Document:

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                                                                     EXHIBIT 4.4

                          REGISTRATION RIGHTS AGREEMENT

                             Dated as of May 7, 2003

                                 By and Between

                                GREY WOLF, INC.,

                                 as the Company,

                                       and

                               D/I PERFENSA, INC.,

                                DI ENERGY, INC.,

                        GREY WOLF DRILLING COMPANY L.P.,

                         GREY WOLF INTERNATIONAL, INC.,

                           GREY WOLF HOLDINGS COMPANY,

                               GREY WOLF LLC, and

                           MURCO DRILLING CORPORATION,

                               as the Guarantors,

                                       and

                         DEUTSCHE BANK SECURITIES INC.,

                            as the Initial Purchaser

               3.75% Contingent Convertible Senior Notes Due 2023

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                                TABLE OF CONTENTS
<TABLE>
<S>                                                                                                    <C>
1.    Definitions..............................................................................         1

2.    Shelf Registration.......................................................................         4

3.    Liquidated Damages.......................................................................         6

4.    Registration Procedures..................................................................         7

5.    Registration Expenses....................................................................        13

6.    Indemnification..........................................................................        14

7.    Rules 144 and 144A.......................................................................        18

8.    Underwritten Registrations...............................................................        18

9.    Miscellaneous............................................................................        19
</TABLE>

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                          REGISTRATION RIGHTS AGREEMENT

                  This Registration Rights Agreement (this "AGREEMENT") is dated
as of May 7, 2003, by and between GREY WOLF, INC., a Texas corporation (the
"COMPANY"), each of the subsidiaries listed on Schedule A attached hereto (each
a "GUARANTOR" and, collectively, the "GUARANTORS"), and DEUTSCHE BANK SECURITIES
INC. (the "INITIAL PURCHASER").

                  This Agreement is entered into in connection with that certain
Purchase Agreement, dated May 1, 2003 (the "PURCHASE AGREEMENT"), by and between
the Company, the Guarantors and the Initial Purchaser, which provides for the
sale by the Company to the Initial Purchaser of $150,000,000 aggregate principal
amount of the Company's 3.75% Contingent Convertible Senior Notes Due 2023 (the
"FIRM SECURITIES"), which are convertible into common stock of the Company, par
value $0.10 per share (together with the Rights (as defined in the Purchase
Agreement), the "UNDERLYING SHARES"), plus up to an additional $37,500,000
aggregate principal amount of the same which the Initial Purchaser may
subsequently elect to purchase pursuant to the terms of the Purchase Agreement
(the "OPTION SECURITIES" and together with the Firm Securities, the
"SECURITIES"). The Securities are being issued pursuant to an Indenture dated as
of the date hereof (the "INDENTURE"), by and between the Company and JPMorgan
Chase Bank, as trustee.

                  In order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Company and Guarantors have agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial
Purchaser and certain subsequent holder or holders of the Securities or
Underlying Shares as provided herein. The execution and delivery of this
Agreement is a condition to the Initial Purchaser's obligation to purchase the
Firm Securities under the Purchase Agreement.

                  The parties hereby agree as follows:

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

                  AGREEMENT: See the first introductory paragraph hereto.

                  AMOUNT OF REGISTRABLE SECURITIES: (a) With respect to
Securities constituting Registrable Securities, the aggregate principal amount
of all such Securities outstanding, (b) with respect to Underlying Shares
constituting Registrable Securities, the aggregate number of such Underlying
Shares outstanding multiplied by the Conversion Price (as defined in the
Indenture relating to the Securities upon the conversion of which such
Underlying Shares were issued) in effect at the time of computing the Amount of
Registrable Securities or, if no such Securities are then outstanding, the last
Conversion Price that was in effect under such Indenture when any such
Securities were last outstanding, and (c) with respect to combinations thereof,
the sum of (a) and (b) for the relevant Registrable Securities.

                  BUSINESS DAY: Any day that is not a Saturday, Sunday or a day
on which banking institutions in New York are authorized or required by law to
be closed.

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                  CLOSING DATE: May 7, 2003.

                  COMPANY: See the first introductory paragraph hereto.

                  DAMAGES PAYMENT DATE: See Section 3(c) hereof.

                  DEPOSITARY: The Depository Trust Company until a successor is
appointed by the Company.

                  EFFECTIVENESS DATE: The 180th day after the Closing Date.

                  EFFECTIVENESS PERIOD: See Section 2(a) hereof.

                  EXCHANGE ACT: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

                  FILING DATE: The 90th day after the Closing Date.

                  GUARANTORS: See the first introductory paragraph hereto.

                  HOLDER: Any holder of Registrable Securities.

                  INDEMNIFIED HOLDER: See Section 6 hereof.

                  INDEMNIFIED PERSON: See Section 6 hereof.

                  INDEMNIFYING PERSON: See Section 6 hereof.

                  INDENTURE: See the second introductory paragraph hereto.

                  INITIAL PURCHASER: See the first introductory paragraph
hereto.

                  INITIAL SHELF REGISTRATION: See Section 2(a) hereof.

                  INSPECTORS: See Section 4(n) hereof.

                  LIQUIDATED DAMAGES: See Section 3(a) hereof.

                  NASD: See Section 4(q) hereof.

                  NOTICE AND QUESTIONNAIRE: means a written notice delivered to
the Company containing substantially the information called for by the Form of
Selling Securityholder Notice and Questionnaire attached as Appendix A to the
Offering Memorandum of the Company dated May 1, 2003 relating to the Securities.

                  PERSON: An individual, partnership, corporation, limited
liability company, unincorporated association, trust or joint venture, or a
governmental agency or political subdivision thereof.

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                  PROSPECTUS: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

                  PURCHASE AGREEMENT: See the second introductory paragraph
hereto.

                  QIU: See Section 4(q) hereof.

                  RECORDS: See Section 4(n) hereof.

                  REGISTRABLE SECURITIES: All Securities and all Underlying
Shares upon original issuance thereof and at all times subsequent thereto until
the earliest to occur of (i) a Registration Statement covering such Securities
and Underlying Shares having been declared effective by the SEC and such
Securities and Underlying Shares having been disposed of in accordance with such
effective Registration Statement, (ii) such Securities and Underlying Shares
having been sold in compliance with Rule 144 or could (except with respect to
affiliates of the Company within the meaning of the Securities Act) be sold in
compliance with Rule 144(k), or (iii) such Securities and any Underlying Shares
ceasing to be outstanding.

                  REGISTRATION DEFAULT: See Section 3(a) hereof.

                  REGISTRATION STATEMENT: Any registration statement of the
Company and the Guarantors filed with the SEC pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.

                  RULE 144: Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.

                  RULE 144A: Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.

                  RULE 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.

                  SEC: The Securities and Exchange Commission.

                  SECURITIES: See the second introductory paragraph hereto.

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                  SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.

                  SELLING HOLDER: On any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.

                  SHELF REGISTRATION: See Section 2(b) hereof.

                  SHELF REGISTRATION STATEMENT: See Section 2(b) hereof.

                  SUBSEQUENT SHELF REGISTRATION: See Section 2(b) hereof.

                  TIA: The Trust Indenture Act of 1939, as amended, and the
rules and regulations of the SEC promulgated thereunder.

                  TRUSTEE: The Trustee under the Indenture.

                  UNDERLYING SHARES: See the second introductory paragraph
hereto.

                  UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.

2.       Shelf Registration.

                  (a)      Shelf Registration. The Company and the Guarantors
shall file with the SEC a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable Securities
(the "INITIAL SHELF REGISTRATION") on or prior to the Filing Date.

                  The Initial Shelf Registration shall be on Form S-3 or another
appropriate form permitting registration of such Registrable Securities for
resale by Holders in the manner or manners designated by them (including,
without limitation, one or more underwritten offerings). The Company and the
Guarantors shall not permit any securities other than the Registrable Securities
to be included in the Initial Shelf Registration or any Subsequent Shelf
Registration (as defined below).

                  The Company and the Guarantors shall use all reasonable
efforts to cause the Initial Shelf Registration to be declared effective under
the Securities Act on or prior to the Effectiveness Date and to keep such
Initial Shelf Registration continuously effective under the Securities Act until
the date that is two years from the Closing Date (as it may be shortened
pursuant to clause (i) or clause (ii) immediately following, the "EFFECTIVENESS
PERIOD"), or such shorter period ending when (i) all of the Registrable
Securities covered by the Initial Shelf Registration have been sold in the
manner set forth and as contemplated in the Initial Shelf Registration, (ii) the
date on which all the Registrable Securities (x) held by Persons who are not
affiliates of the Company may be resold pursuant to Rule 144(k) under the
Securities Act, or any successor provision, or (y) cease to be outstanding, or
(iii) a Subsequent Shelf Registration covering all of the Registrable Securities
has been declared effective under the Securities Act.

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                  (b)      Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration (as defined below) ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because of the sale of all of the securities registered thereunder), the
Company and the Guarantors shall use all reasonable efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any event
shall within 45 days of such cessation of effectiveness amend the Initial Shelf
Registration in a manner to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Securities (a "SUBSEQUENT
SHELF REGISTRATION"). If a Subsequent Shelf Registration is filed, the Company
and the Guarantors shall use all reasonable efforts to cause the Subsequent
Shelf Registration to be declared effective under the Securities Act as soon as
practicable after such filing and to keep such Registration Statement
continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the Initial
Shelf Registration or any Subsequent Shelf Registration was previously
continuously effective. As used herein, the term "SHELF REGISTRATION" means the
Initial Shelf Registration and any Subsequent Shelf Registration and the term
"SHELF REGISTRATION STATEMENT" means any Registration Statement filed in
connection with a Shelf Registration.

                  (c)      Supplements and Amendments. The Company and the
Guarantors shall promptly supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration, if required by the
Securities Act, or if reasonably requested by the Holders of the majority in
Amount of Registrable Securities covered by such Registration Statement or by
any underwriter of such Registrable Securities.

                  (d)      Notice and Questionnaire. Each Holder agrees that if
such Holder wishes to sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus, it will do so only in accordance
with this Section 2(d) and Section 4 hereof. Each Holder wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
three (3) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement. From and after the date the
Initial Shelf Registration Statement is declared effective, the Company and the
Guarantors shall, as promptly as practicable after the date a Notice and
Questionnaire is delivered, and in any event upon the later of (x) five (5)
Business Days after such date or (y) five (5) Business Days after the expiration
of any Deferral Period in effect when the Notice and Questionnaire is delivered
or put into effect within five (5) Business Days of such delivery date:

                           (i)      if required by applicable law, file with the
SEC a post-effective amendment to the Shelf Registration Statement or prepare
and, if required by applicable law, file a supplement to the related Prospectus
or a supplement or amendment to any document incorporated therein by reference
or file any other required document so that the Holder delivering such Notice
and Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of the Registrable Securities in
accordance with applicable law and, if the Company and the Guarantors shall file
a post-effective amendment to the Shelf Registration Statement, use all
reasonable efforts to cause such post-effective amendment to be

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declared effective under the Securities Act as promptly as is practicable, but
in any event by the date (the "AMENDMENT EFFECTIVENESS DEADLINE DATE") that is
forty-five (45) days after the date such post-effective amendment is required by
this clause to be filed;

                           (ii)     provide such Holder copies of any documents
filed pursuant to Section 2(d)(i); and

                           (iii)    notify such Holder as promptly as
practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(d)(i);

provided that if such Notice and Questionnaire is delivered during a Deferral
Period (as defined in Section 3(b)), the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period.
Notwithstanding anything contained herein to the contrary, (i) the Company shall
be under no obligation to name any Holder as a selling security holder in a
Shelf Registration Statement that has not delivered a Notice and Questionnaire
to the Company in accordance with this Section 2(d) and (ii) the Amendment
Effectiveness Deadline Date shall be extended by up to ten (10) Business Days
from the expiration of a Deferral Period (and the Company shall incur no
obligation to pay Liquidated Damages during such extension) if such Deferral
Period shall be in effect on the Amendment Effectiveness Deadline Date.

3.       Liquidated Damages.

                  (a)      The Company and the Initial Purchaser agree that the
Holders of Registrable Securities will suffer damages if the Company and the
Guarantors fail to fulfill certain of their obligations under Section 2 hereof
and that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly, the Company agrees to pay liquidated damages on the
Registrable Securities ("LIQUIDATED DAMAGES") under the circumstances and to the
extent set forth below (each of which shall be given independent effect; each a
"REGISTRATION DEFAULT"):

                           (i)      if the Initial Shelf Registration is not
filed on or prior to the Filing Date, then commencing on the day after the
Filing Date, Liquidated Damages shall accrue on the Registrable Securities at a
rate of 0.50% per annum on the Amount of Registrable Securities;

                           (ii)     if the Initial Shelf Registration is not
declared effective by the SEC on or prior to the Effectiveness Date, then
commencing on the day after the Effectiveness Date, Liquidated Damages shall
accrue on the Registrable Securities at a rate of 0.50% per annum on the Amount
of Registrable Securities; and

                           (iii)    if a Shelf Registration has been declared
effective and such Shelf Registration ceases to be effective at any time during
the Effectiveness Period (other than as permitted under Section 3(b)), then
Liquidated Damages shall accrue on the Registrable Securities at a rate of 0.50%
per annum on the Amount of Registrable Securities;

provided, however, that Liquidated Damages on the Registrable Securities may not
accrue under more than one of the foregoing clauses (i), (ii) or (iii) at any
one time; and provided further,

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however, that (1) upon the filing of the Initial Shelf Registration as required
hereunder (in the case of clause (a)(i) of this Section 3), (2) upon the
effectiveness of the Initial Shelf Registration as required hereunder (in the
case of clause (a)(ii) of this Section 3), or (3) upon the effectiveness of a
Shelf Registration which had ceased to remain effective (in the case of (a)(iii)
of this Section 3), Liquidated Damages on the Registrable Securities as a result
of such clause (or the relevant subclause thereof), as the case may be, shall
cease to accrue. It is understood and agreed that, notwithstanding any provision
to the contrary, no Liquidated Damages shall accrue on any Registrable
Securities that are then covered by an effective Shelf Registration Statement.

                  (b)      Notwithstanding paragraph (a) of this Section 3, the
Company shall be permitted to suspend the effectiveness of a Registration
Statement covering the Registrable Securities for any reason whatsoever for up
to 30 consecutive days (the "DEFERRAL PERIOD") in any 90 day period, for a total
of not more than 90 days in any twelve-month period, without paying Liquidated
Damages.

                  (c)      So long as Securities remain outstanding, the Company
shall notify the Trustee within two Business Days after each and every date on
which an event occurs in respect of which Liquidated Damages is required to be
paid. Any amounts of Liquidated Damages due pursuant to clause (a)(i), (a)(ii)
or (a)(iii) of this Section 3 will be payable in cash semi-annually on each May
7 and November 7 (each, a "DAMAGES PAYMENT DATE"), commencing with the first
such date occurring after any such Liquidated Damages commences to accrue, to
Holders to whom regular interest is payable on such Damages Payment Date, with
respect to Securities that are Registrable Securities, and to Persons that are
registered Holders on the April 22 or October 22 immediately prior to a Damages
Payment Date with respect to Underlying Shares that are Registrable Securities.
The amount of Liquidated Damages for Registrable Securities will be determined
by multiplying the applicable rate of Liquidated Damages by the Amount of
Registrable Securities outstanding on the Damages Payment Date following such
Registration Default in the case of the first such payment of Liquidated Damages
with respect to a Registration Default (and thereafter at the next succeeding
Damages Payment Date until the cure of such Registration Default), multiplied by
a fraction, the numerator of which is the number of days such Liquidated Damages
rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed), and the denominator of which is 360.

4.       Registration Procedures.

                  In connection with the filing of any Registration Statement
pursuant to Section 2 hereof, the Company and the Guarantors shall effect such
registrations to permit the sale of the securities covered thereby in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
and in connection with any Registration Statement filed by the Company and the
Guarantors hereunder the Company and the Guarantors, as applicable, shall:

                  (a)      Prepare and file with the SEC, on or prior to the
Filing Date, a Registration Statement or Registration Statements as prescribed
by Section 2 hereof, and use all reasonable efforts to cause each such
Registration Statement to become effective and remain effective as provided
herein; provided, however, that before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Company shall furnish
to and afford

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the Holders of the Registrable Securities covered by such Registration Statement
and the managing underwriter or underwriters, if any, a reasonable opportunity
to review copies of all such documents proposed to be filed (in each case, where
possible, at least five Business Days prior to such filing, or such later date
as is reasonable under the circumstances) and if such proposed filings contain
material non-public information, such persons must enter into a confidentiality
agreement with respect to such information if reasonably requested by the
Company. The Company and the Guarantors shall not file any Registration
Statement or Prospectus or any amendments or supplements thereto if the Holders
of a majority in Amount of Registrable Securities covered by such Registration
Statement or the managing underwriter or underwriters, if any, shall reasonably
object.

                  (b)      Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration, as may be necessary to
keep such Registration Statement continuously effective for the Effectiveness
Period; cause the related Prospectus to be supplemented by any Prospectus
supplement required by applicable law, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) promulgated under
the Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act applicable to it with respect to the disposition of all Registrable
Securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented. The Company and the Guarantors shall be deemed
not to have used all reasonable efforts to keep a Registration Statement
effective during the Effectiveness Period if any of them voluntarily takes any
action that would result in Selling Holders of the Registrable Securities
covered thereby not being able to sell such Registrable Securities during that
period unless such action is required by applicable law or unless the Company
and the Guarantors comply with this Agreement, including without limitation the
provisions of Section 4(k) hereof.

                  (c)      Notify the Selling Holders, a single counsel to such
Holders (chosen in accordance with Section 5(b)) and the managing underwriter or
underwriters, if any, promptly (but in any event within two Business Days), (i)
when a Prospectus or any prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may, upon request,
obtain, at the sole expense of the Company, one conformed copy of such
Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the initiation
of any proceedings for that purpose, (iii) of the happening of any event, the
existence of any condition or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in or
amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any 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
not misleading, and that in the case of the Prospectus, it will not contain any
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 the light
of the circumstances under which they

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were made, not misleading and (iv) of the Company's or any Guarantor's
determination that a post-effective amendment to a Registration Statement would
be appropriate.

                  (d)      Use all reasonable efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus and, if any such order is
issued, to use all reasonable efforts to obtain the withdrawal of any such order
at the earliest possible moment, and provide immediate notice to the Selling
Holders and the managing underwriter or underwriters, if any, of the withdrawal
of any such order.

                  (e)      If requested by the managing underwriter or
underwriters, if any, or the Holders of the majority in Amount of Registrable
Securities being sold in connection with an underwritten offering (i) promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters (if any), or such
Holders reasonably determine is necessary to be included therein, (ii) make all
required filings of such prospectus supplement or such post-effective amendment
as soon as reasonably practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment and (iii) supplement or make amendments to such Registration
Statement.

                  (f)      Furnish to each Selling Holder, a single counsel to
such Holders (chosen in accordance with Section 5(b)) and the managing
underwriter or underwriters, if any, at the sole expense of the Company, one
conformed copy of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and schedules,
and, if requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.

                  (g)      Deliver to each Selling Holder, a single counsel to
such Holders (chosen in accordance with Section 5(b)) and the managing
underwriter or underwriters, if any, at the sole expense of the Company, as many
copies of the Prospectus (including each form of preliminary prospectus) and
each amendment or supplement thereto and any documents incorporated by reference
therein as such Persons may reasonably request; and, subject to the second
paragraph of Section 4(s) hereof, the Company and the Guarantors hereby consent
to the use of such Prospectus and each amendment or supplement thereto by each
of the Selling Holders of Registrable Securities and the managing underwriter or
underwriters or agents, if any, and dealers (if any), in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

                  (h)      Prior to any public offering of Registrable
Securities, to use all reasonable efforts to register or qualify, to the extent
required by applicable law, and to cooperate with the Selling Holders and the
managing underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities or offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, or the managing underwriter or underwriters, if
any, reasonably request; provided, however, that where Registrable Securities
are offered other than through an underwritten offering, the Company and the
Guarantors agree to cause the Company's counsel to perform Blue Sky
investigations and file

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registrations and qualifications required to be filed pursuant to this Section
4(h); keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept
effective and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement; provided, however,
that the Company and the Guarantors shall not be required to (A) qualify
generally to do business in any jurisdiction where it is not then so qualified,
(B) take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or (C) subject itself to
taxation in excess of a nominal dollar amount in any such jurisdiction where it
is not then so subject.

                  (i)      Cooperate with the Selling Holders and the managing
underwriter or underwriters, if any, and their respective counsel to facilitate
the timely preparation and delivery of certificates representing shares of
Registrable Securities to be sold, which certificates shall not bear any
restrictive legends and shall be in a form eligible for deposit with The
Depository Trust Company; and enable such shares of Registrable Securities to be
in such denominations and registered in such names as the managing underwriter
or underwriters, if any, or Holders may reasonably request.

                  (j)      Use all reasonable efforts to cause the Registrable
Securities covered by any Shelf Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be reasonably
necessary to enable the Selling Holder or Holders thereof or the managing
underwriter or underwriters, if any, to consummate the disposition of such
Registrable Securities, except as may be required solely as a consequence of the
nature of such selling Holder's business, in which case the Company and the
Guarantors will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals.

                  (k)      Upon the occurrence of any event contemplated by
paragraph 4(c)(ii), 4(c)(iii) or 4(c)(iv) hereof, as promptly as practicable
prepare and (subject to Section 4(a) hereof) file with the SEC, at the sole
expense of the Company, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, any such Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

                  (l)      Prior to the effective date of the first Registration
Statement relating to the Registrable Securities, (i) provide the Trustee with
certificates for the Registrable Securities in a form eligible for deposit with
The Depository Trust Company and (ii) provide a CUSIP number for the Registrable
Securities.

                  (m)      In connection with any underwritten offering of
Registrable Securities pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings of securities
similar to the Registrable Securities and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to

                                       10

<PAGE>

expedite or facilitate the registration or the disposition of such Registrable
Securities and, in such connection, (i) make such representations and warranties
to, and covenants with, the managing underwriter or underwriters with respect to
the business of the Company and its subsidiaries (including any acquired
business, properties or entity, if applicable) and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings of securities similar to the Registrable
Securities and confirm the same in writing if and when requested; (ii) obtain
the written opinion of counsel to the Company and the Guarantors and written
updates thereof in form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters, addressed to the managing underwriter or
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings of securities similar to the Registrable Securities and
such other matters as may be reasonably requested by the managing underwriter or
underwriters; and (iii) obtain "cold comfort" letters and updates thereof in
form, scope and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings of securities similar to the Registrable Securities and
such other matters as reasonably requested by the managing underwriter or
underwriters as permitted by the Statement on Auditing Standards No. 72. The
above shall be done as and to the extent required by such underwriting
agreement.

                  (n)      Make available for inspection by any Selling Holder
of such Registrable Securities being sold, any managing underwriter or
underwriters participating in any such disposition of Registrable Securities, if
any, and any attorney, accountant or other agent retained by any such Selling
Holder or underwriter (collectively, the "INSPECTORS"), at the offices where
normally kept, during reasonable business hours at such time or times as shall
be mutually convenient for the Company and the Inspectors as a group, all
financial and other records, pertinent corporate documents and instruments of
the Company and its subsidiaries (collectively, the "RECORDS") as shall be
reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Company
and its subsidiaries to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement. Records that the
Company determines, in good faith, to be confidential and any Records that it
notifies the Inspectors are confidential shall not be disclosed by any Inspector
unless (i) the disclosure of such Records is necessary to avoid or correct a
material misstatement or material omission in such Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, (iii) disclosure of such information is,
in the opinion of counsel for any Inspector, necessary or advisable in
connection with any action, claim, suit or proceeding, directly involving or
potentially involving such Inspector and arising out of, based upon, relating
to, or involving this Agreement or any transactions contemplated hereby or
arising hereunder or (iv) the information in such Records has been made
generally available to the public other than through the acts of such Inspector;
provided, however, that prior notice shall be provided as soon as practicable to
the Company of the potential disclosure of any information by such Inspector

                                       11

<PAGE>

pursuant to clauses (ii) or (iii) of this sentence to permit the Company to
obtain a protective order (or waive the provisions of this paragraph (n)). Each
Inspector shall take such actions as are reasonably necessary to protect the
confidentiality of such information (if practicable) to the extent such actions
are otherwise not inconsistent with, an impairment of or in derogation of the
rights and interests of the Holder or any Inspector, unless and until such
information in such Records has been made generally available to the public
other than as a result of a breach of this Agreement.

                  (o)      Provide (i) the Holders of the Registrable Securities
to be included in such Registration Statement and not more than one counsel for
all the Holders of such Registrable Securities chosen in accordance with Section
5(b), (ii) the managing underwriter or underwriters (which term, for purposes of
this Registration Rights Agreement, shall include a Person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if any,
thereof, (iii) the sales or placement agent, if any, thereof, and (iv) one
counsel for such underwriters or agents, reasonable opportunity to participate
in the preparation of such Registration Statement, each prospectus included
therein or filed with the SEC, and each amendment or supplement thereto.

                  (p)      Comply with all applicable rules and regulations of
the SEC and make generally available to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in a firm commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.

                  (q)      Cooperate with each Selling Holder of Registrable
Securities covered by any Registration Statement and the managing underwriter or
underwriters, if any, participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the National Association of Securities Dealers, Inc. (the
"NASD"), including, if the Conduct Rules of the NASD or any successor thereto as
amended from time to time so require, engaging a "qualified independent
underwriter" ("QIU") as contemplated therein and making Records available to
such QIU as though it were a participating underwriter for the purposes of
Section 4(n) and otherwise applying the provisions of this Agreement to such QIU
(including indemnification) as though it were a participating underwriter.

                  (r)      Cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement relating to
the Registrable Securities; and in connection therewith, cooperate with the
Trustee and the Holders of the Registrable Securities and their respective
counsel to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA; and
execute, and use all reasonable efforts to cause the Trustee to execute, all
documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner.

                                       12

<PAGE>

                  (s)      Use all reasonable efforts to take all other steps
necessary or advisable to effect the registration of the Registrable Securities
covered by a Registration Statement contemplated hereby.

                  Each Holder agrees, by acquisition of the Registrable
Securities, that no Holder shall be entitled to sell any of such Registrable
Securities pursuant to a Registration Statement or to receive a Prospectus
relating thereto, unless such Holder has furnished the Company with a Notice and
Questionnaire as required pursuant to Section 2(d) hereof (including the
information required to be included in such Notice and Questionnaire) and the
information set forth in the next sentence. Each Selling Holder agrees promptly
to furnish to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Selling Holder
not misleading and any other information regarding such Selling Holder and the
distribution of such Registrable Securities as the Company may from time to time
reasonably request. Any sale of any Registrable Securities by any Holder shall
constitute a representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set forth in the
Prospectus delivered by such Holder in connection with such disposition, that
such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan
of distribution and that such Prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such Holder or its
plan of distribution necessary to make the statements in such Prospectus, in the
light of the circumstances under which they were made, not misleading.

                  The Company may require each Selling Holder of Registrable
Securities as to which any registration is being effected to furnish to the
Company such additional information regarding such Holder and the distribution
of such Registrable Securities as the Company may, from time to time, reasonably
request to the extent necessary or advisable to comply with the Securities Act.
The Company may exclude from such registration the Registrable Securities of any
Selling Holder if such Holder fails to furnish such additional information
within 20 Business Days after receiving such request. Each Selling Holder as to
which any Shelf Registration is being effected agrees to furnish promptly to the
Company all information required to be disclosed so that the information
previously furnished to the Company by such Holder is not materially misleading
and does not 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.

                  Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon actual receipt of any notice from the
Company of the Company suspending the effectiveness of the Registration
Statement pursuant to Section 3(b) hereof, or upon the happening of any event of
the kind described in Section 4(c)(ii), 4(c)(iii) or 4(c)(iv) hereof, such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by such Registration Statement or Prospectus until such Holder's receipt
of the copies of the supplemented or amended Prospectus contemplated by Section
4(k) hereof, or until it is advised in writing by the Company that the use of
the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto.

5.       Registration Expenses.

                                       13

<PAGE>

                  (a)      All fees and expenses incident to the performance of
or compliance with this Agreement by the Company and the Guarantors shall be
borne by the Company and the Guarantors, as the case may be, including, without
limitation, (i) all registration and filing fees (including, without limitation,
(A) fees with respect to filings required to be made with the NASD in connection
with an underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as provided in
Section 4(h) hereof), (ii) printing expenses, including, without limitation,
expenses of printing certificates for Registrable Securities in a form eligible
for deposit with The Depository Trust Company and of printing prospectuses if
the printing of prospectuses is requested by the managing underwriter or
underwriters, if any, or by the Holders of the majority in Amount of Registrable
securities included in any Registration Statement, (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) fees and disbursements of all independent certified public accountants
referred to in Section 4(m)(iii) hereof (including, without limitation, the
expenses of any special audit and "cold comfort" letters required by or incident
to such performance), (vi) Securities Act liability insurance, if the Company
desires such insurance, (vii) fees and expenses of all other Persons retained by
the Company, (viii) internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees of the Company
performing legal or accounting duties), (ix) the expense of any annual audit,
(x) the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange, if applicable, and (xi)
the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, securities sales agreements
and any other documents necessary in order to comply with this Agreement.
Notwithstanding anything in this Agreement to the contrary, each Holder shall
pay all underwriting discounts and brokerage commissions with respect to any
Registrable Securities sold by it, and the Company shall not be responsible for
the fees and expenses of any counsel for the managing underwriter or
underwriters, if any.

                  (b)      The Company shall reimburse the Holders of the
Registrable Securities being registered in a Shelf Registration for the
reasonable fees and disbursements of not more than one counsel chosen by the
Holders of a majority in Amount of Registrable Securities to be included in such
Registration Statement.

6.       Indemnification.

                  The Company and the Guarantors agree, jointly and severally,
to indemnify and hold harmless (i) each Holder (which, for the absence of doubt,
for purposes of this Section 6 shall include the Initial Purchaser), (ii) each
Person, if any, who controls (within the meaning of either Section 15 of the
Securities 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"), (iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder (including any predecessor holder)or
any controlling person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "INDEMNIFIED HOLDER"), against any losses,
claims, damages or liabilities to which such Indemnified Holder may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or

                                       14

<PAGE>

actions or proceedings in respect thereof) arise out of or are based upon (A)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement or Prospectus, or any amendment or supplement
thereto or any related preliminary prospectus or (B) 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, in the light of the
circumstances in which they were made; provided, however, that the Company and
the Guarantors will not be liable under this paragraph, (x) to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged omission
made in any such Registration Statement or Prospectus, or any amendment or
supplement thereto or any related preliminary prospectus in reliance upon and in
conformity with written information relating to any Holder furnished to the
Company by or on behalf of such Holder specifically for use therein or (y) with
respect to any untrue statement or alleged untrue statement, or omission or
alleged omission made in any preliminary prospectus if the person asserting any
such loss, claim, damage or liability who purchased Registrable Securities which
are the subject thereof did not receive a copy of the Prospectus (or of the
preliminary prospectus as then amended or supplemented if the Company shall have
furnished such Indemnified Holder with such amendment or supplement thereto on a
timely basis) at or prior to the written confirmation of the sale of such
Registrable Securities to such person and, in any case where such delivery is
required by applicable law and the untrue statement or alleged untrue statement
or omission or alleged omission of a material fact made in such preliminary
prospectus was corrected in the Prospectus (or the preliminary prospectus as
then amended or supplemented if the Company shall have furnished such
Indemnified Holder with such amendment or supplement thereto on a timely basis).
The Company shall notify such Indemnified Holder promptly of the institution,
threat or assertion of any claim, proceeding (including any governmental
investigation) or litigation in connection with the matters addressed by this
Agreement which involves the Company or such Indemnified Holder.

                  The Company and the Guarantors agree, jointly and severally,
to reimburse each Indemnified Holder upon demand for any legal or other
out-of-pocket expenses reasonably incurred by such Indemnified Holder in
connection with investigating or defending any such loss, claim, damage or
liability, action or proceeding or in responding to a subpoena or governmental
inquiry related to the offering of the Registrable Securities, whether or not
such Indemnified Holder is a party to any action or proceeding. In the event
that it is finally judicially determined that an Indemnified Holder was not
entitled to receive payments for legal and other expenses pursuant to this
paragraph, such Indemnified Holder will promptly return all sums that had been
advanced pursuant hereto.

                  Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Guarantors, their respective directors and
officers and each Person who controls the Company or the Guarantors (within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as the indemnity provided in the first paragraph of this
Section 6 from the Company and the Guarantors to each Holder, but only with
reference to such losses, claims, damages or liabilities which are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to a Holder furnished
to the Company in writing by such Holder expressly for use in any Registration
Statement or Prospectus, or any amendment or supplement thereto or any related
preliminary prospectus.

                                       15

<PAGE>

                  In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to either of the first and third paragraphs of
this Section 6, such Person (the "INDEMNIFIED PERSON") shall promptly notify the
Person or Persons against whom such indemnity may be sought (each an
"INDEMNIFYING PERSON") in writing. No indemnification provided for in the first
or third paragraphs of this Section 6 shall be available to any Person who shall
have failed to give notice as provided in this paragraph if the party to whom
notice was not given was unaware of the proceeding to which such notice would
have related and was materially prejudiced by the failure to give such notice,
but the failure to give such notice shall not relieve the Indemnifying Person or
Persons from any liability which it or they may have to the Indemnified Person
for contribution or otherwise than on account of the provisions of the first and
third paragraphs of this Section 6. In case any such proceeding shall be brought
against any Indemnified Person and it shall notify the Indemnifying Person of
the commencement thereof, the Indemnifying Person shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other Indemnifying Person similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such Indemnified Person and shall pay as
incurred (or within 30 days of presentation) the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the Indemnifying Person shall pay as incurred (or
within 30 days of presentation) the fees and expenses of the counsel retained by
the Indemnified Person in the event (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the retention of such counsel,
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them or (iii) the Indemnifying
Person shall have failed to assume the defense and employ counsel reasonably
acceptable to the Indemnified Person within a reasonable period of time after
notice of commencement of the action. It is understood that the Indemnifying
Person shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees and expenses of more
than one separate firm for all such Indemnified Persons. Such firm shall be
designated in writing by a majority in Amount of Registrable Securities in the
case of parties indemnified pursuant to the first paragraph of this Section 6
and by the Company in the case of parties indemnified pursuant to the third
paragraph of this Section 6. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify the Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. In addition, the
Indemnifying Person will not, without the prior written consent of the
Indemnified Person, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any Indemnified Person
is an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
Indemnified Person from all liability arising out of such claim, action or
proceeding.

                  To the extent the indemnification provided for in this Section
6 is unavailable to or insufficient to hold harmless an Indemnified Person under
the first or third paragraph of this Section 6 in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, except by reason of the exceptions set forth in the first or

                                       16

<PAGE>

third paragraphs of this Section 6 or the failure of the Indemnified Person to
give notice as required in the fourth paragraph of this Section 6, then each
Indemnifying Person shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Person
on the one hand and the Indemnified Person on the other hand from the offering
of the Securities pursuant to the Purchase Agreement and the Registrable
Securities pursuant to any Shelf Registration. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law then each Indemnifying Person shall contribute to such amount paid or
payable by such Indemnified Person in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Indemnifying Person on the one hand and the Indemnified Person on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantors on the one hand and any Indemnified
Holder on the other shall be deemed to be in the same proportion as the total
net proceeds (before deducting expenses) received by the Company and the
Guarantors from the offering and sale of the Securities bear to the total net
proceeds received by such Indemnified Holder from sales of Registrable
Securities giving rise to such obligations. 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 Company and the
Guarantors on the one hand or such Indemnified Holder on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

                  The Company, the Guarantors and the Initial Purchaser agree
that it would not be just and equitable if contributions pursuant to the
immediately preceding paragraph of this Section 6 were determined by pro rata
allocation 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 Person as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to in the immediately preceding paragraph shall be deemed to include
any legal or other expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any such action or claim or enforcing
any rights hereunder. Notwithstanding the provisions of this paragraph and the
immediately preceding paragraph of this Section 6, (i) in no event shall any
Holder be required to contribute any amount in excess of the amount by which the
net proceeds received by such Holder from the offering or sale of the
Registrable Securities pursuant to a Shelf Registration Statement exceeds the
amount of damages which such Holder would have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and (ii) 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.

                  Except as otherwise provided in this Section 6, any losses,
claims, damages, liabilities or expenses for which an Indemnified Person is
entitled to indemnification or contribution under this Section 6 shall be paid
by the Indemnifying Person to the Indemnified

                                       17

<PAGE>

Person as such losses, claims, damages, liabilities or expenses are incurred (or
within 30 days of presentation).

                  The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies that may otherwise be available to
any indemnified party at law or in equity.

                  The indemnity and contribution agreements contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder or any Person controlling any Holder or by or on behalf of the
Company and the Guarantors, their respective officers or directors or any other
Person controlling the Company or any of the Guarantors and (iii) acceptance of
and payment for any of the Registrable Securities.

7.       Rules 144 and 144A. The Company and each Guarantor covenants that it
will file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the SEC thereunder in
a timely manner in accordance with the requirements of the Securities Act and
the Exchange Act and, for so long as any Registrable Securities remain
outstanding, if at any time the Company or such Guarantor is not required to
file such reports, it will, upon the request of any Holder or beneficial owner
of Registrable Securities, make available such information necessary to permit
sales pursuant to Rule 144A under the Securities Act. The Company and each
Guarantor further covenants that, for so long as any Registrable Securities
remain outstanding, it will use all reasonable efforts to take such further
action as any Holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities
Act, as such rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. Notwithstanding the foregoing, nothing
in this Section 7 shall be deemed to require the Company or any Guarantor to
register any of its securities pursuant to the Exchange Act.

8.       Underwritten Registrations.

                  If any of the Registrable Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by, and the underwriting arrangements with respect thereto will be
approved by, the Company; provided, however, that such investment bankers and
managers and underwriting arrangements must be reasonably satisfactory to the
Holders of the majority in Amount of Registrable Securities to be included in
such offering.

                  No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.

                                       18

<PAGE>

9.       Miscellaneous.

                  (a)      No Inconsistent Agreements. The Company and the
Guarantors have not, as of the date hereof, and the Company and the Guarantors
shall not, after the date of this Agreement, enter into any agreement with
respect to any of their respective securities that is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof.

                  (b)      Adjustments Affecting Registrable Securities. The
Company and the Guarantors shall not, directly or indirectly, take any action
with respect to the Registrable Securities as a class that would adversely
affect the ability of the Holders of Registrable Securities to include such
Registrable Securities in a registration undertaken pursuant to this Agreement.

                  (c)      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, otherwise than with
the prior written consent of the Company, the Guarantors and the Holders of not
less than the majority in Amount of Registrable Securities; provided, however,
that Section 6 and this Section 9(c) may not be amended, modified or
supplemented without the prior written consent of the Company, the Guarantors
and each Holder (including, in the case of an amendment, modification or
supplement of Section 6, any Person who was a Holder of Registrable Securities
disposed of pursuant to any Registration Statement). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders of Registrable
Securities whose securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect, impair, limit or compromise the
rights of other Holders of Registrable Securities may be given by Holders of at
least a majority in Amount of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement.

                  (d)      Notices. All notices and other communications
(including without limitation any notices or other communications to the
Trustee) provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or facsimile:

                           (1)      if to a Holder of Registrable Securities, at
the most current address of such Holder set forth on the records of the
registrar under the Indenture, in the case of Holders of Securities, and the
stock ledger of the Company, in the case of Holders of common stock of the
Company, unless, in either such case, any Holder shall have provided notice
information in a Notice and Questionnaire or any amendment thereto, in which
case such information shall control.

                           (2)      if to the Initial Purchaser:

                                    Deutsche Bank Securities Inc.
                                    31 West 52nd Street
                                    New York, New York 10019

                                       19

<PAGE>

                                    Facsimile No.: (212) 469-2929
                                    Attention: General Counsel

                  with copies to:

                                    Akin Gump Strauss Hauer & Feld LLP
                                    1700 Pacific Avenue, Suite 4100
                                    Dallas, Texas 75201
                                    Facsimile No.: (214) 969-4343
                                    Attention: Seth R. Molay, P.C.

                           (3)      if to the Company or the Guarantors:

                                    Grey Wolf, Inc.
                                    10370 Richmond Avenue, Suite 600
                                    Houston, Texas 77042
                                    Facsimile No.: (713) 435-6171
                                    Attention: Chief Financial Officer

                  with copies to:

                                    Porter & Hedges, L.L.P.
                                    700 Louisiana St., Suite 3500
                                    Houston, Texas 77002-2764
                                    Facsimile No.: (713) 228-1331
                                    Attention: Nick D. Nicholas

                  All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five (5)
Business Days after being deposited in the mail, postage prepaid, if mailed; one
Business Day after being timely delivered to a next-day air courier; and when
the addressor receives facsimile confirmation, if sent by facsimile during
normal business hours, and otherwise on the next Business Day during normal
business hours.

                  (e)      Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties hereto, including the Holders; provided, however, that this Agreement
shall not inure to the benefit of or be binding upon a successor or assign of a
Holder unless and except to the extent such successor or assign holds
Registrable Securities.

                  (f)      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.

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

                                       20

<PAGE>

                  (h)      Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS SITTING IN
MANHATTAN, NEW YORK CITY, THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.

                  (i)      Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

                  (j)      Securities Held by the Company or Its Affiliates.
Whenever the consent or approval of Holders of a specified percentage in Amount
of Registrable Securities is required hereunder, Registrable Securities held by
the Company or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

                  (k)      Third-Party Beneficiaries. Holders of Registrable
Securities are intended third party beneficiaries of this Agreement and this
Agreement may be enforced by such Persons.

                  (l)      Entire Agreement. This Agreement, together with the
Purchase Agreement and the Indenture, is intended by the parties as a final and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein and any and all prior
oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda between the Initial
Purchaser on the one hand and the Company and the Guarantors on the other, or
between or among any agents, representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect to the subject
matter hereof and thereof are merged herein and replaced hereby.

                                       21

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.

                                 GREY WOLF INC.

                                 By: /s/ DAVID W. WEHLMANN
                                    __________________________________________
                                    David W. Wehlmann, Executive Vice
                                    President and Chief Financial Officer

                                 DEUTSCHE BANK SECURITIES INC.

                                 By: /s/ C. MITCHELL COX
                                    _________________________________________
                                    Authorized Officer

                                 GREY WOLF DRILLING COMPANY L.P.

                                    BY: GREY WOLF HOLDINGS COMPANY
                                        ITS SOLE GENERAL PARTNER

                                 By: /s/ DAVID W. WEHLMANN
                                    __________________________________________
                                    David W. Wehlmann, Executive Vice
                                    President and Chief Financial Officer

                                 GREY WOLF LLC

                                 By: /s/ DAVID W. WEHLMANN
                                    __________________________________________
                                    David W. Wehlmann, Executive Vice
                                    President and Chief Financial Officer

                                 GREY WOLF HOLDINGS COMPANY

                                 By: /s/ DAVID W. WEHLMANN
                                    __________________________________________
                                    David W. Wehlmann, Executive Vice
                                    President and Chief Financial Officer

                                       22

<PAGE>

                                 MURCO DRILLING CORPORATION

                                 By: /s/ DAVID W. WEHLMANN
                                    __________________________________________
                                    David W. Wehlmann, Executive Vice
                                    President and Chief Financial Officer

                                 GREY WOLF INTERNATIONAL, INC.

                                 By: /s/ DAVID W. WEHLMANN
                                    __________________________________________
                                    David W. Wehlmann, Executive Vice
                                    President and Chief Financial Officer

                                 DI/PERFENSA, INC.

                                 By: /s/ DAVID W. WEHLMANN
                                    __________________________________________
                                    David W. Wehlmann, Executive Vice
                                    President and Chief Financial Officer

                                 DI ENERGY, INC.

                                 By: /s/ DAVID W. WEHLMANN
                                    __________________________________________
                                    David W. Wehlmann, Executive Vice
                                    President and Chief Financial Officer

                                       23

<PAGE>

                                   SCHEDULE A

                         Grey Wolf Drilling Company L.P.

                                  Grey Wolf LLC

                           Grey Wolf Holdings Company

                              Murco Drilling Corp.

                          Grey Wolf International, Inc.

                                DI/Perfensa, Inc.

                                 DI Energy, Inc.<PAGE>

                                                                    EXHIBIT 10.1

                                  $150,000,000

                                 GREY WOLF, INC.

               3.75% Contingent Convertible Senior Notes Due 2023

                               PURCHASE AGREEMENT

                                                                     May 1, 2003

Deutsche Bank Securities Inc.
31 West 52nd Street
New York, New York 10019

Ladies and Gentlemen:

         Grey Wolf, Inc., a Texas corporation (the "Company"), proposes, subject
to the terms and conditions contained herein, to issue and sell to you (the
"Initial Purchaser") $150,000,000 aggregate principal amount of its 3.75%
Contingent Convertible Senior Notes Due 2023 (the "Firm Securities"). The
Company also proposes to issue and sell to the Initial Purchaser at the Initial
Purchaser's option an additional $37,500,000 aggregate principal amount of its
3.75% Contingent Convertible Senior Notes Due 2023 (the "Option Securities" and,
together with the Firm Securities, the "Securities") as set forth below. The
Securities will initially be guaranteed (the "Guarantees") by each of the
subsidiaries of the Company listed on Schedule A (each, a "Guarantor" and
collectively the "Guarantors").

         The Securities and the Guarantees are to be issued pursuant to the
terms of an Indenture (the "Indenture") among the Company, the Guarantors and
JPMorgan Chase Bank, a New York banking corporation, as trustee (the "Trustee").
The Securities are convertible into shares of common stock, $0.10 par value per
share (the "Common Stock"), of the Company together with the rights (the
"Rights") evidenced by such Common Stock to the extent provided in the Rights
Agreement (the "Rights Agreement"), dated as of September 21, 1998 between the
Company and American Stock Transfer & Trust Company, as Rights Agent. The Common
Stock and accompanying Rights into which the Securities may be convertible are
referred to herein as the "Underlying Securities."

         The sale of the Securities and the Guarantees to the Initial Purchaser
will be made without registration under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance on exemptions from the registration
requirements of the Securities Act. The Initial Purchaser has advised the
Company that it will offer and sell the Securities and Guarantees purchased by
it hereunder (the "Offering") in accordance with Section 3 hereof as soon as it
deems advisable.

         In connection with the Offering, the Company and the Guarantors will
prepare an offering memorandum (including Appendix A thereto and the information
incorporated by

<PAGE>

reference therein, the "Offering Memorandum"). The Offering Memorandum sets
forth certain information regarding the Company, the Guarantors, the Securities,
the Guarantees and the Underlying Securities. Each of the Company and the
Guarantors hereby confirms that it has authorized the use of the Offering
Memorandum, and any amendment or supplement thereto, in connection with the
Offering by the Initial Purchaser. Unless stated to the contrary, all references
herein to the Offering Memorandum are to the Offering Memorandum and the
information incorporated by reference therein but are not meant to include any
amendment or supplement, or any information incorporated by reference therein
subsequent to the date thereof, and any references herein to the terms "amend,"
"amendment" or "supplement" with respect to the Offering Memorandum shall be
deemed to refer to and include any information filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), subsequent to the date of
the Offering Memorandum which is incorporated by reference therein.

         For purposes of this Agreement, "the Company's knowledge" shall mean
the actual knowledge of any of the executive officers (as defined in Rule 405
under the Securities Act) of the Company and the Guarantors.

         In connection with the Offering, the Company and the Guarantors also
propose to enter into a Registration Rights Agreement, to be dated as of the
Closing Date (as defined below), among the Company, the Guarantors and the
Initial Purchaser (the "Registration Rights Agreement"), for the benefit of the
Initial Purchaser and its direct and indirect transferees.

         In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:

         1.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
GUARANTORS.

                  (a)      Each of the Company and the Guarantors represents and
         warrants to the Initial Purchaser as follows:

                           (i)      the Company has been duly organized and is
                  validly existing as a corporation in good standing under the
                  laws of the State of Texas, with the corporate power and
                  authority to own or lease its properties and conduct its
                  business as described in the Offering Memorandum except where
                  the failure to have such power or to be so authorized would
                  not have a material adverse effect on the Company and its
                  subsidiaries, taken as a whole; each of the Company's
                  subsidiaries has been duly organized and is validly existing
                  as a corporation or other entity in good standing under the
                  laws of the jurisdiction of its incorporation or formation,
                  with the corporate, partnership or company power and authority
                  to own or lease its properties and conduct its business as
                  described in the Offering Memorandum, except where the failure
                  to have such power or to be so authorized would not have a
                  material adverse effect on the Company and its subsidiaries,
                  taken as a whole; the Company and each of its subsidiaries are
                  duly qualified to transact business in all jurisdictions in
                  which the conduct of their business requires such
                  qualification and in which the failure to be qualified would
                  have a material adverse effect upon the Company and its
                  subsidiaries,

                                      -2-

<PAGE>

                  taken as a whole; the outstanding equity interests of each of
                  the Company's subsidiaries have been duly authorized and
                  validly issued, are fully paid and non-assessable and are
                  owned by the Company or one of the Company's subsidiaries free
                  and clear of all liens, encumbrances and equities and claims
                  other than those disclosed in the Offering Memorandum; and no
                  options, warrants or other rights to purchase, agreements or
                  other obligations to issue or other rights to convert any
                  obligations into equity interests of the Company's
                  subsidiaries are outstanding;

                           (ii)     the issuance and sale of the Securities have
                  been duly and validly authorized by all necessary corporate
                  action on the part of the Company and, when executed,
                  authenticated and delivered to and paid for by the Initial
                  Purchaser in accordance with the terms of this Agreement and
                  the Indenture, the Securities will be valid and binding
                  obligations of the Company, enforceable in accordance with
                  their terms and will be entitled to the benefits of the
                  Indenture, subject to the effects of applicable bankruptcy,
                  insolvency and similar laws affecting creditors' rights
                  generally and equitable principles of general applicability;

                           (iii)    the issuance and sale of the Guarantees have
                  been duly and validly authorized by all necessary corporate or
                  other entity action on the part of each Guarantor and, when
                  executed, authenticated and delivered to and paid for by the
                  Initial Purchaser in accordance with the terms of this
                  Agreement and the Indenture, the Guarantees will be valid and
                  binding obligations of each Guarantor, enforceable in
                  accordance with their terms and will be entitled to the
                  benefits of the Indenture, subject to the effects of
                  applicable bankruptcy, insolvency and similar laws affecting
                  creditors' rights generally and equitable principles of
                  general applicability;

                           (iv)     the execution and delivery of, and the
                  performance by the Company and each Guarantor of its
                  obligations under, the Indenture have been duly and validly
                  authorized by all necessary corporate or other action on the
                  part of the Company and each Guarantor and, when duly executed
                  and delivered by the Company, the Guarantors and the Trustee,
                  the Indenture will be a valid and binding agreement of the
                  Company and each Guarantor, enforceable against the Company
                  and each Guarantor in accordance with its terms, subject to
                  the effects of applicable bankruptcy, insolvency and similar
                  laws affecting creditors' rights generally and equitable
                  principles of general applicability;

                           (v)      the outstanding shares of Common Stock have
                  been duly authorized and validly issued and are fully paid and
                  non-assessable; the shares of Common Stock to be issued upon
                  conversion of the Securities have been duly authorized and
                  reserved, and when issued upon conversion of the Securities
                  will be validly issued, fully paid and non-assessable; no
                  preemptive rights of stockholders exist with respect to any of
                  the shares of Common Stock to be issued upon conversion of the
                  Securities; the Rights have been duly authorized

                                      -3-

<PAGE>

                  and, when and if issued upon conversion in accordance with the
                  terms of the Indenture and the Rights Agreement, will have
                  been validly issued;

                           (vi)     the information set forth under the caption
                  "Capitalization" in the Offering Memorandum is true and
                  correct; all of the shares of Common Stock and the Rights
                  conform to the description thereof contained in the Offering
                  Memorandum; the form of certificate for the shares of Common
                  Stock conforms to the requirements of the Texas Business
                  Corporation Act;

                           (vii)    except as described in or contemplated by
                  the Offering Memorandum, there are no outstanding securities
                  of the Company convertible or exchangeable into or evidencing
                  the right to purchase or subscribe for any shares of capital
                  stock of the Company and there are no outstanding or
                  authorized options, warrants or rights of any character
                  obligating the Company to issue any shares of its capital
                  stock or any securities convertible or exchangeable into or
                  evidencing the right to purchase or subscribe for any shares
                  of such stock;

                           (viii)   all of the Underlying Securities issuable
                  upon conversion of the Securities will be duly accepted for
                  listing on The American Stock Exchange, subject to official
                  notice of issuance in timely compliance with the requirements
                  of The American Stock Exchange but in no event later than the
                  Closing Date;

                           (ix)     each document filed, or to be filed prior to
                  the closing of the Offering, by the Company pursuant to the
                  Exchange Act and incorporated, or to be incorporated, by
                  reference in the Offering Memorandum (or any amendment or
                  supplement thereto) at the time filed with the Securities and
                  Exchange Commission (the "Commission") conformed, or will
                  conform, in all material respects with the Exchange Act and
                  the applicable rules and regulations thereunder; the Offering
                  Memorandum as of the date thereof did not, and any amendment
                  or supplement thereto do not contain, and will not contain,
                  any untrue statement of a material fact and do not omit, and
                  will not omit, any material fact necessary in order to make
                  the statements made, in the light of the circumstances under
                  which they were made, not misleading; provided, however, that
                  the Company makes no representation or warranty as to
                  statements or omissions made in the Offering Memorandum or any
                  amendment or supplement thereto in reliance upon and in
                  conformity with written information furnished to the Company
                  by or on behalf of the Initial Purchaser specifically for use
                  therein;

                           (x)      the consolidated financial statements of the
                  Company and its consolidated subsidiaries, together with the
                  related notes and schedules, incorporated by reference in the
                  Offering Memorandum, present fairly in all material respects
                  the financial position and the results of operations and cash
                  flows of the Company and its consolidated subsidiaries, at the
                  indicated dates and for the indicated periods; such financial
                  statements and related schedules have been prepared in
                  accordance with generally accepted principles of accounting,
                  consistently applied throughout the periods involved, except
                  as disclosed therein, and all adjustments necessary for a fair
                  presentation of results for such periods

                                      -4-

<PAGE>

                  have been made; the summary financial and statistical data of
                  the Company and its subsidiaries included or incorporated by
                  reference in the Offering Memorandum together with all other
                  information included or incorporated by reference in the
                  Offering Memorandum present fairly in all material respects
                  the information shown therein and such data has been compiled
                  on a basis consistent with the financial statements presented
                  therein and the books and records of the Company;

                           (xi)     KPMG LLP, who has certified the financial
                  statements incorporated by reference in the Offering
                  Memorandum, is an independent public accountant as required by
                  the Securities Act and the applicable rules and regulations
                  thereunder;

                           (xii)    except as set forth in the Offering
                  Memorandum, there is no action, suit, claim or proceeding
                  pending or, to the Company's knowledge, threatened against the
                  Company or any of its subsidiaries before any court or
                  administrative agency or otherwise which, if determined
                  adversely to the Company or any of its subsidiaries, could
                  reasonably be expected to result in any material adverse
                  change in the earnings, business, management, properties,
                  assets, rights, operations, condition (financial or otherwise)
                  or prospects of the Company and its subsidiaries, taken as a
                  whole, or prevent the consummation of the transactions
                  contemplated hereby or in the Indenture, the Securities, the
                  Guarantees or the Registration Rights Agreement;

                           (xiii)   except as set forth in the Offering
                  Memorandum, each of the Company and its subsidiaries have good
                  and indefeasible title to all of the properties and assets
                  reflected in the consolidated financial statements hereinabove
                  described or described in the Offering Memorandum, subject to
                  no lien, mortgage, pledge, charge or encumbrance of any kind
                  except those reflected in such financial statements or
                  described in the Offering Memorandum or which are not material
                  in amount to the Company and its subsidiaries, taken as a
                  whole, and the Company and its subsidiaries occupy their
                  leased properties under valid and binding leases;

                           (xiv)    the Company and its subsidiaries have filed
                  all Federal, State, local and foreign tax returns which have
                  been required to be filed (or have valid extensions for
                  filing) and have paid all taxes indicated by such returns and
                  all assessments received by any of them to the extent that
                  such taxes have become due other than taxes and assessments
                  being contested in good faith, and except to the extent that
                  any such taxes, or the failure so to file or pay, would not be
                  material to the Company and its subsidiaries, taken as a
                  whole; all tax liabilities have been adequately provided for
                  in the financial statements of the Company, and the Company
                  does not know of any actual or proposed additional material
                  tax assessments not recorded, or reserved against, in the
                  financial statements of the Company;

                                      -5-

<PAGE>

                           (xv)     since the respective dates as of which
                  information is given in the Offering Memorandum, there has not
                  been any material adverse change or any development involving
                  a prospective material adverse change in or affecting the
                  earnings, business, management, properties, assets, rights,
                  operations, condition (financial or otherwise), or prospects
                  of the Company and its subsidiaries, taken as a whole, whether
                  or not occurring in the ordinary course of business, and there
                  has not been any material transaction entered into or any
                  material transaction that is probable of being entered into by
                  the Company or its subsidiaries, other than transactions in
                  the ordinary course of business and changes and transactions
                  described in the Offering Memorandum; the Company and its
                  consolidated subsidiaries have no material contingent
                  obligations that are not disclosed in the Company's financial
                  statements which are incorporated by reference in the Offering
                  Memorandum;

                           (xvi)    neither the Company nor any Guarantor is, or
                  with the giving of notice or lapse of time or both will be, in
                  violation of or in default under its organizational documents;
                  neither the Company nor any of its subsidiaries is, or with
                  the giving of notice or lapse of time or both, will be, in
                  violation of or in default under any agreement, lease,
                  contract, indenture or other instrument or obligation to which
                  it is a party or by which it, or any of its properties, is
                  bound, which violation or default would have a material
                  adverse effect on the earnings, business, management,
                  properties, assets, rights, operations, condition (financial
                  or otherwise) or prospects of the Company and its
                  subsidiaries, taken as a whole; the execution and delivery of
                  this Agreement, the Indenture, the Securities, the Guarantees
                  and the Registration Rights Agreement, the issuance and sale
                  of the Securities to the Initial Purchaser by the Company
                  pursuant to this Agreement, the issuance and sale of the
                  Guarantees to the Initial Purchaser by the Guarantors pursuant
                  to this Agreement, the issuance by the Company of the
                  Underlying Securities issuable upon conversion of the
                  Securities and the consummation of the transactions herein and
                  therein contemplated and the fulfillment of the terms hereof
                  and thereof (1) will not conflict with or result in a breach
                  of any of the terms or provisions of, or constitute a default
                  under, any indenture, mortgage, deed of trust or other
                  agreement or instrument to which the Company or any of its
                  subsidiaries is a party or by which the Company or any of its
                  subsidiaries or any of their respective properties is bound,
                  other than any such conflict, breach or default which will not
                  have a material adverse effect on the Company and its
                  subsidiaries, taken as a whole, (2) will not result in any
                  violation of the organizational documents of the Company or
                  any Guarantor and (3) will not result in the violation of any
                  law, order, rule or regulation, judgment, order, writ or
                  decree applicable to the Company or any Guarantor of any court
                  or of any government, regulatory body or administrative agency
                  or other governmental body having jurisdiction;

                           (xvii)   the execution and delivery of, and the
                  performance by the Company and each Guarantor of its
                  obligations under, this Agreement have been duly and validly
                  authorized by all necessary corporate or other action on the
                  part

                                      -6-

<PAGE>

                  of the Company and each Guarantor, and this Agreement has been
                  duly executed and delivered by the Company and each Guarantor;

                           (xviii)  the execution and delivery of, and the
                  performance by the Company and each Guarantor of its
                  obligations under, the Registration Rights Agreement have been
                  duly and validly authorized by all necessary corporate or
                  other action on the part of the Company and each Guarantor
                  and, when duly executed and delivered by the Company, the
                  Guarantors and the other parties thereto, the Registration
                  Rights Agreement will be a valid and binding agreement of the
                  Company and the Guarantors, enforceable against the Company
                  and each Guarantor in accordance with its terms, subject to
                  applicable bankruptcy, insolvency or similar laws affecting
                  creditors' rights generally and general principles of equity
                  and except as rights to indemnification and contribution set
                  forth therein may be limited under applicable law;

                           (xix)    each approval, consent, order,
                  authorization, designation, declaration or filing by or with
                  any regulatory, administrative or other governmental body
                  necessary in connection with the execution and delivery by the
                  Company and the Guarantors of this Agreement, the Indenture,
                  the Securities, the Guarantees and the Registration Rights
                  Agreement, as applicable, the issuance and sale of the
                  Securities to the Initial Purchaser by the Company pursuant to
                  this Agreement, the issuance and sale of the Guarantees to the
                  Initial Purchaser by the Guarantors pursuant to this
                  Agreement, the issuance of the Underlying Securities issuable
                  upon conversion of the Securities, and the consummation of the
                  transactions herein and therein contemplated has been obtained
                  or made and is in full force and effect, except for (A) the
                  effectiveness of the Shelf Registration Statement (as such
                  term is defined in the Registration Rights Agreement) under
                  the Securities Act, the qualification of the Indenture under
                  the Trust Indenture Act of 1939, as amended (the "Trust
                  Indenture Act") and compliance with state securities or Blue
                  Sky laws, in each case as contemplated by the Registration
                  Rights Agreement, (B) such additional steps as may be
                  necessary to qualify the Securities for public offering by the
                  Initial Purchaser under state securities or Blue Sky laws and
                  (C) such approvals, consents, orders, authorizations,
                  designations, declarations or filings to be obtained or made
                  prior to the Closing Date;

                           (xx)     each of the Company and its subsidiaries
                  hold all material licenses, certificates and permits from
                  governmental authorities which are necessary to the conduct of
                  the business of the Company and its subsidiaries, taken as a
                  whole; except as set forth in the Offering Memorandum, each of
                  the Company and its subsidiaries own or possess the right to
                  use all material patents, patent rights, trademarks, trade
                  names, service marks, service names, copyrights, license
                  rights, know-how (including trade secrets and other unpatented
                  and unpatentable proprietary or confidential information,
                  systems or procedures) and other intellectual property rights
                  ("Intellectual Property") necessary to carry on the business
                  of the Company and its subsidiaries, taken as a whole, in all
                  material respects; to the Company's knowledge, neither the
                  Company nor any of its

                                      -7-

<PAGE>

                  subsidiaries has infringed any Intellectual Property of any
                  other person or entity; except as set forth in the Offering
                  Memorandum, neither the Company nor any of its subsidiaries is
                  a party to or bound by any options, licenses or agreements
                  with respect to the Intellectual Property of any other person
                  or entity that are material to the Company and its
                  subsidiaries, taken as a whole; to the Company's knowledge,
                  none of the technology employed by the Company or its
                  subsidiaries has been obtained or is being used by the Company
                  or its subsidiaries in violation of any contractual obligation
                  binding on the Company or any of its subsidiaries or any of
                  its officers, directors or employees or otherwise in violation
                  of the rights of any persons; to the Company's knowledge,
                  neither the Company nor any of its subsidiaries has received
                  any written or oral communications alleging that the Company
                  or any of its subsidiaries has violated, infringed or
                  conflicted with, or, by conducting its business as set forth
                  in the Offering Memorandum, would violate, infringe or
                  conflict with, any of the Intellectual Property of any other
                  person or entity, except any such violation, infringement or
                  conflict that could not reasonably be expected to have a
                  material adverse effect on the Company and its subsidiaries,
                  taken as a whole; the Company knows of no infringement by
                  others of Intellectual Property owned by or licensed to the
                  Company or its subsidiaries;

                           (xxi)    neither the Company or any Guarantor is, and
                  after giving effect to the offering and sale of the Securities
                  and the application of the proceeds as described in the
                  Offering Memorandum neither of them will be, required to
                  register as an "investment company" as such term is defined in
                  the Investment Company Act of 1940, as amended (the
                  "Investment Company Act"), and the applicable rules and
                  regulations thereunder;

                           (xxii)   the Company and its subsidiaries comply in
                  all material respects with all Environmental Laws (as defined
                  below), except to the extent that failure to comply with such
                  Environmental Laws would not, individually or in the
                  aggregate, have a material adverse effect on the Company and
                  its subsidiaries, taken as a whole; neither the Company, nor
                  any of its subsidiaries is the subject of any pending or, to
                  the Company's knowledge, threatened federal, state or local
                  investigation evaluating whether any remedial action by the
                  Company or any of its subsidiaries is needed to respond to a
                  release of any Hazardous Materials (as defined below) into the
                  environment, resulting from the Company's or any of its
                  subsidiaries' business operations or ownership or possession
                  of any of their respective properties or assets or is in
                  contravention of any Environmental Law that could reasonably
                  be expected, individually or in the aggregate, to result in
                  any material adverse effect on the Company and its
                  subsidiaries, taken as a whole; neither the Company nor any of
                  its subsidiaries has received any notice or claim known to
                  management of the Company, nor are there pending or, to the
                  Company's knowledge, threatened lawsuits against them, with
                  respect to violations of an Environmental Law or in connection
                  with any release of any Hazardous Material into the
                  environment that could reasonably be expected in the aggregate
                  to result in a material adverse effect on the Company and its
                  subsidiaries, taken as a whole; as used herein, "Environmental
                  Laws" means any

                                      -8-

<PAGE>

                  federal, state or local law or regulation presently applicable
                  to the Company's or any of its subsidiaries' business
                  operations or ownership or possession of any of their
                  properties or assets relating to environmental matters, and
                  "Hazardous Materials" means those substances that are
                  regulated by or form the basis of liability under any
                  Environmental Laws;

                           (xxiii)  except as set forth in the Offering
                  Memorandum, the Company and each of its subsidiaries carry, or
                  are covered by, insurance in such amounts and covering such
                  risks as is adequate for the conduct of their respective
                  businesses and the value of their respective properties and as
                  is customary for companies engaged in similar businesses;

                           (xxiv)   none of the Company, the Guarantors or any
                  affiliate (as defined in Rule 501(b) of Regulation D under the
                  Securities Act, an "Affiliate") of the Company or the
                  Guarantors has directly, or, to the Company's knowledge,
                  through any agent, (A) sold, offered for sale, solicited
                  offers to buy or otherwise negotiated in respect of, any
                  security (as defined in the Securities Act) which is or will
                  be integrated with the sale of the Securities or the
                  Guarantees in a manner that would require the registration
                  under the Securities Act of the Securities or (B) offered,
                  solicited offers to buy or sold the Securities or the
                  Guarantees by any form of general solicitation or general
                  advertising (as those terms are used in Regulation D under the
                  Securities Act) or in any manner involving a public offering
                  within the meaning of Section 4(2) of the Securities Act;

                           (xxv)    the Securities satisfy the eligibility
                  requirements of Rule 144A(d)(3) under the Securities Act;

                           (xxvi)   the Company has timely filed all reports
                  required pursuant to Section 13 or Section 15(d) of the
                  Exchange Act during the preceding twelve months;

                           (xxvii)  the Securities, the Guarantees, the Common
                  Stock, the Rights, the Indenture, and the Registration Rights
                  Agreement each conform in all material respects to the
                  description thereof contained in the Offering Memorandum; and

                           (xxviii) assuming that (A) the representations and
                  warranties of the Initial Purchaser in Section 3 hereof are
                  true and correct and (B) the Initial Purchaser complies with
                  the covenants set forth in Section 3 hereof, the purchase and
                  sale of the Securities and the Guarantees pursuant hereto
                  (including the Initial Purchaser's proposed offering of the
                  Securities and the Guarantees on the terms and in the manner
                  set forth in the Offering Memorandum and Section 3 hereof) is
                  exempt from the registration requirements of the Securities
                  Act and does not require the qualification of an indenture
                  under the Trust Indenture Act.

                                      -9-

<PAGE>

         2.       PURCHASE, SALE AND DELIVERY OF THE SECURITIES.

                  (a)      On the basis of the representations, warranties and
         covenants herein contained, and subject to the conditions herein set
         forth, the Company agrees to issue and sell to the Initial Purchaser
         and the Initial Purchaser agrees to purchase from the Company, at a
         purchase price of 97.75% of the aggregate principal amount thereof (the
         "Purchase Price"), plus accrued interest, if any, from May 7, 2003 to
         the Closing Date, the Firm Securities. Each Security will be
         convertible at the option of the holder into shares of Common Stock at
         the conversion price set forth in the Securities (the "Conversion
         Price"), which Conversion Price is subject to adjustment upon the
         occurrence of certain events as provided in the Securities and the
         Indenture. One or more global securities representing the Firm
         Securities shall be registered by the Trustee in the name of the
         nominee of The Depository Trust Company ("DTC"), Cede & Co., credited
         to the accounts of such of its participants as the Initial Purchaser
         shall request, upon notice to the Company at least 48 hours prior to
         the Closing Date, with any transfer taxes payable in connection with
         the transfer of the Securities to the Initial Purchaser duly paid, and
         deposited with the Trustee as custodian for DTC on the Closing Date,
         against payment by or on behalf of the Initial Purchaser to the account
         of the Company of the aggregate Purchase Price therefor by wire
         transfer in immediately available funds. Delivery of and payment for
         the Firm Securities shall be made at the offices of Akin Gump Strauss
         Hauer & Feld LLP, 1900 Pennzoil Place, South Tower, 711 Louisiana
         Street, Houston, Texas 77002, at 9:30 a.m., New York City time, on May
         7, 2003, or at such other place, time or date not later than five
         business days thereafter as the Initial Purchaser and the Company may
         agree upon. Such time and date of delivery against payment are herein
         referred to as the "Closing Date." (As used herein, "business day"
         means a day on which The American Stock Exchange is open for trading
         and on which banks in New York are open for business and are not
         permitted by law or executive order to be closed.)

                  (b)      In addition, on the basis of the representations,
         warranties, and covenants herein contained, and subject to the terms
         and conditions herein set forth, the Company hereby grants an option,
         exercisable in whole or from time to time to the Initial Purchaser to
         purchase the Option Securities at the Purchase Price set forth in
         Section 2(a), plus accrued interest, if any, from May 7, 2003 to the
         Option Closing Date (as defined below). The Option Securities may be
         purchased in whole or in part (on not more than three occasions) (i) on
         the Closing Date or (ii) within 30 days after the Closing Date by the
         Initial Purchaser by delivering prior written notice to the Company
         setting forth the aggregate principal amount of Option Securities as to
         which the Initial Purchaser is exercising the option and the time and
         date for delivery of and payment for such Option Securities. The time
         and date for delivery of and payment for such Option Securities shall
         be determined by the Initial Purchaser but shall not be earlier than
         three nor later than 10 full business days after delivery of notice of
         the Initial Purchaser's election to exercise the option, nor in any
         event prior to the Closing Date or later than 30 days following the
         Closing Date (each such time and date being herein referred to as an
         "Option Closing Date"). If a date of exercise of the option is two or
         more days before the Closing Date, the notice of exercise shall set the
         Closing Date as the Option Closing Date. The Initial Purchaser may
         cancel such option at any time prior to its expiration by

                                      -10-

<PAGE>

         giving written notice of such cancellation to the Company. To the
         extent, if any, that the option is exercised, payment for the Option
         Securities shall be made on the relevant Option Closing Date to the
         account of the Company by wire transfer in immediately available funds.

         3.       OFFERING BY THE INITIAL PURCHASER.

                  (a)      The Initial Purchaser represents and warrants to the
         Company and the Guarantors that it is a qualified institutional buyer
         (a "QIB") within the meaning of Rule 144A and an "accredited investor"
         within the meaning of Rule 501(a) under the Securities Act. It is
         understood that the Initial Purchaser will offer and sell the
         Securities in accordance with this Section as soon as it deems it
         advisable to do so. The Securities are to be initially offered at the
         offering price set forth in the Offering Memorandum. The Initial
         Purchaser may from time to time thereafter change the price and other
         selling terms.

                  (b)      The Initial Purchaser understands and acknowledges
         that the Securities, the Guarantees and the Underlying Securities to be
         issued upon conversion of the Securities have not been and will not be
         registered under the Securities Act (except as contemplated by the
         Registration Rights Agreement) and may not be offered or sold, except
         in compliance with the registration requirements of the Securities Act
         or pursuant to an exemption from, or in a transaction not subject to,
         the registration requirements of the Securities Act; accordingly, the
         Initial Purchaser agrees that it will offer and sell the Securities
         only in accordance with Rule 144A under the Securities Act ("Rule
         144A") to persons it reasonably believes to be QIBs.

                  (c)      The Initial Purchaser represents and agrees that
         neither it nor any person acting on its behalf has engaged or will
         engage in any form of general solicitation or general advertising (as
         those terms are used in Regulation D under the Securities Act).

                  (d)      The Initial Purchaser also represents and agrees that
         it has not entered and will not enter into any contractual arrangement
         with any distributor with respect to the distribution or delivery of
         the Securities, except with its affiliates or with the prior written
         consent of the Company.

         4.       COVENANTS OF THE COMPANY AND THE GUARANTORS.

         Each of the Company and the Guarantors covenants with the Initial
Purchaser that:

                  (a)      The Company and the Guarantors will furnish to the
         Initial Purchaser and counsel for the Initial Purchaser, without
         charge, during the period mentioned in paragraph (d) below, as many
         copies of the Offering Memorandum, any documents incorporated by
         reference therein (other than exhibits thereto) and any supplements or
         amendments thereto as it may reasonably request.

                  (b)      The Company and the Guarantors will furnish to the
         Initial Purchaser a copy of each proposed amendment or supplement to
         the Offering Memorandum, and not use any such proposed amendment or
         supplement to which the Initial Purchaser

                                      -11-

<PAGE>

         reasonably objects in writing; after the date hereof and prior to the
         completion of the distribution of the Securities by the Initial
         Purchaser (as determined by the Initial Purchaser), neither the Company
         nor any Guarantor will file any document under the Exchange Act which
         is incorporated by reference in the Offering Memorandum, in each case
         unless the Initial Purchaser previously has been advised of, and
         furnished with a copy within a reasonable period of time prior to, the
         proposed filing, and if such proposed filing contains material
         non-public information, the Initial Purchaser agrees to enter into a
         confidentiality agreement with respect to such information if
         reasonably requested by the Company. The Company and the Guarantors
         will advise the Initial Purchaser of the time when any amendment or
         supplement to the Offering Memorandum has been made or when any
         document filed under the Exchange Act which is incorporated by
         reference in the Offering Memorandum has been filed with the Commission
         and will provide evidence satisfactory to the Initial Purchaser of each
         such amendment, supplement or filing.

                  (c)      The Company and the Guarantors will cooperate with
         the Initial Purchaser in endeavoring to qualify the Securities and
         Guarantees for sale under the securities laws of such jurisdictions as
         the Initial Purchaser may reasonably have designated in writing and
         will make such applications, file such documents, and furnish such
         information as may be reasonably required for that purpose, provided
         that neither the Company nor the Guarantors shall be required to
         qualify as a foreign corporation or other foreign entity or to file a
         general consent to service of process in any jurisdiction (i) where it
         is not now so qualified or required to file such a consent or (ii)
         where it is not now subject to taxation but would become subject to
         taxation as a result of such qualification or filing. The Company and
         the Guarantors will, from time to time, prepare and file such
         statements, reports, and other documents, as are or may be required to
         continue such qualifications in effect for so long a period as the
         Initial Purchaser may reasonably request for distribution of the
         Securities.

                  (d)      If at any time prior to the date on which all of the
         Securities shall have been sold by the Initial Purchaser, any event
         shall occur as a result of which, in the judgment of the Company or in
         the reasonable opinion of the Initial Purchaser, it becomes necessary
         to amend or supplement the Offering Memorandum in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading, or, if it is necessary at any time to amend
         or supplement the Offering Memorandum to comply with applicable law,
         the Company and the Guarantors will promptly prepare an appropriate
         amendment or supplement to the Offering Memorandum so that the Offering
         Memorandum as so amended or supplemented will not contain statements
         that, in the light of the circumstances under which they were made, are
         misleading, or so that the Offering Memorandum will comply with
         applicable law.

                  (e)      No offering, sale, short sale or other disposition of
         any shares of Common Stock or other securities convertible into or
         exchangeable or exercisable for shares of Common Stock or derivative of
         Common Stock (or agreement for such) will be made for a period of 60
         days after the date of the Offering Memorandum, directly or indirectly,
         by the Company otherwise than hereunder or with the prior written
         consent

                                      -12-

<PAGE>

         of the Initial Purchaser. The foregoing sentence shall not apply to the
         issuance by the Company of any shares of Common Stock upon (A) the
         exercise of outstanding options or warrants or options issued pursuant
         to the Company's existing or former stock option plans, or the
         Company's proposed incentive plan, described in the Offering
         Memorandum, (B) the conversion of the Securities, or (C) the entering
         into of matching transactions pursuant to the Company's 401(k) plan.

                  (f)      The Company shall have caused each executive officer
         and director of the Company to furnish to the Initial Purchaser, dated
         the date of this agreement, a letter or letters, in form and substance
         satisfactory to the Initial Purchaser, pursuant to which each such
         person shall agree not to offer, sell, sell short or otherwise dispose
         of any shares of Common Stock or other capital stock of the Company, or
         any other securities convertible, exchangeable or exercisable for
         Common Stock or derivative of Common Stock owned by such person or
         request the registration for the offer or sale of any of the foregoing
         (or as to which such person has the right to direct the disposition of)
         for a period of 60 days after the date of the Offering Memorandum,
         directly or indirectly, except with the prior written consent of the
         Initial Purchaser ("Lockup Agreements").

                  (g)      Neither the Company nor any Guarantor will, nor will
         it permit any of its Affiliates (as defined in Rule 501(b) under the
         Securities Act) to, during the two-year period following the closing of
         the Offering, resell any Securities that have been acquired by any of
         them.

                  (h)      Except as contemplated by the Registration Rights
         Agreement, none of the Company, the Guarantors, any of their respective
         Affiliates, or any authorized person acting on its or their behalf
         will, directly or indirectly, make offers or sales of any security, or
         solicit offers to buy any security, under circumstances that would
         require the registration of the Securities, the Guarantees or the
         Underlying Securities issuable upon conversion of the Securities under
         the Securities Act.

                  (i)      None of the Company, the Guarantors, any of their
         respective Affiliates, or any person acting on its or their behalf will
         engage in any form of general solicitation or general advertising (as
         those terms are used in Rule 502(c) under the Securities Act) in
         connection with any offer or sale of the Securities or the Guarantees
         in the United States.

                  (j)      So long as any of the Securities, the Guarantees or
         the Underlying Securities issuable upon conversion of the Securities
         are "restricted securities" within the meaning of Rule 144(a)(3) under
         the Securities Act, the Company and the Guarantors will, during any
         period in which it is not subject to and in compliance with Section 13
         or 15(d) of the Exchange Act, provide to each holder of such restricted
         securities and to each prospective purchaser (as designated by such
         holder) of such restricted securities, upon the request of such holder
         or prospective purchaser, any information required to be provided by
         Rule 144A(d)(4) under the Securities Act. This covenant is intended to
         be for the benefit of the holders, and the prospective purchasers
         designated by such holders, from time to time of such restricted
         securities.

                                      -13-

<PAGE>

                  (k)      The Company will cooperate with the Initial Purchaser
         and use all reasonable efforts to (i) permit the Securities to be
         eligible for clearance and settlement through the facilities of DTC and
         such other clearance and settlement systems that the Initial Purchaser
         may designate and (ii) arrange to have the Securities be designated as
         PORTAL-eligible securities in accordance with the rules and regulations
         of the NASD relating to the PORTAL Market.

                  (l)      The Company will use all reasonable efforts to cause
         the Underlying Securities issuable upon conversion of the Securities to
         be duly authorized for listing by The American Stock Exchange on or
         prior to the Closing Date and ensure that the Underlying Securities
         issuable upon conversion of the Securities remain authorized for
         listing following the Closing Date.

                  (m)      The Company shall deposit the net proceeds of its
         sale of the Securities as set forth in the Offering Memorandum.

                  (n)      The Company shall not invest, or otherwise use the
         proceeds received by the Company from its sale of the Securities in
         such a manner as would require the Company to register as an
         "investment company" under the Investment Company Act.

                  (o)      The Company will not take, directly or indirectly,
         any action designed to cause or result in, or that has constituted or
         could reasonably be expected to constitute, the unlawful stabilization
         or manipulation of the price of any securities of the Company.

                  (p)      The Company has issued 8-7/8% Senior Notes due 2007
         (the "EXISTING NOTES"). On or before the Closing Date, the Company will
         deliver to the Trustee a redemption notice in compliance with the terms
         of the indentures governing the Existing Notes (the "EXISTING
         INDENTURES"). The redemption price will be $165 million in principal,
         plus the applicable premium and accrued and unpaid interest through the
         redemption date. On the Closing Date, the Company will deposit with the
         Paying Agent for the Existing Notes a portion of the redemption price
         equal to $150 million in principal, plus the applicable premium and
         accrued and unpaid interest through the redemption date. The Company
         will deposit the remaining balance of the redemption price with the
         Paying Agent for the Existing Notes on or before one business day
         preceding the redemption date. If (i) the Initial Purchaser exercises
         its option to purchase all or any portion of the Option Securities and
         the Company's ability to issue the Option Securities under the Existing
         Indentures is subject to its ability to satisfy the Consolidated
         Interest Coverage Ratio (as defined in the Existing Indentures), and
         (ii) the Company's ability to satisfy the Consolidated Interest
         Coverage Ratio requires it to redeem an additional portion of the
         Existing Notes, then the Company will redeem an additional portion of
         the Existing Notes in an amount sufficient to permit the Company to
         satisfy the Consolidated Interest Coverage Ratio and will, immediately
         upon the issuance of the Option Securities, deposit the proceeds from
         such issuance with the Trustee (together with any additional funds
         needed to deposit the total redemption price).

                                      -14-

<PAGE>

         5.       COSTS AND EXPENSES.

         The Company will pay all costs, expenses and fees incident to the
performance of its obligations under this Agreement, including, without limiting
the generality of the foregoing, the following: accounting fees of the Company;
the fees and disbursements of counsel for the Company; the cost of printing and
delivering to, or as requested by, the Initial Purchaser copies of the Offering
Memorandum and any supplements or amendments thereto and the printing and
production of all other documents connected with the Offering (including this
Agreement, the Indenture, the Registration Rights Agreement and any other
related agreements); the Listing Fee of The American Stock Exchange; the
expenses arising from having the Securities designated as eligible for trading
in the PORTAL Market; the expenses associated with the preparation, issuance and
delivery to the Initial Purchaser of the Securities; the fees and expenses of
the Trustee; lodging expenses of officers and other representatives of the
Company in connection with the "roadshow" and any other meetings with
prospective investors in the Securities; the costs and expenses of advertising
relating to the Offering (other than advertising costs and expenses that the
Initial Purchaser expressly agrees to pay); and the expenses (not to exceed
$5,000), including the fees and disbursements of counsel for the Initial
Purchaser, incurred in connection with the qualification of the Securities under
State securities or Blue Sky laws. Neither the Company nor the Guarantors shall,
however, be required to pay for any of the Initial Purchaser's expenses (other
than those related to qualification under State securities or Blue Sky laws)
except that, if this Agreement shall not be consummated because the conditions
in Section 6 hereof are not satisfied, or because this Agreement is terminated
by the Initial Purchaser pursuant to Section 9 hereof, or by reason of any
failure, refusal or inability on the part of the Company or the Guarantors to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on their part to be performed, unless such failure,
refusal or inability is due primarily to the default or omission of the Initial
Purchaser, the Company and the Guarantors shall reimburse the Initial Purchaser
for reasonable out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred in connection with the Offering; but neither the
Company nor the Guarantors shall in any event be liable to the Initial Purchaser
for damages on account of loss of anticipated profits from the sale by it of the
Securities.

         6.       CONDITIONS OF OBLIGATIONS OF THE INITIAL PURCHASER.

         The obligation of the Initial Purchaser to purchase the Firm Securities
on the Closing Date and any Option Securities on an Option Closing Date are
subject to the accuracy, as of the Closing Date or the relevant Option Closing
Date, as the case may be, of the representations and warranties of the Company
and the Guarantors contained herein, and to the performance by the Company and
each Guarantor of its covenants and obligations hereunder and to the following
additional conditions (any of which may be waived in writing by the Initial
Purchaser):

                  (a)      The Initial Purchaser shall have received on the
         Closing Date or the relevant Option Closing Date, as the case may be,
         an opinion of Porter & Hedges, L.L.P., outside counsel for the Company,
         dated the Closing Date or the relevant Option Closing Date, as the case
         may be, addressed to the Initial Purchaser (and stating that it may be
         relied upon by counsel to the Initial Purchaser) substantially to the
         effect that:

                                      -15-

<PAGE>

                           (i)      each of the Company and the Guarantors is
                  validly existing as a corporation or other entity in good
                  standing under the laws of the state of its formation, with
                  the power and authority as a corporation or other entity to
                  own or lease its properties and conduct its business as
                  described in the Offering Memorandum; the outstanding shares
                  of capital stock of the Company have been duly authorized and
                  validly issued and are fully paid and non-assessable; to the
                  knowledge of such counsel except as described in or
                  contemplated by the Offering Memorandum, there are no
                  outstanding securities of the Company convertible or
                  exchangeable into or evidencing the right to purchase or
                  subscribe for any shares of capital stock of the Company and
                  there are no outstanding or authorized options, warrants or
                  rights of any character obligating the Company to issue any
                  shares of its capital stock or any securities convertible or
                  exchangeable into or evidencing the right to purchase or
                  subscribe for any shares of such stock;

                           (ii)     the statements under the captions
                  "Description of Notes," "Description of Capital Stock" and
                  "Notice to Investors; Transfer Restrictions" in the Offering
                  Memorandum, insofar as such statements constitute a summary of
                  the documents referred to therein or matters of law, provide a
                  fair and accurate summary in all material respects of the
                  information called for with respect to such documents and
                  matters;

                           (iii)    this Agreement has been duly authorized,
                  executed and delivered by the Company and each Guarantor;

                           (iv)     the Registration Rights Agreement has been
                  duly authorized, executed and delivered by the Company and
                  each Guarantor and, assuming due authorization, execution and
                  delivery by the Initial Purchaser, constitutes a valid and
                  binding obligation of the Company and each Guarantor
                  enforceable in accordance with its terms, subject to
                  applicable bankruptcy, insolvency or similar laws affecting
                  creditors' rights generally and general principles of equity
                  and except as rights to indemnification and contribution set
                  forth therein may be limited under applicable law;

                           (v)      the Indenture has been duly authorized,
                  executed and delivered by the Company and each Guarantor, and,
                  assuming due authorization, execution and delivery by the
                  Trustee, constitutes a valid and binding obligation of the
                  Company and each Guarantor enforceable in accordance with its
                  terms, subject to applicable bankruptcy, insolvency or similar
                  laws affecting creditors' rights generally and general
                  principles of equity; and the Securities and the Guarantees
                  have been duly authorized and, when executed by the Company
                  and each Guarantor, as applicable, and authenticated by the
                  Trustee in accordance with the provisions of the Indenture and
                  delivered to and paid for by the Initial Purchaser pursuant to
                  this Agreement, will constitute valid and binding obligations
                  of the Company and each Guarantor, as applicable, subject to
                  the effects of applicable bankruptcy, insolvency and similar
                  laws affecting creditors' rights generally and equitable
                  principles of general applicability;

                                      -16-

<PAGE>

                           (vi)     assuming (A) the accuracy of the
                  representations and warranties of the Company, the Guarantors
                  and the Initial Purchaser contained herein, (B) the Initial
                  Purchaser complies with the covenants set forth in Section 3
                  hereof and (C) the Company and the Guarantors comply with the
                  covenants set forth in Section 4, the purchase and sale of the
                  Securities and Guarantees pursuant hereto (including the
                  Initial Purchaser's proposed offering of the Securities on the
                  terms and in the manner set forth in the Offering Memorandum
                  and Section 3 hereof) is exempt from the registration
                  requirements of the Securities Act and does not require the
                  qualification of an indenture under the Trust Indenture Act,
                  it being understood that no opinion is expressed as to any
                  subsequent resale of a Security, Guarantee or shares of Common
                  Stock issued upon conversion of the Securities;

                           (vii)    the shares of Common Stock initially
                  issuable upon conversion of the Securities have been duly
                  authorized and reserved for issuance upon conversion of the
                  Securities by all necessary corporate action of the Company
                  and when issued will be validly issued, fully paid and
                  non-assessable; and no preemptive rights of stockholders exist
                  under the statutory laws of Texas, under the articles of
                  incorporation or bylaws of the Company or, to such counsel's
                  knowledge, under any contractual arrangement binding upon the
                  Company with respect to any of the shares of Common Stock to
                  be issued upon conversion of the Securities; the Rights, if
                  any, issuable upon conversion of the Securities in accordance
                  with the terms of the Indenture and the Rights Agreement, will
                  have been validly issued;

                           (viii)   the execution and delivery of this
                  Agreement, the Indenture, the Securities, the Guarantees and
                  the Registration Rights Agreement, and the issuance and sale
                  of the Securities to the Initial Purchaser by the Company
                  pursuant to this Agreement, the issuance and sale of the
                  Guarantees to the Initial Purchaser by the Guarantors pursuant
                  to this Agreement, the issuance of the Underlying Securities
                  issuable upon conversion of the Securities, and the
                  consummation of the transactions herein and therein
                  contemplated do not and will not conflict with or result in a
                  breach of any of the terms or provisions of, or constitute a
                  default under, the organizational documents of the Company or
                  the Guarantors, or any indenture, mortgage, deed of trust or
                  other agreement or instrument known to such counsel that is
                  material to the Company and its subsidiaries, taken as a
                  whole, or filed as an exhibit to the Company's most recent
                  annual report on Form 10-K or any subsequent quarterly report
                  on Form 10-Q or any law, order, rule or regulation, judgment,
                  order, writ or decree known to such counsel to be applicable
                  to the Company or any of its subsidiaries of any court or of
                  any government, regulatory body or administrative agency or
                  other governmental body having jurisdiction;

                           (ix)     no approval, consent, order, authorization,
                  designation, declaration or filing by or with any New York or
                  Federal regulatory, administrative or other governmental body
                  is necessary in connection with the execution and delivery of
                  this Agreement, the Indenture, the Guarantees, the Securities
                  and the Registration Rights Agreement, the issuance and sale
                  of the

                                      -17-

<PAGE>

                  Securities to the Initial Purchaser by the Company pursuant to
                  this Agreement, the issuance and sale of the Guarantees to the
                  Initial Purchaser by the Guarantors pursuant to this
                  Agreement, the issuance of the Underlying Securities upon
                  conversion of the Securities, or the consummation of the
                  transactions herein and therein contemplated, except (A) such
                  as have been obtained or made, (B) as may be required by State
                  securities or Blue Sky laws, the National Association of
                  Securities Dealers, Inc., The American Stock Exchange and the
                  PORTAL Market (as to which such counsel need express no
                  opinion) and (C) the effectiveness of the Shelf Registration
                  Statement (as such term is defined in the Registration Rights
                  Agreement) under the Securities Act and the qualification of
                  the Indenture under the Trust Indenture Act, in each case as
                  contemplated by the Registration Rights Agreement;

                           (x)      each document filed, or to be filed prior to
                  the closing of the Offering, by the Company pursuant to the
                  Exchange Act and incorporated, or to be incorporated, by
                  reference in the Offering Memorandum (or any amendment or
                  supplement thereto) at the time filed with the Commission
                  complied, or will comply, in all material respects with the
                  Exchange Act and the applicable rules and regulations
                  thereunder as to form;

                           (xi)     neither the Company nor any Guarantor is,
                  and after giving effect to the offering and sale of the
                  Securities and the application of the net proceeds as
                  described in the Offering Memorandum none of them will be,
                  required to register as an "investment company" under the
                  Investment Company Act and the applicable rules and
                  regulations thereunder;

                           (xii)    the statements under the caption "Certain
                  U.S. Federal Income Tax Considerations" in the Offering
                  Memorandum, insofar as such statements constitute a summary of
                  matters of U.S. Federal tax laws referred to therein, provide
                  a fair and accurate summary in all material respects of such
                  matters under current law;

                           (xiii)   such counsel knows of no legal or
                  governmental proceedings pending or threatened against the
                  Company or any of its subsidiaries that are required to be set
                  forth in the Offering Memorandum and that are not so set forth
                  therein; and

                           (xiv)    nothing has come to the attention of such
                  counsel which leads them to believe that (A) the Company's
                  Annual Report on Form 10-K filed with the Commission on March
                  6, 2003 (including the information contained in the Company's
                  definitive Proxy Statement incorporated by reference in the
                  Annual Report (the "Incorporated Proxy Information")), as of
                  March 6, 2003 (and with respect to the Incorporated Proxy
                  Information, as of March 28, 2003), contained an untrue
                  statement of a material fact or omitted to state a material
                  fact necessary in order to make the statements therein, in the
                  light of the circumstances under which they were made as of
                  March 6, 2003 (and as of March 28, 2003 with respect to the
                  Incorporated Proxy Information), not misleading (except that
                  such

                                      -18-

<PAGE>

                  counsel need express no view as to financial statements,
                  schedules and statistical information therein) and (B) the
                  Offering Memorandum (excluding the information incorporated by
                  reference therein) as of its date or as of the Closing Date or
                  the relevant Option Closing Date, as the case may be,
                  contained or contains an untrue statement of a material fact
                  or omitted or omits to state a material fact necessary in
                  order to make the statements therein, in the light of the
                  circumstances under which they were made, not misleading
                  (except that such counsel need express no view as to financial
                  statements, schedules and statistical information therein).
                  With respect to such statement, such counsel may state that
                  they are not passing upon and are not assuming responsibility
                  for or the accuracy, completeness or fairness of the
                  statements in the Offering Memorandum (except as stated in
                  Section 6(a)(iii)) and that their belief is based upon the
                  procedures set forth therein (relying as to materiality on
                  statements of officers and directors of the Company), but is
                  without independent check and verification.

                  (b)      The Initial Purchaser shall have received from its
         counsel, Akin Gump Strauss Hauer & Feld LLP, on the Closing Date or the
         relevant Option Closing Date, as the case may be, an opinion dated the
         Closing Date or the relevant Option Closing Date, as the case may be,
         substantially to the effect specified in subparagraphs (iii), (iv),
         (v), (vi) and (vii) of paragraph (a) of this Section 6. In addition to
         the matters set forth above, such opinion shall also include a
         statement to the effect that nothing has come to the attention of such
         counsel which leads them to believe that the Offering Memorandum, as of
         its date or as of the Closing Date or the relevant Option Closing Date,
         as the case may be, contained or contains an untrue statement of a
         material fact or omitted or omits to state a material fact necessary in
         order to make the statements therein, in the light of the circumstances
         under which they were made, not misleading (except that such counsel
         need express no view as to financial statements, schedules and
         statistical information therein). With respect to such statement, Akin
         Gump Strauss Hauer & Feld LLP may state that their belief is based upon
         the procedures set forth therein, but is without independent check and
         verification.

                  (c)      The Initial Purchaser shall have received, on each of
         the date hereof, the Closing Date and, if applicable, any Option
         Closing Date, letters dated the date hereof, the Closing Date or the
         relevant Option Closing Date, as the case may be, in form and substance
         satisfactory to the Initial Purchaser, of KPMG LLP confirming that it
         is an independent public accountant within the meaning of the Exchange
         Act and the applicable published rules and regulations thereunder and
         stating that in its opinion the historical and pro forma financial
         statements and schedules of the Company examined by it and incorporated
         by reference in the Offering Memorandum comply as to form in all
         material respects with the applicable accounting requirements of the
         Exchange Act and the related published rules and regulations; and
         containing such other statements and information as is ordinarily
         included in accountants' "comfort letters" to underwriters with respect
         to the financial statements and certain financial and statistical
         information contained or incorporated by reference in the Offering
         Memorandum.

                  (d)      The Initial Purchaser shall have received on the
         Closing Date and, if applicable, any Option Closing Date, as the case
         may be, a certificate or certificates of

                                      -19-

<PAGE>

         the Chief Executive Officer and Chief Financial Officer of the Company
         and each Guarantor (or its general partner) to the effect that, as of
         the Closing Date or the relevant Option Closing Date, as the case may
         be, each of them severally represents as follows:

                           (i)      the representations and warranties of the
                  Company and the Guarantors contained in Section 1 hereof are
                  true and correct as of the Closing Date or the relevant Option
                  Closing Date, as the case may be;

                           (ii)     since the respective dates as of which
                  information is given in the Offering Memorandum, there has not
                  been any material adverse change or any development known to
                  him involving a prospective material adverse change in or
                  affecting the business, management, properties, assets,
                  rights, operations, condition (financial or otherwise) or
                  prospects of the Company and its subsidiaries, taken as a
                  whole, whether or not arising in the ordinary course of
                  business; and

                           (iii)    the Company and each Guarantor has performed
                  all covenants and agreements and satisfied all conditions on
                  its part to be performed or satisfied at or prior to the
                  Closing Date or the relevant Option Closing Date, as the case
                  may be.

                  (e)      The Company and the Guarantors shall have furnished
         to the Initial Purchaser such further certificates and documents
         confirming the representations and warranties, covenants and conditions
         contained herein and related matters as the Initial Purchaser may
         reasonably have requested.

                 (f)      The Underlying Securities issuable upon conversion of
         the Securities shall have been duly listed, subject to notice of
         issuance, on The American Stock Exchange and the Securities shall have
         been designated as PORTAL-eligible securities.

                  (g)      Each of the Indenture and the Registration Rights
         Agreement shall have been executed and delivered by all the parties
         thereto.

                  (h)      The Lockup Agreements described in Section 4(f) shall
         be in full force and effect.

                  (i)      The Company shall have given the initial redemption
         notice and deposited the portion of the redemption price described in
         Section 4(p) above.

         The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Initial Purchaser.

         If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the Initial Purchaser may terminate its obligations hereunder by
notifying the Company of such termination in writing or by telegram at or prior
to the Closing Date or the relevant Option Closing Date, as the case may be. In
such event, the Company and the Guarantors, on the one hand, and the Initial
Purchaser

                                      -20-

<PAGE>

on the other hand, shall not be under any obligation to each other (except to
the extent provided in Sections 5 and 7 hereof).

         7.       INDEMNIFICATION.

                   (a)      Each of the Company and the Guarantors jointly and
         severally agrees:

                  (i)      to indemnify and hold harmless the Initial Purchaser
         and each person, if any, who controls the Initial Purchaser within the
         meaning of either Section 15 of the Securities Act or Section 20 of the
         Exchange Act, against any losses, claims, damages or liabilities to
         which the Initial Purchaser or any such controlling person may become
         subject under the Securities Act or otherwise, insofar as such losses,
         claims, damages or liabilities (or actions or proceedings in respect
         thereof) arise out of or are based upon (A) any untrue statement or
         alleged untrue statement of any material fact contained in the Offering
         Memorandum or any amendment or supplement thereto or (B) 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 in the light of the circumstances under which they were
         made; provided, however, that neither the Company nor any Guarantor
         will be liable under this subsection (a), to the extent that any such
         loss, claim, damage or liability arises out of or is based upon an
         untrue statement or alleged untrue statement, or omission or alleged
         omission made in the Offering Memorandum, or such amendment or
         supplement, in reliance upon and in conformity with written information
         furnished to the Company by or on behalf of the Initial Purchaser
         specifically for use therein; and

                  (ii)     to reimburse the Initial Purchaser and each such
         controlling person upon demand for any legal or other out-of-pocket
         expenses reasonably incurred by the Initial Purchaser or such
         controlling person in connection with investigating or defending any
         such loss, claim, damage or liability, action or proceeding or in
         responding to a subpoena or governmental inquiry related to the
         offering of the Securities, whether or not the Initial Purchaser or
         controlling person is a party to any action or proceeding. In the event
         that it is finally judicially determined that the Initial Purchaser was
         not entitled to receive payments for legal and other expenses pursuant
         to this subparagraph, the Initial Purchaser will promptly return all
         sums that had been advanced pursuant hereto.

                  (b)      The Initial Purchaser will indemnify and hold
         harmless the Company, the Guarantors, their respective directors and
         officers and each person, if any, who controls the Company or the
         Guarantors within the meaning of the Securities Act or the Exchange
         Act, against any losses, claims, damages or liabilities to which the
         Company, the Guarantors or any such director, officer or controlling
         person may become subject under the Securities Act or the Exchange Act
         or otherwise, insofar as such losses, claims, damages or liabilities
         (or actions or proceedings in respect thereof) arise out of or are
         based upon (i) any untrue statement or alleged untrue statement of any
         material fact contained in the Offering Memorandum or any amendment or
         supplement thereto, or (ii) the omission or the alleged omission to
         state therein a material fact required to be stated therein or
         necessary to make the statements therein not misleading in the light of
         the circumstances under which they were made; and will reimburse upon
         demand any legal or other expenses reasonably incurred by the Company
         or any such director,

                                      -21-

<PAGE>

         officer or controlling person in connection with investigating or
         defending any such loss, claim, damage, liability, action or proceeding
         or in responding to a subpoena or governmental inquiry related to the
         offering of the Securities, whether or not the Company, a Guarantor or
         any such director, officer or controlling person is a party to any
         action or proceeding; provided, however, that the Initial Purchaser
         will be liable in each case to the extent, but only to the extent, in
         the case of clauses (i) and (ii), that such untrue statement or alleged
         untrue statement or omission or alleged omission has been made in the
         Offering Memorandum or such amendment or supplement, in reliance upon
         and in conformity with written information furnished to the Company by
         or on behalf of the Initial Purchaser specifically for use therein.
         This indemnity agreement will be in addition to any liability which the
         Initial Purchaser may otherwise have.

                  (c)      In case any proceeding (including any governmental
         investigation) shall be instituted involving any person in respect of
         which indemnity may be sought pursuant to this Section 7, such person
         (the "indemnified party") shall promptly notify the person against whom
         such indemnity may be sought (the "indemnifying party") in writing. No
         indemnification provided for in Section 7(a) or (b) shall be available
         to any party who shall fail to give notice as provided in this Section
         7(c) if the party to whom notice was not given was unaware of the
         proceeding to which such notice would have related and was materially
         prejudiced by the failure to give such notice, but the failure to give
         such notice shall not relieve the indemnifying party or parties from
         any liability which it or they may have to the indemnified party for
         contribution or otherwise than on account of the provisions of Section
         7(a) or (b). In case any such proceeding shall be brought against any
         indemnified party and it shall notify the indemnifying party of the
         commencement thereof, the indemnifying party shall be entitled to
         participate therein and, to the extent that it shall wish, jointly with
         any other indemnifying party similarly notified, to assume the defense
         thereof, with counsel reasonably satisfactory to such indemnified party
         and shall pay as incurred (or within 30 days of presentation) the fees
         and disbursements of such counsel related to such proceeding. In any
         such proceeding, any indemnified party shall have the right to retain
         its own counsel at its own expense. Notwithstanding the foregoing, the
         indemnifying party shall pay as incurred (or within 30 days of
         presentation) the fees and expenses of the counsel retained by the
         indemnified party in the event (i) the indemnifying party and the
         indemnified party shall have mutually agreed to the retention of such
         counsel, (ii) the named parties to any such proceeding (including any
         impleaded parties) include both the indemnifying party and the
         indemnified party and representation of both parties by the same
         counsel would be inappropriate due to actual or potential differing
         interests between them or (iii) the indemnifying party shall have
         failed to assume the defense and employ counsel reasonably acceptable
         to the indemnified party within a reasonable period of time after
         notice of commencement of the action. It is understood that the
         indemnifying party shall not, in connection with any proceeding or
         related proceedings in the same jurisdiction, be liable for the
         reasonable fees and expenses of more than one separate firm for all
         such indemnified parties. Such firm shall be designated in writing by
         the Initial Purchaser in the case of 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 not be liable
         for any settlement of any proceeding effected without its written
         consent but if settled with such consent or if there be a final
         judgment for the plaintiff,

                                      -22-

<PAGE>

         the indemnifying party agrees to indemnify the indemnified party from
         and against any loss or liability by reason of such settlement or
         judgment. In addition, the indemnifying party will not, without the
         prior written consent of the indemnified party, settle or compromise or
         consent to the entry of any judgment in any pending or threatened
         claim, action or proceeding of which indemnification may be sought
         hereunder (whether or not any indemnified party is an actual or
         potential party to such claim, action or proceeding) unless such
         settlement, compromise or consent includes an unconditional release of
         each indemnified party from all liability arising out of such claim,
         action or proceeding.

                  (d)      To the extent the indemnification provided for in
         this Section 7 is unavailable to or insufficient to hold harmless an
         indemnified party under Section 7(a) or (b) above in respect of any
         losses, claims, damages or liabilities (or actions or proceedings in
         respect thereof) referred to therein, except by reason of the
         exceptions set forth in Section 7(a) or 7(b) the failure of the
         indemnified party to give notice as required in Section 7(c), then each
         indemnifying party shall contribute to the amount paid or payable by
         such indemnified party as a result of such losses, claims, damages or
         liabilities (or actions or proceedings in respect thereof) in such
         proportion as is appropriate to reflect the relative benefits received
         by the Company and the Guarantors on the one hand and the Initial
         Purchaser on the other from the offering of the Securities. If,
         however, the allocation provided by the immediately preceding sentence
         is not permitted by applicable law then each indemnifying party shall
         contribute to such amount paid or payable by such indemnified party in
         such proportion as is appropriate to reflect not only such relative
         benefits but also the relative fault of the Company and the Guarantors
         on the one hand and the Initial Purchaser on the other in connection
         with the statements or omissions which resulted in such losses, claims,
         damages or liabilities (or actions or proceedings in respect thereof),
         as well as any other relevant equitable considerations. The relative
         benefits received by the Company and the Guarantors on the one hand and
         the Initial Purchaser on the other shall be deemed to be in the same
         proportion as the total net proceeds from the Offering (before
         deducting expenses) received by the Company bear to the total discounts
         and commissions received by the Initial Purchaser. 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 Company and the Guarantors on the one hand or the
         Initial Purchaser on the other and the parties' relative intent,
         knowledge, access to information and opportunity to correct or prevent
         such statement or omission.

         The Company, the Guarantors and the Initial Purchaser agree that it
would not be just and equitable if contributions pursuant to this Section 7(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this Section 7(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim or
enforcing any rights hereunder. Notwithstanding the provisions of this
subsection (d), (i) the Initial Purchaser shall not be required to contribute
any amount in excess of the discounts and commissions applicable to the
Securities purchased by it and (ii) no person

                                      -23-

<PAGE>

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.

                  (e)      In any proceeding relating to the Offering Memorandum
         or any supplement or amendment thereto, each party against whom
         contribution may be sought under this Section 7 hereby consents to the
         jurisdiction of any court having jurisdiction over any other
         contributing party, agrees that process issuing from such court may be
         served upon it by any other contributing party and consents to the
         service of such process and agrees that any other contributing party
         may join it as an additional defendant in any such proceeding in which
         such other contributing party is a party.

                  (f)      Except as otherwise provided in this Section 7, any
         losses, claims, damages, liabilities or expenses for which an
         indemnified party is entitled to indemnification or contribution under
         this Section 7 shall be paid by the indemnifying party to the
         indemnified party as such losses, claims, damages, liabilities or
         expenses are incurred (or within 30 days of presentation). The
         indemnity and contribution agreements contained in this Section 7 and
         the representations and warranties of the Company and the Initial
         Purchasers set forth in this Agreement shall remain operative and in
         full force and effect, regardless of (i) any investigation made by or
         on behalf of the Initial Purchaser or any person controlling the
         Initial Purchaser, the Company, the Guarantors, their respective
         directors or officers or any persons controlling the Company or the
         Guarantors, (ii) acceptance of any Securities and payment therefor
         hereunder, and (iii) any termination of this Agreement. A successor to
         the Initial Purchaser, or any person controlling the Initial Purchaser,
         or to the Company, the Guarantors, their respective directors or
         officers, or any person controlling the Company or the Guarantors,
         shall be entitled to the benefits of the indemnity, contribution and
         reimbursement agreements contained in this Section 7.

         8.       NOTICES.

         All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Initial Purchaser, to Deutsche Bank
Securities Inc., 31 West 52nd Street, New York, New York 10019, Attention:
General Counsel; if to the Company, to Grey Wolf, Inc., 10370 Richmond Avenue,
Suite 600, Houston, Texas 77042, Attention: David W. Wehlmann, Executive Vice
President and Chief Financial Officer.

         9.       TERMINATION.

                  (a)      This Agreement may be terminated by the Initial
         Purchaser by notice to the Company at any time prior to the Closing
         Date or any Option Closing Date (if different from the Closing Date and
         then only as to the Option Securities to be purchased on such Option
         Closing Date) if any of the following has occurred: (i) since the date
         as of which information is given in the Offering Memorandum, any
         material adverse change or any development involving a prospective
         material adverse change in or affecting the earnings, business,
         management, properties, assets, rights, operations, condition
         (financial or otherwise) or prospects of the Company and its
         subsidiaries,

                                      -24-

<PAGE>

         taken as a whole, whether or not arising in the ordinary course of
         business, (ii) any outbreak or escalation of hostilities or declaration
         of war or national emergency or other national or international
         calamity or crisis or change in economic or political conditions if the
         effect of such outbreak, escalation, declaration, emergency, calamity,
         crisis or change on the financial markets of the United States would,
         in the Initial Purchaser's reasonable judgment, make it impracticable
         or inadvisable to market the Securities or to enforce contracts for the
         sale of the Securities, or (iii) suspension of trading in securities
         generally on The New York Stock Exchange, the American Stock Exchange
         or the Nasdaq National Market or limitation on prices (other than
         limitations on hours or numbers of days of trading) for securities on
         either such Exchange, (iv) the enactment, publication, decree or other
         promulgation of any statute, regulation, rule or order of any court or
         other governmental authority which in the Initial Purchaser's opinion
         materially and adversely affects or could reasonably be expected to
         materially and adversely affect the business or operations of the
         Company or the Guarantors, (v) the declaration of a banking moratorium
         by United States or New York State authorities, (vi) any downgrading,
         or placement on any watch list for possible downgrading, in the rating
         of any of the Company's or any Guarantor's debt securities by any
         "nationally recognized statistical rating organization" (as defined for
         purposes of Rule 436(g) under the Exchange Act); (vii) the suspension
         of trading of the Company's common stock by The American Stock
         Exchange, the Commission or any other governmental authority or, (viii)
         the taking of any action by any governmental body or agency in respect
         of its monetary or fiscal affairs which in the Initial Purchaser's
         reasonable opinion has a material adverse effect on the securities
         markets in the United States and would make it impracticable or
         inadvisable to market the Securities or to enforce contracts for the
         sale of the Securities; or

                  (b)      as provided in Section 6 of this Agreement.

         10.      SUCCESSORS.

         This Agreement has been and is made solely for the benefit of the
Initial Purchaser, the Company and the Guarantors and their respective
successors and assigns, and the officers, directors and controlling persons
referred to herein, and no other person will have any right or obligation
hereunder. No purchaser of any of the Securities from the Initial Purchaser
shall be deemed a successor or assign merely because of such purchase.

         11.      INFORMATION PROVIDED BY THE INITIAL PURCHASER.

         The Company, the Guarantors and the Initial Purchaser acknowledge and
agree that the only information furnished or to be furnished by the Initial
Purchaser to the Company and the Guarantors for inclusion in the Offering
Memorandum consists of the name of the Initial Purchaser on the front and back
covers of the Offering Memorandum and the information set forth in the second
sentence of the second paragraph, and the eighth and ninth paragraphs, in each
case under the heading "Plan of Distribution" (insofar as such information
relates to the Initial Purchaser).

                                      -25-

<PAGE>

         12.      MISCELLANEOUS.

         The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of the
Initial Purchaser or any controlling person thereof, or by or on behalf of the
Company, the Guarantors or their respective directors or officers or any
controlling person of the Company or the Guarantors, and (c) delivery of and
payment for the Securities under this Agreement

         This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

         This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York without regard to conflicts
of laws principles thereof.

                                      -26-

<PAGE>

         If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Guarantors
and the Initial Purchaser in accordance with its terms.

                           Very truly yours,

                           GREY WOLF, INC.

                           By:  /s/ DAVID W. WEHLMANN
                               _____________________________________
                               David W. Wehlmann, Executive Vice
                               President and Chief Financial Officer

                           GREY WOLF DRILLING COMPANY L.P.

                               By: GREY WOLF HOLDINGS COMPANY,
                                   ITS SOLE GENERAL PARTNER

                           By: /s/ DAVID W. WEHLMANN
                               --------------------------------------
                               Name:  David W. Wehlmann
                               Title: Executive Vice President and
                                      Chief Financial Officer

                           GREY WOLF LLC

                           By: /s/ DAVID W. WEHLMANN
                               --------------------------------------
                               Name:  David W. Wehlmann
                               Title: Executive Vice President and
                                      Chief Financial Officer

                           GREY WOLF HOLDINGS COMPANY

                           By: /s/ DAVID W. WEHLMANN
                               --------------------------------------
                               Name:  David W. Wehlmann
                               Title: Executive Vice President and
                                      Chief Financial Officer

                                      S-1

<PAGE>

                           MURCO DRILLING CORP.

                           By: /s/ DAVID W. WEHLMANN
                               -----------------------------------
                               David W. Wehlmann, Executive
                               Vice President and Chief
                               Financial Officer

                           GREY WOLF INTERNATIONAL, INC.

                           By: /s/ DAVID W. WEHLMANN
                               -----------------------------------
                               David W. Wehlmann, Executive
                               Vice President and Chief
                               Financial Officer

                           DI/PERFENSA, INC.

                           By: /s/ DAVID W. WEHLMANN
                               -----------------------------------
                               David W. Wehlmann, Executive
                               Vice President and Chief
                               Financial Officer

                           DI ENERGY, INC.

                           By: /s/ DAVID W. WEHLMANN
                               -----------------------------------
                               David W. Wehlmann, Executive
                               Vice President and Chief
                               Financial Officer

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

DEUTSCHE BANK SECURITIES INC.

By:      C. MITCHELL COX
    --------------------------
        Authorized Officer

                                      S-2

<PAGE>

                                   SCHEDULE A

                               INITIAL GUARANTORS

       NAME OF GUARANTOR                           STATE OF INCORPORATION
Grey Wolf Drilling Company L.P.                            Texas
         Grey Wolf LLC                                   Louisiana
  Grey Wolf Holdings Company                               Nevada
     Murco Drilling Corp.                                 Delaware
 Grey Wolf International, Inc.                             Texas
       DI/Perfensa, Inc.                                   Texas
        DI Energy, Inc.                                    Texas

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