TERMINATION AGREEMENT

Termination Agreement

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GEXA CORP

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Title: TERMINATION AGREEMENT
Date: 7/19/2004

TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT (this "Agreement") is made and entered into

on this 7th day of July, 2004, by and among Gexa Corp., a Texas corporation (the

"Company"), The Catalyst Fund, Ltd., a Texas limited partnership ("Catalyst"),

Southwest/Catalyst Capital, Ltd., a Texas limited partnership ("SWCC"),

Catalyst/Hall Growth Capital, LP, a Texas limited partnership ("CHGC"), Neil M.

Leibman, an individual ("Leibman"), Robert C. Orr, an individual ("Orr"), Don

Aron, an individual ("Aron"), and Gaylor Investment Trust Partnership, a Texas

partnership ("Gaylor"). All capitalized terms not herein defined shall have the

respective meanings given to them in that certain Loan Agreement dated as of

July 16, 203 (the "Loan Agreement"), between the Company and Catalyst.

RECITALS

WHEREAS, pursuant to the Loan Agreement, Catalyst, SWCC, CHGC, Leibman,

Orr, Aron, Gaylor and JTS Enterprises, Inc., a Texas corporation ("JTS"), have

made a loan (the "Loan") to the Company in the original principal amount of

$3,650,000, upon and subject to the terms and conditions of the Loan Agreement;

WHEREAS, in connection with the Loan, the Company and Catalyst entered

into that certain Commercial Security Agreement dated as of July 16, 2003 (the

"Security Agreement"), that certain Consulting Agreement dated as of July 16,

2003 (the "Consulting Agreement"), and that certain Registration Rights

Agreement dated as of July 16, 2003 (the "Registration Rights Agreement");

WHEREAS, in connection with the Loan, the Company issued Catalyst,

SWCC, CHGC, Leibman, Orr, Aron and Gaylor warrants (the "Warrants") to purchase

up to 550,000 shares of the Company's common stock, par value $.01 per share

(the "Common Stock"), upon and subject to the terms and conditions contained

therein;

WHEREAS, in connection with the Loan, the Company, Catalyst, SWCC,

CHGC, Leibman, Orr, Aron, Gaylor and JTS entered into that certain Non-Recourse

Loan Participation and Collateral Agency Agreement dated as of July 16, 2003

(the "Participation Agreement"), pursuant to which, Leibman, Orr, Aron and

Gaylor (collectively, the "Company Related Parties") contributed $500,000 of the

Loan for the rights described therein, including the right to shares in the

Warrants on a pro rata basis according to their respective Agreed Interests (as

defined in the Participation Agreement);

WHEREAS, a credit facility (the "Credit Facility") not to exceed

$15,000,000 has been proposed and negotiated among the Company, each of the

lenders from time to time party thereto (the "Lenders"), and Highbridge/Zwirn

Special Opportunities Fund, L.P., as administrative agent for the Lenders (the

"Administrative Agent");

WHEREAS, in connection with the consummation of the Credit Facility,

the Company will satisfy in full all of the indebtedness and obligations of the

Company evidenced by the Lender Notes, the JTS Note and the other Subject

Documents, and the Company and Catalyst desire to terminate the Loan Agreement,

the Security Agreement, the Consulting Agreement and the Registration Rights

Agreement;

<PAGE>

WHEREAS, in connection with termination of the Consulting Agreement,

the Company has agreed to pay to Leibman, Orr, Aron and Gaylor one-time cash

payments equal to $9,166.50, $9,166.50, $18,334.00 and $9,166.50, respectively;

WHEREAS, in order to induce the Lenders and the Administrative Agent to

consummate the Credit Facility, Catalyst, SWCC and CHGC (collectively, the

"Sellers") desire to sell and the Company desires to purchase, the pro rata

share of the Warrants of the Sellers in accordance with their Agreed Interests

as provided in the Participation Agreement, or 458,333 of the Warrants (the

"Sellers Warrants"), for an aggregate purchase price of $1,629,832 (the

"Purchase Price");

WHEREAS, the Company also desires to grant Catalyst a look back right

that will protect the Purchase Price, on a per share basis, for a period of one

year from the date hereof;

WHEREAS, the Company Related Parties will indirectly benefit from the

consummation of the Credit Facility;

WHEREAS, in order to induce the Lenders and the Administrative Agent to

consummate the Credit Facility, the Company and the Company Related Parties have

agreed to cancel the pro rata share of the Warrants of the Company Related

Parties in accordance with their Agreed Interests (as defined in the

Participation Agreement), or 91,667 of the Warrants (the "Company Related

Parties Warrants"), and the Company has agreed to issue to Leibman, Orr, Aron

and Gaylor replacement warrants (the "Replacement Warrants") to purchase 18,333,

18,333, 36,668 and 18,333 shares of Common Stock, respectively, in the form

attached hereto as Exhibit A;

WHEREAS, the Company has agreed to grant the Company Related Parties

certain piggy-back registration rights in connection with the Replacement

Warrants; and

WHEREAS, in connection with the consummation of the Credit Facility,

the Company, Catalyst, SWCC, CHGC, Leibman, Orr, Aron and Gaylor desire to

terminate the Participation Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained in

this Agreement, and for other good and valuable consideration, the receipt and

adequacy of which are hereby acknowledged, the parties hereby agree as follows:

1. Termination of Agreements. Subject to the consummation of the Credit

Facility and the satisfaction in full all of the indebtedness and obligations of

the Company evidenced by the Lender Notes, the JTS Note and the other Subject

Documents, the parties hereto terminate the Loan Agreement, the Security

Agreement, the Consulting Agreement, the Registration Rights Agreement and the

Participation Agreement by mutual consent.

2. Consulting Agreement Payments. Upon the termination of the Consulting

Agreement, the Company agrees to pay to Leibman, Orr, Aron and Gaylor one-time

cash payments equal to $9,166.50, $9,166.50, $18,334.00 and $9,166.50,

respectively.

3. Purchase of Warrants. The Company agrees to purchase and acquire from

the Sellers, and the Sellers agree to sell, assign, transfer and convey to the

Company, the Sellers Warrants for the Purchase Price. The Purchase Price shall

be payable to the Sellers in cash or by wire transfer or other immediately

available funds. The Sellers further agree to transfer and deliver to the

Company, upon receipt by Catalyst of the Purchase Price, certificates, properly

<PAGE>

endorsed in blank or accompanied by a properly executed stock power,

representing the Sellers Warrants. The Sellers, jointly and severally, represent

and warrant (i) the Sellers Warrants are owned beneficially or of record by the

Sellers, (ii) the Sellers hold good, valid and marketable title to the Sellers

Warrants, free and clear of all liens, charges and encumbrances, (iii) each

Seller possesses full authority and legal right to sell, transfer and assign to

the Company the entire legal and beneficial ownership of the Sellers Warrants,

free and clear of all liens, charges and encumbrances, and (iv) upon transfer to

the Company by the Sellers of the Sellers Warrants, the Company will own the

entire legal and beneficial interest in the Sellers Warrants free and clear of

all liens, charges and encumbrances, and subject to no legal, equitable,

transfer or other restrictions of any kind, except transfer restrictions imposed

by operation of applicable securities laws, and any of all liens, charges or

encumbrances imposed or created by the Company.

4. Cancellation and Issuance of Warrants. The Company and the Company

Related Parties agree to cancel the Company Related Parties Warrants. The

Company Related Parties further agree to transfer and deliver to the Company

certificates, property endorsed in blank or accompanied by a properly executed

stock power, representing the Company Related Parties Warrants. The Company

agrees to issue and deliver to Leibman, Orr, Aron and Gaylor the Replacement

Warrants to purchase 18,333, 18,333, 36,668 and 18,333 shares of Common Stock,

respectively, in the form attached hereto as Exhibit A.

5. Grant of Registration Rights. The Company grants the Company Related

Parties the piggy-back registration rights set forth on Exhibit B hereto.

6. Look Back Right. In the event the Company consummates within one year of

the date hereof, the disposition, by way of a sale, business combination, merger

or other transaction by a corporation or other business entity, of all or part

of the Company's outstanding capital stock or all or substantially all of the

Company's assets (each such transaction being herein called a "Transaction"),

and the price per share of Common Stock actually received by the Company's

shareholders or the Company pursuant to the terms of the Transaction is greater

than $4.00, then, upon the consummation of the Transaction, the Company shall

pay to Catalyst a one-time payment equal to the product of (a) 458,333 and (b)

the difference between (i) the price per share of Common Stock actually received

by the Company's shareholders or the Company pursuant to the terms of the

Transaction and (ii) $4.00. The Company represents and warrants that, as of the

date hereof, it is not presently involved in any discussions or negotiations

with an underwriter concerning the underwritten registered public offering of

the Common Stock.

7. Release by Leibman, Orr, Aron and Gaylor. Leibman, Orr, Aron and Gaylor,

on behalf of themselves, their successors, assigns, heirs, affiliates, parents,

subsidiaries, representatives, officers, directors, employees and agents, hereby

release, acquit, and forever discharge Catalyst, SWCC and CHGC, their

successors, assigns, affiliates, parents, subsidiaries, representatives,

officers, directors, employees and agents from any and all actions, causes of

action, choses in action, claims, demands, rights, damages, costs, expenses,

compensation, liabilities or suits of any nature whatsoever, whether at law or

in equity, whether or not now or heretofore known, unknown, suspected, accrued,

alleged, or claimed, in contract or in tort, past, present or future, arising

out of any act, occurrence, omission, cause, matter, activity, transaction or

other thing whatsoever, which occurred prior to the date hereof and up to and

including the date of execution of this Agreement, including, but not limited

to, any such claim or action arising out of the negotiation, existence,

performance or non performance of the Participation Agreement.

<PAGE>

8. Release by Catalyst, SWCC and CHGC. Catalyst, SWCC and CHGC, on behalf

of themselves, their successors, assigns, affiliates, parents, subsidiaries,

representatives, officers, directors, employees and agents, hereby release,

acquit, and forever discharge Leibman, Orr, Aron and Gaylor, their successors,

assigns, heirs, affiliates, parents, subsidiaries, representatives, officers,

directors, employees and agents from any and all actions, causes of action,

choses in action, claims, demands, rights, damages, costs, expenses,