Document:

Transaction Confirmation by TXU Generation Development Company LLC

    Exhibit
      10(jjj)

     

    

    
      	
              CONFIDENTIAL

            	 	 

    

    CONFIDENTIAL
      TREATMENT REQUESTED.

    CONFIDENTIAL
      PORTIONS OF THIS

    DOCUMENT
      HAVE BEEN REDACTED AND

    HAVE
      BEEN SEPARATELY FILED WITH THE

    COMMISSION.

    TXU
      Generation Development Company LLC

    1601
      Bryan Street

    Dallas,
      TX 75201-3411

     

    February
      ___,  2007

    ***

    

    Re:
       Transaction
      Confirmation

    

    ***

     

    

     

    

     

    

     

    

     

    

     

    Dear
      Sirs:

     

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

     

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

     

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    This
      Confirmation evidences a complete and binding agreement between Party A and
      Party B as to the terms of this Transaction to which this Confirmation relates.
      The Parties to this Confirmation shall in good faith attempt to negotiate and
      execute a 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the
“ISDA
      Form”
or,
      when executed, the “Agreement”)
      with
      such modifications as Party A and Party B will in good faith agree. Upon
      execution of the Agreement, this Confirmation will supplement, form a part
      of,
      and be subject to that Agreement. Until Party A and Party B execute and deliver
      the Agreement, if any, this Confirmation, together with all other documents
      referring to the ISDA Form (each an “Other
      Confirmation”)
      confirming transactions (each an “Other
      Transaction”
and,
      together with this Transaction, the “Party
      A Transactions”)
      entered into between Party A and Party B (notwithstanding anything to the
      contrary in an Other Confirmation), shall supplement, form a part of, and be
      subject to an agreement (which shall survive the termination of this
      Transaction) in the form of the ISDA Form as if Party A and Party B had executed
      an agreement in such form effective as of the Trade Date of this Transaction
      between Party A and Party B (but without any Schedule except for (i) the
      election of Loss and Second Method for the purposes of payments on early
      termination, (ii) New York law as the governing law, (iii) US Dollars
      (“USD”)
      as the
      Termination Currency, (iv) specifying that (A) Section 2(c)(ii) of the ISDA
      Form
      will not apply and (B) the 30-day grace period under Section 5(a)(ii) of the
      ISDA Form will not apply with respect to a breach of Sections 2(b)(i),
      2(b)(iii)(A), 2(b)(iv) of this Confirmation or (insofar as it relates to the
      delivery of collateral by Party B) Section 2(c)(ii) (solely, in the case of
      Section 2(c)(ii), where Party B has elected to provide Alternative Group
      Collateral) of this Confirmation, (v) Section 5(a)(vi) of the ISDA Form shall
      apply and be amended by: (A) deleting the phrase “, or becoming capable at such
      time of being declared,” therefrom and (B) the Threshold Amount (x) with respect
      to Party B shall be *** and (y) with respect to Party A shall be *** (vi)
“Credit Event Upon Merger” shall not apply to Party B and shall apply to Party A
      and (vii) Party A is the Calculation Agent unless an Event of Default or a
      Potential Event of Default where Party A is the Defaulting Party shall occur,
      in
      which case Party B shall be the Calculation Agent). The foregoing provisions
      will be included in the Agreement negotiated by the parties.

     

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

     

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

     

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

     

    1. Transactions:

     

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

     

    2. Collateral
      Requirements:

     

    Party
      A
      Credit Terms:

     

    Credit
      Support Provider: ***.

     

    Credit
      Support Document: ***.

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    Party
      B
      Credit Terms:

     

    Credit
      Support Provider: (a) At any time prior to the release of the Big Brown
      Collateral, Big Brown Company, (b) TXU Energy Company LLC until such time,
      if
      ever, as this Transaction is novated to the Alternative Group Borrower pursuant
      to Section 2(c)(vii) of this Confirmation and (c) to the extent that, in
      connection with the provision of any Alternative Group Collateral, guarantees
      are provided in connection therewith, the guarantors obligated on such
      guarantees. Credit Support Document: (a) Any document evidencing or granting
      a
      lien in Big Brown Collateral or Alternative Group Collateral that is provided,
      or required to be provided, by Party B hereunder for so long as the lien to
      which such document relates is required to be in effect hereunder, (b) Guaranty
      of TXU Energy Company LLC in the form attached as Annex A-2 delivered within
      two
      (2) Business Days of the execution of this Transaction (and the same shall
      remain a Credit Support Document until such time, if ever, as this Transaction
      is novated to the Alternative Group Borrower pursuant to Section 2(c)(vii)
      of
      this Confirmation) and (c) to the extent that, in connection with the provision
      of any Alternative Group Collateral, guarantees are provided in connection
      therewith, such guarantees.

     

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

     

    (b) Initial
      Provision of Big Brown Collateral; Covenants (“Phase
      I”)

     

    (i) Initial
      Provision of Big Brown Collateral.
      On or
      prior to the Trade Date, Party B shall deliver the Big Brown Collateral as
      specified in Section 2(b)(ii) of this Confirmation. 

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    (ii) Delivery
      of Collateral.
      Party
      B, in order to secure its obligations to Party A hereunder, shall cause to
      be
      delivered to Party A: (1) a first priority lien on and security interest in
      the
      Big Brown Collateral, subject to Big Brown Permitted Liens (which security
      interest shall be delivered through the execution by Party A of an Intercreditor
      Agreement Accession Agreement under the Big Brown Intercreditor Agreement);
      provided
      that
      such first priority lien and security interest is and shall be applicable solely
      to Party B’s obligations under this Transaction and all Other Transactions under
      the Agreement in an amount not to exceed its Collateral Percentage of the value
      of the Big Brown Collateral, (2) a copy of the mortgagee’s title policy on the
      real property interests in the Big Brown Collateral in an amount equal to
      $100,000,000, (3) evidence of property insurance covering the Big Brown
      Collateral consistent with customary utility standards, (4) (X) a reliance
      letter permitting Party A to rely, as of the date of the Trade Date, on the
      opinion of Hunton & Williams LLP issued on August 28, 2006 regarding the Big
      Brown Collateral, (Y) an opinion of New York counsel to Party B as to the
      enforceability of this Transaction (subject to customary qualifications,
      assumptions and exceptions) and substantially in the form of the opinion dated
      August 28, 2006 regarding the enforceability of certain other transactions
      secured by the Big Brown Collateral and (Z) an opinion of in-house counsel
      or
      Texas counsel to Party B as to the valid formation of Party B and Big Brown
      Company, the power and authority of Party B and Big Brown Company to execute,
      deliver, enter into, and perform its obligations under this Transaction and
      the
      collateral security documents, and that this Transaction and the collateral
      security documents do not violate the provisions of Party B or Big Brown
      Company’s governing documents or material agreements (collectively, the
“Opinions”
);
      (5)
      a copy of a real property mortgage and fixture filing (the “Big
      Brown Mortgage”)
      granting the lien and security interest referred to in clause (1) above, (6)
      a
      copy of UCC-1 financing statements filed with the appropriate state and local
      authorities perfecting the lien and security interest on personal property
      referred to in clause (1) above, (7) a copy of a letter agreement between Party
      B and Big Brown Company pursuant to which Party B pays Big Brown Company a
      fee
      of $500,000 per annum (in advance) in consideration for Big Brown Company making
      its assets available for credit support for Party B’s obligations, and which
      provides that, for so long as the Big Brown Collateral is provided to Party
      A
      hereunder, such letter agreement shall not be materially modified or terminated
      nor any of its material provisions waived, without the prior written consent
      of
      the collateral agent under the Big Brown Intercreditor Agreement, (8) a letter
      from TXU Energy Company LLC to Party A pursuant to which TXU Energy Company
      LLC
      indemnifies Party A from and against any and all claims, losses, liabilities,
      suits, obligations, fines, damages, judgments, penalties, charges, costs and
      expenses (including reasonable attorneys’ fees and disbursements), whether civil
      or criminal, arising under a theory of negligence or strict liability, or
      otherwise, which, directly or indirectly: (I) arise or relate to the period
      when
      an Affiliate of Party B was the owner or operator of the Big Brown Collateral,
      and (II) result from, or in connection with, any use, release or discharge
      of
      Hazardous Materials in violation of applicable law at, upon or under any
      property of Big Brown Company, and which provides that such indemnity letter
      will survive the transfer or novation of this Transaction and (9) an officer’s
      certificate (mutually acceptable to Party A and Party B) to the effect that,
      after the delivery of the Big Brown Collateral, TXU Energy Company LLC shall
      be
      solvent. To the extent that any of (1) through (9) above is delivered by Party
      B
      to Party A in connection with the execution of the confirmation dated February
      23, 2007 between Party A and Party B, Party B’s obligation to deliver such item
      hereunder shall be satisfied.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    (iii) No
      Sale of Collateral; Release of Collateral.
      

     

    (A)No
      Sale of Collateral.
      For so
      long as Party B is required to provide Big Brown Collateral hereunder, Party
      B
      shall not, and shall not permit Big Brown Company to sell, lease, transfer
      or
      otherwise dispose of any material portion of the Big Brown Collateral;
provided
      that
      Party B and Big Brown Company shall be permitted to (i) sell or otherwise
      dispose of power, capacity, ancillary services, coal, natural gas, fuel or
      inventory, (ii) sell, lease, transfer or otherwise dispose of assets that are
      obsolete, damaged or not used or useful in its business, (iii) sell, lease,
      transfer or otherwise dispose of assets to an Affiliate as contemplated by
      Section 6(d) of the Big Brown Intercreditor Agreement and (iv) sell, lease,
      transfer or otherwise dispose of assets for cash consideration in an aggregate
      amount not to exceed $25,000,000 in any calendar year.

     

    (B)Release
      of Collateral.
      On the
      earlier of (A) the date on which no obligations in respect of this Transaction
      remain outstanding (other than contingent and unasserted obligations in respect
      of indemnities and similar provisions), (B) the Eagle Date and (C) if Party
      B
      provides a first lien on Alternative Group Collateral to Party A as provided
      in
      Section 2(c)(ii) of this Confirmation, the date of execution and delivery of
      a
      Alternative Group First Lien Facility, Party A shall, at Party B’s sole cost and
      expense, release its liens on and security interests in the Big Brown Collateral
      and promptly execute such releases and other documentation as may be necessary
      or, in the reasonable opinion of Party B, desirable to effect such release
      (but
      only, in the case of the foregoing clause (C), if substitute collateral
      contemplated by this Agreement has been concurrently provided).

     

    (iv) Restrictions
      on Further Liens.
      To the
      extent that any mortgage or security interest has been granted in the Big Brown
      Collateral in connection with this Transaction and for so long as such lien
      is
      required to remain outstanding hereunder, Party B shall not, and shall cause
      Big
      Brown Company not to, create, incur or suffer to exist any liens on Big Brown
      Collateral other than the liens granted herein and any Big Brown Permitted
      Lien
      (including, without limitation, in the case of Big Brown Permitted Liens, liens
      in favor of other counterparties on power purchase agreements and commodity
      or
      hedging agreements).

     

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

     

    (vi) Further
      Assurances.
      For so
      long as Party B is required to provide Big Brown Collateral hereunder, Party
      B
      shall, and shall cause, as applicable, Big Brown Company to preserve, protect
      and defend the liens and security interests granted on such collateral and,
      from
      time to time, take such actions as may be reasonably necessary to render fully
      valid and enforceable under all applicable laws the rights, liens and priorities
      of Party A with respect to such collateral furnished thereunder or intended
      to
      be so furnished.

     

    (c) Group
      Financing (“Phase II”)

     

    (i) Occurrence
      of Eagle Date.
      

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    (A)In
      the
      event that the Eagle Date shall
      occur, the terms of all Commodity Transactions subject hereto shall be amended
      and restated automatically to reflect the terms set forth on Annex X and the
      rights and obligations under all Commodity Transactions subject hereto shall
      be
      novated from Party B to TXU Energy Company
      LLC. The
      term “Eagle
      Date”
shall
      mean the date of the closing of the secured first lien financing transaction
      described in the commitment letter (the “Eagle
      Letter”)
      dated
      as of February 25, 2007 among *** (the “Eagle
      Group First Lien Facilities”).
      

     

    (B)[Reserved]. 

     

    (ii) Provision
      of Alternative Group Collateral.

     

    (A)If
      (1)
      the Eagle Date has not occurred on or prior to the termination or expiration
      of
      the Eagle Letter and (2) TXU Corp. and its controlled Affiliates (the
“TXU
      Group”)
      or a
      subset thereof consisting of at least TXU Energy Company LLC and its controlled
      subsidiaries (the TXU Group or any such subset, the “TXU
      Alternative Group”)
      enter
      into a secured first lien financing transaction (the “Alternative
      Group First Lien Facilities”)
      within
      twenty-four (24) months following the termination or expiration of the Eagle
      Letter, in order to secure its obligations under this Transaction and the
      Agreement, Party B may, at its sole option, deliver to Party A in consideration
      for Party A’s release of its lien on the Big Brown Collateral: 

     

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    (I)
       a
      first
      priority security interest in and lien on the Alternative Group Collateral,
      which security interest and lien are Pari Passu with the Alternative Group
      First
      Lien Facilities, subject to Alternative Group Collateral Permitted Liens (which
      security interest shall be granted through the execution by Party A of an
      instrument which entitles Party A to share in the first priority lien granted
      in
      the Alternative Group Collateral to holders of obligations under the Alternative
      Group First Lien Facilities and a collateral agency and intercreditor agreement
      executed in connection with the Alternative Group First Lien Facilities, which
      collateral agency and intercreditor agreement shall be on terms materially
      consistent with Section 2(c)(ii)(B) of this Confirmation (the “Alternative
      Intercreditor Agreement”));
      provided that such first priority security interest and lien is and shall be
      applicable solely to Party B’s obligations under the Party A Transactions and
      the Agreement; provided,
      however,
      that
      such Alternative Group First Lien Collateral shall be deemed to be insufficient
      to the extent that it is provided to support a notional amount of Commodity
      Transactions in excess of 51,000,000 MMBtus per calendar year of natural gas
      hedge transactions per 1,000 MW of gross coal-or lignite-fired capacity
      delivered as such Alternative Group First Lien Collateral (allowing that for
      development projects, hedging restrictions shall be based on EPC contractor
      projections); and provided
      however, further
      that to
      the extent that such Alternative Group First Lien Collateral is insufficient
      based on the notional amount of Commodity Transactions as set forth in the
      preceding proviso, Party B shall select Commodity Transactions represented
      by
      such excess notional amounts which shall not be subject to the Alternative
      Group
      First Lien Collateral and, to the extent that such Commodity Transactions are
      Party A Transactions, such Party A Transactions shall remain supported by the
      lien on the Big Brown Collateral (which, in such circumstance, 
      shall
      not be released in full upon the provision of the Alternative Group Collateral
      as otherwise provided herein and no action on the part of Party A or Party
      B
      shall be required to permit such liens to remain outstanding on the Big Brown
      Collateral and otherwise be subject to the terms of the Big Brown Intercreditor
      Agreement and this Confirmation) or shall be subject to alternate credit support
      arrangements to be negotiated between Party A and Party B; 

     

    
      	 	
              (II)
                

            	
              a
                reliance letter permitting Party A to rely on all opinions given
                to the
                administrative agent for the lenders in connection with the closing
                of the
                Alternative Group First Lien Facilities; and

            

    

     

    
      	 	
              (III)
                

            	
              a
                copy of a real property mortgage and fixture filing granting the
                lien and
                security interest referred to in clause (I) above together with copies
                of
                UCC-1 financing statements filed with the appropriate state and local
                authorities perfecting the lien and security interest on personal
                property
                referred to in clause (I) above. 

            

    

     

    Notwithstanding
      anything herein to the contrary, Party B shall have no obligation to provide
      a
      first lien on the Alternative Group Collateral to Party A and Party B’s
      obligations to Party A shall, in such case, remain supported solely by the
      Big
      Brown Collateral and the guaranty of TXU Energy Company LLC substantially in
      the
      form of Annex A-2 hereto.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    (B)The
      salient terms of the Alternative Intercreditor Agreement shall provide that
      (1)
      Party A’s first lien shall be Pari Passu with
      the
      Alternative Group First Lien Facilities, (2) Party A shall be entitled to share
      in the first lien on the Alternative Group Collateral as a secured party in
      the
      event of a liquidation of such collateral and (3) Party A (I)
      shall
      have voting rights with respect to any remedies proposed to be taken by the
      holders of indebtedness under the Alternative Group First Lien Facilities with
      respect to the Alternative Group Collateral and all other matters relating
      to
      the Alternative Group Collateral or first lien collateral documents granting
      liens on the Alternative Group Collateral (and such voting rights shall be
      calculated at an amount equal to the greater of its Aggregate Net Settlement
      Amount and *** and (II) shall have voting rights with respect to any amendment
      or waiver of any provision of the Alternative Intercreditor Agreement that
      by
      its terms affects Party A or any other holders of obligations relating to
      commodity hedges or power purchase agreements disproportionately as compared
      to
      any other holders of indebtedness under the Alternative Group First Lien
      Facilities and such amendment or waiver shall only be effective if approved
      by a
      majority in principal amount of obligations that are disproportionately
      affected.
      Party A
      shall not be afforded any other voting rights or right to approve amendments
      to
      the Alternative Intercreditor Agreement.

     

    (iii) Phase
      II Incorporation of Restrictive Covenants.
      In the
      event that Party B provides to Party A a lien on Alternative Group Collateral
      and prior to the date of the release of any such lien, the following terms,
      in
      the form contained in the Alternative Group First Lien Facilities as of the
      date
      of its execution and (except with respect to clauses (A) through (D) below)
      giving effect to subsequent modification, waiver, replacement or refinancing,
      shall be incorporated by reference herein or by supplement hereto: (A)
      limitation of first lien indebtedness, subject to certain baskets to be agreed,
      (B) limitation on liens, subject to certain baskets to be agreed, (C)
      prohibition on speculative hedging, (D) restriction on hedging to specified
      volume and tenors restrictions (for development projects, hedging restrictions
      shall be based on EPC contractor projections), (E) maintenance of insurance,
      (F)
      restrictions on asset sales and lien releases; provided, that with respect
      to
      any asset sale permitted under the applicable Alternative Group First Lien
      Facilities, the proceeds of which are applied to reduce first lien indebtedness,
      Party B shall terminate or collateralize its hedges in an amount equal to its
      pro rata portion of such asset sale proceeds, as further specified in Section
      2(c)(iv) of this Confirmation; and provided further that none of Party B, any
      guarantor or any of their respective subsidiaries shall agree to an amendment,
      waiver or other modification of any restriction on the disposition of assets
      or
      release of liens or guarantors set forth in the definitive documentation for
      any
      applicable Alternative Group First Lien Facility (or any successor facility)
      that adversely and disproportionately affects Party A, giving regard to the
      affect such change would have on the collateral and guarantee release provisions
      of the Alternative Intercreditor Agreement and the applicable collateral
      security documents; and provided further, such terms referred to clauses (A)
      through (F) shall have default grace periods with respect thereto equivalent
      to
      those in the Alternative Group First Lien Facilities. 

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    (iv) Phase
      II Sale of Assets.
      In the
      event that Party B provides to Party A a lien on Alternative Group Collateral
      and prior to the date of the release of any such lien, if any member of the
      TXU
      Alternative Group, as the case may be, shall sell or transfer (or release or
      subordinate any lien on), any coal-or lignite-fired power generation station
      that is a part of Alternative Group Collateral (including, without limitation,
      through the sale of any subsidiary), Party B shall calculate the “Phase
      II Allowed Hedge Capacity”,
      which
      shall equal *** per calendar year of natural gas hedge transactions per ***
      of
      gross capacity for each coal-or lignite-fired power generation station still
      owned or controlled by a member of the TXU Alternate Group, as applicable
      (excluding the power plant to be the subject of such release or lien or
      subordination) that is scheduled to be commercially available in the current
      and
      each future calendar year during the term covered by Commodity Transactions
      supported by the Alternative Group Collateral (provided that the size of the
      maximum allowed hedge position will be prorated to reflect the monthly
      production schedule in each such calendar year), and provide written notice
      of
      such Phase II Allowed Hedge Capacity to Party A. Party B shall notify Party
      A in
      the event that the outstanding notional amounts if any in respect of any such
      calendar year would be in excess of the Phase II Allowed Hedged Capacity after
      such sale or transfer. Party A and Party B agree that at the closing of such
      sale or transfer, Party B shall terminate all or a portion of the Commodity
      Transactions (including, if selected by Party B, Party A Transactions that
      are
      Commodity Transactions) (with the appropriate Party making the termination
      payment pursuant to Section 6(e) of the ISDA Form or the Agreement (as
      applicable) based on the occurrence of an “Additional Termination Event”
thereunder where both parties are Affected Parties) such that the Phase II
      Allowed Hedging Capacity is not exceeded. 

     

    (v) Further
      Assurances.
      In the
      event that Party B provides to Party A a lien on Alternative Group Collateral
      and prior to the date of the release of any such lien, Party B shall, and shall
      cause, as applicable, each guarantor (subject to the terms of the applicable
      Phase II Intercreditor Agreement), to preserve, protect and defend the liens
      and
      security interests granted applicable collateral documents, and, from time
      to
      time, take such actions as may be reasonably necessary to render fully valid
      and
      enforceable under all applicable laws the rights, liens and priorities of Party
      A with respect to such collateral furnished thereunder or intended to be so
      furnished.

     

    (vi) Release.
      In the
      event that Party B provides a first lien on Alternative Group Collateral in
      respect of this Transaction, on the date on which no obligations in respect
      of
      this Transaction remain outstanding (other than contingent and unasserted
      obligations in respect of indemnities and similar provisions), Party A shall,
      at
      Party B’s sole cost and expense, release its liens on and security interests in
      Alternative Group Collateral and promptly execute such releases and other
      documentation as may be necessary or, in the reasonable opinion of Party B,
      desirable to effect such release.

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    
      	 	
              (vii)

            	
              Novation
                to Alternative Group Borrower.
                In connection with the provision of a lien on Alternative Group
                Collateral, Party B may assign and novate Party A Transactions to
                the
                Alternative Group Borrower in respect of the Alternative Group First
                Lien
                Facilities in respect of which the Alternative Group Collateral has
                been
                pledged. In the event Party B elects to novate Party A Transactions
                to the
                Alternative Group Borrower, Party A shall execute such documentation
                as
                may be necessary, or in the opinion of Party B, desirable to reflect
                such
                novation including an ISDA Master Agreement, Schedule and confirmation
                with the Alternative Group Borrower that reflects the terms of this
                Confirmation (and such novation shall only be effective upon the
                execution
                by both parties of such documentation). No payment shall be due to
                or from
                Party A or Party B in connection with such novation, except that
                Party B
                shall pay to (or receive from) the Alternative Group Borrower reasonably
                equivalent value for the execution of such novation. In the event
                that a
                novation to the Alternative Group Borrower becomes effective, the
                Guaranty
                of TXU Energy Company LLC shall be deemed fully released and discharged,
                and Party A agrees to execute such documentation as may be necessary,
                or
                in the opinion of Party B, desirable to reflect such
                discharge.

            

    

     

    (d) Additional
      Events of Default. Each
      of
      the following will constitute an Additional Event of Default hereunder with
      Party B as the Defaulting Party:

     

    (i) Prior
      to
      the release of the Big Brown Collateral and the provision of subsequent
      collateral where required by Section 2(c) of this Confirmation, any of the
      obligations of Party B to Party A hereunder cease to be subject to a valid
      and
      perfected lien on and security interest in the Big Brown Collateral pursuant
      to
      the applicable collateral documents, and having the priority purported to be
      granted under such documents.

     

    (ii) At
      any
      time following the date, if any, on which the obligations of Party B are secured
      by a lien on Alternative Group Collateral ranking Pari Passu with the lien
      securing the applicable Alternative Group First Lien Facilities, as applicable,
      any of the following occurs with respect to Party B's obligations to Party
      A or
      any guarantor’s obligations to Party A under any guarantees in respect thereof:

     

    (A)subject
      to the terms of the applicable Alternative Intercreditor Agreement, such
      obligations cease to be subject to a valid and perfected lien on and security
      interest in such Alternative Group Collateral pursuant to the applicable
      collateral documents, and having the priority purported to be granted under
      such
      documents;

     

    (B)such
      obligations cease to be at least equally and ratably secured in all respects
      with Party B's or the applicable guarantor’s obligations to the lenders under
      such Alternative Group First Lien Facilities in accordance with the terms of
      the
      Alternative Intercreditor Agreement and except as expressly permitted in Section
      2(c) of this Confirmation; and

     

    (C)such
      obligations cease to rank at least Pari Passu with Party B's or the applicable
      guarantor’s obligations to the lenders under such Alternative Group First Lien
      Facilities, as applicable, and in accordance with the terms of the Alternative
      Intercreditor Agreement and except as expressly permitted in Section 2(c) of
      this Confirmation.

     

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

     

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

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    “Alternative
      Group
      Borrower” means
      the
      borrower in respect of any Alternative
      Group First Lien Facilities.

     

    “Alternative
      Group Collateral”
shall
      mean collateral granted under the Alternative Group First Lien
      Facilities.

     

    “Alternative
      Group Collateral Permitted Liens”
shall
      mean any and all liens permitted under the terms of the Alternative Group First
      Lien Facilities.

     

    “Alternative
      Group First Lien Facilities”
has
      the
      meaning set forth in Section 2(c)(ii)(A) of this Confirmation.

     

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

     

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

     

    “Big
      Brown Collateral”
shall
      mean: (a) the two generating units of the Big Brown Facility known as Unit
      1 and
      Unit 2, and all associated fixtures, contracts, inventory, general intangibles,
      appurtenances and easements that are reasonably necessary to operate these
      generating units; and (b) all proceeds therefrom; provided
      that any
      facilities that are necessary or, in the opinion of Party B, desirable for
      the
      development, construction and operation of the planned development of Big Brown
      Unit 3 and that would otherwise be a part of the Big Brown Collateral shall
      be
      expressly excluded therefrom (and, to the extent a lien thereon or a security
      interest therein is granted to Party A in connection herewith, Party A shall
      promptly release such lien on and security interest in such property upon the
      request of Party B and shall execute such releases and other documentation
      as
      may be necessary or, in the reasonable opinion of Party B, desirable to effect
      such release).

     

    “Big
      Brown Intercreditor Agreement”
means
      that certain Amended and Restated Collateral Agency and Intercreditor Agreement
      dated as of February 23, 2007 among DevCo, as obligor, TXU Big Brown Company,
      L.P., as pledgor, ***and each of the other parties that are party thereto from
      time to time, as amended.

     

    “Big
      Brown Permitted Liens”
shall
      mean:

     

    
      	
              (a)

            	
              liens
                created under the Big Brown
                Mortgage;

            

    

     

    
      	
              (b)

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

            

    

     

    
      	
              (c)

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

            

    

     

    
      	
              (d)

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

            

    

     

    
      	
              (e)

            	
              liens
                consisting of encumbrances set forth and described on the applicable
                schedules to the applicable title commitments and/or title policies
                delivered pursuant to Section 2(b)(ii)(2) of this
                Confirmation;

            

    

     

    
      	
              (f)

            	
              other
                liens incident to the ordinary course of
                business;

            

    

     

    
      	
              (g)

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

            

    

     

    
      	
              (h)

            	
              additional
                liens in favor of counterparties under power purchase agreements
                or
                commodity or hedging agreements subject to the aggregate Collateral
                Percentage of all such persons, together with Party A, never exceeding
                1.00 (i.e.,
                100%);

            

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    
      	
              (i)

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

            

    

     

    
      	
              (j)

            	
              second
                priority or third priority liens that are subordinated to the first
                priority liens;

            

    

     

    provided,
      however, that the foregoing liens listed in clauses (b), (c), (d), (f) and
      (g)
      do not in the aggregate materially impair the value of the Big Brown Collateral.
      

     

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

     

    
      	 	
              (A)

            	
              the
                terms of the Agreement, this Confirmation, this Transaction and any
                Other
                Transactions;

            

    

     

    
      	 	
              (B)

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

            

    

     

    
      	 	
              (C)

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

            

    

     

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

     

    
      	 	
              (W)

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

            

    

     

    
      	 	
              (X)

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

            

    

     

    
      	 	
              (Y)

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

            

    

     

    “Collateral
      Percentage”
shall
      mean a quotient, expressed as a percentage, equal to: (a) the aggregate notional
      amount of MMBtus that are subject of this Transaction divided by (b) the Full
      Hedge Amount; provided
      that the
      numerator of the Collateral Percentage may, with respect to Party A, be adjusted
      in accordance with Other Transactions executed under the Agreement. In the
      event
      that Party A and Party B undertake a Commodity Transaction that is in the nature
      of a power purchase or sale agreement, each megawatt hour of power subject
      of
      such Commodity Transaction shall equal 8.00 MMBtu.

     

    “Eagle
      Date”
has
      the
      meaning set forth in Section 2(c)(i)(A) of this Confirmation.

     

    “Eagle
      Group First Lien Facilities”
has
      the
      meaning set forth in Section 2(c)(i)(A) of this Confirmation.

     

    “Eagle
      Letter”
has
      the
      meaning set forth in Section 2(c)(i)(A) of this Confirmation.

     

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

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    “Exposure”
means,
      at any time and from time to time during the term of the Agreement (and
      notwithstanding whether an Event of Default under the Agreement has occurred),
      an amount equal to the Loss that would be owed to Party A by Party B at such
      time, if any. For purposes of this definition, the calculation of Loss shall
      be
      calculated by Party A as if all outstanding Party A Transactions had been
      liquidated, and in addition thereto, shall include all amounts owed but not
      yet
      paid by either Party A or Party B, whether or not such amounts are due, for
      performance already provided pursuant to any and all Party A Transactions;
      provided that Party A shall not be required to provide any documentation in
      support of its calculation of Exposure, and Party A’s calculation thereof shall
      be conclusive for all purposes in the absence of manifest error (it being
      acknowledged and agreed that if the calculation of Exposure hereunder results
      in
      a negative amount, Exposure shall be zero).

     

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

     

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

     

    “Incremental
      Exposure”
means,
      as of any date of determination, (x) Party A’s Exposure as of such date of
      determination minus (y) Party A’s Exposure as of the date of a default that is
      the subject of any cure pursuant to the Consent (it being acknowledged and
      agreed that if the calculation of Incremental Exposure hereunder results in
      a
      negative amount, Incremental Exposure shall be zero). 

     

    “Pari
      Passu”
means
      with respect to the Alternative Group Collateral and Party B’s obligations to
      Party A hereunder, pari passu on liquidation and in rights to ordinary course
      cash flow (which pari passu ranking will be satisfied if ordinary course
      settlement payments rank at least pari passu with ordinary course interest
      payments and Early Termination Payments rank pari passu with accelerated
      principal payments).

     

    3. Payment
      Instructions:

     

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

     

    4. Additional
      Terms and Conditions:

     

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

     

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

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    (c) Transfer
      and Novation Rights.
      Party B
      may assign its rights and delegate its obligations under any Transaction, in
      whole or in part, to any Affiliate (an “Assignee”)
      Controlled by TXU Corp., effective (the “Assignment
      Effective Date”)
      upon
      delivery to Party A of an executed acceptance and assumption by the Assignee
      of
      the transferred obligations of Party B under the Party A Transaction(s) (the
      “Transferred
      Obligations”).
      On
      the Assignment Effective Date, (a) to the extent that the Assignee has provided
      credit support reasonably acceptable to Party A (taking into account Party
      A's
      relative credit position before and after the proposed assignment) in lieu
      of
      the credit support provided as set out in “Party B Credit Terms” above (provided
      that the Assignee may continue to provide the credit support outlined in Section
      2 of this Confirmation, and, if so, Party A shall be obliged to accept such
      credit support), Party A shall release its lien on such collateral and promptly
      execute such releases and other documentation as may be necessary or, in the
      reasonable opinion of Party B, desirable to effect such release, (b) Party
      B
      shall be released from all obligations and liabilities arising under the
      Transferred Obligations; and (c) the Transferred Obligations shall cease to
      be
“Transaction(s)” under the Agreement and shall be deemed to be “Transaction(s)”
under the master agreement between Assignee and Party A; provided that, if
      at
      such time Assignee and Party A have not entered into a master agreement,
      Assignee and Party A shall be deemed to have entered into a form of 1992 ISDA
      Master Agreement (Multicurrency - Cross Border) without any Schedule attached
      thereto, except for (i) the election of Loss and Second Method for the purposes
      of payments on early termination, (ii) New York law as the governing law, (iii)
      USD as the Termination Currency, (iv) specifying that Section 2(c)(ii) of the
      ISDA Form will not apply, and (v) Party A as the Calculation Agent unless an
      Event of Default or a Potential Event of Default where Party A is the Defaulting
      Party shall occur, in which case Assignee shall be the Calculation
      Agent.

     

    (d) Financing
      Consent.
      Party A
      also hereby consents to the assignment of this Agreement (and the rights and
      obligations of Party B hereunder) pursuant to the applicable collateral
      documents to the agent of the holders of the related secured obligations. If
      requested by Party B, Party A shall execute and deliver on the closing date
      under the Group First Lien Facilities, as applicable, a consent agreement with
      the trustee or administrative agent of the lenders under the Group First Lien
      Facilities in commercially reasonable form in which Party A consents to the
      collateral assignment of the Agreement (the “Consent”
);
      provided, however, that in no event will the forbearance or standstill period
      under such Consent (the period between (a) the effective date of notice from
      Party A to the trustee or administrative agent that an Event of Default,
      Termination Event or Additional Termination Event has occurred with respect
      to
      Party B or that Party A otherwise has the right to terminate the Agreement,
      and
      (b) the date on which an Early Termination Date is designated) be greater than:
      (i) in the case of termination due to an event described in Section 5(a)(vi)
      of
      the ISDA Form, zero (-0-) days; (ii) in the case of termination due to monetary
      defaults, ten (10) days; (iii) in the case termination due to an event described
      under Section 5(a)(vii) of the ISDA Form (other than any such default arising
      as
      a result of any proceeding under Chapter 7 of the United States Bankruptcy
      Code,
      in which event, there shall be no cure period), two (2) days; and (iv) in the
      case of termination due to non-monetary defaults, thirty (30) days.
      Notwithstanding the foregoing, in the case of (ii) and (iv) above, any such
      right to cure shall terminate if Party A shall not have been provided with
      cash
      collateral, one or more letters of credit or any combination thereof (in the
      case of any letter of credit, in form and substance reasonably satisfactory
      to
      Party A) in an aggregate amount equal to or greater than 110% of Party A’s
      Incremental Exposure at such time to secure Party B's obligations under the
      Agreement, such termination to be effective on the second business day following
      receipt of Party A's first notice of the amount of such Incremental Exposure
      and
      thereafter on the business day immediately following receipt of Party A's notice
      of the amount of such Incremental Exposure.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    (e) Commodity
      Definitions.

     

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

     

    (A)Price
      Source Disruption

     

    (B)Trading
      Disruption

     

    (C)Disappearance
      of Commodity Reference Price

     

    (D)Material
      Change in Formula

     

    (E)Material
      Change in Content

     

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

     

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

     

    (B)Fallback
      Reference Price (if the parties have specified an alternate Commodity Reference
      Price in this Confirmation or any Other Confirmation);

     

    (C)Negotiated
      Fallback; and

     

    (D)Fallback
      Reference Dealers.

     

    (f) Confidentiality.  Each
      party that receives Confidential Information hereunder (the “Receiving
      Party”)
      agrees
      that all such Confidential Information will be held and treated by it and its
      representatives inconfidence and will not, except as hereinafter provided,
      without the prior written consent of the party that provided such Confidential
      Information (the “Providing
      Party”),
      be
      disclosed, in any manner whatsoever, in whole or in part, and will not be used
      other than in connection with the purposes contemplated in this Confirmation;
      provided
      that
      either party may disclose such Confidential Information (i) to potential
      arrangers of financing and potential lenders (and their respective accountants,
      attorneys and advisors) (provided that disclosure will not be made to potential
      lenders until the arrangers of financing have launched a general syndication
      process as evidenced by the holding of a bank meeting), (ii) to credit rating
      agencies, (iii) as required by applicable securities laws or regulatory
      authorities and (iv) to potential acquirers of any of the Big Brown Collateral
      or assets comprising Alternative Group Collateral. Except as set forth in
      clauses (i) through (iv), in the event that the Receiving Party is requested
      or
      required to disclose any Confidential Information, the Receiving Party shall
      provide the Providing Party with prompt written notice of any such request
      or
      requirement, if such notice is, in the determination of the Receiving Party’s
      counsel, permitted by law, so that the Providing Party may seek an appropriate
      protective order or waive compliance with the provisions of this Section. If,
      failing the entry of a protective order or the receipt of a waiver hereunder,
      the Receiving Party, in the determination of its counsel, is compelled to
      disclose Confidential Information, the Receiving Party may disclose that portion
      of the Confidential Information which the Receiving Party’s counsel advises that
      the Receiving Party is compelled to disclose. All right, title and interest
      in
      Confidential Information shall remain with the Providing Party and nothing
      contained herein shall be construed as granting or conferring any rights by
      license or otherwise in any Confidential Information.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    5. Non-reliance
      Representations:

     

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

     

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

     

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

     

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

     

    6. Representations
      and Warranties:

     

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

     

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

     

    7. Additional
      Representations:

     

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

     

    (a) to
      the
      extent such collateral consists of equity interests of in any entity, the liens
      granted to Party A (or to the applicable collateral agent for the benefit of
      Party A) are free and clear of all liens, restrictions on transfer or other
      encumbrances other than those (i) arising pursuant to the limited liability
      company agreements or other governing documents of such entity or applicable
      securities laws, (ii) for taxes not yet due, real property taxes imposed by
      the
      State of Texas that are not yet delinquent, or taxes that are being contested
       in good faith and for which reserves have been maintained in accordance
      with GAAP, (iii) that arise by operation of law and (iv) permitted pursuant
      to
      the Alternative Group First Lien Facilities (or related second lien facilities);
      and

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

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

     

    8. Limitation
      of Liability:

     

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

     

    

     

    Please
      provide your confirmation that the foregoing accurately reflects our agreement
      by signing in the space below and delivering a duly executed counterpart hereof
      (which delivery shall be deemed to have been made upon delivery thereof at
      our
      above address or upon our receipt of a facsimile transmission of a copy thereof
      to our facsimile (214-875-9050)). Your response should reflect the appropriate
      person within your organization who has authority to enter into this Agreement.
      Please direct and questions or concerns to Sara Herrlein at (214)
      875-9526.

    
      	 	 	
              Very
                truly yours,

            	 
	 	 	 	 
	 	 	
              TXU
                Generation Development Company LLC

            	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Anthony Horton

            	 
	 	
              Name:

            	
              Anthony
                Horton

            	 
	 	
              Title:

            	
              Senior
                Vice President & Treasurer

            	 
	 	 	 	 
	 	 	 	 

    

    

    

    
      	
              ACCEPTED
                AND AGREED

            	 	 
	 	 	 	 
	
              ***

            	 	 	 
	 	 	 	 
	
              By:

            	
              /s/
                ***

            	 	 
	
              Name:

            	
              ***

            	 	 
	
              Title:

            	
              ***

            	 	 

    

    

     

    

    

    
      
        
          
            ***
              CONFIDENTIAL MATERIAL REDACTED

            AND
              FILED
              SEPARATELY WITH THE

            COMMISSION

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    

     

    Schedule
      I 

     

    Transaction
      Terms

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    
       

      ***CONFIDENTIAL
        MATERIAL REDACTED

      AND
        FILED SEPARATELY WITH THE
        COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    ***CONFIDENTIAL
      MATERIAL REDACTED

    AND
      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              Contract
                Reference Number:

            	
              ***

            
	
              Trade
                Date:

            	
              23
                Feb 2007

            
	
              Commodity
                Type:

            	
              Nymex
                Natural Gas - USD/MMbtu

            
	
              Fixed
                Price Payer:

            	
              ***

            
	
              Floating
                Price Payer:

            	
              TXU
                Generation Development Company LLC

            
	
              Start
                Date:

            	
              ***

            
	
              End
                Date:

            	
              ***

            
	
              Determination
                Period(s):

            	
              12
                monthly period(s) with each Determination Period corresponding to
                a
                calendar month ("Reference Month"), beginning with the Start Date
                and
                ending on the End Date

            
	
              Quantity
                per Year:

            	
              ***

            
	
              Quantity
                per Month:

            	
              The
                Quantity per Year divided by twelve (monthly periods in one year).
                The
                calculation will be rounded to the nearest MMbtu.

            
	
              Fixed
                Price:

            	
              ***

            
	
              Floating
                Price:

            	
              For
                each Determination Period, the closing price on the last trading
                day of
                the applicable contract (“Pricing Day”) of the New York Mercantile
                Exchange's (Nymex) Natural Gas Henry Hub Futures Contract for the
                Reference Month stated in U.S. Dollars per MMbtu as made public by
                the
                Nymex on the Pricing Day. 

            
	
              If,
                for any Determination Period, the Fixed Price exceeds the Floating
                Price,
                the Fixed Price Payer shall pay the Floating Price Payer an amount
                equal
                to the product of (x) the Fixed Price minus the Floating Price, and
                (y)
                the applicable Quantity per Month. If for any Determination Period,
                the
                Floating Price exceeds the Fixed Price, the Floating Price Payer
                shall pay
                the Fixed Price Payer an amount equal to the product of (x) the Floating
                Price minus the Fixed Price, and (y) the applicable Quantity per
                Month.
                If, for any Determination Period, the Floating Price is equal to
                the Fixed
                Price, then no payment shall be owed by either party to the
                other.

            
	
              Settlement
                Date(s):

            	
              The
                day the Floating Price is published in each Determination
                Period

            
	
              Payment
                Date(s):

            	
              5
                New York Business Day(s) after each Settlement Date via wire transfer
                of
                Federal Funds

            

    

    

    
      ***CONFIDENTIAL
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    ANNEX
      X

    
      	
              CONFIDENTIAL

            	 	 

    

     

    

     

    TXU
      Energy Company LLC

     

    1601
      Bryan Street

     

    Dallas,
      TX 75201-3411

     

    __________,
      2007

     

    ***

     

    
      	
              Re:

            	
              Transaction
                Confirmation

            

    

     

    Our
      Ref:_____________  Fax:  _______________

     

    ***
      Ref:
      _____________

     

    

     

    

     

    

     

    

     

    Dear
      Sirs:

     

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

     

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

     

    ***CONFIDENTIAL
      MATERIAL REDACTED

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      FILED SEPARATELY WITH THE COMMISSION.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    This
      Confirmation evidences a complete and binding agreement between Party A and
      Party B as to the terms of the Transaction to which this Confirmation relates.
      The Parties to this Confirmation shall in good faith attempt to negotiate and
      execute a 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the
“ISDA
      Form”
or,
      when executed, the “Agreement”)
      with
      such modifications as Party A and Party B will in good faith agree. Upon
      execution of the Agreement, this Confirmation will supplement, form a part
      of,
      and be subject to that Agreement. Until Party A and Party B execute and deliver
      the Agreement, if any, this Confirmation, together with all other documents
      referring to the ISDA Form (each an “Other Confirmation”)
      confirming transactions (each an “Other
      Transaction”,
      and
      together with this Transaction, the “Party
      A Transactions”)
      entered into between Party A and Party B (notwithstanding anything to the
      contrary in an Other Confirmation), shall supplement, form a part of, and be
      subject to an agreement (which shall survive the termination of this
      Transaction) in the form of the ISDA Form as if Party A and Party B had executed
      an agreement in such form effective as of the Trade Date of this Transaction
      between Party A and Party B (but without any Schedule except for (i) the
      election of Loss and Second Method for the purposes of payments on early
      termination, (ii) New York law as the governing law, (iii) US Dollars
      (“USD”)
      as the
      Termination Currency, (iv) specifying that (A) Section 2(c)(ii) of the ISDA
      Form
      will not apply, and (B) the 30-day grace period under Section 5(a)(ii) of the
      ISDA Form will not apply with respect Sections 2(b)(i) through (vi) (provided,
      that with respect to clause 2(b)(v), this provision shall not be deemed to
      limit
      the forty-five (45) day period described therein), (v) Section 5(a)(vi) of
      the
      ISDA Form shall be amended by: (A) deleting the phrase “, or becoming capable at
      such time of being declared,” and (B) the Threshold Amount (x) with respect to
      Party B shall be ***, and (y) with respect to Party A shall be *** and (z)
      “Specified Indebtedness” shall mean with respect to Party B the Group First Lien
      Facilities and any refinancing or replacement thereof or successor facility
      thereto and (vi) Party A is the Calculation Agent unless an Event of Default
      or
      a Potential Event of Default where Party A is the Defaulting Party shall occur,
      in which case Party B shall be the Calculation Agent). The foregoing provisions
      will be included in the Agreement negotiated by Party A and Party
      B.

     

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

     

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

     

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

     

    1. Transactions:

     

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

     

    2. Collateral
      Requirements:

     

    Party
      A
      Credit Terms:

     

    Credit
      Support Provider:***.

    ***CONFIDENTIAL
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    Credit
      Support Document: ***

     

    Party
      B
      Credit Terms:

     

    Credit
      Support Provider: None.

     

    Credit
      Support Document: any security document, collateral trust agreement, guaranty
      or
      any other collateral security document or arrangement evidencing or granting
      a
      lien in the Group Collateral that is entered into by Party B or one of its
      affiliates in connection with the Group First Lien Facilities.

     

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

     

    ***CONFIDENTIAL
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    (b) TXU
      Group Financing

     

    (i) Provision
      of Group Collateral.
      On the
      Eagle Date, TXU Corp and/or its subsidiaries (the “TXU
      Group”)
      will
      enter into a secured first lien financing transaction having terms similar
      to
      those set forth in the commitment letter dated as of February 25, 2007 (such
      secured financing, as the same may be amended, supplemented, restated, replaced,
      refinanced, renewed or otherwise modified from time to time, the “Group
      First Lien Facilities”),
      and,
      in connection with entering into the Group First Lien Facilities, Party B will
      secure its obligations under this Transaction and the Agreement by granting
      to
      Party A a first priority security interest in and lien on the Group Collateral,
      which security interest and lien shall rank pari passu with the Group First
      Lien
      Facilities and shall be subject only to Group Collateral Permitted Liens. Such
      security interest and liens shall be granted through instruments that entitle
      Party A’s obligations hereunder to benefit from the same lien granted in the
      Group Collateral to holders of obligations under the Group First Lien
      Facilities. Party A and the collateral agent or other representative of the
      holders of the obligations under the Group First Lien Facilities shall also
      enter into a collateral agency and intercreditor agreement in connection with
      the Group First Lien Facilities on the Eagle Date (as the same may be amended,
      supplemented, or otherwise modified from time to time, the “Intercreditor
      Agreement”),
      The
      Intercreditor Agreement shall contain the terms set forth in the last sentence
      of this clause (b)(i);
      (2)
      deliver to Party A a reliance letter permitting Party A to rely on opinions
      related to the Group Collateral given to the administrative agent for the
      lenders in connection with the closing of the Group First Lien Facilities;
      and
      (3) deliver to Party A a copy of a real property mortgage and fixture filing
      and
      all security documents granting the lien and security interest referred to
      in
      clause (1) above together with copies of UCC-1 financing statements filed with
      the appropriate state and local authorities perfecting the lien and security
      interest on personal property referred to in clause (1) above. The salient
      terms
      of the Intercreditor Agreement shall provide that Party A: (x) with respect
      to
      the lien described in clause (A), (I) such lien shall rank pari passu with
      the
      lien granted on the Group Collateral to the holders of the obligations under
      the
      Group First Lien Facilities as provided in clause (1)(A) above, (II) shall
      be
      entitled to share, on a pro rata basis, in the proceeds of any liquidation
      of
      the Group Collateral consummated in connection with a foreclosure on the Group
      Collateral in an amount equal to the Aggregate Net Settlement Amount and
      (III) (aa)
      shall have voting rights with respect to any remedies proposed to be taken
      by
      the holders of indebtedness under the Group First Lien Facilities with respect
      to the Group Collateral (and such voting rights shall be calculated at an amount
      equal to the greater of its Aggregate Net Settlement Amount and ***, where
      “Aggregate
      Net Settlement Amount”
shall
      be the payment due upon declaration of an Early Termination Date (or if no
      Early
      Termination Date has been declared, the payment that would be due upon such
      a
      declaration) in respect of this Transaction and all other Transactions under
      the
      Agreement under Section 6(e) of the ISDA Form (or the Agreement if it has been
      executed) and (bb) shall have voting rights with respect to any amendment or
      waiver of any provision of the Intercreditor Agreement that (x) changes the
      priority of Party A’s lien on the Group Collateral relative to the priortiy of
      the lien granted to the secure the obligations of the holders of the Group
      First
      Lien Facilities or the priority of payments to Party A upon a foreclosure and
      liquidation of the Group Collateral relative to the priority of the lien granted
      to the holders of the Group First Lien Credit Facilities or (y) by its terms
      affects Party A and the other holders of obligations relating to commodity
      hedges and power purchase agreements disproportionately as compared to the
      holders of obligations under the Group First Lien Facilities and such amendment
      or waiver shall only be effective if approved by a majority of all obligations
      secured by a lien on the Group Collateral (where Party A’s voting rights shall
      be calculated in the manner set forth above) that is disproportionately
      affected.
      

    
      ***CONFIDENTIAL
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        COMMISSION.

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    (ii) Restrictive
      Covenants.
      Simultaneously with the execution of the Group First Lien Facilities, the
      following terms, in the form contained in the Group First Lien Facilities giving
      effect to subsequent modification, amendment, supplement, waiver, replacement
      or
      refinancing, shall be incorporated by reference herein or by supplement hereto:
      (A) limitation on liens; and (B)maintenance of insurance. The restriction
      requiring that proceeds from asset sales be reinvested or used to make mandatory
      prepayments of indebtedness in the form such restriction is contained in the
      Group First Lien Facilities shall be incorporated herein without regard to
      any
      subsequent modification, amendment, supplement, waiver, replacement or
      refinancing unless Party A’s Maximum Expected Exposure is below *** at which
      point the restriction shall thereafter be subject to any subsequent
      modification, amendment, supplement, waiver, replacement or refinancing. For
      this purpose, “Maximum Expected Exposure” means the sum of (A) the average of
      the amounts that would be owing to Party A (if positive) if an Early Termination
      Date were established on the twenty days (whether or not consecutive) within
      the
      six month period preceding the relevant determination on which Party A would
      be
      owed the largest payments under Section 6(e) of the ISDA Form (after
      disregarding the day for which the highest amount would be owing to Party A
      if
      an Early Termination Date were established on such date), plus (B) the product
      of *** multiplied by the Notional Quantity remaining outstanding under this
      Transaction and all Other Transactions between Party A and Party B.

     

    (iii) Limitations
      on Trading Activities.
      Party B
      agrees to comply with the provisions of Schedule 2 hereto as of the Eagle Date.
      If Party A and Party B mutually agree to a different framework on the
      limitations on trading activities in conjunction with a TXU Group Financing,
      Schedule 2 will be updated to be consistent with the mutually acceptable
      modifications.

     

    (iv) INTENTIONALLY
      OMITTED 

     

    (v) Overhedging.
      Party B shall be subject to the following requirements: On each Determination
      Date Party B shall determine whether it is Hedge Compliant or Hedge
      Non-Compliant. Promptly following each Determination Date Party B shall provide
      a certification of its determination to Party A. If as of a Determination Date
      Party B determines that it is in Hedge Non-Compliant then it shall by not later
      than the 45th
      calendar
      day following such Determination Date become Hedge Compliant. Failure to become
      Hedge Compliant by such date shall constitute an immediate Event of Default
      with
      respect to Party B.

     

    For
      purposes of this Section, the following terms shall have the meanings specified
      below:

     

    “Determination
      Date”
means
      (i) any date on which TXU Corp. or any of its subsidiaries sells or otherwise
      disposes of a baseload power generating asset having a nameplate capacity of
      ***
      or more (each, a “Relevant Power Asset”) or, in the case of Relevant Power
      Assets under development, having an anticipated volume (based on the relevant
      EPC contract) of *** or more, (ii) any date on which Party A’s lien on a
      Relevant Power Asset is released or subordinated and (iii) the first business
      day of February of each calendar year commencing with such first business day
      to
      occur after the Eagle Date.

     

    “Hedge
      Compliant”
means
      that the aggregate net volume of Party B Hedges (aggregating actual and notional
      quantities) for each Hedge Year for which there are Party B Hedges is less
      than
      the Allowed Hedge Capacity.

     

    “Hedge
      Non-Compliant”
means
      the aggregate net volume of Party B Hedges (aggregating actual and notional
      quantities) for any Hedge Year for which there are Party B Hedges is greater
      than the Allowed Hedge Capacity. 

     

    
      ***CONFIDENTIAL
        MATERIAL REDACTED

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        FILED SEPARATELY WITH THE
        COMMISSION.

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    “Hedge
      Year”
means
      the twelve month period from January 1 through December 31 of each year during
      the term of this Transaction and any Other Transaction with the exception of
      the
      year in which the Determination Date occurs - for this year, the Hedge Year
      shall represent the remaining months of the year.

     

    “Allowed
      Hedge Capacity”
means
      in relation to each Hedge Year, the expected generation output from all baseload
      power plants of TXU Corp and its subsidiaries (excluding any such power plant
      to
      be sold and their associated hedges, but including any such power plant that,
      based on a current schedule provided by the relevant EPC provider, will be
      placed in service within *** of the Determination Date) based on TXU Corp.’s
      projected capacity factor and outage schedule by such power plant, plus any
      power purchased under power purchase contracts (including but not limited to
      power purchased from wind generation), converted to an mmbtu equivalent based
      on
      the prevailing forward looking market heat rate for that period. The Allowed
      Hedge Capacity shall be *** for the calculated mmbtu equivalent for the Hedge
      Year in which the Determination Date occurs and the immediately following Hedge
      Year (second year) and *** for next following Hedge Year and for each Hedge
      Year
      thereafter, it being understood that the Allowed Hedge Capacity for the Hedge
      Year in which a Determination Date occurs will be prorated to reflect the
      monthly production schedule for the balance of the Hedge Year.

    “Hedges”
means
      any wholesale physical and or financial sales and purchases of power or power
      equivalents (including but not limited to natural gas swaps, options or forward
      contracts); for purposes of clarity, Hedges do not include sales to end-use
      customers (such as retail residential customers) and transactions that are
      defined as trading activities in Schedule 2.

    

     

    “Party
      B Hedges”
means
      Hedges entered into by TXU Energy Company LLC or its Affiliates in connection
      with the baseload power generation business (and not the retail power business)
      conducted by such entities and Hedges entered into by any successors to such
      entities in the conduct of such power generation business.

     

    (vi) Release
      of Collateral.
      In no
      event may Party B sell assets or permit the release of the liens on the Group
      Collateral required under (b)(i), individually or in the aggregate and whether
      in one or a series of transactions, on assets comprising all or a substantially
      all of the Group Collateral. If the Group First Lien Facilities are terminated,
      including in connection with any amendment and restatement or refinancing,
      the
      liens securing Party B’s (and each guarantor’s) obligations to Party A shall
      survive. Subject to the foregoing, Party A agrees that it shall, at Party B’s
      sole cost and expense, release its liens on and security interests in the Group
      Collateral (and Party A shall promptly execute such releases and other
      documentation as may be necessary or, in the reasonable opinion of Party B,
      desirable to effect such release) on the date on which no obligations in respect
      of this Transaction remain outstanding (other than contingent and unasserted
      obligations in respect of indemnities and similar provisions).

     

    (vii) Further
      Assurances.
      The
      further assurances terms, in the form contained in the Group First Lien
      Facilities giving effect to subsequent modification, waiver, replacement or
      refinancing, shall be incorporated by reference herein or by supplement
      hereto.

     

    (c) Additional
      Events of Default.

     

    Each
      of
      the following will constitute an Additional Event of Default hereunder with
      Party B as the Defaulting Party:

     

    (i) Any
      of
      the following occurs with respect to Party B's obligations to Party A or any
      guarantor’s obligations to Party A under any guarantees in respect thereof:

     

    
      ***CONFIDENTIAL
        MATERIAL REDACTED

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    (A) such
      obligations cease to be subject to, on a pari passu basis with the obligations
      under the Group First Lien Credit Facilties, an enforceable, valid and perfected
      uncapped first priority lien on and security interest in the Group Collateral
      subject only to Group Collateral Permitted Liens (it being understood that
      the
      release of any Group Collateral not prohibited by the Agreement shall not result
      in a breach of the foregoing Additional Event of Default); or 

     

    (B) at
      any
      time a release or disposal (in one or more related transactions) of all or
      substantially all of the collateral securing the obligations of Party
      B.

     

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

     

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

     

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

     

    
      	 	
              (A)

            	
              the
                terms of the Agreement, this Confirmation, this Transaction, any
                other
                Transactions hereunder;

            

    

     

    
      	 	
              (B)

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

            

    

     

    
      	 	
              (C)

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

            

    

     

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

     

    
      	 	
              (W)

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

            

    

     

    
      	 	
              (X)

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

            

    

     

    
      	 	
              (Y)

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

            

    

     

    “Eagle
      Date”
means
      the date that TXU Corp. and/or its subsidiaries has entered the Group First
      Lien
      Facilities and Party B has secured the obligations of Party A hereunder by
      complying with clauses (1), (2) and (3) of section 2(b)(i) hereof.

     

    “Group
      Collateral”
shall
      mean collateral granted under the Group First Lien Facilities.

     

    “Group
      Collateral Permitted Liens”
shall
      have the same meaning as such similar term in the Group First Lien Facilities,
      as such term may be amended, modified, waived or supplemented from time to
      time.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    3. Payment
      Instructions:

     

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

     

    4. Additional
      Terms and Conditions:

     

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

     

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

     

    (c) Financing
      Consent.
      Party A
      also hereby consents to the assignment of this Agreement (and the rights and
      obligations of Party B hereunder) pursuant to the applicable collateral
      documents to the collateral agent or other representative of the holders of
      the
      Group First Lien Facilities. If Party B or one of its Affiliates requires
      further written acknowledgement of the foregoing consent to assignment of this
      Agreement from Party A, Party A shall not be required to execute such additional
      written acknowledgement unless it is in a form acceptable to it. 

     

    (d) Commodity
      Definitions.

     

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

     

    (A) Price
      Source Disruption

     

    (B) Trading
      Disruption

     

    (C) Disappearance
      of Commodity Reference Price

     

    (D) Material
      Change in Formula

     

    (E) Material
      Change in Content

     

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

     

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

     

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

     

    (C) Negotiated
      Fallback; and

     

    (D) Fallback
      Reference Dealers.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    (e) Confidentiality. Each
      party that receives Confidential Information hereunder (the “Receiving
      Party”)
      agrees
      that all such Confidential Information will be held and treated by it and its
      representatives in confidence and will not, except as hereinafter provided,
      without the prior written consent of the party that provided such Confidential
      Information (the “Providing
      Party”),
      be
      disclosed, in any manner whatsoever, in whole or in part, and will not be used
      other than in connection with the purposes contemplated in this Confirmation;
      provided
      that
      either party may disclose such Confidential Information (i) to potential
      investors or buyers, potential arrangers of financing and potential lenders
      (and
      their respective accountants, attorneys and advisors) (provided that disclosure
      will not be made to potential lenders until the arrangers of financing have
      launched a general syndication process as evidenced by the holding of a bank
      meeting), (ii) to credit rating agencies and (iii) as required by applicable
      securities laws or regulatory authorities. Except as set forth in clauses (i)
      through (v), in the event that the Receiving Party is requested or required
      to
      disclose any Confidential Information, the Receiving Party shall provide the
      Providing Party with prompt written notice of any such request or requirement,
      if such notice is, in the determination of the Receiving Party’s counsel,
      permitted by law, so that the Providing Party may seek an appropriate protective
      order or waive compliance with the provisions of this Section. If, failing
      the
      entry of a protective order or the receipt of a waiver hereunder, the Receiving
      Party, in the determination of its counsel, is compelled to disclose
      Confidential Information, the Receiving Party may disclose that portion of
      the
      Confidential Information which the Receiving Party’s counsel advises that the
      Receiving Party is compelled to disclose. All right, title and interest in
      Confidential Information shall remain with the Providing Party and nothing
      contained herein shall be construed as granting or conferring any rights by
      license or otherwise in any Confidential Information.

     

    5. Non-reliance
      Representations:

     

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

     

    
      	
              (a)

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

            

    

     

    
      	
              (b)

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

            

    

     

    
      	
              (c)

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

            

    

     

    6. Representations
      and Warranties:

     

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

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

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

     

    7. Additional
      Representations:

     

    As
      of the
      date hereof, Party B represents and warrants to Party A that:

     

    (a) to
      the
      extent that the Group Collateral consists of equity interests in any entity,
      the
      liens granted to Party A (or to the applicable collateral agent for the benefit
      of Party A) are free and clear of all liens other than those (i) arising
      pursuant to the limited liability company agreements or other governing
      documents of such entity or applicable securities laws, (ii) for taxes not
      yet
      due, real property taxes imposed by the State of Texas that are not yet
      delinquent, or taxes that are being contested  in good faith and for which
      reserveshave been maintained in accordance with GAAP, (iii) that arise by
      operation of law and (iv) Group Permitted Liens; and

     

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

     

    8. Limitation
      of Liability:

     

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

     

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

     

    
      	 	 	
              Very
                truly yours

              TXU
                Energy Company LLC

            	 
	 	 	 	 
	 	
              By:

            	 	 
	 	
              Name:

            	
               

            	 
	 	
              Title:

            	
               

            	 

    

     

    

    
      	
              ACCEPTED
                AND AGREED

            	 	 
	 	 	 	 
	
               

            	 	 	 
	 	 	 	 
	
              By:

            	
               

            	 	 
	
              Name:

            	
               

            	 	 
	
              Title:

            	
               

            	 	 

    

     

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

     

    CREDIT
      SUPPORT ANNEX

    to
      the Schedule to the ISDA Master Agreement

    incorporated
      by reference in the Long-Form Confirmation

    dated
      [____________], 20071 

    between

    
      	
              ***

              (“Party
                A”)

            	
              and

            	
              TXU
                ENERGY COMPANY LLC

              (“Party
                B”)

            

    

    

    Paragraph
      13. Elections
      and Variables

     

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

     

    With
      respect to Party A: Not
      Applicable.

     

    With
      respect to Party B: Not
      Applicable.

     

    10. Credit
      Support Obligations.

     

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

     

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

     

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

     

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

     

    
      ***CONFIDENTIAL
        MATERIAL REDACTED

      AND
        FILED SEPARATELY WITH THE
        COMMISSION.

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

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

    
      	 	
              Party
                A

            	
              Valuation

              Percentage

            
	
              (A) Cash

            	
              [X]

            	
              100%

            
	
              (B) negotiable
                debt obligations having an original maturity at issuance of not more
                than
                one year (1) issued by the U.S. Treasury Department (“Treasury
                Securities”), or (2) which are issued and/or guaranteed as to both
                principal and interest by the Federal Home Loan Mortgage Corporation,
                the
                Federal National Mortgage Association, or the Government National
                Mortgage
                Association, including mortgage-backed securities and REMICs
                (collectively, “Agency Securities”), but excluding interest only
                securities, principal only securities and residual
                interests.

            	
              [X]

            	
              97%

            
	
              (C) Treasury
                Securities and Agency Securities having an original maturity at issuance
                of more than one year but not more than 5 years

            	
              [X]

            	
              95%

            
	
              (D) Treasury
                Securities and Agency Securities having an original maturity at issuance
                of 5 years or more but not more than 10 years

            	
              [X]

            	
              93%

            
	
              (E) Treasury
                Securities and Agency Securities having an original maturity at issuance
                of 10 years or more

            	
              [X]

            	
              90%

            

    

    

     

    (c) Other
      Eligible Support.
      The
      following items will qualify as “Other Eligible Support” for the party
      specified: Any other type of collateral acceptable to the Secured Party in
      its
      sole discretion.

     

    (d) Thresholds.

     

    (i) “Independent
      Amount”
      means
      with respect to Party A: Not applicable.

     

    “Independent
      Amount”
      means
      with respect to Party B: Not applicable, it being understood that Party B shall
      be only a Secured Party hereunder and not a Pledgor and shall be under no
      obligation to Transfer Collateral hereunder.

     

    (ii) “Threshold”
      means
      with respect to Party A: Infinity; provided, however, that Party A’s Threshold
      shall be (i) *** if *** credit rating is (A) BBB or BBB- from S&P, or (B)
      Baa2 or Baa3 from Moody’s, or (ii) ***, if *** credit rating is below BBB- from
      S&P or below Baa3 from Moody’s; and provided further that Party A’s
      Collateral Threshold shall be *** if an Event of Default or Potential Event
      of
      Default with respect to Party A has occurred and is continuing. In the event
      of
      a split credit rating, the lower credit rating shall control.

     

    
      ***CONFIDENTIAL
        MATERIAL REDACTED

      AND
        FILED SEPARATELY WITH THE
        COMMISSION.

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    “Threshold”
      means
      with respect to Party B: Not applicable, it being understood that Party A shall
      be only a Secured Party hereunder and not a Pledgor and shall be under no
      obligation to Transfer Collateral hereunder.

     

    (iii) “Minimum
      Transfer Amount”
      means
      with respect to a party, $100,000; provided,
      however,
      that if
      an Event of Default has occurred and is continuing with respect to a party,
      the
      Minimum Transfer Amount with respect to such party shall be zero.

     

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

     

    11. Valuation
      and Timing.

     

    (a) “Valuation
      Agent”:
      Party B
      will be the Valuation Agent, subject to the following: Party A will
      automatically become the Valuation Agent (i) if Party B fails to performs its
      obligations as Valuation Agent under Paragraph 4(c) or Paragraph 6(d) in a
      timely manner, (ii) an Event of Default or Potential Event of Default with
      respect to Party B is continuing or (iii) an Early Termination Date has been
      designated in connection with any such event or a Specified Condition with
      respect to Party B, so long as an Event of Default or Potential Event of Default
      with respect to Party A is not continuing and an Early Termination Date has
      not
      occurred or been designated in connection with any such event or a Specified
      Condition with respect to Party A.

     

    (b) “Valuation
      Date”
      means
      each New York Banking Day.

     

    (c) “Valuation
      Time”
      means
      the close of business in the city of the Valuation Agent on the Local Business
      Day before the Valuation Date or date of calculation, as applicable;
provided
      that the
      calculations of Value and Exposure will be made as of approximately the same
      time on the same date.

     

    (d) “Notification
      Time”
      means no
      later than 10:00 a.m., New York time, on a Local Business Day.

     

    12. Conditions
      Precedent and Secured Party’s Rights and Remedies.
      The following Termination Event(s) will be a “Specified Condition” for the party
      specified (that party being the Affected Party if the Termination Event occurs
      with respect to that party): With respect to Party A, all Termination
      Events.

     

    13. Substitution.

     

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

     

    (b) Consent.
      The
      Pledgor is not required to obtain the Secured Party’s consent for any
      substitutions pursuant to Paragraph 4(d).

     

    14. Dispute
      Resolution.

     

    (a) “Resolution
      Time”
      means
      1:00 p.m., New York time, on the Local Business Day following the date on which
      the notice is given that gives rise to a dispute under Paragraph 5.

     

    (b) “Value”.
      For the
      purpose of Paragraph 5(i)(C) and 5(ii), the Value of Posted Credit Support
      will
      be calculated as follows:

     

    (i) The
      Value
      of Cash will be the face amount thereof, multiplied by the applicable Valuation
      Percentage.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    (ii) With
      respect to any Treasury Securities or Agency Securities, the sum of (I) (x)
      the
      mean of the high bid and low asked prices quoted on such date by any principal
      market maker for such Securities chosen by the Disputing Party, or (y) if no
      quotations are available from a principal market maker on such date, the mean
      of
      such high bid and low asked prices as of the day, next preceding such date,
      on
      which such quotations were available, plus (II) the accrued interest on such
      Securities (except to the extent Transferred to a party pursuant to any
      applicable provision of this Agreement or included in the applicable price
      referred to in (I) of this clause (B)) as of such date, multiplied by the
      applicable Valuation Percentage.

     

    (c) “Alternative”.
      The
      provisions of Paragraph 5 will apply.

     

    15. Holding
      and Using Posted Collateral.

     

    (a) Eligibility
      to Hold Posted Collateral; Custodians.
      Party B
      and its Custodian will be entitled to hold Posted Collateral pursuant to
      Paragraph 6(b), provided
      that the
      following conditions applicable to it are satisfied:

     

    (i) Party
      B
      is not a Defaulting Party.

     

    (ii) No
      Specified Condition has occurred and is continuing with respect to Party
      B.

     

    (iii) Posted
      Collateral is held only in the United States.

     

    Initially,
      the Custodian for Party B is: To be specified.

     

    (b) Use
      of Posted Collateral.
      The
      provisions of Paragraph 6(c) will apply to Party B.

     

    16. Distributions
      and Interest Amount.

     

    (a) Interest
      Rate.
      The
“Interest Rate” will be, with respect to Eligible Collateral in the form of
      Cash, for any day, the rate equal to the overnight Fed Funds (Effective) rate,
      in effect for such day, as set forth on Telerate Page 120 or any successor
      page
      thereto on or about 11:00 a.m., New York time, on such day, brought out to
      two
      decimal places or, if no successor page is quoted, any page agreed to by the
      parties.

     

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

     

    (c) Alternative
      to Interest Amount.
      Not
      Applicable.

     

    17. Additional
      Representations.

    None.

     

    18. Other
      Eligible Support and Other Posted Support.

     

    (a) “Value”
      with
      respect to Other Eligible Support and Other Posted Support means: Not
      Applicable.

     

    (b) “Transfer”
      with
      respect to Other Eligible Support and Other Posted Support means: Not
      Applicable.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    19. Demands
      and Notices.

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

    
      	
              With
                respect to Party A:

            	
               

               

               

               

              Tel:
                

              Fax:
                

              Email:
                

            
	 	 
	
              With
                respect to Party B:

            	
              ________________________

            
	 	
              ________________________

            
	 	
              ________________________

            

    

     

    20. Addresses
      for Transfers.

     

    Party
      A: To
      be
      specified by Party A in writing.

     

    Party
      B: To
      be
      specified by Party B in writing.

     

    21. Other
      Provisions:

     

    None.

    IN
      WITNESS WHEREOF
      the
      parties have executed this Annex as of the date specified on the first page
      hereof.

    

    
      	 	
              ***

            
	 	 
	 	 
	 	
              By:_________________________________

            
	 	
              Name:

            
	 	
              Title:

            
	 	 
	 	
              TXU
                ENERGY COMPANY LLC

            
	 	 
	 	 
	 	 
	 	
              By:_________________________________

            
	 	
              Name:

            
	 	
              Title:

            

    

    

    
      ***CONFIDENTIAL
        MATERIAL REDACTED

      AND
        FILED SEPARATELY WITH THE
        COMMISSION.

    

      

      
        
          	
                  1 

                	
                  For
                    the avoidance of doubt, this Credit Support Annex Paragraph 13,
                    together
                    with a 1994 ISDA Credit Support Annex (New York law), shall be
                    deemed to
                    become effective simultaneously and automatically with the effectiveness
                    of the Confirmation to which this Credit Support Annex Paragraph
                    13 is
                    attached.Exhibit 10.22

    
      

    

    Exhibit
      10.22

    

    Summary
      of Director Compensation for Fiscal 2007

    

    Each
      member of the Board of Directors (the “Board”) who is not an employee of
      Tredegar or any of its subsidiaries receives
      $1,500 for attendance at each Board meeting with respect to which such director
      participates. The non-executive/non-employee Chairman of the Board of Directors
      receives an additional $500 for attendance at each Board meeting. Each director
      who is a member of Tredegar’s Audit Committee, Executive Committee (non-employee
      directors only), Executive Compensation Committee and Nominating and Governance
      Committee (the “Committees”), including the chairperson of each such Committee,
receives
      $1,250 for attendance at each meeting of the Committee with respect to which
      such director participates. A
      director who participates in a Board or Committee meeting by telephone receives
      $500 for such meeting, with the exception of any Committee chairperson who
      is
      paid $750 for telephonic participation.

    

    In
      addition to individual meeting fees, each Board member receives an annual
      retainer of $16,000 plus 400 shares of Tredegar common stock. The
      non-executive/non-employee Chairman of the Board receives an additional annual
      retainer of $8,000. These retainers are payable in equal quarterly
      installments.

    

    In
      addition to individual Committee meeting fees, the Committee chairpersons
      receive the following annual retainers, payable in equal quarterly installments
      commencing after their election to such position by the Board:

    

    
      	
              Audit
                Committee Chairperson

            	 	
              $

            	
              5,000

            	 
	
              Executive
                Compensation Committee Chairperson

            	 	
              $

            	
              2,000

            	 
	
              Nominating
                & Governance Committee Chairperson

            	 	
              $

            	
              2,000

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