Document:

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                                                                    EXHIBIT 4.46
                                                                  EXECUTION COPY

                           TRANSTEXAS GAS CORPORATION

                         Series A Junior Preferred Stock

                          REGISTRATION RIGHTS AGREEMENT

                                                                  March 15, 2000

                  TransTexas Gas Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated in the Second
Amended, Modified and Restated Plan of Reorganization dated January 25, 2000 and
pursuant to the Order dated February 7, 2000 of the United States Bankruptcy
Court for the Southern District of Texas (the "Plan"), to issue to the holders
of TransTexas Subordinated Notes, as defined in the Plan, named on the signature
page hereto (the "Initial Holders") certain shares of the Company's Series A
Junior Preferred Stock (the "Preferred Stock"). The Company hereby agrees as
follows:

                  1. Shelf Registration. The Company shall take the following
actions:

                  (a) The Company will at its cost, within seventy-five (75)
         days after the effective date of the Plan (the "Effective Date"), file
         with the Securities and Exchange Commission (the "Commission") and have
         declared effective as soon as practicable thereafter, a registration
         statement (the "Shelf Registration Statement") on an appropriate form
         under the Securities Act of 1933, as amended (the "Securities Act"),
         relating to the offer and sale of Transfer Restricted Stock (as defined
         in Section 7 below) by the Holders thereof from time to time in
         accordance with Rule 415 under the Securities Act; provided, however,
         that no Holder (other than the Initial Holders) shall be entitled to
         have the Preferred Stock held by it covered by such Shelf Registration
         Statement unless such Holder agrees in writing to be bound by all the
         provisions of this Agreement applicable to such Holder.

                  (b) The Company shall keep the Shelf Registration Statement
         continuously effective in order to permit the prospectus included
         therein to be lawfully delivered by the Holders of the relevant shares
         of the Preferred Stock until five years from the date hereof or for
         such shorter period that will terminate when all the Preferred Stock
         covered by the Shelf Registration Statement has been sold pursuant
         thereto.

                  (c) Notwithstanding any other provisions of this Agreement to
         the contrary, the Company shall cause the Shelf Registration Statement,
         and the related prospectus and any amendment or supplement thereto, as
         of the effective date of the Shelf Registration Statement, or amendment
         or supplement thereto, (i) to comply in all material respects with the
         applicable requirements of the Securities Act and the rules and
         regulations of the Commission and (ii) not to contain any untrue
         statement of a material fact or omit to state

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         a material fact required to be stated therein or necessary in order to
         make the statements therein, in light of the circumstances under which
         they were made, not misleading.

                  2. Registration Procedures. In connection with the
registration pursuant to Rule 415 under the Securities Act contemplated by
Section 1 hereof (the "Shelf Registration"), the following provisions shall
apply:

                  (a) At least three (3) days prior to the filing thereof with
         the Commission, the Company shall furnish to the Initial Holders a copy
         of the proposed form of the Shelf Registration Statement and each
         amendment thereto and each supplement, if any, to the prospectus
         included therein, and shall in its reasonable judgment reflect in each
         such document, when so filed with the Commission, such comments as such
         Initial Holders may reasonably propose.

                  (b) The Company shall give written notice to the Holders
         (which notice pursuant to clauses (ii) - (v) hereof shall be
         accompanied by an instruction to suspend the use of the prospectus
         until the requisite changes have been made):

                           (i) when the Shelf Registration Statement or any
                  amendment thereto has been filed with the Commission and when
                  the Shelf Registration Statement or any post-effective
                  amendment thereto has become effective;

                           (ii) of any request by the Commission for amendments
                  or supplements to the Shelf Registration Statement or the
                  prospectus included therein or for additional information;

                           (iii) of the issuance by the Commission of any stop
                  order suspending the effectiveness of the Shelf Registration
                  Statement or the initiation of any proceedings for that
                  purpose;

                           (iv) of the receipt by the Company or its legal
                  counsel of any notification with respect to the suspension of
                  the qualification of the Preferred Stock for sale in any
                  jurisdiction or the initiation or threatening of any
                  proceeding for such purpose; and

                           (v) of the happening of any event that requires the
                  Company to make changes in the Shelf Registration Statement or
                  the prospectus in order that the Shelf Registration Statement
                  or the prospectus does not contain an untrue statement of a
                  material fact nor omit to state a material fact required to be
                  stated therein or necessary to make the statements therein not
                  misleading.

                  (c) The Company shall make every reasonable effort to obtain
         the withdrawal at the earliest possible time of any order suspending
         the effectiveness of the Shelf Registration Statement.

                  (d) The Company shall furnish to each Holder included within
         the coverage of the Shelf Registration, without charge, at least one
         copy of the Shelf Registration Statement and any post-effective
         amendment thereto, including financial statements and

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         schedules, and, if the Holder so requests in writing, all exhibits
         thereto (including those, if any, incorporated by reference).

                  (e) The Company shall deliver to each Holder included within
         the coverage of the Shelf Registration, without charge, as many copies
         of the prospectus (including each preliminary prospectus) included in
         the Shelf Registration Statement and any amendment or supplement
         thereto as such person may reasonably request. The Company consents,
         subject to the provisions of this Agreement, to the use of the
         prospectus or any amendment or supplement thereto included in the Shelf
         Registration Statement by each of the selling Holders in connection
         with the offering and sale of the Preferred Stock covered by such
         prospectus or any such amendment or supplement.

                  (f) Prior to any public offering of the Preferred Stock
         pursuant to the Shelf Registration, the Company shall register or
         qualify or cooperate with the Holders of Preferred Stock included
         therein and their respective counsel in connection with the
         registration or qualification of the Preferred Stock for offer and sale
         under the securities or "blue sky" laws of such states of the United
         States as any Holder reasonably requests in writing and do any and all
         other acts or things necessary or advisable to enable the offer and
         sale in such jurisdictions of the Preferred Stock covered by the Shelf
         Registration Statement; provided, however, that the Company shall not
         be required to (i) qualify generally to do business in any jurisdiction
         where it is not then so qualified or (ii) take any action which would
         subject it to general service of process or to taxation in any
         jurisdiction where it is not then so subject.

                  (g) The Company shall cooperate with the Holders to facilitate
         the timely preparation and delivery of certificates representing the
         shares of Preferred Stock to be sold pursuant to the Shelf Registration
         Statement free of any restrictive legends and in such denominations and
         registered in such names as such Holders may request a reasonable
         period of time prior to sales of the Preferred Stock pursuant to the
         Shelf Registration Statement.

                  (h) Upon the occurrence of any event contemplated by
         paragraphs (ii) through (v) of Section 2(b) above during the period for
         which the Company is required to maintain an effective Shelf
         Registration Statement, the Company shall promptly prepare and file a
         post-effective amendment to the Shelf Registration Statement or a
         supplement to the related prospectus and any other required document so
         that, as thereafter delivered to Holders, the prospectus will not
         contain an untrue statement of a material fact or omit to state any
         material fact required to be stated therein or necessary to make the
         statements therein, in light of the circumstances under which they were
         made, not misleading. If the Company notifies the Holders in accordance
         with paragraphs (ii) through (v) of Section 2(b) above to suspend the
         use of the prospectus until the requisite changes to the prospectus
         have been made, then the Holders shall suspend use of such prospectus,
         and the period of effectiveness of the Shelf Registration Statement
         provided for in Section 1(b) above shall be extended by the number of
         days from and including the date of the giving of such notice to and
         including the date when the Holders shall have received such amended or
         supplemented prospectus pursuant to this Section 2(h).

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                  (i) The Company will comply with all rules and regulations of
         the Commission to the extent and so long as they are applicable to the
         Shelf Registration and will make generally available to its security
         holders (or otherwise provide in accordance with Section 11(a) of the
         Securities Act) an earnings statement satisfying the provisions of
         Section 11(a) of the Securities Act, no later than 45 days after the
         end of a 12-month period (or 90 days, if such period is a fiscal year)
         beginning with the first month of the Company's first fiscal quarter
         commencing after the effective date of the Shelf Registration
         Statement, which statement shall cover such 12-month period.

                  (j) The Company may require each Holder of shares of Preferred
         Stock to be sold pursuant to the Shelf Registration Statement to
         furnish to the Company such information regarding such Holder and the
         distribution of such shares as the Company may from time to time
         reasonably require for inclusion in the Shelf Registration Statement,
         and the Company may exclude from such Shelf Registration Statement the
         shares of Preferred Stock of any Holder that unreasonably fails to
         furnish such information within a reasonable time after receiving such
         request.

                  (k) The Company shall enter into such customary agreements
         (including, if requested, an underwriting agreement in customary form)
         and take all such other action, if any, as any Holder shall reasonably
         request in order to facilitate the disposition of shares of the
         Preferred Stock pursuant to the Shelf Registration in an underwritten
         offering or otherwise.

                  (l) The Company shall: (i) make reasonably available for
         inspection by the Holders, any underwriter participating in any
         disposition pursuant to the Shelf Registration Statement and any
         attorney, accountant or other agent retained by the Holders or any such
         underwriter, all relevant financial and other records, pertinent
         corporate documents and properties of the Company and (ii) cause the
         Company's officers, directors, employees, accountants and auditors to
         supply all relevant information reasonably requested by the Holders or
         any such underwriter, attorney, accountant or agent in connection with
         the Shelf Registration Statement, in each case as shall be reasonably
         necessary, in the judgment of such Holder or any such underwriter,
         attorney, accountant or agent referred to in this paragraph, to conduct
         a reasonable investigation within the meaning of Section 11 of the
         Securities Act; provided, however, that the foregoing inspection and
         information gathering shall be coordinated by the Initial Holders and
         on behalf of the other parties by counsel designated by and on behalf
         of such other parties as described in Section 3 hereof.

                  Until the Shelf Registration Statement is filed with the
         Commission, the Company may require each Holder to agree to keep
         confidential any non-public information, relating to the Company,
         received by such Holder in accordance with this Section 2(l) and not
         disclose such information (other than to an affiliate or prospective
         purchaser who agrees to respect the confidentiality provisions of this
         Section 2(l)); provided that each Holder shall be released from its
         confidentiality obligations hereunder to the extent necessary to permit
         such Holder to trade its Preferred Stock in compliance with the
         securities laws if the Company breaches its obligations to timely file
         the Shelf Registration Statement and each Holder shall be relieved of
         its confidentiality obligations

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         hereunder if the release of such information is required by law or
         necessary to respond to inquiries of regulatory authorities; provided,
         however, that no Holder shall be relieved of its confidentiality
         obligation with respect to any such information otherwise permitted to
         be released pursuant to this Section 2 (l) that is not material to the
         Company. The foregoing requirement shall exclude information which (i)
         is or becomes generally available to the public other than as a result
         of disclosure by the Holder or the Holder's Representatives, or (ii)
         becomes available to the Holder or any of the Holder's Representatives
         on a non-confidential basis from a source other than the Company or its
         affiliates or Representatives, provided that neither the Holder or any
         of the Holder's Representatives is aware that such source is under an
         obligation (whether contractual, legal or fiduciary) to the Company or
         its affiliates or Representatives to keep such information
         confidential. For purposes hereof, the "Representatives" of any entity
         means such entity's directors, officers, employees, legal and financial
         advisors, accounts and other agents and representatives.

                  (m) The Company, if requested by any Holder of shares of the
         Preferred Stock covered thereby, shall cause (i) its counsel to deliver
         an opinion and updates thereof relating to the Preferred Stock in
         customary form addressed to the selling Holders of the applicable
         Preferred Stock or the managing underwriters, if any, thereof and
         dated, in the case of the initial opinion, the effective date of such
         Shelf Registration Statement, it being agreed that the matters to be
         covered by such opinion shall include, without limitation, the due
         incorporation and good standing of the Company and its subsidiaries;
         the due authorization, execution and delivery of the relevant agreement
         of the type referred to in Section 3(k) hereof; the due authorization
         and issuance of the Preferred Stock; the absence of material legal or
         governmental proceedings involving the Company; the absence of
         governmental approvals required to be obtained in connection with the
         Shelf Registration Statement, the offering and sale of the Preferred
         Stock or any agreement of the type referred to in Section 3(k) hereof;
         the compliance as to form of such Shelf Registration Statement and any
         documents incorporated by reference therein and of the Indenture with
         the requirements of the Securities Act, respectively; and, as of the
         date of the opinion and as of the effective date of the Shelf
         Registration Statement or most recent post effective amendment thereto,
         as the case may be, the absence from such Shelf Registration Statement
         and the prospectus included therein, as then amended or supplemented,
         and from any documents incorporated by reference therein, of an untrue
         statement of a material fact or the omission to state therein a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading (in the case of any such documents,
         in the light of the circumstances existing at the time that such
         documents were filed with the Commission under the Securities Exchange
         Act of 1934, as amended (the "Exchange Act"), all subject to customary
         assumptions and qualifications and otherwise in form and content
         customary for similar opinions; (ii) its officers to execute and
         deliver all customary documents and certificates and updates thereof
         requested by the selling Holders of the applicable shares of Preferred
         Stock or any underwriters of the applicable shares of Preferred Stock;
         and (iii) its independent public accountants to provide to the selling
         Holders of the applicable Preferred Stock and any underwriter therefor
         a comfort letter in customary form and covering matters of the type
         customarily covered in comfort letters in connection with primary
         underwritten offerings,

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         subject to receipt of appropriate documentation as contemplated, and
         only if permitted, by Statement of Auditing Standards No. 72.

                  (n) The Company and the Subsidiary Guarantors shall use their
         best efforts to take all other steps necessary to effect the
         registration of the Preferred Stock covered by the Shelf Registration
         Statement contemplated hereby.

                  3. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 1 and 2 hereof, whether or not the Shelf Registration is filed or
becomes effective, and, shall bear or reimburse the Holders of the Preferred
Stock covered thereby, for the reasonable fees and disbursements of one firm of
counsel designated by the Holders of a majority of the outstanding shares of the
Preferred Stock covered thereby to act as counsel for the Holders in connection
therewith.

                  4. Indemnification.

                  (a) The Company shall indemnify and hold harmless each Holder
         and each person, if any, who controls such Holder within the meaning of
         the Exchange Act (each such Holder and each such controlling person
         being referred to collectively as the "Indemnified Parties") from and
         against any losses, claims, damages or liabilities, joint or several,
         or any actions in respect thereof (including, but not limited to, any
         losses, claims, damages, liabilities or actions relating to purchases
         and sales of the Preferred Stock) to which each Indemnified Party may
         become subject under the Securities Act, the Exchange Act or otherwise,
         insofar as such losses, claims, damages, liabilities or actions arise
         out of or are based upon any untrue statement or alleged untrue
         statement of a material fact contained in the Shelf Registration
         Statement or any prospectus included therein or in any amendment or
         supplement thereto, or arise out of, or are based upon, the omission or
         alleged omission to state therein a material fact required to be stated
         therein or necessary to make the statements therein not misleading. The
         Company shall reimburse, as incurred, each Indemnified Party for any
         legal or other expenses reasonably incurred by it in connection with
         investigating or defending any such loss, claim, damage, liability or
         action in respect thereof. The Company shall not, however, be liable in
         any such case to the extent that such --------- ------- loss, claim,
         damage, liability or action arises out of or is based upon any untrue
         statement or alleged untrue statement or omission or alleged omission
         made in the Shelf Registration Statement or any prospectus included
         therein or in any amendment or supplement thereto or in any preliminary
         prospectus relating to the Shelf Registration in reliance upon and in
         conformity with written information pertaining to such Holder and
         furnished to the Company by or on behalf of such Holder specifically
         for inclusion therein. The Company shall also indemnify underwriters,
         selling brokers, dealer managers and similar securities industry
         professionals participating in the distribution (in each case as
         described in the Shelf Registration Statement), their officers and
         directors and each person who controls such persons within the meaning
         of the Securities Act or the Exchange Act to the same extent as
         provided above with respect to the indemnification of the Holders if
         requested by such Holders.

                  (b) Each Holder, severally and not jointly, will indemnify and
         hold harmless the Company and each person, if any, who controls the
         Company within the meaning of

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         the Securities Act or the Exchange Act from and against any losses,
         claims, damages, liabilities or actions in respect thereof to which the
         Company or any such controlling person may become subject under the
         Securities Act, the Exchange Act or otherwise, insofar as such losses,
         claims, damages, liabilities or actions arise out of or are based upon
         any untrue statement or alleged untrue statement of a material fact
         contained in the Shelf Registration Statement or any prospectus
         included therein or in any amendment or supplement thereto or in any
         preliminary prospectus relating to the Shelf Registration, or arise out
         of or are based upon the omission or alleged omission to state therein
         a material fact necessary to make the statements therein not
         misleading, but in each case only to the extent that the untrue
         statement or alleged untrue statement or omission or alleged omission
         was made in reliance upon and in conformity with written information
         pertaining to such Holder and furnished to the Company by or on behalf
         of such Holder specifically for inclusion therein; and, subject to the
         limitation set forth immediately preceding this clause, shall
         reimburse, as incurred, the Company for any legal or other expenses
         reasonably incurred by the Company or any controlling person in
         connection with investigating or defending any loss, claim, damage,
         liability or action in respect thereof. This indemnity agreement will
         be in addition to any liability which such Holder may otherwise have to
         the Company and any of their controlling persons.

                  (c) Promptly after receipt by an Indemnified Party under this
         Section 4 of notice of the commencement of any action or proceeding
         (including a governmental investigation), such Indemnified Party will,
         if a claim in respect thereof is to be made against any person (the
         "Indemnifying Party") under this Section 4, notify the Indemnifying
         Party of the commencement thereof; but the omission so to notify the
         Indemnifying Party will not, in any event, relieve the Indemnifying
         Party from any obligations to any Indemnified Party including the
         indemnification obligation provided in paragraph (a) or (b) above. In
         case any such action is brought against any Indemnified Party, and it
         notifies the Indemnifying Party of the commencement thereof, the
         Indemnifying Party will be entitled to participate therein and, to the
         extent that it may wish, jointly with any other Indemnifying Party
         similarly notified, to assume the defense thereof, with counsel
         reasonably satisfactory to such Indemnified Party (who shall not,
         except with the consent of the Indemnified Party, be counsel to the
         Indemnifying Party), 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 Section 4 for any legal or other expenses, other than
         reasonable costs of investigation, subsequently incurred by such
         Indemnified Party in connection with the defense thereof. No
         Indemnifying Party shall, without the prior written consent of the
         Indemnified Party, effect any settlement of any pending or threatened
         action in respect of which any Indemnified Party is or could have been
         a party and indemnity could have been sought hereunder by such
         Indemnified Party unless such settlement includes an unconditional
         release of such Indemnified Party from all liability on any claims that
         are the subject matter of such action.

                  (d) If the indemnification provided for in this Section 4 is
         unavailable or insufficient to hold harmless an Indemnified Party, then
         each Indemnified Party shall contribute to the amount paid or payable
         to such Indemnifying Party as a result of the losses, claims, damages
         or liabilities referred to in this Section 4 an amount or additional

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         amount, as the case may be, in such proportion as is appropriate to
         reflect the relative fault of the Indemnifying Party or parties on the
         one hand and the Indemnified Party on the other in connection with the
         statements or omission which resulted in such loses, claims, demands or
         liabilities as well as any other relevant equitable considerations. The
         relative fault shall be determined by reference to, among other things,
         whether the untrue or alleged untrue statement of a material fact or
         the omission or alleged omission to state a material fact relates to
         information supplied by the Indemnifying Party or parties on the one
         hand or the Indemnified Party on the other and the parties' relative
         intent, knowledge, access to information and opportunity to correct or
         prevent such untrue statement or omission. The amount paid to an
         Indemnified Party as a result of the losses, claims, damages or
         liabilities referred to in the first sentence of this Section 4 shall
         be deemed to include any legal or other expenses reasonably incurred by
         such Indemnified Party in connection with investigating or defending
         any action or claim which is the subject of this Section 4. No person
         guilty of fraudulent misrepresentation within the meaning of Section
         11(f) of the Securities Act shall be entitled to contribution from any
         person who was not guilty of such fraudulent misrepresentation.

                  (e) The agreements contained in this Section 4 shall survive
         the sale of the Preferred Stock pursuant to the Shelf Registration
         Statement and shall remain in full force and effect, regardless of any
         termination or cancellation of this Agreement or any investigation made
         by or on behalf of any indemnified party.

                  5. Rules 144 and 144A. The Company shall use commercially
reasonable efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner and, if at any time the
Company is not required to file such reports, it will, upon the request of any
Holder of Transfer Restricted Stock (as defined below), make publicly available
other information so long as necessary to permit sales of their Preferred Stock
pursuant to Rules 144 and 144A. The Company covenants that it will take such
further action as any Holder of Transfer Restricted Stock may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Transfer Restricted Stock without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A
(including the requirements of Rule 144A (d) (4)). The Company will provide a
copy of this Agreement to prospective purchasers of Transfer Restricted Stock
identified to the Company upon request. Upon the request of any Holder of
Transfer Restricted Stock, the Company shall deliver to such Holder a written
statement as to whether the Company has complied with such requirements.

                  6. Underwritten Registrations. If any of the Transfer
Restricted Stock covered by the Shelf Registration is to be sold in an
underwritten offering, the managing underwriters will be selected by the Holders
of a majority in aggregate principal amount of such Transfer Restricted Stock to
be included in such offering.

                  No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Stock on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities,

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underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

                  7. Definitions:

                  "Holder" means the Initial Holders and any person or entity to
whom Transfer Restricted Stock is validly transferred by an Initial Holder or a
Holder pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144 promulgated under the Securities Act.

                  "Transfer Restricted Stock" means shares of Preferred Stock
issuable to the Initial Holders under the Plan, additional shares of Preferred
Stock payable as dividends thereon, if applicable, and common stock into which
the Preferred Stock is convertible until (i) the date on which such Preferred
Stock or common stock, as applicable, has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (ii) the date on which such Preferred Stock or common stock, as
applicable, is distributed to the public pursuant to Rule 144 under the
Securities Act.

                  8. Miscellaneous.

                  (a) Amendments and Waivers. The provisions of this Agreement
         may not be amended, modified or supplemented, and waivers or consents
         to departures from the provisions hereof may not be given, except by
         the Company and with the written consent of the Holders of 75% of then
         outstanding shares of the Preferred Stock affected by such amendment,
         modification, supplement, waiver or consent.

                  (b) Notices. All notices and other communications provided for
         or permitted hereunder shall be made in writing by hand delivery,
         first-class mail, facsimile transmission, or air courier which
         guarantees overnight delivery:

                  (1) if to a Holder, at the most current address given by such
         Holder to the Company in accordance with the provisions of this Section
         8(b), which address initially is, with respect to each Holder, the
         address of such Holder to which confirmation of the sale of such
         Preferred Stock to such Holder was first sent by the Company with
         copies in like manner to you as follows:

                                    Cadwalader, Wickersham & Taft
                                    100 Maiden Lane
                                    New York, New York 10038
                                    Fax No.:   (212) 504-6666
                                    Attention: Brian Hoffmann

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                  (2) if to the Company at the Company's address as follows:

                                    TransTexas Gas Corporation
                                    1300 North Sam Houston Parkway East
                                    Houston, Texas 77032-2949
                                    Fax No.:   (281) 986-8877
                                    Attention: Secretary

                  with a copy to:

                                    Gardere & Wynne, L.L.P.
                                    3000 Thanksgiving Tower
                                    1601 Elm Street, Suite 3000
                                    Dallas, TX  75201
                                    Fax No.:   (214) 999-3534
                                    Attention: C. Robert Butterfield

                  All such notices and communications shall be deemed to have
         been duly given: at the time delivered by hand, if personally
         delivered; three business days after being deposited in the mail,
         postage prepaid, if mailed; when receipt is acknowledged by recipient's
         facsimile machine operator, if sent by facsimile transmission; and on
         the day delivered, if sent by overnight air courier guaranteeing next
         day delivery.

                  (c) No Inconsistent Agreements. The Company has not, as of the
         date hereof, entered into, nor shall it, on or after the date hereof,
         enter into, any agreement with respect to its Preferred Stock that is
         inconsistent with the rights granted to the Holders herein or otherwise
         conflicts with the provisions hereof.

                  (d) Successors and Assigns. This Agreement shall be binding
         upon the Company and its respective successors and assigns; provided
         however, that no successor or assign may exercise any rights under this
         Agreement unless such successor or assign agrees in writing to be bound
         by the provisions hereof.

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

                  (f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
         CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
         REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

                  (g) Severability. If any one or more of the provisions
         contained herein, or the application thereof in any circumstance, is
         held invalid, illegal or unenforceable, the validity, legality and
         enforceability of any such provision in every other respect and of the
         remaining provisions contained herein shall not be affected or impaired
         thereby.

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                  If the foregoing is in accordance with your understanding of
our agreement, please sign and return to TransTexas a counterpart hereof,
whereupon this Agreement will become a binding agreement among the Company and
the Initial Holders in accordance with its terms.

                                       Very truly yours,

                                       TRANSTEXAS GAS CORPORATION

                                       By:
                                          -------------------------------------
                                           Name:
                                           Title:

[Junior Preferred Stock Registration Rights Agreement]

<PAGE>   12

                                    The foregoing Registration Rights Agreement
                                    is hereby confirmed and accepted as of the
                                    date first above written.

                                    Initial Holders

                                    CREDIT SUISSE FIRST BOSTON CORPORATION

                                    By:
                                       ----------------------------------------
                                        Name:
                                        Title

                                    OAKTREE CAPITAL MANAGEMENT, LLC
                                    as general partner and investment manager
                                    of certain funds and accounts it manages

                                    By:
                                       ----------------------------------------
                                        Name:
                                        Title

                                    By:
                                       ----------------------------------------
                                        Name:
                                        Title

[Junior Preferred Stock Registration Rights Agreement]<PAGE>   1

                                                                   EXHIBIT 10.50

                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
March 17, 2000, by and between TRANSTEXAS GAS CORPORATION, a business
corporation organized and operating under the laws of the State of Delaware and
having its principal office at 1300 North Sam Houston Parkway East, Houston,
Texas 77032 ("Company"), and JOHN R. STANLEY, an individual residing in Houston,
Texas ("Executive").

                                  WITNESSETH :

     WHEREAS, Executive is currently serving as Chief Executive Officer of the
Company, and the Company wishes to assure itself of the services of Executive
for the period provided in this Agreement; and

     WHEREAS, Executive is willing to serve in the employ of the Company on the
terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the Company and Executive hereby agree as
follows:

1. POSITION AND RESPONSIBILITIES.

     During the period of his employment hereunder, Executive agrees to serve as
Chairman of the Board and Chief Executive Officer of the Company. Executive
shall render administrative and management services to the Company such as are
customarily performed by persons situated in a similar executive capacity and
shall perform such other duties not inconsistent with his title and office as
may be assigned to him by or under the authority of the Board of Directors of
the Company (the "Board"). Executive shall have such authority as is necessary
or appropriate to carry out his assigned duties, including, without limitation,
the right to employ and remove officers, employees and agents of the Company and
fix their compensation; provided that such compensation taken as a whole is
commensurate with the compensation of similarly employed individuals within the
oil and gas industry or in accordance with any reasonable guidelines that may be
prescribed by the Board.

2. EMPLOYMENT PERIOD.

     (a) The terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this Section 2
("Employment Period"). The Employment Period shall be for an initial term of
three (3) years beginning on the date of this Agreement. Prior to the third
(3rd) anniversary of the date of this Agreement and on the next immediately
succeeding anniversary date (each, an "Anniversary Date"), the Board shall
review the terms of this Agreement and Executive's performance of services
hereunder and may, in the absence of objection from Executive, approve a
one-year extension of the Employment Agreement. For purposes of this Agreement,
the term "Employment Period" shall mean the then unexpired term of this
Agreement.

<PAGE>   2

     (b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, disability, holidays, reasonable vacation periods
and reasonable leaves of absence, Executive shall devote substantially all of
his business time, attention, skill and efforts to the faithful performance of
his duties hereunder which shall include: (i) service as Chief Executive Officer
of the Company, and, if duly elected, as a member of, and as Chairman of, the
Board of the Company; (ii) performance of such duties not inconsistent with his
title and office as may be assigned to him by or under the authority of the
Board; and (iii) other activities and services related to the organization,
operation and management of the Company.

     (c) Notwithstanding anything herein contained to the contrary: (i)
Executive's employment with the Company may be terminated by Executive during
the term of this Agreement, subject to the terms and conditions of this
Agreement; (ii) commencing two years after the date hereof, Executive's
employment with the Company may be terminated by the Company, subject to the
terms and conditions of this Agreement, and (iii) nothing in this Agreement
shall mandate or prohibit a continuation of Executive's employment following the
expiration of the term of this Agreement upon such terms and conditions as the
Board and Executive may mutually agree.

     (d) During Executive's employment, Executive shall receive the maximum
indemnification protection from the Company as permitted by applicable law and
shall receive the same directors' and officers' insurance coverage provided to
any other director of the Company.

3. COMPENSATION AND OTHER CONDITIONS OF EMPLOYMENT.

     (a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 1. The Company
shall pay Executive as compensation, a salary at an annual rate of not less than
Three Hundred Thousand Dollars ($300,000.00) per year or such higher rate as may
be prescribed by or under the authority of the Board ("Base Salary"). The Base
Salary payable under this Section 3 shall be paid in approximately equal
installments in accordance with the Company's customary payroll practices. All
salary, bonuses and other compensation or benefits in cash or in kind paid to
Executive hereunder shall be subject to normal withholdings and deductions
imposed by any one or more of local, state, federal or foreign governments.

     (b) During the Employment Period, Executive shall be treated as an employee
of the Company and shall be eligible to participate in and receive benefits
under any and all qualified or non-qualified retirement, pension, savings,
profit-sharing or stock bonus plans, any and all group life, health (including
hospitalization, medical and major medical), dental, accident and long-term
disability insurance plans, and any other employee benefit and compensation
plans (including, but not limited to, any incentive compensation plans or
programs, stock option and appreciation rights plans and restricted stock plans)
as may from time to time be maintained by, or cover employees of, the Company,
in accordance with the terms and conditions of such employee benefit plans and
programs and compensation plans and programs and consistent with the Company's
customary practices.

     (c) Executive will also be given warrants at the beginning of each year
during the term of the Agreement to purchase 37,500 shares of New Common Stock
at an exercise price of

                                      -2-

<PAGE>   3

$120 per share. Such warrants shall be issued pursuant to the Warrant Agreement
executed and delivered by the Company pursuant to its Plan of Reorganization
under Chapter 11 of the United States Bankruptcy Code which was confirmed on
February 7, 2000, by order of the United States Bankruptcy Court for the
Southern District of Texas in Case No. 99-21550-C-11 and shall not expire prior
to June 30, 2002.

     (d) Executive's principal place of employment shall be at the Company's
executive offices at the address first above written, or at such other location
in Harris County, Texas at which the Company shall maintain its principal
executive offices, or at such other location as the Board and Executive may
mutually agree upon. The Company shall provide Executive, at his principal place
of employment with support services and facilities suitable to his position with
the Company and necessary or appropriate in connection with the performance of
his assigned duties under this Agreement. The Company shall reimburse Executive
for his ordinary and necessary business expenses, including, without limitation,
fees for memberships in such clubs and organizations as Executive and the Board
shall mutually agree are necessary and appropriate for business purposes, and
travel and entertainment expenses, incurred in connection with the performance
of his duties under this Agreement, upon presentation to the Company of an
itemized account of such expenses in such form as the Company may reasonably
require.

4. TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN CAUSE.

     (a) Upon the occurrence of an Event of Termination as set forth in Section
4(c), on the Date of Termination, as defined in Section 7(b), the Company shall
be obligated to pay, or to provide Executive, the benefits provided below and a
payment equal to the sum of the payments set forth below:

         (i) payment of Executive's annual Base Salary through the Date of
     Termination to the extent not theretofore paid;

         (ii) the benefits, if any, to which Executive is entitled as a former
     employee under the Company's employee benefit plans and programs and
     compensation plans and programs, excluding any payments as severance in
     cash, securities or otherwise;

         (iii) a lump sum payment, as liquidated damages, in an amount equal to
     Three Million Dollars ($3,000,000.00).

Subject to the last sentence of Section 4(b), the benefits to be provided under,
and the amounts payable pursuant to, this Section shall be provided and be
payable without regard to proof of damages and without regard to Executive's
efforts, if any, to mitigate damages. The Company and Executive hereby stipulate
that the damages which may be incurred by Executive following any such
termination of employment are not capable of accurate measurement as of the date
first above written and that such liquidated damages constitute reasonable
damages under the circumstances; provided, however, in the event Executive fails
to provide a Release (as defined below) and does not receive the amount
specified in 4(a)(iii), this stipulation shall not be applicable and shall have
no force and effect.

                                      -3-

<PAGE>   4

     (b) Payments to Executive under Section 4 shall be made within thirty (30)
days of Executive's Date of Termination; provided, however, that the Company and
Executive agree that the Company may condition the payments and benefits due
under Section 4(a) hereof on the receipt of Executive's resignation from any and
all positions which he holds as an officer with respect to the Company and any
subsidiary or affiliate; provided further, however, that the Company and
Executive agree that the Company may condition the payment due under Section
4(a)(iii) hereof upon receipt of a release in form and substance reasonably
satisfactory to the Board releasing its officers, directors, affiliates,
stockholders and debt holders and any officers, directors or affiliates of such
stockholders and debt holders from all liabilities and obligations to Executive
hereunder or otherwise in connection with the employment of Executive (a
"Release"). If Executive elects not to accept the payment provided for in
Section 4(a)(iii) hereof, Executive shall not be obligated to deliver a Release
and shall be entitled to pursue any remedies that may be available to him at law
or in equity as a result of the termination of his employment by the Company and
the Company shall have no further obligation to pay any amounts pursuant to
Section 4(a)(iii).

     (c) An "Event of Termination" shall mean the termination of Executive's
employment for any reason other than Cause, voluntary resignation, disability or
death; provided, however, the Company shall not have the right to terminate
Executive's employment for any reason other than Cause during the first two
years of the term of this Agreement.

5. TERMINATION OF EMPLOYMENT FOR CAUSE.

     (a) The terms "Termination for Cause" or "Cause" shall mean the termination
of Executive's employment with the Company as a result of Executive's personal
dishonesty, willful misconduct, willful or gross neglect which has a material
adverse effect on the Company, fraud, misappropriation, embezzlement in the
performance of his duties hereunder, any breach of fiduciary duty involving
personal profit (unless the amount of such profit is de minimus), knowing
failure to perform material stated duties, conviction of a crime with respect to
the Company or any material breach of this Agreement which Executive has failed
to cure within fifteen (15) days following the receipt of written notice from
the Company specifying such breach (each, a "Non-economic Termination");
provided, however, the Company shall also be permitted to terminate Executive's
employment for "Cause" in the event that any of the following events occur: (i)
the Company defaults in the payment of interest or principal of any two payments
due on the New Senior Secured Notes(1) in accordance with the Indenture for such
Notes; (ii) the Company fails to pay dividends on any of its Capital Stock on a
dividend payment date in accordance with the Company's Certificate of
Incorporation on any two occasions; (iii) the Company fails to redeem the New
Senior Preferred Stock(2) when obligated to do so in accordance with the
Company's Certificate of Incorporation; (iv) the Company files for bankruptcy
under the Federal Bankruptcy Code; or (v) the Board of

------------------

(1) For purposes of this Agreement, the term "New Senior Secured Notes" shall
have the meaning ascribed to it in Section 2.79 of the First Amended Plan of
Reorganization under Chapter 11 of the Bankruptcy Code Proposed by TransTexas
Gas Corporation dated July 22, 1999 (the "Plan of Reorganization").

(2) For purposes of this Agreement, the term "New Senior Preferred Stock" shall
have the meaning ascribed to it in Section 2.77 of the Plan of Reorganization.

                                      -4-

<PAGE>   5

Directors shall determine that Executive is unable to carry out his duties under
this Agreement because of a disabling illness or injury including chronic
alcoholism or substance abuse. Any act, or failure to act, taken or omitted in
accordance with express instructions given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to him a Notice of Termination which shall
include a copy of a resolution duly adopted by the affirmative vote of not less
than a majority of the members of the Board at a meeting of the Board called and
held for that purpose (after reasonable notice to Executive and an opportunity
for him, together with counsel, to be heard before the Board), finding that in
the good faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail. Except
as provided in Section 5(b) below, Executive shall not have the right to receive
compensation or other benefits for any period after Termination for Cause.

     (b) In the event of Executive's Termination For Cause, the Company shall be
obligated to pay, or to provide, Executive, the benefits provided below and a
payment equal to the sum of the payments set forth below:

         (i) payment of Executive's annual Base Salary through the Date of
     Termination to the extent not theretofore paid;

         (ii) the benefits, if any, to which Executive is entitled as a former
     employee under the Company's employee benefit plans and programs and
     compensation plans and programs, excluding any payments as severance in
     cash, securities or otherwise;

         (iii) a lump sum payment, as liquidated damages, in an amount equal to
     One Million, Five Hundred Thousand Dollars ($1,500,000.00);

provided, however, in no event shall the Company be obligated to pay to
Executive the payment described in Section 5(b)(iii) above if the Company's
termination of Executive's employment was due, in whole or in part, to a
Non-economic Termination. Subject to the last sentence of Section 5(c), the
benefits to be provided under, and the amounts, if any, payable pursuant to,
this Section 5 shall be provided and be payable without regard to proof of
damages and without regard to Executive's efforts, if any, to mitigate damages.
The Company and Executive hereby stipulate that the damages which may be
incurred by Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that such
liquidated damages constitute reasonable damages under the circumstances;
provided, however, in the event Executive fails to provide a Release and does
not receive the amount specified in 5(b)(iii), this stipulation shall not be
applicable and shall have no force and effect.

     (c) Payments to Executive under Section 5 shall be made within thirty (30)
days of Executive's Date of Termination; provided, however, that the Company may
condition the payments and benefits due under Section 5(b) upon the receipt of
executive's resignation from any and all positions which he holds as an officer,
and, if the Termination for Cause was, in whole or in part, a Non-economic
Termination, as a director or committee member, with respect to the Company

                                      -5-

<PAGE>   6

and any subsidiary or affiliate provided further, however, that the Company and
Executive agree that the Company may condition the payments and benefits due
under Section 5(b)(iii) hereof upon receipt of a Release. If Executive elects
not to accept the payment provided for in Section 5(b)(iii) hereof, Executive
shall not be obligated to deliver a Release and shall be entitled to pursue any
remedies that may be available to him at law or in equity as a result of the
termination of his employment by the Company and the Company shall have no
further obligation to pay any amounts pursuant to Section 5(b)(iii).

     (d) Effective immediately upon the termination of Executive for Cause,
Executive shall automatically cease to be an officer of the Company and any
subsidiary or affiliate. Effective immediately upon the Non-economic Termination
of Executive, Executive shall automatically cease to be a director or committee
member of the Company and any subsidiary or affiliate.

6. TERMINATION WITHOUT ADDITIONAL COMPANY LIABILITY.

     In the event that Executive's employment with the Company shall terminate
during the Employment Period on account of:

     (a) Executive's death; or

     (b) Executive's voluntary resignation from employment with the Company;

then the Company shall have no further liability under this Agreement, other
than the payment to Executive (or, in the event of his death, to his estate) of
his earned but unpaid salary as of the date of the termination of his
employment, and the provision of such other benefits, if any, to which he is
entitled as a former employee under the employee benefit plans and programs and
compensation plans and programs maintained by, or covering employees of, the
Company, excluding any payments as severance in cash, securities or otherwise.

7. NOTICE.

     (a) Any purported termination by the Company or by Executive shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated. For purposes of this Agreement, a "Notice of Termination" shall
comply with any requirements of Sections 4, 5 and 6 hereof.

     (b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a Termination for Cause, shall be immediate).

     (c) Subject to Sections 4, 5, 6 and 8, the Company may terminate
Executive's employment at any time.

                                      -6-

<PAGE>   7

     (d) Any communication to a party required or permitted under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party, as
follows. If to Executive, John R. Stanley, 1300 North Sam Houston Parkway East,
Houston, Texas 77032; with a copy to: John C. Nabors, Gardere & Wynne, L.L.P.,
3000 Thanksgiving Tower, Dallas, Texas 75201; and if to the Company, 1300 North
Sam Houston Parkway East, Houston, Texas 77032; Attention: Ed Donahue, Vice
President; with a copy to General Counsel, TransTexas Gas Company, 1300 North
Sam Houston Parkway East, Houston, Texas 77032.

8. LIMITATIONS ON TERMINATION. Notwithstanding the provisions of Sections 4 and
5, the Company shall not terminate Executive without Cause prior to the second
anniversary of this Agreement. This Section 8 in no way limits the provisions of
Section 6 herein.

9. POST-TERMINATION OBLIGATIONS.

     (a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one full year after the expiration or
termination hereof.

     (b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party; provided that the Company shall be
required to reimburse Executive for the reasonable value of his time in
connection therewith and for any out-of-pocket costs attributable thereto.

10. SOURCE OF PAYMENTS.

     All payments provided in this Agreement shall be timely paid in cash or
check by the Company.

11. EFFECT ON PRIOR AGREEMENTS.

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Company or any
predecessor of the Company and Executive.

12. NO ATTACHMENT.

     Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

                                      -7-

<PAGE>   8

13. MODIFICATION AND WAIVER.

     (a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

     (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

14. SUCCESSOR AND ASSIGNS.

     This Agreement will inure to the benefit of and be binding upon Executive,
his legal representatives and testate or intestate distributees, and the
Company, its successors and assigns, including any successor by purchase,
merger, consolidation or otherwise or a statutory receiver or any other person
or firm or corporation to which all or substantially all of the assets and
business of the Company may be sold or otherwise transferred. Any such successor
of the Company shall be deemed to have assumed this Agreement and to have become
obligated hereunder to the same extent as the Company and Executive's
obligations hereunder shall continue in favor of such successor.

15. SEVERABILITY.

     If for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.

16. HEADINGS FOR REFERENCE ONLY.

     The headings of Sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement. Any reference in this Agreement to a
Section or Subsection shall refer to a Section or Subsection of this Agreement,
except as otherwise specified.

17. GOVERNING LAW.

     THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REFERENCE TO CONFLICTS OF LAW PRINCIPLES.

18. COVENANT NOT TO COMPETE.

     (a) Executive acknowledges that he, at the expense of the Company, has been
and will be specially trained in the business of the Company, has established
and will continue to

                                      -8-

<PAGE>   9

establish favorable relations with the customers, clients and accounts of the
Company and will have access to trade secrets of the Company. Therefore, in
consideration of such training and relations and to further protect trade
secrets, directly or indirectly, of the Company, Executive agrees that during
the term of his employment by the Company and for one (1) year thereafter, he
will not, directly or indirectly, without the express written consent of the
Company:

         (i) own or have any interest in or act as an officer, director,
     partner, principal, employee, agent, representative, consultant or
     independent contractor of, or in any way assist in, any business located in
     or doing business in the United States of America or Canada in any area
     within 300 miles of any facility of the Company during the term of
     Executive's employment by the Company which is engaged, directly or
     indirectly, in (A) oil, petroleum or gas exploration, development,
     production or transportation or (B) any other business in which the Company
     is engaged or proposes to engage on the Date of Termination (the businesses
     described in clauses (i)(A) and (B) are collectively referred to as the
     "Competitive Businesses"); provided, however, that notwithstanding the
     above, Executive may own, directly or indirectly, solely as an investment,
     the securities of any such Competitive Businesses which are traded on any
     national securities exchange or NASDAQ if Executive: (x) is not a
     controlling person of, or a member of a group which controls, such Business
     and (y) does not, directly or indirectly, own 5% or more of any class of
     securities of such Business;

         (ii) solicit clients, customers (who are or were customers of the
     Company within the twelve (12) months prior to termination) or accounts of
     the Company for, on behalf of or otherwise related to any such Competitive
     Businesses or any products related thereto;

         (iii) solicit, employ or in any manner influence or encourage any
     person who is or shall be in the employ or service of the Company to leave
     such employ or service for any other employment opportunity.

     (b) Notwithstanding anything contained in Section 18(a), Executive may
participate in the acquisition of oil or gas prospects or drilling of oil or gas
wells (each a "Prospect") outside the Company's Area of Interest (as defined
below). In addition, notwithstanding anything contained in Section 18(a),
Executive may participate in any Prospect inside the Company's Area of Interest;
provided that the Company shall have a Right of First Refusal (as defined below)
at any time during the period commencing on the date of this Agreement and
ending on the date that is one calendar year after the date this Agreement is
terminated for any reason. Further, notwithstanding anything contained in
Section 18(a), Executive may, with respect to oil or gas wells acquired or
drilled by him (or by an entity in which he participates) as permitted by this
Section 18(b) and with respect to production therefrom, solicit clients,
customers or accounts of the Company. For the purposes of this paragraph the
"Company's Area of Interest" shall mean the area within (i) a five-mile radius
of each existing producing well of the Company at the time Executive elects to
participate in a Prospect or (ii) any reservoir within which the Company has an
existing well or has identified a prospect at the time the Executive elects to
participate in a Prospect. At any time Executive elects to participate in a
Prospect, Executive shall so notify the Company in writing and provide the
Company a copy of all geological and economic data and information available to
Executive concerning the Prospect. If such Prospect is subject to a Right of
First Refusal, the Company shall have 45 days following receipt of such
information from Executive to make an election (a "Right of First Refusal"). The
Company may choose to take all or any part of the interest available to

                                      -9-

<PAGE>   10

Executive in the Prospect. However, if the Company elects not to participate or
elects to take less than all of the interest available to Executive, then
Executive may participate in the Prospect and the Area of Interest that is
specified for that Prospect to the extent that the Company has elected to not
participate therein.

     (c) Notwithstanding the foregoing, the terms of this covenant not to
compete shall be enforceable against Executive only to the extent that during
Executive's employment, the Company continues to pay Executive compensation
equal to the Base Salary set forth in Section 3 of this Agreement and to provide
Executive the other benefits provided for in this Agreement and after
termination of Executive's employment, the Company continues to pay Executive
any and all payments and benefits required under Sections 4 or 5 of this
Agreement, as applicable. Furthermore, if any court determines that the covenant
not to compete, or any part thereof, is unenforceable because of the duration of
such provision or the geographic area or scope covered thereby, then such court
shall have the power to reduce the duration, area or scope of such provision
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.

19. CONFIDENTIAL INFORMATION.

     Executive shall hold in a fiduciary capacity for the benefit of the Company
all secret or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective businesses,
which shall have been obtained by Executive during Executive's employment by the
Company or any subsidiary or affiliate and which shall not be or become public
knowledge (other than by acts by Executive or representatives of Executive in
violation of this Agreement) and shall not use or disclose the same other than
as required in the performance of his duties under this Agreement. After
termination of Executive's employment with the Company, Executive shall not,
without the prior written consent of the Company or as may otherwise be required
by law or legal process, communicate or divulge any such information, knowledge
or data to anyone other than the Company and those designated by it and shall
not use or disclose the same other than as required in the performance of his
duties under this Agreement. For purposes of this Agreement, secret and
confidential information, knowledge or data relating to the Company or any of
its subsidiaries or affiliates, and their respective business, shall not include
any information that is public, publicly available or available through trade
association sources (other than by acts by Executive or representatives of
Executive in violation of this Agreement).

20. REMEDIES

     Notwithstanding any other provision of this Agreement to the contrary,
Executive acknowledges and agrees (i) that in the event of a violation or
threatened violation of any of the provisions of Sections 18 and 19, the Company
shall have no adequate remedy at law and shall therefore be entitled to enforce
each such provision by temporary or permanent injunction or mandatory relief
obtained in any court of competent jurisdiction without the necessity of proving
damages or posting any bond or other security, and without prejudice to any
other remedies that may be available at law or in equity and (ii) that in the
event of a violation or the filing of litigation seeking to declare
unenforceable the provisions of Sections 18 or 19, Executive shall repay to the
Company any liquidated damages paid to him under Sections 4(a)(iii) or
5(b)(iii), as applicable.

                                      -10-

<PAGE>   11

     IN WITNESS WHEREOF, TransTexas Gas Corporation has caused this Employment
Agreement to be executed and its seal to be affixed hereunto by its duly
authorized officer, and Executive has signed this Employment Agreement, on the
____ day of March, 2000.

ATTEST:                                TRANSTEXAS GAS CORPORATION

                                       By:
                                          --------------------------------------
Name:                                     Ed Donahue
     ------------------------------       Vice President
Title:
      -----------------------------
      [Seal]
WITNESS:
        ---------------------------    -----------------------------------------
                                                  JOHN R. STANLEY

                                      -11-

<PAGE>   12

STATE OF TEXAS                )
                              )
COUNTY OF DALLAS              )

     On this ____ day of March, 2000, before me personally came Ed Donahue, to
me known, who, being by me duly sworn, did depose and say that he is Vice
President of TRANSTEXAS GAS CORPORATION, the Delaware corporation described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such seal; that it was
so affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.

                                       -----------------------------------------

                                       Name:
                                            ------------------------------------
                                                      Notary Public

STATE OF TEXAS                )
                              )
COUNTY OF HARRIS              )

     On this ____ day of March, 2000, before me personally came JOHN R. STANLEY
to me known, and known to me to be the individual described in the foregoing
instrument, who, being by me duly sworn, did depose and say that he resides at
the address set forth in said instrument, and that he signed his name to the
foregoing instrument.

                                       Name:
                                            ------------------------------------
                                                      Notary Public

                                       12

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