EXHIBIT 4.3
PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
Dated as of September 29, 1997
by and between
EEX Capital Inc.
and
UBS Securities LLC
This Registration Rights Agreement (this "Agreement") is
made and entered into as of September 29, 1997, by and between
EEX Capital Inc., a Delaware corporation (the "Company"), and UBS
Securities LLC, as Placement Agent for the Holders (as defined
below) of the Company's Class A Cumulative Perpetual Increasing
Dividend Preferred Stock (the "Preferred Stock"), issued pursuant
to the Subscription Agreement (as defined below).
RECITALS:
This Agreement is made pursuant to the Subscription
Agreement, dated September 29, 1997 (the "Subscription
Agreement"), by and among Enserch Exploration, Inc. a Texas
corporation ("EEX"), the Company, MIStS Issuer L.L.C., a Delaware
limited liability company, and UBS. In order to induce UBS to
purchase the Preferred Stock, the Company has agreed to provide
the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the
obligations of UBS as set forth in the Subscription Agreement.
Capitalized terms used herein and not otherwise defined shall
have the meaning assigned to them in the Subscription Agreement.
AGREEMENT:
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144 promulgated under the
Act.
Certificate of Designations. The Certificate of
Designations, Preferences and Relative, Participating, Optional
and other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions thereof relating to the Preferred
Stock.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Effectiveness Deadline: As defined in Section 3(a).
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Exempt Resales: The transactions in which UBS propose to
sell the Preferred Stock to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act, to
certain "accredited investors," as such term is defined in Rule
501(a)(1), (2), (3), (5) and (7) of Regulation D under the Act
and pursuant to Regulation S under the Act.
Holders: As defined in Section 2.
Indemnified Holder: As defined in Section 7(a).
Indemnified Party: As defined in Section 7(c).
Indemnified Person: As defined in Section 7(c).
Prospectus: The prospectus included in a Registration
Statement at the time such Registration Statement is declared
effective, as amended or supplemented by any prospectus
supplement and by all other amendments thereto, including post-
effective amendments, and all material incorporated by reference
into such Prospectus.
Recommencement Date: As defined in Section 5(c).
Registration Default: As defined in Section 4.
Registration Statement: Any registration statement of the
Company relating to the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration
Statement (i) that is filed pursuant to the provisions of this
Agreement and (ii) including the preliminary prospectus or the
Prospectus, as the case may be, included therein, all amendments
and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
Regulation S: Regulation S promulgated under the Act.
Rule 144: Rule 144 promulgated under the Act.
Shelf Registration Statement: As defined in Section 3.
Suspension Notice: As defined in Section 5(c).
Transfer Restricted Securities: Each share of Preferred
Stock, until the earliest to occur of (a) the date on which such
share of Preferred Stock has been disposed of pursuant to a Shelf
Registration Statement or (b) the date on which such share of
Preferred Stock is distributed in accordance with to Rule 144.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted
Securities (each, a "Holder") whenever such Person owns Transfer
Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) Shelf Registration. The Company shall:
(i) cause to be filed, on or prior to September 30,
1998 a shelf registration statement pursuant to Rule 415
under the Act (the "Shelf Registration Statement"), relating
to all then outstanding Transfer Restricted Securities, and
(ii) shall use its reasonable best efforts to cause
such Shelf Registration Statement to become effective on or
prior to September 30, 1998 (the "Effectiveness Deadline").
The Company shall use its reasonable best efforts to keep
the Shelf Registration Statement required by this Section 3(a)
continuously effective, supplemented and amended as required by
and subject to the provisions of Sections 5(a) and (b) hereof to
the extent necessary to ensure that it is available for sales of
Transfer Restricted Securities by the Holders thereof entitled to
the benefit of this Section 3(a), and to ensure that it conforms
with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced
from time to time, for a period of at least two years (as
extended pursuant to Section 5(b)(i)) following the date on which
such Shelf Registration Statement first becomes effective under
the Act, or such shorter period as will terminate when all of the
then outstanding Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in
Connection with the Shelf Registration Statement. No Holder of
Transfer Restricted Securities may include any of its Transfer
Restricted Securities in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes
to the Company in writing, within 10 days after receipt of a
request therefor, the information required by Item 507 or 508 of
Regulation S-K, as applicable, of the Act for use in connection
with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages
pursuant to Section 4 unless and until such Holder shall have
provided all such information. Each selling Holder agrees to
promptly furnish additional information required to be disclosed
in order to make the information previously furnished to the
Company by such Holder not materially misleading.
SECTION 4. LIQUIDATED DAMAGES
If (i) the Registration Statement required by this Agreement
is not filed with the Commission on or prior to the Effectiveness
Deadline, (ii) such Registration Statement has not been declared
effective by the Commission on or prior to the Effectiveness
Deadline (except where such delay is caused by a Holder of
Transfer Restricted Securities) or (iii) the Registration
Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to
be usable for its intended purpose without being succeeded timely
by a post-effective amendment to such Registration Statement that
cures such failure and that is timely declared effective (each
such event referred to in clauses (i) through (iii), a
"Registration Default"), then the Company hereby agrees to pay to
each Holder of Transfer Restricted Securities affected thereby
liquidated damages in an amount equal to 50 basis points per
annum on the Liquidation Preference of Transfer Restricted
Securities held by such Holder for the first 90-day period
immediately following the occurrence of such Registration
Default. The amount of the liquidated damages shall increase by
an additional 50 basis points per annum on the Liquidation
Preference of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of liquidated damages of 200
basis points per annum on the Liquidation Preference of Transfer
Restricted Securities; provided, however, the Company shall in no
event be required to pay liquidated damages for more than one
Registration Default at any given time. Notwithstanding anything
to the contrary set forth herein, (1) upon filing of the Shelf
Registration Statement, in the case of (i) above, (2) upon the
effectiveness of the Shelf Registration Statement, in the case of
(ii) above or (3) upon the filing of a post-effective amendment
to the Registration Statement or an additional Registration
Statement that causes the Shelf Registration Statement to again
be declared effective or made usable in the case of (iii) above,
the liquidated damages payable with respect to the Transfer
Restricted Securities as a result of such clause (i), (ii) or
(iii), as applicable, shall cease.
All accrued but unpaid liquidated damages shall be paid to
the Holders entitled thereto, in the manner provided for the
payment of dividends in the Certificate of Designations, on the
next regular Dividend Payment Date (as defined in Section 2(a) of
the Certificate of Designations). All obligations of the Company
set forth in the preceding paragraph that are outstanding with
respect to any then outstanding Transfer Restricted Security at
the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations
with respect thereto have been satisfied in full.
SECTION 5. REGISTRATION PROCEDURES
(a) Shelf Registration Statement. In connection with the
Shelf Registration Statement, the Company shall comply with all
the provisions of Section 5(b) below and shall use its reasonable
best efforts to effect such registration to permit the sale of
the Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to
Section 3(b) hereof), and pursuant thereto the Company will
prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the
Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and
otherwise in accordance with the provisions hereof.
(b) General Provisions. In connection with any
Registration Statement and any related Prospectus required by
this Agreement, the Company shall:
(i) use its reasonable best efforts to keep such
Registration Statement continuously effective and provide
all requisite financial statements for the period specified
in Section 3 of this Agreement. Upon the occurrence of any
event that would cause any such Registration Statement or
the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Company shall
file promptly an appropriate amendment to such Registration
Statement curing such defect, and, if Commission review is
required, use its reasonable best efforts to cause such
amendment to be declared effective as soon as practicable.
(ii) prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement as may be necessary to keep such Registration
Statement effective for the period set forth in Section 3;
cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Act, and to comply fully with
Rules 424, 430A and 462, as applicable, under the Act in a
timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities covered by
such Registration Statement during the period in accordance
with the intended method or methods of distribution by the
selling Holder named in such Registration Statement or
supplement to the Prospectus;
(iii) advise the selling Holders promptly and, if
requested by such Persons, confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or post-
effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or
of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for
offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event known to
the Company that makes any statement of a material fact made
in the Registration Statement, the Prospectus, any amendment
or supplement thereto or any document incorporated by
reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement in
order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the
Prospectus in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; if at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or
Blue Sky laws, the Company shall use its reasonable best
efforts to obtain the withdrawal or lifting of such order at
the earliest possible time;
(iv) subject to Section 5(b)(i), if any fact or event
contemplated by Section 5(b)(iii)(D) above shall exist or
have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference
or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted
Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading;
(v) furnish to UBS and each selling Holder named in
any Registration Statement or Prospectus in connection with
such sale, if any, before filing with the Commission, copies
of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing
of such Registration Statement), which documents will be
subject to the review and comment of such Holders in
connection with such sale, if any, for a period of at least
three Business Days, and the Company will not file any such
Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) to
which the selling Holders of the Transfer Restricted
Securities covered by such Registration Statement in
connection with such sale, if any, shall reasonably object
within three Business Days; a selling Holder shall be deemed
to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains a material
misstatement or omission or fails to comply with the
applicable requirements of the Act;
(vi) promptly prior to the filing of any document that
is to be incorporated by reference into a Registration
Statement or Prospectus, provide copies of such document to
the selling Holders in connection with such sale, if any,
make the Company's representatives available for discussion
of such document and other customary due diligence matters;
(vii) make available at reasonable times for inspection
by the selling Holders participating in any disposition
pursuant to such Registration Statement and any attorney or
accountant retained by such selling Holders, all financial
and other records, pertinent corporate documents of the
Company and cause the Company's officers, directors and
employees to supply all information reasonably requested by
any such selling Holder, attorney or accountant in
connection with such Registration Statement or any post-
effective amendment thereto subsequent to the filing thereof
and prior to its effectiveness; provided, however, no such
information shall be required to be made available, unless
such Selling Holders enter into customary confidentiality
agreements;
(viii) if requested by any selling Holders in connection
with such sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-
effective amendment if necessary, such information as such
Selling Holders may reasonably request to have included
therein, including without limitation, information relating
to the "Plan of Distribution" of the Transfer Restricted
Securities; provided, however, if the Company reasonably
objects to the inclusion of such information, it shall be
excluded; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to
be included in such Prospectus supplement or post-effective
amendment;
(ix) furnish to each selling Holder in connection with
such sale, if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission,
and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
(x) deliver to each selling Holder, without charge, as
many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company hereby consent
to the use (in accordance with law) of the Prospectus and
any amendment or supplement thereto by each of the selling
Holders in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto;
(xi) upon the request of any selling Holder, enter into
such agreements (including underwriting agreements) and make
such representations and warranties and take all such other
actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement
contemplated by this Agreement as may be reasonably
requested by any Holder of Transfer Restricted Securities in
connection with any sale or resale pursuant to any
Registration Statement and in such connection, the Company
shall:
(A) upon request of any selling Holder, furnish (or
in the case of paragraphs (2) and (3), use its reasonable
best efforts to cause to be furnished) to each selling
Holder, upon the effectiveness of the Shelf Registration
Statement:
(1) a certificate, dated such date, signed on
behalf of the Company by (x) the President or any Vice
President and (y) a principal financial or accounting
officer of the Company, confirming, as of the date
thereof, such matters as the selling Holders may
reasonably request;
(2) an opinion, dated the date of effectiveness
of the Shelf Registration Statement of counsel for the
Company covering customary matters subject to customary
qualifications and exceptions; and
(3) a customary comfort letter, subject to and in
accordance with applicable Statements on Auditing
Standards and related pronouncements dated the date of
effectiveness of the Shelf Registration Statement from
the Company's independent accountants, in the customary
form and covering matters of the type customarily
covered in comfort letters to underwriters in
connection with underwritten offerings; and
(B) deliver such other documents and certificates
as may be reasonably requested by the selling Holders to
evidence compliance with clause (A) above and with any
customary conditions contained in the any agreement
entered into by the Company pursuant to this clause (xi);
(xii) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders
and their counsel in connection with the registration and
qualification of the Transfer Restricted Securities under
the securities or Blue Sky laws of such jurisdictions as the
selling Holders may request and do any and all other acts or
things necessary or advisable to enable the disposition in
such jurisdictions of the Transfer Restricted Securities
covered by the Registration Statement; provided, however,
that neither the Company shall be required to register or
qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so
subject;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer
being Transfer Restricted Securities, cooperate with the
selling Holders to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities
in such denominations and such names as the selling Holders
may request at least two Business Days prior to such sale of
Transfer Restricted Securities;
(xiv) use its reasonable best efforts to cause the
disposition of the Transfer Restricted Securities covered by
the Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (xii)
above;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a
Registration Statement covering such Transfer Restricted
Securities and provide printed certificates for the Transfer
Restricted Securities which are in a form eligible for
deposit with the Depository Trust Company;
(xvi) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the
Commission, and make generally available to its security
holders with regard to any Registration Statement, as soon
as practicable, a consolidated earnings statement meeting
the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective
date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);
(xvii) make appropriate officers of the Company
reasonably available to the selling Holders for meetings
with prospective purchasers of the Transfer Restricted
Securities and prepare and present to potential investors
customary "road show" material in a manner consistent with
other new issuances of other securities similar to the
Transfer Restricted Securities; and
(xviii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange
Act.
(c) Restrictions on Holders. Each Holder agrees by
acquisition of a Transfer Restricted Security that, upon receipt
of the notice referred to in Section 5(b)(i) or any notice from
the Company of the existence of any fact of the kind described in
Section 5(b)(iii)(D) hereof (in each case, a "Suspension
Notice"), such Holder will immediately discontinue distribution
of Transfer Restricted Securities pursuant to the Registration
Statement until (i) such Holder's has received copies of the
supplemented or amended Prospectus contemplated by Section
5(b)(iv), or (ii) such Holder is advised in writing by the
Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus (in each case,
the "Recommencement Date"). Each Holder receiving a Suspension
Notice hereby agrees that it will either (i) promptly destroy any
Prospectuses, other than permanent file copies, then in such
Holder's possession which have been replaced by the Company with
more recently dated Prospectuses or (ii) deliver to the Company
all copies, other than permanent file copies, then in such
Holder's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of
the Suspension Notice. The time period regarding the
effectiveness of such Registration Statement set forth in Section
3, shall be extended by a number of days equal to the number of
days in the period from and including the date of delivery of the
Suspension Notice to the Recommencement Date.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of
or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing
fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company; (v) all application and
filing fees in connection with listing the Preferred Stock on a
national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort
letters required by or incident to such performance).
The Company will, in any event, bear its internal expenses,
including the expenses of any annual audit and the fees and
expenses of any special experts, retained by the Company.
(b) In connection with any Registration Statement required
by this Agreement, the Company will reimburse the Purchasers and
the Holders of Transfer Restricted Securities being registered
pursuant to the Shelf Registration Statement for the reasonable
fees and disbursements of not more than one counsel, who shall be
Latham & Watkins, unless another firm shall be chosen by the
Holders of a majority in Liquidation Preference of the Transfer
Restricted Securities for whose benefit such Registration
Statement is being prepared.
SECTION 7. INDEMNIFICATION
(a) The Company agrees, to indemnify and hold harmless (i)
each Holder and (ii) each person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any Holder (any of the persons referred to in this
clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any
controlling person (any person referred to in clause (i), (ii) or
(iii) may hereinafter be referred to as an "Indemnified Holder"),
from and against any and all losses, claims, damages,
liabilities, judgments, (including without limitation, any legal
or other expenses incurred in connection with investigating or
defending any matter, including any action that could give rise
to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, or
Prospectus (or any amendment or supplement thereto) provided by
the Company to any holder or any prospective purchaser of
Preferred Stock, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments
are caused by an untrue statement or omission or alleged untrue
statement or omission that is based upon information relating to
any of the Holders furnished in writing to the Company by any of
the Holders.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the
Company, and its directors and officers, and each person, if any,
who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) the Company, to the same extent
as the foregoing indemnity from the Company to each of the
Indemnified Holders, but only with reference to information
relating to such Indemnified Holder furnished in writing to the
Company by such Indemnified Holder expressly for use in any
Registration Statement. In no event shall any Indemnified Holder
be liable or responsible for any amount in excess of the amount
by which the total amount received by such Indemnified Holder
with respect to its sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid
by such Indemnified Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such
Indemnified Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged
omission.
(c) In case any action shall be commenced involving any
person in respect of which indemnity may be sought pursuant to
Section 7(a) or 7(b) (the "indemnified party"), the indemnified
party shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such
action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees
and expenses of such counsel, as incurred (except that in the
case of any action in respect of which indemnity may be sought
pursuant to both Sections 7(a) and 7(b), an Indemnified Holder
shall not be required to assume the defense of such action
pursuant to this Section 7(c), but may employ separate counsel
and participate in the defense thereof, but the fees and expenses
of such counsel, except as provided below, shall be at the
expense of the Indemnified Holder). Any indemnified party shall
have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party,
unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party,
(ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory
to the indemnified party or (iii) the named parties to any such
action (including any impleaded parties) include both the
indemnified party and the indemnifying party, and the indemnified
party shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party
(in which case the indemnifying party shall not have the right to
assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for
the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by a majority
of the Indemnified Holders, in the case of the parties
indemnified pursuant to Section 7(a), and by the Company, in the
case of parties indemnified pursuant to Section 7(b). The
indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of
any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into
more than twenty business days after the indemnifying party shall
have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case
where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement,
the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment
with respect to, any pending or threatened action in respect of
which the indemnified party is or could have been a party and
indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of
the indemnified party from all liability on claims that are or
could have been the subject matter of such action and (ii) does
not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in
this Section 7 is unavailable to an indemnified party in respect
of any losses, claims, damages, liabilities or judgments referred
to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Holders, on the other hand,
from their sale of Transfer Restricted Securities or (ii) if the
allocation provided by clause 7(d)(i) is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 7(d)(i)
above but also the relative fault of the Company, on the one
hand, and of the Indemnified Holder, on the other hand, in
connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well
as any other relevant equitable considerations. The relative
fault of the Company, on the one hand, and of the Indemnified
Holder, on the other hand, 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
Company, on the one hand, or by the Indemnified Holder, on the
other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as
a result of the losses, claims, damages, liabilities and
judgments referred to above shall be deemed to include, subject
to the limitations set forth in the second paragraph of Section
7(a), any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any
action or claim.
The Company and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending
any matter, including any action that could have given rise to
such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 7, no Holder or
its related Indemnified Holders shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of its
Transfer Restricted Securities pursuant to a Registration
Statement exceeds the sum of (A) the amount paid by such Holder
for such Transfer Restricted Securities plus (B) the amount of
any damages which such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 7(c) are
several in proportion to the respective Liquidated Preference
amount of Transfer Restricted Securities held by each of the
Holders hereunder and not joint.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during
any period in which the Company is not subject to Section 13 or
15(d) of the Securities Exchange Act, to make available, upon
request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or
beneficial owner, the information required by Rule 144A(d)(4)
under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 9. "PIGGY-BACK" RIGHTS
9.1 Registration Rights.
(a) Piggyback Rights. If at any time during the period
commencing on September 30, 1998 until eligible for resale
pursuant to 144(k), but not to exceed two years, the Company
shall file a registration statement (other than on Form S-4, Form
S-8, or any successor form) with the Commission, the Company
shall give all the then holders of any Shares of Preferred Stock
(the "Eligible Holders") at least 30 days prior written notice of
the filing of such registration statement. If requested by any
Eligible Holder in writing within 30 days after receipt of any
such notice, the Company shall, at the Company's sole expense
(other than the fees and disbursements of counsel for the
Eligible Holders and the underwriting discounts payable in
respect of the Shares of Preferred Stock sold by any Eligible
Holder), register or qualify all or, at each Eligible Holder's
option, any portion of the Shares of Preferred Stock of any
Eligible Holders who shall have made such request, concurrently
with the registration of such other securities, all to the extent
requisite to permit the public offering and sale of the Shares of
Preferred Stock through the facilities of all appropriate
securities exchanges and the over-the-counter market, and will
use its best efforts through its officers, directors, auditors
and counsel to cause such registration statement to become
effective as promptly as practicable. Notwithstanding the
foregoing, if the managing underwriter of any such offering shall
advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Shares of Preferred Stock
requested to be included in the registration concurrently with
the securities being registered by the Company would materially
adversely affect the distribution of such securities by the
Company for its own account, then the Company shall not be
required to include such Shares of Preferred Stock in such
registration, provided that any such reduction shall be on a pro
rata basis among all selling shareholders; provided, however, (i)
that in the event that the Company does not intend to include all
of the requested Shares of Preferred Stock in the registration
statement due to such advice received from the managing
underwriter, if the Company includes in the registration
statement any securities other than securities being offered by
the Company for its own account, then the Company shall include
any of the Shares of Preferred Stock requested to be included in
such registration statement by the Eligible Holders and any such
other securities on a pro rata basis and (ii) if the Company does
not include all of the requested Shares of Preferred Stock in the
registration statement, then, if requested by the Eligible
Holders, the Company will within six months after the
registration statement becomes effective file at its sole expense
a new registration statement relating to those Shares of
Preferred Stock which the Company did not include in the prior
registration statement and the Company will use its best efforts
to cause the registration statement to become effective as
promptly as practical.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company acknowledges and agrees that any
failure by the Company to comply with its obligations under
Sections 3 hereof may result in material irreparable injury to
UBS or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, UBS or any
Holder may obtain such relief as may be required to specifically
enforce the Company's obligations under Sections 3 hereof. The
Company further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on
or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. The Company has not
previously entered into any agreement granting any registration
rights with respect to its securities to any Person. The rights
granted to the Holders hereunder do not in any way materially
conflict with and are not materially inconsistent with the rights
granted to the holders of the Company's securities under any
agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof
may not be given unless (i) in the case of Section 4 hereof and
this Section 10(c)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted
Securities and (ii) in the case of all other provisions hereof,
the Company has obtained the written consent of Holders of a
majority of the outstanding Liquidated Preference amount of
Transfer Restricted Securities (excluding Transfer Restricted
Securities held by the Company of its Affiliates).
(d) Third Party Beneficiary. The Holders shall be third
party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and UBS, on the other hand, and shall
have the right to enforce such agreements directly to the extent
they may deem such enforcement necessary or advisable to protect
its rights or the rights of Holders hereunder.
(e) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail (registered or certified, return
receipt requested), telex, telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Company under the Preferred Stock Register;
and
(ii) if to the Company, to it c/o:
Enserch Exploration, Inc.
2500 City West Boulevard, Suite 1400
Houston, Texas 77042
Telecopier No.: (281) 271-3416
Attention: Treasurer
With a copy to:
Akin, Gump, Strauss, Hauer & Feld, LLP
1900 Pennzoil - South Tower
711 Louisiana Street
Houston, Texas 77002
Telecopier No.: (713) 236-0822
Attention: William D. Morris
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if
telecopied; and on the next business day, if timely delivered to
an air courier guaranteeing overnight delivery.
Upon the date of filing of the Shelf Registration Statement
notice shall be delivered to UBS Securities LLC, on behalf of
Holders (in the form attached hereto as Exhibit A) and shall be
addressed to: Attention: James A. Ajello, 299 Park Avenue, New
York, New York 10171-0026.
(f) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of
each of the parties, including without limitation and without the
need for an express assignment, subsequent Holders of Transfer
Restricted Securities; provided, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of
Transfer Restricted Securities in violation of the terms hereof
or of the Subscription Agreement or the Certificate of
Designations. If any transferee of any Holder shall acquire
Transfer Restricted Securities in any manner, whether by
operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted
Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and
provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the
Subscription Agreement, and such Person shall be entitled to
receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that 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.
(k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or
referred to herein with respect to the registration rights
granted with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
EEX Capital Inc.
By:/s/ Joseph T. Leary
-----------------------------
Name: Joseph T. Leary
Title: Vice President,
Finance and
Treasurer
UBS Securities LLC
By: /s/ James A. Ajello
------------------------
Name: James A. Ajello
Title: Managing Director
By: /s/ Jeffrey Donahue
------------------------
Name: Jeffrey Donahue
Title: Director
EXHIBIT A
NOTICE OF FILING OF
REGISTRATION STATEMENT
To: UBS Securities LLC
299 Park Avenue
New York, New York 10171-0026
Attention: _______________ (Compliance Department)
Fax: (212) 821-3285
From: EEX Capital Inc.
Class A Cumulative Perpetual Increasing Dividend
Preferred Stock
Date:___, 199__
For your information only (NO ACTION REQUIRED):
Today, ______, 199_, the Company filed a Shelf Registration
Statement with the Securities and Exchange Commission. The
Company anticipates the Registration Statement to be declared
effective on or before _______________.