Document:

WARRANT

       

      THE
        SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
        THE
        SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
        SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
        STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
        OR
        APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
        SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
        OR
        APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
        SAID
        ACT. 

       

      TXP
        CORPORATION

       

      Warrant
        To Purchase Common Stock

       

      
        	
                Warrant
                  No.: TXPO-3-[1]
                  [2] [3]

              	
                Number
                  of Shares:

              	
                [8,870,000]

              
	
                [4,430,000]
                  [3,700,000]

              	 	 
	 	
                Warrant
                  Exercise Price:

              	
                $0.20

              
	 	
                Expiration
                  Date:       
                          [May]
                  __, 2013

              

      

      

      Date
        of
        Issuance: [May]
        __,
        2008

      

      TXP
        Corporation, a Nevada corporation (the “Company”),
        hereby certifies that, for good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, YA
        Global Investments, L.P.
        (the
“Holder”),
        the
        registered holder hereof or its permitted assigns, is entitled, subject to
        the
        terms set forth below, to purchase from the Company upon surrender of this
        Warrant, at any time or times on or after the date hereof, but not after
        11:59 P.M. Eastern Time on the Expiration Date (as defined herein) up to
[8,870,000]
        [4,430,000] [3,700,000] fully
        paid and nonassessable shares of Common Stock (as defined herein) of the
        Company
        (the “Warrant
        Shares”)
        at the
        exercise price per share provided in Section 1(b) below or as subsequently
        adjusted; provided, however, that in no event shall the holder be entitled
        to
        exercise this Warrant for a number of Warrant Shares in excess of that number
        of
        Warrant Shares which, upon giving effect to such exercise, would cause the
        aggregate number of shares of Common Stock beneficially owned by the holder
        and
        its affiliates to exceed 9.99% of the outstanding shares of the Common Stock
        following such exercise, except within sixty (60) days of the Expiration
        Date
        and such restriction may be waived by the Holder upon 65 days prior notice
        to
        the Company. For purposes of the foregoing proviso, the aggregate number
        of
        shares of Common Stock beneficially owned by the holder and its affiliates
        shall
        include the number of shares of Common Stock issuable upon exercise of this
        Warrant with respect to which the determination of such proviso is being
        made,
        but shall exclude shares of Common Stock which would be issuable upon
        (i) exercise of the remaining, unexercised Warrants beneficially owned by
        the holder and its affiliates and (ii) exercise or conversion of the
        unexercised or unconverted portion of any other securities of the Company
        beneficially owned by the holder and its affiliates (including, without
        limitation, any convertible notes or preferred stock) subject to a limitation
        on
        conversion or exercise analogous to the limitation contained herein. Except
        as
        set forth in the preceding sentence, for purposes of this paragraph, beneficial
        ownership shall be calculated in accordance with Section 13(d) of the Securities
        Exchange Act of 1934, as amended. For purposes of this Warrant, in determining
        the number of outstanding shares of Common Stock a holder may rely on the
        number
        of outstanding shares of Common Stock as reflected in (1) the Company’s most
        recent Form 10-Q or Form 10-KSB, as the case may be, (2) a more recent public
        announcement by the Company or (3) any other notice by the Company or its
        transfer agent setting forth the number of shares of Common Stock outstanding.
        Upon the written request of any holder, the Company shall promptly, but in
        no
        event later than one (1) Business Day following the receipt of such notice,
        confirm in writing to any such holder the number of shares of Common Stock
        then
        outstanding. In any case, the number of outstanding shares of Common Stock
        shall
        be determined after giving effect to the exercise of Warrants (as defined
        below)
        by such holder and its affiliates since the date as of which such number
        of
        outstanding shares of Common Stock was reported.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Section
        1.

       

      (a) This
        Warrant is issued pursuant to the Securities Purchase Agreement (“Securities
        Purchase Agreement”)
        dated
        the date hereof between the Company and the Buyers listed on Schedule I thereto
        or issued in exchange or substitution thereafter or replacement thereof.
        Each
        Capitalized term used, and not otherwise defined herein, shall have the meaning
        ascribed thereto in the Securities Purchase Agreement.

       

      (b) Definitions.
        The
        following words and terms as used in this Warrant shall have the following
        meanings:

       

      (i) “Approved
        Stock Plan”
means
        the Company’s Amended and Restated 2006 stock incentive plan as in effect as of
        the date of the Securities Purchase Agreement.

       

      (ii) “Business
        Day”
means
        any day other than Saturday, Sunday or other day on which commercial banks
        in
        the City of New York are authorized or required by law to remain
        closed.

       

      (iii) “Closing
        Bid Price”
means
        the closing bid price of Common Stock as quoted on the Principal Market (as
        reported by Bloomberg Financial Markets (“Bloomberg”)
        through its “Volume at Price” function).

       

      (iv) “Common
        Stock”
means
        (i) the Company’s common stock, par value $0.001 per share, and
        (ii) any capital stock into which such Common Stock shall have been changed
        or any capital stock resulting from a reclassification of such Common
        Stock.

       

      (v) “Event
        of Default”
means
        an event of default under the Securities Purchase Agreement or the Convertible
        Debentures issued in connection therewith.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (vi) “Excluded
        Securities”
means,
        (a) shares or options issued or deemed to have been issued by the Company
        pursuant to an Approved Stock Plan (b) shares of Common Stock issued or deemed
        to be issued by the Company upon the conversion, exchange or exercise of
        any
        right, option, obligation or security outstanding on the date prior to date
        of
        the Securities Purchase Agreement, provided that the terms of such right,
        option, obligation or security are not amended or otherwise modified on or
        after
        the date of the Securities Purchase Agreement, and provided that the conversion
        price, exchange price, exercise price or other purchase price is not reduced,
        adjusted or otherwise modified and the number of shares of Common Stock issued
        or issuable is not increased (whether by operation of, or in accordance with,
        the relevant governing documents or otherwise) on or after the date of the
        Securities Purchase Agreement, (c) the shares of Common Stock issued or
        deemed to be issued by the Company upon conversion of Debenture, the Prior
        Notes, or the Warrants (d) any
        issuance by the Company of securities in connection with a strategic partnership
        or a joint venture (the primary purpose of which is not to raise equity
        capital), or (e) any issuance by the Company of securities as consideration
        for
        a merger or consolidation or the acquisition of a business, product, license,
        or
        other assets of another person or entity.

       

      (vii) “Expiration
        Date”
means
        the date written on the first page of this Warrant.

       

      (viii) “Issuance
        Date”
means
        the date hereof.

       

      (ix) “Options”
means
        any rights, warrants or options to subscribe for or purchase Common Stock
        or
        Convertible Securities. 

       

      (x) “Person”
means
        an individual, a limited liability company, a partnership, a joint venture,
        a
        corporation, a trust, an unincorporated organization and a government or
        any
        department or agency thereof.

       

      (xi) “Primary
        Market”
means
        on any of (a) the American Stock Exchange, (b) New York Stock Exchange, (c)
        the
        Nasdaq Global Select Market, (d) the Nasdaq Global Market, (e) the Nasdaq
        Capital Market, or (e) the Over-the-Counter Bulletin Board (“OTCBB”)
        

       

      (xii) “Securities
        Act”
means
        the Securities Act of 1933, as amended. 

       

      (xiii) “Warrant”
means
        this Warrant and all Warrants issued in exchange, transfer or replacement
        thereof. 

       

      (xiv) “Warrant
        Exercise Price”
shall
        be $0.20 or as subsequently adjusted as provided in Section 8 hereof.

       

      (c) Other
        Definitional Provisions. 

       

      (i) Except
        as
        otherwise specified herein, all references herein (A) to the Company shall
        be deemed to include the Company’s successors and (B) to any applicable law
        defined or referred to herein shall be deemed references to such applicable
        law
        as the same may have been or may be amended or supplemented from time to
        time.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (ii) When
        used
        in this Warrant, the words “herein”,
        “hereof”,
        and
“hereunder”
        and
        words of similar import, shall refer to this Warrant as a whole and not to
        any
        provision of this Warrant, and the words “Section”,
        “Schedule”,
        and
“Exhibit”
shall
        refer to Sections of, and Schedules and Exhibits to, this Warrant unless
        otherwise specified. 

       

      (iii) Whenever
        the context so requires, the neuter gender includes the masculine or feminine,
        and the singular number includes the plural, and vice versa. 

       

      Section
        2. Exercise
        of Warrant.
        

       

      (a) Subject
        to the terms and conditions hereof, this Warrant may be exercised by the
        holder
        hereof then registered on the books of the Company, pro rata as hereinafter
        provided, at any time on any Business Day on or after the opening of business
        on
        such Business Day, commencing with the first day after the date hereof, and
        prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by delivery of
        a written notice, in the form of the subscription notice attached as
Exhibit
        A
        hereto
        (the “Exercise
        Notice”),
        of
        such holder’s election to exercise this Warrant, which notice shall specify the
        number of Warrant Shares to be purchased, payment to the Company of an
        amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares
        being purchased, multiplied by the number of Warrant Shares (at the
        applicable Warrant Exercise Price) as to which this Warrant is being
        exercised (plus any applicable issue or transfer taxes) (the “Aggregate
        Exercise Price”)
        in
        cash or wire transfer of immediately available funds and the surrender of
        this
        Warrant (or an indemnification undertaking with respect to this Warrant in
        the
        case of its loss, theft or destruction) to a common carrier for overnight
        delivery to the Company as soon as practicable following such date
        (“Cash
        Basis”)
        or
        (ii) if at the time of exercise, the Warrant Shares are not subject to an
        effective registration statement or if an Event of Default has occurred,
        by
        delivering an Exercise Notice and in lieu of making payment of the Aggregate
        Exercise Price in cash or wire transfer, elect instead to receive upon such
        exercise the “Net Number” of shares of Common Stock determined according to the
        following formula (the “Cashless
        Exercise”):
        

       

      
        	 	
                Net
                  Number = (A
                  x B) – (A x C)

              
	 	
                 B

              

      

      

      For
        purposes of the foregoing formula: 

      

      A
        = the
        total number of Warrant Shares with respect to which this Warrant is then
        being
        exercised. 

      

      B
        = the
        Closing Bid Price of the Common Stock on the date of exercise of the
        Warrant.

      

      C
        = the
        Warrant Exercise Price then in effect for the applicable Warrant Shares at
        the
        time of such exercise. 

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      In
        the
        event of any exercise of the rights represented by this Warrant in compliance
        with this Section 2, the Company shall, on or before the fifth (5th)
        Business Day following the date of receipt of the Exercise Notice, the Aggregate
        Exercise Price and this Warrant (or an indemnification undertaking with respect
        to this Warrant in the case of its loss, theft or destruction) and the receipt
        of the representations of the holder specified in Section 6 hereof, if requested
        by the Company (the “Exercise
        Delivery Documents”),
        and
        if the Common Stock is DTC eligible, credit such aggregate number of shares
        of
        Common Stock to which the holder shall be entitled to the holder’s or its
        designee’s balance account with The Depository Trust Company; provided, however,
        if the holder who submitted the Exercise Notice requested physical delivery
        of
        any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible
        then the Company shall, on or before the fifth (5th)
        Business Day following receipt of the Exercise Delivery Documents, issue
        and
        surrender to a common carrier for overnight delivery to the address specified
        in
        the Exercise Notice, a certificate, registered in the name of the holder,
        for
        the number of shares of Common Stock to which the holder shall be entitled
        pursuant to such request. Upon delivery of the Exercise Notice and Aggregate
        Exercise Price referred to in clause (i) or (ii) above the holder of this
        Warrant shall be deemed for all corporate purposes to have become the holder
        of
        record of the Warrant Shares with respect to which this Warrant has been
        exercised. In the case of a dispute as to the determination of the Warrant
        Exercise Price, the Closing Bid Price or the arithmetic calculation of the
        Warrant Shares, the Company shall promptly issue to the holder the number
        of
        Warrant Shares that is not disputed and shall submit the disputed determinations
        or arithmetic calculations to the holder via facsimile within one (1) Business
        Day of receipt of the holder’s Exercise Notice. 

       

      (b) If
        the
        holder and the Company are unable to agree upon the determination of the
        Warrant
        Exercise Price or arithmetic calculation of the Warrant Shares within one
        (1)
        day of such disputed determination or arithmetic calculation being submitted
        to
        the holder, then the Company shall immediately submit via facsimile (i) the
        disputed determination of the Warrant Exercise Price or the Closing Bid Price
        to
        an independent, reputable investment banking firm or (ii) the disputed
        arithmetic calculation of the Warrant Shares to its independent, outside
        accountant. The Company shall cause the investment banking firm or the
        accountant, as the case may be, to perform the determinations or calculations
        and notify the Company and the holder of the results no later than forty-eight
        (48) hours from the time it receives the disputed determinations or
        calculations. Such investment banking firm’s or accountant’s determination or
        calculation, as the case may be, shall be deemed conclusive absent manifest
        error.

       

      (c) Unless
        the rights represented by this Warrant shall have expired or shall have been
        fully exercised, the Company shall, as soon as practicable and in no event
        later
        than five (5) Business Days after any exercise and at its own expense, issue
        a
        new Warrant identical in all respects to this Warrant exercised except it
        shall
        represent rights to purchase the number of Warrant Shares purchasable
        immediately prior to such exercise under this Warrant exercised, less the
        number
        of Warrant Shares with respect to which such Warrant is exercised.

       

      (d) No
        fractional Warrant Shares are to be issued upon any pro rata exercise of
        this
        Warrant, but rather the number of Warrant Shares issued upon such exercise
        of
        this Warrant shall be rounded up or down to the nearest whole
        number.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      Section
        3. Covenants
        as to Common Stock.
        The
        Company hereby covenants and agrees as follows:

       

      (a) This
        Warrant is, and any Warrants issued in substitution for or replacement of
        this
        Warrant will upon issuance be, duly authorized and validly issued.

       

      (b) All
        Warrant Shares which may be issued upon the exercise of the rights represented
        by this Warrant will, upon issuance, be validly issued, fully paid and
        nonassessable and free from all taxes, liens and charges with respect to
        the
        issue thereof.

       

      (c) During
        the period within which the rights represented by this Warrant may be exercised,
        the Company will at all times have authorized and reserved at least one hundred
        percent (100%) of the number of shares of Common Stock needed to provide
        for the
        exercise of the rights then represented by this Warrant and the par value
        of
        said shares will at all times be less than or equal to the applicable Warrant
        Exercise Price. If at any time the Company does not have a sufficient number
        of
        shares of Common Stock authorized and available, then the Company shall call
        and
        hold a special meeting of its stockholders within ninety (90) days of that
        time for the sole purpose of increasing the number of authorized shares of
        Common Stock.

       

      (d) If
        at any
        time after the date hereof the Company shall file a registration statement,
        the
        Company shall include the Warrant Shares issuable to the holder, pursuant
        to the
        terms of this Warrant and shall maintain, so long as any other shares of
        Common
        Stock shall be so listed, such listing of all Warrant Shares from time to
        time
        issuable upon the exercise of this Warrant; and the Company shall so list
        on
        each national securities exchange or automated quotation system, as the case
        may
        be, and shall maintain such listing of, any other shares of capital stock
        of the
        Company issuable upon the exercise of this Warrant if and so long as any
        shares
        of the same class shall be listed on such national securities exchange or
        automated quotation system.

       

      (e) The
        Company will not, by amendment of its Articles of Incorporation or through
        any
        reorganization, transfer of assets, consolidation, merger, dissolution, issue
        or
        sale of securities, or any other voluntary action, avoid or seek to avoid
        the
        observance or performance of any of the terms to be observed or performed
        by it
        hereunder, but will at all times in good faith assist in the carrying out
        of all
        the provisions of this Warrant and in the taking of all such action as may
        reasonably be requested by the holder of this Warrant in order to protect
        the
        exercise privilege of the holder of this Warrant against dilution or other
        impairment, consistent with the tenor and purpose of this Warrant. The Company
        will not increase the par value of any shares of Common Stock receivable
        upon
        the exercise of this Warrant above the Warrant Exercise Price then in effect,
        and (ii) will take all such actions as may be necessary or appropriate in
        order that the Company may validly and legally issue fully paid and
        nonassessable shares of Common Stock upon the exercise of this
        Warrant.

       

      (f) This
        Warrant will be binding upon any entity succeeding to the Company by merger,
        consolidation or acquisition of all or substantially all of the Company’s
        assets.

       

      Section
        4. Taxes.
        The
        Company shall pay any and all taxes, except any applicable withholding, which
        may be payable with respect to the issuance and delivery of Warrant Shares
        upon
        exercise of this Warrant.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      Section
        5. Warrant
        Holder Not Deemed a Stockholder.
        Except
        as otherwise specifically provided herein, no holder, as such, of this Warrant
        shall be entitled to vote or receive dividends or be deemed the holder of
        shares
        of capital stock of the Company for any purpose, nor shall anything contained
        in
        this Warrant be construed to confer upon the holder hereof, as such, any
        of the
        rights of a stockholder of the Company or any right to vote, give or withhold
        consent to any corporate action (whether any reorganization, issue of stock,
        reclassification of stock, consolidation, merger, conveyance or otherwise),
        receive notice of meetings, receive dividends or subscription rights, or
        otherwise, prior to the issuance to the holder of this Warrant of the Warrant
        Shares which he or she is then entitled to receive upon the due exercise
        of this
        Warrant. In addition, nothing contained in this Warrant shall be construed
        as
        imposing any liabilities on such holder to purchase any securities (upon
        exercise of this Warrant or otherwise) or as a stockholder of the Company,
        whether such liabilities are asserted by the Company or by creditors of the
        Company. Notwithstanding this Section 5, the Company will provide the holder
        of
        this Warrant with copies of the same notices and other information given
        to the
        stockholders of the Company generally, contemporaneously with the giving
        thereof
        to the stockholders.

       

      Section
        6. Representations
        of Holder.
        The
        holder of this Warrant, by the acceptance hereof, represents that it is
        acquiring this Warrant and the Warrant Shares for its own account for investment
        only and not with a view towards, or for resale in connection with, the public
        sale or distribution of this Warrant or the Warrant Shares, except pursuant
        to
        sales registered or exempted under the Securities Act; provided, however,
        that
        by making the representations herein, the holder does not agree to hold this
        Warrant or any of the Warrant Shares for any minimum or other specific term
        and
        reserves the right to dispose of this Warrant and the Warrant Shares at any
        time
        in accordance with or pursuant to a registration statement or an exemption
        under
        the Securities Act. The holder of this Warrant further represents, by acceptance
        hereof, that, as of this date, such holder is an “accredited investor” as such
        term is defined in Rule 501(a)(1) of Regulation D promulgated by the
        Securities and Exchange Commission under the Securities Act (an “Accredited
        Investor”).
        Upon
        exercise of this Warrant the holder shall, if requested by the Company, confirm
        in writing, in a form satisfactory to the Company, that the Warrant Shares
        so
        purchased are being acquired solely for the holder’s own account and not as a
        nominee for any other party, for investment, and not with a view toward
        distribution or resale and that such holder is an Accredited Investor. If
        such
        holder cannot make such representations because they would be factually
        incorrect, it shall be a condition to such holder’s exercise of this Warrant
        that the Company receive such other representations as the Company considers
        reasonably necessary to assure the Company that the issuance of its securities
        upon exercise of this Warrant shall not violate any United States or state
        securities laws.

       

      Section
        7. Ownership
        and Transfer.

       

      (a) The
        Company shall maintain at its principal executive offices (or such other
        office
        or agency of the Company as it may designate by notice to the holder hereof),
        a
        register for this Warrant, in which the Company shall record the name and
        address of the person in whose name this Warrant has been issued, as well
        as the
        name and address of each transferee. The Company may treat the person in
        whose
        name any Warrant is registered on the register as the owner and holder thereof
        for all purposes, notwithstanding any notice to the contrary, but in all
        events
        recognizing any transfers made in accordance with the terms of this
        Warrant.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      Section
        8. Adjustment
        of Warrant Exercise Price and Number of Shares.
        The
        Warrant Exercise Price and the number of shares of Common Stock issuable
        upon
        exercise of this Warrant shall be adjusted from time to time as
        follows:

       

      (a) Adjustment
        of Warrant Exercise Price and Number of Shares upon Issuance of Common
        Stock.
        If and
        whenever on or after the Issuance Date of this Warrant, the Company issues
        or
        sells, or is deemed to have issued or sold, any shares of Common
        Stock (other than Excluded Securities) for a consideration per share less
        than a price (the “Applicable
        Price”)
        equal
        to the Warrant Exercise Price in effect immediately prior to such issuance
        or
        sale, then immediately after such issue or sale the Warrant Exercise Price
        then
        in effect shall be reduced to an amount equal to such consideration per share.
        Upon each such adjustment of the Warrant Exercise Price hereunder, the number
        of
        Warrant Shares issuable upon exercise of this Warrant shall be adjusted to
        the
        number of shares determined by multiplying the Warrant Exercise Price in
        effect
        immediately prior to such adjustment by the number of Warrant Shares issuable
        upon exercise of this Warrant immediately prior to such adjustment and dividing
        the product thereof by the Warrant Exercise Price resulting from such
        adjustments. 

       

      (b) Effect
        on Warrant Exercise Price of Certain Events.
        For
        purposes of determining the adjusted Warrant Exercise Price under Section
        8(a)
        above, the following shall be applicable:

       

      (i) Issuance
        of Options.
        If
        after the date hereof, the Company in any manner grants any Options and the
        lowest price per share for which one share of Common Stock is issuable upon
        the
        exercise of any such Option or upon conversion or exchange of any convertible
        securities issuable upon exercise of any such Option is less than the Applicable
        Price, then such share of Common Stock shall be deemed to be outstanding
        and to
        have been issued and sold by the Company at the time of the granting or sale
        of
        such Option for such price per share. For purposes of this Section 8(b)(i),
        the
        lowest price per share for which one share of Common Stock is issuable upon
        exercise of such Options or upon conversion or exchange of such Convertible
        Securities shall be equal to the sum of the lowest amounts of consideration
        (if
        any) received or receivable by the Company with respect to any one share
        of
        Common Stock upon the granting or sale of the Option, upon exercise of the
        Option or upon conversion or exchange of any convertible security issuable
        upon
        exercise of such Option. No further adjustment of the Warrant Exercise Price
        shall be made upon the actual issuance of such Common Stock or of such
        convertible securities upon the exercise of such Options or upon the actual
        issuance of such Common Stock upon conversion or exchange of such convertible
        securities.

      (ii) Issuance
        of Convertible Securities.
        If the
        Company in any manner issues or sells any convertible securities and the
        lowest
        price per share for which one share of Common Stock is issuable upon the
        conversion or exchange thereof is less than the Applicable Price, then such
        share of Common Stock shall be deemed to be outstanding and to have been
        issued
        and sold by the Company at the time of the issuance or sale of such convertible
        securities for such price per share. For the purposes of this
        Section 8(b)(ii), the lowest price per share for which one share of Common
        Stock is issuable upon such conversion or exchange shall be equal to the
        sum of
        the lowest amounts of consideration (if any) received or receivable by the
        Company with respect to one share of Common Stock upon the issuance or sale
        of
        the convertible security and upon conversion or exchange of such convertible
        security. No further adjustment of the Warrant Exercise Price shall be made
        upon
        the actual issuance of such Common Stock upon conversion or exchange of such
        convertible securities, and if any such issue or sale of such convertible
        securities is made upon exercise of any Options for which adjustment of the
        Warrant Exercise Price had been or are to be made pursuant to other provisions
        of this Section 8(b), no further adjustment of the Warrant Exercise Price
        shall
        be made by reason of such issue or sale. 

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      (iii) Change
        in Option Price or Rate of Conversion.
        If the
        purchase price provided for in any Options, the additional consideration,
        if
        any, payable upon the issue, conversion or exchange of any convertible
        securities, or the rate at which any convertible securities are convertible
        into
        or exchangeable for Common Stock changes at any time, the Warrant Exercise
        Price
        in effect at the time of such change shall be adjusted to the Warrant Exercise
        Price which would have been in effect at such time had such Options or
        convertible securities provided for such changed purchase price, additional
        consideration or changed conversion rate, as the case may be, at the time
        initially granted, issued or sold and the number of Warrant Shares issuable
        upon
        exercise of this Warrant shall be correspondingly readjusted. For purposes
        of
        this Section 8(b)(iii), if the terms of any Option or convertible security
        that
        was outstanding as of the Issuance Date of this Warrant are changed in the
        manner described in the immediately preceding sentence, then such Option
        or
        convertible security and the Common Stock deemed issuable upon exercise,
        conversion or exchange thereof shall be deemed to have been issued as of
        the
        date of such change. No adjustment pursuant to this Section 8(b) shall be
        made if such adjustment would result in an increase of the Warrant Exercise
        Price then in effect.

       

      (iv) Calculation
        of Consideration Received.
        If any
        Common Stock, Options or convertible securities are issued or sold or deemed
        to
        have been issued or sold for cash, the consideration received therefore will
        be
        deemed to be the net amount received by the Company therefore. If any Common
        Stock, Options or convertible securities are issued or sold for a consideration
        other than cash, the amount of such consideration received by the Company
        will
        be the fair value of such consideration, except where such consideration
        consists of marketable securities, in which case the amount of consideration
        received by the Company will be the market price of such securities on the
        date
        of receipt of such securities. If any Common Stock, Options or convertible
        securities are issued to the owners of the non-surviving entity in connection
        with any merger in which the Company is the surviving entity, the amount
        of
        consideration therefore will be deemed to be the fair value of such portion
        of
        the net assets and business of the non-surviving entity as is attributable
        to
        such Common Stock, Options or convertible securities, as the case may be.
        The
        fair value of any consideration other than cash or securities will be determined
        jointly by the Company and the holders of Warrants representing at least
        two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
        then
        outstanding. If such parties are unable to reach agreement within ten (10)
        days after the occurrence of an event requiring valuation (the “Valuation
        Event”),
        the
        fair value of such consideration will be determined within five (5) Business
        Days after the tenth (10th)
        day
        following the Valuation Event by an independent, reputable appraiser jointly
        selected by the Company and the holders of Warrants representing at least
        two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
        then
        outstanding. The determination of such appraiser shall be final and binding
        upon
        all parties and the fees and expenses of such appraiser shall be borne jointly
        by the Company and the holders of Warrants.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      (v) Integrated
        Transactions.
        In case
        any Option is issued in connection with the issue or sale of other securities
        of
        the Company, together comprising one integrated transaction in which no specific
        consideration is allocated to such Options by the parties thereto, the Options
        will be deemed to have been issued for a consideration of $.01.

       

      (vi) Treasury
        Shares.
        The
        number of shares of Common Stock outstanding at any given time does not include
        shares owned or held by or for the account of the Company, and the disposition
        of any shares so owned or held will be considered an issue or sale of Common
        Stock.

       

      (vii) Record
        Date.
        If the
        Company takes a record of the holders of Common Stock for the purpose of
        entitling them (1) to receive a dividend or other distribution payable in
        Common Stock, Options or in convertible securities or (2) to subscribe for
        or purchase Common Stock, Options or convertible securities, then such record
        date will be deemed to be the date of the issue or sale of the shares of
        Common
        Stock deemed to have been issued or sold upon the declaration of such dividend
        or the making of such other distribution or the date of the granting of such
        right of subscription or purchase, as the case may be.

       

      (c) Adjustment
        of Warrant Exercise Price upon Subdivision or Combination of Common
        Stock.
        If the
        Company at any time after the date of issuance of this Warrant subdivides
        (by
        any stock split, stock dividend, recapitalization or otherwise) one or more
        classes of its outstanding shares of Common Stock into a greater number of
        shares, any Warrant Exercise Price in effect immediately prior to such
        subdivision will be proportionately reduced and the number of shares of Common
        Stock obtainable upon exercise of this Warrant will be proportionately
        increased. If the Company at any time after the date of issuance of this
        Warrant
        combines (by combination, reverse stock split or otherwise) one or more classes
        of its outstanding shares of Common Stock into a smaller number of shares,
        any
        Warrant Exercise Price in effect immediately prior to such combination will
        be
        proportionately increased and the number of Warrant Shares issuable upon
        exercise of this Warrant will be proportionately decreased. Any adjustment
        under
        this Section 8(c) shall become effective at the close of business on the
        date the subdivision or combination becomes effective.

       

      (d) Distribution
        of Assets.
        If the
        Company shall declare or make any dividend or other distribution of its assets
        (or rights to acquire its assets) to holders of Common Stock, by way of return
        of capital or otherwise (including, without limitation, any distribution
        of
        cash, stock or other securities, property or options by way of a dividend,
        spin
        off, reclassification, corporate rearrangement or other similar transaction)
        (a
“Distribution”),
        at
        any time after the issuance of this Warrant, then, in each such
        case:

       

      (i) any
        Warrant Exercise Price in effect immediately prior to the close of business
        on
        the record date fixed for the determination of holders of Common Stock
        entitled to
        receive the Distribution shall be reduced, effective as of the close of business
        on such record date, to a price determined by multiplying such Warrant Exercise
        Price by a fraction of which (A) the numerator shall be the Closing Sale
        Price
        of the Common Stock on the trading day immediately preceding such record
        date
        minus the value of the Distribution (as determined in good faith by the
        Company’s Board of Directors) applicable to one share of Common Stock, and (B)
        the denominator shall be the Closing Sale Price of the Common Stock on the
        trading day immediately preceding such record date; and

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      (ii) either
        (A) the number of Warrant Shares obtainable upon exercise of this Warrant
        shall
        be increased to a number of shares equal to the number of shares of Common
        Stock
        obtainable immediately prior to the close of business on the record date
        fixed
        for the determination of holders of Common Stock entitled to receive the
        Distribution multiplied by the reciprocal of the fraction set forth in the
        immediately preceding clause (i), or (B) in the event that the Distribution
        is
        of common stock of a company whose common stock is traded on a national
        securities exchange or a national automated quotation system, then the holder
        of
        this Warrant shall receive an additional warrant to purchase Common Stock,
        the
        terms of which shall be identical to those of this Warrant, except that such
        warrant shall be exercisable into the amount of the assets that would have
        been
        payable to the holder of this Warrant pursuant to the Distribution had the
        holder exercised this Warrant immediately prior to such record date and with
        an
        exercise price equal to the amount by which the exercise price of this Warrant
        was decreased with respect to the Distribution pursuant to the terms of the
        immediately preceding clause (i).

       

      (e) Certain
        Events.
        If any
        event occurs of the type contemplated by the provisions of this Section 8
        but not expressly provided for by such provisions (including, without
        limitation, the granting of stock appreciation rights, phantom stock rights
        or
        other rights with equity features), then the Company’s Board of Directors will
        make an appropriate adjustment in the Warrant Exercise Price, and the number
        of
        shares of Common Stock obtainable upon exercise of this Warrant, if applicable,
        so as to protect the rights of the holders of the Warrants; provided, except
        as
        set forth in section 8(c),that no such adjustment pursuant to this Section
        8(e)
        will increase the Warrant Exercise Price or decrease the number of shares
        of
        Common Stock obtainable as otherwise determined pursuant to this Section
        8.

       

      (f) Voluntary
        Adjustments By Company.
        The
        Company may at any time during the term of this Warrant reduce the then current
        Exercise Price to any amount and for any period of time deemed appropriate
        by
        the Board of Directors of the Company.

       

      (g) Notices.

       

      (i) Immediately
        upon any adjustment of the Warrant Exercise Price, the Company will give
        written
        notice thereof to the holder of this Warrant, setting forth in reasonable
        detail, and certifying, the calculation of such adjustment.

       

      (ii) The
        Company will give written notice to the holder of this Warrant at least ten
        (10)
        days prior to the date on which the Company closes its books or takes a record
        (A) with respect to any dividend or distribution upon the Common Stock,
        (B) with respect to any pro rata subscription offer to holders of Common
        Stock or (C) for determining rights to vote with respect to any Organic
        Change (as defined below), dissolution or liquidation, provided that such
        information shall be made known to the public prior to or in conjunction
        with
        such notice being provided to such holder.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      (iii) The
        Company will also give written notice to the holder of this Warrant at least
        ten
        (10) days prior to the date on which any Organic Change, dissolution or
        liquidation will take place, provided that such information shall be made
        known
        to the public prior to or in conjunction with such notice being provided
        to such
        holder.

      Section
        9. Purchase
        Rights; Reorganization, Reclassification, Consolidation, Merger or
        Sale.

       

      (a) In
        addition to any adjustments pursuant to Section 8 above, if at any time the
        Company grants, issues or sells any Options, Convertible Securities or rights
        to
        purchase stock, warrants, securities or other property pro rata to the record
        holders of any class of Common Stock (the “Purchase
        Rights”),
        then
        the holder of this Warrant will be entitled to acquire, upon the terms
        applicable to such Purchase Rights, the aggregate Purchase Rights which such
        holder could have acquired if such holder had held the number of shares of
        Common Stock acquirable upon complete exercise of this Warrant immediately
        before the date on which a record is taken for the grant, issuance or sale
        of
        such Purchase Rights, or, if no such record is taken, the date as of which
        the
        record holders of Common Stock are to be determined for the grant, issue
        or sale
        of such Purchase Rights.

       

      (b) Any
        recapitalization, reorganization, reclassification, consolidation, merger,
        sale
        of all or substantially all of the Company’s assets to another Person or other
        transaction in each case which is effected in such a way that holders of
        Common
        Stock are entitled to receive (either directly or upon subsequent liquidation)
        stock, securities or assets with respect to or in exchange for Common Stock
        is
        referred to herein as an “Organic
        Change.”
Prior
        to the consummation of any (i) sale of all or substantially all of the Company’s
        assets to an acquiring Person or (ii) other Organic Change following which
        the
        Company is not a surviving entity, the Company will secure from the Person
        purchasing such assets or the successor resulting from such Organic Change
        (in
        each case, the “Acquiring
        Entity”)
        a
        written agreement (in form and substance satisfactory to the holders of Warrants
        representing at least two-thirds (iii) of the Warrant Shares issuable upon
        exercise of the Warrants then outstanding) to deliver to each holder of Warrants
        in exchange for such Warrants, a security of the Acquiring Entity evidenced
        by a
        written instrument substantially similar in form and substance to this Warrant
        and satisfactory to the holders of the Warrants (including an adjusted warrant
        exercise price equal to the value for the Common Stock reflected by the terms
        of
        such consolidation, merger or sale, and exercisable for a corresponding number
        of shares of Common Stock acquirable and receivable upon exercise of the
        Warrants without regard to any limitations on exercise, if the value so
        reflected is less than any Applicable Warrant Exercise Price immediately
        prior
        to such consolidation, merger or sale). Prior to the consummation of any
        other
        Organic Change, the Company shall make appropriate provision (in form and
        substance satisfactory to the holders of Warrants representing a
        majority of
        the
        Warrant Shares issuable upon exercise of the Warrants then outstanding) to
        insure that each of the holders of the Warrants will thereafter have the
        right
        to acquire and receive in lieu of or in addition to (as the case may be)
        the
        Warrant Shares immediately theretofore issuable and receivable upon the exercise
        of such holder’s Warrants (without regard to any limitations on exercise),
        such shares of stock, securities or assets that would have been issued or
        payable in such Organic Change with respect to or in exchange for the number
        of
        Warrant Shares which would have been issuable and receivable upon the exercise
        of such holder’s Warrant as of the date of such Organic Change (without taking
        into account any limitations or restrictions on the exercisability of this
        Warrant).

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      Section
        10. Lost,
        Stolen, Mutilated or Destroyed Warrant.
        If this
        Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
        on
        receipt of an indemnification undertaking (or, in the case of a mutilated
        Warrant, the Warrant), issue a new Warrant of like denomination and tenor
        as
        this Warrant so lost, stolen, mutilated or destroyed.

       

      Section
        11. Notice.
        Any
        notices, consents, waivers or other communications required or permitted
        to be
        given under the terms of this Warrant must be in writing and will be deemed
        to
        have been delivered: (i) upon receipt, when delivered personally;
        (ii) upon receipt, when sent by facsimile (provided confirmation of receipt
        is received by the sending party transmission is mechanically or electronically
        generated and kept on file by the sending party); or (iii) one Business Day
        after deposit with a nationally recognized overnight delivery service, in
        each
        case properly addressed to the party to receive the same. The addresses and
        facsimile numbers for such communications shall be:

       

      
        	
                If
                  to Holder:

              	
                YA
                  Global Investments, L.P.

              
	 	
                101
                  Hudson Street – Suite 3700

              
	 	
                Jersey
                  City, NJ 07302

              
	 	
                Attention:

              	
                Mark
                  A. Angelo

              
	 	
                Telephone:

              	
                (201)
                  985-8300

              
	 	
                Facsimile:

              	
                (201)
                  985-8266

              
	 	 
	
                With
                  Copy to:

              	
                David
                  Gonzalez, Esq.

              
	 	
                101
                  Hudson Street – Suite 3700

              
	 	
                Jersey
                  City, NJ 07302

              
	 	
                Telephone:

              	
                (201)
                  985-8300

              
	 	
                Facsimile:

              	
                (201)
                  985-8266

              
	 	 
	
                If
                  to the Company, to:

              	
                TXP
                  Corporation

              
	 	
                1299
                  Commerce Drive

              
	 	
                Richardson,
                  Texas 75081

              
	 	
                Attention:
                  Michael Shores

              
	 	
                Telephone:
                  (214) 575-9300

              
	 	
                Facsimile:
                  (214) 575-9314

              
	 	 
	
                With
                  a copy to:

              	
                Hodgson
                  Russ LLP

              
	 	
                1540
                  Broadway, 24th Floor

              
	 	
                New
                  York, New York 10036

              
	 	
                Attention:
                  Eric Pinero, Esq.

              
	 	
                Telephone:
                  (212) 751-4300

              
	 	
                Facsimile:
                  (212) 751-0928

              

      

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      If
        to a
        holder of this Warrant, to it at the address and facsimile number set forth
        in
        this Section 11, or at such other address and facsimile as shall be delivered
        to
        the Company upon the issuance or transfer of this Warrant. Each party shall
        provide five days’ prior written notice to the other party of any change in
        address or facsimile number. Written confirmation of receipt (A) given by
        the recipient of such notice, consent, facsimile, waiver or other communication,
        (or (B) provided by a nationally recognized overnight delivery service
        shall be rebuttable evidence of personal service, receipt by facsimile or
        receipt from a nationally recognized overnight delivery service in accordance
        with clause (i), (ii) or (iii) above, respectively.

       

      Section
        12. Date.
        The
        date of this Warrant is set forth on page 1 hereof. This Warrant, in all
        events, shall be wholly void and of no effect after the close of business
        on the
        Expiration Date, except that notwithstanding any other provisions hereof,
        the
        provisions of Section 8(b) shall continue in full force and effect after
        such date as to any Warrant Shares or other securities issued upon the exercise
        of this Warrant.

       

      Section
        13. Amendment
        and Waiver.
        Except
        as otherwise provided herein, the provisions of the Warrants may be amended
        and
        the Company may take any action herein prohibited, or omit to perform any
        act
        herein required to be performed by it, only if the Company has obtained the
        written consent of the holders of Warrants representing at least two-thirds
        of
        the Warrant Shares issuable upon exercise of the Warrants then outstanding;
        provided that, except for Section 8(d), no such action may increase the Warrant
        Exercise Price or decrease the number of shares or class of stock obtainable
        upon exercise of any Warrant without the written consent of the holder of
        such
        Warrant.

       

      Section
        14. Descriptive
        Headings; Governing Law.
        The
        descriptive headings of the several sections and paragraphs of this Warrant
        are
        inserted for convenience only and do not constitute a part of this Warrant.
        The
        corporate laws of the State of Nevada shall govern all issues concerning
        the
        relative rights of the Company and its stockholders. All other questions
        concerning the construction, validity, enforcement and interpretation of
        this
        Agreement shall be governed by the internal laws of the State of New Jersey,
        without giving effect to any choice of law or conflict of law provision or
        rule
        (whether of the State of New Jersey or any other jurisdictions) that would
        cause
        the application of the laws of any jurisdictions other than the State of
        New
        Jersey. Each party hereby irrevocably submits to the exclusive jurisdiction
        of
        the state and federal courts sitting in Hudson County and the United States
        District Court for the District of New Jersey, for the adjudication of any
        dispute hereunder or in connection herewith or therewith, or with any
        transaction contemplated hereby or discussed herein, and hereby irrevocably
        waives, and agrees not to assert in any suit, action or proceeding, any claim
        that it is not personally subject to the jurisdiction of any such court,
        that
        such suit, action or proceeding is brought in an inconvenient forum or that
        the
        venue of such suit, action or proceeding is improper. Each party hereby
        irrevocably waives personal service of process and consents to process being
        served in any such suit, action or proceeding by mailing a copy thereof to
        such
        party at the address for such notices to it under this Agreement and agrees
        that
        such service shall constitute good and sufficient service of process and
        notice
        thereof. Nothing contained herein shall be deemed to limit in any way any
        right
        to serve process in any manner permitted by law. 

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      Section
        15. Waiver
        of Jury Trial.
        AS
        A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
        PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
        RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
        ASSOCIATED WITH THIS TRANSACTION.

       

      REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF,
        the
        Company has caused this Warrant to be signed as of the date first set forth
        above.

       

      
        	 	
                TXP
                  CORPORATION

              
	 	 
	 	
                By:
                  

              	/s/
                Michael C. Shores 
	 	
                Name:  
                  Michael C. Shores

              
	 	
                Title:    
                  Chief Executive Officer

              

      

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

       

      EXHIBIT
        A TO WARRANT

       

      EXERCISE
        NOTICE

       

      TO
        BE EXECUTED

      BY
        THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

       

      TXP
        CORPORATION

       

      The
        undersigned holder hereby exercises the right to purchase ______________
        of the
        shares of Common Stock (“Warrant
        Shares”)
        of TXP
        Corporation (the “Company”),
        evidenced by the attached Warrant (the “Warrant”).
        Capitalized terms used herein and not otherwise defined shall have the
        respective meanings set forth in the Warrant.

       

      Specify
        Method of exercise by check mark:

       

      1.
        ___ Cash
        Exercise

       

      (a)
        Payment
        of Warrant Exercise Price.
        The
        holder shall pay the Aggregate Exercise Price of $______________ to the Company
        in accordance with the terms of the Warrant. 

       

      (b)
        Delivery
        of Warrant Shares.
        The
        Company shall deliver to the holder _________
        Warrant
        Shares in accordance with the terms of the Warrant. 

       

      2.
        ___ Cashless
        Exercise

       

      (a)
        Payment
        of Warrant Exercise Price.
        In lieu
        of making payment of the Aggregate Exercise Price, the holder elects to receive
        upon such exercise the Net Number of shares of Common Stock determined in
        accordance with the terms of the Warrant. 

       

      (b)
        Delivery
        of Warrant Shares.
        The
        Company shall deliver to the holder _________
        Warrant
        Shares in accordance with the terms of the Warrant. 

       

      Date:
        _______________ __, __________

      

      Name
        of
        Registered Holder

      

      By:______________________________

      Name:____________________________

      Title:_____________________________

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      EXHIBIT
        B TO WARRANT

      
         

        FORM
          OF WARRANT POWER

         

        FOR
          VALUE RECEIVED,
          the
          undersigned does hereby assign and transfer to ________________, Federal
          Identification No. __________, a warrant to purchase ____________ shares of
          the capital stock of TXP Corporation represented by warrant certificate
          no. _____, standing in the name of the undersigned on the books of said
          corporation. The undersigned does hereby irrevocably constitute and appoint
          ______________, attorney to transfer the warrants of said corporation,
          with full
          power of substitution in the premises.

         

        
          	
                  Dated:__________________________________

                	 	_______________________________________________
	 	 	 
	 	 	
                  By:____________________________________________

                
	 	 	
                  Name:__________________________________________

                
	 	 	
                  Title:___________________________________________REGISTRATION
        RIGHTS AGREEMENT

       

      THIS
        REGISTRATION RIGHTS AGREEMENT
        (this
“Agreement”),
        dated
        as of May 29, 2008, by and among TXP
        CORPORATION,
        a Nevada
        corporation (the “Company”),
        and
        the undersigned Buyers listed on Schedule I attached hereto (each, a
“Buyer”
and
        collectively, the “Buyers”).

       

      WHEREAS:

       

      A. In
        connection with the Securities Purchase Agreement by and among the parties
        hereto of even date herewith (the “Securities
        Purchase Agreement”),
        the
        Company has agreed, upon the terms and subject to the conditions of the
        Securities Purchase Agreement, to issue and sell to the Buyers (i) secured
        convertible debentures (the “Convertible
        Debentures”)
        which
        shall be convertible into shares of the Company’s common stock, par value $0.001
        per share (the “Common
        Stock,”
as
        converted, the “Conversion
        Shares”)
        in
        accordance with the terms of the Convertible Debentures, and (ii) warrants
        (the
“Warrants”),
        which
        will be exercisable to purchase shares of Common Stock (as exercised,
        collectively, the “Warrant
        Shares”).
        Capitalized terms not defined herein shall have the meaning ascribed to them
        in
        the Securities Purchase Agreement.

       

      B. To
        induce
        the Buyers to execute and deliver the Securities Purchase Agreement, the
        Company
        has agreed to provide certain registration rights under the Securities Act
        of
        1933, as amended, and the rules and regulations thereunder, or any similar
        successor statute (collectively, the “Securities
        Act”),
        and
        applicable state securities laws and other rights as provided for
        herein.

       

      NOW,
        THEREFORE,
        in
        consideration of the premises and the mutual covenants contained herein and
        other good and valuable consideration, the receipt and sufficiency of which
        are
        hereby acknowledged, the Company and the Buyers hereby agree as
        follows:

       

      1. DEFINITIONS.

       

      As
        used
        in this Agreement, the following terms shall have the following
        meanings:

       

      (a) “Effectiveness
        Deadline”
means,
        with respect to a Registration Statement filed hereunder, the 120th calendar
        day
        following the date filed, provided, however, in the event the Company is
        notified by the U.S. Securities and Exchange Commission (“SEC”)
        that
        one of the above Registration Statements will not be reviewed or is no longer
        subject to further review and comments, the Effectiveness Date as to such
        Registration Statement shall be the fifth Trading Day following the date
        on
        which the Company is so notified if such date precedes the dates required
        above.

       

      (b) “Filing
        Deadline”
means,
        with respect to the initial Registration Statement required hereunder, the
        30th
        calendar day following the date the Company receives a Filing
        Notice.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (c) “Filing
        Notice”
means
        a
        written notice from the Buyer to the Company to file a Registration Statement
        and stating the number of Registrable Securities to be included on such
        Registration Statement.

       

      (d) “Person”
means
        a
        corporation, a limited liability company, an association, a partnership,
        an
        organization, a business, an individual, a governmental or political subdivision
        thereof or a governmental agency.

       

      (e) “Prospectus”
means
        the prospectus included in a Registration Statement (including, without
        limitation, a prospectus that includes any information previously omitted
        from a
        prospectus filed as part of an effective registration statement in reliance
        upon
        Rule 430A promulgated under the Securities Act), as amended or supplemented
        by
        any prospectus supplement, with respect to the terms of the offering of any
        portion of the Registrable Securities covered by a Registration Statement,
        and
        all other amendments and supplements to the Prospectus, including post-effective
        amendments, and all material incorporated by reference or deemed to be
        incorporated by reference in such Prospectus.

       

      (f) “Registrable
        Securities”
means
        all of (i) the Conversion Shares issuable upon conversion of the Convertible
        Debentures, (ii) the Warrant Shares issued or issuable upon exercise of the
        Warrants, (iii) any additional shares issuable in connection with any
        anti-dilution provisions in the Warrants or the Convertible Debentures (without
        giving effect to any limitations on exercise set forth in the Warrants or
        Convertible Debentures) and (iv) any shares of Common Stock issued or issuable
        with respect to the Conversion Shares, the Convertible Debentures, the Warrant
        Shares, or the Warrants as a result of any stock split, dividend or other
        distribution, recapitalization or similar event or otherwise, without regard
        to
        any limitations on the conversion of the Convertible Debentures or exercise
        of
        the Warrants.

       

      (g) “Registration
        Statement”
means
        the registration statements required to be filed hereunder (including any
        additional registration statements contemplated by Section 3(c)), including
        (in
        each case) the Prospectus, amendments and supplements to such registration
        statement or Prospectus, including pre- and post-effective amendments, all
        exhibits thereto, and all material incorporated by reference or deemed to
        be
        incorporated by reference in such registration statement.

       

      (h) “Required
        Registration Amount”
means
        33% of the Company’s public float as of the trading day immediately preceding
        the applicable date of determination (or such lesser amount as the SEC may
        permit as evidenced in comments received to a filed Registration
        Statement).

       

      (i) “Rule
        415”
means
        Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule
        may
        be amended from time to time, or any similar rule or regulation hereafter
        adopted by the SEC having substantially the same purpose and effect as such
        Rule.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      2. REGISTRATION.

       

      (a) The
        Company’s registration obligations set forth in this Section 2 including its
        obligations to file Registration Statements upon receipt of Filing Notices,
        obtain effectiveness of Registration Statements, and maintain the continuous
        effectiveness of Registration Statement that have been declared effective
        shall
        begin on the date hereof and continue until all the Registrable Securities
        have
        been sold or may permanently be sold without any restrictions pursuant to
        Rule
        144, as determined by the counsel to the Company pursuant to a written opinion
        letter to such effect, addressed and acceptable to the Company’s transfer agent
        and the affected Holders (the “Registration
        Period”).
        

       

      (b) Anytime
        during the Registration Period, the Buyer shall have the right to deliver
        to the
        Company a Filing Notice which shall trigger the Company’s obligations to file a
        Registration Statement as set forth below. 

       

      (c) After
        receipt of a Filing Notice, the Company shall, on or prior to the Filing
        Deadline, prepare and file with the SEC a Registration Statement on Form
        S-1
        (or, if the Company is then eligible, on Form S-3) covering the resale by
        the
        Buyer of the Registrable Securities set forth in such Filing Notice
        equal to
        the Required Registration Amount.
        Each
        Registration Statement shall contain the “Selling
        Stockholders”
and
        “Plan
        of Distribution”
        sections in substantially the form attached hereto as Exhibit
        A
        and
        contain all the required disclosures set forth on Exhibit
        B.
        The
        Company shall use its best efforts to have each Registration Statement declared
        effective by the SEC as soon as practicable, but in no event later than the
        Effectiveness Deadline. By 9:30 am on the date following the date of
        effectiveness, the Company shall file with the SEC in accordance with Rule
        424
        under the 1933 Act the final Prospectus to be used in connection with sales
        pursuant to such Registration Statement. Prior to the filing of the Registration
        Statement with the SEC, the Company shall furnish a draft of the Registration
        Statement to the Buyer for their review and comment. The Buyer shall furnish
        comments on the Registration Statement to the Company within twenty-four
        (24)
        hours of the receipt thereof from the Company.

       

      (d) During
        the Registration Period, the Company shall (i) promptly prepare and file
        with
        the SEC such amendments (including post-effective amendments) and
        supplements to a Registration Statement and the Prospectus used in connection
        with a Registration Statement, which Prospectus is to be filed pursuant to
        Rule
        424 promulgated under the Securities Act, as may be necessary to keep such
        Registration Statement effective at all times during the Registration Period,
        (ii) prepare and file with the SEC additional Registration Statements in
        order
        to register for resale under the Securities Act all of the Registrable
        Securities; (ii) cause the related Prospectus to be amended or supplemented
        by
        any required Prospectus supplement (subject to the terms of this Agreement),
        and
        as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond
        as
        promptly as reasonably possible to any comments received from the SEC with
        respect to a Registration Statement or any amendment thereto and as promptly
        as
        reasonably possible provide the Buyers true and complete copies of all
        correspondence from and to the SEC relating to a Registration Statement
        (provided that the Company may excise any information contained therein which
        would constitute material non-public information as to any Buyer which has
        not
        executed a confidentiality agreement with the Company); and (iv) comply with
        the
        provisions of the Securities Act with respect to the disposition of all
        Registrable Securities of the Company covered by such Registration Statement
        until such time as all of such Registrable Securities shall have been disposed
        of in accordance with the intended methods of disposition by the seller or
        sellers thereof as set forth in such Registration Statement. In the case
        of
        amendments and supplements to a Registration Statement which are required
        to be
        filed pursuant to this Agreement by reason of the Company’s filing a report on
        Form 10-KSB, Form 10-QSB or Form 8-K or any analogous report under the
        Securities Exchange Act of 1934, as amended (the “Exchange
        Act”),
        the
        Company shall incorporate such report by reference into the Registration
        Statement, if applicable, or shall file such amendments or supplements with
        the
        SEC on the subsequent day on which the Exchange Act report is filed which
        created the requirement for the Company to amend or supplement the Registration
        Statement. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (e) Reduction
        of Registrable Securities Included in a Registration Statement.
        Notwithstanding anything contained herein, in the event that the SEC requires
        the Company to reduce the number of Registrable Securities to be included
        in a
        Registration Statement in order to allow the Company to rely on Rule 415
        with
        respect to a Registration Statement, then the Company shall be obligated
        to
        include in such Registration Statement (which may be a subsequent Registration
        Statement if the Company needs to withdraw a Registration Statement and refile
        a
        new Registration Statement in order to rely on Rule 415) only such limited
        portion of the Registrable Securities as the SEC shall permit. Any Registrable
        Securities that are excluded in accordance with the foregoing terms are
        hereinafter referred to as “Cut
        Back Securities.”
To
        the
        extent Cut Back Securities exist, as soon as may be permitted by the SEC,
        the
        Company shall be required to file a Registration Statement covering the resale
        of the Cut Back Securities (subject also to the terms of this Section) and
        shall
        use best efforts to cause such Registration Statement to be declared effective
        as promptly as practicable thereafter.

       

      (f) Failure
        to File or Obtain Effectiveness of the Registration Statement or Remain
        Current.
        If: (i)
        a Registration Statement is not filed on or prior to its Filing Date (if
        the
        Company files a Registration Statement without affording the Holders the
        opportunity to review and comment on the same as required by Section 3(c),
        the
        Company shall not be deemed to have satisfied this clause (i)), or (ii) the
        Company fails to file with the SEC a request for acceleration in accordance
        with
        Rule 461 promulgated under the Securities Act, within five Trading Days of
        the
        date that the Company is notified (orally or in writing, whichever is earlier)
        by the SEC that a Registration Statement will not be “reviewed,” or not subject
        to further review, or (iii) a Registration Statement filed or required to
        be
        filed hereunder is not declared effective by the SEC by its Effectiveness
        Deadline, or (iv) after the effectiveness, a Registration Statement ceases
        for
        any reason to remain continuously effective as to all Registrable Securities
        for
        which it is required to be effective, or the Holders are otherwise not permitted
        to utilize the Prospectus therein to resell such Registrable Securities for
        more
        than 30 consecutive calendar days or more than an aggregate of 40 calendar
        days
        during any 12-month period (which need not be consecutive calendar days),
        or (v)
        if after the six month anniversary of the date hereof, the Company does not
        have
        available adequate current public information as set forth in Rule 144(c)
        (any
        such failure or breach being referred to as an “Event”),
        then
        in addition to any other rights the holders of the Convertible Debentures
        may
        have hereunder or under applicable law, on each such Event date and on each
        monthly anniversary of each such Event date (if the applicable Event shall
        not
        have been cured by such date) until the applicable Event is cured, the Company
        shall pay to each holder of Convertible Debentures an amount in cash or in
        shares of Common Stock, as partial liquidated damages (“Liquidated
        Damages”)
        and
        not as a penalty, equal to 2.0% of the aggregate purchase price paid by such
        holder pursuant to the Securities Purchase Agreement for any Convertible
        Debentures then held by such holder. The parties agree that (1) the Company
        shall not be liable for Liquidated Damages under this Agreement with respect
        to
        any Warrants or Warrant Shares and (2) the maximum aggregate Liquidated Damages
        payable to a holder of Convertible Debentures under this Agreement shall
        be
        twenty four percent (24%) of the aggregate Purchase Price paid by such holder
        pursuant to the Securities Purchase Agreement. The partial Liquidated Damages
        pursuant to the terms hereof shall apply on a daily pro-rata basis for any
        portion of a month prior to the cure of an Event. Notwithstanding the foregoing,
        it shall not be deemed an Event, and no Liquidated Damages shall accrue or
        otherwise become payable by the Company, with respect to any Cut Back
        Securities.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (g) Liquidated
        Damages.
        The
        Company and the Buyer hereto acknowledge and agree that the sums payable
        under
        subsection 2(f) above shall constitute liquidated damages and not penalties
        and
        are in addition to all other rights of the Buyer, including the right to
        call a
        default. The parties further acknowledge that (i) the amount of loss or damages
        likely to be incurred is incapable or is difficult to precisely estimate,
        (ii)
        the amounts specified in such subsections bear a reasonable relationship
        to, and
        are not plainly or grossly disproportionate to, the probable loss likely
        to be
        incurred in connection with any failure by the Company to obtain or maintain
        the
        effectiveness of a Registration Statement, (iii) one of the reasons for the
        Company and the Buyer reaching an agreement as to such amounts was the
        uncertainty and cost of litigation regarding the question of actual damages,
        and
        (iv) the Company and the Buyer are sophisticated business parties and have
        been
        represented by sophisticated and able legal counsel and negotiated this
        Agreement at arm’s length. 

       

      3. RELATED
        OBLIGATIONS.

       

      (a) The
        Company shall, not less than three (3) Trading Days prior to the filing of
        each
        Registration Statement and not less than one (1) Trading Day prior to the
        filing
        of any related amendments and supplements to all Registration Statements
        (except
        for annual reports on Form 10-K or Form 10-KSB), furnish to each Buyer copies
        of
        all such documents proposed to be filed, which documents (other than those
        incorporated or deemed to be incorporated by reference) will be subject to
        the
        reasonable and prompt review of such Buyers. The Company shall not file a
        Registration Statement or any such Prospectus or any amendments or supplements
        thereto to which the Buyers shall reasonably object in good faith; provided
        that,
        the Company is notified of such objection in writing no later than two (2)
        Trading Days after the Buyers have been so furnished copies of a Registration
        Statement.

       

      (b) The
        Company shall furnish to each Buyer whose Registrable Securities are included
        in
        any Registration Statement, without charge, (i) at least one (1) copy of
        such
        Registration Statement as declared effective by the SEC and any amendment(s)
        thereto, including financial statements and schedules, all documents
        incorporated therein by reference, all exhibits and each preliminary prospectus,
        (ii) ten (10) copies of the final prospectus included in such Registration
        Statement and all amendments and supplements thereto (or such other number
        of
        copies as such Buyer may reasonably request) and (iii) such other documents
        as
        such Buyer may reasonably request from time to time in order to facilitate
        the
        disposition of the Registrable Securities owned by such Buyer.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (c) The
        Company shall use its best efforts to (i) register and qualify the Registrable
        Securities covered by a Registration Statement under such other securities
        or
“blue sky” laws of such jurisdictions in the United States as any Buyer
        reasonably requests, (ii) prepare and file in those jurisdictions, such
        amendments (including post-effective amendments) and supplements to such
        registrations and qualifications as may be necessary to maintain the
        effectiveness thereof during the Registration Period, (iii) take such other
        actions as may be necessary to maintain such registrations and qualifications
        in
        effect at all times during the Registration Period, and (iv) take all other
        actions reasonably necessary or advisable to qualify the Registrable Securities
        for sale in such jurisdictions; provided, however, that the Company shall
        not be
        required in connection therewith or as a condition thereto to (w) make any
        change to its articles of incorporation or by-laws, (x) qualify to do business
        in any jurisdiction where it would not otherwise be required to qualify but
        for
        this Section 3(d), (y) subject itself to general taxation in any such
        jurisdiction, or (z) file a general consent to service of process in any
        such
        jurisdiction. The Company shall promptly notify each Buyer who holds Registrable
        Securities of the receipt by the Company of any notification with respect
        to the
        suspension of the registration or qualification of any of the Registrable
        Securities for sale under the securities or “blue sky” laws of any jurisdiction
        in the United States or its receipt of actual notice of the initiation or
        threat
        of any proceeding for such purpose.

       

      (d) As
        promptly as practicable after becoming aware of such event or development,
        the
        Company shall notify each Buyer in writing of the happening of any event
        as a
        result of which the Prospectus included in a Registration Statement, as then
        in
        effect, includes an untrue statement of a material fact or omission to state
        a
        material fact required to be stated therein or necessary to make the statements
        therein, in light of the circumstances under which they were made, not
        misleading (provided that in no event shall such notice contain any material,
        nonpublic information), and promptly prepare a supplement or amendment to
        such
        Registration Statement to correct such untrue statement or omission, and
        deliver
        ten (10) copies of such supplement or amendment to each Buyer. The Company
        shall
        also promptly notify each Buyer in writing (i) when a Prospectus or any
        Prospectus supplement or post-effective amendment has been filed, and when
        a
        Registration Statement or any post-effective amendment has become effective
        (notification of such effectiveness shall be delivered to each Buyer by
        facsimile on the same day of such effectiveness), (ii) of any request by
        the SEC
        for amendments or supplements to a Registration Statement or related prospectus
        or related information, and (iii) of the Company’s reasonable determination
        that a post-effective amendment to a Registration Statement would be
        appropriate.

       

      (e) The
        Company shall use its best efforts to prevent the issuance of any stop order
        or
        other suspension of effectiveness of a Registration Statement, or the suspension
        of the qualification of any of the Registrable Securities for sale in any
        jurisdiction within the United States of America and, if such an order or
        suspension is issued, to obtain the withdrawal of such order or suspension
        at
        the earliest possible moment and to notify each Buyer who holds Registrable
        Securities being sold of the issuance of such order and the resolution thereof
        or its receipt of actual notice of the initiation or threat of any proceeding
        for such purpose.

       

      (f) If,
        after
        the execution of this Agreement, a Buyer believes, after consultation with
        its
        legal counsel, that it could reasonably be deemed to be an underwriter of
        Registrable Securities, at the request of any Buyer, the Company shall furnish
        to such Buyer, on the date of the effectiveness of the Registration Statement
        and thereafter from time to time on such dates as a Buyer may reasonably
        request
        (i) a letter, dated such date, from the Company’s independent certified public
        accountants in form and substance as is customarily given by independent
        certified public accountants to underwriters in an underwritten public offering,
        and (ii) an opinion, dated as of such date, of counsel representing the Company
        for purposes of such Registration Statement, in form, scope and substance
        as is
        customarily given in an underwritten public offering, addressed to the
        Buyers.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (g) If,
        after
        the execution of this Agreement, a Buyer believes, after consultation with
        its
        legal counsel, that it could reasonably be deemed to be an underwriter of
        Registrable Securities, at the request of any Buyer, the Company shall make
        available for inspection by (i) any Buyer and (ii) one (1) firm of
        accountants or other agents retained by the Buyers (collectively, the
“Inspectors”)
        all
        pertinent financial and other records, and pertinent corporate documents
        and
        properties of the Company (collectively, the “Records”),
        as
        shall be reasonably deemed necessary by each Inspector, and cause the Company’s
        officers, directors and employees to supply all information which any Inspector
        may reasonably request; provided, however, that each Inspector shall agree,
        and
        each Buyer hereby agrees, to hold in strict confidence and shall not make
        any
        disclosure (except to a Buyer) or use any Record or other information which
        the
        Company determines in good faith to be confidential, and of which determination
        the Inspectors are so notified, unless (a) the disclosure of such Records
        is
        necessary to avoid or correct a misstatement or omission in any Registration
        Statement or is otherwise required under the Securities Act, (b) the release
        of
        such Records is ordered pursuant to a final, non-appealable subpoena or order
        from a court or government body of competent jurisdiction, or (c) the
        information in such Records has been made generally available to the public
        other than by disclosure in violation of this or any other agreement of which
        the Inspector and the Buyer has knowledge. Each Buyer agrees that it shall,
        upon
        learning that disclosure of such Records is sought in or by a court or
        governmental body of competent jurisdiction or through other means, give
        prompt
        notice to the Company and allow the Company, at its expense, to undertake
        appropriate action to prevent disclosure of, or to obtain a protective order
        for, the Records deemed confidential.

       

      (h) The
        Company shall hold in confidence and not make any disclosure of information
        concerning a Buyer provided to the Company unless (i) disclosure of such
        information is necessary to comply with federal or state securities laws,
        (ii)
        the disclosure of such information is necessary to avoid or correct a
        misstatement or omission in any Registration Statement, (iii) the release
        of
        such information is ordered pursuant to a subpoena or other final,
        non-appealable order from a court or governmental body of competent
        jurisdiction, or (iv) such information has been made generally available
        to the
        public other than by disclosure in violation of this Agreement or any other
        agreement. The Company agrees that it shall, upon learning that disclosure
        of
        such information concerning a Buyer is sought in or by a court or governmental
        body of competent jurisdiction or through other means, give prompt written
        notice to such Buyer and allow such Buyer, at the Buyer’s expense, to undertake
        appropriate action to prevent disclosure of, or to obtain a protective order
        for, such information.

       

      (i) The
        Company shall use its best efforts either to cause all the Registrable
        Securities covered by a Registration Statement (i) to be listed on each
        securities exchange on which securities of the same class or series issued
        by
        the Company are then listed, if any, if the listing of such Registrable
        Securities is then permitted under the rules of such exchange or (ii) the
        inclusion for quotation on the National Association of Securities Dealers,
        Inc.
        OTC Bulletin Board for such Registrable Securities. The Company shall pay
        all
        fees and expenses in connection with satisfying its obligation under this
        Section 3(j).

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (j) The
        Company shall cooperate with each Buyer who holds Registrable Securities
        being
        offered and, to the extent applicable, to facilitate the timely preparation
        and
        delivery of certificates (not bearing any restrictive legend) representing
        the
        Registrable Securities to be offered pursuant to a Registration Statement
        and
        enable such certificates to be in such denominations or amounts, as the case
        may
        be, as the Buyers may reasonably request and registered in such names as
        the
        Buyers may request.

       

      (k) The
        Company shall use its best efforts to cause the Registrable Securities covered
        by the applicable Registration Statement to be registered with or approved
        by
        such other governmental agencies or authorities as may be necessary to
        consummate the disposition of such Registrable Securities.

       

      (l) The
        Company shall otherwise use its best efforts to comply with all applicable
        rules
        and regulations of the SEC in connection with any registration
        hereunder.

       

      (m) Within
        two (2) business days after a Registration Statement which covers Registrable
        Securities is declared effective by the SEC, the Company shall deliver, and
        shall cause legal counsel for the Company to deliver, to the transfer agent
        for
        such Registrable Securities (with copies to the Buyer whose Registrable
        Securities are included in such Registration Statement) confirmation that
        such
        Registration Statement has been declared effective by the SEC in the form
        attached hereto as Exhibit
        C.

       

      (n) The
        Company shall take all other reasonable actions necessary to expedite and
        facilitate disposition by each Buyer of Registrable Securities pursuant to
        a
        Registration Statement.

       

      4. OBLIGATIONS
        OF THE BUYERS.

       

      (a) Each
        Buyer agrees that, upon receipt of any notice from the Company of the happening
        of any event of the kind described in Section 3(d) such Buyer will immediately
        discontinue disposition of Registrable Securities pursuant to any Registration
        Statement covering such Registrable Securities until such Buyer’s receipt of the
        copies of the supplemented or amended prospectus contemplated by Section
        3(d) or
        receipt of notice that no supplement or amendment is required. Notwithstanding
        anything to the contrary, the Company shall cause its transfer agent to deliver
        unlegended certificates for shares of Common Stock to a transferee of a Buyer
        in
        accordance with the terms of the Securities Purchase Agreement in connection
        with any sale of Registrable Securities with respect to which a Buyer has
        entered into a contract for sale prior to the Buyer’s receipt of a notice from
        the Company of the happening of any event of the kind described in Section
        3(d)
        and for which the Buyer has not yet settled.

       

      (b) Each
        Buyer covenants and agrees that it will comply with the prospectus delivery
        requirements of the Securities Act as applicable to it or an exemption therefrom
        in connection with sales of Registrable
        Securities pursuant to the Registration Statement.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      5. EXPENSES
        OF REGISTRATION.

       

      All
        expenses incurred in connection with registrations, filings or qualifications
        pursuant to Sections 2 and 3, including, without limitation, all registration,
        listing and qualifications fees, printers, legal and accounting fees shall
        be
        paid by the Company. 

       

      6. INDEMNIFICATION.

       

      With
        respect to Registrable Securities which are included in a Registration Statement
        under this Agreement:

       

      (a) To
        the
        fullest extent permitted by law, the Company will, and hereby does, indemnify,
        hold harmless and defend each Buyer, the directors, officers, partners,
        employees, agents, representatives of, and each Person, if any, who controls
        any
        Buyer within the meaning of the Securities Act or the Exchange Act (each,
        an
“Indemnified
        Person”),
        against any losses, claims, damages, liabilities, judgments, fines, penalties,
        charges, costs, reasonable attorneys’ fees, amounts paid in settlement or
        expenses, joint or several (collectively, “Claims”)
        incurred in investigating, preparing or defending any action, claim, suit,
        inquiry, proceeding, investigation or appeal taken from the foregoing by
        or
        before any court or governmental, administrative or other regulatory agency,
        body or the SEC, whether pending or threatened, whether or not an indemnified
        party is or may be a party thereto (“Indemnified
        Damages”),
        to
        which any of them may become subject insofar as such Claims (or actions or
        proceedings, whether commenced or threatened, in respect thereof) arise out
        of
        or are based upon: (i) any untrue statement or alleged untrue statement of
        a
        material fact in a Registration Statement or any post-effective amendment
        thereto or in any filing made in connection with the qualification of the
        offering under the securities or other “blue sky” laws of any jurisdiction in
        which Registrable Securities are offered (“Blue
        Sky Filing”),
        or
        the omission or alleged omission to state a material fact required to be
        stated
        therein or necessary to make the statements therein not misleading; (ii)
        any
        untrue statement or alleged untrue statement of a material fact contained
        in any
        final prospectus (as amended or supplemented, if the Company files any amendment
        thereof or supplement thereto with the SEC) or the omission or alleged omission
        to state therein any material fact necessary to make the statements made
        therein, in light of the circumstances under which the statements therein
        were
        made, not misleading; or (iii) any violation or alleged violation by the
        Company
        of the Securities Act, the Exchange Act, any other law, including, without
        limitation, any state securities law, or any rule or regulation there under
        relating to the offer or sale of the Registrable Securities pursuant to a
        Registration Statement (the matters in the foregoing clauses (i) through
        (iii)
        being, collectively, “Violations”).
        The
        Company shall reimburse the Buyers and each such controlling person promptly
        as
        such expenses are incurred and are due and payable, for any legal fees or
        disbursements or other reasonable expenses incurred by them in connection
        with
        investigating or defending any such Claim. Notwithstanding anything to the
        contrary contained herein, the indemnification agreement contained in this
        Section 6(a): (x) shall not apply to a Claim by an Indemnified Person arising
        out of or based upon a Violation which occurs in reliance upon and in conformity
        with information furnished in writing to the Company by such Indemnified
        Person
        expressly for use in connection with the preparation of the Registration
        Statement or any such amendment thereof or supplement thereto; (y) shall
        not be
        available to the extent such Claim is based on a failure of the Buyer to
        deliver
        or to cause to be delivered the prospectus made available by the Company,
        if
        such prospectus was timely made available by the Company pursuant to Section
        3(c); and (z) shall not apply to amounts paid in settlement of any Claim if
        such settlement is effected without the prior written consent of the Company,
        which consent shall not be unreasonably withheld. Such indemnity shall remain
        in
        full force and effect regardless of any investigation made by or on behalf
        of
        the Indemnified Person and shall survive the transfer of the Registrable
        Securities by the Buyers pursuant to Section 9 hereof.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (b) In
        connection with a Registration Statement, each Buyer agrees to severally
        and not
        jointly indemnify, hold harmless and defend, to the same extent and in the
        same
        manner as is set forth in Section 6(a), the Company, each of its directors,
        each
        of its officers, employees, representatives, or agents and each Person, if
        any,
        who controls the Company within the meaning of the Securities Act or the
        Exchange Act (each an “Indemnified
        Party”),
        against any Claim or Indemnified Damages to which any of them may become
        subject, under the Securities Act, the Exchange Act or otherwise, insofar
        as
        such Claim or Indemnified Damages arise out of or is based upon any Violation,
        in each case to the extent, and only to the extent, that such Violation occurs
        in reliance upon and in conformity with written information furnished to
        the
        Company by such Buyer expressly for use in connection with such Registration
        Statement; and, subject to Section 6(d), such Buyer will reimburse any legal
        or
        other expenses reasonably incurred by them in connection with investigating
        or
        defending any such Claim; provided, however, that the indemnity agreement
        contained in this Section 6(b) and the agreement with respect to contribution
        contained in Section 7 shall not apply to amounts paid in settlement of any
        Claim if such settlement is effected without the prior written consent of
        such
        Buyer, which consent shall not be unreasonably withheld; provided, further,
        however, that the Buyer shall be liable under this Section 6(b) for only
        that
        amount of a Claim or Indemnified Damages as does not exceed the net proceeds
        to
        such Buyer as a result of the sale of Registrable Securities pursuant to
        such
        Registration Statement. Such indemnity shall remain in full force and effect
        regardless of any investigation made by or on behalf of such Indemnified
        Party
        and shall survive the transfer of the Registrable Securities by the Buyers
        pursuant to Section 9. Notwithstanding anything to the contrary contained
        herein, the indemnification agreement contained in this Section 6(b) with
        respect to any prospectus shall not inure to the benefit of any Indemnified
        Party if the untrue statement or omission of material fact contained in the
        prospectus was corrected and such new prospectus was delivered to each Buyer
        prior to such Buyer’s use of the prospectus to which the Claim
        relates.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (c) Promptly
        after receipt by an Indemnified Person or Indemnified Party under this Section
        6
        of notice of the commencement of any action or proceeding (including any
        governmental action or proceeding) involving a Claim, such Indemnified Person
        or
        Indemnified Party shall, if a Claim in respect thereof is to be made against
        any
        indemnifying party under this Section 6, deliver to the indemnifying party
        a
        written notice of the commencement thereof, and the indemnifying party shall
        have the right to participate in, and, to the extent the indemnifying party
        so
        desires, jointly with any other indemnifying party similarly noticed, to
        assume
        control of the defense thereof with counsel mutually satisfactory to the
        indemnifying party and the Indemnified Person or the Indemnified Party, as
        the
        case may be; provided, however, that an Indemnified Person or Indemnified
        Party
        shall have the right to retain its own counsel with the fees and expenses
        of not
        more than one (1) counsel for such Indemnified Person or Indemnified Party
        to be
        paid by the indemnifying party, if, in the reasonable opinion of counsel
        retained by the indemnifying party, the representation by such counsel of
        the
        Indemnified Person or Indemnified Party and the indemnifying party would
        be
        inappropriate due to actual or potential differing interests between such
        Indemnified Person or Indemnified Party and any other party represented by
        such
        counsel in such proceeding. The Indemnified Party or Indemnified Person shall
        cooperate fully with the indemnifying party in connection with any negotiation
        or defense of any such action or claim by the indemnifying party and shall
        furnish to the indemnifying party all information reasonably available to
        the
        Indemnified Party or Indemnified Person which relates to such action or claim.
        The indemnifying party shall keep the Indemnified Party or Indemnified Person
        fully apprised at all times as to the status of the defense or any settlement
        negotiations with respect thereto. No indemnifying party shall be liable
        for any
        settlement of any action, claim or proceeding effected without its prior
        written
        consent; provided, however, that the indemnifying party shall not unreasonably
        withhold, delay or condition its consent. No indemnifying party shall, without
        the prior written consent of the Indemnified Party or Indemnified Person,
        consent to entry of any judgment or enter into any settlement or other
        compromise which does not include as an unconditional term thereof the giving
        by
        the claimant or plaintiff to such Indemnified Party or Indemnified Person
        of a
        release from all liability in respect to such claim or litigation. Following
        indemnification as provided for hereunder, the indemnifying party shall be
        subrogated to all rights of the Indemnified Party or Indemnified Person with
        respect to all third parties, firms or corporations relating to the matter
        for
        which indemnification has been made. The failure to deliver written notice
        to
        the indemnifying party within a reasonable time of the commencement of any
        such
        action shall not relieve such indemnifying party of any liability to the
        Indemnified Person or Indemnified Party under this Section 6, except to the
        extent that the indemnifying party is prejudiced in its ability to defend
        such
        action.

       

      (d) The
        indemnification required by this Section 6 shall be made by periodic payments
        of
        the amount thereof during the course of the investigation or defense, as
        and
        when bills are received or Indemnified Damages are incurred.

       

      (e) The
        indemnity agreements contained herein shall be in addition to (i) any cause
        of action or similar right of the Indemnified Party or Indemnified Person
        against the indemnifying party or others, and (ii) any liabilities the
        indemnifying party may be subject to pursuant to the law.

       

      7. CONTRIBUTION.

       

      To
        the
        extent any indemnification by an indemnifying party is prohibited or limited
        by
        law, the indemnifying party agrees to make the maximum contribution with
        respect
        to any amounts for which it would otherwise be liable under Section 6 to
        the
        fullest extent permitted by law; provided, however, that: (i) no seller of
        Registrable Securities guilty of fraudulent misrepresentation (within the
        meaning of Section 11(f) of the Securities Act) shall be entitled to
        contribution from any seller of Registrable Securities who was not guilty
        of
        fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
        Securities shall be limited in amount to the net amount of proceeds received
        by
        such seller from the sale of such Registrable Securities.

       

      8. REPORTS
        UNDER THE EXCHANGE ACT.

       

      With
        a
        view to making available to the Buyers the benefits of Rule 144 promulgated
        under the Securities Act or any similar rule or regulation of the SEC that
        may
        at any time permit the Buyers to sell securities of the Company to the public
        without registration (“Rule
        144”),
        and
        as a material inducement to the Buyer’s purchase of the Convertible Debentures,
        the Company represents, warrants, and covenants to the following: 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (a) The
        Company is subject to the reporting requirements of section 13 or 15(d) of
        the
        Exchange Act and has filed all required reports under section 13 or 15(d)
        of the
        Exchange Act during the 12 months prior to the date hereof (or for such shorter
        period that the issuer was required to file such reports), other than Form
        8-K
        reports

       

      (b) During
        the Registration Period, the Company shall file with the SEC in a timely
        manner
        all required reports under section 13 or 15(d) of the Exchange Act (it being
        understood that nothing herein shall limit the Company’s obligations under the
        Securities Purchase Agreement) and such reports shall conform to the requirement
        of the Exchange Act and the SEC for filing thereunder. 

       

      (c) The
        Company shall furnish to each Buyer so long as such Buyer owns Registrable
        Securities, promptly upon request, (i) a written statement by the Company
        that
        it has complied with the reporting requirements of Rule 144, (ii) a copy
        of the
        most recent annual or quarterly report of the Company and such other reports
        and
        documents so filed by the Company, and (iii) such other information as may
        be
        reasonably requested to permit the Buyers to sell such securities pursuant
        to
        Rule 144 without registration.

       

      9. AMENDMENT
        OF REGISTRATION RIGHTS.

       

      Provisions
        of this Agreement may be amended and the observance thereof may be waived
        (either generally or in a particular instance and either retroactively or
        prospectively), only with the written consent of the Company and Buyers who
        then
        hold at least two-thirds (2/3) of the Registrable Securities. Any amendment
        or
        waiver effected in accordance with this Section 9 shall be binding upon
        each Buyer and the Company. No such amendment shall be effective to the extent
        that it applies to fewer than all of the holders of the Registrable Securities.
        No consideration shall be offered or paid to any Person to amend or consent
        to a
        waiver or modification of any provision of any of this Agreement unless the
        same
        consideration also is offered to all of the parties to this
        Agreement.

       

      10. MISCELLANEOUS.

       

      (a) A
        Person
        is deemed to be a holder of Registrable Securities whenever such Person owns
        or
        is deemed to own of record such Registrable Securities or owns the right
        to
        receive the Registrable Securities. If the Company receives conflicting
        instructions, notices or elections from two (2) or more Persons with respect
        to
        the same Registrable Securities, the Company shall act upon the basis of
        instructions, notice or election received from the registered owner of such
        Registrable Securities.

       

      (b) No
        Piggyback on Registrations.
        Except
        as set forth on Schedule
        10(b)
        attached
        hereto, neither the Company nor any of its security holders (other than the
        Buyers in such capacity pursuant hereto) may include securities of the Company
        in the initial Registration Statement other than the Registrable Securities.
        The
        Company shall not file any other registration statements until the initial
        Registration Statement required hereunder is declared effective by the SEC,
        provided that this Section 10(b) shall not prohibit the Company from filing
        amendments to registration statements already filed.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (c) Piggy-Back
        Registrations.
        If at
        any time there is not an effective Registration Statement covering all of
        the
        Registrable Securities and the Company shall determine to prepare and file
        with
        the SEC a registration statement relating to an offering for its own account
        or
        the account of others under the Securities Act of any of its equity securities,
        other than on Form S-4 or Form S-8 (each as promulgated under the Securities
        Act) or their then equivalents relating to equity securities to be issued
        solely
        in connection with any acquisition of any entity or business or equity
        securities issuable in connection with the stock option or other employee
        benefit plans, then the Company shall send to each Buyer a written notice
        of
        such determination and, if within fifteen (15) days after the date of such
        notice, any such Buyer shall so request in writing, the Company shall include
        in
        such registration statement all or any part of such Registrable Securities
        such
        Buyer requests to be registered; provided,
        however,
        that,
        the Company shall not be required to register any Registrable Securities
        pursuant to this Section 10(c) that are eligible for resale pursuant to Rule
        144
        promulgated under the Securities Act or that are the subject of a then effective
        Registration Statement.

       

      (d) Any
        notices, consents, waivers or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered: (i) upon receipt, when delivered personally; (ii) upon
        receipt, when sent by facsimile (provided confirmation of transmission is
        mechanically or electronically generated and kept on file by the sending
        party);
        or (iii) one (1) business day after deposit with a nationally recognized
        overnight delivery service, in each case properly addressed to the party
        to
        receive the same. The addresses and facsimile numbers for such communications
        shall be:

       

      
        	
                If
                  to the Company, to:

              	
                TXP
                  Corporation 

              
	 	
                1299
                  Commerce Drive

              
	 	
                Richardson,
                  Texas 75081

              
	 	
                Attention:
                  Michael Shores

              
	 	
                Telephone:
                  (214) 575-9300

              
	 	
                Facsimile:
                  (214) 575-9314

              
	 	 
	
                With
                  Copy to:

              	
                Hodgson
                  Russ LLP

              
	 	
                1540
                  Broadway, 24th
                  Floor

              
	 	
                New
                  York, NY 10036

              
	 	
                Attention:
                  Eric Pinero, Esq.

              
	 	
                Telephone: (212)
                  751-4300

              
	 	
                Facsimile:
                   (212)
                  751-0928

              

      

       

      If
        to an
        Buyer, to its address and facsimile number on the Schedule of Buyers attached
        hereto, with copies to such Buyer’s representatives as set forth on the Schedule
        of Buyers or to such other address and/or facsimile number and/or to the
        attention of such other person as the recipient party has specified by written
        notice given to each other party five (5) days prior to the effectiveness
        of
        such change. Written confirmation of receipt (A) given by the recipient of
        such
        notice, consent, waiver or other communication, (B) mechanically or
        electronically generated by the sender’s facsimile machine containing the time,
        date, recipient facsimile number and an image of the first page of such
        transmission or (C) provided by a courier or overnight courier service shall
        be
        rebuttable evidence of personal service, receipt by facsimile or receipt
        from a
        nationally recognized overnight delivery service in accordance with clause
        (i),
        (ii) or (iii) above, respectively.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      (e) Failure
        of any party to exercise any right or remedy under this Agreement or otherwise,
        or delay by a party in exercising such right or remedy, shall not operate
        as a
        waiver thereof.

       

      (f) The
        laws
        of the State of New Jersey shall govern all issues concerning the relative
        rights of the Company and the Buyers as its stockholders. All other questions
        concerning the construction, validity, enforcement and interpretation of
        this
        Agreement shall be governed by the internal laws of the State of New Jersey,
        without giving effect to any choice of law or conflict of law provision or
        rule
        (whether of the State of New Jersey or any other jurisdiction) that would
        cause
        the application of the laws of any jurisdiction other than the State of New
        Jersey. Each party hereby irrevocably submits to the non-exclusive jurisdiction
        of the Superior Courts of the State of New Jersey, sitting in Hudson County,
        New
        Jersey and federal courts for the District of New Jersey sitting Newark,
        New
        Jersey, for the adjudication of any dispute hereunder or in connection herewith
        or with any transaction contemplated hereby or discussed herein, and hereby
        irrevocably waives, and agrees not to assert in any suit, action or proceeding,
        any claim that it is not personally subject to the jurisdiction of any such
        court, that such suit, action or proceeding is brought in an inconvenient
        forum
        or that the venue of such suit, action or proceeding is improper. Each party
        hereby irrevocably waives personal service of process and consents to process
        being served in any such suit, action or proceeding by mailing a copy thereof
        to
        such party at the address for such notices to it under this Agreement and
        agrees
        that such service shall constitute good and sufficient service of process
        and
        notice thereof. Nothing contained herein shall be deemed to limit in any
        way any
        right to serve process in any manner permitted by law. If any provision of
        this
        Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
        or unenforceability shall not affect the validity or enforceability of the
        remainder of this Agreement in that jurisdiction or the validity or
        enforceability of any provision of this Agreement in any other jurisdiction.
        EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT
        TO
        REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
        CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
        CONTEMPLATED HEREBY.

       

      (g) This
        Agreement shall inure to the benefit of and be binding upon the permitted
        successors and assigns of each of the parties hereto.

       

      (h) The
        headings in this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning hereof.

       

      (i) This
        Agreement may be executed in identical counterparts, each of which shall
        be
        deemed an original but all of which shall constitute one and the same agreement.
        This Agreement, once executed by a party, may be delivered to the other party
        hereto by facsimile transmission of a copy of this Agreement bearing the
        signature of the party so delivering this Agreement.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      (j) Each
        party shall do and perform, or cause to be done and performed, all such further
        acts and things, and shall execute and deliver all such other agreements,
        certificates, instruments and documents, as the other party may reasonably
        request in order to carry out the intent and accomplish the purposes of this
        Agreement and the consummation of the transactions contemplated
        hereby.

       

      (k) The
        language used in this Agreement will be deemed to be the language chosen
        by the
        parties to express their mutual intent and no rules of strict construction
        will
        be applied against any party.

       

      (l) This
        Agreement is intended for the benefit of the parties hereto and their respective
        permitted successors and assigns, and is not for the benefit of, nor may
        any
        provision hereof be enforced by, any other Person.

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        each
        Buyer and the Company have caused their signature page to this Registration
        Rights Agreement to be duly executed as of the date first above
        written.

       

      
        	 	
                COMPANY:

              
	 	
                TXP
                  CORPORATION

              
	 	 
	 	
                By:

              	
                /s/
                  Michael C. Shores

              
	 	
                Name:    Michael
                  C. Shores

              
	 	
                Title:      Chief
                  Executive Officer

              

      

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        each
        Buyer and the Company have caused their signature page to this Registration
        Rights Agreement to be duly executed as of the date first above
        written.

       

      
        	 	
                BUYER:

              
	 	
                YA
                  GLOBAL INVESTMENTS, L.P.

              
	 	 
	 	
                By:

              	
                Yorkville
                  Advisors, LLC

              
	 	
                Its:

              	
                Investment
                  Manager

              
	 	 
	 	
                By:

              	 /s/
                Gerald Eicke
	 	
                Name:

              	
                Gerald
                  Eicke

              
	 	
                Title:
                  

              	
                Managing
                  Partner

              

      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        I

       

      SCHEDULE
        OF BUYERS

       

      
        	
                Buyer

              	 	
                Address/Facsimile 

                Number of Buyer

              	 	
                Address/Facsimile 

                Number of Buyer’s

                Representative

              
	 	 	 	 	 
	
                YA Global
                  Investments, L.P.

              	 	
                101
                  Hudson Street – Suite 3700

              	 	
                101
                  Hudson Street – Suite 3700

              
	 	 	
                Jersey
                  City, NJ 07302

              	 	
                Jersey
                  City, NJ 07302

              
	 	 	
                Facsimile:        (201)
                  985-8266

              	 	
                Facsimile:      (201)
                  985-8266

              
	 	 	 	 	
                Attention:
                  David Gonzalez, Esq.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

       

      SELLING
        STOCKHOLDERS 

       

      AND
        PLAN OF DISTRIBUTION

       

      Selling
        Stockholders

      

      The
        shares of Common Stock being offered by the selling stockholders are issuable
        upon conversion of the convertible debentures and upon exercise of the warrants.
        For additional information regarding the issuance of those convertible notes
        and
        warrants, see “Private Placement of Convertible Debentures and Warrants” above.
        We are registering the shares of Common Stock in order to permit the selling
        stockholders to offer the shares for resale from time to time. Except as
        otherwise notes and except for the ownership of the convertible Debentures
        and
        the warrants issued pursuant to the Securities Purchase Agreement, the selling
        stockholders have not had any material relationship with us within the past
        three years.

       

      The
        table
        below lists the selling stockholders and other information regarding the
        beneficial ownership of the shares of Common Stock by each of the selling
        stockholders. The second column lists the number of shares of Common Stock
        beneficially owned by each selling stockholder, based on its ownership of
        the
        convertible debentures and warrants, as of ________, 200_, assuming conversion
        of all convertible debentures and exercise of the warrants held by the selling
        stockholders on that date, without regard to any limitations on conversions
        or
        exercise.

       

      The
        third
        column lists the shares of Common Stock being offered by this prospectus
        by the
        selling stockholders.

       

      In
        accordance with the terms of a registration rights agreement with the selling
        stockholders, this prospectus generally covers the resale of at least
        ___________ shares of common stock issued or issuable to the selling
        stockholders pursuant to the Securities Purchase Agreement.
        Because
        the conversion price of the convertible debentures and the exercise price
        of the
        warrants may be adjusted, the number of shares that will actually be issued
        may
        be more or less than the number of shares being offered by this prospectus.
        The
        fourth column assumes the sale of all of the shares offered by the selling
        stockholders pursuant to this prospectus.

       

      Under
        the
        terms of the convertible debentures and the warrants, a selling stockholder
        may
        not convert the convertible debentures or exercise the warrants to the extent
        such conversion or exercise would cause such selling stockholder, together
        with
        its affiliates, to beneficially own a number of shares of Common Stock which
        would exceed 4.99% of our then outstanding shares of Common Stock following
        such
        conversion or exercise, excluding for purposes of such determination shares
        of
        Common Stock issuable upon conversion of the convertible debentures which
        have
        not been converted and upon exercise of the warrants which have not been
        exercised. The number of shares in the second column does not reflect this
        limitation. The selling stockholders may sell all, some or none of their
        shares
        in this offering. See "Plan of Distribution."

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Name of Selling Stockholder

              	 	
                Number of Shares Owned

                Prior to Offering

              	 	
                Maximum Number of Shares

                to be Sold Pursuant to this

                Prospectus

              	 	
                Number of Shares Owned

                After Offering

              	 
	 	 	 	 	 	 	 	 
	
                YA
                  Global Investments, L.P. (1)

              	 	 	 	 	 	 	 	 	 	 

      

       

      (1) YA
        Global
        Investments, L.P. is a Cayman Island exempt limited partnership. YA Global
        is
        managed by Yorkville Advisors, LLC. Investment decisions for Yorkville Advisors
        are made by Mark Angelo, its portfolio manager. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Plan
        of Distribution

       

      Each
        Selling Stockholder (the “Selling
        Stockholders”)
        of the
        common stock and any of their pledgees, assignees and successors-in-interest
        may, from time to time, sell any or all of their shares of common stock on
        the
        __________ or any other stock exchange, market or trading facility on which
        the
        shares are traded or in private transactions. These sales may be at fixed
        or
        negotiated prices. A Selling Stockholder may use any one or more of the
        following methods when selling shares:

       

      
        	 	
                ·

              	
                ordinary
                  brokerage transactions and transactions in which the broker-dealer
                  solicits purchasers;

              

      

       

      
        	 	
                ·

              	
                block
                  trades in which the broker-dealer will attempt to sell the shares
                  as agent
                  but may position and resell a portion of the block as principal
                  to
                  facilitate the transaction;

              

      

       

      
        	 	
                ·

              	
                purchases
                  by a broker-dealer as principal and resale by the broker-dealer
                  for its
                  account;

              

      

       

      
        	 	
                ·

              	
                an
                  exchange distribution in accordance with the rules of the applicable
                  exchange;

              

      

       

      
        	 	
                ·

              	
                privately
                  negotiated transactions;

              

      

       

      
        	 	
                ·

              	
                broker-dealers
                  may agree with the Selling Stockholders to sell a specified number
                  of such
                  shares at a stipulated price per
                  share;

              

      

       

      
        	 	
                ·

              	
                through
                  the writing or settlement of options or other hedging transactions,
                  whether through an options exchange or otherwise;
                  

              

      

       

      
        	 	
                ·

              	
                a
                  combination of any such methods of sale;
                  or

              

      

       

      
        	 	
                ·

              	
                any
                  other method permitted pursuant to applicable
                  law.

              

      

       

      The
        Selling Stockholders may also sell shares under Rule 144 under the Securities
        Act of 1933, as amended (the “Securities
        Act”),
        if
        available, rather than under this prospectus.

       

      Broker-dealers
        engaged by the Selling Stockholders may arrange for other brokers-dealers
        to
        participate in sales. Broker-dealers may receive commissions or discounts
        from
        the Selling Stockholders (or, if any broker-dealer acts as agent for the
        purchaser of shares, from the purchaser) in amounts to be negotiated, but,
        except as set forth in a supplement to this Prospectus, in the case of an
        agency
        transaction not in excess of a customary brokerage commission in compliance
        with
        NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
        in compliance with NASDR IM-2440. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      In
        connection with the sale of the common stock or interests therein, the Selling
        Stockholders may enter into hedging transactions with broker-dealers or other
        financial institutions, which may in turn engage in short sales of the Common
        Stock in the course of hedging the positions they assume. The Selling
        Stockholders may also enter into option or other transactions with
        broker-dealers or other financial institutions or the creation of one or
        more
        derivative securities which require the delivery to such broker-dealer or
        other
        financial institution of shares offered by this prospectus, which shares
        such
        broker-dealer or other financial institution may resell pursuant to this
        prospectus (as supplemented or amended to reflect such
        transaction).

       

      The
        Selling Stockholders and any broker-dealers or agents that are involved in
        selling the shares may be deemed to be “underwriters” within the meaning of the
        Securities Act in connection with such sales. In such event, any commissions
        received by such broker-dealers or agents and any profit on the resale of
        the
        shares purchased by them may be deemed to be underwriting commissions or
        discounts under the Securities Act. Each Selling Stockholder has informed
        the
        Company that it does not have any written or oral agreement or understanding,
        directly or indirectly, with any person to distribute the Common Stock. In
        no
        event shall any broker-dealer receive fees, commissions and markups which,
        in
        the aggregate, would exceed eight percent (8%).

       

      The
        Company is required to pay certain fees and expenses incurred by the Company
        incident to the registration of the shares. The Company has agreed to indemnify
        the Selling Stockholders against certain losses, claims, damages and
        liabilities, including liabilities under the Securities Act. 

       

      Because
        Selling Stockholders may be deemed to be “underwriters” within the meaning of
        the Securities Act, they will be subject to the prospectus delivery requirements
        of the Securities Act including Rule 172 thereunder. In addition, any securities
        covered by this prospectus which qualify for sale pursuant to Rule 144 under
        the
        Securities Act may be sold under Rule 144 rather than under this prospectus.
        There is no underwriter or coordinating broker acting in connection with
        the
        proposed sale of the resale shares by the Selling Stockholders.

       

      We
        agreed
        to keep this prospectus effective until the earlier of (i) the date on which
        the
        shares may be resold by the Selling Stockholders without registration and
        without regard to any volume limitations by reason of Rule 144 under the
        Securities Act or any other rule of similar effect or (ii) all of the shares
        have been sold pursuant to this prospectus or Rule 144 under the Securities
        Act
        or any other rule of similar effect. The resale shares will be sold only
        through
        registered or licensed brokers or dealers if required under applicable state
        securities laws. In addition, in certain states, the resale shares may not
        be
        sold unless they have been registered or qualified for sale in the applicable
        state or an exemption from the registration or qualification requirement
        is
        available and is complied with.

       

      Under
        applicable rules and regulations under the Exchange Act, any person engaged
        in
        the distribution of the resale shares may not simultaneously engage in market
        making activities with respect to the common stock for the applicable restricted
        period, as defined in Regulation M, prior to the commencement of the
        distribution. In addition, the Selling Stockholders will be subject to
        applicable provisions of the Exchange Act and the rules and regulations
        thereunder, including Regulation M, which may limit the timing of purchases
        and
        sales of shares of the common stock by the Selling Stockholders or any other
        person. We will make copies of this prospectus available to the Selling
        Stockholders and have informed them of the need to deliver a copy of this
        prospectus to each purchaser at or prior to the time of the sale (including
        by
        compliance with Rule 172 under the Securities Act).

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      EXHIBIT
        C

       

      FORM
        OF NOTICE OF EFFECTIVENESS
OF
        REGISTRATION STATEMENT

       

      Attention: 

      

      
        	 	
                Re:

              	
                TXP
                  CORPORATION

              

      

      

      Ladies
        and Gentlemen:

      

      We
        are
        counsel to TXP Corporation, a Nevada corporation (the “Company”),
        and
        have represented the Company in connection with that certain Securities Purchase
        Agreement (the “Securities
        Purchase Agreement”)
        entered into by and among the Company and the Buyers named therein
        (collectively, the “Buyers”)
        pursuant to which the Company issued to the Buyers shares of its Common Stock,
        par value $0.001 per share (the “Common
        Stock”).
        Pursuant to the Purchase Agreement, the Company also has entered into a
        Registration Rights Agreement with the Buyers (the “Registration
        Rights Agreement”)
        pursuant to which the Company agreed, among other things, to register the
        Registrable Securities (as defined in the Registration Rights Agreement)
        under
        the Securities Act of 1933, as amended (the “Securities
        Act”).
        In
        connection with the Company’s obligations under the Registration Rights
        Agreement, on ________________, the Company filed a Registration Statement
        on
        Form ________ (File No. 333-_____________) (the “Registration
        Statement”)
        with
        the Securities and Exchange Commission (the “SEC”)
        relating to the Registrable Securities which names each of the Buyers as
        a
        selling stockholder there under.

       

      In
        connection with the foregoing, we advise you that a member of the SEC’s staff
        has advised us by telephone that the SEC has entered an order declaring the
        Registration Statement effective under the Securities Act at [ENTER
        TIME OF EFFECTIVENESS]
        on
[ENTER
        DATE OF EFFECTIVENESS]
        and we
        have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that
        any stop order suspending its effectiveness has been issued or that any
        proceedings for that purpose are pending before, or threatened by, the SEC
        and
        the Registrable Securities are available for resale under the Securities
        Act
        pursuant to the Registration Statement.

      

        
          	
                  Very
                    truly yours,

                
	 
	
                  [Law
                    Firm]

                
	 
	
                  By:

                	 

        

      

       

      cc: [LIST
        NAMES OF BUYERS]

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      SCHEDULE
        10(b)

      

      Additional
        Securities of the Company to be included in the initial 

      Registration
        Statement other than the Registrable Securities

       

      
        	 	
                (i)

              	
                1,000,000
                  shares of common stock issuable upon exercise of five year warrants
                  at an
                  exercise price equal to $0.65 per share;

              

      

       

      
        	 	
                (ii)

              	
                1,000,000
                  shares of common stock issuable upon exercise of five year warrants
                  at an
                  exercise price equal to $0.75 per share;

              

      

       

      
        	 	
                (iii)

              	
                1,000,000
                  shares of common stock issuable upon exercise of five year warrants
                  at an
                  exercise price equal to $0.85 per share; and

              

      

       

      
        	 	
                (iv)

              	
                1,000,000
                  shares of common stock issuable upon exercise of five year warrants
                  at an
                  exercise price equal to $1.00 per
                  share.

              

      

       

      All
        of
        the foregoing are held by Dyna Porter International Limited and were issued
        to
        such entity on September 6, 2007. 

       

      
        	
              	(v)	
                securities
                  issued by the Company in connection with the Required
                  Capital Raise.

              

      

      
         

        
          
            
            

          

          
            6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00143-of-00352.parquet"}]]