<PAGE>                                      EXHIBIT 4.3


                                
                                
                                
                                
                                
                                
                      AMENDED AND RESTATED
                                
        CLASS A CUMULATIVE PERPETUAL INCREASING DIVIDEND
                         PREFERRED STOCK
                                
                     SUBSCRIPTION AGREEMENT
                                
                              among
                                
                        EEX Capital Inc.,
                                
                       UBS Securities LLC,
                                
          as Placement Agent for the Holders from time
                 to time of the Preferred Stock,
                               and
                                
                    Enserch Exploration, Inc.
                         (not an issuer)
                                
                                
                  _____________________________
                                
                                
               Effective as of September 29, 1997
                                
                  _____________________________
                                
                                
                                
                                
                                
                                
   AMENDED AND RESTATED PREFERRED STOCK SUBSCRIPTION AGREEMENT
                                
          THIS  AMENDED AND RESTATED PREFERRED STOCK SUBSCRIPTION
AGREEMENT  (this "Agreement"), is entered into as of October  27,
1997,  and  effective as of September 29, 1997, by and among  EEX
Capital  Inc., a Delaware corporation (the surviving  corporation
of  the merger between EEX Preferred Capital Inc. and EEX Capital
L.L.C.)  ("EEX  Capital"), a wholly owned subsidiary  of  Enserch
Exploration,   Inc.,  a  Texas  corporation  ("EEX"),   and   UBS
Securities  LLC individually ("UBS") and as placement  agent  for
the  holders from time to time of the Preferred Stock (as defined
below) (in such capacity, the "Placement Agent"), and amends  and
restates  in  its  entirety  that  certain  Cumulative  Perpetual
Increasing  Dividend Preferred Interests and Class  A  Cumulative
Perpetual   Increasing  Dividend  Preferred  Stock   Subscription
Agreement  dated  as  of  September 29, 1997  by  and  among  EEX
Capital,  MIStS  Issuer L.L.C., EEX, UBS and the Placement  Agent
(the "Existing Agreement").

                            RECITALS
                                
          EEX  Capital has authorized the execution and  issuance
of  150,000 shares of its Class A Cumulative Perpetual Increasing
Dividend Preferred Stock (the "Preferred Stock").

          On  September 29, 1997, UBS purchased 75,000 shares  of
Preferred  Stock for $75,000,000 and purchased 75,000  Cumulative
Perpetual Increasing Dividend Preferred Interests of MIStS Issuer
L.L.C.  (the  "Preferred  Interests") pursuant  to  the  Existing
Agreement.

          
          On  October  27, 1997, (i) UBS purchased an  additional
75,000 shares of Preferred Stock for $75,000,000 plus accrued and
unpaid  dividends, (ii) EEX Capital paid in full  and  terminated
its obligations under it subordinated promissory note made by EEX
Capital in favor of MIStS Issuer L.L.C., reevidencing $75,000,000
of  Indebtedness  and  (iii)  MIStS Issuer  L.L.C.  redeemed  the
Preferred Interests in full.  Accordingly, as of the date hereof,
UBS owns all of the authorized, issued and outstanding shares  of
the Preferred Stock.

          The   Preferred   Stock  was  issued  pursuant   to   a
certificate   of   designations,   preferences   and    relative,
participating,  optional and other special  rights  of  preferred
stock  and qualifications, limitations and restrictions  thereof,
filed  with  the Secretary of State of the State of  Delaware  on
September 29, 1997 which is being amended and restated as of  the
date  hereof  (as  so amended and restated, the  "Certificate  of
Designations").

          On  the terms and subject to the conditions hereinafter
set  forth,  the parties wish to amend and restate  the  Existing
Agreement as hereinafter provided to govern certain of the  terms
of the Preferred Stock from and after the Effective Date.

                            AGREEMENT
                                
          Accordingly, the parties agree as follows:

                             ARTICLE
                           DEFINITIONS
                                
          Section    Defined  Terms.  As used in this  Agreement,
the following terms shall have the meanings specified below:

          "Action" has the meaning specified in Section 10.2.

          "Additional   Costs"  means  costs  indemnified   under
Section 10.4.

          "Affected Party" means any Holder, any beneficial owner
of any Holder, and their respective successors and assigns.

          "Affiliate" means with respect to any Person, any other
Person  that,  directly  or  indirectly,  through  one  or   more
intermediaries, controls, or is controlled by, or is under common
control  with,  such  Person.   For  purposes  of  the  foregoing
definition,  "control" means the direct or indirect ownership  of
more  than  50% of the outstanding capital stock or other  equity
interests having ordinary voting power.

          "Bankruptcy Law" means Title 11, United States Code, or
any similar federal or state law for the relief of debtors.

          "beneficial owner" has the meaning as defined  in  Rule
13d-3 and Rule 13d-5 under the Exchange Act.

          "Benefit Plan" means any employee pension benefit plan,
as  defined  in section 3(2) of ERISA (other than a Multiemployer
Plan),  which (a) is currently or hereafter sponsored, maintained
or  contributed to by EEX, a Subsidiary or an ERISA Affiliate  or
(b)  was  at  any time during the six preceding years, sponsored,
maintained  or contributed to by EEX, a Subsidiary  or  an  ERISA
Affiliate.

          "Board"  means  the Board of Governors of  the  Federal
Reserve System of the United States or any successor.

          "Business  Day" means a day other than  a  Saturday,  a
Sunday, any federal holiday or any day on which dealings in  U.S.
dollar  deposits  are  not carried out in  the  London  interbank
market.

          "Capital Lease Obligations" means, with respect to  EEX
or any Subsidiary of EEX (including EEX Capital), the obligations
of  such Person to pay rent or other amounts under a lease of (or
other  agreement conveying the right to use) real and/or personal
property  which  obligations are required to  be  classified  and
accounted  for as a liability for a capital lease  on  a  balance
sheet of such Person in accordance with GAAP and, for purposes of
this  Agreement,  the  amount of such obligations  shall  be  the
capitalized amount thereof.

          "Capital Stock" means (i) in the case of a corporation,
corporate  stock, (ii) in the case of an association or  business
entity, any and all shares, interests, participations, rights  or
other  equivalents (however designated) of corporate stock, (iii)
in  the  case  of  a partnership, partnership interests  (whether
general  or limited) and (iv) any other interest or participation
that  confers  on a Person the right to receive a  share  of  the
profits and losses of, or distributions of assets of, the issuing
Person.

          "Certificate of Designations" has the meaning specified
in  the  recitals to this Agreement and is in the  form  attached
hereto as Exhibit A.

          "Change  of  Control"  means  the  acquisition  by  any
Person,  or  two or more Persons acting in concert, of beneficial
ownership (within the meaning of the Exchange Act) of 35% or more
of the outstanding shares of voting stock of EEX.

          "Closing Date" means September 29, 1997.

          "Code"  means  the Internal Revenue Code  of  1986,  as
amended, and any regulation promulgated thereunder.

          "Commitment" means the commitment to purchase Preferred
Stock  in the Liquidation Preference amount in each case  as  set
forth on the signature pages hereto opposite UBS' name.

          "Commitment   Letter"   means   that   certain   bridge
commitment  letter,  including  the  summary  of  terms  attached
thereto,  by  and  among UBS, EEX, MIStS Issuer  L.L.C.  and  EEX
Capital, effective as of September 29, 1997.

          "Common  Stock"  means  all  shares  now  or  hereafter
authorized of any class of common stock of EEX Capital, including
the  common  stock, par value per share $100.00,  and  any  other
stock of EEX Capital, howsoever designated, authorized after  the
Initial Issue Date, that have the right (subject always to  prior
rights  of any class or series of preferred stock) to participate
in the distribution of the assets and earnings of EEX Capital.

          "Consolidated   Subsidiaries"  means  each   Subsidiary
(whether  now  existing  or hereafter created  or  acquired)  the
financial  statements  of which shall be (or  should  have  been)
consolidated  with the financial statements of EEX in  accordance
with GAAP.

          "Custodian"  means  any  receiver,  trustee,  assignee,
liquidator,  custodian or similar official under  any  Bankruptcy
Law.

          "Debt"  means for EEX and its Subsidiaries (except  EEX
Capital),  the  sum of the following (without duplication):   (i)
all  obligations  for  borrowed  money  or  evidenced  by  bonds,
debentures,   mandatorily   redeemable   preferred   stock   with
maturities  before  the  Revolving Credit  Termination  Date  (as
defined  in  the  EEX Credit Agreement), notes or  other  similar
instruments  (excluding  interest, fees and  charges);  (ii)  all
obligations  in  respect  of  bankers  acceptances,  unreimbursed
drawings  on letters of credit, surety or other bonds; (iii)  all
Capital  Lease Obligations; (iv) all Operating Lease Obligations;
(v)  all  financial  guaranties in  respect  of  Indebtedness  of
unconsolidated  Affiliates  and  unrelated  Persons;   (vi)   all
obligations secured by a Lien on any asset, whether or  not  such
indebtedness is assumed, but excluding obligations secured  by  a
Lien permitted by Sections 9.02(c), (e), (f), (h), (i), (j),  (k)
and  (l)  of  the  EEX  Credit Agreement;  (vii)  all  production
payments  in connection with oil and gas properties;  and  (viii)
all  Indebtedness  of Special Entities (as  defined  in  the  EEX
Credit  Agreement) to the extent EEX, EEX Capital is  liable  for
such Indebtedness under GAAP or such Indebtedness is reflected on
the  consolidated  balance  sheet  of  EEX  and/or  EEX  Capital;
provided,   however,  such  term  shall  not  include   Permitted
Subordinated Debt.

          "Default" means any event that is, or after the passage
of  time or the giving of notice (or both) would be, an Event  of
Default.

          "Effective Date" means October 27, 1997.

          "EEX"   means  Enserch  Exploration,  Inc.,   a   Texas
corporation.

          "EEX Capital" has the meaning specified in the preamble
to this Agreement.

          "EEX   Credit  Agreement"  means  that  certain  Credit
Agreement  dated  as of May 1, 1995 among EEX, as  borrower,  The
Chase  Manhattan Bank, as Administrative Agent, and  the  lenders
signatory  thereto,  as  amended by  the  First  Amendment  dated
September 19, 1996, and the Second Amendment dated June 27, 1997,
and   as  modified  by  that  certain  letter  from  EEX  to  the
Administrative Agent and in effect on the Closing Date,  together
with such amendments thereto as may be both adopted in accordance
therewith and consented to by the Majority Holders.

          "EEX  Subordination Agreement" means the  subordination
agreement  effective  as of September 29,  1997,  issued  by  EEX
Capital  in  favor of the administrative agent  and  the  lenders
under  the  EEX  Credit Agreement subordinating the  Subordinated
Note  to the "Superior Indebtedness" (as such term is defined  in
such subordination agreement).

          "Engagement  Letter"  means that  certain  amended  and
restated  engagement letter agreement by and among UBS,  EEX  and
EEX Capital effective as of September 29, 1997.

          "Environmental  Laws"  means any and  all  Governmental
Requirements pertaining to health or the environment in effect in
any  and  all  jurisdictions in which EEX or  any  Subsidiary  is
conducting  or at any time has conducted business, or  where  any
Property  of EEX or any Subsidiary is located, including  without
limitation,  the Oil Pollution Act of 1990, as amended,  ("OPA"),
the  Clean  Air Act, as amended, the Comprehensive Environmental,
Response,  Compensation, and Liability Act of 1980,  as  amended,
("CERCLA"), the Federal Water Pollution Control Act, as  amended,
the  Occupational Safety and Health Act of 1970, as amended,  the
Resource  Conservation  and Recovery Act  of  1976,  as  amended,
("RCRA"),  the  Safe  Drinking Water Act, as amended,  the  Toxic
Substances Control Act, as amended, the Superfund Amendments  and
Reauthorization Act of 1986, as amended, the Hazardous  Materials
Transportation   Act,   as  amended,  and   other   environmental
conservation or protection laws.  The term "oil" shall  have  the
meaning  specified  in OPA, the terms "hazardous  substance"  and
"release"  (or  "threatened release")  shall  have  the  meanings
specified  in CERCLA, and the terms "solid waste" and  "disposal"
(or  "disposed")  shall  have  the meanings  specified  in  RCRA;
provided,  however, that (i) in the event either OPA,  CERCLA  or
RCRA  is amended so as to broaden the meaning of any term defined
thereby,  such  broader  meaning shall apply  subsequent  to  the
effective date of such amendment and (ii) to the extent the  laws
of  the  state in which any Property of EEX or any Subsidiary  is
located  establish  a  meaning for "oil," "hazardous  substance,"
"release," "solid waste" or "disposal" which is broader than that
specified  in  either OPA, CERCLA or RCRA, such  broader  meaning
shall apply.

          "ERISA"  means the Employee Retirement Income  Security
Act of 1974, as amended, and any successor statute.

          "ERISA Affiliate" means each trade or business (whether
or  not  incorporated) which together with EEX  or  a  Subsidiary
would  be deemed to be a "single employer" within the meaning  of
section 4001(b)(1) of ERISA or subsections (b), (c), (m)  or  (o)
of section 414 of the Code.

          "ERISA  Event" means (i) a "Reportable Event" described
in  section  4043 of ERISA and the regulations issued  thereunder
(other than a "Reportable Event" not subject to the provision for
30-day  notice  to  the  PBGC), (ii) the  withdrawal  of  EEX,  a
Subsidiary or any ERISA Affiliate from a Plan during a plan  year
in  which  it was a "substantial employer" as defined in  section
4001(a)(2)  of ERISA, (iii) the filing of a notice of  intent  to
terminate  a  Plan  or  the treatment of a Plan  amendment  as  a
termination under section 4041 of ERISA, (iv) the institution  of
proceedings to terminate a Plan by the PBGC, (v) any other  event
or condition which might constitute grounds under section 4042 of
ERISA for the termination of, or the appointment of a trustee  to
administer,  any Plan or (vi) the partial or complete  withdrawal
of  EEX, a Subsidiary or any ERISA Affiliate from a Multiemployer
Plan.

          "Event of Default" means any event specified in Section
8.1.

          "Exchange  Act"  means the Securities Exchange  Act  of
1934, as amended.

          "Fee  Letter"  means that certain amended and  restated
fee  letter  agreement  by and among UBS, EEX  and  EEX  Capital,
effective as of September 29, 1997.

          "Financial Statements" means the financial statement or
statements of EEX and its Consolidated Subsidiaries described  or
referred to in Section 4.1.

          "GAAP"  means generally accepted accounting  principles
in the United States of America in effect from time to time.

          "Governmental   Authority"   means   any   nation    or
government, any state or other political subdivision thereof  and
any   Person   exercising   executive,   legislative,   judicial,
regulatory  or  administrative  functions  of  or  pertaining  to
government.

          "Governmental  Requirement"  means  any  law,  statute,
code,   ordinance,   order,  determination,   rule,   regulation,
judgment,  decree,  injunction, franchise,  permit,  certificate,
license, authorization or other directive or requirement (whether
or  not  having the force of law), including, without limitation,
Environmental  Laws, energy regulations and occupational,  safety
and health standards or controls, of any Governmental Authority.

          "Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America  for  the
payment  of  which obligations or guarantee the  full  faith  and
credit of the United States of America is pledged.

          "Guarantee"   means   a  guarantee   (other   than   by
endorsement  of  negotiable instruments  for  collection  in  the
ordinary  course of business), direct or indirect, in any  manner
(including,   without   limitation,   letters   of   credit   and
reimbursement agreements in respect thereof), of all or any  part
of any Indebtedness.

          "Holder" means the record holder of one or more  shares
of  Preferred  Stock, as shown on the books and  records  of  EEX
Capital.

          "Incur" has the meaning specified in Section 5.2.

          "Indebtedness"  of  a Person means  such  Person's  (i)
obligations  for borrowed money, whether or not  evidenced  by  a
bond,  note  or similar instrument, (ii) obligations representing
the  deferred  purchase  price of property  other  than  accounts
payable  arising in the ordinary course of such Person's business
on  terms  customary in the trade, (iii) obligations, whether  or
not  assumed, secured by Liens or payable out of the proceeds  or
production  from property now or hereafter owned or  acquired  by
such  Person,  (iv)  obligations which are  evidenced  by  notes,
acceptances, or other instruments, (v) Capital Lease Obligations,
(vi) obligations for which such Person is obligated pursuant to a
Guarantee  or  pursuant  to  a letter of  credit,  (vii)  Hedging
Obligations, and (viii) Mandatorily Redeemable Obligations.

          "Indemnified  Party"  has  the  meaning  specified   in
Section 10.1.

          "Indemnifying  Parties" has the  meaning  specified  in
Section 10.1

          "Lien"  means  any  interest in  Property  securing  an
obligation owed to, or a claim by, a Person other than the  owner
of  the  Property, whether such interest is based on  the  common
law, statute or contract, and whether such obligation or claim is
fixed or contingent, and including but not limited to the lien or
security  interest arising from a mortgage, encumbrance,  pledge,
security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes.

          "Liquidated  Damages"  means  any  and  all  liquidated
damages then owing pursuant to any of the Transaction Documents.

          "Liquidation Preference" means $1,000.00 per  share  of
Preferred Stock.

          "Loan  Documents" has the meaning specified in the  EEX
Credit Agreement.

          "Majority  Holders"  means a  majority  in  Liquidation
Preference of the Holders of the Preferred Stock.

          "Mandatorily Redeemable Obligation" means, with respect
to  any  Person,  an  obligation of such Person  or  any  of  its
Subsidiaries  to  the  extent that it is redeemable,  payable  or
required to be purchased or otherwise retired or extinguished (a)
at  a  fixed  or  determinable date, whether by  operation  of  a
sinking fund or otherwise, (b) at the option of any Person  other
than  such  Person or such Subsidiary, or (c) upon the occurrence
of  a  condition not solely within the control of such Person  or
such Subsidiary, such as a redemption required to be made out  of
future earnings.

          "Material  Adverse  Effect"  means  any  material   and
adverse change in the financial condition, business or results of
operations  of EEX and its Subsidiaries (including  EEX  Capital)
taken  as  a  whole  which  makes  EEX  unable  to  perform   its
obligations under the Subordinated Note.

          "Multiemployer  Plan"  means a  multiemployer  plan  as
defined  in  section 3(37) or 4001(a)(3) of ERISA  which  is,  or
within  the  six preceding years was, contributed to  by  EEX,  a
Subsidiary or an ERISA Affiliate.

          "Net  Cash Proceeds" means the aggregate cash  proceeds
received (including any cash payments received by way of deferred
payment of principal pursuant to a promissory note or installment
receivable or otherwise, but only as and when received) from  any
Capital Market Transaction, net of (i) all commissions (including
any   underwriters'  discounts)  and  (ii)  other  ordinary   and
reasonable fees and expenses (including legal fees and  expenses)
incurred as a consequence of such Capital Market Transaction.

          "Obligations" means any principal, interest, penalties,
fees (including, but not limited to, reasonable fees and expenses
of  counsel), indemnifications, reimbursements, damages and other
liabilities   payable  under  the  documentation  governing   and
Indebtedness.

          "Officer"  means,  with  respect  to  any  Person,  the
Chairman   of  the  Board,  the  Chief  Executive  Officer,   the
President,  the  Chief  Operating Officer,  the  Chief  Financial
Officer,  the  Managing  Member,  the  Treasurer,  any  Assistant
Treasurer, the Controller, the Secretary or any Vice-President of
such Person.

          "Officer's  Certificate" means,  with  respect  to  any
Person,   a  certificate signed on behalf of such  Person  by  an
Officer  of such Person, who must be the Chief Executive officer,
the  Chief  Financial  officer, the Treasurer  or  the  Principal
accounting officer of such Person that meets the requirements  of
Section 13.4.

          "Operating Lease Obligations" means, as to EEX  or  any
direct or indirect Subsidiary, the obligations of such person  to
pay  rent  or other amounts under a lease of (or other  agreement
conveying  the right to use) real and/or personal property  which
obligations  are not required to be classified and accounted  for
as  a  liability for a capital lease on a balance sheet  of  such
Person  and, the purposes of this Agreement, the amount  of  such
obligations  shall be the discounted present value of  the  lease
payments, discounted in the same manner a capital lease would  be
discounted according to GAAP.

          "Opinion of Counsel" means, with respect to any Person,
an  opinion  from legal counsel to such Person that is reasonably
acceptable to the Majority Holders on the applicable date.

          "PBGC"  means the Pension Benefit Guaranty Corporation,
or any successor thereto.

          "Permanent  Securities" means any securities  or  other
obligation  issued by EEX Capital to redeem or  otherwise  retire
the  Preferred Stock in accordance with the terms and  conditions
of the Fee Letter.

          "Permitted  Subordinated Debt" means  Debt  of  EEX  or
another Subsidiary (other than EEX Capital) subordinated  to  the
Indebtedness  on  terms substantially similar to  the  terms  set
forth in the EEX Subordination Agreement.

          "Person"  means  any individual, corporation,  company,
limited  liability  company, voluntary association,  partnership,
joint  venture, trust, unincorporated organization or  government
or  any agency, instrumentality or political subdivision thereof,
or any other form of entity.

          "Placement  Agent"  has the meaning  specified  in  the
preamble to this Agreement.

          "Plan" means each Benefit Plan and Multiemployer Plan.

          "Preferred  Stock"  has the meaning  specified  in  the
recitals to this Agreement.

          "Preferred   Stock   Register"   means   the   register
maintained  by  EEX  Capital  pursuant  to  the  Certificate   of
Designations.

          "Prohibited  Issuance" means an issuance of  securities
or  incurrence of Indebtedness in violation of the  covenant  set
forth in Section 5.2.

          "Property"  means any interest in any kind of  property
or  asset,  whether  real,  personal or  mixed,  or  tangible  or
intangible.

          "Redemption  Price"  means the Liquidation  Preference,
plus  (i)  accrued and unpaid dividends to the date of redemption
and (ii) any Additional Costs.

          "Relevant Parties" means EEX, EEX Capital and  each  of
their respective Subsidiaries (if any).

          "Responsible   Officer"  means  as  to   EEX   or   any
Subsidiary,  the  Chief Executive Officer, the President  or  any
Vice  President  of  EEX Capital and, with respect  to  financial
matters,  the term "Responsible Officer" shall include the  Chief
Financial Officer, Controller, Vice President, Finance, Treasurer
or  Treasury Officer of such Person.  Unless otherwise specified,
all  references  to  a Responsible Officer herein  shall  mean  a
Responsible Officer of EEX.

          "SEC" means the Securities and Exchange Commission.

          "Securities Act" means the Securities Act of  1933,  as
amended.

          "Senior  Debt" means the principal (whether denominated
as   principal,  monthly  rental  or  other  notional  quantity),
premium, if any, and unpaid interest on, and any reasonable  fees
or  costs  related  to, (a) any Debt of EEX and its  Subsidiaries
(other  than EEX Capital), whether outstanding on the date hereof
or  hereafter created, which is incurred, assumed, or  guaranteed
in  compliance  with  the  EEX Credit Agreement,  unless  in  the
instrument creating or evidencing the same or pursuant  to  which
the same is outstanding it is provided that such indebtedness  is
not  superior in right of payment to the Subordinated  Note,  and
(b)  renewals,  extensions, modifications and refundings  of  any
such  Debt.   For the avoidance of doubt, Debt which is  created,
incurred, assumed, or guaranteed in violation of terms of the EEX
Credit Agreement shall not constitute Senior Debt, and Debt which
is  created, incurred, assumed, or guaranteed in compliance  with
the  terms  of the EEX Credit Agreement Debt shall at  all  times
constitute Senior Debt, notwithstanding any event or circumstance
which may subsequently occur which would constitute the creation,
incurrence, assumption or guarantee of such Debt at such  time  a
violation of the EEX Credit Agreement.

          "Significant  Subsidiary"  means  any  Subsidiary  that
would be a "significant subsidiary" as defined in Article 1, Rule
1-02  of  Regulation S-X, promulgated pursuant to the  Securities
Act, as such Regulation is in effect on the date hereof.

          "Special  Entity"  means  any  joint  venture,  limited
liability  company, general or limited partnership or  any  other
type of partnership or company in which EEX or one or more of its
other  Subsidiaries is a member, owner, partner or joint venturer
and owns at least a majority of the equity of such entity.

          "Stock   Registration  Rights  Agreement"   means   the
registration  rights agreement, dated as of September  29,  1997,
between  EEX  Capital and the Placement Agent on  behalf  of  the
Holders, in the form attached as Exhibit D.

          "Subordinated  Note"  means the subordinated  debenture
issued  by EEX and held by EEX Capital evidencing $150.0  million
of  Permitted  Subordinated Debt, effective as of  September  29,
1997.

          "Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of  which  more
than  50%  of  the total voting power of shares of  Voting  Stock
thereof  is  at  the  time  owned  or  controlled,  directly   or
indirectly,  by  such  Person  or  one  or  more  of  the   other
Subsidiaries of that Person (or a combination thereof)  and  (ii)
any  partnership  (a) the sole general partner  or  the  managing
general  partner of which is such Person or a Subsidiary of  such
person  or (b) the only general partners of which are such Person
or of one or more Subsidiaries of such Person (or any combination
thereof).

          "Subsidiary Guarantor" means any Subsidiary or  Special
Entity that has executed a Subsidiary Guaranty Agreement.

          "Subsidiary  Guaranty  Agreement"  means  any  Guaranty
Agreement  executed  by  a Subsidiary  or  a  Special  Entity  as
required by the EEX Credit Agreement.

          "Transaction  Documents"  means  this  Agreement,   the
Certificate of Designations, the Preferred Stock, the  Engagement
Letter,  the Fee Letter, the Stock Registration Rights Agreement,
the Subordinated Note and the EEX Subordination Agreement.

          "UBS" has the meaning specified in the preamble to this
Agreement.

          "Voting Stock" means, with respect to any Person at any
time,  the  Capital Stock of such Person that  is  at  such  time
entitled  to  vote in the election of the board of  directors  of
such Person.

          "Voting  Rights  Trigger Event" means a  voting  rights
trigger event as defined in the Certificate of Designations.

          "Withdrawal  Liability" shall have  the  meaning  given
such term under Part I of Subtitle E of Title IV of ERISA.

          Section    Interpretation.   In  this  Agreement,   the
singular  includes  the  plural  and  the  plural  includes   the
singular;  words implying any gender include the  other  genders;
references  to any section, exhibit or schedule are to  sections,
exhibits   or   schedules  hereto  unless  otherwise   indicated;
references  to  statutes  are to be construed  as  including  all
statutory  provisions consolidating, amending  or  replacing  the
statute  referred  to; references to "writing" include  printing,
typing,  lithography and other means of reproducing  words  in  a
visible form; "including" following a word or phrase shall not be
construed to limit the generality of such word or phrase; and  an
accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP as in effect from time to time.

                             ARTICLE
                 REPRESENTATIONS AND WARRANTIES
                                
          As  of  the Closing Date (after giving pro forma effect
to the Transaction Documents, the issuance of the Preferred Stock
and the application of the proceeds thereof, and the transactions
contemplated  hereby and thereby) and as of the  Effective  Date,
each  of  EEX and EEX Capital hereby agrees with, and  represents
and warrants to, the Placement Agent and the Holders as follows:

          Section   Due Authorization and Enforceability.

                Each  of  the Transaction Documents (i) has  been
duly authorized, executed and delivered by each Relevant Party to
the  extent  a  party thereto and (ii) constitutes  a  valid  and
binding  obligation  of such Relevant Party, enforceable  against
each  of them in accordance with its terms, except as enforcement
may    be   limited   by   applicable   bankruptcy,   insolvency,
reorganization, moratorium and other similar laws  affecting  the
enforceability  of  creditors' rights generally  and  by  general
principles of equity (whether arising under a proceeding  at  law
or in equity).

                The  shares  of  Preferred Stock have  been  duly
authorized  by  EEX  Capital and, when issued  and  paid  for  in
accordance   with   the  terms  hereof  will   be   fully   paid,
nonassessable   and  entitled  to  the  rights,  privileges   and
preferences set forth in the Certificate of Designations, and the
issuance of such shares will not be subject to any preemptive  or
similar rights.

                The  Certificate of Designations  has  been  duly
authorized by all necessary corporate and stockholder action.

          Section   Private Offering; Rule 144A Matters.

                 Based   in   part   on  the  accuracy   of   the
representations of UBS in Section 7.1, the sale of the  Preferred
Stock  hereunder is and will be exempt from the registration  and
prospectus  delivery  requirements of the Securities  Act.   Each
Preferred Security shall bear the following legend.

          "THE   SECURITY  (OR  ITS  PREDECESSOR)  EVIDENCED
          HEREBY  WAS  ORIGINALLY ISSUED  IN  A  TRANSACTION
          EXEMPT  FROM REGISTRATION UNDER SECTION 5  OF  THE
          UNITED  STATES SECURITIES ACT OF 1933, AS  AMENDED
          (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
          HEREBY  MAY NEITHER BE OFFERED, SOLD NOR OTHERWISE
          TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
          AN  APPLICABLE EXEMPTION THEREFROM NOR BE OFFERED,
          SOLD  OR  OTHERWISE TRANSFERRED TO ANY  PERSON  OR
          ENTITY  PRIMARILY ENGAGED, DIRECTLY OR INDIRECTLY,
          IN THE OIL AND GAS EXPLORATION INDUSTRY OTHER THAN
          THE  CORPORATION  OR ANY OF ITS  AFFILIATES.  EACH
          PURCHASER  OF  THE  SECURITY EVIDENCED  HEREBY  IS
          HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING  ON
          THE EXEMPTION FROM THE PROVISIONS OF SECTION 5  OF
          THE   SECURITIES  ACT  PROVIDED   BY   RULE   144A
          THEREUNDER.  THE HOLDER OF THE SECURITY  EVIDENCED
          HEREBY  AGREES FOR THE BENEFIT OF THE ISSUER  THAT
          (A)  SUCH  SECURITY  MAY  BE  RESOLD,  PLEDGED  OR
          OTHERWISE  TRANSFERRED, ONLY (1) (a) TO  A  PERSON
          WHO  THE SELLER REASONABLY BELIEVES IS A QUALIFIED
          INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
          THE  SECURITIES ACT) IN A TRANSACTION MEETING  THE
          REQUIREMENTS  OF RULE 144A, (b) IN  A  TRANSACTION
          MEETING  THE  REQUIREMENTS OF RULE 144  UNDER  THE
          SECURITIES ACT, OR (c) IN ACCORDANCE WITH  ANOTHER
          EXEMPTION  FROM  THE REGISTRATION REQUIREMENTS  OF
          THE  SECURITIES AT (AND BASED UPON AN  OPINION  OF
          COUNSEL  IF  THE ISSUER SO REQUESTS), (2)  TO  THE
          ISSUER   OR   (3)   PURSUANT   TO   AN   EFFECTIVE
          REGISTRATION  STATEMENT  AND,  IN  EACH  CASE,  IN
          ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS  OF
          ANY  STATE  OF  THE  UNITED STATES  OR  ANY  OTHER
          APPLICABLE  JURISDICTION AND (B) THE HOLDER  WILL,
          AND  EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
          ANY  PURCHASER  FROM IT OF THE SECURITY  EVIDENCED
          HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
          ABOVE."
          
                The  Preferred Stock will be eligible for  resale
pursuant to Rule 144A under the Securities Act.

          Section   Existence.  Each of EEX and EEX Capital:  (i)
is  a  corporation or limited liability company  duly  organized,
legally  existing  and in good standing under  the  laws  of  the
jurisdiction of its formation; (ii) has all requisite power,  and
has  all material governmental licenses, authorizations, consents
and  approvals  necessary  to own its assets  and  carry  on  its
business  as now being or as proposed to be conducted; and  (iii)
is  qualified  to do business in all jurisdictions in  which  the
nature  of  the business conducted by it makes such qualification
necessary  and where failure so to qualify would have a  Material
Adverse Effect.

          Section    Financial  Condition.  The  audited  balance
sheet  of  EEX as at December 31, 1996 and the related statements
of  operations, cash flows and changes in partners'  capital  and
common  shareholders' equity of EEX and its predecessor for  each
of  the  three years in the period ended on said date,  with  the
opinion  thereon  of  Deloitte & Touche  LLP  and  the  unaudited
interim  financial statements of EEX at June 30, 1997  heretofore
furnished  to  the Placement Agent and each of the  Holders,  are
complete  and correct and fairly present the financial  condition
of  EEX  as at said date and the results of operations  and  cash
flows  of  EEX  and its predecessor for the stated  periods  then
ended,  all in accordance with GAAP, subject, in the case of  the
interim  financial  statements, to normal  year-end  adjustments.
Except as contemplated by the Commitment Letter, neither EEX  nor
EEX  Capital has on the Closing Date or on the Effective Date any
material  Debt,  contingent liabilities, liabilities  for  taxes,
unusual  forward  or  long-term  commitments  or  unrealized   or
anticipated  losses from any unfavorable commitments,  except  as
referred  to  or  reflected  or provided  for  in  the  Financial
Statements.  Since June 30, 1997 to the Effective Date, there has
been  no change or event having a Material Adverse Effect.  Since
the  date  of  the  Financial Statements to the  Effective  Date,
neither  the business nor the Properties of EEX or any Subsidiary
have  been materially and adversely affected as a result  of  any
fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking
of  Property or cancellation of contracts, permits or concessions
by  any  Governmental Authority, riot, activities of armed forces
or acts of God or of any public enemy.

          Section   Litigation.  As of the Closing Date, there is
no  litigation,  legal,  administrative or  arbitral  proceeding,
investigation or other action of any nature pending  or,  to  the
knowledge  of EEX threatened against or affecting EEX or  any  of
its  Subsidiaries which involves the possibility of any  judgment
or  liability  against EEX or any of its Subsidiaries  not  fully
covered  by insurance (except for normal deductibles), and  which
would have a Material Adverse Effect.

          Section     No  Breach.   Neither  the  execution   and
delivery  of the Transaction Documents to which EEX, EEX  Capital
or   any  of  their  respective  Subsidiaries  is  a  party,  nor
compliance  with  the terms and provisions hereof  will  conflict
with  or result in a breach of, or require any consent which  has
not  been obtained as of the Effective Date under, the respective
charter or by-laws or other organizational documents of EEX,  any
Subsidiary or EEX Capital or any Governmental Requirement or  any
agreement  or instrument for borrowed money to which any  of  the
foregoing  is a party or by which it is bound or to which  it  or
its  Properties  are subject, or constitute a default  under  any
such  agreement  or  instrument, or result  in  the  creation  or
imposition of any Lien upon any of the revenues or assets of EEX,
any  Subsidiary or EEX Capital pursuant to the terms of any  such
agreement or instrument.

          Section    Authority.   EEX and EEX  Capital  have  all
necessary power and authority to execute, deliver and perform its
obligations  under the Transaction Documents to  which  it  is  a
party; and the execution, delivery and performance by any of  the
foregoing  of the Transaction Documents to which it is  a  party,
have  been  duly authorized by all necessary corporate or  member
action on its part; and the Transaction Documents constitute  the
legal,  valid  and  binding obligations of EEX and  EEX  Capital,
enforceable in accordance with their terms, except to the  extent
that  enforcement  may  be limited by bankruptcy,  insolvency  or
similar  laws  affecting  the enforcement  of  creditor's  rights
generally.

          Section    Approvals.  No authorizations, approvals  or
consents   of,  and  no  filings  or  registrations   with,   any
Governmental Authority are necessary for the execution,  delivery
or performance by EEX or EEX Capital of the Transaction Documents
or for the validity or enforceability thereof.

          Section    ERISA.   As of the Closing Date,  except  as
would not have a Material Adverse Effect:

                EEX,  the  Subsidiaries and each ERISA  Affiliate
have  complied  in  all material respects with ERISA  and,  where
applicable, the Code regarding each Plan.

               No act, omission or transaction has occurred which
could  result in imposition on EEX, any Subsidiary or  any  ERISA
Affiliate  (whether  directly  or indirectly)  of  (i)  either  a
material civil penalty assessed pursuant to subsections (c),  (i)
or  (l)  of  section  502 of ERISA or a tax imposed  pursuant  to
Chapter  43 of Subtitle D of the Code or (ii) breach of fiduciary
duty liability damages under section 409 of ERISA.

                No  liability  to the PBGC (other  than  for  the
payment  of current premiums which are not past due) by EEX,  any
Subsidiary or any ERISA Affiliate has been or is expected by EEX,
any Subsidiary or any ERISA Affiliate to be incurred with respect
to  any  Plan.   No  ERISA Event with respect  to  any  Plan  has
occurred which could result in a liability of EEX, any Subsidiary
or any ERISA Affiliate.

               Full payment when due has been made of all amounts
which  EEX,  the Subsidiaries or any ERISA Affiliate is  required
under  the terms of each Plan or applicable law to have  paid  as
contributions  to  such  Plan  as of  the  date  hereof,  and  no
accumulated  funding deficiency (as defined  in  section  302  of
ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Benefit Plan.

                 The  actuarial  present  value  of  the  benefit
liabilities under each Benefit Plan which is subject to Title  IV
of  ERISA  does  not, as of the end of EEX's most recently  ended
fiscal year, exceed the current value of the assets (computed  on
a plan termination basis in accordance with Title IV of ERISA) of
such  Benefit  Plan allocable to such benefit  liabilities.   The
term  "actuarial present value of the benefit liabilities"  shall
have the meaning specified in section 4041 of ERISA.

                Neither  EEX nor any ERISA Affiliate has received
any  notification (or has knowledge of any reason to expect) that
any  Multiemployer Plan is in reorganization, is insolvent or has
been terminated, within the meaning of Title IV of ERISA.

               Neither EEX nor any ERISA Affiliate is required to
provide  security under section 401(a)(29) of the Code due  to  a
Plan  amendment that results in an increase in current  liability
for the Plan.

          Section   Taxes.  Each of EEX and its Subsidiaries  has
filed  all United States Federal income tax returns and all other
tax  returns which are required to be filed by them and has  paid
all  material taxes due pursuant to such returns or  pursuant  to
any  assessment received by EEX or any Subsidiary except for  any
such  tax,  assessment, charge or levy the payment  of  which  is
being  contested  in  good faith and by  proper  proceedings  and
against  which  adequate  reserves  are  being  maintained.   The
charges,  accruals  and reserves on the  books  of  EEX  and  its
Subsidiaries  in respect of taxes and other governmental  charges
are, in the opinion of EEX, adequate.  No tax lien has been filed
and,  to the knowledge of EEX and EEX Capital, no claim is  being
asserted with respect to any such tax, fee or other charge.

          Section   Titles, etc.  To the best of EEX's knowledge:

                 Each  of  EEX  and  EEX  Capital  has  good  and
defensible  title  to  its  material  (individually  or  in   the
aggregate) Properties in all material respects, free and clear of
all Liens except Liens permitted by Section 5.5.

                All  leases  and  agreements  necessary  for  the
conduct  of  the business of EEX and EEX Capital  are  valid  and
subsisting, in full force and effect and there exists no  default
or  event or circumstance which with the giving of notice or  the
passage  of time or both would give rise to a default  under  any
such  lease or leases, which would affect in any material respect
the conduct of the business of EEX and EEX Capital.

                The rights, properties and other assets presently
owned,  leased  or  licensed by EEX and EEX  Capital,  including,
without limitation, all easements and rights of way, include  all
rights,  Properties and other assets necessary to permit EEX  and
EEX Capital to conduct their business in all material respects in
the  same manner as its business has been conducted prior to  the
Closing Date.

          Section    No  Material Misstatements.  No information,
exhibit or report furnished to the Placement Agent or any  Holder
by  or  on behalf of EEX or any of its Subsidiaries in connection
with   the  negotiation  and  administration  of  this  Agreement
contains  any material misstatement of fact or omits to  state  a
material fact necessary in order to make the statements contained
therein not misleading.

          Section   Investment Company Act.  Neither EEX nor  EEX
Capital  is an "investment company" or a company "controlled"  by
an  "investment  company," within the meaning of  the  Investment
Company Act of 1940, as amended.

          Section    Subsidiaries  and  Partnerships.    On   the
Closing  Date  and the Effective Date, except  as  set  forth  on
Schedule  2.14, EEX has no Subsidiaries and neither EEX  nor  any
Subsidiary   has   any  interest  in  any  general   or   limited
partnerships, but excluding solely tax partnerships and  oil  and
gas joint ventures under joint operating agreements.

          Section    Public Utility Holding Company Act.  Neither
EEX  nor  EEX  Capital is a "holding company," or  a  "subsidiary
company"  of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company,"  or
a  "public  utility"  within the meaning of  the  Public  Utility
Holding Company Act of 1935, as amended.

          Section    Defaults.  As of the Closing  Date,  neither
EEX  nor any of its Subsidiaries is in default nor has any  event
or  circumstance  occurred which, but for the expiration  of  any
applicable  grace period or the giving of notice, or both,  would
constitute  a  default  under  any agreement  or  instrument  for
borrowed  money to which any of the foregoing is a  party  or  by
which it is bound.  No Default has occurred and is continuing.

          Section    Environmental Matters.  As  of  the  Closing
Date, except as would not have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such
actions would not have a Material Adverse Effect):

                Neither any Property of EEX or any Subsidiary nor
the operations conducted thereon violate any order or requirement
of any court or Governmental Authority or any Environmental Laws;

                 Without  limitation  of  clause  (a)  above,  no
Property  of  EEX or any Subsidiary nor the operations  currently
conducted thereon or, to the best knowledge of EEX, by any  prior
owner or operator of such Property or operation, are in violation
of  or  subject  to  any existing, pending or threatened  action,
suit, investigation, inquiry or proceeding by or before any court
or  Governmental  Authority or to any remedial obligations  under
Environmental Laws;

                 All   notices,  permits,  licenses  or   similar
authorizations,  if  any, required to be  obtained  or  filed  in
connection  with the operation or use of any and all Property  of
EEX  and  each Subsidiary, including without limitation  past  or
present  treatment, storage, disposal or release of  a  hazardous
substance  or  solid waste into the environment, have  been  duly
obtained  or filed, and EEX and each Subsidiary are in compliance
with  the  terms  and  conditions of all such  notices,  permits,
licenses and similar authorizations;

               All hazardous substances, solid waste, and oil and
gas  exploration and production wastes, if any, generated at  any
and  all Property of EEX or any Subsidiary have in the past  been
transported,   treated  and  disposed  of  in   accordance   with
Environmental  Laws  and  so  as not  to  pose  an  imminent  and
substantial  endangerment  to public health  or  welfare  or  the
environment,  and,  to  the  best  knowledge  of  EEX,  all  such
transport  carriers  and treatment and disposal  facilities  have
been and are operating in compliance with Environmental Laws  and
so  as  not  to pose an imminent and substantial endangerment  to
public  health  or welfare or the environment, and  are  not  the
subject   of   any   existing,  pending  or  threatened   action,
investigation  or  inquiry  by  any  Governmental  Authority   in
connection with any Environmental Laws;

                EEX  has taken all steps reasonably necessary  to
determine and has determined that no hazardous substances,  solid
waste,  or  oil and gas exploration and production  wastes,  have
been  disposed  of or otherwise released and there  has  been  no
threatened  release  of any hazardous substances  on  or  to  any
Property  of  EEX  or  any Subsidiary except in  compliance  with
Environmental  Laws  and  so  as not  to  pose  an  imminent  and
substantial  endangerment  to public health  or  welfare  or  the
environment;

                To the extent applicable, all Property of EEX and
each  Subsidiary currently satisfies all design,  operation,  and
equipment requirements imposed by the OPA or scheduled as of  the
Closing  Date or the Effective Date to be imposed by  OPA  during
the  term of this Agreement, and EEX does not have any reason  to
believe  that such Property, to the extent subject to  OPA,  will
not  be  able  to  maintain compliance with the OPA  requirements
during the term of this Agreement; and

                Neither  EEX  nor any Subsidiary  has  any  known
contingent liability in connection with any release or threatened
release  of any oil, hazardous substance or solid waste into  the
environment.

          Section    Compliance with Laws.   As  of  the  Closing
Date,  neither EEX nor any of its Subsidiaries has  violated  any
Governmental Requirement or failed to obtain any license, permit,
franchise or other governmental authorization necessary  for  the
ownership  of  any  of  its Properties  or  the  conduct  of  its
business,  which violation or failure would have  (in  the  event
such  violation  or failure were asserted by any  Person  through
appropriate action) a Material Adverse Effect.

          Section    Subordination.   The  Liabilities  and   the
obligations  of EEX under the Subordinated Note are  subordinated
to Senior Debt.

                             ARTICLE
         SALE AND OPTIONAL REPAYMENT OF PREFERRED STOCK
                                
          Section   Sale of the Preferred Stock.  On the basis of
the  representations and warranties herein contained and  subject
to  the terms and conditions herein set forth, to the extent  not
already  consummated  under the Existing Agreement,  EEX  Capital
sold  to  UBS,  and  UBS purchased from EEX  Capital,  shares  of
Preferred Stock with an aggregate Liquidation Preference equal to
UBS' Commitment, at an aggregate purchase price equal to 100%  of
such Liquidation Preference.

          Section    Indemnity.  EEX and EEX Capital jointly  and
severally agree to indemnify each Affected Party and to hold each
Affected  Party  harmless from and against any  loss  or  expense
which  such Holder may sustain or incur as a consequence  of  (a)
the  failure by EEX Capital to issue the additional 75,000 shares
of  the  Preferred Stock on the Closing Date, (b) default by  EEX
Capital  in making any redemption after EEX Capital has  given  a
notice   thereof  in  accordance  with  the  provisions  of   the
Certificate of Designations, or (c) the making of any dividend or
redemption  payment  on any date other than  a  dividend  payment
date.   Such indemnification may include an amount equal to  such
Affected  Party's  actual loss and expenses  incurred  (excluding
lost  profits) in connection with, or by reason of,  any  of  the
foregoing  events.    A  certificate as to  any  amounts  payable
pursuant  to  this Section 3.2 submitted to EEX  Capital  by  any
Affected  Party  shall be conclusive in the absence  of  manifest
error.   This  covenant  shall survive the  termination  of  this
Agreement  and  the redemption of all outstanding shares  of  the
Preferred Stock and all other amounts payable hereunder.

          Section    Method of Payment.  All obligations  arising
under the Transaction Documents shall be payable by wire transfer
in  immediately  available funds to the account  of  the  Holder,
designated  in  a written notice to EEX Capital  at  least  three
Business Days prior to the due date therefor.

          Section   Payment on Business Days.  If any payment  to
be  made hereunder or under any share of Preferred Stock shall be
due  on  a  day other than a Business Day, such payment shall  be
made  on the next succeeding Business Day (and such extension  of
time  shall be included in computing dividends in connection with
such payment).

                             ARTICLE
                      AFFIRMATIVE COVENANTS
                                
          Section   Financial Statements.  EEX shall deliver,  or
shall  cause to be delivered, to the Placement Agent and each  of
the Holders:

                As  soon as available and in any event within one
hundred  twenty (120) days after the end of each fiscal  year  of
EEX,  (i) EEX's Form 10-K filed with the SEC or (ii) the  audited
consolidated statements of income, shareholders' equity, and cash
flows  of  EEX and its Consolidated Subsidiaries for such  fiscal
year,  and the related consolidated balance sheet of EEX and  its
Consolidated Subsidiaries as at the end of such fiscal year,  and
setting  forth in each case in comparative form the corresponding
figures  as of the end of and for the preceding fiscal year,  and
accompanied   by  the  related  opinion  of  independent   public
accountants  of  recognized national standing acceptable  to  the
Majority  Holders which opinion shall state that  said  financial
statements  fairly present the consolidated financial  condition,
results  of operations and cash flows of EEX and its Consolidated
Subsidiaries as at the end of, and for, such fiscal year and that
such  financial statements have been prepared in accordance  with
GAAP  except for such changes in such principles with  which  the
independent  public  accountants shall have  concurred  and  such
opinion shall not contain a "going concern" or like qualification
or exception, and a certificate of such accountants stating that,
in  making  the  examination necessary for  their  opinion,  they
obtained  no  knowledge, except as specifically  stated,  of  any
Default.

               As soon as available and in any event within sixty
(60)  days  after  the  end of each of  the  first  three  fiscal
quarterly periods of each fiscal year of EEX, (i) EEX's Form 10-Q
filed  with the SEC or (ii) unaudited consolidated statements  of
income,  shareholders' equity, and cash  flows  of  EEX  and  its
Consolidated Subsidiaries for such period and for the period from
the  beginning of the respective fiscal year to the end  of  such
period, and the related consolidated balance sheets as at the end
of  such  period, and setting forth in each case  in  comparative
form  the  corresponding figures as of the end  of  and  for  the
corresponding period in the preceding fiscal year, accompanied by
the certificate of a Responsible Officer, which certificate shall
state   that   said  financial  statements  fairly  present   the
consolidated financial condition, results of operations and  cash
flows of EEX and its Consolidated Subsidiaries in accordance with
GAAP,  as at the end of, and for, such period (subject to  normal
year-end adjustments).

                As  soon as available and in any event within one
hundred  twenty (120) days after the end of each fiscal  year  of
EEX Capital, the unaudited balance sheet of EEX Capital as at the
end of such fiscal year accompanied by the related Certificate of
a  Responsible  Officer which certificate shall state  that  said
financial  statements fairly present the financial  condition  of
EEX Capital at the end of, and for, such fiscal year.

               Promptly after a Responsible Officer of EEX or EEX
Capital  knows  that any Default has occurred, a notice  of  such
Default, describing the same in reasonable detail and the  action
EEX and EEX Capital propose to take with respect thereto.

                 Promptly  upon  its  becoming  available,   each
financial  statement, report, notice or proxy statement  sent  by
EEX to stockholders generally and each regular or periodic report
and  any  registration statement or prospectus in respect thereof
filed by EEX with or received by EEX in connection therewith from
any  securities  exchange  or the SEC or  any  successor  agency,
including without limitation, Form 10-K's and Form 10-Q's.

          EEX and EEX Capital will furnish to the Placement Agent
and  each  of the Holders, at the time it furnishes each  set  of
financial  statements pursuant to paragraph (a) or (b)  above,  a
certificate  executed by a Responsible Officer (i) certifying  as
to  the matters set forth therein and stating that no Default has
occurred  and is continuing (or, if any Default has occurred  and
is  continuing,  describing the same in reasonable  detail),  and
(ii)   setting   forth  in  reasonable  detail  the  computations
necessary to determine whether EEX is in compliance with  Section
5.1  as  of  the end of the respective fiscal quarter  or  fiscal
year.

          Section   Litigation.  EEX shall promptly give  to  the
Placement Agent and each of the Holders, notice of all  legal  or
arbitral   proceedings,  and  of  all  proceedings   before   any
Governmental  Authority affecting EEX or any of its  Subsidiaries
except proceedings which, if adversely determined, would not have
a Material Adverse Effect.

          Section   Maintenance, Etc.

                EEX  and  EEX Capital shall preserve and maintain
their  corporate  existence and all of their respective  material
rights,  privileges  and franchises; keep  books  of  record  and
account  in which full, true and correct entries will be made  of
all  dealings  or  transactions in relation to its  business  and
activities; comply with all Governmental Requirements if  failure
to  comply  with  such requirements will have a Material  Adverse
Effect; pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on
any  of  its Property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy  the
payment  of which is being contested in good faith and by  proper
proceedings  and  against  which  adequate  reserves  are   being
maintained;  during the continuance of an Event  of  Default  and
upon  reasonable notice, permit representatives of  the  Holders,
during  normal business hours, to examine its books and  records,
to  inspect  its  Properties, and to  discuss  its  business  and
affairs with its financial officers, all to the extent reasonably
requested  by  the  Placement Agent  (at  the  direction  of  the
Majority  Holders),  copy  and make extracts  of  its  books  and
records;  and  keep, or cause to be kept, insured by  financially
sound  and reputable insurers all Property of a character usually
insured  by  Persons  engaged in the  same  or  similar  business
similarly situated against loss or damage of the kinds and in the
amounts  customarily insured against by such  Persons  and  carry
such  other  insurance  as  is usually carried  by  such  Persons
including,  without limitation, pollution liability insurance  to
the extent reasonably available.  EEX Capital shall not engage in
any activity except as contemplated by the Transaction Documents.

                 Contemporaneously  with  the  delivery  of   the
financial  statements required by Section 4.1(a) to be  delivered
for  each year, EEX will furnish or cause to be furnished to  the
Placement Agent a certificate of insurance coverage from insurers
and, if requested, will furnish the Placement Agent copies of the
applicable policies.

          Section   Environmental Matters.

                EEX  will,  and  will cause each  Subsidiary  to,
establish  and  implement such procedures as  may  be  reasonably
necessary  to continuously determine and assure that any  failure
of the following does not have a Material Adverse Effect: (i) all
Property of EEX and its Subsidiaries and the operations conducted
thereon and other activities of EEX and its Subsidiaries  are  in
compliance  with  and  do  not violate the  requirements  of  any
Environmental  Laws, (ii) no oil, hazardous substances  or  solid
wastes  are  disposed  of or otherwise  released  on  or  to  any
Property  owned  by  any  such party except  in  compliance  with
Environmental Laws, (iii) no hazardous substance will be released
on  or  to  any such Property in a quantity equal to or exceeding
that quantity which requires reporting pursuant to Section 103 of
CERCLA,  and (iv) no oil, oil and gas exploration and  production
wastes  or  hazardous substance is released on  or  to  any  such
Property  so  as to pose an imminent and substantial endangerment
to public health or welfare or the environment.

                EEX  and  EEX  Capital will promptly  notify  the
Holders  in  writing of any threatened action,  investigation  or
inquiry  by any Governmental Authority of which EEX has knowledge
in  connection  with  any Environmental Laws  which  may  have  a
Material Adverse Effect.

          Section   Further Assurances.  EEX and EEX Capital will
cure  promptly  any defects in the creation and issuance  of  the
Subordinated  Note,  the Preferred Stock and  the  execution  and
delivery  of  the  other  Transaction  Documents.   EEX  and  EEX
Capital,  at their expense, will promptly execute and deliver  to
the Holders upon request all such other documents, agreements and
instruments  to  comply  with  or accomplish  the  covenants  and
agreements  of  EEX  and  EEX Capital in  the  other  Transaction
Documents,  or  to  correct  any  omissions  in  the  Transaction
Documents,  or  to make any recordings, to file  any  notices  or
obtain  any  consents, all as may be necessary or appropriate  in
connection therewith.

          Section   ERISA Information and Compliance.  If any  of
the following would result in a Material Adverse Effect, EEX will
promptly  furnish and will cause the Subsidiaries and  any  ERISA
Affiliate to promptly furnish to the Placement Agent and each  of
the   Holders:   (i)  immediately  upon  becoming  aware  of  the
occurrence  of any ERISA Event which could result in a  liability
of  EEX,  any Subsidiary or any ERISA Affiliate having a Material
Adverse Effect (individually or in the aggregate with respect  to
all  ERISA  Events),  a written notice signed  by  a  Responsible
Officer  of  EEX, the Subsidiary or the ERISA Affiliate,  as  the
case may be, specifying the nature thereof, what action EEX,  the
Subsidiary or the ERISA Affiliate is taking or proposes  to  take
with  respect  thereto,  and, when known,  any  action  taken  or
proposed by the Internal Revenue Service, the Department of Labor
or  the PBGC with respect thereto, (ii) promptly after request by
the Placement Agent (at the direction of the Majority Holders), a
true  and correct copy of each actuarial report for any Plan  and
each  annual report for any Multiemployer Plan, (iii) immediately
upon receipt of a notice from a Multiemployer Plan regarding  the
imposition  of  Withdrawal Liability having  a  Material  Adverse
Effect, a true and complete copy of such notice, (iv) immediately
upon   becoming  aware  that  a  Multiemployer  Plan   has   been
terminated,  that  the  administrator  or  plan  sponsor   of   a
Multiemployer Plan intends to terminate a Multiemployer Plan,  or
that  the PBGC has instituted or intends to institute proceedings
under  section  4042  of ERISA to terminate a Multiemployer  Plan
which  occurrence would have a Material Adverse Effect, a written
notice signed by a Responsible Officer of EEX, the Subsidiary  or
the ERISA Affiliate, as the case may be, specifying the nature of
such  occurrence  and  any  other  information  relating  thereto
requested  by  the  Placement Agent  (at  the  direction  of  the
Majority  Holders),  and (v) immediately  upon  receipt  thereof,
copies of any notice of the PBGC's intention to terminate  or  to
have a trustee appointed to administer any Benefit Plan.

          Section    Compliance with Engagement  Letter  and  Fee
Letter.  EEX and EEX Capital shall, and shall cause each of their
respective  Subsidiaries to comply with  the  provisions  of  the
Engagement Letter and Fee Letter.

          Section    Notice of Default.  EEX and/or  EEX  Capital
shall provide written notice to the Placement Agent of any of the
Default  or  Event  of  Default  under  any  of  the  Transaction
Documents  or  the  EEX Credit Agreement at the  same  time  such
entity  provides such notice to the agent under  the  EEX  Credit
Agreement or any similar entity.

          Section    Liquidation of MIStS Issuer L.L.C.  EEX  and
EEX  Capital shall liquidate and dissolve MIStS Issuer L.L.C.  as
soon as practicable after the Effective Date, but in no event any
later than October 31, 1997.

                             ARTICLE
                       NEGATIVE COVENANTS
                                
          So long as any of the Preferred Stock is outstanding or
any obligation in respect of any of the Preferred Stock shall  be
unpaid, EEX and EEX Capital covenant and agree with the Placement
Agent and each Holder as follows:

          Section    Debt  to EEX Capital Ratio.   EEX  will  not
permit  its  ratio ("Debt to EEX Capital Ratio") expressed  as  a
percentage  of (i) Debt of EEX and its Consolidated  Subsidiaries
on  a consolidated basis ("Consolidated Debt") to (ii) the sum of
Consolidated  Debt  plus Net Worth to exceed  60%  at  any  time;
provided  that  in  no event will Consolidated Debt  ever  exceed
$1,000,000,000.

          Section     Limitation  on  Incurrence  of   Additional
Indebtedness and/or Debt and Issuance of Capital Stock.

                 Except   as   contemplated  by  the  Transaction
Documents, EEX Capital shall not directly or indirectly,  create,
incur,  issue,  assume,  guarantee or  otherwise  become  liable,
contingently   or  otherwise,  with  respect  to   (collectively,
"incur")  any  Indebtedness or issue any shares of Capital  Stock
(other than (i) the issuance of the Permanent Securities and (ii)
the incurrence of Indebtedness owing to Affiliates of up to $10.0
million  in  aggregate principal amount) unless, in each  of  the
foregoing  cases,  the proceeds thereof are used  to  redeem  the
Preferred Stock in full.

                Notwithstanding  the fact  that  the  EEX  Credit
Agreement  may  permit  incurrences  and  issuances  by  EEX   of
Permitted  Subordinated Debt and Capital Stock,  EEX  shall  not,
directly  or  indirectly, incur additional subordinated  Debt  or
issue  any shares of Capital Stock (other than treasury stock  or
issuances of common stock of EEX employee benefit plans)  unless,
in  each of the foregoing cases, the proceeds thereof are used to
repay the Preferred Stock in full.

          Section   Line of Business.

                EEX  Capital  shall not directly  or  indirectly,
engage  in  any  line  of  business  other  than  the  businesses
conducted  on the Closing Date and businesses reasonably  related
thereto or incidental thereto.

                 Except   as   contemplated  by  the  Transaction
Documents, EEX Capital shall not, directly or indirectly,  engage
in  any  activity  or  line of business other  than  holding  the
Subordinated   Note,   and  enforcing  remedies   thereunder   in
accordance  with  the  terms  thereof  but  subject  to  the  EEX
Subordination Agreement.

          Section   Payments for Consents.  EEX Capital shall not
directly or indirectly, pay or cause to be paid as consideration,
whether by way of divided, fee or otherwise, to any Holder of any
Preferred Stock for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of the Certificate of
Designations,  this Agreement, the Preferred  Stock  unless  such
consideration is offered to be paid or is paid to all Holders  of
Preferred Stock that consent, waive or agree to amend in the time
fame  set  forth in the solicitation documents relating  to  such
consent, waiver or amendment.

          Section   Liens.  Except as expressly permitted in this
Section  5.5, EEX and EEX Capital will not at any time,  directly
or  indirectly, create, assume or suffer to exist, and  will  not
cause,  suffer or permit any Subsidiary Guarantor as long  as  it
remains  a  Subsidiary  Guarantor,  directly  or  indirectly,  to
create,  assume or suffer to exist, except in favor of  EEX,  any
Lien   upon  any  of  its  Properties  (now  owned  or  hereafter
acquired), without making effective provision (and EEX  covenants
that  in any such case it will make or cause to be made effective
provision) whereby the Indebtedness and any other Debt of EEX  or
any  Subsidiary Guarantor then entitled thereto shall be  secured
by  such  Lien  equally  and  ratably  with  any  and  all  other
obligations and indebtedness thereby secured, so long as any such
other  obligations or indebtedness shall be so secured.   Nothing
in  this  Agreement  shall be construed to  prevent  EEX  or  any
Subsidiary  Guarantor without so securing the amounts outstanding
hereunder,  from  creating, assuming or suffering  to  exist  the
following Liens, to which the provisions of this paragraph  shall
not be applicable:

                 Liens  upon  any  Property  presently  owned  or
hereafter acquired, created at the time of acquisition to  secure
a  portion of the purchase price thereof, or existing thereon  at
the date of acquisition, whether or not assumed by EEX or one  of
its  Subsidiary Guarantors, provided that every such  Lien  shall
apply  only  to  the Property so acquired and fixed  improvements
thereon;

                any  extension, renewal or refunding of any  Lien
permitted  by  Section 5.5(a), if limited to  the  same  Property
subject to, and securing not more than the amount secured by, the
Lien extended, renewed or refunded;

                the  pledge  of  current assets in  the  ordinary
course of business, to secure current liabilities;

                Liens upon (i) Property, to secure obligations to
pay all or a part of the purchase price of such Property only out
of  or  measured  by  the production, or  the  proceeds  of  such
production, from such Property of oil or gas or products  or  by-
products thereof, or (ii) the production from Property of oil  or
gas  or products or by-products thereof, or the proceeds of  such
production,  to secure obligations to pay all or a  part  of  the
expenses of exploration, drilling or development of such Property
only out of such production or the proceeds of such production;

                mechanics'  or  materialmen's liens,  good  faith
deposits in connection with tenders, leases of real estate,  bids
or  contracts  (other than contracts for the payment  of  money),
deposits  to secure public or statutory obligations, deposits  to
secure, or in lieu of, surety, stay or appeal bonds, and deposits
as  security for the payment of taxes or assessments  or  similar
charges, Liens given in connection with bid or completion  bonds;
provided  that such obligations secured are not yet  due  or  are
being  contested in good faith by appropriate action and  against
which an adequate reserve has been established;

                any  Lien arising by reason of deposits with,  or
the giving of any form of security to, any governmental agency or
any  body  created or approved by law or governmental  regulation
for  any  purposes at any time as required by law or governmental
regulation  as a condition to the transaction of any business  or
the  exercise of any privilege or license, or to enable EEX or  a
Subsidiary  to maintain self-insurance or to participate  in  any
funds  established to cover any insurance risks or in  connection
with  workmen's  compensation, unemployment  insurance,  old  age
pensions  or other social security, or to share in the privileges
or   benefits  required  for  companies  participating  in   such
arrangements; provided that such obligations secured are not  yet
due  or  are being contested in good faith by appropriate  action
and against which an adequate reserve has been established;

                the  pledge or assignment of accounts receivable,
including  customers' installment paper, to banks or others  made
in  the  ordinary  course  of business  (including  to  or  by  a
Subsidiary  which  is  principally engaged  in  the  business  of
financing the business of EEX and its Subsidiaries);

                the  Liens of taxes or assessments for  the  then
current  year or not at the time due, or the Liens  of  taxes  or
assessments  already  due  but the validity  of  which  is  being
contested  in good faith by appropriate action and against  which
an adequate reserve has been established;

                any  judgment or Lien against EEX or a Subsidiary
Guarantor,  so  long as the finality of such  judgment  is  being
contested  in good faith by appropriate action and the  execution
thereon is stayed;

               assessments or similar encumbrances, the existence
of  which  does not impair the value or the use of  the  Property
subject thereto for the purposes for which it was acquired;

                landlords' liens on fixtures and movable Property
located  on  premises leased by EEX or a Subsidiary Guarantor  in
the  ordinary  course  of business so long as  the  rent  secured
thereby is not in default;

                Liens  on  the  assets of any  limited  liability
company  organized under a limited liability company act  of  any
state  in  which  a limited liability company  is  treated  as  a
partnership  for  federal  income  tax  purposes;  provided  that
neither  EEX nor any Subsidiary Guarantor is liable for the  Debt
of such limited liability company; and

                other  Liens  on any Properties  of  EEX  or  any
Subsidiary with an aggregate value not exceeding 1% of  the  book
value of the total assets of EEX on a consolidated basis.

          Section    ERISA Compliance.  EEX and the  Subsidiaries
will not at any time:

               Engage in, or permit any ERISA Affiliate to engage
in, any transaction in connection with which EEX, a Subsidiary or
any  ERISA Affiliate could be subjected to either a civil penalty
assessed  pursuant to subsections (c), (i) or (l) of section  502
of  ERISA  or a tax imposed by Chapter 43 of Subtitle  D  of  the
Code;

                Terminate,  or  permit  any  ERISA  Affiliate  to
terminate, any Benefit Plan in a manner, or take any other action
with  respect  to  any Benefit Plan, which could  result  in  any
liability  of  EEX, a Subsidiary or any ERISA  Affiliate  to  the
PBGC;

                Fail  to  make, or permit any ERISA Affiliate  to
fail  to make, full payment when due of all amounts which,  under
the  provisions  of  any  Plan,  agreement  relating  thereto  or
applicable  law,  EEX,  a Subsidiary or any  ERISA  Affiliate  is
required to pay as contributions thereto;

                Permit to exist, or allow any ERISA Affiliate  to
permit  to  exist, any accumulated funding deficiency within  the
meaning  of  section 302 of ERISA or section  412  of  the  Code,
whether or not waived, with respect to any Benefit Plan;

                Permit,  or allow any ERISA Affiliate to  permit,
the  actuarial present value of the benefit liabilities under any
Benefit  Plan  maintained  by EEX,  a  Subsidiary  or  any  ERISA
Affiliate  which is regulated under Title IV of ERISA  to  exceed
the  current  value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA) of such Benefit  Plan
allocable  to  such  benefit liabilities.   The  term  "actuarial
present  value of the benefit liabilities" shall have the meaning
specified in section 4041 of ERISA;

                Incur, or permit any ERISA Affiliate to incur,  a
liability  to or on account of a Plan under sections 4062,  4063,
or 4064 of ERISA;

                Amend, or permit any ERISA Affiliate to amend,  a
Plan resulting in an increase in current liability such that EEX,
a  Subsidiary  or  any  ERISA Affiliate is  required  to  provide
security to such Plan under section 401(a)(29) of the Code; or

               Incur or permit Withdrawal Liability and liability
in   connection  with  a  reorganization  or  termination  of   a
Multiemployer  Plan  of  EEX,  the  Subsidiaries  and  the  ERISA
Affiliates;

provided, however, that the transactions, events and occurrences
described in this Section 5.6 shall be permitted so long as such
transactions, events and occurrences (individually and in the
aggregate) will not result in a Material Adverse Effect.

          Section    Environmental Matters.  Neither EEX nor  any
Subsidiary  will  cause or permit any of its Property  to  be  in
violation of, or do anything or permit anything to be done  which
will subject any such Property to any remedial obligations under,
any  Environmental  Laws, assuming disclosure to  the  applicable
Governmental  Authority  of all relevant  facts,  conditions  and
circumstances,  if  any, pertaining to such Property  where  such
violations or remedial obligations would have a Material  Adverse
Effect.

          Section    Transactions with Affiliates.   Neither  EEX
nor  any  Subsidiary  Guarantor  will  enter  into  any  material
transaction,  including, without limitation, any purchase,  sale,
lease  or exchange of Property including the purchase or sale  of
oil  and gas properties and hydrocarbons or the rendering of  any
service, with any Affiliate unless such transactions are  in  the
ordinary  course of its business and are upon fair and reasonable
terms  no  less  favorable  to it  than  it  would  obtain  in  a
comparable  arm's  length  transaction  with  a  Person  not   an
Affiliate.

          Section   Restrictive Dividend Agreements.  Neither EEX
nor EEX Capital will create, incur, assume or suffer to exist any
financing  agreement  (other than this Agreement  and  the  other
Transaction  Documents) which in any way  restricts  EEX  or  EEX
Capital from paying dividends to their respective stockholders.

                             ARTICLE
                   CONDITIONS TO EFFECTIVENESS
                                
          Section    Effectiveness.  This Agreement shall  become
effective  as  of the Effective Date when each of  the  following
conditions precedent has been satisfied:

                Documentation; Legal Matters; Etc.   All  matters
relating  to  the  transactions  contemplated  hereby  shall   be
satisfactory to UBS, and UBS shall have received such  additional
certificates, legal and other opinions and documentation as  they
shall reasonably request.

               Consent under EEX Credit Agreement.  The requisite
lenders party to the EEX Credit Agreement shall have amended  the
EEX  Credit Agreement to permit the merger of a Subsidiary of the
Company if the Subsidiary is the survivor of such merger.

                Approvals and Consents.  All governmental, quasi-
governmental,   equity  holder  and  third-party  approvals   and
consents   necessary   or  desirable  in  connection   with   the
transactions  contemplated hereby shall have  been  received  and
shall be in full force and effect.

                Certificate of Designations.  The Certificate  of
Designations shall have been amended and restated in the form  of
Exhibit A hereto and filed with the Delaware Secretary of State.

                Litigation,  etc.   There  shall  not  exist  any
action, suit, investigation, litigation or proceeding pending  or
threatened  in any court or before any arbitrator or governmental
authority  that, in the opinion of UBS, affects the  transactions
contemplated hereby, or that could have a Material Adverse Effect
on  the  Relevant  Parties  (including  any  such  action,  suit,
investigation, litigation or proceeding which, in the  reasonable
opinion  of  UBS, is likely to result in such a Material  Adverse
Effect) or any of the transactions contemplated hereby.

                Legal Opinions.  The Placement Agent and each  of
the  Holders shall have received such legal opinions  as  it  may
reasonably  request (including opinions from counsel to  EEX  and
EEX  Capital),  as  Exhibit E and satisfactory  to  the  Majority
Holders on the date when delivered.

                Subordination  of  the  Subordinated  Note.   The
Subordinated Note shall have been subordinated to Senior Debt.

                             ARTICLE
                TRANSFER OF THE PREFERRED STOCK;
                   REPRESENTATIONS OF HOLDERS
                                
          Section    Transfer of Preferred Stock.  UBS represents
and  agrees that it is purchasing the Preferred Stock for its own
account and with investment intent and that it will not, directly
or  indirectly,  transfer,  sell,  assign,  pledge  or  otherwise
dispose  of  such  Preferred Stock unless  such  transfer,  sale,
assignment,  pledge or other disposition is made (i) pursuant  to
an  effective registration statement under the Securities Act  or
(ii)  pursuant to an available exemption from registration under,
or  otherwise in compliance with, the Securities Act.   UBS  also
represents  and  warrants  to EEX  Capital  that  it  (i)  is  an
"accredited  investor" (as that term is defined in  Rule  501  of
Regulation D promulgated under the Securities Act) (ii) has  been
given or has had access to the information described in Rule  502
of  Regulation D promulgated under the Securities Act, and  (iii)
has  been given the opportunity to ask any question of management
of  the Relevant Parties that UBS may have.  UBS and each of  the
Interim   Purchasers  acknowledges  that  the   Preferred   Stock
certificates will bear a legend (as set forth in Exhibit A to the
LLC   Agreement   or   Section  13(a)  of  the   Certificate   of
Designations,  as  the  case  may be)  restricting  the  transfer
thereof for so long as may be required by the Securities Act.

          Subject  to  the  provisions of the previous  paragraph
(including  the  terms  of  the legend referred  to  therein  and
applicable law), each of the Relevant Parties agrees that UBS and
each  subsequent Holder will be free to sell or transfer  all  or
any  part of the Preferred Stock to any third party and to pledge
any  or all of the Preferred Stock to any commercial bank,  other
institutional lender, qualified institutional buyer or accredited
investor.

                             ARTICLE
                        EVENTS OF DEFAULT
                                
          Section    Events  of Default.  An "Event  of  Default"
with respect to the Preferred Stock shall occur if:

               an "Event of Default" as defined in the EEX Credit
Agreement;

                EEX  Capital fails to pay any dividend on any  of
the  shares of Preferred Stock, in each case on or within 30 days
after the same is due;

                EEX  Capital fails to make any Change of  Control
redemption within the time periods provided in the Certificate of
Designations and the LLC Agreement, as applicable;

                EEX,  EEX  Capital  or any  of  their  respective
Subsidiaries consummates a Prohibited Issuance;

                any "Maturity Event" under and as defined in  the
Subordinated Note shall occur; or

                any  of the Relevant Parties fails to observe  or
perform any of its covenants or agreements (other than those  set
forth  in clauses (a) through (e) above) contained in any of  the
Transaction Documents and such failure continues for a period  of
60  Business Days following the earlier of (i) written notice  to
EEX  Capital of such failure by the Placement Agent or any Holder
of  outstanding Preferred Stock or (ii) the date  on  which  such
failure is discovered by such Relevant Party; (except that breach
of the covenants described in Section 4.9 and Section 12.1 hereof
shall not be entitled to any such cure period).

          Section    Rights and Remedies.  The occurrence  of  an
Event  of Default under this Agreement shall trigger those rights
and  remedies available to Holders pursuant to the provisions  of
the  LLC  Agreement  or  the  Certificate  of  Designations,   as
applicable.

          Section   Rights and Remedies Cumulative.  No right  or
remedy  herein conferred upon or reserved to the Placement  Agent
or  Holders  is  intended to be exclusive of any other  right  or
remedy, and every right and remedy shall, to the extent permitted
by  law,  be cumulative and in addition to every other right  and
remedy given hereunder or now or hereafter existing at law or  in
equity or otherwise.  The assertion or employment of any right or
remedy  hereunder, or otherwise, shall not prevent the concurrent
or  subsequent  assertion or employment of any other  appropriate
right or remedy.

          Section    Delay or Omission Not Waiver.  No  delay  or
omission  by  the Placement Agent or any Holder to  exercise  any
right  or remedy accruing upon any Event of Default shall  impair
any such right or remedy or constitute a waiver of any such Event
of  Default  or an acquiescence therein.  Every right and  remedy
given  by  this Article or by law to the Placement Agent  or  the
Holders may be exercised from time to time, and as often  as  may
be deemed expedient, by the Placement Agent or the Holders.

          Section    Waiver of Past Defaults.  Subject to Section
13.3,  the  Placement  Agent (at the direction  of  the  Majority
Holders)  by  written  notice  to  EEX  Capital  may  rescind  an
acceleration  and  its consequences if the rescission  would  not
conflict  with any judgment or decree and if all existing  Events
of Default have been cured or waived.

          Section     Rights  of  Holders  to  Receive   Payment.
Notwithstanding  anything  to  the  contrary  contained  in  this
Agreement,  the LLC Agreement or the Certificate of Designations,
the  right of any Holder to receive payment of dividends  on  the
Preferred  Stock held by such Holder, on or after the  respective
due  dates expressed in the Preferred Stock, or to bring suit for
the  enforcement of any such payment on or after such  respective
dates,  shall not be impaired or affected without the consent  of
such Holder.

                             ARTICLE
                           TERMINATION
                                
          Section    Termination.  This Agreement shall terminate
upon  redemption in full of the Preferred Stock at the Redemption
Price.

          Section    Liability.  If this Agreement is  terminated
pursuant  to  Section  9.1,  such termination  shall  be  without
liability  of any party to any other party, except that,  whether
or  not  the  transactions contemplated  by  this  Agreement  are
consummated:  (i)  each  of  EEX and  EEX  Capital,  jointly  and
severally,  agrees to reimburse the Placement Agent for  all  its
reasonable  out-of-pocket expenses pursuant to Section  13.1  and
the Commitment Letter and (ii) the indemnity provisions contained
in Article X shall remain operative and in full force and effect.

                             ARTICLE
                            INDEMNITY
                                
          Section   Indemnification.  EEX and EEX Capital  (each,
an  "Indemnifying  Party"  and, collectively,  the  "Indemnifying
Parties")  jointly  and  severally agree to  indemnify  and  hold
harmless the Placement Agent, UBS and all subsequent the Holders,
each  of  their respective controlling persons and each director,
officer,   employee,  affiliate  and  agent  thereof  (each,   an
"Indemnified Party") from and against any and all losses, claims,
damages   and  liabilities,  joint  or  several,  to  which   any
Indemnified  Party may become subject relating to or arising  out
of  or  in connection with the transactions contemplated  by  the
Transaction Documents (including the use of the proceeds from the
sale  of the Preferred Stock) or any related transaction, and  to
reimburse  each  Indemnified Party,  promptly  upon  demand,  for
expenses (including reasonable counsel fees and expenses) as they
are incurred in connection with the investigation of, preparation
for  or  defense of any pending or threatened loss, claim, damage
or  liability, or any litigation, proceeding or other  action  in
respect thereof, including any amount paid in settlement  of  any
litigation,  proceeding or other action (commenced or threatened)
to which the Indemnifying Parties shall have consented in writing
(such consent not to be unreasonably withheld) whether or not any
Indemnified  Party  is  a  party and  whether  or  not  liability
resulted; provided, however, that the indemnity contained in this
Article X will not apply to any Indemnified Party with respect to
losses,  claims, damages, liabilities or related expenses arising
from   the  willful  misconduct  or  gross  negligence  of   such
Indemnified Party.

          Section   Notice of Action.

                Promptly after receipt by an Indemnified Party of
written   notice  with  respect  to  the  commencement   of   any
investigation,  claim,  litigation, proceeding  or  other  action
(collectively,   an  "Action")  with  respect   to   which   such
Indemnified  Party  may  seek  indemnification  hereunder,   such
Indemnified  Party  shall  notify  the  Indemnifying  Parties  in
writing  of  such  Action;  but the omission  so  to  notify  the
Indemnifying  Party  shall not relieve the  Indemnifying  Parties
from  any  liability  that  the  Indemnifying  Parties  may  have
hereunder  to such Indemnified Party unless such failure  results
in  material  prejudice to the Indemnifying Parties, defenses  in
such Action.

                Upon  receipt  of such notice by an  Indemnifying
Party, such Indemnifying Party will be entitled to participate in
any  Action  and, to the extent it wishes, to assume the  defense
thereof,  and  after notice from the Indemnifying Party  to  such
Indemnified Party of its election to assume the defense  thereof,
the  Indemnifying  Party will not be liable to  such  Indemnified
Party  under  this indemnity for any legal expenses  subsequently
incurred  by  such  Indemnified Party  in  connection  with  such
defense; provided, however, that such Indemnified Party will have
the  right to employ its own counsel in any such Action, and  the
fees  and expenses of such counsel will be at the expense of such
Indemnified Party; provided, further, that if (i) the  employment
of such counsel has been authorized by such Indemnifying Party in
connection  with the defense of such Action, which  authorization
shall not be unreasonably withheld, or (ii) the named parties  in
any  such  Action (including any impleaded parties)  include  any
Indemnified   Party  and  such  Indemnifying   Party   and   such
Indemnified  Party  will have been advised by such  counsel  that
there  may  be  one  or  more legal defenses  available  to  such
Indemnified Party which are different from or additional to those
available   to  the  Indemnifying  Party  (in  which   case   the
Indemnifying Party will not have the right to assume the  defense
of such Action on behalf of such Indemnified Party) or (iii) such
Indemnifying  Party shall not have assumed the  defense  of  such
Action  and employed counsel therefor reasonably satisfactory  to
such  Indemnified Party within a reasonable time after notice  of
commencement of such action, such fees and expenses will be borne
by   the  Indemnifying  Party,  it  being  understood  that  such
Indemnifying  Party will not, in connection  with  any  one  such
Action, be liable for the fees and expenses of more than one firm
of attorneys in any one jurisdiction.

          Section    Indemnity Not Available.  If indemnification
were  for  reason  of  public policy not  to  be  available,  the
Indemnifying  Parties  and the Holders agree  to  contribute  (in
proportion  to their respective commitments in the  case  of  the
Holders)  to the losses, claims, damages, liabilities or expenses
(or Actions in respect thereof) for which such indemnification is
held  unavailable in such proportion as is appropriate to reflect
the relative benefits to the Indemnifying Party, on the one hand,
and the Holders, on the other hand, in connection with the matter
giving  rise  to  such  losses, claims, damages,  liabilities  or
expenses (or actions in respect thereof).

          Section    Indemnity for Taxes, Reserves and  Expenses.
If after the date hereof, the adoption of any law or guideline or
any amendment or change in the administration, interpretation  or
application  of  any existing or future law or guideline  by  any
Governmental   Authority   charged   with   the   administration,
interpretation or application thereof, or the compliance with any
request  or  directive of any Governmental Authority (whether  or
not having the force of law):

                subjects an Affected Party to any tax or  changes
     the  basis of taxation with respect to this Agreement or the
     Preferred  Stock  or payments of amounts  due  hereunder  or
     thereunder  or  with  respect  to  this  Agreement  or   the
     Transaction  Documents, (including, without limitation,  any
     sales,   gross  receipts,  general  corporate,  withholding,
     personal property, privilege or license taxes, and including
     claims,  losses and liabilities arising from any failure  to
     pay or delay in paying any such tax (unless such failure  or
     delay  results  solely  from  such  Affected  Party's  gross
     negligence  or  willful misconduct), but excluding  federal,
     state  or  local  taxes based on income or  franchise  taxes
     imposed  in lieu of income taxes) incurred by such  Affected
     Party arising out of or as a result of this Agreement or the
     Transaction Documents;
     
                imposes, modifies or deems applicable any reserve
     (including, without limitation, any reserve imposed  by  the
     Board  of Governors of the Federal Reserve System),  special
     deposit  or  similar  requirement against  assets  held  by,
     credit extended by, deposits with or for the account of,  or
     other acquisition of funds by, an Affected Party;
     
                shall change the amount of capital maintained  or
     requested or directed to be maintained by an Affected Party;
     or
     
               imposes upon an Affected Party any other condition
     or  expense  (including,  without limitation,  (i)  loss  of
     margin  and  (ii)  attorneys' fees  and  expenses,  expenses
     incurred  by officers or employees of an Affected Party  (or
     any  successor  thereto)  and  expenses  of  litigation   or
     preparation  therefor in contesting any  of  the  foregoing)
     with  respect to this Agreement or the Transaction Documents
     or  the purchase, maintenance or funding of the purchase  of
     the Preferred Stock by an Affected Party, and the result  of
     any  of the foregoing is to increase the cost to, reduce the
     income  receivable by, reduce the rate of return on  capital
     of,  or impose any expense (including loss of margin)  upon,
     an  Affected  Party  with  respect to  this  Agreement,  the
     obligations  hereunder,  the Transaction  Documents  or  the
     funding  of  the purchase of the Preferred Stock  hereunder,
     the  Affected Party may notify the Indemnifying  Parties  of
     the  amount of such increase, reduction, or imposition,  and
     the Indemnifying Parties shall pay to the Affected Party the
     amount the Affected Party deems necessary to compensate  the
     Affected  Party for such increase, reduction or  imposition.
     Any  Affected  Party claiming additional compensation  under
     this Section 10.4 shall deliver to EEX a certificate setting
     forth  any  additional amounts that such Affected  party  is
     entitled  to  receive,  including a calculation  thereof  in
     reasonable detail, such certificate to be conclusive  absent
     manifest  error.  Such amounts shall be due and  payable  by
     the  Indemnifying Parties five (5) Business Days after  such
     certificate is delivered.
     
               To avoid doubt, the parties hereto acknowledge and
     agree that none of EEX, EEX Capital or their Affiliates have
     made  any  representations or warranties  to  the  Placement
     Agent,  the  Holders  or any Affected Party  concerning  the
     availability,  or  lack thereof, of the  "dividend  received
     deduction  under the Code."  Accordingly, no indemnification
     with  respect to any taxes owed, or purported  to  be  owed,
     relating  to  such deduction shall be available  under  this
     Agreement or any Transaction Document.
     
          Section     Survivorship   of   Indemnification.    The
provisions contained in this Article X and in Section  3.2  shall
remain  in  full  force and effect whether  or  not  any  of  the
transactions    contemplated   hereby   are    consummated    and
notwithstanding the termination of this Agreement.   The  amounts
payable  by any Indemnifying Party under this Article X shall  be
payable whether or not any of the transactions contemplated under
this Agreement are consummated.

          Section    Liability  Not  Exclusive;  Payments.    The
agreements of each Indemnifying Party in this Article X shall  be
in  addition to any liability that each may otherwise have.   All
amounts  due  under this Article X shall be payable  as  incurred
within  five  (5)  Business Days after  such  written  notice  is
delivered.

                             ARTICLE
                       THE PLACEMENT AGENT
                                
          Section   Appointment of Placement Agent.  In order  to
expedite   the  transactions  contemplated  by  the   Transaction
Documents, UBS is hereby appointed to act as the Placement  Agent
on  behalf  of  the  Holders.  Each Holder by its  acceptance  of
Preferred  Stock, irrevocably authorizes the Placement  Agent  to
take  such actions on behalf of the Holders and to exercise  such
powers  as are specifically delegated to the Placement  Agent  by
the  terms and provisions of the Transaction Documents,  together
with  such  actions  and  powers  as  are  reasonably  incidental
thereto.   The  Placement Agent is expressly authorized  by  each
Holder  hereby,  and  by  each  Holder  upon  its  acceptance  of
Preferred  Stock  without hereby limiting any implied  authority,
(a) to give notice on behalf of such Holder to EEX Capital of any
Event  of  Default  specified  in this  Agreement  of  which  the
Placement Agent has actual knowledge acquired in connection  with
its  agency hereunder and (b) to distribute to each Holder copies
of   all   notices,  financial  statements  and  other  materials
delivered  by  any  of  the  Relevant Parties  pursuant  to  this
Agreement and the other Transaction Documents as received by  the
Placement Agent.

          Section   No Liability as Placement Agent.  Neither the
Placement  Agent  nor any of its directors, officers,  employees,
beneficial owners or agents shall be liable as such to any Holder
for any action taken or omitted by any of them except for its  or
his own gross negligence or willful misconduct, or be responsible
for  any  statement,  warranty or representation  herein  or  the
contents of any document delivered in connection herewith, or  be
required  to  ascertain  or to make any  inquiry  concerning  the
performance or observance by any of the Relevant Parties  of  any
of  the  terms,  conditions, covenants  or  agreements  contained
herein.   The  Placement Agent shall not be  responsible  to  the
Holders   for   the   due   execution,   genuineness,   validity,
enforceability   or   effectiveness  of   this   Agreement,   the
Transaction  Documents  or any other instruments  or  agreements.
The  Placement  Agent shall in all cases be  fully  protected  in
acting,  or  refraining from acting, in accordance  with  written
instructions  signed  by  any Holder  and,  except  as  otherwise
specifically provided herein, such instructions and any action or
inaction  pursuant thereto shall be binding on all  the  Holders.
The  Placement  Agent shall, in the absence of knowledge  to  the
contrary,  be  entitled  to rely on any  instrument  or  document
believed  by  it in good faith to be genuine and correct  and  to
have  been  signed  or  sent  by the proper  Person  or  Persons.
Neither  the Placement Agent nor any of its directors,  officers,
employees or agents shall have any responsibility to EEX  or  EEX
Capital  on account of the failure of or delay in performance  or
breach  by any Holder of any of its obligations hereunder  or  to
any  Holder  on account of the failure of or delay in performance
or  breach by any other Holder or any of the Relevant Parties  or
any   of  their  respective  obligations  under  the  Transaction
Documents  or in connection herewith or therewith.  The Placement
Agent  may  execute any and all duties hereunder  by  or  through
agents or employees and shall be entitled to rely upon the advice
of  legal  counsel  selected by it with respect  to  all  matters
arising hereunder and shall not be liable for any action taken or
suffered  in  good faith by it in accordance with the  advice  of
such counsel.

          Section    No  Duty  to  Act.   Each  Holder   by   its
acceptance  of  Preferred Stock, acknowledges that the  Placement
Agent  shall  be  under no duty to take any discretionary  action
permitted  to be taken by it pursuant to the provisions  of  this
Agreement  or any other Transaction Document unless it  shall  be
requested  in  writing  to  do so by a  majority  in  Liquidation
Preference of the Holders of Preferred Stock.

          Section    Successor Placement Agent.  Subject  to  the
appointment  and  acceptance of a successor  Placement  Agent  as
provided  below, the Placement Agent may resign at  any  time  by
notifying  the  Holders and EEX or EEX Capital.   Upon  any  such
resignation,  the  Holders shall have  the  right  to  appoint  a
successor.  If no successor shall have been so appointed  by  the
Holders  and shall have accepted such appointment within 30  days
after   the  retiring  Placement  Agent  files  notice   of   its
resignation, then the retiring Placement Agent may, on behalf  of
the Holders, appoint a successor Placement Agent, which shall  be
a  bank  having  a  combined capital  and  surplus  of  at  least
$500,000,000  or  an  Affiliate  of  any  such  bank.   Upon  the
acceptance of any appointment as Placement Agent hereunder  by  a
successor bank, such successor shall succeed to and become vested
with  all  the  rights,  powers, privileges  and  duties  of  the
retiring Placement Agent, and the retiring Placement Agent  shall
be  discharged from its duties and obligations hereunder.   After
the  Placement  Agent's resignation hereunder, the provisions  of
this Article XI and Article X hereof shall continue in effect for
its  benefit  in respect of any actions taken or  omitted  to  be
taken by it while it was acting as Placement Agent.

          Section   Rights Placement Agent as Holder of Preferred
Stock.  With respect to its Commitment made in its capacity as  a
Holder, the Placement Agent in its individual capacity and not as
Placement  Agent  shall have the same rights and  powers  as  any
other Holder and may exercise the same as though it were not  the
Placement  Agent, and the Placement Agent and its Affiliates  may
accept  deposits from, lend money to and generally engage in  any
kind  of  business with the Relevant Parties or  other  Affiliate
thereof as if it were not the Placement Agent.

          Section   Expenses of Placement Agent.  Each Holder  by
acceptance  of  Preferred Stock, agrees that  (a)  the  Placement
Agent  shall be reimbursed, on demand, for any expenses  incurred
for  the benefit of the Holders by the Placement Agent, including
reasonable counsel fees and compensation of agents and  employees
paid  for services rendered on behalf of the Holders, that  shall
not  have  been  reimbursed by EEX or  EEX  Capital  and  (b)  to
indemnify  and  hold  harmless  the  Placement  Agent   and   its
beneficial  owners, directors, officers, employees or agents,  on
demand,   from and against any and all suits, costs, expenses  or
disbursements  of  any  kind or nature  whatsoever  that  may  be
imposed on, incurred by or asserted against it in its capacity as
the  Placement  Agent or any of them in any way  relating  to  or
arising  out this Agreement or any other Transaction Document  or
any  action  taken  or omitted by it or any of  them  under  this
Agreement  or any other Transaction Document, to the  extent  the
same  shall  not  have  been reimbursed by EEX  or  EEX  Capital;
provided,  however, no Holder shall be liable  to  the  Placement
Agent  or  any such other indemnified Person for any  portion  of
such liabilities, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are determined by  a
court  of  competent  jurisdiction  by  final  and  nonappealable
judgment  to have resulted from the gross negligence  or  willful
misconduct  of  the  Placement Agent or  any  of  its  directors,
officers,  employees or agents.  If no Preferred Stock  are  then
outstanding, each Holder shall contribute an amount equal to  its
pro  rata share of the aggregate Commitment of all of the Holders
to  any  amounts payable to the Placement Agent pursuant to  this
paragraph.   If  any  Preferred Stock is then  outstanding,  each
Holder shall contribute an amount equal to its pro rata share  of
the   aggregate   Liquidation  Preference,  of  all   outstanding
Preferred  Stock  to any amounts payable to the  Placement  Agent
pursuant to this paragraph.

          Section   Due Diligence by Holders.  Each Holder by its
acceptance  of  Preferred  Stock,  acknowledges  that   it   has,
independently and without reliance upon the Placement  Agent,  or
any other Holder, and based on such documents and information  as
it  has deemed appropriate, made its own investment analysis  and
decision  to  purchase the Preferred Stock.  Each Holder  by  its
acceptance  of  Preferred Stock, also acknowledges  that  it  (i)
will, independently and without reliance upon the Placement Agent
or  any other Holder, and based on such documents and information
as  it shall from time to time deem appropriate, continue to make
its  own decisions in taking or not taking action under or  based
upon  this  Agreement, the Transaction Documents or  any  related
agreement  or any document furnished hereunder or thereunder  and
(ii)  has reviewed publicly available information filed with  the
SEC.

                             ARTICLE
                      THE SUBORDINATED NOTE
                                
          Section    Covenants With Respect to  the  Subordinated
Note.  EEX Capital hereby agrees to deliver prompt written notice
to  the  Placement  Agent of the occurrence of  a  Voting  Rights
Trigger  Event  and to defend the Subordinated Note  against  all
claims  and demands of all Persons at any time claiming the  same
or  any  interest  therein except as expressly provided  in  this
Article  XII.   Upon  demand  by  the  Placement  Agent  (at  the
direction  of  the Majority Holders) after the  occurrence  of  a
Voting Rights Trigger Event, EEX Capital agrees to deliver to the
Placement  Agent the originals of the Subordinated Note  and  the
EEX  Subordination Agreement.  EEX Capital hereby further  agrees
that  at  any time while the Preferred Stock remains outstanding,
EEX  Capital will not, without the prior written consent  of  the
Majority Holders, in any way encumber, or hypothecate, or  create
or  permit to exist any lien, security interest or encumbrance on
or  other interest in the Subordinated Note except for the rights
granted  to the Placement Agent, for the benefit of the  Holders,
under  this  Article  XII, nor will EEX Capital  sell,  transfer,
assign, exchange or otherwise dispose of the Subordinated Note or
any interest therein.

          Section    Power  of  Attorney.   EEX  Capital   hereby
irrevocably  appoints the Placement Agent as EEX Capital's  agent
and  attorney-in-fact, coupled with an interest, with full  power
and  authority in the place and stead of EEX Capital and  in  the
name  of  EEX Capital or otherwise, from and after the occurrence
of  a  Voting  Rights  Trigger Event  in  the  Placement  Agent's
reasonable discretion, but at EEX's and EEX Capital's  joint  and
several cost and expense, to:

                upon  instruction of EEX Capital or the Placement
     Agent  (at  the  direction  of the Majority  Holders),  make
     demand for payment under the Subordinated Note,
     
                take  any actions necessary or desirable, in  the
     Majority Holders' sole discretion, to collect, on behalf  of
     EEX  Capital,  the  amounts due to  EEX  Capital  under  the
     Subordinated  Note, including compromising any  amounts  due
     thereunder  and  acknowledging satisfaction of  the  maker's
     liability thereunder,
     
                instruct  EEX,  as the maker of the  Subordinated
     Note, to pay all sums payable thereunder to EEX Capital,
     
                endorse,  cash, sue upon, collect  and  otherwise
     enforce,  the  Subordinated Note and  all  instruments  made
     payable to EEX Capital representing any payment of principal
     or  interest  thereon or any part thereof and to  give  full
     discharge for the same, and
     
                pay all reasonable costs and expenses incurred in
     the   exercise  or  enforcement  of  its  rights  hereunder,
     including reasonable attorneys' fees,
     
subject, in each of the foregoing cases, to the provisions of the
EEX  Subordination  Agreement.  EEX Capital  shall  send  to  the
Placement Agent a copy of any written payment notice given to EEX
with  respect to the Subordinated Note, concurrently with sending
such   notice  to  EEX.   The  Placement  Agent  shall  only   be
accountable for monies which it actually receives as attorney-in-
fact  for EEX Capital from or out of the Subordinated Note.   The
power  of  attorney granted herein shall automatically  terminate
and  be of no further force and effect upon redemption for  value
of  the  Preferred  Stock and payment of all accrued  and  unpaid
dividends  thereon and any other fees, expenses,  LIBOR  breakage
fees  and  Additional Costs owing to the Placement Agent  or  the
Holders in accordance with this Agreement in connection with  the
Preferred  Stock.  EEX hereby acknowledges receipt of  notice  of
the  foregoing  power  of attorney, agrees  to  comply  with  any
payment  instructions  it  receives  from  the  Placement   Agent
following a Voting Rights Trigger Event, as attorney-in-fact  for
EEX  Capital,  and hereby agrees that it will not assert  against
the   Subordinated   Note  any  right  of  setoff,   defense   or
counterclaim it may have against EEX Capital, whether or not such
right,  defense or counterclaim arises out of the loan  evidenced
by the Subordinated Note or otherwise.

                             ARTICLE
                          MISCELLANEOUS
                                
          Section    Expenses; Documentary Taxes.   EEX  and  EEX
Capital jointly and severally agree to pay, within 30 days of the
date  of  invoice,  (a)  all  reasonable  out-of-pocket  expenses
(including,  without limitation, expenses incurred in  connection
with   due   diligence  of  the  Holders)  associated  with   the
preparation,  execution  and  delivery,  administration,  waiver,
enforcement  or modification and enforcement of the documentation
contemplated hereby and (b) the reasonable fees and disbursements
of  Latham & Watkins and Richards, Layton & Finger legal  counsel
to  the  Placement Agent and the Holders in connection  with  the
transactions  contemplated herein.   EEX and EEX Capital  jointly
and  severally  agree to indemnify the Placement  Agent  and  the
Holders   against   any   transfer  taxes,   documentary   taxes,
assessments  or  charges  made by any Governmental  Authority  by
reason  of  the  execution and delivery, or the  terms,  of  this
Agreement or the Transaction Documents.

          Section      Notices.     All   notices    and    other
communications  pertaining to this Agreement, the Certificate  of
Designations or any share of Preferred Stock shall be in  writing
and  shall be delivered in person, with receipt acknowledged,  or
by  facsimile  and  confirmed immediately in writing  by  a  copy
mailed by registered or certified mail, return receipt requested,
postage  prepaid, addressed as hereafter set forth, or mailed  by
registered  or certified mail, return receipt requested,  postage
prepaid, addressed as follows:

          (i)  If to the Placement Agent or the Holders, to them
at:

               UBS Securities LLC
               229 Park Avenue
               New York, New York 10171-0026
               Attention: James A. Ajello
               Facsimile No.: (212) 821-6119
               
               with a copy to:
               
               Latham & Watkins
               885 Third Avenue, Suite 1000
               New York, New York  10022
               Attention:  Nancy L. Schimmel, Esq.
               Facsimile No.:  (212) 751-4864

          (ii) If to EEX or EEX Capital, to it at:

               c/o Enserch Exploration, Inc.
               2500 City West Boulevard, Suite 1400
               Houston, Texas  77042
               Attention: Joseph T. Leary
               Facsimile No.: (281) 271-3416
               
               with a copy to:
               
               Akin, Gump, Strauss, Hauer & Feld, L.L.P.
               1900 Pennzoil-South Tower
               711 Louisiana Street
               Houston, Texas  77002
               Attention: William D. Morris, Esq.
               Facsimile No.: (713) 236-0822
               
or  to such other Person or address as shall be furnished to  the
other parties in compliance with this Section 13.2.

          Section    Consent  to  Amendments  and  Waivers.   (a)
Except  as  provided in Section 13.3(b), this  Agreement  may  be
amended  or  supplemented with the consent of each  of  EEX,  EEX
Capital  and the Majority Holders (including, without limitation,
consents  obtained in connection with a purchase  of,  or  tender
offer  or exchange offer for, Preferred Stock), and any event  of
default or compliance with any provision of this Agreement or the
Preferred  Stock may be waived with the consent of  the  Majority
Holders  (including  consents  obtained  in  connection  with   a
purchase  of,  or  tender offer or exchange offer  for  Preferred
Stock).  Preferred Stock held by EEX, EEX Capital or any of their
Affiliates  will not be deemed to be outstanding for purposes  of
this Section 13.3.

                None  of the Relevant Parties shall, directly  or
indirectly, pay or cause to be paid any consideration, whether by
way  of  interest, fee or otherwise, to any Holder for or  as  an
inducement  to  any  consent, waiver or  amendment  permitted  by
Section  13.3(a) unless such consideration is offered to be  paid
or  is  paid to all Holders that consent, waive or agree to amend
in  the  time  frame  set  forth in  the  solicitation  documents
relating to such consent, waiver or agreement.

          Section    Statements Required in Officer's Certificate
and   Opinion.   Each  Officer's  Certificate  with  respect   to
compliance provided for in this Agreement shall include:

               a   statement   that   the  Person   making   such
               certificate  or opinion has read such covenant  or
               condition;
               
               a  brief  statement as to the nature and scope  of
               the  examination or investigation upon  which  the
               statements   or   opinions   contained   in   such
               certificate or opinion are based;
               
               a  statement that, in the opinion of such  Person,
               he   or   she   has   made  such  examination   or
               investigation as is necessary to enable him or her
               to  express  an informed opinion as to whether  or
               not  such  covenant or condition has been complied
               with; and
               
               a  statement  as  to  whether,  in  such  Person's
               opinion,  such  condition  or  covenant  has  been
               complied with.
               
          Section   Parties.  This Agreement shall inure  to  the
benefit  of  and  be  binding upon the parties  hereto  and  each
subsequent  Holder  and each of their respective  successors  and
assigns.   Except as otherwise expressly provided in Section  3.2
and  Article  X in the preceding sentence, nothing  expressed  or
mentioned in this Agreement is intended or shall be construed  to
give  any Person, other than the parties hereto, the Holders  and
their  respective successors and assigns, any legal or  equitable
right,  remedy or claim under or in respect of this Agreement  or
any  provision  herein contained.  Except as otherwise  expressly
provided  in Section 3.2 and Article X in the preceding sentence,
all  conditions and provisions hereof are intended to be for  the
sole  and  exclusive benefit of UBS, the parties hereto  and  the
affiliates  and  beneficial  owners  of  the  Holders,  and   any
subsequent  Holder  of  any  of the  Preferred  Stock  and  their
respective  successors and assigns, and for  the  benefit  of  no
other person.

          Section    New  York  Law; Submission to  Jurisdiction;
Waiver  of Jury Trial.  THIS AGREEMENT SHALL BE GOVERNED BY,  AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF  NEW  YORK
AS  APPLIED  TO CONTRACTS MADE AND PERFORMED WITHIN  SUCH  STATE,
WITHOUT  GIVING  EFFECT TO THE PRINCIPLES OF  CONFLICTS  OF  LAWS
THEREOF.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF  THE  PLACEMENT AGENT, EEX AND EEX CAPITAL HEREBY  IRREVOCABLY
SUBMITS  TO  THE  JURISDICTION OF ANY NEW  YORK  STATE  COURT  OR
FEDERAL  COURT SITTING IN THE BOROUGH OF MANHATTAN  IN  NEW  YORK
CITY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT  OF
OR  RELATING  TO THE PROVISIONS OF THIS AGREEMENT AND IRREVOCABLY
AGREES  THAT  ALL CLAIMS IN RESPECT OF ANY SUCH SUIT,  ACTION  OR
PROCEEDING  MAY BE HEARD AND DETERMINED IN ANY SUCH COURT.   EACH
OF  THE  PLACEMENT  AGENT, EEX AND EEX  CAPITAL  WAIVES,  TO  THE
FULLEST  EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY  JURY,  ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY  SUCH
COURT,  AND  ANY CLAIM THAT ANY SUCH SUIT, ACTION  OR  PROCEEDING
BROUGHT  IN  ANY  SUCH COURT HAS BEEN BROUGHT IN AN  INCONVENIENT
FORUM.

          Section    Successors and Assigns.   Whenever  in  this
Agreement  any  of  the  parties  hereto  is  referred  to,  such
reference  shall be deemed to include the successors and  assigns
of  such  party; and all covenants and agreements of EEX and  EEX
Capital  or of the Placement Agent, UBS or any subsequent  Holder
in  this  Agreement  or  any Preferred  Stock  shall  bind  their
respective  successors and assigns.  Neither EEX nor EEX  Capital
may assign or transfer any of its rights or obligations hereunder
(by  operation  of  law or otherwise) without the  prior  written
consent  of  the  Holders of at least a majority  in  Liquidation
Preference  of  Preferred  Stock  then  outstanding.   Prior   to
purchase  of the Preferred Stock, UBS may not assign or  transfer
any  of its rights or obligations hereunder (by operation of  law
or otherwise) without the prior written consent of EEX.

          Section    Severability Clause.  In case any  provision
in  this Agreement shall be invalid, illegal or unenforceable  in
any  jurisdiction,  the validity, legality and enforceability  of
the  remaining  provisions shall not in any way  be  affected  or
impaired thereby and such provision shall be ineffective in  such
jurisdiction only to the extent of such invalidity, illegality or
unenforceability.

          Section   Representations, Warranties and Agreements to
Survive Delivery.  All representations, warranties and agreements
contained in or incorporated into this Agreement, or contained in
Officers'  Certificates submitted pursuant hereto,  shall  remain
operative and in full force and effect until the Preferred  Stock
have been repaid in full, regardless of any investigation made by
or  on  behalf  of the Holders or any controlling person  of  the
Interim Purchasers, or by or on behalf of EEX or EEX Capital, and
shall survive delivery of the Preferred Stock.

    [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

<PAGE>
<PAGE>

                                
          IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly
executed  this Agreement on the Effective Date, effective  as  of
September 29, 1997.

                              Enserch Exploration, Inc.
                              
                              
                              By:
                              Name:     Joseph T. Leary
                              Title:    Vice PresidentFinance and
                              Treasurer
                              
                              EEX Capital Inc.
                              
                              
                              By:
                              Name:     Joseph T. Leary
                              Title:    Vice PresidentFinance and
                              Treasurer
<PAGE>
<PAGE>


                              UBS Securities LLC, as Placement
                              Agent
                              
                              
                              By:
                              Name:     James A. Ajello
                              Title:    Managing Director
                              
                              By:
                              Name:     Jeffrey M. Donahue
                              Title:    Director
<PAGE>
<PAGE>

PREFERRED STOCK:

Commitment                         UBS Securities LLC
$150,000,000.00
  (150,000 Shares)
                              By:
                              Name:     James A. Ajello
                              Title:    Managing Director
                              
                              
                              By:
                              Name:     Jeffrey M. Donahue
                              Title:    Director
                              
                              
                              Wire Transfer Instructions
                              
                              Account Name:  UBS Securities LLC
                              Name of Bank:  The Chase Manhattan
                              Bank
                                    ABA#:  021000021
                                    Account No.:  140083231
                              Attention:     Bruce J. Burmester

<PAGE>