cash Pay Notes and any
        Additional Series B Cash Pay Notes.

       

      “Tax
        Legend” means the legend set forth in Section 2.06(g)(iv) hereof to be
        placed on all Series B Cash Pay Notes (if applicable) and all Toggle Notes
        (if
        applicable) issued under this Indenture except where otherwise permitted
        by the
        provisions of this Indenture.

       

      “Toggle
        Notes” means the Initial Toggle Notes, any Additional Toggle Notes and any
        Related PIK Notes issued in respect of any Toggle Notes (and any increase
        in the
        principal amount of any of the foregoing) as a result of a PIK
        Payment.  For purposes of this Indenture, all references to “principal
        amount” of the Toggle Notes shall include any PIK Notes issued in respect
        thereof (and any increase in the principal amount thereof) as a result of
        a PIK
        Payment.

       

      “Treasury
        Rate” means, as of any Redemption Date, the yield to maturity as of such
        Redemption Date of United States Treasury securities with a constant maturity
        (as compiled and published in the most recent Federal Reserve Statistical
        Release H.15 (519) that has become publicly available at least two Business
        Days
        prior to the Redemption Date (or, if such Statistical Release is no longer
        published, any publicly available source of similar market data)) most nearly
        equal to the period from the Redemption Date to (x) November 1, 2011, in
        the
        case of Cash Pay Notes, and (y) November 1, 2012, in the case of Toggle Notes;
        provided, however, that if the period from the Redemption Date to
        November 1, 2011 or November 1, 2012, as the case may be, is less than one
        year, the weekly average yield on actually traded United States Treasury
        securities adjusted to a constant maturity of one year will be
        used.

       

      “Unrestricted
        Global Note” means a permanent Global Note, substantially in the form of
Exhibit A-1 (in the case of the Existing Cash Pay Notes), Exhibit
        A-2 (in the case of the Series B Cash Pay Notes) or Exhibit A-3 (in
        the case of the Toggle Notes) attached hereto, that bears the Global Note
        Legend
        and that has the “Schedule of Exchanges of Interests in the Global Note”
attached thereto, and that is deposited with or on behalf of and registered
        in
        the name of the Depositary, representing Global Notes that do not bear and
        are
        not required to bear the Private Placement Legend.

       

      
        	
                 

              	
                2.2

              	
                Amendments
                  to Article 2.

              

      

       

      
        	
                 

              	
                2.2.1

              	
                Paragraph
                  (a) of Section 2.01 shall be deleted and replaced with the
                  following:

              

      

       

      

       

      “(a)           General.  The
        Notes and the Trustee’s certificate of authentication shall be substantially in
        the form of Exhibit A-1 (in the case of the Existing Cash Pay
        Notes), Exhibit A-2 (in the case of the Series B Cash Pay Notes) or
Exhibit A-3 (in the case of the Toggle Notes) hereto.  The
        Notes may have notations, legends or endorsements required by law, stock
        exchange rules or usage.  Each Note shall be dated the date of its
        authentication.  The Notes shall be in minimum denominations of $2,000
        and integral multiples of $1,000 in excess thereof, subject to the issuance
        of
        certificated PIK Notes as set forth in Exhibit A-3.”

       

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                2.2.2

              	
                Paragraph
                  (b) of Section 2.01 shall be deleted and replaced with the
                  following:

              

      

       

      

       

      “(b)           Global
        Notes.  Notes issued in global form shall be substantially in the
        form of Exhibit A-1 (in the case of the Existing Cash Pay Notes),
        Exhibit A-2 (in the case of the Series B Cash Pay Notes) or Exhibit A-3
        (in the case of the Toggle Notes) hereto (including, in each case, the Global
        Note Legend thereon and the “Schedule of Exchanges of Interests in the Global
        Note” attached thereto).  Notes issued in definitive form shall be
        substantially in the form of Exhibit A-1 (in the case of the
        Existing Cash Pay Notes), Exhibit A-2 (in the case of the Series B Cash Pay
        Notes) or Exhibit A-3 (in the case of the Toggle Notes) attached hereto
        (but without, in each case, the Global Note Legend thereon and without the
        “Schedule of Exchanges of Interests in the Global Note” attached
        thereto).  Each Global Note shall represent such of the outstanding
        Notes as shall be specified in the “Schedule of Exchanges of Interests in the
        Global Note” attached thereto and each shall provide that it shall represent up
        to the aggregate principal amount of Notes from time to time endorsed thereon
        and that the aggregate principal amount of outstanding Notes represented
        thereby
        may from time to time be reduced or increased, as applicable, to reflect
        exchanges and redemptions.  Any endorsement of a Global Note to
        reflect the amount of any increase or decrease in the aggregate principal
        amount
        of outstanding Notes represented thereby shall be made by the Trustee or
        the
        Custodian, at the direction of the Trustee, in accordance with instructions
        given by the Holder thereof as required by Section 2.06
        hereof.”

       

      

       

      
        	
                 

              	
                2.2.3

              	
                The
                  fourth paragraph of paragraph (d) of Section 2.01 shall be deleted
                  and
                  replaced with the following:

              

      

       

      

       

      “Additional
        Notes of any series ranking paripassu with the Initial Notes
        of such series may be created and issued from time to time by the Issuer
        without
        notice to or consent of the Holders and shall be consolidated with and form
        a
        single class with the Initial Notes of such series and shall have the same
        terms
        as to status, redemption or otherwise as the Initial Notes of such series;
        provided that the Issuer’s ability to issue Additional Notes shall be
        subject, among other things, to the Issuer’s compliance with Section 4.09
        hereof; providedfurther that in connection with the payment of PIK
        Interest, the Issuer may, without the consent of the Holders (and without
        regard
        to any restrictions or limitations set forth in Section 4.09 hereof),
        increase the outstanding principal amount of the Toggle Notes or issue PIK
        Notes.  The Existing Cash Pay Notes, the Series B Cash Pay Notes and
        the Toggle Notes are each a separate series of Notes but will be treated
        as a
        single class of securities under this Indenture, except as otherwise stated
        herein.  As a result, Holders of each series of Notes will not have
        separate rights to, among other things, give notice of Defaults or to direct
        the
        Trustee to exercise remedies during an Event of Default or
        otherwise.   Except as otherwise stated herein, the Notes offered
        by the Issuer, any PIK Notes and any Additional Notes subsequently issued
        under
        this Indenture will be treated as a single class for all purposes under this
        Indenture, including waivers, amendments, redemptions and offers to
        purchase.  Unless the context requires otherwise, references to
“Notes” for all purposes under this Indenture include PIK Notes and any
        Additional Notes that are actually issued, and references to “principal amount”
of the notes includes and increases in the principal amount of the outstanding
        Notes as a result of a PIK Payment.  Any Additional Notes shall be
        issued with the benefit of an indenture supplemental to this
        Indenture.  The Notes are a separate series of debt, but will be
        treated as a single class with other series of Required Debt for certain
        actions
        and voting as set forth in this Indenture.  As a result, Holders of
        the Notes will not have separate rights to, among other things, give notice
        of
        Defaults, direct the Trustee to exercise remedies during an Event of Default
        or
        otherwise or vote for amendments and waivers.”

       

      

       

      
        	
                 

              	
                2.2.4

              	
                Section
                  2.02 shall be deleted and replaced with the
                  following:

              

      

       

      “At
        least
        one Officer shall execute the Notes on behalf of the Issuer by manual or
        facsimile signature.

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      If
        an
        Officer whose signature is on a Note no longer holds that office at the time
        a
        Note is authenticated, the Note shall nevertheless be valid.

       

      A
        Note
        shall not be entitled to any benefit under this Indenture or be valid or
        obligatory for any purpose until authenticated substantially in the form
        of
Exhibit A-1 (in the case of the Existing Cash Pay Notes), Exhibit
        A-2 (in the case of the Series B Cash Pay Notes) or Exhibit A-3 (in the
        case of the Toggle Notes) attached hereto, as the case may be, by the manual
        signature of the Trustee.  The signature shall be conclusive evidence
        that the Note has been duly authenticated and delivered under this
        Indenture.

       

      On
        the
        Issue Date, the Trustee shall, upon receipt of a written order of the Issuer
        signed by an Officer (an “Issuer Authentication Order”) authenticate and
        deliver the Initial Existing Cash Pay Notes specified in such Issuer
        Authentication Order.  On the date of this First Supplemental
        Indenture, the Trustee shall, upon receipt of an Issuer Authentication Order,
        authenticate and deliver the Initial Series B Cash Pay Notes and the Initial
        Toggle Notes.  In addition, at any time, and from time to time, the
        Trustee shall, upon receipt of an Issuer Authentication Order, authenticate
        and
        deliver any Additional Notes, Exchange Notes or PIK Notes (or increases in
        the
        principal amount of any Toggle Notes) as a result of a PIK Payment, for an
        aggregate principal amount specified in such Issuer Authentication Order
        for
        such Additional Notes, Exchange Notes or PIK Notes (or increases in the
        principal amount of such Toggle Notes).

       

      On
        any
        Interest Payment Date on which the Issuer pays PIK Interest with respect
        to a
        Global Note, the Trustee shall increase the principal amount of such Global
        Note
        by an amount equal to the interest payable, rounded up to the nearest $1,000,
        for the relevant interest period on the principal amount of such Global Note
        as
        of the relevant Record Date, for such Interest Payment Date, to the credit
        of
        the Holders on such Record Date, prorata in
        accordance with their interests, and an adjustment shall be made on the books
        and records of the Trustee (if it is then the Custodian for such Global Note)
        with respect to such Global Note, by the Trustee or the Custodian, to reflect
        such increase. On any Interest Payment Date on which the Issuer pays PIK
        Interest by issuing definitive PIK Notes, the principal amount of any such
        PIK
        Notes issued to any Holder, for the relevant interest period as of the relevant
        Record Date for such Interest Payment Date, shall be rounded up to the nearest
        $1.00.

       

      The
        Trustee may appoint an authenticating agent acceptable to the Issuer to
        authenticate Notes.  An authenticating agent may authenticate Notes
        whenever the Trustee may do so.  Each reference in this Indenture to
        authentication by the Trustee includes authentication by such
        agent.  An authenticating agent has the same rights as an Agent to
        deal with Holders or an Affiliate of the Issuer.”

       

      
        	
                 

              	
                2.2.5

              	
                The
                  following paragraph will be added to Section
                  2.06(g):

              

      

       

      “(iv)           Tax
        Legend.  The Global Note with respect to the Series B Cash Pay
        Notes and the Toggle Notes and each Definitive Note with respect to the Series
        B
        Cash Pay Notes and the Toggle Notes shall bear the legend in substantially
        the
        following form:

       

      “THIS
        NOTE IS ISSUED WITH ORIGINAL ISSUE
        DISCOUNT FOR PURPOSES OF
        SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE.  A HOLDER MAY
        OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, CLOSING DATE AND
        YIELD TO MATURITY FOR SUCH NOTE BY SUBMITTING A REQUEST FOR SUCH INFORMATION
        TO
        THE ISSUER AT THE FOLLOWING ADDRESS:
        TEXAS COMPETITIVE ELECTRIC
        HOLDINGS COMPANY LLC, ENERGY PLAZA, 1601 BRYAN STREET, DALLAS, TEXAS 75201-3411,
        ATTENTION: GENERAL COUNSEL.”

       

      
        	
                 

              	
                2.3

              	
                Amendments
                  to Article 3.

              

      

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
        	
                 

              	
                2.3.1

              	
                Section
                  3.01 shall be deleted and replaced with the
                  following:

              

      

       

      

       

      “If
        the
        Issuer elects to redeem the Existing Cash Pay Notes, the Series B Cash Pay
        Notes
        or the Toggle Notes, as the case may be, pursuant to Section 3.07 hereof,
        it shall furnish to the Trustee, at least 2 Business Days before notice of
        redemption is required to be mailed or caused to be mailed to Holders pursuant
        to Section 3.03 hereof but not more than 60 days before a Redemption Date,
        an Officer’s Certificate setting forth (i) the paragraph or subparagraph of
        such Notes and/or Section of this Indenture pursuant to which the
        redemption shall occur, (ii) the Redemption Date, (iii) the principal
        amount of such Cash Pay Notes or Toggle Notes, as the case may be, to be
        redeemed and (iv) the redemption price.”

       

      

       

      
        	
                 

              	
                2.3.2

              	
                The
                  first paragraph of paragraph (a) of Section 3.02 shall be deleted
                  and
                  replaced with the following:

              

      

       

      

       

      “If
        less
        than all of the Existing Cash Pay Notes, the Series B Cash Pay Notes or the
        Toggle Notes, as the case may be, are to be redeemed or purchased in an offer
        to
        purchase at any time, the Trustee shall select the Notes of such series to
        be
        redeemed or purchased (a) if the Notes are listed on any national
        securities exchange, in compliance with the requirements of the principal
        national securities exchange on which the Notes are listed, (b) on a
prorata basis to the extent practicable or (c) by lot or such
        similar method in accordance with the procedures of DTC.”

       

      

       

      
        	
                 

              	
                2.3.3

              	
                Paragraph
                  (i) of  Section 3.03 shall be deleted and replaced with the
                  following:

              

      

       

      “(i)           if
        in connection with a redemption of either series of Cash Pay Notes pursuant
        to
        Section 3.07(b) hereof or a redemption of Toggle Notes pursuant to Section
        3.07(f), any condition to such redemption.”

       

      
        	
                 

              	
                2.3.4

              	
                Section
                  3.04 shall be deleted and replaced with the
                  following:

              

      

       

      

       

      “Once
        notice of redemption is mailed in accordance with Section 3.03 hereof,
        Notes called for redemption become irrevocably due and payable on the Redemption
        Date at the redemption price (except as provided for in Section 3.07(b), in
        the case of either series of Cash Pay Notes, and Section 3.07(f), in the
        case of
        Toggle Notes).  The notice, if mailed in a manner herein provided,
        shall be conclusively presumed to have been given, whether or not the Holder
        receives such notice.  In any case, failure to give such notice by
        mail or any defect in the notice to the Holder of any Note designated for
        redemption in whole or in part shall not affect the validity of the proceedings
        for the redemption of any other Note.  Subject to Section 3.05
        hereof, on and after the Redemption Date, interest ceases to accrue on Notes
        or
        portions of Notes called for redemption.”

       

      

       

      
        	
                 

              	
                2.3.5

              	
                Section
                  3.06 shall be deleted and replaced with the
                  following:

              

      

       

      

       

      “Upon
        surrender of a Note that is redeemed or purchased in part, the Issuer shall
        issue and, upon receipt of an Issuer Authentication Order, the Trustee shall
        authenticate for the Holder at the expense of the Issuer a new Note of the
        same
        series equal in principal amount to the unredeemed or unpurchased portion
        of the
        Note surrendered representing the same indebtedness to the extent not redeemed
        or purchased; provided that each new Existing Cash Pay Note, Series B
        Cash Pay Note and Toggle Note (other than PIK Notes) will be in a principal
        amount of $2,000 or an integral multiple of $1,000 in excess
        thereof.  It is understood that, notwithstanding anything in this
        Indenture to the contrary, only an Issuer Authentication Order and not an
        Opinion of Counsel or Officer’s Certificate is required for the Trustee to
        authenticate such new Note.”

       

      

       

      
        	
                 

              	
                2.3.6

              	
                Section
                  3.07 shall be deleted and replaced with the
                  following:

              

      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (a)                 At
        any time prior to November 1, 2011, the Issuer may redeem all or a part of
        each series of Cash Pay Notes at a redemption price equal to 100% of the
        principal amount of the Cash Pay Notes redeemed plus the Applicable
        Premium as of, and accrued and unpaid interest and Additional Interest, if
        any,
        to, the date of redemption (the “Redemption Date”), subject to the right
        of Holders of such Cash Pay Notes of record on the relevant Record Date to
        receive interest due on the relevant Interest Payment Date.

       

      (b)                 Prior
        to November 1, 2010, the Issuer may, at its option, on one or more occasions,
        redeem up to 35% of the aggregate principal amount of each series of Cash
        Pay
        Notes at a redemption price equal to 110.250% of the aggregate principal
        amount
        thereof, plus accrued and unpaid interest and Additional Interest, if any,
        to
        the Redemption Date, subject to the right of Holders of such Cash Pay Notes
        of
        record on the relevant Record Date to receive interest due on the relevant
        Interest Payment Date, with the net cash proceeds of one or more Equity
        Offerings; provided that at least 50% of the sum of the original
        aggregate principal amount of such series of Cash Pay Notes and any Additional
        Cash Pay Notes of such series issued under this Indenture after the Issue
        Date
        remains outstanding immediately after the occurrence of each such redemption;
        providedfurther that each such redemption occurs within 90 days of
        the date of closing of each such Equity Offering.  Notice of any
        redemption upon any Equity Offerings may be given prior to the redemption
        thereof, and any such redemption or notice may, at the Issuer’s option and
        discretion, be subject to one or more conditions precedent, including, but
        not
        limited to, completion of the related Equity Offering.

       

      (c)                 Except
        pursuant to clause (a) and (b) of this Section 3.07, the Cash Pay
        Notes will not be redeemable at the Issuer’s option prior to November 1,
        2011.

       

      (d)                 From
        and after November 11, 2011, the Issuer may redeem each series of Cash Pay
        Notes, in whole or in part at the redemption prices (expressed as percentages
        of
        principal amount of the Cash Pay Notes to be redeemed) set forth below,
plus accrued and unpaid interest and Additional Interest, if any, to
        the
        Redemption Date, subject to the right of Holders of such Cash Pay Notes of
        record on the relevant Record Date to receive interest due on the relevant
        Interest Payment Date if redeemed during the twelve-month period beginning
        on
        November 1 of each of the years indicated below:

       

      
        	
                Year

              	 	
                Percentage

              	 
	
                2011                                                                                        

              	 	 	105.125	%
	
                2012                                                                                        

              	 	 	102.563	%
	
                2013
                  and
                  thereafter                                                                                        

              	 	 	100.000	%
	 	 	 	 	 

      

      

      (e)                 At
        any time prior to November 1, 2012, the Issuer may redeem all or a part of
        the
        Toggle Notes at a redemption price equal to 100% of the principal amount
        of the
        Toggle Notes redeemed plus the Applicable Premium as of, and accrued and
        unpaid
        interest and Additional Interest, if any, to the Redemption Date, subject
        to the
        rights of Holders of Toggle Notes on the relevant Record Date to receive
        interest due on the relevant Interest Payment Date.

       

      (f)                 Prior
        to November 1, 2010, the Issuer may, at its option, on one or more occasions
        redeem up to 35% of the aggregate principal amount of Toggle Notes at a
        redemption price equal to 110.500% of the aggregate principal amount thereof,
        plus accrued and unpaid interest thereon and Additional Interest, if any,
        to the
        applicable Redemption 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Date,
        subject to the right of Holders of Toggle Notes of record on the relevant
        Record
        Date to receive interest due on the relevant Interest Payment Date, with
        the net
        cash proceeds of one or more Equity Offerings; provided that at least
        50% of the sum of the original aggregate principal amount of Initial Toggle
        Notes issued under the Indenture and the original principal amount of any
        Additional Toggle Notes issued under the Indenture remains outstanding
        immediately after the occurrence of each such redemption; provided
        further that each such redemption occurs within 90 days of the date of
        closing of each such Equity Offering.

       

      (g)                 Except
        pursuant to clause (e) and (f) of this Section 3.07, the Issuer will
        not be entitled to redeem Toggle Notes at its option prior to November 1,
        2012.

       

      (h)                 On
        and after November 1, 2012, the Issuer may redeem the Toggle Notes, in whole
        or
        in part at the redemption prices (expressed as percentages of principal amount
        of the Toggle Notes to be redeemed) set forth below, plus accrued and unpaid
        interest thereon and Additional Interest, if any, to the applicable Redemption
        Date, subject to the right of Holders of Toggle Notes of record on the relevant
        Record Date to receive interest due on the relevant Interest Payment Date,
        if
        redeemed during the twelve-month period beginning on November 1 of each of
        the
        years indicated below:

       

      
        	
                
                  Year

                

              	 	
                
                  Percentage

                

              	 
	
                2012                                                                       

              	 	 	105.250	%
	
                2013                                                                       

              	 	 	103.500	%
	
                2014                                                                       

              	 	 	101.750	%
	
                2015
                  and
                  thereafter                                                                       

              	 	 	100.000	%

      

      

      (i)                 Any
        redemption pursuant to this Section 3.07 shall be made pursuant to the
        provisions of Sections 3.01 through 3.06 hereof.”

       

      
        	
                 

              	
                2.3.7

              	
                Section
                  3.08 shall be deleted and replaced with the
                  following:

              

      

       

      “Except
        as set forth in Section 4.01 hereof with respect to the Toggle Notes, the
        Issuer
        will not be required to make any mandatory redemption or sinking fund payments
        with respect to the Notes.”

       

      

       

      
        	
                 

              	
                2.4

              	
                Amendments
                  to Article 4.

              

      

       

      
        	
                 

              	
                2.4.1

              	
                Section
                  4.01 shall be deleted and replaced with the
                  following:

              

      

       

      “The
        Issuer shall pay or cause to be paid the principal of, premium, if any,
        Additional Interest, if any, and interest on the Notes on the dates and in
        the
        manner provided in the Notes.  Principal, premium, if any, Additional
        Interest, if any, and interest, including Cash Interest, shall be considered
        paid on the date due if the Paying Agent, if other than the Issuer or a
        Subsidiary, holds as of noon Eastern Time on the due date money deposited
        by the
        Issuer in immediately available funds and designated for and sufficient to
        pay
        all principal, premium, if any, and interest then due. PIK Interest shall
        be
        considered paid on the date due if the Trustee is directed on or prior to
        such
        date to issue PIK Notes or increase the principal amount of the applicable
        Toggle Notes, in each case in an amount equal to the amount of the applicable
        PIK Interest.

       

      The
        Issuer shall pay all Additional Interest, if any, in the same manner on the
        dates and in the amounts set forth in the applicable Registration Rights
        Agreement.

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      The
        Issuer shall pay interest (including post-petition interest in any proceeding
        under any Bankruptcy Law) on overdue principal at the rate equal to the then
        applicable interest rate on the Notes to the extent lawful; it shall pay
        interest (including post-petition interest in any proceeding under any
        Bankruptcy Law) on overdue installments of interest and Additional Interest,
        if
        any (without regard to any applicable grace period) at the same rate to the
        extent lawful.

       

      At
        the
        end of any “accrual period” (as defined in Section 1272(a)(5) of the Code)
        ending after the fifth anniversary of the date of the First Supplemental
        Indenture (each, an “Optional Interest Repayment Date”), the Issuer may pay in
        cash, without duplication, all accrued and unpaid interest, if any, and all
        accrued but unpaid “original issue discount” (as defined in Section 1273(a)(1)
        of the Code) on the Toggle Notes then outstanding up to, in the aggregate,
        the
        Optional Interest Repayment Amount (each such redemption, an “Optional Interest
        Repayment”). The “Optional Interest Repayment Amount” shall mean, as of each
        Optional Interest Repayment Date, the excess, if any, of (a) the aggregate
        amount of accrued and unpaid interest and all accrued and unpaid “original issue
        discount” (as defined in Section 1273(a)(1) of the Code) with respect to the
        Toggle Notes, over (b) an amount equal to the product of (i) the “issue price”
(as defined in Sections 1273(b) and 1274(a) of the Code) of the Toggle Notes
        multiplied by (ii) the “yield to maturity” (as defined in the Treasury
        Regulation Section 1.1272-1(b)(1)(i)) of the Toggle Notes, minus (c)
        $50,000,000.

       

      On
        May 1,
        2016, the Issuer will repay in full in U.S. Dollars an amount of Toggle Notes
        equal to $50,000,000, which shall be made on a pro rata basis based on the
        aggregate principal amount of Toggle Notes outstanding.  Prepayments
        of Toggle Notes made pursuant to the preceding sentence shall be made on
        a
pro rata basis based on the aggregate principal amount of Toggle Notes
        outstanding.”

       

      
        	
                 

              	
                2.5

              	
                Amendments
                  to Article 9.

              

      

       

      
        	
                 

              	
                2.5.1

              	
                Clause
                  (11) of Section 9.01 shall be deleted and replaced with the
                  following:

              

      

       

      “(11)                      to
        conform the text of this Indenture, the Guarantees or the Notes to anyprovision
        of the “Description of Notes” section of the applicable Offering Memorandum to
        theextent that such provision in the “Description of Notes” is intended to be a
        verbatim recitation of a provision of this Indenture, the Guarantee or the
        Notes;”

       

      
        	
                 

              	
                2.5.2

              	
                The
                  following clause (14) shall be added to the first paragraph of
                  Section
                  9.01:

              

      

       

      “(14)                      in
        the event that PIK Notes are issued in certificated form, to make appropriate
        amendments to this Indenture to reflect an appropriate minimum denomination
        of
        certificated PIK Notes and establish minimum redemption amounts for certificated
        PIK Notes.”

       

      
        	
                 

              	
                2.6

              	
                Amendments
                  to Exhibits.

              

      

       

      
        	
                 

              	
                2.6.1

              	
                Exhibit
                  A-1 of the Existing Indenture shall be deleted and replaced with
                  Exhibit
                  A-1 to this First Supplemental
                  Indenture.

              

      

       

      
        	
                 

              	
                2.6.2

              	
                Exhibits
                  A-2 and A-3 to this First Supplemental Indenture shall be added
                  to the
                  Existing Indenture.

              

      

       

      
        	
                 

              	
                2.6.3

              	
                Exhibits
                  B, C and D of the Existing Indenture shall be deleted and replaced
                  with
                  Exhibits B, C and D to this First Supplemental
                  Indenture.

              

      

       

      
        	
                                 2.7

              	
                Other
                  Amendments

              

      

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      All
        references in the Existing Indenture and the Initial Existing Cash Pay Notes
        to
“Texas Competitive Electric Holdings Company LLC, a Texas limited liability
        company” and “TCEH Finance, Inc., a Texas corporation” are hereby deleted and
        replaced with “Texas Competitive Electric Holdings Company LLC, a Delaware
        limited liability company” and “TCEH Finance, Inc., a Delaware corporation,”
respectively.

       

      
        	
                Section
                  3.

              	
                RATIFICATION
                  OF EXISTING INDENTURE; FIRST SUPPLEMENTAL INDENTURE PART OF EXISTING
                  INDENTURE.

              

      

       

        Except
        as expressly amended hereby, the Existing Indenture is in all respects ratified
        and confirmed and all the terms, conditions and provisions thereof shall
        remain
        in full force and effect.  Upon the execution and delivery of this
        First Supplemental Indenture by the Issuer, the Guarantors and the Trustee,
        this
        First Supplemental Indenture shall form a part of the Existing Indenture
        for all
        purposes, and the Issuer, the Guarantors, the Trustee and every Holder of
        Notes
        heretofore or hereafter authenticated and delivered shall be bound
        hereby.  Any and all references to the Existing Indenture, whether
        within the Existing Indenture or in any notice, certificate or other instrument
        or document, shall be deemed to include a reference to this First Supplemental
        Indenture (whether or not made), unless the context shall otherwise
        require.

      

      
        	
                Section
                  4.

              	
                NO
                  EXCHANGE OF EXISTING NOTES
                  REQUIRED.

              

      

       

       The
        execution of this First Supplemental Indenture shall not require the exchange
        of
        or modification to the certificates representing Notes existing prior to
        the
        date hereof.

      

      
        	
                Section
                  5.

              	
                GOVERNING
                  LAW.

              

      

       

      THIS
        FIRST SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
        WITH, THE LAWS OF THE STATE OF NEW YORK.

       

      
        	
                Section
                  6.

              	
                COUNTERPARTS.

              

      

       

      The
        parties may sign any number of copies of this First Supplemental
        Indenture.  Each signed copy shall be an original, but all of them
        together represent the same agreement.

       

      
        	
                Section
                  7.

              	
                EFFECT
                  OF HEADINGS.

              

      

       

      The
        Section headings herein are for convenience only and shall not affect the
        construction hereof.

       

      
        	
                Section
                  8.

              	
                THE
                  TRUSTEE.

              

      

       

      The
        Trustee shall not be responsible in any manner whatsoever for or in respect
        of
        the validity or sufficiency of this First Supplemental Indenture or for or
        in
        respect of the recitals contained herein, all of which recitals are made
        solely
        by the Issuer.

       

      
        	
                Section
                  9.

              	
                BENEFITS
                  OF FIRST SUPPLEMENTAL INDENTURE.

              

      

       

        Nothing
        in this First Supplemental Indenture, the Existing Indenture or the Notes
        express or implied, shall give to any Person, other than the parties hereto
        and
        thereto and their successors hereunder and thereunder, any Paying Agent,
        any
        Registrar and the Holders any benefit of any legal or equitable right, remedy
        or
        claim under the Existing Indenture, this First Supplemental Indenture or
        the
        Notes.

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      
        	
                Section
                  10.

              	
                SUCCESSORS.

              

      

       

      All
        agreements of the Issuer in this First Supplemental Indenture shall bind
        its
        Successors.  All agreements of the Trustee in this First Supplemental
        Indenture shall bind its successors.

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this First Supplemental
        Indenture to be duly executed, all as of the date first above
        written.

       

      
        	 	
                TEXAS
                  COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

              
	 	 
	 	 
	 	 
	 	
                By:                                                                 

              
	 	
                Name:   Anthony
                  R. Horton

              
	 	
                Title:     Treasurer
                  and Assistant Secretary

              
	 	 

      

       

      
 

      
        
          SIGNATURE
            PAGE TO SUPPLEMENTAL INDENTURE

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	
                TCEH
                  FINANCE, INC.

              
	 	 
	 	 
	 	
                By:                                                                 

              
	 	
                Name:   Jonathan
                  D. Smidt

              
	 	
                Title:     President
                  and Treasurer

              

      

      

      

      

      
        
          SIGNATURE
            PAGE TO SUPPLEMENTAL INDENTURE

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	
                ENERGY
                  FUTURE COMPETITIVE HOLDINGS COMPANY

              
	 	 
	 	 
	 	
                By:                                                                 

              
	 	
                Name:   Anthony
                  R. Horton

              
	 	
                Title:     Treasurer

              
	 	 
	 	 

      

       

      
 

      
        
          SIGNATURE
            PAGE TO SUPPLEMENTAL INDENTURE

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	
                BIG
                  BROWN 3 POWER COMPANY LLC

              
	 	
                BIG
                  BROWN LIGNITE COMPANY LLC

              
	 	
                BIG
                  BROWN POWER COMPANY LLC

              
	 	
                COLLIN
                  POWER COMPANY LLC

              
	 	
                DECORDOVA
                  POWER COMPANY LLC

              
	 	
                GENERATION
                  MT COMPANY LLC

              
	 	
                GENERATION
                  SVC COMPANY

              
	 	
                LAKE
                  CREEK 3 POWER COMPANY LLC

              
	 	
                LUMINANT
                  BIG BROWN MINING COMPANY LLC

              
	 	
                LUMINANT
                  ENERGY COMPANY LLC

              
	 	
                LUMINANT
                  ENERGY SERVICES COMPANY

              
	 	
                LUMINANT
                  GENERATION COMPANY LLC

              
	 	
                LUMINANT
                  HOLDING COMPANY LLC

              
	 	
                LUMINANT
                  MINERAL DEVELOPMENT COMPANY LLC

              
	 	
                LUMINANT
                  MINING COMPANY LLC

              
	 	
                LUMINANT
                  MINING SERVICES COMPANY

              
	 	
                LUMINANT
                  POWER SERVICES COMPANY

              
	 	
                LUMINANT
                  RENEWABLES COMPANY LLC

              
	 	
                MARTIN
                  LAKE 4 POWER COMPANY LLC

              
	 	
                MONTICELLO
                  4 POWER COMPANY LLC

              
	 	
                MORGAN
                  CREEK 7 POWER COMPANY LLC

              
	 	
                NCA
                  RESOURCES DEVELOPMENT COMPANY LLC

              
	 	
                OAK
                  GROVE MANAGEMENT COMPANY LLC

              
	 	
                OAK
                  GROVE MINING COMPANY LLC

              
	 	
                OAK
                  GROVE POWER COMPANY LLC

              
	 	
                SANDOW
                  POWER COMPANY LLC

              
	 	
                TRADINGHOUSE
                  3 & 4 POWER COMPANY LLC

              
	 	
                TRADINGHOUSE
                  POWER COMPANY LLC

              
	 	
                TXU
                  CHILLED WATER SOLUTIONS COMPANY

              
	 	
                TXU
                  ENERGY RETAIL COMPANY LLC

              
	 	
                TXU
                  ENERGY RETAIL MANAGEMENT COMPANY LLC

              
	 	
                TXU
                  ENERGY SOLUTIONS COMPANY LLC

              
	 	
                TXU
                  ENERGY TRADING (CALIFORNIA) COMPANY

              
	 	
                TXU
                  ET SERVICES COMPANY

              
	 	
                TXU
                  RETAIL SERVICES COMPANY

              
	 	
                TXU
                  SEM COMPANY

              
	 	
                TXU
                  SESCO COMPANY LLC

              
	 	
                TXU
                  SESCO ENERGY SERVICES COMPANY

              
	 	
                VALLEY
                  NG POWER COMPANY LLC

              
	 	
                VALLEY
                  POWER COMPANY LLC

              
	 	
                WICHITA/VICTORY
                  AVE., LLC

              
	 	 
	 	 
	 	
                By:                                                                         

              
	 	
                Name:  Anthony
                  R. Horton

              
	 	
                Title:    Authorized
                  Representative

              
	 	 

      

       

      
 

      
        
          SIGNATURE
            PAGE TO SUPPLEMENTAL INDENTURE

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	
                THE
                  BANK OF NEW YORK, as Trustee

              
	 	 
	 	 
	 	
                By:                                                                         

              
	 	
                Name:

              
	 	
                Title:

              

      

      

      

      
        
          SIGNATURE
            PAGE TO SUPPLEMENTAL INDENTURE

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXHIBIT A-1

       

      [Face
        of
        Existing Cash Pay Note]

       

      [Insert
        the Global Note Legend, if applicable pursuant to the provisions of the
        Indenture]

       

      [Insert
        the Private Placement Legend, if applicable pursuant to the provisions of
        the
        Indenture]

       

      [Insert
        the Regulation S Temporary Global Note Legend, if applicable pursuant to
        the provisions of the Indenture]

       

      CUSIP
        [               ]

      ISIN
        [               ]1

       

      [RULE 144A]
        [REGULATION S]  GLOBAL NOTE

       

      10.25%
        Senior Notes due 2015

       

      No.___                                                                                                                
                                                                                               [$______________]

       

      TEXAS
        COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

      TCEH
        FINANCE, INC.

      

      promise
        to pay to CEDE & CO. or registered assigns, the principal sum [set forth on
        the Schedule of Exchanges of Interests in the Global Note attached hereto]
        [of
        ________________________ United States Dollars] on November 1,
        2015.

       

      Interest
        Payment Dates:  May 1 and November 1

       

      Record
        Dates:  April 15 and October 15

       

      

       

      

       

      

       

      [SIGNATURE
        PAGE FOLLOWS]

       

      

        

      

        
        
          	
                  1

                	
                  Rule
                    144A Note CUSIP:

                	
                  882330
                    AA1

                
	 	
                  Rule
                    144A Note ISIN:

                	
                  US882330
                    AA18

                
	 	
                  Regulation
                    S Note CUSIP:

                	
                  U88235
                    AC7

                
	 	
                  Regulation
                    S Note ISIN:

                	
                  USU88235
                    AC76

                

        

         

         

        
          
            A-1-1

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      IN
        WITNESS HEREOF, the Issuer has caused this instrument to be duly
        executed.

       

      Dated:  _____________,
        20__

       

      
        	
                TEXAS
                  COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

              
	 
	 
	
                By:                                                                         

              
	
                Name:

              
	
                Title:

              

      

       

      
 

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] CASH-PAY NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                TCEH
                  FINANCE, INC.

              
	 
	 
	
                By:                                                                         

              
	
                Name:

              
	
                Title:

              

      

       

      
 

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] CASH-PAY NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

      This
        is
        one of the Existing Cash Pay Notes referred to in the within-mentioned
        Indenture:

       

      
        	
                THE
                  BANK OF NEW YORK, as Trustee

              
	 
	 
	
                By:                                                              

              
	
                Authorized
                  Signatory

              

      

       

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] CASH-PAY NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      [Back
        of
        Existing Cash Pay Note]

       

      Capitalized
        terms used herein shall have the meanings assigned to them in the Indenture
        referred to below unless otherwise indicated.

       

      (1)           Interest.  Texas
        Competitive Electric Holding Company LLC, a Delaware limited liability company
        and TCEH Finance, Inc., a Delaware corporation (collectively, the
“Issuers”), promise to pay interest on the principal amount of this
        Existing Cash Pay Note at 10.25% perannum from October 31, 2007
        until maturity and shall pay Additional Interest, if any, payable pursuant
        to
        the Registration Rights Agreement referred to below.  The Issuer will
        pay interest and Additional Interest, if any, semi-annually in arrears on
        May 1 and November 1 of each year, or if any such day is not a Business
        Day, on the next succeeding Business Day (each, an “Interest Payment
        Date”) without interest accruing on the amount then so payable from such day
        that is not a Business Day until such Business Day.  Interest on the
        Existing Cash Pay Notes will accrue from the most recent date to which interest
        has been paid or, if no interest has been paid, from the date of
        issuance.  The Issuer will pay interest (including post-petition
        interest in any proceeding under any Bankruptcy Law) on overdue principal
        and
        premium, if any, from time to time on demand at the interest rate on the
        Existing Cash Pay Notes; it shall pay interest (including post-petition interest
        in any proceeding under any Bankruptcy Law) on overdue installments of interest
        and Additional Interest, if any, (without regard to any applicable grace
        periods) from time to time on demand at the interest rate on the Existing
        Cash
        Pay Notes.  Interest will be computed on the basis of a 360-day year
        comprised of twelve 30-day months.

       

      (2)           Method
        of Payment.  The Issuer will pay interest on the Existing Cash
        Pay Notes and Additional Interest, if any, to the Persons who are registered
        Holders of Existing Cash Pay Notes at the close of business on the April 15
        and October 15 (whether or not a Business Day), next preceding the Interest
        Payment Date, even if such Existing Cash Pay Notes are canceled after such
        Record Date and on or before such Interest Payment Date, except as provided
        in
        Section 2.12 of the Indenture with respect to defaulted
        interest.  Payment of interest and Additional Interest, if any, may be
        made by check mailed to the Holders at their addresses set forth in the register
        of Holders; provided that payment by wire transfer of immediately
        available funds will be required with respect to principal of and interest,
        premium and Additional Interest, if any, on, all Global Notes and all other
        Existing Cash Pay Notes the Holders of which shall have provided wire transfer
        instructions to the Issuer or the Paying Agent.  Such payment shall be
        in such coin or currency of the United States of America as at the time of
        payment is legal tender for payment of public and private debts.

       

      (3)           Paying
        Agent and Registrar.  Initially, The Bank of New York, the
        Trustee under the Indenture, will act as Paying Agent and
        Registrar.  The Issuer may change any Paying Agent or Registrar
        without notice to the Holders.  The Issuer or any of its Subsidiaries
        may act in any such capacity.

       

      (4)           Indenture.  The
        Issuer issued the Existing Cash Pay Notes under an Indenture, dated as of
        October 31, 2007 (the “Existing Indenture”), among the Issuer, the
        Guarantors named therein and the Trustee.  The Existing Indenture was
        supplemented by the First Supplemental Indenture dated as of December 6,
        2007
        among the Issuer, the Guarantors named therein and the Trustee (the Existing
        Indenture as supplemented, the “Indenture”).  This Existing Cash Pay
        Note is one of a duly authorized issue of notes of the Issuer designated
        as its
        10.25% Senior Notes due 2015.  The Issuer shall be entitled to issue
        Additional Existing Cash Pay Notes pursuant to Sections 2.01 and 4.09 of
        the
        Indenture.  The Existing Cash Pay Notes (including any Exchange Notes
        issued in exchange therefor), the Series B Cash Pay Notes (including any
        Exchange Notes issued in exchange therefor) and the Toggle Notes (including
        any
        Exchange Notes issued in exchange therefor) (collectively referred to herein
        as
        the “Notes”) are separate series of Senior Notes, but shall be treated as
        a single class of securities under the Indenture, unless otherwise specified
        in
        the Indenture.  The terms of the Existing Cash Pay Notes include those

       

      
        
          A-1-5

        

        
          
          

          
            

          

        

        
          
          

        

      

      stated
        in
        the Indenture and those made part of the Indenture by reference to the Trust
        Indenture Act of 1939, as amended (the “Trust Indenture
        Act”).  The Existing Cash Pay Notes are subject to all such terms,
        and Holders are referred to the Indenture and such Act for a statement of
        such
        terms.  To the extent any provision of this Existing Cash Pay Note
        conflicts with the express provisions of the Indenture, the provisions of
        the
        Indenture shall govern and be controlling.

       

      (5)           Optional
        Redemption.

       

      (a)           Except
        as set forth below, the Issuer will not be entitled to redeem Existing Cash
        Pay
        Notes at its option prior to November 1, 2011.

       

      (b)           At
        any time prior to November 1, 2011, the Issuer may redeem all or a part of
        the
        Existing Cash Pay Notes, at a redemption price equal to 100% of the principal
        amount of the Existing Cash Pay Notes redeemed plus the Applicable
        Premium as of, and accrued and unpaid interest, and Additional Interest,
        if any,
        to, the date of redemption (the “Redemption Date”), subject to the right
        of Holders of Existing Cash Pay Notes of record on the relevant Record Date
        to
        receive interest due on the relevant Interest Payment Date.

       

      (c)           From
        and after November 1, 2011, the Issuer may redeem the Existing Cash Pay Notes,
        in whole or in part, at the redemption prices (expressed as percentages of
        the
        principal amount of the Existing Cash Pay Notes to be redeemed) set forth
        below,
plus accrued and unpaid interest and Additional Interest, if any, to
        the
        applicable Redemption Date, subject to the right of Holders of Existing Cash
        Pay
        Notes of record on the relevant Record Date to receive interest due on the
        relevant Interest Payment Date if redeemed during the twelve-month period
        beginning on November 1 of each of the years indicated below:

       

      
        	
                Year

              	 	
                Percentage

              	 
	
                2011                                                                                        

              	 	 	105.125	%
	
                2012                                                                                        

              	 	 	102.563	%
	
                2013
                  and
                  thereafter                                                                                        

              	 	 	100.000	%

      

      

      (d)           Prior
        to November 1, 2010, the Issuer may, at its option, on one or more occasions,
        redeem up to 35% of the aggregate principal amount of the Existing Cash Pay
        Notes at a redemption price equal to 110.250% of the aggregate principal
        amount
        thereof, plus accrued and unpaid interest and Additional Interest, if
        any, to the Redemption Date, subject to the right of Holders of Existing Cash
        Pay Notes of record on the relevant Record Date to receive interest due on
        the
        relevant Interest Payment Date, with the net cash proceeds of one or more
        Equity
        Offerings; provided that at least 50% of the sum of the original
        aggregate principal amount of Existing Cash Pay Notes and any Additional
        Existing Cash Pay Notes issued under the Indenture after the Issue Date remains
        outstanding immediately after the occurrence of each such redemption;
providedfurther that each such redemption occurs within 90 days of
        the date of closing of each such Equity Offering.  Notice of any
        redemption upon any Equity Offerings may be given prior to the redemption
        thereof, and any such redemption or notice may, at the Issuer’s discretion, be
        subject to one or more conditions precedent, including, but not limited to,
        completion of the related Equity Offering.

       

      (e)           If
        the Issuer redeems less than all of the outstanding Existing Cash Pay Notes,
        the
        Trustee shall select the Existing Cash Pay Notes to be redeemed in the manner
        described under Section 3.02 of the Indenture.

       

      (f)           Any
        redemption pursuant to this paragraph 5 shall be made pursuant to the provisions
        of Sections 3.01 through 3.06 of the Indenture.

       

       

      
        
          A-1-6

        

        
          
          

          
            

          

        

        
          
          

        

      

      (6)           Mandatory
        Redemption.  The Issuer shall not be required to make mandatory
        redemption or sinking fund payments with respect to the Existing Cash Pay
        Notes.

       

      (7)           Notice
        of Redemption.  Subject to Section 3.03 of the Indenture,
        notice of redemption will be mailed by first-class mail at least 30 days
        but not
        more than 60 days before the Redemption Date (except that redemption notices
        may
        be mailed more than 60 days prior to a Redemption Date if the notice is issued
        in connection with Article 8 or Article 11 of the Indenture) to each
        Holder whose Existing Cash Pay Notes are to be redeemed at its registered
        address or otherwise in accordance with the procedures of
        DTC.  Existing Cash Pay Notes in denominations larger than $2,000 may
        be redeemed in part but only in whole multiples of $1,000 in excess thereof,
        unless all of the Existing Cash Pay Notes held by a Holder are to be
        redeemed.  On and after the Redemption Date interest ceases to accrue
        on Existing Cash Pay Notes or portions thereof called for
        redemption.

       

      (8)           Offers
        to Repurchase.

       

      (a)           If
        a Change of Control occurs, the Issuer shall make an offer (a “Change of
        Control Offer”) to each Holder to purchase all or any part (equal to $2,000
        or an integral multiple of $1,000 in excess thereof) of each Holder’s Existing
        Cash Pay Notes at a purchase price equal to 101% of the aggregate principal
        amount thereof plus accrued and unpaid interest and Additional Interest,
        if any, to the date of purchase (the “Change of Control Payment”),
        subject to the right of Holders of Existing Cash Pay Notes of record on the
        relevant Record Date to receive interest due on the relevant Interest Payment
        Date. The Change of Control Offer shall be made in accordance with
        Section 4.14 of the Indenture.

       

      (b)           If
        the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale,
        within ten Business Days of each date that the aggregate amount of Excess
        Proceeds exceeds $200.0 million, the Issuer shall make an offer to all Holders
        of the Notes, and if required or permitted by the terms of any Senior
        Indebtedness, to the holders of such Senior Indebtedness (an “Asset Sale
        Offer”), to purchase the maximum aggregate principal amount of the Notes and
        such Senior Indebtedness that is a minimum of $2,000 or an integral multiple
        of
        $1,000 in excess thereof that may be purchased out of the Excess Proceeds
        at an
        offer price in cash in an amount equal to 100% of the principal amount thereof,
        plus accrued and unpaid interest and Additional Interest, if any, to
        the
        date fixed for the closing of such offer, in accordance with the procedures
        set
        forth in the Indenture.  To the extent that the aggregate amount of
        Notes and such Senior Indebtedness tendered pursuant to an Asset Sale Offer
        is
        less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds
        to make Restricted Payments to the extent permitted by clause (16) of
        Section 4.07(b) of the Indenture.  If the aggregate principal
        amount of Notes or such Senior Indebtedness surrendered by such holders thereof
        exceeds the amount of Excess Proceeds, the Trustee shall select the Notes
        and
        such Senior Indebtedness to be purchased on a pro rata basis based on
        the accreted value or principal amount of the Notes or such Senior Indebtedness
        tendered.

       

      (c)           The
        Issuer may, at its option, make an Asset Sale Offer using proceeds from any
        Asset Sale at any time after consummation of such Asset Sale; provided
        that such Asset Sale Offer shall be in an aggregate amount of not less than
        $25.0 million.  Upon consummation of such Asset Sale Offer, any Net
        Proceeds not required to be used to purchase Notes shall not be deemed Excess
        Proceeds.

       

      (9)           Denominations,
        Transfer, Exchange.  The Existing Cash Pay Notes are in
        registered form without coupons in denominations of $2,000 and integral
        multiples of $1,000 in excess thereof.  The transfer of Existing Cash
        Pay Notes may be registered and Existing Cash Pay Notes may be exchanged
        as
        provided in the Indenture.  The Registrar and the Trustee may require
        a Holder, among other things, to furnish appropriate endorsements and transfer
        documents and the Issuer may require a Holder to pay any taxes and fees required
        by law or permitted by the Indenture.  The Issuer need not exchange or
        register the transfer of any Existing Cash Pay Notes or portion of Existing
        Cash
        Pay Notes selected for redemption, 

       

      
        
          A-1-7

        

        
          
          

          
            

          

        

        
          
          

        

      

      except
        for the unredeemed portion of any Existing Cash Pay Notes being redeemed
        in
        part.  Also, the Issuer need not exchange or register the transfer of
        any Existing Cash Pay Notes for a period of 15 days before a selection of
        Existing Cash Pay Notes to be redeemed.

       

      (10)           Persons
        Deemed Owners.  The registered Holder of an Existing Cash Pay
        Note may be treated as its owner for all purposes.

       

      (11)           Amendment,
        Supplement and Waiver.  The Indenture, the Guarantees or the
        Existing Cash Pay Notes may be amended or supplemented as provided in the
        Indenture.

       

      (12)           Defaults
        and Remedies.  The Events of Default relating to the Notes are
        defined in Section 6.01 of the Indenture.  If any Event of
        Default occurs and is continuing, the Trustee or the Required Holders of
        at
        least 30% in aggregate principal amount of the Required Debt may declare
        the
        principal, premium, if any, interest and any other monetary obligations on
        all
        the then outstanding Notes to be due and payable
        immediately.  Notwithstanding the foregoing, in the case of an Event
        of Default arising from certain events of bankruptcy or insolvency, all
        outstanding Notes will become due and payable immediately without further
        action
        or notice.  Holders may not enforce the Indenture, the Notes or the
        Guarantees except as provided in the Indenture.  Subject to certain
        limitations, Required Holders of a majority in aggregate principal amount
        of the
        Required Debt may direct the Trustee in its exercise of any trust or
        power.  The Trustee may withhold from Holders of the Notes notice of
        any continuing Default (except a Default relating to the payment of principal,
        premium, if any, Additional Interest, if any, or interest) if it determines
        that
        withholding notice is in their interest.  The Required Holders of a
        majority in aggregate principal amount of the Required Debt by notice to
        the
        Trustee may on behalf of the Holders of all of the Notes waive any existing
        Default or and its consequences under the Indenture except a continuing Default
        in payment of the principal of, premium, if any, Additional Interest, if
        any, or
        interest on, any of the Notes held by a non-consenting Holder.  The
        Issuer and each Guarantor (to the extent that such Guarantor is so required
        under the Trust Indenture Act) is required to deliver to the Trustee annually
        a
        statement regarding compliance with the Indenture, and the Issuer is required
        within five (5) Business Days after becoming aware of any Default, to deliver
        to
        the Trustee a statement specifying such Default and what action the Issuer
        proposes to take with respect thereto.

       

      (13)           Authentication.  This
        Existing Cash Pay Note shall not be entitled to any benefit under the Indenture
        or be valid or obligatory for any purpose until authenticated by the manual
        signature of the Trustee.

       

      (14)           Additional
        Rights of Holders of Restricted Global Notes and Restricted Definitive
        Notes.  In addition to the rights provided to Holders of Existing
        Cash Pay Notes under the Indenture, Holders of Restricted Global Notes and
        Restricted Definitive Notes shall have all the rights set forth in the
        Registration Rights Agreement relating to such Existing Cash Pay Notes,
        including the right to receive Additional Interest, if any (as defined in
        such
        Registration Rights Agreement).

       

      (15)           GOVERNING
        LAW.  THE INDENTURE, THE EXISTING CASH PAY NOTES AND ANY
        GUARANTEE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
        OF THE
        STATE OF NEW YORK.

       

      (16)           CUSIP/ISIN
        Numbers.  Pursuant to a recommendation promulgated by the
        Committee on Uniform Security Identification Procedures, the Issuer has caused
        CUSIP/ISIN numbers to be printed on the Existing Cash Pay Notes and the Trustee
        may use CUSIP/ISIN numbers in notices of redemption as a convenience to
        Holders.  No representation is made as to the accuracy of such numbers
        either as printed on the Existing Cash Pay Notes or as contained in any notice
        of redemption and reliance may be placed only on the other identification
        numbers placed thereon.

       

      
        
          A-1-8

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
        Issuer will furnish to any Holder upon written request and without charge
        a copy
        of the Indenture and/or the Registration Rights Agreement relating to the
        Existing Cash Pay Notes.  Requests may be made to the Issuer at the
        following address:

       

      
        	
                c/o
                  Texas Competitive Electric Holdings Company LLC

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              

      

      

      
        	
                c/o
                  TCEH Finance, Inc.

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              

      

      

       

      
        
          A-1-9

        

        
          
          

          
            

          

        

        
          
          

        

      

      ASSIGNMENT
        FORM

       

          To
        assign this
        Existing Cash Pay Note, fill in the form below:

       

      
        
          	
                  (I)
                    or (we) assign and transfer this Existing Cash Pay Note
                    to:

                	 
	 	
                  (Insert
                    assignee’s legal name)

                
	 
	 
	
                  (Insert
                    assignee’s Soc. Sec. or tax I.D. no.)

                
	 
	 
	 
	 
	 
	 
	 
	 
	
                  (Print
                    or type assignee’s name, address and zip
                    code)

                

        

        

        

        and
          irrevocably appoint
          ________________________________________________________________ to transfer
          this Existing Cash Pay Note on the books of the Issuer.  The agent may
          substitute another to act for him.

         

        

         

        
          	
                  Date:

                	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
                  Your
                    Signature

                	 	 
	 	 	
                  (Sign
                    exactly as your name appears on the face of this Existing Cash
                    Pay
                    Note)

                	 
	 	 	 	 
	 	 
	
                  Signature
                    Guarantee*:                                            ___________

                	 

        

      
        	
                *

              	
                Participant
                  in a recognized Signature Guarantee Medallion Program (or other
                  signature
                  guarantor acceptable to the
                  Trustee).

              

      

       

      

      
        
          A-1-10

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      OPTION
        OF HOLDER TO ELECT PURCHASE

       

      If
        you
        want to elect to have this Existing Cash Pay Note purchased by the Issuer
        pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate
        box below:

       

                                                                         o 
        Section 4.10                                            o    
Section 4.14

      
        	
                 

              	
                 

              

      

      If
        you
        want to elect to have only part of this Existing Cash Pay Note purchased
        by the
        Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture,
        state the amount you elect to have purchased:

       

      
        	 	
                $_______________

              
	 	 
	
                Date:  _____________________

              	 
	 	 
	
                 Your
                  Signature: 

              	
                                                                                        

              
	 	
                (Sign
                  exactly as your name appears on the face of this
                  Existing Cash
                  Pay Note)

              
	 	
              
	 	 
	
                 Tax
                  Identification No.:  

              	
                                                                                       

              
	 	 
	
                Signature
                  Guarantee*:                                                                               

              	 

      

      

      *           Participant
        in a recognized Signature Guarantee Medallion Program (or other signature
        guarantor acceptable to the Trustee).

       

      

      
        
          A-1-11

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE1

       

      The
        initial outstanding principal amount of this Global Note is $
        ___________________.  The following exchanges of a part of this Global
        Note for an interest in another Global Note or for a Definitive Note, or
        exchanges of a part of another Global or Definitive Note for an interest
        in this
        Global Note, have been made:

       

      
        	
                
                  Date
                    of Exchange

                

              	 	
                
                  Amount
                    of decrease in Principal Amount

                

              	 	
                
                  Amount
                    of increase

                  in
                    Principal

                  Amount
                    of this

                  Global
                    Note

                

              	 	
                
                  Principal
                    Amount of this Global Note following each decrease or
                    increase

                

              	 	
                
                  Signature
                    of authorized officer of Trustee or
                    Custodian

                

              

      

      
 

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      ______________________  
        
          1           This
            schedule should be included only if the Existing Cash Pay Note is issued
            in
            global form.

        

         

         

        
          
            A-1-12

          

          
            
            

            
              

            

          

          
            
            

          

        

         

      

      EXHIBIT A-2

       

      [Face
        of
        Series B Cash Pay Note]

       

      [Insert
        the Global Note Legend, if applicable pursuant to the provisions of the
        Indenture]

       

      [Insert
        the Private Placement Legend, if applicable pursuant to the provisions of
        the
        Indenture]

       

      [Insert
        the Regulation S Temporary Global Note Legend, if applicable pursuant to
        the provisions of the Indenture]

       

      [Insert
        the Tax Legend, if applicable, pursuant to the provisions of the
        Indenture]

       

      CUSIP
        [               ]

      ISIN
        [               ]1

       

      [RULE 144A]
        [REGULATION S]  GLOBAL NOTE

       

      10.25%
        Senior Notes due 2015, Series B

       

      No.___                                                                                                                                                        
                                                    [$______________]

       

      TEXAS
        COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

      TCEH
        FINANCE, INC.

      

      promise
        to pay to CEDE & CO. or registered assigns, the principal sum [set forth on
        the Schedule of Exchanges of Interests in the Global Note attached hereto]
        [of
        ________________________ United States Dollars] on November 1,
        2015.

       

      Interest
        Payment Dates:  May 1 and November 1

       

      Record
        Dates:  April 15 and October 15

       

      

       

      

       

      

       

      [SIGNATURE
        PAGE FOLLOWS]

       

      ______________________________

       

      
        
          	
                  1

                	
                  Rule
                    144A Note CUSIP:

                	
                  882330
                    AC7

                
	 	
                  Rule
                    144A Note ISIN:

                	
                  US882330AC73

                
	 	
                  Regulation
                    S Note CUSIP:

                	
                  U88235
                    AE3

                
	 	
                  Regulation
                    S Note ISIN:

                	
                  USU88235AE33

                

        

         

      

      
        
          
            A-2-1

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      IN
        WITNESS HEREOF, the Issuer has caused this instrument to be duly
        executed.

       

      Dated:  _____________,
        20__

       

      
        	
                TEXAS
                  COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

              
	 
	 
	
                By:                                                                         

              
	
                Name:

              
	
                Title:

              

      

      

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] CASH-PAY NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                TCEH
                  FINANCE, INC.

              
	 
	 
	
                By:                                                                         

              
	
                Name:

              
	
                Title:

              

      

       

      
 

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] CASH-PAY NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

      This
        is
        one of the Series B Cash Pay Notes referred to in the within-mentioned
        Indenture:

       

      
        	
                THE
                  BANK OF NEW YORK, as Trustee

              
	 
	 
	
                By:                                                              

              
	
                Authorized
                  Signatory

              

      

       

      
 

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] CASH-PAY NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

      [Back
        of
        Series B Cash Pay Note]

       

      Capitalized
        terms used herein shall have the meanings assigned to them in the Indenture
        referred to below unless otherwise indicated.

       

      (1)           Interest.  Texas
        Competitive Electric Holding Company LLC, a Delaware limited liability company
        and TCEH Finance, Inc., a Delaware corporation (collectively, the
“Issuers”), promise to pay interest on the principal amount of this
        Series B Cash Pay Note at 10.25% perannum from October 31, 2007
        until maturity and shall pay Additional Interest, if any, payable pursuant
        to
        the Registration Rights Agreement referred to below.  The Issuer will
        pay interest and Additional Interest, if any, semi-annually in arrears on
        May 1 and November 1 of each year, or if any such day is not a Business
        Day, on the next succeeding Business Day (each, an “Interest Payment
        Date”) without interest accruing on the amount then so payable from such day
        that is not a Business Day until such Business Day.  Interest on the
        Series B Cash Pay Notes will accrue from the most recent date to which interest
        has been paid or, if no interest has been paid, from October 31,
        2007.  The Issuer will pay interest (including post-petition interest
        in any proceeding under any Bankruptcy Law) on overdue principal and premium,
        if
        any, from time to time on demand at the interest rate on the Series B Cash
        Pay
        Notes; it shall pay interest (including post-petition interest in any proceeding
        under any Bankruptcy Law) on overdue installments of interest and Additional
        Interest, if any, (without regard to any applicable grace periods) from time
        to
        time on demand at the interest rate on the Series B Cash Pay
        Notes.  Interest will be computed on the basis of a 360-day year
        comprised of twelve 30-day months.

       

      (2)           Method
        of Payment.  The Issuer will pay interest on the Series B Cash
        Pay Notes and Additional Interest, if any, to the Persons who are registered
        Holders of Series B Cash Pay Notes at the close of business on the April 15
        and October 15 (whether or not a Business Day), next preceding the Interest
        Payment Date, even if such Series B Cash Pay Notes are canceled after such
        Record Date and on or before such Interest Payment Date, except as provided
        in
        Section 2.12 of the Indenture with respect to defaulted
        interest.  Payment of interest and Additional Interest, if any, may be
        made by check mailed to the Holders at their addresses set forth in the register
        of Holders; provided that payment by wire transfer of immediately
        available funds will be required with respect to principal of and interest,
        premium and Additional Interest, if any, on, all Global Notes and all other
        Series B Cash Pay Notes the Holders of which shall have provided wire transfer
        instructions to the Issuer or the Paying Agent.  Such payment shall be
        in such coin or currency of the United States of America as at the time of
        payment is legal tender for payment of public and private debts.

       

      (3)           Paying
        Agent and Registrar.  Initially, The Bank of New York, the
        Trustee under the Indenture, will act as Paying Agent and
        Registrar.  The Issuer may change any Paying Agent or Registrar
        without notice to the Holders.  The Issuer or any of its Subsidiaries
        may act in any such capacity.

       

      (4)           Indenture.  The
        Issuer issued the Series B Cash Pay Notes under an Indenture, dated as of
        October 31, 2007 (the “Existing Indenture”), among the Issuer, the
        Guarantors named therein and the Trustee, as supplemented by the First
        Supplemental Indenture dated as of December 6, 2007, among the Issuer, the
        Guarantors named therein and the Trustee (the Existing Indenture as
        supplemented, the “Indenture”).  This Series B Cash Pay Note is
        one of a duly authorized series of notes of the Issuer designated as its
        10.25%
        Senior Notes due 2015, Series B.  The Issuer shall be entitled to
        issue Additional Series B Cash Pay Notes pursuant to Sections 2.01 and 4.09
        of
        the Indenture.  The Existing Cash Pay Notes (including any Exchange
        Notes issued in exchange therefor), the Series B Cash Pay Notes (including
        any
        Exchange Notes issued in exchange therefor) and the Toggle Notes (including
        any
        Exchange Notes issued in exchange therefor) (collectively referred to herein
        as
        the “Notes”) are separate series of Senior Notes, but shall be treated as
        a single class of securities under the Indenture, unless otherwise specified
        in
        the Indenture.  The terms of the Series B Cash Pay Notes include those
        stated in the 

       

      
        
          A-2-5

        

        
          
          

          
            

          

        

        
          
          

        

      

      Indenture
        and those made part of the Indenture by reference to the Trust Indenture
        Act of
        1939, as amended (the “Trust Indenture Act”).  The Series B
        Cash Pay Notes are subject to all such terms, and Holders are referred to
        the
        Indenture and such Act for a statement of such terms.  To the extent
        any provision of this Series B Cash Pay Note conflicts with the express
        provisions of the Indenture, the provisions of the Indenture shall govern
        and be
        controlling.

       

      (5)           Optional
        Redemption.

       

      (a)           Except
        as set forth below, the Issuer will not be entitled to redeem Series B Cash
        Pay
        Notes at its option prior to November 1, 2011.

       

      (b)           At
        any time prior to November 1, 2011, the Issuer may redeem all or a part of
        the
        Series B Cash Pay Notes, at a redemption price equal to 100% of the principal
        amount of the Series B Cash Pay Notes redeemed plus the Applicable
        Premium as of, and accrued and unpaid interest, and Additional Interest,
        if any,
        to, the date of redemption (the “Redemption Date”), subject to the right
        of Holders of Series B Cash Pay Notes of record on the relevant Record Date
        to
        receive interest due on the relevant Interest Payment Date.

       

      (c)           From
        and after November 1, 2011, the Issuer may redeem the Series B Cash Pay Notes,
        in whole or in part, at the redemption prices (expressed as percentages of
        the
        principal amount of the Series B Cash Pay Notes to be redeemed) set forth
        below,
plus accrued and unpaid interest and Additional Interest, if any, to
        the
        applicable Redemption Date, subject to the right of Holders of Series B Cash
        Pay
        Notes of record on the relevant Record Date to receive interest due on the
        relevant Interest Payment Date if redeemed during the twelve-month period
        beginning on November 1 of each of the years indicated below:

       

      
        	
                Year

              	 	
                Percentage

              	 
	
                2011                                                                                        

              	 	 	105.125	%
	
                2012                                                                                        

              	 	 	102.563	%
	
                2013
                  and
                  thereafter                                                                                        

              	 	 	100.000	%

      

      

      (d)           Prior
        to November 1, 2010, the Issuer may, at its option, on one or more occasions,
        redeem up to 35% of the aggregate principal amount of Series B Cash Pay Notes
        at
        a redemption price equal to 110.250% of the aggregate principal amount thereof,
        plus accrued and unpaid interest and Additional Interest, if any, to
        the
        Redemption Date, subject to the right of Holders of Series B Cash Pay Notes
        of
        record on the relevant Record Date to receive interest due on the relevant
        Interest Payment Date, with the net cash proceeds of one or more Equity
        Offerings; provided that at least 50% of the sum of the original
        aggregate principal amount of Series B Cash Pay Notes and any Additional
        Series
        B Cash Pay Notes issued under the Indenture after the Issue Date remains
        outstanding immediately after the occurrence of each such redemption;
providedfurther that each such redemption occurs within 90 days of
        the date of closing of each such Equity Offering.  Notice of any
        redemption upon any Equity Offerings may be given prior to the redemption
        thereof, and any such redemption or notice may, at the Issuer’s discretion, be
        subject to one or more conditions precedent, including, but not limited to,
        completion of the related Equity Offering.

       

      (e)           If
        the Issuer redeems less than all of the outstanding Series B Cash Pay Notes,
        the
        Trustee shall select the Series B Cash Pay Notes to be redeemed in the manner
        described under Section 3.02 of the Indenture.

       

      (f)           Any
        redemption pursuant to this paragraph 5 shall be made pursuant to the provisions
        of Sections 3.01 through 3.06 of the Indenture.

       

       

      
        
          A-2-6

        

        
          
          

          
            

          

        

        
          
          

        

      

      (6)           Mandatory
        Redemption.  The Issuer shall not be required to make mandatory
        redemption or sinking fund payments with respect to the Series B Cash Pay
        Notes.

       

      (7)           Notice
        of Redemption.  Subject to Section 3.03 of the Indenture,
        notice of redemption will be mailed by first-class mail at least 30 days
        but not
        more than 60 days before the Redemption Date (except that redemption notices
        may
        be mailed more than 60 days prior to a Redemption Date if the notice is issued
        in connection with Article 8 or Article 11 of the Indenture) to each
        Holder whose Series B Cash Pay Notes are to be redeemed at its registered
        address or otherwise in accordance with the procedures of DTC.  Series
        B Cash Pay Notes in denominations larger than $2,000 may be redeemed in part
        but
        only in whole multiples of $1,000 in excess thereof, unless all of the Series
        B
        Cash Pay Notes held by a Holder are to be redeemed.  On and after the
        Redemption Date interest ceases to accrue on Series B Cash Pay Notes or portions
        thereof called for redemption.

       

      (8)           Offers
        to Repurchase.

       

      (a)           If
        a Change of Control occurs, the Issuer shall make an offer (a “Change of
        Control Offer”) to each Holder to purchase all or any part (equal to $2,000
        or an integral multiple of $1,000 in excess thereof) of each Holder’s Series B
        Cash Pay Notes at a purchase price equal to 101% of the aggregate principal
        amount thereof plus accrued and unpaid interest and Additional Interest,
        if any, to the date of purchase (the “Change of Control Payment”),
        subject to the right of Holders of Series B Cash Pay Notes of record on the
        relevant Record Date to receive interest due on the relevant Interest Payment
        Date. The Change of Control Offer shall be made in accordance with
        Section 4.14 of the Indenture.

       

      (b)           If
        the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale,
        within ten Business Days of each date that the aggregate amount of Excess
        Proceeds exceeds $200.0 million, the Issuer shall make an offer to all Holders
        of the Notes, and if required or permitted by the terms of any Senior
        Indebtedness, to the holders of such Senior Indebtedness (an “Asset Sale
        Offer”), to purchase the maximum aggregate principal amount of the Notes and
        such Senior Indebtedness that is a minimum of $2,000 or an integral multiple
        of
        $1,000 in excess thereof that may be purchased out of the Excess Proceeds
        at an
        offer price in cash in an amount equal to 100% of the principal amount thereof,
        plus accrued and unpaid interest and Additional Interest, if any, to
        the
        date fixed for the closing of such offer, in accordance with the procedures
        set
        forth in the Indenture.  To the extent that the aggregate amount of
        Notes and such Senior Indebtedness tendered pursuant to an Asset Sale Offer
        is
        less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds
        to make Restricted Payments to the extent permitted by clause (16) of
        Section 4.07(b) of the Indenture.  If the aggregate principal
        amount of Notes or such Senior Indebtedness surrendered by such holders thereof
        exceeds the amount of Excess Proceeds, the Trustee shall select the Notes
        and
        such Senior Indebtedness to be purchased on a pro rata basis based on
        the accreted value or principal amount of the Notes or such Senior Indebtedness
        tendered.

       

      (c)           The
        Issuer may, at its option, make an Asset Sale Offer using proceeds from any
        Asset Sale at any time after consummation of such Asset Sale; provided
        that such Asset Sale Offer shall be in an aggregate amount of not less than
        $25.0 million.  Upon consummation of such Asset Sale Offer, any Net
        Proceeds not required to be used to purchase Notes shall not be deemed Excess
        Proceeds.

       

      (9)           Denominations,
        Transfer, Exchange.  The Series B Cash Pay Notes are in
        registered form without coupons in denominations of $2,000 and integral
        multiples of $1,000 in excess thereof.  The transfer of Series B Cash
        Pay Notes may be registered and Series B Cash Pay Notes may be exchanged
        as
        provided in the Indenture.  The Registrar and the Trustee may require
        a Holder, among other things, to furnish appropriate endorsements and transfer
        documents and the Issuer may require a Holder to pay any taxes and fees required
        by law or permitted by the Indenture.  The Issuer need not exchange or
        register the transfer of any Series B Cash Pay Notes or portion of Series
        B Cash
        Pay Notes selected for redemption, 

       

      
        
          A-2-7

        

        
          
          

          
            

          

        

        
          
          

        

      

      except
        for the unredeemed portion of any Series B Cash Pay Notes being redeemed
        in
        part.  Also, the Issuer need not exchange or register the transfer of
        any Series B Cash Pay Notes for a period of 15 days before a selection of
        Series
        B Cash Pay Notes to be redeemed.

       

      (10)           Persons
        Deemed Owners.  The registered Holder of a Series B Cash Pay Note
        may be treated as its owner for all purposes.

       

      (11)           Amendment,
        Supplement and Waiver.  The Indenture, the Guarantees or the
        Series B Cash Pay Notes may be amended or supplemented as provided in the
        Indenture.

       

      (12)           Defaults
        and Remedies.  The Events of Default relating to the Notes are
        defined in Section 6.01 of the Indenture.  If any Event of
        Default occurs and is continuing, the Trustee or the Required Holders of
        at
        least 30% in aggregate principal amount of the Required Debt may declare
        the
        principal, premium, if any, interest and any other monetary obligations on
        all
        the then outstanding Notes to be due and payable
        immediately.  Notwithstanding the foregoing, in the case of an Event
        of Default arising from certain events of bankruptcy or insolvency, all
        outstanding Notes will become due and payable immediately without further
        action
        or notice.  Holders may not enforce the Indenture, the Notes or the
        Guarantees except as provided in the Indenture.  Subject to certain
        limitations, Required Holders of a majority in aggregate principal amount
        of the
        Required Debt may direct the Trustee in its exercise of any trust or
        power.  The Trustee may withhold from Holders of the Notes notice of
        any continuing Default (except a Default relating to the payment of principal,
        premium, if any, Additional Interest, if any, or interest) if it determines
        that
        withholding notice is in their interest.  The Required Holders of a
        majority in aggregate principal amount of the Required Debt by notice to
        the
        Trustee may on behalf of the Holders of all of the Notes waive any existing
        Default or and its consequences under the Indenture except a continuing Default
        in payment of the principal of, premium, if any, Additional Interest, if
        any, or
        interest on, any of the Notes held by a non-consenting Holder.  The
        Issuer and each Guarantor (to the extent that such Guarantor is so required
        under the Trust Indenture Act) is required to deliver to the Trustee annually
        a
        statement regarding compliance with the Indenture, and the Issuer is required
        within five (5) Business Days after becoming aware of any Default, to deliver
        to
        the Trustee a statement specifying such Default and what action the Issuer
        proposes to take with respect thereto.

       

      (13)           Authentication.  This
        Series B Cash Pay Note shall not be entitled to any benefit under the Indenture
        or be valid or obligatory for any purpose until authenticated by the manual
        signature of the Trustee.

       

      (14)           Additional
        Rights of Holders of Restricted Global Notes and Restricted Definitive
        Notes.  In addition to the rights provided to Holders of Series B
        Cash Pay Notes under the Indenture, Holders of Restricted Global Notes and
        Restricted Definitive Notes shall have all the rights set forth in the
        Registration Rights Agreement relating to such Series B Cash Pay Notes,
        including the right to receive Additional Interest, if any (as defined in
        such
        Registration Rights Agreement).

       

      (15)           GOVERNING
        LAW.  THE INDENTURE, THE SERIES B CASH PAY NOTES AND ANY
        GUARANTEE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
        OF THE
        STATE OF NEW YORK.

       

      (16)           CUSIP/ISIN
        Numbers.  Pursuant to a recommendation promulgated by the
        Committee on Uniform Security Identification Procedures, the Issuer has caused
        CUSIP/ISIN numbers to be printed on the Series B Cash Pay Notes and the Trustee
        may use CUSIP/ISIN numbers in notices of redemption as a convenience to
        Holders.  No representation is made as to the accuracy of such numbers
        either as printed on the Series B Cash Pay Notes or as contained in any notice
        of redemption and reliance may be placed only on the other identification
        numbers placed thereon.

       

       

      
        
          A-2-8

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        Issuer will furnish to any Holder upon written request and without charge
        a copy
        of the Indenture and/or the Registration Rights Agreement relating to the
        Series
        B Cash Pay Notes.  Requests may be made to the Issuer at the following
        address:

       

      
        	
                c/o
                  Texas Competitive Electric Holdings Company LLC

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              

      

      

      
        	
                c/o
                  TCEH Finance, Inc.

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              

      

       

      
 

      
        
          A-2-9

        

        
          
          

          
            

          

        

        
          
          

        

      

      ASSIGNMENT
        FORM

       

      To
        assign
        this Series B Cash Pay Note, fill in the form below:

       

      
         

        
          
            	
                    (I)
                      or (we) assign and transfer this Series B Cash Pay Note
                      to:

                  	 
	 	
                    (Insert
                      assignee’s legal name)

                  
	 
	 
	
                    (Insert
                      assignee’s Soc. Sec. or tax I.D. no.)

                  
	 
	 
	 
	 
	 
	 
	 
	 
	
                    (Print
                      or type assignee’s name, address and zip
                      code)

                  

          

          

          

          and
            irrevocably appoint
            ________________________________________________________________ to transfer
            this Series B Cash Pay Note on the books of the Issuer.  The agent may
            substitute another to act for him.

           

          

           

          
            	
                    Date:

                  	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
                    Your
                      Signature

                  	 	 
	 	 	
                    (Sign
                      exactly as your name appears on the face of this Series B Cash
                      Pay
                      Note)

                  	 
	 	 	 	 
	 	 
	
                    Signature
                      Guarantee*:                                            ___________

                  	 

          

      

      
        	
                *

              	
                Participant
                  in a recognized Signature Guarantee Medallion Program (or other
                  signature
                  guarantor acceptable to the
                  Trustee).

              

      

       

      

      
        
          A-2-10

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      OPTION
        OF HOLDER TO ELECT PURCHASE

       

      If
        you
        want to elect to have this Series B Cash Pay Note purchased by the Issuer
        pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate
        box below:

      
         

                                                                           o 
          Section 4.10                                            o    
Section 4.14

      

      
        	
                 

              	
                 

              

      

          If
        you want
        to elect to have only part of this Series B Cash Pay Note purchased by the
        Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture,
        state the amount you elect to have purchased:

       

      
        	 	
                $_______________

              
	 	 
	
                Date:  _____________________

              	 
	 	 
	
                 Your
                  Signature:  

              	
                                                                                       

              
	 	
                (Sign
                  exactly as your name appears on the face of

              
	 	
                this
                  Series B Cash Pay Note)

              
	 	 
	
                 Tax
                  Identification No.:  

              	
                                                                                       

              
	 	 
	
                Signature
                  Guarantee*:                                                                               

              	 

      

      

      *           Participant
        in a recognized Signature Guarantee Medallion Program (or other signature
        guarantor acceptable to the Trustee).

       

      

      
        
          A-2-11

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE1

       

      The
        initial outstanding principal amount of this Global Note is $
        ___________________.  The following exchanges of a part of this Global
        Note for an interest in another Global Note or for a Definitive Note, or
        exchanges of a part of another Global or Definitive Note for an interest
        in this
        Global Note, have been made:

       

      
         

        
          	
                  
                    Date
                      of Exchange

                  

                	 	
                  
                    Amount
                      of decrease in Principal Amount

                  

                	 	
                  
                    Amount
                      of increase

                    in
                      Principal

                    Amount
                      of this

                    Global
                      Note

                  

                	 	
                  
                    Principal
                      Amount of this Global Note following each decrease or
                      increase

                  

                	 	
                  
                    Signature
                      of authorized officer of Trustee or
                      Custodian

                  

                

        

        

      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        

      

        
        
          	
                  1

                	
                  This
                    schedule should be included only if the Series B Cash Pay Note
                    is issued
                    in global form.

                

        

         

      

       

      
        
          A-2-12

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT A-3

       

      

       

      [Face
        of
        Toggle Note]

       

      [Insert
        the Global Note Legend, if applicable pursuant to the provisions of the
        Indenture]

       

      [Insert
        the Private Placement Legend, if applicable pursuant to the provisions of
        the
        Indenture]

       

      [Insert
        the Regulation S Temporary Global Note Legend, if applicable pursuant to
        the provisions of the Indenture]

       

      [Insert
        the Tax Legend, if applicable, pursuant to the provisions of the
        Indenture]

       

      CUSIP
        [               ]

      ISIN
        [               ]1

       

      [RULE 144A]
        [REGULATION S]  GLOBAL NOTE

       

      10.50%/11.25%
        Senior Toggle Notes due 2016

       

      No.___                                                                                                                                                                          
                                    [$______________]

       

      TEXAS
        COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

      TCEH
        FINANCE, INC.

      

      promise
        to pay to CEDE & CO. or registered assigns, the principal sum [set forth on
        the Schedule of Exchanges of Interests in the Global Note attached hereto]
        [of
        ________________________ United States Dollars] on November 1,
        2016.

       

      Interest
        Payment Dates:  May 1 and November 1

       

      Record
        Dates:  April 15 and October 15

       

      

       

      

       

      

       

      [SIGNATURE
        PAGE FOLLOWS]

       

       

       

       

      ___________________________

      
        
          	
                  1

                	
                  Rule
                    144A Note CUSIP:

                	
                  882330
                    AB9

                
	 	
                  Rule
                    144A Note ISIN:

                	
                  US882330AB90

                
	 	
                  Regulation
                    S Note CUSIP:

                	
                  U88235
                    AD5

                
	 	
                  Regulation
                    S Note ISIN:

                	
                  USU88235AD59

                

        
 

       

      
        
          A-3-1

        

        
          
          

          
            

          

        

        
          
          

        

      

      I        N
        WITNESS HEREOF, the
        Issuer has caused this instrument to be duly executed.

       

      Dated:  _____________,
        20__

       

      
        	
                TEXAS
                  COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

              
	 
	 
	
                By:                                                                         

              
	
                Name:

              
	
                Title:

              

      

      

      

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] TOGGLE NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                TCEH
                  FINANCE, INC.

              
	 
	 
	
                By:                                                                         

              
	
                Name:

              
	
                Title:

              

      

       

       

      
 

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] TOGGLE NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      This
        is
        one of the Toggle Notes referred to in the within-mentioned
        Indenture:

       

      
        	
                THE
                  BANK OF NEW YORK, as Trustee

              
	 
	 
	
                By:                                                              

              
	
                Authorized
                  Signatory

              

      

       

      
 

      
        
          SIGNATURE
            PAGE TO GLOBAL [144A] [REGULATION S] TOGGLE NOTE

        

        
          
          

          
            

          

        

        
          
          

        

      

      [Back
        of
        Toggle Note]

       

      Capitalized
        terms used herein shall have the meanings assigned to them in the Indenture
        referred to below unless otherwise indicated.

       

      (1)           Interest.  Texas
        Competitive Electric Holding Company LLC, a Delaware limited liability company
        and TCEH Finance, Inc., a Delaware corporation (collectively, the
“Issuers”), promise to pay interest on the principal amount of this
        Toggle Note at a rate perannum set forth below from December 6,
        2007 until maturity and shall pay Additional Interest, if any, payable pursuant
        to the Registration Rights Agreement referred to below.  The Issuer
        will pay interest and Additional Interest, if any, semi-annually in arrears
        on
        May 1 and November 1 of each year, or if any such day is not a Business
        Day, on the next succeeding Business Day (each, an “Interest Payment
        Date”) without interest accruing on the amount then so payable from such day
        that is not a Business Day until such Business Day.  Interest on the
        Toggle Notes will accrue from the most recent date to which interest has
        been
        paid or, if no interest has been paid, from December 6, 2007.  The
        Issuer will pay interest (including post-petition interest in any proceeding
        under any Bankruptcy Law) on overdue principal and premium, if any, from
        time to
        time on demand at the interest rate on the Toggle Notes; it shall pay interest
        (including post-petition interest in any proceeding under any Bankruptcy
        Law) on
        overdue installments of interest and Additional Interest, if any, (without
        regard to any applicable grace periods) from time to time on demand at the
        interest rate on the Toggle Notes.  Interest will be computed on the
        basis of a 360-day year comprised of twelve 30-day months.

       

      Cash
        Interest on the Toggle Notes will accrue at a rate of 10.50%
perannum and be payable in cash.  PIK Interest on the
        Toggle Notes will accrue at a rate of 11.25% perannum and be
        payable (x) with respect to Toggle Notes represented by one or more global
        notes registered in the name of, or held by, The Depository Trust Company
        (“DTC”) or its nominee on the relevant Record Date, by increasing the
        principal amount of the outstanding global Toggle Note by an amount equal
        to the
        amount of PIK Interest for the applicable interest period (rounded up to
        the
        nearest $1,000) (or, if necessary, pursuant to the requirements of DTC or
        otherwise, to authenticate new global Toggle Notes executed by the Issuer
        with
        such increased principal amounts) and (y) with respect to Toggle Notes
        represented by certificated notes, by issuing PIK Notes in certificated form
        in
        an aggregate principal amount equal to the amount of PIK Interest for the
        applicable period (rounded up to the nearest whole dollar), and the Trustee
        will, at the request of the Issuer, authenticate and deliver such PIK Notes
        in
        certificated form for original issuance to the Holders on the relevant Record
        Date, as shown by the records of the register of Holders.  In the
        event that the Issuer elects to pay Partial PIK Interest for any interest
        period, each Holder will be entitled to receive Cash Interest in respect
        of 50%
        of the principal amount of the Toggle Notes held by such Holder on the relevant
        Record Date and PIK Interest in respect of 50% of the principal amount of
        the
        Toggle Notes held by such Holder on the relevant Record
        Date.  Following an increase in the principal amount of the
        outstanding global Toggle Notes as a result of a PIK Payment, the global
        Toggle
        Notes will bear interest on such increased principal amount from and after
        the
        date of such PIK Payment.  Any PIK Notes issued in certificated form
        will be dated as of the applicable Interest Payment Date and will bear interest
        from and after such date.  All Toggle Notes issued pursuant to a PIK
        Payment will mature on November 1, 2016 and will be governed by, and subject
        to
        the terms, provisions and conditions of, the Indenture and shall have the
        same
        rights and benefits as the Toggle Notes issued on the Issue Date.  Any
        certificated PIK Notes will be issued with the description PIK on the face
        of
        such PIK Note.

       

      At
        the
        end of any “accrual period” (as defined in Section 1272(a)(5) of the Code)
        ending after the fifth anniversary of the First Supplemental Indenture (each,
        an
“Optional Interest Repayment Date”), the Issuer may pay in cash, without
        duplication, all accrued and unpaid interest, if any, and all accrued but
        unpaid
“original issue discount” (as defined in Section 1273(a)(1) of the Code) on the
        Toggle Notes then outstanding up to the Optional Interest Repayment Amount
        (each
        such redemption, an “Optional Interest 

       

      
        
          A-3-5

        

        
          
          

          
            

          

        

        
          
          

        

      

      Repayment”).  The
        “Optional Interest Repayment Amount” shall mean, as of each Optional
        Interest Repayment Date, the excess, if any, of (a) the aggregate amount
        of
        accrued and unpaid interest and all accrued and unpaid “original issue discount”
(as defined in Section 1273(a)(1) of the Code) with respect to the Toggle
        Notes,
        over (b) an amount equal to the product of (i) the “issue price” (as defined in
        Sections 1273(b) and 1274(a) of the Code) of the Toggle Notes multiplied
        by (ii)
        the “yield to maturity” (as defined in the Treasury Regulation Section
        1.1272-1(b)(1)(i)) the Toggle Notes, minus (c) $50,000,000.

       

      On
May 1,
        2016, the Issuer shall repay in
        full in U.S.
        Dollars an amount of Toggle Notes equal to $50,000,000.  Prepayments
        of Toggle Notes made pursuant to the preceding
        sentence shall be
        made on a pro rata
        basis based on the aggregate principal
        amount of Toggle Notes outstanding.

       

      (2)           Method
        of Payment.  For any interest payment period after the initial
        interest payment period and prior to November 1, 2012, the Issuer may, at
        its option elect to pay interest on the Toggle Notes:

       

      (i)         entirely
        in cash (“Cash Interest”);

       

      (ii)         entirely
        by increasing the principal amount of the outstanding Toggle Notes or by
        issuing
        PIK Notes (“PIK Interest”); or

       

      (iii)           on
        50% of the outstanding principal amount of the Toggle Notes in cash and on
        50%
        of the outstanding principal amount by increasing the principal amount of
        the
        outstanding Toggle Notes or by issuing PIK Notes (“Partial PIK
        Interest”).

       

      The
        Issuer must elect the form of interest payment with respect to each interest
        period by delivering a notice to the Trustee prior to the beginning of such
        interest period.  The Trustee shall promptly deliver a corresponding
        notice to the Holder of this Toggle Note.  In the absence of such an
        election for any interest period, interest on this Toggle Note shall be payable
        according to the election for the previous interest period.  Interest
        for the first interest payment period commencing on the Issue Date shall
        be
        payable entirely in cash.  After November 1, 2012, the Issuer will
        make all interest payments on this Toggle Note entirely in
        cash.  Notwithstanding anything to the contrary, the payment of
        accrued interest in connection with any redemption of Toggle Notes as described
        under Sections 3.07, 4.10 and 4.14 of the Indenture shall be made solely
        in
        cash.

       

      The
        Issuer will pay Cash Interest on the Toggle Notes and Additional Interest,
        if
        any, to the Persons who are registered Holders of Toggle Notes at the close
        of
        business on the April 15 and October 15 (whether or not a Business
        Day), next preceding the Interest Payment Date, even if such Toggle Notes
        are
        canceled after such Record Date and on or before such Interest Payment Date,
        except as provided in Section 2.12 of the Indenture with respect to
        defaulted interest.  Payments of Cash Interest and Additional
        Interest, if any, may be made by check mailed to the Holders at their addresses
        set forth in the register of Holders; provided that payment by wire
        transfer of immediately available funds will be required with respect to
        principal of and interest, premium and Additional Interest, if any, on, all
        Global Notes and all other Toggle Notes the Holders of which shall have provided
        wire transfer instructions to the Issuer or the Paying Agent.  Such
        payment shall be in such coin or currency of the United States of America
        as at
        the time of payment is legal tender for payment of public and private
        debts.

       

      (3)           Paying
        Agent and Registrar.  Initially, The Bank of New York, the
        Trustee under the Indenture, will act as Paying Agent and
        Registrar.  The Issuer may change any Paying Agent or Registrar
        without notice to the Holders.  The Issuer or any of its Subsidiaries
        may act in any such capacity.

       

      
        
          A-3-6

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (4)           Indenture.  The
        Issuer issued the Toggle Notes under an Indenture, dated as of October 31,
        2007 (the “Existing Indenture”), among the Issuer, the Guarantors named
        therein and the Trustee, as supplemented by the First Supplemental Indenture
        dated as of December 6, 2007, among the Issuer, the Guarantors named therein
        and
        the Trustee (the Existing Indenture as supplemented, the
“Indenture”).  This Toggle Note is one of a duly authorized
        issue of notes of the Issuer designated as its 10.50%/11.25% Senior Toggle
        Notes
        due 2016.  The Issuer shall be entitled to issue Additional
        Toggle  Notes pursuant to Sections 2.01 and 4.09 of the
        Indenture.  The Existing Cash Pay Notes (including any Exchange Notes
        issued in exchange therefor), the Series B Cash Pay Notes (including any
        Exchange Notes issued in exchange therefor) and the Toggle Notes (including
        any
        Exchange Notes issued in exchange therefor) (collectively referred to herein
        as
        the “Notes”) are separate series of Senior Notes, but shall be treated as
        a single class of securities under the Indenture, unless otherwise specified
        in
        the Indenture.  The terms of the Toggle Notes include those stated in
        the Indenture and those made part of the Indenture by reference to the Trust
        Indenture Act of 1939, as amended (the “Trust Indenture
        Act”).  The Toggle Notes are subject to all such terms, and
        Holders are referred to the Indenture and such Act for a statement of such
        terms.  To the extent any provision of this Toggle Note conflicts with
        the express provisions of the Indenture, the provisions of the Indenture
        shall
        govern and be controlling.

       

      (5)           Optional
        Redemption.

       

      (a)           Except
        as set forth below, the Issuer will not be entitled to redeem Toggle Notes
        at
        its option prior to November 1, 2011.

       

      (b)           At
        any time prior to November 1, 2011, the Issuer may redeem all or a part of
        the
        Toggle Notes, at a redemption price equal to 100% of the principal amount
        of the
        Toggle Notes redeemed plus the Applicable Premium as of, and accrued and
        unpaid interest, and Additional Interest, if any, to, the date of redemption
        (the “Redemption Date”), subject to the right of Holders of Toggle Notes
        of record on the relevant Record Date to receive interest due on the relevant
        Interest Payment Date.

       

      (c)           From
        and after November 1, 2011, the Issuer may redeem the Toggle  Notes,
        in whole or in part, at the redemption prices (expressed as percentages of
        the
        principal amount of the Toggle Notes to be redeemed) set forth below,
plus accrued and unpaid interest and Additional Interest, if any, to
        the
        applicable Redemption Date, subject to the right of Holders of Toggle Notes
        of
        record on the relevant Record Date to receive interest due on the relevant
        Interest Payment Date if redeemed during the twelve-month period beginning
        on
        November 1 of each of the years indicated below:

       

      
        	
                Year

              	
                Percentage

              
	
                2012                                                                                        

              	
                105.250%

              
	
                2013                                                                                        

              	
                103.500%

              
	
                2014                                                                                        

              	
                101.750%

              
	
                2015
                  and
                  thereafter                                                                                        

              	
                100.000%

              

      

      

      (d)           Prior
        to November 1, 2010, the Issuer may, at its option, on one or more occasions,
        redeem up to 35% of the aggregate principal amount of all Toggle Notes at
        a
        redemption price equal to 110.500% of the aggregate principal amount thereof,
        plus accrued and unpaid interest and Additional Interest, if any, to
        the
        Redemption Date, subject to the right of Holders of Toggle Notes of record
        on
        the relevant Record Date to receive interest due on the relevant Interest
        Payment Date, with the net cash proceeds of one or more Equity Offerings;
        provided that at least 50% of the sum of the original aggregate principal
        amount of the Initial Toggle Notes and any Additional Toggle Notes issued
        under
        the Indenture after the Issue Date remains outstanding immediately after
        the
        occurrence of each such redemption; providedfurther that each such
        redemption occurs within 90 days of the date of closing of each such Equity
        Offering.  Notice of any redemption upon any Equity Offerings may be
        given prior to 

       

      
        
          A-3-7

        

        
          
          

          
            

          

        

        
          
          

        

      

      the
        redemption thereof, and any such redemption or notice may, at the Issuer’s
        discretion, be subject to one or more conditions precedent, including, but
        not
        limited to, completion of the related Equity Offering.

       

      (e)           If
        the Issuer redeems less than all of the outstanding Toggle Notes, the Trustee
        shall select the Toggle Notes to be redeemed in the manner described under
        Section 3.02 of the Indenture.

       

      (f)           Any
        redemption pursuant to this paragraph 5 shall be made pursuant to the provisions
        of Sections 3.01 through 3.06 of the Indenture.

       

      (6)           Mandatory
        Redemption.  Except as set forth under “Interest,” the Issuer
        shall not be required to make mandatory redemption or sinking fund payments
        with
        respect to the Toggle Notes.

       

      (7)           Notice
        of Redemption.  Subject to Section 3.03 of the Indenture,
        notice of redemption will be mailed by first-class mail at least 30 days
        but not
        more than 60 days before the Redemption Date (except that redemption notices
        may
        be mailed more than 60 days prior to a Redemption Date if the notice is issued
        in connection with Article 8 or Article 11 of the Indenture) to each
        Holder whose Toggle Notes are to be redeemed at its registered address or
        otherwise in accordance with the procedures of DTC.  Toggle Notes in
        denominations larger than $2,000 may be redeemed in part but only in whole
        multiples of $1,000 in excess thereof, unless all of the Toggle Notes held
        by a
        Holder are to be redeemed.  On and after the Redemption Date interest
        ceases to accrue on Toggle Notes or portions thereof called for
        redemption.

       

      (8)           Offers
        to Repurchase.

       

      (a)           If
        a Change of Control occurs, the Issuer shall make an offer (a “Change of
        Control Offer”) to each Holder to purchase all or any part (equal to $2,000
        or an integral multiple of $1,000 in excess thereof) of each Holder’s Toggle
        Notes at a purchase price equal to 101% of the aggregate principal amount
        thereof plus accrued and unpaid interest and Additional Interest, if any,
        to the date of purchase (the “Change of Control Payment”), subject to the
        right of Holders of Toggle Notes of record on the relevant Record Date to
        receive interest due on the relevant Interest Payment Date. The Change of
        Control Offer shall be made in accordance with Section 4.14 of the
        Indenture.

       

      (b)           If
        the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale,
        within ten Business Days of each date that the aggregate amount of Excess
        Proceeds exceeds $200.0 million, the Issuer shall make an offer to all Holders
        of the Notes, and if required or permitted by the terms of any Senior
        Indebtedness, to the holders of such Senior Indebtedness (an “Asset Sale
        Offer”), to purchase the maximum aggregate principal amount of the Notes and
        such Senior Indebtedness that is a minimum of $2,000 or an integral multiple
        of
        $1,000 in excess thereof that may be purchased out of the Excess Proceeds
        at an
        offer price in cash in an amount equal to 100% of the principal amount thereof,
        plus accrued and unpaid interest and Additional Interest, if any, to
        the
        date fixed for the closing of such offer, in accordance with the procedures
        set
        forth in the Indenture.  To the extent that the aggregate amount of
        Notes and such Senior Indebtedness tendered pursuant to an Asset Sale Offer
        is
        less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds
        to make Restricted Payments to the extent permitted by clause (16) of
        Section 4.07(b) of the Indenture.  If the aggregate principal
        amount of Notes or such Senior Indebtedness surrendered by such holders thereof
        exceeds the amount of Excess Proceeds, the Trustee shall select the Notes
        and
        such Senior Indebtedness to be purchased on a pro rata basis based on
        the accreted value or principal amount of the Notes or such Senior Indebtedness
        tendered.

       

      (c)           The
        Issuer may, at its option, make an Asset Sale Offer using proceeds from any
        Asset Sale at any time after consummation of such Asset Sale; provided
        that such Asset Sale Offer shall 

       

      
        
          A-3-8

        

        
          
          

          
            

          

        

        
          
          

        

      

      be
        in an
        aggregate amount of not less than $25.0 million.  Upon consummation of
        such Asset Sale Offer, any Net Proceeds not required to be used to purchase
        Notes shall not be deemed Excess Proceeds.

       

      (9)           Denominations,
        Transfer, Exchange.  The Toggle Notes are in registered form
        without coupons in denominations of $2,000 and integral multiples of $1,000
        in
        excess thereof.  The transfer of Toggle Notes may be registered and
        Toggle Notes may be exchanged as provided in the Indenture.  The
        Registrar and the Trustee may require a Holder, among other things, to furnish
        appropriate endorsements and transfer documents and the Issuer may require
        a
        Holder to pay any taxes and fees required by law or permitted by the
        Indenture.  The Issuer need not exchange or register the transfer of
        any Toggle Notes or portion of Toggle Notes selected for redemption, except
        for
        the unredeemed portion of any Toggle Notes being redeemed in
        part.  Also, the Issuer need not exchange or register the transfer of
        any Toggle Notes for a period of 15 days before a selection of Toggle Notes
        to
        be redeemed.

       

      (10)           Persons
        Deemed Owners.  The registered Holder of a Toggle Note may be
        treated as its owner for all purposes.

       

      (11)           Amendment,
        Supplement and Waiver.  The Indenture, the Guarantees or the
        Toggle Notes may be amended or supplemented as provided in the
        Indenture.

       

      (12)           Defaults
        and Remedies.  The Events of Default relating to the Notes are
        defined in Section 6.01 of the Indenture.  If any Event of
        Default occurs and is continuing, the Trustee or the Required Holders of
        at
        least 30% in aggregate principal amount of the Required Debt may declare
        the
        principal, premium, if any, interest and any other monetary obligations on
        all
        the then outstanding Notes to be due and payable
        immediately.  Notwithstanding the foregoing, in the case of an Event
        of Default arising from certain events of bankruptcy or insolvency, all
        outstanding Notes will become due and payable immediately without further
        action
        or notice.  Holders may not enforce the Indenture, the Notes or the
        Guarantees except as provided in the Indenture.  Subject to certain
        limitations, Required Holders of a majority in aggregate principal amount
        of the
        Required Debt may direct the Trustee in its exercise of any trust or
        power.  The Trustee may withhold from Holders of the Notes notice of
        any continuing Default (except a Default relating to the payment of principal,
        premium, if any, Additional Interest, if any, or interest) if it determines
        that
        withholding notice is in their interest.  The Required Holders of a
        majority in aggregate principal amount of the Required Debt by notice to
        the
        Trustee may on behalf of the Holders of all of the Notes waive any existing
        Default or and its consequences under the Indenture except a continuing Default
        in payment of the principal of, premium, if any, Additional Interest, if
        any, or
        interest on, any of the Notes held by a non-consenting Holder.  The
        Issuer and each Guarantor (to the extent that such Guarantor is so required
        under the Trust Indenture Act) is required to deliver to the Trustee annually
        a
        statement regarding compliance with the Indenture, and the Issuer is required
        within five (5) Business Days after becoming aware of any Default, to deliver
        to
        the Trustee a statement specifying such Default and what action the Issuer
        proposes to take with respect thereto.

       

      (13)           Authentication.  This
        Toggle Note shall not be entitled to any benefit under the Indenture or be
        valid
        or obligatory for any purpose until authenticated by the manual signature
        of the
        Trustee.

       

      (14)           Additional
        Rights of Holders of Restricted Global Notes and Restricted Definitive
        Notes.  In addition to the rights provided to Holders of Toggle
        Notes under the Indenture, Holders of Restricted Global Notes and Restricted
        Definitive Notes shall have all the rights set forth in the Registration
        Rights
        Agreement relating to such Toggle Notes, including the right to receive
        Additional Interest, if any (as defined in such Registration Rights
        Agreement).

       

      
        
          A-3-9

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (15)           GOVERNING
        LAW.  THE INDENTURE, THE TOGGLE NOTES AND ANY GUARANTEE WILL BE
        GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
        YORK.

       

      (16)           CUSIP/ISIN
        Numbers.  Pursuant to a recommendation promulgated by the
        Committee on Uniform Security Identification Procedures, the Issuer has caused
        CUSIP/ISIN numbers to be printed on the Toggle Notes and the Trustee may
        use
        CUSIP/ISIN numbers in notices of redemption as a convenience to
        Holders.  No representation is made as to the accuracy of such numbers
        either as printed on the Toggle Notes or as contained in any notice of
        redemption and reliance may be placed only on the other identification numbers
        placed thereon.

       

      The
        Issuer will furnish to any Holder upon written request and without charge
        a copy
        of the Indenture and/or the Registration Rights Agreement relating to the
        Toggle
        Notes.  Requests may be made to the Issuer at the following
        address:

       

      
        	
                c/o
                  Texas Competitive Electric Holdings Company LLC

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                       (214)
                  812-4097

              

      

      

      
        	
                c/o
                  TCEH Finance, Inc.

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              

      

       

      
 

      
        
          A-3-10

        

        
          
          

          
            

          

        

        
          
          

        

      

      ASSIGNMENT
        FORM

       

      To
        assign
        this Toggle Note, fill in the form below:

      
         

        
          
            	
                    (I)
                      or (we) assign and transfer this Toggle Note to:

                  	 
	 	
                    (Insert
                      assignee’s legal name)

                  
	 
	 
	
                    (Insert
                      assignee’s Soc. Sec. or tax I.D. no.)

                  
	 
	 
	 
	 
	 
	 
	 
	 
	
                    (Print
                      or type assignee’s name, address and zip
                      code)

                  

          

          

          

          and
            irrevocably appoint
            ________________________________________________________________ to transfer
            this Toggle Note on the books of the Issuer.  The agent may substitute
            another to act for him.

           

          

           

          
            	
                    Date:

                  	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
                    Your
                      Signature

                  	 	 
	 	 	
                    (Sign
                      exactly as your name appears on the face of this Toggle
                      Note)

                  	 
	 	 	 	 
	 	 
	
                    Signature
                      Guarantee*:                                            ___________

                  	 

          

      

       

       

      
        	
                *

              	
                Participant
                  in a recognized Signature Guarantee Medallion Program (or other
                  signature
                  guarantor acceptable to the
                  Trustee).

              

      

       

      

      
        
          A-3-11

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      OPTION
        OF HOLDER TO ELECT PURCHASE

       

      If
        you
        want to elect to have this Toggle Note purchased by the Issuer pursuant to
        Section 4.10 or 4.14 of the Indenture, check the appropriate box
        below:

       

      
        
           

                                                                             o 
            Section 4.10                                            o    
            Section 4.14

        

      If
        you
        want to elect to have only part of this Toggle Note purchased by the Issuer
        pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
        amount you elect to have purchased:

       

      
        	 	
                $_______________

              
	 	 
	
                Date:  _____________________

              	 
	 	 
	
                 Your
                  Signature: 

              	
                                                                                        

              
	 	
                (Sign
                  exactly as your name appears on the face of

              
	 	
                this
                  Toggle Note)

              
	 	 
	
                 Tax
                  Identification No.:

              	
                                                                                      

              
	 	 
	
                Signature
                  Guarantee*:                                                                               

              	 

      

      

      *           Participant
        in a recognized Signature Guarantee Medallion Program (or other signature
        guarantor acceptable to the Trustee).

       

      

      
        
          A-3-12

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE1

       

      The
        initial outstanding principal amount of this Global Note is $
        ___________________.  The following exchanges of a part of this Global
        Note for an interest in another Global Note or for a Definitive Note, or
        exchanges of a part of another Global or Definitive Note for an interest
        in this
        Global Note, have been made:

       

       

      
         

        
          	
                  
                    Date
                      of Exchange

                  

                	 	
                  
                    Amount
                      of decrease in Principal Amount

                  

                	 	
                  
                    Amount
                      of increase

                    in
                      Principal

                    Amount
                      of this

                    Global
                      Note

                  

                	 	
                  
                    Principal
                      Amount of this Global Note following each decrease or
                      increase

                  

                	 	
                  
                    Signature
                      of authorized officer of Trustee or
                      Custodian

                  

                

        

        

      

       

      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      ___________________________

      
        
          	
                  1

                	
                  This
                    schedule should be included only if the Toggle Note is issued
                    in global
                    form.

                

        

         

         

        
          
            A-3-11

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      EXHIBIT B

       

      FORM
        OF CERTIFICATE OF TRANSFER

       

      
        	
                c/o
                  Texas Competitive Electric Holdings Company LLC

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              
	 
	
                c/o
                  TCEH Finance, Inc.

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              

      

      

      The
        Bank
        of New York

      Corporate
        Trust Division

      101
        Barclay Street-8W

      New
        York,
        New York 10286

      Facsimile
        No.:  (212) 815-5704

      Attention:  EFHC
        Trustee

      

      
        	
                Re:

              	
                [10.25%
                  Senior Notes due 2015]

              
	 	
                [10.25%
                  Senior Notes due 2015, Series B]

              
	 	
                [10.50%/11.25%
                  Senior Toggle Note due 2016]

              

      

      

      Reference
        is hereby made to the Indenture, dated as of October 31, 2007 (the
“ExistingIndenture”), among Texas Competitive Electric Holdings
        Company LLC and TCEH Finance, Inc., the Guarantors named therein and the
        Trustee
        as supplemented by the First Supplemental Indenture dated as of December
        6, 2007
        among Texas Competitive Electric Holdings Company LLC and TCEH Finance, Inc.,
        the Guarantors named therein and the Trustee (the Existing Indenture as
        supplemented, the “Indenture”).  Capitalized terms used but not
        defined herein shall have the meanings given to them in the
        Indenture.

       

      _______________
        (the “Transferor”) owns and proposes to transfer the Note[s] or interest
        in such Note[s] specified in Annex A hereto, in the principal amount of
        $___________ in such Note[s] or interests (the “Transfer”), to
        _______________ (the “Transferee”), as further specified in Annex A
        hereto.  In connection with the Transfer, the Transferor hereby
        certifies that:

       

      [CHECK
        ALL THAT APPLY]

      

      1.      o     Check
        if Transferee will take delivery of a beneficial
        interest in the 144A Global Note or a Definitive Note pursuant to
        Rule 144A.  The Transfer is being effected pursuant
        to and in accordance with Rule 144A under the United States Securities Act
        of 1933, as amended (the “Securities Act”), and, accordingly, the
        Transferor hereby further certifies that the beneficial interest or Definitive
        Note is being transferred to a Person that the Transferor reasonably believes
        is
        purchasing the beneficial interest or Definitive Note for its own account,
        or
        for one or more accounts with respect to which such Person exercises sole
        investment discretion, and such Person and each such account is a

       

      
        
          B-1

        

        
          
          

          
            

          

        

        
          
          

        

      

      “qualified
        institutional buyer” within the meaning of Rule 144A in a transaction
        meeting the requirements of Rule 144A and such Transfer is in compliance
        with any applicable blue sky securities laws of any state of the United
        States.

       

      2.     o      Check
        if Transferee will take delivery of a beneficial
        interest in the Regulation S Global Note or a Definitive Note pursuant to
        Regulation S.  The Transfer is being effected
        pursuant to and in accordance with Rule 903 or Rule 904 under the
        Securities Act and, accordingly, the Transferor hereby further certifies
        that
        (i) the Transfer is not being made to a person in the United States and
        (x) at the time the buy order was originated, the Transferee was outside
        the United States or such Transferor and any Person acting on its behalf
        reasonably believed and believes that the Transferee was outside the United
        States or (y) the transaction was executed in, on or through the facilities
        of a designated offshore securities market and neither such Transferor nor
        any
        Person acting on its behalf knows that the transaction was prearranged with
        a
        buyer in the United States, (ii) no directed selling efforts have been made
        in contravention of the requirements of Rule 903(b) or Rule 904(b) of
        Regulation S under the Securities Act, (iii) the transaction is not
        part of a plan or scheme to evade the registration requirements of the
        Securities Act and (iv) if the proposed transfer is being made prior to the
        expiration of the Restricted Period, the transfer is not being made to a
        U.S.
        Person or for the account or benefit of a U.S. Person (other than an Initial
        Purchaser).  Upon consummation of the proposed transfer in accordance
        with the terms of the Indenture, the transferred beneficial interest or
        Definitive Note will be subject to the restrictions on Transfer enumerated
        in
        the Indenture and the Securities Act.

       

      3.     o      Check
        and complete if Transferee will take delivery of a
        beneficial interest in the Definitive Note pursuant to any provision of the
        Securities Act other than Rule 144A or
        Regulation S.  The Transfer is being effected in
        compliance with the transfer restrictions applicable to beneficial interests
        in
        Restricted Global Notes and Restricted Definitive Notes and pursuant to and
        in
        accordance with the Securities Act and any applicable blue sky securities
        laws
        of any state of the United States, and accordingly the Transferor hereby
        further
        certifies that (check one):

       

      (a)           [  ]
        such Transfer is being effected pursuant to and in accordance with Rule 144
        under the Securities Act;

       

      OR

       

      (b)           [  ]
        such Transfer is being effected to the Issuer or a subsidiary
        thereof;

       

      OR

       

      (c)           [  ]
        such Transfer is being effected pursuant to an effective registration statement
        under the Securities Act and in compliance with the prospectus delivery
        requirements of the Securities Act.

       

      4.    o       Check
        if Transferee will take delivery of a beneficial
        interest in an Unrestricted Global Note or of an Unrestricted Definitive
        Note.

       

      (a)    o       Check
        if Transfer is Pursuant to
        Rule 144.  (i) The Transfer is being effected
        pursuant to and in accordance with Rule 144 under the Securities Act and in
        compliance with the transfer restrictions contained in the Indenture and
        any
        applicable blue sky securities laws of any state of the United States and
        (ii) the restrictions on transfer contained in the Indenture and the
        Private Placement Legend are not required in order to maintain compliance
        with
        the Securities Act.  Upon consummation of the proposed Transfer in
        accordance with the terms of the Indenture, the transferred beneficial interest
        or Definitive Note will no longer be 

       

      
        
          B-2

        

        
          
          

          
            

          

        

        
          
          

        

      

      subject
        to the restrictions on transfer enumerated in the Private Placement Legend
        printed on the Restricted Global Notes, on Restricted Definitive Notes and
        in
        the Indenture.

       

      (b)     o      Check
        if Transfer is Pursuant to
        Regulation S.  (i) The Transfer is being effected
        pursuant to and in accordance with Rule 903 or Rule 904 under the
        Securities Act and in compliance with the transfer restrictions contained
        in the
        Indenture and any applicable blue sky securities laws of any state of the
        United
        States and (ii) the restrictions on transfer contained in the Indenture and
        the Private Placement Legend are not required in order to maintain compliance
        with the Securities Act.  Upon consummation of the proposed Transfer
        in accordance with the terms of the Indenture, the transferred beneficial
        interest or Definitive Note will no longer be subject to the restrictions
        on
        transfer enumerated in the Private Placement Legend printed on the Restricted
        Global Notes, on Restricted Definitive Notes and in the
        Indenture.

       

      (c)     o      Check
        if Transfer is Pursuant to Other
        Exemption.  (i) The Transfer is being effected pursuant
        to and in compliance with an exemption from the registration requirements
        of the
        Securities Act other than Rule 144, Rule 903 or Rule 904 and in
        compliance with the transfer restrictions contained in the Indenture and
        any
        applicable blue sky securities laws of any State of the United States and
        (ii) the restrictions on transfer contained in the Indenture and the
        Private Placement Legend are not required in order to maintain compliance
        with
        the Securities Act. Upon consummation of the proposed Transfer in accordance
        with the terms of the Indenture, the transferred beneficial interest or
        Definitive Note will not be subject to the restrictions on transfer enumerated
        in the Private Placement Legend printed on the Restricted Global Notes or
        Restricted Definitive Notes and in the Indenture.

       

      This
        certificate and the statements contained herein are made for your benefit
        and
        the benefit of the Issuer.

       

      
        	 	
                [Insert
                  Name of Transferor]

              
	 	 
	 	 
	 	
                By:                                                               

              
	 	
                Name:

              
	 	
                Title:

              
	
                Dated:  _______________________

              	 

      

      

      
        
          B-3

        

        
          
          

          
            

          

        

        
          
          

        

      

      ANNEX
        A TO CERTIFICATE OF TRANSFER

       

      1.           The
        Transferor owns and proposes to transfer the following:

       

      [CHECK
        ONE OF (a) OR (b)]

       

      (a)       o   a
        beneficial interest in the:

       

      (i)            o 144A
        Global Note
        (CUSIP
        [                 ]
        [                ]),
        or

       

      (ii)           o  Regulation S
        Global Note (CUSIP
        [                 ]
        [                ]),
        or

       

      (b)       o
        a Restricted Definitive Note.

       

      2.           After
        the Transfer the Transferee will hold:

       

      [CHECK
        ONE]

       

      (a)       o      a
        beneficial interest in the:

       

      (i)            o 144A
        Global Note
        (CUSIP
        [                 ]
        [                ]),
        or

       

      (ii)           o Regulation S
        Global Note (CUSIP
        [                 ]
        [                ]),
        or

       

      (iii)          o   Unrestricted
        Global Note (CUSIP
        [                 ]
        [                ]);

       

      or

       

      (b)       o      a
        Restricted Definitive Note; or

       

      (c)        o     an
        Unrestricted Definitive Note, in accordance with the
        terms of the Indenture.

       

      

      
        
          B-4

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT C

       

      FORM
        OF CERTIFICATE OF
        EXCHANGE

       

      
        	
                c/o
                  Texas Competitive Electric Holdings Company LLC

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              

      

      

      
        	
                c/o
                  TCEH Finance, Inc.

              
	
                Energy
                  Plaza

              
	
                1601
                  Bryan Street

              
	
                Dallas,
                  Texas 75201-3411

              
	
                Facsimile
                  No.:  (214) 812-6032

              
	
                                        (214)
                  812-4097

              

      

      

      The
        Bank
        of New York

      Corporate
        Trust Division

      101
        Barclay Street-8W

      New
        York,
        New York 10286

      Facsimile
        No.:  (212) 815-5704

      Attention:  EFHC
        Trustee

      

       

      
        	
                Re:

              	
                [10.25%
                  Senior Notes due 2015]

              
	 	
                [10.25%
                  Senior Notes due 2015, Series B]

              
	 	
                [10.50%/11.25%
                  Senior Toggle Note due 2016]

              

      

      

      Reference
        is hereby made to the Indenture, dated as of October 31, 2007 (the
“Indenture”), among Texas Competitive Electric Holdings Company LLC and
        TCEH Finance, Inc., the Guarantors named therein and the Trustee as supplemented
        by the First Supplemental Indenture dated as of December 6, 2007 among Texas
        Competitive Electric Holdings Company LLC and TCEH Finance, Inc., the Guarantors
        named therein and the Trustee (the Existing Indenture as supplemented, the
        “Indenture”).  Capitalized terms used but not defined herein shall
        have the meanings given to them in the Indenture.

       

      ___________
        (the “Owner”) owns and proposes to exchange the Note[s] or interest in
        such Note[s] specified herein, in the principal amount of $__________ in
        such
        Note[s] or interests (the “Exchange”).  In connection with the
        Exchange, the Owner hereby certifies that:

       

      1.           Exchange
        of Restricted Definitive Notes or Beneficial Interests in a Restricted Global
        Note for Unrestricted Definitive Notes or Beneficial Interests in an
        Unrestricted Global Note

       

      (a)       o    Check
        if Exchange is from beneficial interest in a
        Restricted Global Note to beneficial interest in an Unrestricted Global
        Note.  In connection with the Exchange of the Owner’s
        beneficial interest in a Restricted Global Note for a beneficial interest
        in an
        Unrestricted Global Note in an equal principal amount, the Owner hereby
        certifies (i) the beneficial interest is being acquired for the Owner’s own
        account without transfer, (ii) such Exchange has been effected in
        compliance with the transfer restrictions applicable to the Global Notes
        and
        pursuant to and in accordance with the 

       

      
        
          C-1

        

        
           

          
            

          

        

        
           

        

      

      United
        States Securities Act of 1933, as amended (the “Securities Act”),
        (iii) the restrictions on transfer contained in the Indenture and the
        Private Placement Legend are not required in order to maintain compliance
        with
        the Securities Act and (iv) the beneficial interest in an Unrestricted
        Global Note is being acquired in compliance with any applicable blue sky
        securities laws of any state of the United States.

       

      (b)      o     Check
        if Exchange is from beneficial interest in a
        Restricted Global Note to Unrestricted Definitive Note.  In
        connection with the Exchange of the Owner’s beneficial interest in a Restricted
        Global Note for an Unrestricted Definitive Note, the Owner hereby certifies
        (i) the Definitive Note is being acquired for the Owner’s own account
        without transfer, (ii) such Exchange has been effected in compliance with
        the transfer restrictions applicable to the Restricted Global Notes and pursuant
        to and in accordance with the Securities Act, (iii) the restrictions on
        transfer contained in the Indenture and the Private Placement Legend are
        not
        required in order to maintain compliance with the Securities Act and
        (iv) the Definitive Note is being acquired in compliance with any
        applicable blue sky securities laws of any state of the United
        States.

       

      (c)       o    Check
        if Exchange is from Restricted Definitive Note to
        beneficial interest in an Unrestricted Global Note.  In
        connection with the Owner’s Exchange of a Restricted Definitive Note for a
        beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
        (i) the beneficial interest is being acquired for the Owner’s own account
        without transfer, (ii) such Exchange has been effected in compliance with
        the transfer restrictions applicable to Restricted Definitive Notes and pursuant
        to and in accordance with the Securities Act, (iii) the restrictions on
        transfer contained in the Indenture and the Private Placement Legend are
        not
        required in order to maintain compliance with the Securities Act and
        (iv) the beneficial interest is being acquired in compliance with any
        applicable blue sky securities laws of any state of the United
        States.

       

      (d)       o    Check
        if Exchange is from Restricted Definitive Note to
        Unrestricted Definitive Note.  In connection with the Owner’s
        Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note,
        the Owner hereby certifies (i) the Unrestricted Definitive Note is being
        acquired for the Owner’s own account without transfer, (ii) such Exchange
        has been effected in compliance with the transfer restrictions applicable
        to
        Restricted Definitive Notes and pursuant to and in accordance with the
        Securities Act, (iii) the restrictions on transfer contained in the
        Indenture and the Private Placement Legend are not required in order to maintain
        compliance with the Securities Act and (iv) the Unrestricted Definitive
        Note is being acquired in compliance with any applicable blue sky securities
        laws of any state of the United States.

       

      2.           Exchange
        of Restricted Definitive Notes or Beneficial Interests in Restricted Global
        Notes for Restricted Definitive Notes or Beneficial Interests in Restricted
        Global Notes

       

      (a)      o     Check
        if Exchange is from beneficial interest in a
        Restricted Global Note to Restricted Definitive Note.  In
        connection with the Exchange of the Owner’s beneficial interest in a Restricted
        Global Note for a Restricted Definitive Note with an equal principal amount,
        the
        Owner hereby certifies that the Restricted Definitive Note is being acquired
        for
        the Owner’s own account without transfer.  Upon consummation of the
        proposed Exchange in accordance with the terms of the Indenture, the Restricted
        Definitive Note issued will continue to be subject to the restrictions on
        transfer enumerated in the Private Placement Legend printed on the Restricted
        Definitive Note and in the Indenture and the Securities Act.

       

      (b)      o     Check
        if Exchange is from Restricted Definitive Note to
        beneficial interest in a Restricted Global Note.  In
        connection with the Exchange of the Owner’s Restricted Definitive Note for a
        beneficial interest in the [CHECK ONE]    144A Global Note    Regulation S
        Global Note, with an equal principal
        amount, the Owner hereby certifies (i) the beneficial interest is being

       

      
        
          C-2

        

        
           

          
            

          

        

        
           

        

      

      acquired
        for the Owner’s own account without transfer and (ii) such Exchange has
        been effected in compliance with the transfer restrictions applicable to
        the
        Restricted Global Notes and pursuant to and in accordance with the Securities
        Act, and in compliance with any applicable blue sky securities laws of any
        state
        of the United States. Upon consummation of the proposed Exchange in accordance
        with the terms of the Indenture, the beneficial interest issued will be subject
        to the restrictions on transfer enumerated in the Private Placement Legend
        printed on the relevant Restricted Global Note and in the Indenture and the
        Securities Act.

       

      
        
          C-3

        

        
           

          
            

          

        

        
           

        

      

      This
        certificate and the statements contained herein are made for your benefit
        and
        the benefit of the Issuer and are dated ______________________.

       

      
        	 	
                [Insert
                  Name of Transferor]

              
	 	 
	 	 
	 	
                By:                                                               

              
	 	
                Name:

              
	 	
                Title:

              
	 	 
	
                Dated:  _______________________

              	 

      

       

      
        
          C-4

        

        
           

          
            

          

        

        
           

        

      

       

      EXHIBIT D

       

      [FORM
        OF SUPPLEMENTAL INDENTURE

       

      TO
        BE DELIVERED BY SUBSEQUENT GUARANTORS]

       

      Supplemental
        Indenture (this “Supplemental Indenture”), dated as of _______________,
        among __________________ (the “Guaranteeing Subsidiary”), a subsidiary of
        Texas Competitive Electric Holdings Company LLC, a Delaware limited liability
        company (“TCEH” ), TCEH Finance, Inc., a Delaware Corporation (together with
        TCEH, the “Issuer”), and The Bank of New York, as trustee (the
“Trustee”).

       

      W
        I T N E
        S S E T H

       

      WHEREAS,
        each of the Issuer and the Guarantors (as defined in the Indenture referred
        to
        below) has heretofore executed and delivered to the Trustee an Indenture
        (the
“Existing Indenture”), dated as of October 31, 2007, as supplemented by
        the First Supplemental Indenture (the Existing Indenture as supplemented,
        the
“Indenture”), dated as of December 6, 2007 providing for the issuance of an
        unlimited aggregate principal amount of 10.25% Senior Notes due 2015, 10.25%
        Senior Notes due 2015, Series B and 10.50%/11.25% Senior Toggle Notes due
        2016
        (together, the “Notes”);

       

      WHEREAS,
        the Indenture provides that under certain circumstances the Guaranteeing
        Subsidiary shall execute and deliver to the Trustee a supplemental indenture
        pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee
        all of the Issuer’s Obligations under the Notes and the Indenture on the terms
        and conditions set forth herein and under the Indenture (the
“Guarantee”); and

       

      WHEREAS,
        pursuant to Section 9.01 of the Indenture, the Trustee is authorized to
        execute and deliver this Supplemental Indenture.

       

      NOW
        THEREFORE, in consideration of the foregoing and for other good and valuable
        consideration, the receipt of which is hereby acknowledged, the parties mutually
        covenant and agree for the equal and ratable benefit of the Holders of the
        Notes
        as follows:

       

      1.           Capitalized
        Terms.  Capitalized terms used herein without definition shall have
        the meanings assigned to them in the Indenture.

       

      2.           Agreement
        to Guarantee.  The Guaranteeing Subsidiary hereby agrees as
        follows:

       

      (a)           Along
        with all Guarantors named in the Indenture, to jointly and severally
        unconditionally guarantee to each Holder of a Note authenticated and delivered
        by the Trustee and to the Trustee and its successors and assigns, irrespective
        of the validity and enforceability of the Indenture, the Notes or the
        obligations of the Issuer hereunder or thereunder, that:

       

      (i)           the
        principal of and interest, premium and Additional Interest, if any, on the
        Notes
        will be promptly paid in full when due, whether at maturity, by acceleration,
        redemption or otherwise, and interest on the overdue principal of and interest
        on the Notes, if any, if lawful, and all other obligations of the Issuer
        to the
        Holders or the Trustee hereunder or thereunder will be promptly paid in full
        or
        performed, all in accordance with the terms hereof and thereof; and

       

      
        
          D-1

        

        
           

          
            

          

        

        
           

        

      

      (ii)           in
        case of any extension of time of payment or renewal of any Notes or any of
        such
        other obligations, that same will be promptly paid in full when due or performed
        in accordance with the terms of the extension or renewal, whether at stated
        maturity, by acceleration or otherwise.  Failing payment when due of
        any amount so guaranteed or any performance so guaranteed for whatever reason,
        the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally
        obligated to pay the same immediately.  This is a guarantee of payment
        and not a guarantee of collection.

       

      (b)           The
        obligations hereunder shall be unconditional, irrespective of the validity,
        regularity or enforceability of the Notes or the Indenture, the absence of
        any
        action to enforce the same, any waiver or consent by any Holder of the Notes
        with respect to any provisions hereof or thereof, the recovery of any judgment
        against the Issuer, any action to enforce the same or any other circumstance
        which might otherwise constitute a legal or equitable discharge or defense
        of a
        guarantor.

       

      (c)           The
        following is hereby waived:  diligence, presentment, demand of
        payment, filing of claims with a court in the event of insolvency or bankruptcy
        of the Issuer, any right to require a proceeding first against the Issuer,
        protest, notice and all demands whatsoever.

       

      (d)           Except
        as set forth in Section 5 hereto, this Guarantee shall not be discharged
        except by complete performance of the obligations contained in the Notes,
        the
        Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary
        accepts all obligations of a Guarantor under the Indenture.

       

      (e)           If
        any Holder or the Trustee is required by any court or otherwise to return
        to the
        Issuer, the Guarantors (including the Guaranteeing Subsidiary), or any
        custodian, trustee, liquidator or other similar official acting in relation
        to
        either the Issuer or the Guarantors, any amount paid either to the Trustee
        or
        such Holder, this Guarantee, to the extent theretofore discharged, shall
        be
        reinstated in full force and effect.

       

      (f)           The
        Guaranteeing Subsidiary shall not be entitled to any right of subrogation
        in
        relation to the Holders in respect of any obligations guaranteed hereby until
        payment in full of all obligations guaranteed hereby.

       

      (g)           As
        between the Guaranteeing Subsidiary, on the one hand, and the Holders and
        the
        Trustee, on the other hand, (x) the maturity of the obligations guaranteed
        hereby may be accelerated as provided in Article 6 of the Indenture for the
        purposes of this Guarantee, notwithstanding any stay, injunction or other
        prohibition preventing such acceleration in respect of the obligations
        guaranteed hereby, and (y) in the event of any declaration of acceleration
        of such obligations as provided in Article 6 of the Indenture, such
        obligations (whether or not due and payable) shall forthwith become due and
        payable by the Guaranteeing Subsidiary for the purpose of this
        Guarantee.

       

      (h)           The
        Guaranteeing Subsidiary shall have the right to seek contribution from any
        non-paying Guarantor so long as the exercise of such right does not impair
        the
        rights of the Holders under this Guarantee.

       

      (i)           Pursuant
        to Section 10.02 of the Indenture, after giving effect to all other
        contingent and fixed liabilities that are relevant under any applicable
        Bankruptcy or fraudulent conveyance laws, and after giving effect to any
        collections from, rights to receive contribution from or payments made by
        or on
        behalf of any other Guarantor in respect of the obligations 

       

      
        
          D-2

        

        
           

          
            

          

        

        
           

        

      

      of
        such
        other Guarantor under Article 10 of the Indenture, this new Guarantee shall
        be limited to the maximum amount permissible such that the obligations of
        such
        Guaranteeing Subsidiary under this Guarantee will not constitute a fraudulent
        transfer or conveyance.

       

      (j)           This
        Guarantee shall remain in full force and effect and continue to be effective
        should any petition be filed by or against the Issuer for liquidation,
        reorganization, should the Issuer become insolvent or make an assignment
        for the
        benefit of creditors or should a receiver or trustee be appointed for all
        or any
        significant part of the Issuer’s assets, and shall, to the fullest extent
        permitted by law, continue to be effective or be reinstated, as the case
        may be,
        if at any time payment and performance of the Notes are, pursuant to applicable
        law, rescinded or reduced in amount, or must otherwise be restored or returned
        by any obligee on the Notes and Guarantee, whether as a “voidable preference”,
“fraudulent transfer” or otherwise, all as though such payment or performance
        had not been made.  In the event that any payment or any part thereof,
        is rescinded, reduced, restored or returned, the Note shall, to the fullest
        extent permitted by law, be reinstated and deemed reduced only by such amount
        paid and not so rescinded, reduced, restored or returned.

       

      (k)           In
        case any provision of this Guarantee shall be invalid, illegal or unenforceable,
        the validity, legality, and enforceability of the remaining provisions shall
        not
        in any way be affected or impaired thereby.

       

      (l)           This
        Guarantee shall be a general senior obligation of such Guaranteeing Subsidiary,
        ranking equally in right of payment with all existing and future Senior
        Indebtedness of the Guaranteeing Subsidiary, will be effectively subordinated
        to
        all Secured Indebtedness of such Guaranteeing Subsidiary to the extent of
        the
        value of the collateral securing such indebtedness.  The Guarantees
        will be senior in right of payment to all existing and future Subordinated
        Indebtedness of each Guarantor.  The Notes will be structurally
        subordinated to Indebtedness and other liabilities of Subsidiaries of the
        Issuer
        that do not Guarantee the Notes, if any.

       

      (m)           Each
        payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee
        shall be made without set-off, counterclaim, reduction or diminution of any
        kind
        or nature.

       

      3.           Execution
        And
        Delivery.                                                                The
        Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force
        and
        effect notwithstanding the absence of the endorsement of any notation of
        such
        Guarantee on the Notes.

       

      4.           Merger,
        Consolidation or Sale of All or Substantially All Assets.

       

      (a)           Except
        as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing
        Subsidiary may not consolidate or merge with or into or wind up into (whether
        or
        not the Issuer or Guaranteeing Subsidiary is the surviving corporation),
        or
        sell, assign, transfer, lease, convey or otherwise dispose of all or
        substantially all of its properties or assets, in one or more related
        transactions, to any Person unless:

       

      (i)(A)                      the
        Guaranteeing Subsidiary is the surviving corporation or the Person formed
        by or
        surviving any such consolidation or merger (if other than the Guaranteeing
        Subsidiary) or to which such sale, assignment, transfer, lease, conveyance
        or
        other disposition will have been made is a corporation, partnership, limited
        partnership, limited liability partnership, limited liability corporation
        or
        trust organized or existing under the 

       

      laws
        of
        the jurisdiction of organization of the Guaranteeing Subsidiary, as the case
        may
        be, or the laws of the United States, any state thereof, the District of
        Columbia, or any territory thereof (the Guaranteeing Subsidiary or such Person,
        as the case may be, being herein called the “Successor
        Person”);

       

      
        
          D-3

        

        
           

          
            

          

        

        
           

        

      

       

      (B)           the
        Successor Person, if other than the Guaranteeing Subsidiary, expressly assumes
        all the obligations of the Guaranteeing Subsidiary under the Indenture and
        the
        Registration Rights Agreement and the Guaranteeing Subsidiary’s related
        Guarantee pursuant to supplemental indentures or other documents or instruments
        in form reasonably satisfactory to the Trustee;

       

      (C)           immediately
        after such transaction, no Default exists; and

       

      (D)           the
        Issuer shall have delivered to the Trustee an Officer’s Certificate and an
        Opinion of Counsel, each stating that such consolidation, merger or transfer
        and
        such supplemental indentures, if any, comply with the Indenture; or

       

      (ii)           the
        transaction is made in compliance with Section 4.10 of the
        Indenture;

       

      (b)           Subject
        to certain limitations described in the Indenture, the Successor Person will
        succeed to, and be substituted for, the Guaranteeing Subsidiary under the
        Indenture and the Guaranteeing Subsidiary’s
        Guarantee.  Notwithstanding the foregoing, the Guaranteeing Subsidiary
        may (i) merge into or transfer all or part of its properties and assets to
        another Guarantor or the Issuer, (ii) merge with an Affiliate of the Issuer
        solely for the purpose of reincorporating the Guaranteeing Subsidiary in
        the
        United States, any state thereof, the District of Columbia or any territory
        thereof or (iii) convert into a corporation, partnership, limited
        partnership, limited liability corporation or trust organized or existing
        under
        the laws of the jurisdiction of organization of such Guarantor.

       

      5.           Releases.  The
        Guarantee of the Guaranteeing Subsidiary shall be automatically and
        unconditionally released and discharged, and no further action by the
        Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release
        of the Guaranteeing Subsidiary’s Guarantee, upon:

       

      (1)(A)                      any
        sale, exchange or transfer (by merger or otherwise) of the Capital Stock
        of the
        Guaranteeing Subsidiary (including any sale, exchange or transfer), after
        which
        the Guaranteeing Subsidiary is no longer a Restricted Subsidiary or all or
        substantially all the assets of the Guaranteeing Subsidiary which sale, exchange
        or transfer is made in compliance with the applicable provisions of the
        Indenture;

       

      (B)           the
        release or discharge of the guarantee by the Guaranteeing Subsidiary of the
        TCEH
        Senior Secured Facilities or the guarantee which resulted in the creation
        of the
        Guarantee, except a discharge or release by or as a result of payment under
        such
        guarantee;

       

      (C)           the
        proper designation of the Guaranteeing Subsidiary as an Unrestricted Subsidiary
        in compliance with Section 4.08 hereof; or

       

      (D)           the
        Issuer exercising its Legal Defeasance option or Covenant Defeasance option
        in
        accordance with Article 8 of the Indenture or the Issuer’s 

       

      
        
          D-4

        

        
           

          
            

          

        

        
           

        

      

      obligations
        under the Indenture being discharged in accordance with the terms of the
        Indenture; and

       

      (2)           the
        Guaranteeing Subsidiary delivering to the Trustee an Officer’s Certificate and
        an Opinion of Counsel, each stating that all conditions precedent provided
        for
        in the Indenture relating to such transaction have been complied
        with.

       

      6.           No
        Recourse Against Others.  No director, officer, employee, incorporator
        or stockholder of the Guaranteeing Subsidiary shall have any liability for
        any
        obligations of the Issuer or the Guarantors (including the Guaranteeing
        Subsidiary) under the Notes, any Guarantees, the Indenture or this Supplemental
        Indenture or for any claim based on, in respect of, or by reason of, such
        obligations or their creation.  Each Holder by accepting Notes waives
        and releases all such liability.  The waiver and release are part of
        the consideration for issuance of the Notes.

       

      7.           Governing
        Law.  THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED
        IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

       

      8.           Counterparts.  The
        parties may sign any number of copies of this Supplemental
        Indenture.  Each signed copy shall be an original, but all of them
        together represent the same agreement.

       

      9.           Effect
        of Headings.  The Section headings herein are for convenience
        only and shall not affect the construction hereof.

       

      10.           The
        Trustee.  The Trustee shall not be responsible in any manner
        whatsoever for or in respect of the validity or sufficiency of this Supplemental
        Indenture or for or in respect of the recitals contained herein, all of which
        recitals are made solely by the Guaranteeing Subsidiary.

       

      11.           Subrogation.  The
        Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes
        against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary
        pursuant to the provisions of Section 2 hereof and Section 10.01 of
        the Indenture; provided that if an Event of Default has occurred and is
        continuing, the Guaranteeing Subsidiary shall not be entitled to enforce
        or
        receive any payments arising out of, or based upon, such right of subrogation
        until all amounts then due and payable by the Issuer under the Indenture
        or the
        Notes shall have been paid in full.

       

      12.           Benefits
        Acknowledged.  The Guaranteeing Subsidiary’s Guarantee is subject to
        the terms and conditions set forth in the Indenture.  The Guaranteeing
        Subsidiary acknowledges that it will receive direct and indirect benefits
        from
        the financing arrangements contemplated by the Indenture and this Supplemental
        Indenture and that the guarantee and waivers made by it pursuant to this
        Guarantee are knowingly made in contemplation of such benefits.

       

      13.           Successors.  All
        agreements of the Guaranteeing Subsidiary in this Supplemental Indenture
        shall
        bind its Successors, except as otherwise provided in Section 2(k) hereof or
        elsewhere in this Supplemental Indenture.  All agreements of the
        Trustee in this Supplemental Indenture shall bind its successors.

       

       

      
        
          D-5

        

        
           

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
        to
        be duly executed, all as of the date first above written.

       

      
        	 	
                TEXAS
                  COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

              
	 	 
	 	 
	 	
                By:                                                                

              
	 	
                Name:

              
	 	
                Title:

              
	 	 
	 	
                TCEH
                  FINANCE, INC.

              
	 	 
	 	 
	 	
                By:                                                                

              
	 	
                Name:

              
	 	
                Title:

              
	 	 
	 	 
	 	
                [NAMES
                  OF GUARANTORS]

              
	 	 
	 	
                By:                                                                

              
	 	
                Name:

              
	 	
                Title:

              
	 	 
	 	 
	 	
                THE
                  BANK OF NEW YORK, as Trustee

              
	 	 
	 	 
	 	
                By:                                                                

              
	 	
                Name:

              
	 	
                Title:

              
	 	 
	 	 
	 	
                [GUARANTEEING
                  SUBSIDIARY]

              
	 	 
	 	 
	 	
                By:                                                                

              
	 	
                Name:

              
	 	
                Title:

              

      

      

      

      

      
        
          D-6Exhibit 10.1

                        AMENDMENT TO CONSULTING AGREEMENT

      Amendment (this "Amendment") made as of December 6, 2007 between Jade Art
Group Inc. (the "Company") and Jin-Jun Xiong (the "Consultant"), an individual
retained by the Company under that Consulting Agreement between the Company
(formerly known as Vella Productions Inc.) and the Consultant (the "Consulting
Agreement"), an accurate and complete copy of which is attached as an exhibit
hereto.

      The parties agree to amend the Consulting Agreement to provide, as
follows:

      1. In full satisfaction for the "Services" rendered by the Consultant
under the Consulting Agreement, the Company hereby awards and delivers to the
Consultant 1,000,000 shares of the Company's common stock, $.001 par value (the
"Award Shares"). For purposes of this Amendment, the Award Shares are valued at
$0.30 per share, based upon the last reported sales price for the Company's
common stock on November 28, 2007, as reported by the OTC Bulletin Board.

      2. The Consultant acknowledges and agrees that the Award Shares have not
been registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and, because the Consultant is acquiring them directly from
the Company, constitute "restricted securities" as that term is defined under
Rule 144 of the Securities Act. Accordingly, the Consultant further acknowledges
and agrees that the Award Shares may not be sold, transferred, assigned, pledged
or subjected to any lien or security interest unless they are first registered
under the Securities Act and applicable state securities laws or an exemption
from the registration provisions of the Securities Act and applicable state
securities laws are available with respect to the proposed sale or transfer.

      3. Subsequent to the issuance to you of the Award Shares, the Company
intends to file with the U.S. Securities and Exchange Commission a registration
statement on Form S-8 registering for resale the Award Shares acquired by the
Consultant.

      4. The Consultant represents and warrants to the Company in connection
with its receipt of the Award Shares, that:

            a) the "Services" performed were not in connection with the offer or
sale of the Company's securities in a capital raising transaction or promotion
of the Company's securities;

            b) by reason of its engagement, the Consultant is sufficiently
knowledgeable about the Company's business, management and financial affairs to
evaluate, when deciding to accept the Award Shares in lieu of cash compensation,
the risks and merits of an investment in the Award Shares and the Company's
proposed business activities;

            c)the Company is entitled to an amount of Award Shares sufficient to
satisfy the withholding obligations of the Company;

                                       1
<PAGE>

            d)the Consultant has reviewed with its own tax advisors the federal,
state, local and foreign tax consequences of an investment in the Company and
the transaction contemplated by this Amendment, has relied solely upon such
advisors (and not the Company) with respect to such tax consequences, and shall
be responsible for its own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement; and

            e)an investment in the Award Shares involves a high degree of risk.

      5. The Consultant irrevocably and unconditionally releases the Company
from all claims, promises, causes of action or similar rights of any type or
nature that the Consultant has or had which in any way relate to claims for
compensation relating to the "Services."

      6. Capitalized terms not otherwise defined in this Amendment shall have
the meaning ascribed to such terms in the Consulting Agreement.

      7. Except as modified by this Amendment, the Consulting Agreement shall
remain in full force and effect.

      IN WITNESS WHEREOF, the parties have executed this Amendment, which may be
executed in counterparts, as of the day and year first indicated above.

                                          Jade Art Group Inc.

                                          By: /s/ Hua-Cai Song
                                              ----------------------------------
                                          Name:  Hua-Cai Song
                                          Title: Chief Executive Officer

                                          CONSULTANT:

                                          /s/ Jin-Jun Xiong
                                          --------------------------------------
                                          Name:    Jin-Jun Xiong
                                          Address: #6 Group, Huawu Village,
                                                   Dingzu Juweihui,
                                                   Dingzu Town, Echeng District,
                                                   Ezhou City, Hubei Province,
                                                   P.R. China

                                       2
<PAGE>

                                                            Exhibit to Amendment

                              CONSULTING AGREEMENT

This Consulting Agreement dated 8th day of October, 2007, by and between Vella
Productions Inc. (the "Company") and Jin-Jun Xiong (the "Consultant"), pursuant
to which the Company do hereby retain the Consultant to provide consulting
services, and the parties agree as follows:
1. Services For purpose of this Agreement, "Services" is defined as the
following consulting services required by the Company:
(1) Consultant will conduct a market research and evaluation works on the
education industry in China;
(2) Consultant will provide consultation and advisory services to the Company on
various corporate, accounting, legal and regulatory issues;
(3) Consultant will coordinate with the Company's management team, legal counsel
and other consultants on various corporate, accounting, legal and regulatory
matters;
(4) Consultant will provide consultation and advisory services to the Company on
strategy planning, team development, mergers and acquisition, ownership
transition designing, and public reporting requirements of the Company;
(5) Consultant will research and assist the Company in its selection of
professionals, including legal counsels, accounting firm, investment bankers,
and other intermediary entities;
(6) Consultant will assist in the review of all corporate legal documents;
(7) Consultant will assist in analyzing accounting implications and disclosure
requirements of proposed acquisitions; and
(8) such other matters as may reasonably be requested by the Client. All the
Services above were not in connection with the offer or sale of the Company's
securities in a capital raising transaction or promotion of the Company's
securities.

2. Compensation In consideration for the above services to be provided by the
Consultant for the benefit of the Company, the Consultant shall be compensated
as follows:
Fee: USD 450 per hour, with an engagement time of at least 650 hours for the
period starting from October 8, 2007 to December 31, 2007. All out-of-pocket
expenses, including but not limited to travel expenses, telephone, fax, and
printing charges shall be paid by Consultant himself (or herself). Compensation
payment can be paid by shares under the terms mutually agreed upon by both
parties in a future date under a separate Stock Award Agreement.

3. Term and Termination of the Engagement The term of the engagement hereunder
is commencing from October 8, 2007 until December 31, 2007.

This agreement may be terminated at any time by either party with or without
cause, effective upon written 30 days notice to the other party. However,
termination by the Company shall not waive the obligation of the Company to pay
the Consultant.

                            Amendment Exhibit Page 1
<PAGE>

4. Independent Contractor In providing any of the services identified herein to
the Company, Consultant shall be an independent contractor, and no party to this
Agreement shall make any representations or statements indicating or suggesting
that any joint venture, partnership, or other similar relationship exists
between the Consultant and the Company. Consultant shall not be entitled to make
any commitments or create any obligations on behalf of the Company.

5. Counterparts It is understood and agreed that this Agreement may be executed
in any number of identical counterparts, each of which may be deemed an original
for all purposes. Facsimile signatures shall have the same force and effect as
original signatures.

6. Confidentiality Consultant agreed to maintain as private and confidential all
information and documentation that it is provided with or otherwise acquires in
conjunction with the services to be provided pursuant to this Consulting
Agreement.

7. Legal Matters This Consulting Agreement shall be governed by and construed in
accordance with the laws of the People's Republic of China.

8. Indemnity As a result of Consultant's reliance on the information and
representations provided by the Company, the Company shall indemnify and hold
harmless Consultant from any and all liability and costs relating to the
services to be rendered under this Consulting Agreement.

9. Additional Terms This Consulting Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and may not be
modified except by a written instrument signed by duly authorized
representatives of both parties.

      IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the day and the year first above written.

Agreed and Approved:
                                              Vella Productions Inc.

/s/ Jin-Jun Xiong                             By: /s/ Hui Ping Cheng
------------------------------                    ------------------------------
Jin-Jun Xiong                                     Name:  Hui Ping Cheng
                                                  Title: Chief Executive Officer

                            Amendment Exhibit Page 2

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