Document:

<PAGE>

  NOTE. This form contract is a suggested guide only and use of this form or any
  variation thereof shall be at the sole discretion and risk of the user
  parties. Users of the form contract or any portion or variation thereof are
  encouraged to seek the advice of counsel to ensure that their contract
  reflects the complete agreement of the parties and applicable law. The
  International Association of Drilling Contractors disclaims any liability
  whatsoever for loss or damages which may result from use of the form contract
  or portions or variations thereof. Computer generated form, reproduced under
  license from IADC.

                                                              REVISED JULY, 1998

                INTERNATIONAL ASSOCIATION OF DRILLING CONTRACTORS

                              DRILLING BID PROPOSAL
                                       AND
                        DAYWORK DRILLING CONTRACT - U.S.

TO:
   ----------------------------------------
   ----------------------------------------

Please submit bid on this drilling contract form for performing the work
outlined below, upon the terms and for the consideration set forth, with the
understanding that if the bid is accepted by ___________________________________
this instrument will constitute a contract between us. Your bid should be mailed
or delivered not later than _____________ P.M. on _______________, ___________
to the following address: ____________________________________________________

            THIS AGREEMENT CONTAINS PROVISIONS RELATING TO INDEMNITY,
                  RELEASE OF LIABILITY, AND ALLOCATION OF RISK

THIS AGREEMENT (The "Contract") is made and entered into on the date hereinafter
set forth by and between the parties herein designated as "Operator" and
"Contractor".

     OPERATOR:      GMX RESOURCES, INC.
                    ------------------------------------------------------------
     ADDRESS:       ONE BENHAM PLACE, 9400 N. BROADWAY, SUITE 600
                    ------------------------------------------------------------
                    OKLAHOMA CITY, OK 73114
                    ------------------------------------------------------------

     CONTRACTOR:    NABORS DRILLING USA, INC.
                    ------------------------------------------------------------
     ADDRESS:       515 W. GREENS RD., SUITE 1000
                    ------------------------------------------------------------
                    HOUSTON, TX 77067
                    ------------------------------------------------------------

IN CONSIDERATION of the mutual promises, conditions and agreements herein
contained and the specifications and special provisions set forth in Exhibit
"A" and Exhibit "B" attached hereto and made a part hereof, Operator engages
Contractor as an Independent Contractor to drill the hereinafter designated
well or wells in search of oil or gas on a daywork basis.

For purposes hereof, the term "daywork basis" means Contractor shall furnish
equipment, labor, and perform services as herein provided, for a specified sum
per day under the direction, supervision and control of Operator (inclusive of
any employee, agent, consultant or subcontractor engaged by Operator to direct
drilling operations). When operating on a daywork basis, Contractor shall be
fully paid at the applicable rates of payment and assumes only the obligations
and liabilities stated herein. Except for such obligations and liabilities
specifically assumed by Contractor, Operator shall be solely responsible and
assumes liability for all consequences of operations by both parties while on a
daywork basis, including results and all other risks or liabilities incurred in
or incident to such operations.

1. LOCATION OF WELL:
   Well Name
   and Number: TO BE DESIGNATED BY OPERATOR.
               -----------------------------------------------------------------
   Parish/                                               Field
   County:                                  State:       Name:
               _____________________________      ______      __________________
   Well location and
   land description: N/A
                    ------------------------------------------------------------

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

   1.1 ADDITIONAL WELL LOCATIONS OR AREAS: TWO YEAR CONTRACT IN COTTON VALLEY
                                           FIELDS OF EAST TEXAS.
--------------------------------------------------------------------------------
Locations described above are for well and Contract identification only and
Contractor assumes no liability whatsoever for a proper survey or location stake
on Operator's lease.

2. COMMENCEMENT DATE:

   Contractor agrees to use reasonable efforts to commence operations for the
   drilling of the well by the 1 day of JULY, 2001, or
   AS SOON AS RIGS ARE AVAILABLE, INCLUDING RIG MOBILIZATION.
   -----------------------------------------------------------------------------

3. DEPTH:

   3.1 WELL DEPTH: The well(s) shall be drilled to a depth of approximately
   10,000 feet, or to the N/A _____________________formation, whichever is
   deeper, but the Contractor shall not be required hereunder to drill said
   well(s) below a maximum depth of 14,000 feet, unless Contractor and Operator
   mutually agree to drill to a greater depth.

4. DAYWORK RATES:
   Contractor shall be paid at the following rates for the work performed
   hereunder.

4.1 MOBILIZATION: Operator shall pay Contractor a mobilization fee of $* and a
    mobilization day rate of $14,000 per day. This sum shall be due and payable
    in full at the time the rig is rigged up or positioned at the well site
    ready to spud. Mobilization shall include:
    ACTUAL COST OF TRUCKS AND CRANES.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

4.2 DEMOBILIZATION: Operator shall pay Contractor a demobilization fee of
    $35,000 provided however that no demobilization fee shall be payable if the
    Contract is terminated due to the total loss or destruction of the rig.
    Demobilization shall include: TEAR DOWN, LOAD, HAUL OFF. (FINAL WELL OF
    CONTRACT)

4.3 MOVING RATE: During the time the rig is in transit to or from a drill site,
    or between drill sites, commencing on RIG RELEASE, Operator shall pay
    Contractor a sum of $14,000 per twenty-four (24) hour day.

4.4 OPERATING DAY RATE: For work performed per twenty-four (24) hour day with
    FIVE (5) man crew the operating day rate shall be:

      DEPTH INTERVALS
    From             To            WITHOUT DRILL PIPE            WITH DRILL PIPE

      0             T.D.           $  14,000  per day           $ 14,000 per day
______________ ______________       _________                    _______

______________ ______________      $_________ per day           $_______ per day

______________ ______________      $_________ per day           $_______ per day

Using Operator's drill pipe $14,000 per day.

                        (U.S. DAYWORK CONTRACT - Page 1)
<PAGE>

                                                              REVISED JULY, 1998

If under the above column "With Drill Pipe" no day rates are specified, the
daywork rate per twenty-four hour day when drill pipe is in use shall be the
applicable daywork rate specified in the column "Without Drill Pipe" plus
compensation for any drill pipe actually used at the rates specified below,
computed on the basis of the maximum drill pipe in use at any time during each
twenty-four hour day.

                         DRILL PIPE RATE PER 24-HOUR DAY

                                           DIRECTIONAL OR
 STRAIGHT HOLE      SIZE   GRADE    UNCONTROLLABLE DEVIATED HOLE   SIZE    GRADE
$ ________ PER FT.  ____   _____       $  ____________ PER FT.     ____    _____

$ ________ PER FT.  ____   _____       $  ____________ PER FT.     ____    _____

$ ________ PER FT.  ____   _____       $  ____________ PER FT.     ____    _____

Directional or uncontrolled deviated hole will be deemed to exist when
deviation exceeds N/A degrees or when the change of angle exceeds ___ degrees
per one hundred feet.

         Drill pipe shall be considered in use not only when in actual use but
also while it is being picked up or laid down. When drill pipe is standing in
the derrick, it shall not be considered in use, provided, however, that if
Contractor furnishes special strings of drill pipe, drill collars, and handling
tools as provided for in Exhibit "A", the same shall be considered in use at all
times when on location or until released by Operator. In no event shall
fractions of an hour be considered in computing the amount of time drill pipe is
in use but such time shall be computed to the nearest hour, with thirty minutes
or more being considered a full hour and less than thirty minutes not to be
counted.

         Operating rate will begin when the drilling unit is rigged up at the
drilling location, or positioned over the location during marine work, and ready
to commence operations; and will cease when the rig is ready to be moved off the
location.

    4.5  REPAIR TIME: In the event it is necessary to shut down Contractor's rig
for repairs, excluding routine rig servicing, Contractor shall be allowed
compensation at the applicable daywork rate for such shut down time up to a
maximum of 8 hours for any one rig repair job or 24 hours for any calendar
month. Thereafter, Contractor shall be compensated at a rate of $0 per
twenty-four (24) hour day. Routine rig servicing shall include, but not be
limited to, cutting and slipping drilling line, changing pump or swivel
expendables, lubricating rig, and
                                  ----------------------------------------------
--------------------------------------------------------------------------------

    4.6  STANDBY TIME RATE WITH CREWS: $14,000 per twenty-four(24) day. Standby
time shall be defined to include time when the rig is shut down although in
readiness to begin or resume operations but Contractor is waiting on orders of
Operator or on materials, services or other items to be furnished by Operator.

    4.7  FORCE MAJEURE RATE: $12,500 per twenty-four (24) hour day for any
continuous period that normal operations are suspended or cannot be carried on
due to conditions of force majeure as defined in Paragraph 17 hereof. It is,
however, understood that subject to Subparagraph 6.3 below, Operator can release
the rig in accordance with Operator's right to direct stoppage of the work,
effective when conditions will permit the rig to be moved from the location.

    4.8  REIMBURSABLE COSTS: Operator shall reimburse Contractor for the costs
of material, equipment, work or services which are to be furnished by Operator
as provided for herein but which for convenience are actually furnished by
Contractor at Operator's request, plus 15 percent for such cost of handling.

    4.9  REVISION IN RATES: The rates and/or payments herein set forth due to
Contractor from Operator shall be revised to reflect the change in costs if the
costs of any of the items hereinafter listed shall vary by more than 0 percent
from the costs thereof on the date of this Contract or by the same percent after
the date of any revision pursuant to this Subparagraph:

         (a) Labor costs, including all benefits, of Contractor's personnel;
         (b) Contractor's cost of insurance premiums;
         (c) Contractor's cost of fuel, including all taxes and fees; the cost
             per gallon/MCF being $N/A;
         (d) Contractor's cost of catering, when applicable;
         (e) If Operator requires Contractor to increase or decrease the number
             of Contractor's personnel;
         (f) Contractor's cost of spare parts and supplies with the
             understanding that such spare parts and supplies constitute 10
             percent of the Operating Rate and that the parties shall use the
             U.S. Bureau of Labor Statistics Oilfield Drilling Machinery and
             Equipment Wholesale Price Index (Code No. 1191-02) to determine to
             what extent a price variance has occurred in said spare parts and
             supplies;
         (g) If there is any change in legislation or regulations in the area in
             which Contractor is working or other unforeseen, unusual event that
             alters Contractor's financial burden.

5.  TIME OF PAYMENT        SEE 25.1
         Payment is due by Operator to Contractor as follows:

    5.1  Payment for mobilization, drilling and other work performed at
applicable day rates, and all other applicable charges shall be due, upon
presentation of invoice therefor, upon completion of mobilization,
demobilization, rig release or at the end of the month in which such work was
performed or other charges are incurred, whichever shall first occur. All
invoices may be mailed to Operator at the address hereinabove shown, unless
Operator does hereby designate that such invoices shall be mailed as follows:

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

    5.2  DISPUTED INVOICES AND LATE PAYMENT: Operator shall pay all invoices
within 30 days after receipt except that if Operator disputes an invoice or any
part thereof, Operator shall, within fifteen days after receipt of the invoice,
notify Contractor of the item disputed, specifying the reason therefor, and
payment of the disputed item may be withheld until settlement of the dispute,
but timely payment shall be made of any undisputed portion. Any sums (including
amounts ultimately paid with respect to a disputed invoice) not paid within the
above specified days shall bear interest at the rate of 1.5 percent or the
maximum legal rate, whichever is less, per month from the due date until paid.
If Operator does not pay undisputed items within the above stated time,
Contractor may terminate this Contract as specified under Subparagraph 6.3.

6.  TERM:

    6.1  DURATION OF CONTRACT: This Contract shall remain in full force and
effect until drilling operations are completed on the well or wells specified in
Paragraph 1 above, or for a term of TWO (2) YEARS, commencing on the date
specified in Paragraph 2 above.

    6.3  EARLY TERMINATION:

    (a)  BY EITHER PARTY: Upon giving of written notice, either party may
terminate this Contract when total loss or destruction of the rig, or a major
breakdown with indefinite repair time necessitate stopping operations
hereunder.

                        (U.S. DAYWORK CONTRACT - PAGE 2)
<PAGE>

                                                              REVISED JULY, 1998

    (b)  By Operator: Notwithstanding the provisions of Paragraph 3 with respect
to the depth to be drilled, Operator shall have the right following thirty (30)
days prior written notice to Contractor to direct the stoppage of the work to be
performed by Contractor hereunder at any time prior to reaching the specified
depth, and even though Contractor has made no default hereunder.

In such event, Operator shall reimburse Contractor as set forth in Subparagraph
6.4 hereof.
    (c)  By CONTRACTOR: Notwithstanding the provisions of Paragraph 3 with
respect to the depth to be drilled, in the event Operator shall become
insolvent, or be adjudicated a bankrupt, or file, by way of petition or answer,
a debtor's petition or other pleading seeking adjustment of Operator's debts,
under any bankruptcy or debtor's relief laws now or hereafter prevailing, or if
any such be filed against Operator, or in case a receiver be appointed of
Operator or Operator's property, or any part thereof, or Operator's affairs be
placed in the hands of a Creditor's Committee, or, following ten days prior
written notice to Operator if Operator does not pay Contractor within the time
specified in Subparagraph 5.2 all undisputed items due and owing, Contractor
may, at its option, elect to terminate further performance of any work under
this Contract and Contractor's right to compensation shall be as set forth in
Subparagraph 6.4 hereof. In addition to Contractor's right to terminate
performance hereunder, Operator hereby expressly agrees to protect, defend and
indemnify Contractor from and against any claims, demands and causes of action,
including all costs of defense, in favor of Operator, Operator's joint
venturers, or other parties arising out of any drilling commitments or
obligations contained in any lease, farmout agreement or other agreement, which
may be affected by such termination of performance hereunder.

    6.4  EARLY TERMINATION COMPENSATION:

    (a)  PRIOR TO COMMENCEMENT: In the event Operator terminates this Contract
prior to commencement of operations hereunder, Operator shall pay Contractor as
liquidated damages and not as a penalty a sum equal to the Standby Rate with
Crews (Subparagraph 4.6) for a period of 10 days or a lump sum of $150,000.

    (b)  If such termination occurs after commencement, Operator shall pay
Contractor, within seven (7) days of the date of termination, a lump sum early
termination fee for each rig terminated which shall be calculated by multiplying
the balance of the contract term by a shortfall rate of $7,000 per rig per day.
From the date of receipt of the notice of termination, Nabors will be free to
market the terminated rig.

7.  CASING PROGRAM

    Operator shall have the right to designate the points at which casing will
be set and the manner of setting, cementing and testing. Operator may modify the
casing program, however, any such modification which materially increases
Contractors hazards or costs can only be made by mutual consent of Operator and
Contractor and upon agreement as to the additional compensation to be paid
Contractor as a result thereof.

8.  DRILLING METHODS AND PRACTICES:

    8.1  Contractor shall maintain well control equipment in good condition at
all times and shall use all reasonable means to prevent and control fires and
blowouts and to protect the hole.

    8.2  Subject to the terms hereof, and at Operator's cost, at all times
during the drilling of the well, Operator shall have the right to control the
mud program, and the drilling fluid must be of a type and have characteristics
and be maintained by Contractor in accordance with the specifications shown in
Exhibit "A".

    8.3  Each party hereto agrees to comply with all laws, rules, and
regulations of any federal, state or local governmental authority which are now
or may become applicable to that party's operations covered by or arising out
of the performance of this Contract. When required by law, the terms of Exhibit
"B" shall apply to this Contract. In the event any provision of this Contract
is inconsistent with or contrary to any applicable federal, state or local law,
rule or regulation, said provision shall be deemed to be modified to the extent
required to comply with said law, rule or regulation, and as so modified said
provision and this Contract shall continue in full force and effect.

    8.4  Contractor shall keep and furnish to Operator an accurate record of the
work performed and formations drilled on the IADC-API Daily Drilling Report Form
or other form acceptable to Operator. A legible copy of said form shall be
furnished by Contractor to Operator.

    8.5  If requested by Operator, Contractor shall furnish Operator with a copy
of delivery tickets covering any material or supplies provided by Operator and
received by Contractor.

9.  INGRESS, EGRESS, AND LOCATION:

    Operator hereby assigns to Contractor all necessary rights of ingress and
egress with respect to the tract on which the well is to be located for the
performance by Contractor of all work contemplated by this Contract. Should
Contractor be denied free access to the location for any reason not reasonably
within Contractor's control, any time lost by Contractor as a result of such
denial shall be paid for at the applicable rate. Operator agrees at all times to
maintain the road and location in such a condition that will allow free access
and movement to and from the drilling site in an ordinarily equipped highway
type vehicle. If Contractor is required to use bulldozers, tractors, four-wheel
drive vehicles, or any other specialized transportation equipment for the
movement of necessary personnel, machinery, or equipment over access roads or on
the drilling location, Operator shall furnish the same at its expense and
without cost to Contractor. The actual cost of repairs to any transportation
equipment furnished by Contractor or its personnel damaged as a result of
improperly maintained access roads or location will be charged to Operator,
Operator shall reimburse Contractor for all amounts reasonably expended by
Contractor for repairs and/or reinforcement of roads, bridges and related or
similar facilities (public and private) required as a direct result of a rig
move pursuant to performance hereunder.

                        (U.S. DAYWORK CONTRACT - PAGE 3)
<PAGE>

                                                              REVISED JULY, 1998

10.  SOUND LOCATION:

     Operator shall prepare a sound location adequate in size and capable of
properly supporting the drilling rig, and shall be responsible for a conductor
pipe program adequate to prevent soil and subsoil wash out. It is recognized
that Operator has superior knowledge of the location and access routes to the
location, and must advise Contractor of any subsurface conditions, or
obstructions including, but not limited to, mines, caverns, sink holes, streams,
pipelines, power lines and telephone lines which Contractor might encounter
while en route to the location or during operations hereunder. In the event
subsurface conditions cause a cratering or shifting of the location surface, or
if seabed conditions prove unsatisfactory to properly support the rig during
marine operations hereunder, and loss or damage to the rig or its associated
equipment results therefrom, Operator shall, without regard to other provisions
of this Contract, including Subparagraph 14.1 hereof, reimburse Contractor to
the extent not covered by Contractor's insurance, for all such loss or damage
including payment of force majeure rate during repair and/or demobilization if
applicable.

11.  EQUIPMENT CAPACITY

     If applicable hereunder, operations shall not be attempted where canal or
water depths are in excess of N/A feet, or under any other conditions which
exceed the capacity of the equipment specified to be used hereunder. Contractor
shall make final decision as to when an operation or attempted operation would
exceed the capacity of specified equipment.

12.  TERMINATION OF LOCATION LIABILITY:

     When Contractor has complied with all obligations of the Contract regarding
restoration of Operator's location, Operator shall thereafter be liable for
damage to property, personal injury or death of any person which occurs as a
result of conditions of the location and Contractor shall be relieved of such
liability; provided, however, if Contractor shall subsequently reenter upon the
location for any reason, including removal of the rig, any term of the Contract
relating to such reentry activity shall become applicable during such period.

13. INSURANCE

During the life of this Contract, Contractor shall at Contractor expense
maintain, with an insurance company or companies authorized to do business in
the state where the work is to be performed or through a self-insurance program,
insurance coverages of the kind and in the amount set forth in Exhibit "A",
insuring the liabilities specifically assumed by Contractor in Paragraph 14 of
this Contract. Contractor shall, if requested to do so by Operator, procure from
the company or companies writing said insurance a certificate or certificates
that said insurance is in full force and effect and that the same shall not be
canceled or materially changed without ten (10) days prior written notice to
Operator. For liabilities assumed hereunder by Contractor, its insurance shall
be endorsed to provide that the underwriters waive their right of subrogation
against Operator. Operator will, as well, cause its insurer to waive subrogation
against Contractor for liability it assumes and shall maintain, at Operators
expense, or shall self insure, insurance coverage of the same kind and in the
same amount as is required of Contractor, insuring the liabilities specifically
assumed by Operator in Paragraph 14 of this Contract.

14. RESPONSIBILITY FOR LOSS OR DAMAGE, INDEMNITY, RELEASE OF LIABILITY AND
    ALLOCATION OF RISK:

    14.1 Contractor's Surface Equipment: Contractor shall assume liability at
all times for damage to or destruction of Contractor's surface equipment,
regardless of when or how such damage or destruction occurs, and Contractor
shall release Operator of any liability for any such loss, except loss or damage
under the provisions of Paragraph 10 or Subparagraph 14.3.

    14.2 Contractor's In-Hole Equipment: Operator shall assume liability at all
times for damage to or destruction of Contractor's in-hole equipment, including,
but not limited to, drill pipe, drill collars, and tool joints, and Operator
shall reimburse Contractor for the value of any such loss or damage; the value
to be determined by agreement between Contractor and Operator as current repair
costs or 100 percent of current new replacement cost of such equipment delivered
to the well site.

    14.3 Contractor's Equipment - Environmental Loss or Damage: Notwithstanding
the provisions of Subparagraph 14.1 above, Operator shall assume liability at
all times for damage to or destruction of Contractor's equipment caused by
exposure to highly corrosive or otherwise destructive elements, including those
introduced into the drilling fluid.

    14.4 Operator's Equipment: Operator shall assume liability at all times for
damage to or destruction of Operators equipment, including, but not limited to,
casing, tubing, well head equipment, and platform if applicable, regardless of
when or how such damage or destruction occurs, and Operator shall release
Contractor of any liability for any such loss or damage.

    14.5 The Hole: In the event the hole should be last or damaged, Operator
shall be solely responsible for such damage to or loss of the hole, including
the casing therein. Operator shall release Contractor of any liability for
damage to or loss of the hole, and shall protect, defend and indemnify
Contractor from and against any and all claims, liability, and expense relating
to such damage to or loss of the hole.

    14.6 Underground Damage: Operator shall release Contractor of any liability
for, and shall protect, defend and indemnify Contractor from and against any and
all claims, liability, and expense resulting from operations under this Contract
on account of injury to, destruction of, or loss or impairment of any property
right in or to oil, gas, or other mineral substance or water, if at the time of
the act or omission causing such injury, destruction, loss, or impairment, said
substance had not bean reduced to physical possession above the surface of the
earth, and for any loss or damage to any formation, strata, or reservoir beneath
the surface of the earth.

    14.7 Inspection of Materials Furnished by Operator: Contractor agrees to
visually inspect all materials furnished by Operator before using same and to
notify Operator of any apparent defects therein. Contractor shall not be liable
for any loss or damage resulting from the use of materials furnished by
Operator, and Operator shall release Contractor from, and shall protect, defend
and indemnify Contractor from and against, any such liability.

    14.8 Contractor's Indemnification of Operator: Contractor shall release
Operator of any liability for, and shall protect, defend and indemnify Operator,
its officers, directors, employees and joint owners from and against all claims,
demands, and causes of action of every kind and character, without limit and
without regard to the cause or causes thereof or the negligence of any party or
parties, arising in connection herewith in favor of Contractor's employees or
Contractor's subcontractors or their employees, or Contractor's invitees, on
account of bodily injury, death or damage to property. Contractor's indemnity
under this Paragraph shall be without regard to and without any right to
contribution from any insurance maintained by Operator pursuant to Paragraph 13.
If it is judicially determined that the monetary limits of insurance required
hereunder or of the indemnities voluntarily assumed under Subparagraph 14.8
(which Contractor and Operator hereby agree will be supported either by
available liability insurance, under which the insurer has no right of
subrogation against the indemnities, or voluntarily self-insured, in part or
whole) exceed the maximum limits permitted under applicable law, it is agreed
that said insurance requirements or indemnities shall automatically be amended
to conform to the maximum monetary limits permitted under such law.

    14.9 Operator's Indemnification of Contractor: Operator shall release
Contractor of any liability for, and shall protect, defend and indemnify
Contractor, officers, directors, employees and joint owners from and against all
claims, demands, and causes of action of every kind and character, without limit
and without regard to the cause or causes thereof or the negligence of any party
or parties, arising in connection herewith in favor of Operator's employees or
Operator's contractors or their employees, or Operator's invitees, other than
those parties identified in Subparagraph 14.8 on account of bodily injury, death
or damage to

                        (U.S. DAYWORK CONTRACT - PAGE 4).
<PAGE>

                                                              REVISED JULY, 1998

property. Operator's indemnity under this Paragraph shall be without regard to
and without any right to contribution from any insurance maintained by
Contractor pursuant to Paragraph 13. If it is judicially determined that the
monetary limits of insurance required hereunder or of the indemnities
voluntarily assumed under Subparagraph 14.9 (which Contractor and Operator
hereby agree will be supported either by available liability insurance, under
which the insurer has no right of subrogation against the indemnitees, or
voluntarily self-insured, in part or whole) exceed the maximum limits permitted
under applicable law, it is agreed that said insurance requirements or
indemnities shall automatically be amended to conform to the maximum monetary
limits permitted under such law.

     14.10 Liability for Wild Well: Operator shall be liable for the cost of
regaining control of any wild well, as well as for cost of removal of any
debris, and shall release Contractor of, and Operator shall protect, defend and
indemnify Contractor from and against any liability for such cost.

     14.11 Pollution and Contamination: Notwithstanding anything to the contrary
contained herein, except the provisions of Paragraphs 10 and 12, it is
understood and agreed by and between Contractor and Operator that the
responsibility for pollution and contamination shall be as follows:

     (a) Unless otherwise provided herein, Contractor shall assume all
responsibility for, including control and removal of, and shall protect, defend
and indemnify Operator from and against all claims, demands and causes of action
of every kind and character arising from pollution or contamination, which
originates above the surface of the land or water from spills of fuels,
lubricants, motor oils, pipe dope, paints, solvents, ballast, bilge and garbage,
except unavoidable pollution from reserve pits, wholly in Contractor's
possession and control and directly associated with Contractor's equipment and
facilities.

     (b) Operator shall assume all responsibility for, including control and
removal of, and shall protect, defend and Indemnify Contractor from and against
all claims, demands, and causes of action of every kind and character arising
directly or indirectly from all other pollution or contamination which may occur
during the conduct of operations hereunder, including, but not limited to, that
which may result from fire, blowout, cratering, seepage or any other
uncontrolled flow of oil, gas, water or other substance, as well as the use or
disposition of all drilling fluids, including, but not limited to, oil emulsion,
oil base or chemically treated drilling fluids, contaminated cuttings or
cavings, lost circulation and fish recovery materials and fluids. Operator shall
release Contractor of any liability for the foregoing.

     (c) In the event a third party commits an act or omission which results in
pollution or contamination for which either Contractor or Operator, for whom
such party is performing work, is held to be legally liable, the responsibility
therefor shall be considered, as between Contractor and Operator, to be the same
as if the party for whom the work was performed had performed the same and all
of the obligations respecting protection, defense, indemnity and limitation of
responsibility and liability, as set forth in (a) and (b) above, shall be
specifically applied.

     14.12 Consequential Damages; Neither party shall be liable to the other for
special, indirect or consequential damages resulting from or arising out of this
Contract, including, without limitation, loss of profit or business
interruptions including loss or delay of production, however same may be caused.

     14.13 lndemnity Obligation: Except as otherwise expressly limited herein,
it is the intent of parties hereto that all releases, indemnity obligations
and/or liabilities assumed by such parties under terms of this Contract,
including, without limitation, Subparagraphs 14.1 through 14.12 hereof, be
without limit and without regard to the cause or causes thereof (including
preexisting conditions), strict liability, regulatory or statutory liability,
breach of warranty (express or implied), any theory of tort, breach of contract
or the negligence of any party or parties, whether such negligence be sole,
joint or concurrent, active or passive. The indemnities, and releases and
assumptions of liability extended by the parties hereto under the provisions of
Paragraph 14 shall inure to the benefit of the parties, their parent, holding
and affiliated companies and their respective officers, directors, employees,
agents and servants. The terms and provisions of Subparagraphs 14.1 through
14.12 shall have no application to claims or causes of action asserted against
Operator or Contractor by reason of any agreement of indemnity with a person or
entity not a party hereto.

15.  AUDIT

     If any payment provided for hereunder is made on the basis of Contractor's
costs, Operator shall have the right to audit Contractor's books and records
relating to such costs. Contractor agrees to maintain such books and records for
a period of two (2) years from the date such costs were incurred and to make
such books and records readily available to Operator at any reasonable time or
times within the period.

16.  NO WAIVER EXCEPT IN WRITING

     It is fully understood and agreed that none of the requirements of this
Contract shall be considered as waived by either party unless the same is done
in writing, and then only by the persons executing this Contract, or other duly
authorized agent or representative of the party.

17.  FORCE MAJEURE

     Except for the duty to make payments hereunder when due, and the
indemnification provisions under this Contract, neither Operator nor Contractor
shall be responsible to the other for any delay, damage or failure caused by or
occasioned by a Force Majeure Event. As used in this Contract, "Force Majeure
Event" includes: acts of God, action of the elements, warlike action,
insurrection, revolution or civil strife, piracy, civil war or hostile action,
strikes, differences with workmen, acts of public enemies, federal or state
laws, rules and regulations of any governmental authorities having jurisdiction
in the premises or of any other group, organization or informal association
(whether or not formally recognized as a government), inability to procure
material, equipment or necessary labor in the open market, acute and unusual
labor or material or equipment shortages, or any other causes (except financial)
beyond the control of either party. Neither Operator nor Contractor shall be
required against its will to adjust any labor or similar disputes except in
accordance with applicable law. In the event that either party hereto is
rendered unable, wholly or in part, by any of these causes to carry out its
obligation under this Contract, it is agreed that such party shall give notice
and details of Force Majeure in writing to the other party as promptly as
possible after its occurrence. In such cases, the obligations of the party
giving the notice shall be suspended during the continuance of any inability so
caused except that Operator shall be obligated to pay to Contractor the Force
Majeure Rate provided for in Subparagraph 4.7 above.

18.  GOVERNING LAW:

     This Contract shall be construed, governed, interpreted, enforced and
litigated, and the relations between the parties determined in accordance with
the laws of the State of Texas.

19.  INFORMATION CONFIDENTIAL:

     Upon written request by Operator, information obtained by Contractor in
the conduct of drilling operations on this well, including, but not limited
to, depth, formations penetrated, the results of coring, testing and
surveying, shall be considered confidential and shall not be divulged by
Contractor or its employees, to any person, firm, or corporation other than
Operator's designated representatives.

20.  SUBCONTRACTS BY OPERATOR:

     Operator may employ other contractors to perform any of the operations or
services to be provided or performed by it according to Exhibit "A".

21.  ATTORNEY'S FEES

     If this Contract is placed in the hands of an attorney for collection of
any sums due hereunder, or suit is brought on same, or sums due hereunder are
collected through bankruptcy or arbitration proceedings, then the prevailing
party shall be entitled to recover reasonable attorney's fees and costs.

22.  CLAIMS AND LIENS:

     Contractor agrees to pay all valid claims for labor, material, services and
supplies to be furnished by Contractor hereunder, and agrees to allow no lien by
such third parties to be fixed upon the lease, the well, or other property of
the Operator or the land upon which said well is located.

                        (U.S. Daywork Contract - Page 5)
<PAGE>

                                                              Revised July, 1998
23.  ASSIGNMENT.

     Neither party may assign this Contract without the prior written consent of
the other, and prompt notice of any such intent to assign shall be given to the
other party. In the event of such assignment, the assigning party shall remain
liable to the other party as a guarantor of the performance by the assignee of
the terms of this Contract. If any assignment is made that materially alters
Contractor's financial burden, Contractor's compensation shall be adjusted to
give effect to any increase or decrease in Contractor's operating costs.

24.  NOTICES AND PLACE OF PAYMENT:

     Notices, reports, and other communications required or permitted by this
Contract to be given or sent by one party to the other shall be delivered by
hand, mailed or telecopied to the address hereinabove shown. All sums payable
hereunder to Contractor shall be payable at its address hereinabove shown unless
otherwise specified herein.

25.  SPECIAL PROVISIONS:

     25.1 In support of Operator's payment obligations under the Contract, and
          no later than ten (10) days prior to commencement of rig mobilization,
          Operator will provide Contractor with a Contractor approved Letter of
          Credit in the form attached hereto issued by a bank acceptable to
          Contractor for the amount of Five Hundred Thousand Dollars
          ($500,000.00) in the form attached hereto. If Operator fails to pay
          invoices in accordance with Paragraph 5.2 then, in addition to
          Contractor's other rights under this Contract and at law, Contractor
          shall have the right to immediately draw on the Letter of Credit for
          amounts due and remove its rig, equipment and personnel from the
          location. Operator agrees to file all necessary documents with any
          State or Federal agency having jurisdiction to gain consent for
          Contractor to remove its rig and equipment from the location. In the
          event Contractor elects to terminate the Contract as provided herein,
          Operator hereby expressly agrees to PROTECT, DEFEND AND INDEMNIFY
          Contractor from and against any and all claims, demands and causes of
          action, including all costs of defense, in favor of Operator,
          Operator's joint venturers or other parties arising out of any
          drilling commitments or obligations contained in any lease, farmout
          agreement or other agreement, which may be affected by such
          termination of performance hereunder.

     25.2 In the event Operator is unable to maintain a continuous drilling
          program during the term of this Contract then, subject to the
          conditions, listed in items (a) through (c) below, Operator shall have
          the right to substitute wells to be operated by other parties to
          mitigate Operator's standby costs.
          (a) the proposed Operator of the substitute well shall meet
              Contractor's credit requirements.
          (b) Rates and conditions for the drilling of the substitute well shall
              be reflective of then-prevailing market conditions as Determined
              by Contractor.
          (c) for the duration of the substitute well, Operator shall pay
              Contractor a rig retention rate of $2,500 per day.

26. ACCEPTANCE OF CONTRACT:

         The foregoing Contract is agreed to and accepted by Operator this 29th
day of May, 2001.

                                       Operator:   GMX RESOURCES, INC.
                                                   -----------------------------

                                       By:         /s/ Ken L. Kenworthy, Jr.
                                                   -----------------------------
                                       Title:      President & CEO

         The foregoing Contract is accepted by the undersigned as Contractor
this 22 day of May, 2001, which is the effective date of this agreement, subject
to rig availability, and subject to all of its terms and provisions, with the
understanding that unless said Contract is thus executed by Operator within
Seven (7) days of the above date, Contractor shall be in no manner bound by its
signature thereto.

                                       Contractor: NABORS DRILLING USA, INC.
                                                   -----------------------------

                                       By:         /s/ R. E. Wilder
                                                   -----------------------------

                                       Title:      V.P. SALES
                                                   -----------------------------

                        (U.S. Daywork Contract - Page 6)

<PAGE>

                                                              Revised July, 1998

                                   EXHIBIT "A"

To Daywork Contract dated        May         ,    2001
                          -------------------  ---------
Operator:  GMX RESOURCES, INC.            Contractor:  NABORS DRILLING USA, INC.
         ------------------------------               --------------------------
Well Name and Number      To be designated by Operator.
                     -----------------------------------------------------------

                      SPECIFICATIONS AND SPECIAL PROVISIONS

I. CASING PROGRAM (See Paragraph 7)

<TABLE>
<CAPTION>

                                                                                         APPROXIMATE           WAIT ON CEMENT
           HOLE SIZE          CASING SIZE             WEIGHT                 GRADE      SETTING DEPTH               TIME
<S>        <C>              <C>                 <C>                        <C>        <C>                    <C>
CONDUCTOR              IN.                 IN.                    LBS/FT.                               FT.                     HRS.
           -----------      --------------      -----------------          ---------  -----------------      ------------------
SURFACE                IN.                 IN.                    LBS/FT.                               FT.                     HRS.
           -----------      --------------      -----------------          ---------  -----------------      ------------------
PROTECTION             IN.                 IN.                    LBS/FT.                               FT.                     HRS.
           -----------      --------------      -----------------          ---------  -----------------      ------------------
                       IN.                 IN.                    LBS/FT.                               FT.                     HRS.
           -----------      --------------      -----------------          ---------  -----------------      ------------------
PRODUCTION             IN.                 IN.                    LBS/FT.                               FT.                     HRS.
           -----------      --------------      -----------------          ---------  -----------------      ------------------
LINER                  IN.                 IN.                    LBS/FT.                               FT.                     HRS.
           -----------      --------------      -----------------          ---------  -----------------      ------------------
                       IN.                 IN.                    LBS/FT.                               FT.                     HRS.
---------- -----------      --------------      -----------------          ---------  -----------------      ------------------

</TABLE>

2. MUD CONTROL PROGRAM (SEE SUBPARAGRAPH 8.2)

<TABLE>
<CAPTION>

           DEPTH INTERVAL
               (FT)

      FROM               TO              TYPE MUD          WEIGHT (LBS/GAL)       VISCOSITY (SECS)      WATER LOSS (CC)
<S>               <C>               <C>                  <C>                    <C>                   <C>
---------------   ---------------   ------------------   --------------------   -------------------   -------------------
---------------   ---------------   ------------------   --------------------   -------------------   -------------------
---------------   ---------------   ------------------   --------------------   -------------------   -------------------
---------------   ---------------   ------------------   --------------------   -------------------   -------------------
---------------   ---------------   ------------------   --------------------   -------------------   -------------------
---------------   ---------------   ------------------   --------------------   -------------------   -------------------
---------------   ---------------   ------------------   --------------------   -------------------   -------------------
---------------   ---------------   ------------------   --------------------   -------------------   -------------------
---------------   ---------------   ------------------   --------------------   -------------------   -------------------

</TABLE>

Other mud specifications:
                          ------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

3.  INSURANCE (SEE PARAGRAPH 13)

    3.1  Adequate Workers' Compensation Insurance complying with State Laws
         applicable or Employers' Liability Insurance with limits of $1,000,000
         covering all of Contractor's employees working under this Contract.

    3.2  Commercial (or Comprehensive) General Liability Insurance, including
         contractual obligations as respects this Contract and proper coverage
         for all other obligations assumed in this Contract. The limit shall be
         $1,000,000 combined single limit per occurrence for Bodily Injury and
         Property Damage.

    3.3  Automobile Public Liability Insurance with limits of $1,000,000 for the
         death or injury of each person and $1,000,000 for each accident; and
         Automobile Public Liability Property Damage Insurance with limits of
         $1,000,000 for each accident.

    3.4  In the event operations are over water, Contractor shall carry in
         addition to the Statutory Workers' Compensation Insurance. endorsements
         covering liability under the Longshoremen's & Harbor Workers'
         Compensation Act and Maritime liability including maintenance and cure
         with limits of $ N/A for each death or injury to one person and $ N/A
         for any one accident.

    3.5  Other insurance:  $4,000,000 EXCESS LIABILITY
                         -------------------------------------------------------
         -----------------------------------------------------------------------
         -----------------------------------------------------------------------

4.  EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY CONTRACTOR:

    The machinery, equipment, tools, materials, supplies, instruments, services
and labor hereinafter listed, including any transportation required for such
items, shall be provided at the well location at the expense of Contractor
unless otherwise noted by this Contract.

    4.1  DRILLING RIG

    Complete drilling rig, designated by Contractor as its Rig No. RIG 408 OR
EQUIVALENT AT CONTRACTORS ELECTION, the major items of equipment being:

Drawworks: Make and Model
                          ------------------------------------------------------
Engines: Make, Model, and H.P.
                              --------------------------------------------------
         No. on Rig
                   -------------------------------------------------------------
Pumps:   No. 1 Make, Size, and Power
                                    --------------------------------------------
         No. 2 Make, Size, and Power
                                    --------------------------------------------
Mud Mixing Pump: Make, Size, and Power
                                      ------------------------------------------
Boilers: Number, Make, H.P. and W.P
                                   ---------------------------------------------
Derrick or Mast: Make, Size, and Capacity
                                         ---------------------------------------
Substructure: Size and Capacity
                               -------------------------------------------------
Rotary Drive: Type
                  --------------------------------------------------------------
Drill Pipe: Size  __________  in. ______________________ ft.;
            Size: ________________________ in. ______________________ ft.
Drill Collars: Number and Size
                              --------------------------------------------------

                 (U.S. DAYWORK CONTRACT - EXHIBIT "A" - PAGE 1)

<PAGE>

                                                              Revised July, 1998
Blowout Preventers:
                   -------------------------------------------------------------

<TABLE>
<CAPTION>

    SIZE             SERIES OR TEST PR.          MAKE & MODEL           NUMBER
<S>             <C>                          <C>                     <C>
-------------   --------------------------   ---------------------   --------------
-------------   --------------------------   ---------------------   --------------
-------------   --------------------------   ---------------------   --------------
-------------   --------------------------   ---------------------   --------------

</TABLE>

B.O.P. Closing Unit:
                    ------------------------------------------------------------
B.O.P. Accumulator:
                   -------------------------------------------------------------

    4.2 Derrick timbers.

    4.3 Normal strings of drill pipe and drill collars specified above.

    4.4 Conventional drift indicator.

    4 5 Circulating mud pits.

    4.6 Necessary pipe racks and rigging up material.

    4.7 Normal storage for mud and chemicals.

    4.8 Shale Shaker

    4.9
        ------------------------------------------------------------------------
    4.10
        ------------------------------------------------------------------------
    4.11
        ------------------------------------------------------------------------
    4.12
        ------------------------------------------------------------------------
    4.13
        ------------------------------------------------------------------------
    4.14
        ------------------------------------------------------------------------
    4.15
        ------------------------------------------------------------------------
    4.16
        ------------------------------------------------------------------------
    4.17
        ------------------------------------------------------------------------

5.  EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY OPERATOR:

    The machinery, equipment, tools, materials, supplies, instruments, services
and labor hereinafter listed, including any transportation required for such
items, shall be provided at the well location at the expense of Operator unless
otherwise noted by this Contract.

    5.1  Furnish and maintain adequate roadway and/or canal to location,
         right-of-way, including rights-of-way for fuel and water lines, river
         crossings, highway crossings, gates and cattle guards.

    5.2  Stake location, clear and grade location, and provide turnaround,
         including surfacing when necessary.

    5.3  Test tanks with pipe and fittings.

    5.4  Mud storage tanks with pipe and fittings.

    5.5  Separator with pipe and fittings.

    5.6  Labor to connect and disconnect mud tank, test tank, and separator.

    5.7  Labor to disconnect and clean test tanks and separator.

    5.8  Drilling mud, chemicals, lost circulation materials and other
         additives.

    5.9  Pipe and connections for oil circulating lines.

    5.10 Labor to lay, bury and recover oil circulating lines.

    5.11 Drilling bits, reamers, reamer cutters, stabilizers and special tools.

    5.12 Contract fishing tool services and tool rental.

    5.13 Wire line core bits or heads, core barrels and wire line core catchers
         if required.

    5.14 Conventional core bits, core catchers and core barrels.

    5.15 Diamond core barrel with head.

    5.16 Cement and cementing service.

    5.17 Electrical wireline logging services.

    5.18 Directional, caliper, or other special services.

    5.19 Gun or jet perforating services.

    5.20 Explosives and shooting devices.

    5.21 Formation testing, hydraulic fracturing, acidizing and other related
         services.

    5.22 Equipment for drill stem testing.

    5.23 Mud logging services.

    5.24 Sidewall coring service.

    5.25 Welding service for welding bottom joints of casing, guide shoe, float
         shoe, float collar and in connection with installing of well head
         equipment if required.

    5.26 Casing, tubing, liners, screen, float collars, guide and float shoes
         and associated equipment.

    5.27 Casing scratchers and centralizers.

    5.28 Well head connections and all equipment to be installed in or on well
         or on the premises for use in connection with testing, completion and
         operation of well.

    5.29 Special or added storage for mud and chemicals.

    5.30 Casinghead, API series, to conform to that shown for the blowout
         preventers specified in Subparagraph 4.1 above.

    5.31 Blowout preventer testing packoff.

    5.32 Casing Thread Protectors and Casing Lubricants.

    5.33 H2S training and equipment as necessary or as required by law.

    5.34
         -----------------------------------------------------------------------
    5.35
         -----------------------------------------------------------------------
    5.36
         -----------------------------------------------------------------------
    5.37
         -----------------------------------------------------------------------
    5.38
         -----------------------------------------------------------------------
    5.39
         -----------------------------------------------------------------------
    5.40
         -----------------------------------------------------------------------
    5.41
         -----------------------------------------------------------------------

                 (U.S. DAYWORK CONTRACT - EXHIBIT "A" - PAGE 2)

<PAGE>

                                                               RENSED JULY, 1998

6.  EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY DESIGNATED PARTY:

    The machinery, equipment, tools, materials, supplies, instruments,
services, and labor listed as the following numbered items, including any
transportation required for such items unless otherwise specified, shall be
provided at the well location and at the expense of the party hereto as
designated by an X mark in the appropriate column.

<TABLE>
<CAPTION>

                                                                                            To Be Provided By and
                                                                                              At The Expense Of

                                  Item                                          Operator                          Contractor
    <S>                                                               <C>                                 <C>
    6.1  Cellar and Runways...................................                     X
                                                                      --------------------------          --------------------------
    6.2  Fuel (located at ____________).......................                     X
                                                                      --------------------------          --------------------------
    6.3  Fuel Lines (length ____________).....................                                                         X
                                                                      --------------------------          --------------------------
    6.4  Water at source, including and required permits......                     X
                                                                      --------------------------          --------------------------
    6.5  Water well, including required permits...............                     X
                                                                      --------------------------          --------------------------
    6.6  Water lines, including required permits..............                     X
                                                                      --------------------------          --------------------------
    6.7  Water storage tanks  500 BBL capacity................                                                         X
                                                                      --------------------------          --------------------------
    6.8  Labor to operate water well or water pump............                                                         X
                                                                      --------------------------          --------------------------
    6.9  Maintenance of water well, if required...............                     X
                                                                      --------------------------          --------------------------
    6.10 Water Pump...........................................                     X
                                                                      --------------------------          --------------------------
    6.11 Fuel for water pump..................................                     X
                                                                      --------------------------          --------------------------
    6.12 Mats for engines and boilers, or motors and mud pumps                                                         X
                                                                      --------------------------          --------------------------
    6.13 Transportation of Contractor's property:
                                                                      --------------------------          --------------------------
         Move in..............................................                     X
                                                                      --------------------------          --------------------------
         Move out.............................................                     X
                                                                      --------------------------          --------------------------
    6.14 Materials for "boxing in" rig and derrick............                                                         X
                                                                      --------------------------          --------------------------
    6.15 Special strings of drill pipe and drill collars as
         follows:                                                     --------------------------          --------------------------
                                                                                   X
         -----------------------------------------------------        --------------------------          --------------------------

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

         -----------------------------------------------------        --------------------------          --------------------------
    6.16 Kelly joints, subs, elevators, tongs and slips for
         use with special drill pipe..........................                     X
                                                                      --------------------------          --------------------------
    6.17 Drill pipe protectors for Kelly joint and each joint
         of drill pipe running inside of Surface Casing as
         required, for use with normal strings of drill pipe..                     X
                                                                      --------------------------          --------------------------
    6.18 Drill pipe protectors for Kelly joint and drill pipe
         running inside of Protection Casing..................                     X
                                                                      --------------------------          --------------------------
    6.19 Rate of penetration recording device.................                                                         X
                                                                      --------------------------          --------------------------
    6.20 Extra labor for running and cementing casing (Casing
         crews)...............................................                     X
                                                                      --------------------------          --------------------------
    6.21 Casing tools.........................................                     X
                                                                      --------------------------          --------------------------
    6.22 Power casing tongs...................................                     X
                                                                      --------------------------          --------------------------
    6.23 Laydown and pickup machine...........................                     X
                                                                      --------------------------          --------------------------
    6.24 Tubing tools.........................................                     X
                                                                      --------------------------          --------------------------
    6.25 Power tubing tong....................................                     X
                                                                      --------------------------          --------------------------
    6.26 Crew Boats, Number  N/A..............................                                      N/A
                                                                      --------------------------          --------------------------
    6.27 Service Barge........................................                                      N/A
                                                                      --------------------------          --------------------------
    6.28 Service Tug Boat.....................................                                      N/A
                                                                      --------------------------          --------------------------
    6.29 Rat Hole.............................................                     X
                                                                      --------------------------          --------------------------
    6.30 Mouse Hole...........................................                     X
                                                                      --------------------------          --------------------------
    6.31 Reserve Pits.........................................                     X
                                                                      --------------------------          --------------------------
    6.32 Upper Kelly Cock.....................................                                                         X
                                                                      --------------------------          --------------------------
    6.33 Lower Kelly Valve....................................                                                         X
                                                                      --------------------------          --------------------------
    6.34 Drill Pipe Safety Valve..............................                                                         X
                                                                      --------------------------          --------------------------
    6.35 Inside Blowout Preventer.............................                                                         X
                                                                      --------------------------          --------------------------
    6.36 Drilling hole for or driving for conductor pipe......                     X
                                                                      --------------------------          --------------------------
    6.37 Charges, cost of bonds for public roads..............                     X
                                                                      --------------------------          --------------------------
    6.38 Cost of all labor and material to clean rig after
         use of oil-base mud..................................                     X
                                                                      --------------------------          --------------------------
    6.39 Portable Toilet......................................                     X
                                                                      --------------------------          --------------------------
    6.40 Trash Receptacle.....................................                                                         X
                                                                      --------------------------          --------------------------
    6.41 Linear Motion Shale Shaker...........................                                                         X
                                                                      --------------------------          --------------------------
    6.42 Shale Shaker Screens.................................                     X
                                                                      --------------------------          --------------------------
    6.43 Mud Cleaner..........................................                     X
                                                                      --------------------------          --------------------------
    6.44 Mud/Gas Separator....................................                     X
                                                                      --------------------------          --------------------------
    6.45 Desander.............................................                                                         X
                                                                      --------------------------          --------------------------
    6.46 Desilter.............................................                                                         X
                                                                      --------------------------          --------------------------
    6.47 Degasser.............................................                                                         X
                                                                      --------------------------          --------------------------
    6.48 Centrifuge...........................................                     X
                                                                      --------------------------          --------------------------
    6.49 Rotating Head........................................                     X
                                                                      --------------------------          --------------------------
    6.50 Rotating Head Rubbers................................                     X
                                                                      --------------------------          --------------------------
    6.51 Hydraulic Adjustable Choke...........................                     X
                                                                      --------------------------          --------------------------
    6.52 Pit Volume Totalizer.................................                     X
                                                                      --------------------------          --------------------------
    6.53 Communication, type TOOLPUSHER TELEPHONE.............                                                         X
                                                                      --------------------------          --------------------------
    6.54 Forklift, capacity ..................................                     X
                                                                      --------------------------          --------------------------
    6.55 Corrosion Inhibitor for protecting drill string......                     X
                                                                      --------------------------          --------------------------
    6.56
         -----------------------------------------------------        --------------------------          --------------------------
    6.57
         -----------------------------------------------------        --------------------------          --------------------------
    6.58
         -----------------------------------------------------        --------------------------          --------------------------

</TABLE>

                 (U.S. DAYWORK CONTRACT - EXHIBIT "A" - PAGE 3)

<PAGE>

7. OTHER PROVISION:                                           REVISED JULY, 1998

                         CONTRACTORS SPECIAL PROVISIONS

         1.       Contractor shall furnish initial tested annular preventer
                  element. If the element is damaged due to destructive elements
                  introduced to the mud, stripping, or excessive testing, the
                  Operator agrees to furnish a new element.

         2.       Chemical Additives to the mud for preventing oxidation of the
                  drill string and hydrogen sulfide scavenging chemicals to
                  treat the mud or drilling fluid as necessary to remove all
                  traces of H2S and to control oxygen corrosion to be furnished
                  by the Operator.

         3.       Day Rate will be increased $100.00 per day when oil base mud
                  or salt saturated fluids are in use.

         4.       Operator shall furnish all labor, equipment and materials to
                  clean rig after use of oil base mud and/or completion fluid.

         5.       Extra cost to rig up for drilling with oil base mud including,
                  but not limited to, the cost of pit covers, steam cleaners,
                  drip pans, mud vacs and cleaning materials shall be at
                  Operator's expense.

         6.       Operator to reimburse Contractor for drill crew and rig
                  superintendent clothing allowance of $20.00 per man per day
                  when oil base mud, KCL, Calcium Chloride or other salt
                  saturated products are in use. Contractor will be allowed to
                  cover the cost of payroll and burden when calculating the
                  amount billed to the operator.

         7.       Initial inspection of all drill pipe, drill collars, kelly,
                  kelly joints, valves, subs and HWDP shall be at Contractor's
                  expense. All repairs, replacements and hauling for repairs
                  will be at Contractor's expense. (The inspection will be to
                  T.H. Hill, DS-1, Category 3 or its equivalent.)

         8.       Subsequent inspections (including the inspection at the end of
                  the job) of all drill pipe, drill collars, kelly, kelly
                  joints, valves, subs and HWDP shall be at the Operator's
                  expense. All repairs, replacements and hauling for repairs
                  will be at Operator's expense. (The inspection will be to T.H.
                  Hill, DS-1, Category 3 or its equivalent.)

         9.       Operator shall furnish all screens for shale shakers.

         10.      Operator shall furnish all potable water for Operator and
                  Contractor personnel.

         11.      Contractor shall agree to furnish, subject to availability and
                  at Operator's request, any necessary 3 1/2" drill pipe, 4 3/4"
                  drill collars and all related handling equipment for a
                  mutually agreed rental rate.

         12.      Operator, Operator's representatives and Operator's
                  sub-contractors shall support Contractor's Safety Policies and
                  Procedures in general and in particular, will comply with all
                  Contractor's personal protective equipment requirements.

         13.      Operator will be responsible for the provision and maintenance
                  of any site septic systems.

         14.      Contractor will provide only one size of mud pump liners. Any
                  additional sizes required by Operator will be provided by
                  Operator at Operator's cost.

                 (U.S. DAYWORK CONTRACT - EXHIBIT "A" - PAGE 4)

<PAGE>

                                                              REVISED, JULY 1998

         15.      All third party equipment required to nipple up/nipple down
                  BOP equipment will be provided and paid for by Operator.

         16.      The rates contained in this Contract are based on the rig
                  inventory attached hereto. Any modification or addition to the
                  rig requested by Operator will be at Operator's expense.

         17.      In all cases where Contractor's employees (including
                  Contractor's direct, borrowed, special or statutory employees)
                  are covered by the Louisiana Worker's Compensation Act, La. R.
                  S. 23:1021 et. seq., Operator and Contractor agree that all
                  work and operations performed by Contractor and its employees
                  pursuant to this agreement are an integral part of and are
                  essential to the ability of Operator to generate Operator's
                  goods, products and services. Furthermore, Operator and
                  Contractor agree that Operator is a statutory employer of
                  Contractor's employees for purposes of La. R. S. 23:1061 (A)
                  (3). Notwithstanding Operator's status as a statutory employer
                  or special employer (as defined in La. R. S. 23:1031 (C)) of
                  Contractor's employees, Contractor shall remain primarily
                  responsible for the payment of Louisiana Worker's Compensation
                  benefits to its employees, and shall not be entitled to seek
                  contribution for any such payments from Operator.

Signed by the
Parties as correct:                  For Contractor:   /s/ R. E. Wilder
                                                    ----------------------------
                                     For Operator:     /s/ Ken L. Kenworthy, Jr.
                                                    ----------------------------

                 (U.S. DAYWORK CONTRACT - EXHIBIT "A" - PAGE 5)

<PAGE>

                                                              REVISED JULY, 1998

EXHIBIT "B"
(SEE SUBPARAGRAPH 8.3)

The following clauses, when required by law, are incorporated in the Contract by
reference as if fully set out:
(1) The Equal Opportunity Clause prescribed in 41 CFR 60-l.4.
(2) The Affirmative Action Clause prescribed in 41 CFR 60-250.4 regarding
    veterans and veterans of the Vietnam era.
(3) The Affirmative Action Clause for handicapped workers prescribed in 41 CFR
    60-741.4.
(4) The Certification of Compliance with Environmental Laws prescribed in 40
    CFR 15.20.

                  (U.S. Daywork CONTRACT - EXHIBIT "B"- PAGE 1)

<PAGE>

                                      DATE

BANK NAME
ADDRESS

Beneficiary:
Nabors Drilling U.S.A., Inc.
515 W. Greens Road                      Letter of Credit No. ___________________
Suite 1000                              Amount: ________________________________
Houston, Texas 77067                    Date of Issue: _________________________

We hereby establish our Irrevocable Standby Letter of Credit No. ______________
in your favor for account of:__________________ (Operator), ____________________
(Address) in the amount of:________________________________.

Expiring ___________________ (Date) at our counters available by payment against
beneficiary's draft at sight on ___________________________ (Bank Name)
accompanied by a written statement purportedly signed by a purported
representative of Nabors Drilling U.S.A., Inc. stating "The undersigned officer
of Nabors Drilling U.S.A., Inc. hereby certifies that the amount drawn under
this letter of credit represents an amount due and owing to Nabors Drilling
U.S.A., Inc. and is unpaid or defaulted by__________________________ (Operator).

We hereby engage with the beneficiary that drafts drawn and presented in
conformity with the terms of this credit will be duly honored on presentation to
us:_______________________________ (Bank Name), _______________________________
(Bank Address). For assistance please call ____________________ (Bank
Representative) at____________.

Partial drawing are permitted.

Any draft drawn under this credit must be marked "Drawn under Irrevocable
Standby Letter of Credit No ____________ issued by _______________ (Bank Name).

Unless otherwise expressly stated herein, this Letter of Credit is governed by
the laws of the State of Texas, and where not inconsistent, the "Uniform Customs
and Practice of Documentary Credits (1993 Revision, in effect as of January 1,
1994) International Chambers of Commerce Publication No. 500." Disputes arising
under this credit shall be governed first by the laws of the State of Texas.

Sincerely,06212001 8K PR EX10.39

Exhibit 10.39

 

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (this "Agreement"),
dated as of June 20, 2001, among
SangStat Medical Corporation, a corporation organized under the laws of the
State of Delaware (the "Company"), and the Purchasers listed on Schedule
I attached hereto (each, a "Purchaser" and collectively, the
"Purchasers").

WHEREAS:

The Company and the Purchasers are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by the provisions of Regulation D ("Regulation D"), as
promulgated by the United States Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933, as amended (the "Securities
Act").

	The Company desires to sell, and the Purchasers desire to
purchase, upon the terms and conditions stated in this Agreement, shares of the
Company's common stock, par value $.001 per share (the "Common Stock").
The shares of Common Stock issuable pursuant to this Agreement are referred to
herein as the "Shares." 

	Contemporaneous with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, in the form attached hereto as Exhibit A (the "Registration
Rights Agreement"), pursuant to which the Company has agreed to provide
certain registration rights under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities
laws.

	All references herein to monetary denominations shall
refer to lawful money of the United States of America.

NOW, THEREFORE, the Company and the Purchasers hereby agree
as follows:

	PURCHASE AND SALE COMMON STOCK.

	Purchase of  Shares.  On the Closing Date (as
defined below), subject to the satisfaction (or waiver) of the conditions set
forth in Section 6 and Section 7 below, the Company shall issue and sell to the
Purchasers, and the Purchasers severally agree to purchase from the Company,
that number of Shares set forth opposite each Purchaser's name on Schedule I
hereto at a purchase price of $11.00 per share, for the aggregate purchase price
and consideration set forth opposite such Purchaser's name thereon.

	Form of Payment.  At the Closing, the Company
shall deliver to each Purchaser a duly executed certificate or certificates (in
such denominations as such Purchaser may reasonably request) representing that
number of Shares set forth opposite such Purchaser's name on Schedule I against
payment of the purchase price therefor by wire transfer, in accordance with the
Company's written wiring instructions.

	Closing Date.  Subject to the satisfaction (or
waiver) of the conditions thereto set forth in Section 6 and Section 7 below,
the issuance, sale and purchase of the Shares shall take place in a Closing (the
"Closing") to be held on June 20, 2001 at 12:00 noon, New York City time,
or at such other time as may be mutually agreed upon by the parties (the
"Closing Date").  The Closing shall occur at the offices of Klehr,
Harrison, Harvey, Branzburg & Ellers, LLP, 260 South Broad Street,
Philadelphia, Pennsylvania 19102.

	Participation Right.  Subject to the terms and
conditions specified in this Section 1(d), for a period of one year after the
date that the Registration Statement (as defined in the Registration Rights
Agreement) the Company is required to file pursuant to Section 2(a) of the
Registration Rights Agreement is declared effective, the Purchasers shall have a
right to participate with respect to future sales by the Company of its capital
stock sold in any financings by the Company involving (i) equity or equity-linked securities,
or (ii) debt which is convertible into equity or in which
there is an equity component ("Additional Securities").  Each time the
Company proposes to offer any Additional Securities, the Company shall make an
offering of such Additional Securities to each Purchaser in accordance with the
following provisions:

	the Company shall deliver a notice (the "Notice")
to the Purchasers stating (i) its bona fide intention to offer such Additional
Securities, (ii) the number of such Additional Securities to be offered, (iii)
the price and terms, if any, upon which it proposes to offer such Additional
Securities, and (iv) the anticipated closing date of the sale of such Additional
Securities;

	by written notification received by the Company, within
the earlier of (i) two (2) days prior to the anticipated closing date or (ii)
ten (10) days after giving of the Notice, any Purchaser may elect to purchase or
obtain, at the price and on the terms specified in the Notice, up to that
portion of such Additional Securities which equals the proportion that the
number of shares of Common Stock purchased by such Purchaser bears to the total
number of shares of Common Stock then outstanding (assuming full conversion and
exercise of all convertible or exercisable securities then outstanding). The
Company shall promptly, in writing, inform each Purchaser which elects to
purchase all of the Additional Shares available to it ("Fully-Exercising
Purchaser") of any other Purchaser's failure to do likewise.  During the
five-day period commencing after such information is given, each Fully-Exercising Purchaser
shall be entitled to obtain that portion of the Additional
Securities for which the Purchasers were entitled to subscribe but which were
not subscribed for by the Purchasers which is equal to the proportion that the
number of shares of Common Stock held by such Fully-Exercising Purchaser bears
to the total number of shares of Common Stock held by all Fully-Exercising
Purchasers who wish to purchase some of the unsubscribed shares;

	if all Additional Securities which the Purchasers are
entitled to obtain pursuant to subsection 1(d)(2) are not elected to be
obtained as provided in subsection 1(d)(2) hereof, the Company may, during
the 90-day period following the expiration of the period provided in
subsection 1(d)(2) hereof, offer the remaining unsubscribed portion of such
Additional Securities to any person or persons at a price not less than, and
upon terms no more favorable to the offeree than those specified in the Notice.
If the Company does not consummate the sale of such Additional Securities within
such period, the right provided hereunder shall be deemed to be revived and such
Additional Securities shall not be offered or sold unless first reoffered to the
Purchasers in accordance herewith;

	the participation right in this Section 1(d) shall not be
applicable to (i) the issuance or sale of shares of Common Stock (or
options therefor) to employees, officers, directors, or consultants of the
Company for the primary purpose of soliciting or retaining their employment or
service pursuant to a stock option plan (or similar equity incentive plan)
approved by the Board of Directors, (ii) the issuance of securities in
connection with a bona fide underwritten public offering that results in total
proceeds to the Company of at least $25,000,000 or any public offering if such
participation is reasonably deemed by the Company to violate the Securities Act
or, as a result of the SEC deeming such participation to potentially violate the
Securities Act, such participation would significantly delay an underwritten
public offering of less than $25,000,000 (iii) the issuance or sale of the
Shares, (iv) the issuance of securities in connection with mergers,
acquisitions, strategic business partnerships or joint ventures (the primary
purpose of which, in the reasonable judgment of the Board, is not to raise
additional capital), or (v) equity-based financings under an equity line of
credit or similar vehicle;

	the participation right set forth in this Section 1(d)
may not be assigned or transferred, except that such right is assignable by each
Purchaser (i) to any wholly owned subsidiary or parent of, or to any corporation
or entity that is, within the meaning of the Securities Act, controlling,
controlled by or under common control with, any such Purchaser, (ii) to any
affiliated venture capital fund and (iii) to any other transferee, provided that
with respect to (i), (ii) and (iii), such transfer (and the related
participation rights) must include at least 100,000 Shares (as adjusted for
stock splits, consolidations and similar transactions).

	PURCHASERS' REPRESENTATIONS AND
WARRANTIES.

Each Purchaser hereby severally represents and warrants to
the Company as follows:

	Purchase for Own Account, Etc.  Each Purchaser is
purchasing the Shares for the Purchaser's own account for investment purposes
only and not with a present view towards the public sale or distribution
thereof, except pursuant to sales that are exempt from the registration
requirements of the Securities Act and/or sales registered under the Securities
Act.  Each Purchaser understands that it must bear the economic risk of this
investment indefinitely, unless the Shares are registered pursuant to the
Securities Act and any applicable state securities or blue sky laws or an
exemption from such registration is available, and that the Company has no
present intention of registering the resale of any of the Shares other than as
contemplated by the Registration Rights Agreement.  Notwithstanding anything in
this Section 2(a) to the contrary, by making the representations herein, the
Purchasers do not agree to hold the Shares for any minimum or other specific
term and reserve the right to dispose of the Shares at any time in accordance
with or pursuant to a registration statement or an exemption from the
registration requirements under the Securities Act.

	Accredited Investor Status.  Each Purchaser is an
"Accredited Investor" as that term is defined in Rule 501(a) of
Regulation D.

	Reliance on Exemptions.  Each Purchaser
understands that the Shares are being offered and sold to the Purchaser in
reliance upon specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying upon
the truth and accuracy of, and such Purchaser's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire the
Securities.

	Information.  Each Purchaser and its counsel, if
any, have been furnished all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Shares which have been specifically requested by such Purchaser or its counsel.
Each Purchaser and its counsel have been afforded the opportunity to ask
questions of the Company and have received what each Purchaser believes to be
satisfactory answers to any such inquiries.  Neither such inquiries nor any
other investigation conducted by each Purchaser or its counsel or any of its
representatives shall modify, amend or affect such Purchaser's right to rely on
the Company's representations and warranties contained in Section 3 below.  Each
Purchaser understands that the Purchaser's investment in the Shares involves a
high degree of risk.

	Governmental Review.  Each Purchaser understands
that no United States federal or state agency or any other government or
governmental agency has passed upon or made any recommendation or endorsement of
the Shares.

	Transfer or Resale.  Each Purchaser understands
that (i) except as provided in the Registration Rights Agreement, the sale or
resale of the Shares have not been and are not being registered under the
Securities Act or any state securities laws, and the Shares may not be
transferred unless (a) the resale of the Shares has been registered thereunder;
or (b) the Purchaser shall have delivered to the Company an opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that the Shares to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; or (c) sold under and in compliance with Rule 144 promulgated
under the Securities Act (or a successor rule) ("Rule 144"); or (d) sold
or transferred to an affiliate of the Purchaser who agrees to sell or otherwise
transfer the Shares only in accordance with the provisions of this Section 2(f)
and who is an Accredited Investor; and (ii) neither the Company nor any other
person is under any obligation to register such Shares under the Securities Act
or any state securities laws (other than pursuant to the Registration Rights
Agreement).  Notwithstanding the foregoing or anything else contained herein to
the contrary, the Shares may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement, provided such pledge is
consistent with applicable laws, rules and regulations.

	Legends.  Each Purchaser understands that until
such time as the Shares have been registered under the Securities Act (including
registration pursuant to Rule 416 thereunder) as contemplated by the
Registration Rights Agreement or otherwise may be sold by the Purchaser under
Rule 144(k), certificates for the Shares may bear a restrictive legend in
substantially the following form:

The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the securities laws
of any state of the United States or in any other jurisdiction.  The securities
represented hereby may not be offered, sold or transferred in the absence of an
effective registration statement for the securities under applicable securities
laws unless offered, sold or transferred pursuant to an available exemption from
the registration requirements of those laws.

The Company agrees that it shall, immediately prior to the
Registration Statement (as defined in the Registration Rights Agreement) being
declared effective, deliver to its transfer agent an opinion letter of counsel,
opining that at any time the Registration Statement is effective, the transfer
agent shall issue certificates representing the Shares without the restrictive
legend above, provided such Shares are to be sold pursuant to the prospectus
contained in the Registration Statement.  Upon receipt of such opinion, the
Company shall cause the transfer agent to confirm, for the benefit of the
holders, that no further opinion of counsel is required at the time of transfer
in order to issue such shares without such restrictive legend.

The legend set forth above shall be removed and the Company
shall issue (or instruct the transfer agent to issue) a certificate without such
legend to the holder of any Shares upon which it is stamped, if, unless
otherwise required by state securities laws, (a) the sale of such Shares is
registered under the Securities Act (including registration pursuant to Rule 416
thereunder) as contemplated by the Registration Rights Agreement; (b) such
holder provides the Company with an opinion of counsel, in form, substance and
scope customary for opinions of counsel in comparable transactions and
reasonably acceptable to the Company, to the effect that a public sale or
transfer of such Shares may be made without registration under the Securities
Act; or (c) such holder provides the Company with reasonable assurances that
such Shares can be sold under Rule 144(k).  In the event the above legend is
removed from any Shares and thereafter the effectiveness of a registration
statement covering such Shares is suspended or the Company determines that a
supplement or amendment thereto is required by applicable securities laws or if
Rule 144 is no longer available, then upon reasonable advance written notice to
the Purchaser, (subject to the provisions of the Registration Rights Agreement)
the Company may (i) instruct its transfer agent to issue a "stop transfer" order
with respect to the Shares and (ii) require the Purchaser or the Purchaser's
broker to confirm that no sales of the Shares will be effected until the "stop
transfer" order is removed.  The Purchasers agree to hold the Shares in
certificated form until the Shares can be sold under Rule 144(k).

	Authorization; Enforcement.  Each Purchaser has
full power and authority to enter into this Agreement and the Registration
Rights Agreement.  This Agreement and the Registration Rights Agreement have
been duly and validly authorized, executed and delivered on behalf of each
Purchaser and are valid and binding agreements of each Purchaser enforceable
against each Purchaser in accordance with their terms; except as such
enforceability may be limited by bankruptcy laws and other similar laws
affecting creditors' rights generally and general principles of equity.

	Residency.  Each Purchaser is a resident of the
jurisdiction set forth under the Purchaser's name on Schedule I hereto.

	Waiver of Participation Right.  Each Purchaser
hereby waives any and all rights that it may have, including, without
limitation, the right to prior notice, arising under Section 1(4) of that
certain Securities Purchase Agreement, dated as of December 29, 2000, by and
among the Company and the other signatories thereto, with respect to the offer
and sale of the Shares pursuant to this Agreement.

The Purchasers' representations and warranties made in this
Article 2(a) through (g) and (i) are made solely for the purpose of
permitting the Company to make a determination that the offer and sale of the
Shares pursuant to this Agreement complies with applicable U.S. federal and
state securities laws and not for any other purpose.  Accordingly, the Company
should not rely on such representations and warranties for any other
purpose. 

	REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

The Company represents and warrants to each Purchaser as
follows, except as set forth on the disclosure schedules delivered herewith with
corresponding section numbers:

	Organization and Qualification.  The Company is a
corporation duly organized and existing in good standing under the laws of the
jurisdiction in which it is incorporated, and has the requisite corporate power
to own its properties and to carry on its business as now being conducted.  The
Company has sufficient licenses, permits and other governmental authorizations
currently required for the conduct of its business or ownership of properties
and is in all material respects complying herewith.  The Company has no material
subsidiaries.  The Company is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted by it makes such qualification necessary and where the
failure so to qualify would have a Material Adverse Effect.  "Material
Adverse Effect" means any material adverse effect on (i) the Shares, (ii)
the ability of the Company to perform its obligations hereunder or under the
Registration Rights Agreement or (iii) the business, operations, properties,
prospects or financial condition of the Company and its subsidiaries, taken as a
whole, but not material adverse effects stemming from changes in the economy as
a whole or in the Company's industry generally. 

	Authorization; Enforcement.  (i) The Company has
the requisite corporate power and authority to enter into and perform its
obligations under this Agreement and the Registration Rights Agreement, to issue
and sell the Shares in accordance with the terms hereof; (ii) the execution,
delivery and performance of this Agreement, and the Registration Rights
Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Shares) have been duly authorized by the Company's Board of Directors and no
further consent or authorization of the Company, its Board of Directors, any
committee of the Board of Directors or the Company's stockholders is required,
and (iii) this Agreement constitutes, and, upon execution and delivery by the
Company of the Registration Rights Agreement, such agreement will constitute,
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms; except as such enforceability may be limited by
bankruptcy laws and other similar laws affecting creditors' rights generally and
general principles of equity.

	Stockholder Authorization.  Neither the execution,
delivery or performance by the Company of its obligations under this Agreement
or the Registration Rights Agreement, nor the consummation by it of the
transactions contemplated hereby or thereby (including, without limitation, the
issuance of the Shares) requires any consent or authorization of the Company's
stockholders, including but not limited to consent under Rule 4350(i)
promulgated by the National Association of Securities Dealers, Inc. (the
"NASD") or any similar rule. 

	Capitalization.  The capitalization of the Company
as of the date hereof, including the authorized capital stock, the number of
shares issued and outstanding, the number of shares issuable and reserved for
issuance pursuant to the Company's stock option plans, the number of shares
issuable and reserved for issuance pursuant to securities exercisable or
exchangeable for, or convertible into, any shares of capital stock and the
number of shares to be issued pursuant to the terms of this Agreement is set
forth on Schedule 3(d).  All of such outstanding shares of capital stock
have been, or upon issuance, will be, validly issued, fully paid and non-assessable.  No
shares of capital stock of the Company (including the Shares)
are subject to preemptive rights or any other similar rights of the stockholders
of the Company or any liens or encumbrances created by the Company.  Except for
the Shares and as set forth on Schedule 3(d), as of the date of this
Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exercisable or exchangeable for, any
shares of capital stock of the Company or any of its subsidiaries, or
arrangements by which the Company or any of its subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
subsidiaries, nor are any such issuances or arrangements contemplated, and (ii)
there are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of its or their securities
under the Securities Act (except the Registration Rights Agreement).
Schedule 3(d) sets forth all of the Company issued securities or
instruments containing anti-dilution or similar provisions that will be
triggered by, and all of the resulting adjustments that will be made to such
securities and instruments as a result of, the issuance of the Shares in
accordance with the terms of this Agreement.  The Company has furnished to the
Purchaser true and correct copies of the Company's Certificate of Incorporation
as in effect on the date hereof ("Certificate of Incorporation"), the
Company's Bylaws as in effect on the date hereof (the "Bylaws"), and all
other instruments and agreements governing securities convertible into or
exercisable or exchangeable for capital stock of the Company. 

	Issuance of Shares.  The Shares will be duly
authorized and, upon issuance, and in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and free from
all taxes, liens, claims and encumbrances created by the Company and will not,
to the Company's knowledge, be subject to preemptive rights or other similar
rights of stockholders of the Company and will not impose personal liability on
the holders thereof. 

	No Conflicts.  The execution, delivery and
performance of this Agreement and the Registration Rights Agreement, by the
Company, and the consummation and performance by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Shares) will not (i) result in a violation of the Certificate of
Incorporation or Bylaws or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment (including, without
limitation, the triggering of any anti-dilution provisions), acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including United States federal and state
securities laws and regulations and rules or regulations of any self-regulatory
organizations to which either the Company or its securities are subject)
applicable to the Company or any of its subsidiaries or by which any property or
asset of the Company or any of its subsidiaries is bound or affected (except,
with respect to clause (ii), for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations that would not,
individually or in the aggregate, have a Material Adverse Effect).  Neither the
Company nor any of its subsidiaries is in violation of its Certificate of
Incorporation, Bylaws or other organizational documents and neither the Company
nor any of its subsidiaries is in default (and no event has occurred which, with
notice or lapse of time or both, would put the Company or any of its
subsidiaries in default) under, nor to the Company's knowledge, except as set
forth on Schedule 3(f) hereto, has there occurred any event giving others
(with notice or lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its subsidiaries is a party, except for actual or possible
violations, defaults or rights that would not, individually or in the aggregate,
have a Material Adverse Effect. The businesses of the Company and its
subsidiaries are not being conducted, and shall not be conducted so long as the
Purchaser owns any of the Shares, in violation of any law, ordinance or
regulation of any governmental entity, except for possible violations the
sanctions for which either singly or in the aggregate would not have a Material
Adverse Effect.  Except as specifically contemplated by this Agreement and the
Registration Rights Agreement, the Company is not required to obtain any
consent, approval, authorization or order of, or make any filing or registration
with, any court or governmental agency or any regulatory or self regulatory
agency or other third party in order for it to execute, deliver or perform any
of its obligations under this Agreement or, the Registration Rights Agreement,
in each case in accordance with the terms hereof or thereof.  The Company is not
in violation of the listing requirements of the Nasdaq National Market
("NASDAQ") and does not reasonably anticipate that the Common Stock will
be delisted by NASDAQ for the foreseeable future.

	SEC Documents, Financial Statements.  Since
December 31, 1998, the Company has timely filed (within applicable
extension periods) all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (all of the foregoing filed prior to the date hereof
and all exhibits included therein and financial statements and schedules thereto
and documents incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents").  All of the SEC Documents from December
31, 1998 are currently available for review on the SEC website via EDGAR and
documents filed prior to such date have been made available to the Purchasers.
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act or the Securities Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.  None of the statements made in any such SEC
Documents is, or has been, required to be amended or updated under applicable
law (except for such statements as have been amended or updated in subsequent
filings made prior to the date hereof).  As of their respective dates, the
financial statements of the Company included in the SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC applicable with respect thereto.
Such financial statements have been prepared in accordance with U.S. generally
accepted accounting principles ("GAAP"), consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
immaterial year-end audit adjustments).  Except as set forth in the financial
statements of the Company included in the SEC Documents filed prior to the date
hereof, the Company has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to the date
of such financial statements and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
GAAP to be reflected in such financial statements, which liabilities and
obligations referred to in clauses (i) and (ii), individually or in the
aggregate, are not material to the financial condition or operating results of
the Company. 

	Absence of Certain Changes.  Since
December 31, 2000, there has been no material adverse change and no
material adverse development in the business, properties, operations, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, which would have a Material Adverse Effect on
the Company, except as disclosed in the SEC Documents filed prior to the date
hereof.

	Absence of Litigation.  Except as disclosed in the
SEC Documents filed prior to the date hereof, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body, including, without
limitation, the SEC or NASDAQ, pending or, to the knowledge of the Company or
any of its subsidiaries, threatened against or affecting the Company, any of its
subsidiaries, or any of their respective directors or officers in their
capacities as such.  To the knowledge of the Company, after reasonable
investigation, there are no facts which, if known by a potential claimant or
governmental authority, could give rise to a claim or proceeding which, if
asserted or conducted with results unfavorable to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse Effect on
the Company.

	Intellectual Property.  Each of the Company and
its subsidiaries owns or is licensed to use all patents, patent applications,
trademarks, trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, permits, inventions, discoveries, processes,
scientific, technical, engineering and marketing data, object and source codes,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) and other
similar rights and proprietary knowledge necessary for the conduct of its
business as now being conducted (collectively, "Intangibles").  To the
knowledge of the Company and except as disclosed in the SEC documents filed
prior to the date hereof, neither the Company nor any subsidiary of the Company
infringes or is in conflict with any right of any other person with respect to
any Intangibles which, if the subject of an unfavorable decision, ruling or
finding would have a Material Adverse Effect.  Except as disclosed in the SEC
documents filed prior to the date hereof, neither the Company nor any of its
subsidiaries has received written notice of any pending conflict with or
infringement upon such third party Intangibles.  Except as disclosed in the SEC
documents filed prior to the date hereof, neither the Company nor any of its
subsidiaries has entered into any consent agreement, indemnification agreement,
forbearance to sue or settlement agreement with respect to the validity of the
Company's or its subsidiaries' ownership or right to use its Intangibles and, to
the knowledge of the Company, there is no reasonable basis for any such claim to
be successful.  The Intangibles are valid and enforceable and no registration
relating thereto has lapsed, expired or been abandoned or canceled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and in good standing.  The Company and its subsidiaries
have complied, in all material respects, with their respective contractual
obligations relating to the protection of the Intangibles used pursuant to
licenses.  To the knowledge of the Company, no person is infringing on or
violating the Intangibles owned or used by the Company or its
subsidiaries.

	Foreign Corrupt Practices. Neither the Company,
nor any of its subsidiaries, nor any director, officer, agent, employee or other
person acting on behalf of the Company or any subsidiary has, in the course of
his actions for, or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.

	Disclosure.  All information relating to or
concerning the Company set forth in this Agreement or provided to the Purchasers
in connection with the transactions contemplated hereby is true and correct in
all material respects and the Company has not omitted to state any material fact
necessary in order to make the statements made herein or therein, in light of
the circumstances under which they were made, not misleading. To the Company's
knowledge, no event or circumstance has occurred or exists with respect to the
Company or its subsidiaries or their respective businesses, properties,
prospects, operations or financial conditions, which has not been publicly
disclosed but, under applicable law, rule or regulation, would be required to be
disclosed by the Company in a registration statement filed on the date hereof by
the Company under the Securities Act with respect to a primary issuance of the
Company's securities.

	Acknowledgment Regarding Purchasers' Purchase of the
Shares.  The Company acknowledges and agrees that the Purchasers are not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement or the transactions contemplated
hereby, the relationship between the Company and the Purchasers is "arms-length"
and, except for the Purchaser's representations and warranties in Section 2
hereof, any statement made by any Purchaser or any of their representatives or
agents in connection with this Agreement and the transactions contemplated
hereby is merely incidental to the Purchasers' purchase of the Shares and has
not been relied upon by the Company, its officers or directors in any way.  The
Company further acknowledges that the Company's decision to enter into this
Agreement has been based solely on an independent evaluation by the Company and
its representatives.

	Form S-3 Eligibility.  The Company is currently
eligible to register the resale of its Common Stock on a registration statement
on Form S-3 under the Securities Act.  There exist no facts or circumstances
that would prohibit or delay the preparation and filing of a registration
statement on Form S-3 with respect to the Registrable Securities (as defined in
the Registration Rights Agreement).  The Company has no basis to believe that
its past or present independent public auditors will withhold their consent to
the inclusion, or incorporation by reference, of their audit opinion concerning
the Company's financial statements which are included in the Registration
Statement required to be filed pursuant to the Registration Rights
Agreement.

	No General Solicitation.  Neither the Company nor
any distributor participating on the Company's behalf in the transactions
contemplated hereby (if any) nor any person acting for the Company, or any such
distributor, has conducted any "general solicitation," as such term is defined
in Regulation D, with respect to any of the Shares being offered
hereby.

	No Integrated Offering.  Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales of any security or solicited any
offers to buy any security under circumstances that would require registration
of the Shares being offered hereby under the Securities Act or cause this
offering of Shares to be integrated with any prior offering of securities of the
Company for purposes of the Securities Act, the result of such integration which
would require registration under the Securities Act, or any applicable
stockholder approval provisions, including, without limitation, Rule 4460(i) of
the NASD or any similar rule.

	No Brokers.  The Company has taken no action that
would give rise to any claim by any person for brokerage commissions, finder's
fees or similar payments by the Purchaser relating to this Agreement or the
transactions contemplated hereby.

	Acknowledgment Regarding Shares.  The Company's
executive officers have studied and fully understand the nature of the Shares
being sold hereunder.  The Company's Board of Directors has determined in its
good faith business judgment that the issuance of the Shares hereunder and the
consummation of the other transactions contemplated hereby are in the best
interests of the Company and its stockholders.

	Title.  The Company and its subsidiaries have good
and marketable title in fee simple to all real property and good and
merchantable title to all personal property owned by them that is material to
the business of the Company and its subsidiaries, in each case free and clear of
all liens, encumbrances and defects except such as do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries.  Any
real property and facilities held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not materially interfere with
the use made and proposed to be made of such real property and facilities by the
Company and its subsidiaries.

	Tax Status. Except as set forth in the SEC
Documents, the Company and each of its subsidiaries has made or filed all
foreign, U.S. federal, state and local income and all other material tax
returns, reports and declarations required by any jurisdiction to which it is
subject (unless and only to the extent that the Company and each of its
subsidiaries has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply, or except as would
not have a Material Adverse Effect on the Company.  There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim except as would not have a Material Adverse Effect on the Company.  The
Company has not executed a waiver with respect to any statute of limitations
relating to the assessment or collection of any federal, state or local tax.
None of the Company's tax returns are presently being audited by any taxing
authority.

	Key Employees.  Each of the Company's directors,
officers and any Key Employee (as defined below) is currently serving the
Company in the capacity disclosed in the SEC Documents.  As of the Closing Date,
no Key Employee, to the knowledge of the Company and its subsidiaries, is in
violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each Key Employee does not subject the Company or any of its
subsidiaries to any material liability with respect to any of the foregoing
matters.  As of the Closing Date, no Key Employee has, to the  knowledge of the
Company and its subsidiaries, any intention to terminate or limit his employment
with, or services to, the Company or any of its subsidiaries, nor is any such
Key Employee subject to any constraints which would cause such employee to be
unable to devote his full time and attention to such employment or services.
"Key Employee" means the persons listed on Schedule 3(u).

	Insurance.  The Company has in force fire,
casualty, product liability and other insurance policies, with extended
coverage, sufficient in amount to allow it to replace any of its material
properties or assets which might be damaged or destroyed or sufficient to cover
liabilities to which the Company may reasonably become subject, and such types
and amounts of other insurance with respect to its business and properties, on
both a per occurrence and an aggregate basis, as are customarily carried by
persons engaged in the same or similar business as the Company.  No default or
event has occurred that could give rise to a default under any such
policy.

	Environmental Matters.  There is no environmental
litigation or other environmental proceeding pending or threatened in writing by
any governmental regulatory authority or others with respect to the current or
any former business of the Company or any partnership or joint venture currently
or at any time affiliated with the Company.  To the Company's knowledge, no
state of facts exists as to environmental matters or Hazardous Substances (as
defined below) that involves the reasonable likelihood of a material capital
expenditure by the Company or that may otherwise have a Material Adverse Effect.
No Hazardous Substances have been treated, stored or disposed of, or otherwise
deposited, in or on the properties owned or leased by the Company or by any
partnership or joint venture currently or at any time affiliated with the
Company in violation of any applicable environmental laws.  The environmental
compliance programs of the Company comply in all respects with all environmental
laws, whether federal, state or local, currently in effect.  As used herein,
"Hazardous Substances" means any substance, waste, contaminant, pollutant
or material that has been determined by any governmental authority to be capable
of posing a risk of injury to health, safety, property or the
environment. 

	COVENANTS.

	Best Efforts.  The parties shall use their best
efforts timely to satisfy each of the conditions described in Section 6 and
Section 7 of this Agreement.

	Form D: Blue Sky Laws.  The Company shall file
with the SEC a Form D with respect to the Shares as required under Regulation D
and provide a copy thereof to the Purchasers promptly after such filing.  The
Company shall, on or before the First Closing Date, take such action as the
Company shall reasonably determine is necessary to qualify the Shares for sale
to the Purchasers pursuant to this Agreement under applicable securities or
"blue sky" laws of the states of the United States or obtain exemption
therefrom, and shall provide evidence of any such action so taken to the
Purchasers on or prior to the Closing Date.  Within ten (10) days after the
Closing Date, the Company shall file a Current Report on Form 8-K (a "Form 8-K")
concerning this Agreement and the transactions contemplated hereby,
which Form 8-K shall attach this Agreement as exhibits to such Form 8-K.

	Reporting Status.  So long as any Purchaser
beneficially owns any of the Shares, the Company shall timely file all reports
required to be filed with the SEC pursuant to the Exchange Act, and the Company
shall not terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations thereunder
would permit such termination.  In addition, the Company shall take all
commercially reasonable actions to meet the "registrant eligibility"
requirements set forth in the general instructions to Form S-3 or any successor
form thereto, to continue to be eligible to register the resale of its Common
Stock on a registration statement on Form S-3 under the Securities Act.

	Use of Proceeds.  The Company shall  use the
proceeds from the sale of the Shares as set forth in Schedule
4(d).

	Expenses.  The Company shall pay to SDS Capital
Partners ("SDS Capital") at the Closing, reimbursement for the out-of-pocket
expenses reasonably incurred by SDS Capital's advisors in connection with
the negotiation, preparation, execution and delivery of this Agreement
(including earlier versions of this transaction) and the other agreements to be
executed in connection herewith, including, without limitation, SDS Capital's
advisors' reasonable due diligence and attorneys' fees and expenses (the
"Expenses") not to exceed $25,000; provided, however, that SDS Capital
shall be permitted to deduct all Expenses from the purchase price payable by SDS
Capital hereunder.  In addition, from time to time thereafter, upon SDS
Capital's written request, the Company shall pay to SDS Capital such additional
Expenses, if any, not covered by such payment, in each case to the extent
reasonably incurred by SDS Capital's agents in connection with the negotiation,
preparation, execution and delivery of this Agreement; provided, however, that
in no event shall the Company be obligated to pay more than $25,000 on account
of Expenses.

	Financial Information.  The Company agrees to add
each Purchaser to its mailing list (whether via electronic transmission or
otherwise) for purposes of each Purchaser receiving, if sent by the Company to
its stockholders, copies of the following reports:  (i)  its Annual Report on
Form 10-K, its Quarterly Reports on Form 10-Q, its proxy statements and any
Current Reports on Form 8-K; (ii) copies of all press releases issued by the
Company or any of its subsidiaries; and (iii) copies of any notices and other
information made available or given to stockholders of the Company
generally.

	Listing. The Company shall use commercially
reasonable efforts to maintain, for a period of five years from the Closing
Date, the listing of all Shares on each national securities exchange or
automated quotation system on which shares of Common Stock are currently listed.
The Company will use commercially reasonable efforts to continue the listing and
trading of its Common Stock on NASDAQ, the New York Stock Exchange
("NYSE") or the American Stock Exchange ("AMEX") and will comply
in all respects with the reporting, filing and other obligations under the
bylaws or rules of the NASD and such exchanges, as applicable.  The Company
shall promptly provide to each Purchaser copies of any notices it receives
regarding the continued eligibility of the Common Stock for trading on the
NASDAQ or, if applicable, any securities exchange or automated quotation system
on which securities of the same class or series issued by the Company are then
listed or quoted, if any.  This Section shall not apply if the Company is
acquired. 

	No Integrated Offerings.  The Company shall not
make any offers or sales of any security (other than the Shares) under
circumstances that would require registration of the Shares being offered or
sold hereunder under the Securities Act or cause this offering of the Shares to
be integrated with any other offering of securities by the Company for purposes
of any stockholder approval provision applicable to the Company or its
securities.

	Legal Compliance.  The Company shall conduct its
business and the business of its subsidiaries in compliance with all laws,
ordinances or regulations of governmental entities applicable to such
businesses, except where the failure to do so would not have a Material Adverse
Effect on the Company.

	Inspection of Properties and Books.  So long as
any Purchaser shall hold any Shares, such Purchasers and its representatives and
agents (collectively, the "Inspectors") shall have the right upon
reasonable notice to the Company and during business hours, at the Purchasers'
expense, to visit and inspect any of the properties of the Company and of its
subsidiaries, to examine the books of account and records of the Company and of
its subsidiaries, to make or be provided with copies and extracts therefrom, to
discuss the affairs, finances and accounts of the Company and of its
subsidiaries with, and to be advised as to the same by, its and their officers,
employees and independent public accountants (and by this provision the Company
authorizes such accountants to discuss such affairs, finances and accounts,
whether or not a representative of the Company is present) all at such
reasonable times and intervals and to such reasonable extent as the Purchasers
may desire; provided, however, that each Inspector shall hold in
confidence and shall not make any disclosure (except to the Purchasers) of any
such information which the Company determines in good faith to be confidential,
and of which determination the Inspectors are so notified, unless (a) the
disclosure of such information is necessary to avoid or correct a misstatement
or omission in any Registration Statement filed pursuant to the Registration
Rights Agreement (a final determination of which shall be based upon an opinion
of outside counsel to the Company), (b) the release of such information is
ordered pursuant to a subpoena or other order from a court or government body of
competent jurisdiction, or (c) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement.  The Company shall not be required to disclose any confidential
information to any Inspector until and unless such Inspector shall have entered
into confidentiality agreements (in form and substance satisfactory to the
Company) with the Company with respect thereto, substantially in the form of
this Section 4(j).  Each Purchaser agrees that it shall, upon learning that
disclosure of such information is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the information
deemed confidential.

	TRANSFER AGENT INSTRUCTIONS.

	The Company shall instruct its transfer agent to issue
certificates, registered in the name of each Purchaser or its nominee, for the
Shares in such amounts as specified by such Purchaser to the Company.

	The Company warrants that no instruction other than such
instructions referred to in this Section 5, will be given by the Company to its
transfer agent and that the Shares shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the Registration Rights Agreement.  Nothing in this Section or any other
limits in the Registration Rights Agreement shall affect in any way the
Purchasers' obligations and agreement set forth in Section 2(g) hereof to resell
the Shares pursuant to an effective registration statement or under an exemption
from the registration requirements of applicable securities law. 

	If a Purchaser provides the Company and the transfer
agent with an opinion of counsel, which opinion of counsel shall be in form,
substance and scope customary for opinions of counsel in comparable transactions
and reasonably acceptable to the Company, to the effect that the Shares to be
sold or transferred may be sold or transferred pursuant to an exemption from
registration, or a Purchaser provides the Company with reasonable assurances
that such Shares may be sold under Rule 144, the Company shall permit the
transfer.

	CONDITIONS TO THE COMPANY'S OBLIGATION TO
SELL.

The obligation of the Company hereunder to issue and sell the
Shares to the Purchasers hereunder is subject to the satisfaction, at or before
the Closing Date of each of the following conditions thereto, provided that
these conditions are for the Company's sole benefit and may be waived in writing
by the Company at any time in its sole discretion:

	Each of the Purchasers shall have executed this Agreement
and the Registration Rights Agreement, and delivered executed original copies of
the same to the Company.

	Each Purchaser shall have delivered the purchase price
set forth opposite its name on Schedule I hereto for the Shares being purchased
by it at such Closing in accordance with Section 1(b) above.

	The representations and warranties of each Purchaser
shall be true and correct as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which representations and warranties shall be true and
correct as of such date), and each Purchaser shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Purchasers at or prior to the Closing Date.

	No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction or any self-
regulatory organization having authority over the matters contemplated hereby
which questions the validity of, challenges or prohibits the consummation of any
of the transactions contemplated by this Agreement.

	CONDITIONS TO THE PURCHASERS' OBLIGATION TO
PURCHASE.

The obligation of the Purchasers hereunder to purchase the
Shares from the Company hereunder is subject to the satisfaction, at or before
the Closing Date of each of the following conditions, provided that such
conditions are for the Purchasers' sole benefit and may be waived in writing by
the Purchasers at any time in the Purchasers' sole discretion:

	The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered executed original copies of the
same to the Purchasers.

	The Company shall have delivered to the Purchasers duly
executed certificates (each in such denominations as each Purchaser shall
reasonably request) representing the Shares being so purchased by the Purchasers
at the Closing in accordance with Section 1(b) above.

	The Common Stock shall be listed on NASDAQ and trading in
the Common Stock (or NASDAQ generally) shall not have been suspended by the SEC
or NASDAQ.

	The representations and warranties of the Company shall
be true and correct as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which representations and warranties shall be true and
correct as of such date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date.  The Purchasers shall have received a
certificate, executed by the Chief Executive Officer of the Company after
reasonable investigation, dated as of the Closing Date to the foregoing effect
and as to such other matters as may reasonably be requested by the
Purchasers.

	No statute, rule, regulation, executive order, decree,
ruling, injunction, action or proceeding shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which questions the validity of, challenges or
prohibits the consummation of, any of the transactions contemplated by this
Agreement.

	The Purchasers shall have received opinions of the
Company's general counsel and of the Company's outside counsel, dated as of the
Closing Date, in form, scope and substance reasonably satisfactory to the
Purchasers and in substantially the form of Exhibits B-1 and B-2
attached hereto.

	There shall have been no material adverse changes and no
material adverse developments in the business, properties, operations,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, since the date hereof, and no information, of
which the Purchasers are not currently aware, shall come to the attention of the
Purchasers that is materially adverse to the Company.

	The Secretary of the Company shall deliver to each
Purchaser at the Closing a certificate stating that all Board of Directors and
stockholder approvals necessary to authorize the performance by the Company of
its obligations contemplated by this Agreement have been obtained and attaching
thereto: (i) a copy of the Certificate of Incorporation (with any and all
certificates of designation) and the Bylaws (as amended through the date of the
Closing), certified by the Secretary of the Company as the true and correct
copies thereof as of the Closing; and (ii) a copy of the resolutions of the
Board of Directors and, if required, the stockholders of the Company,
authorizing the execution and delivery of this Agreement and the Registration
Rights Agreement, the issuance of the Shares and other matters contemplated
hereby.

	GOVERNING LAW; MISCELLANEOUS.

	Governing Law; Jurisdiction.  This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed in the State of
Delaware.  The Company and the Purchasers irrevocably consent to the
jurisdiction of the United States federal courts and the state courts located in
the State of Delaware in any suit or proceeding based on or arising under this
Agreement and irrevocably agree that all claims in respect of such suit or
proceeding may be determined in such courts. The Company and the Purchasers
irrevocably waive the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The parties further agree that service of process upon
the other party mailed by first class mail shall be deemed in every respect
effective service of process upon such party in any such suit or proceeding.
Nothing herein shall affect the right of the parties to serve process in any
other manner permitted by law.  The parties agree that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful
manner.

	Counterparts.  This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party.  This Agreement, once executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the party so delivering this
Agreement.  In the event any signature is delivered by facsimile transmission,
the party using such means of delivery shall cause the manually executed
execution page or pages hereof to be physically delivered to the other party
within five (5) business days of the execution hereof, provided that the failure
to so deliver any manually executed execution page shall not affect the validity
or enforceability of this Agreement.

	Headings.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

	Severability.  If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

	Entire Agreement; Amendments.  This Agreement, and
the instruments referenced herein and the Registration Rights Agreement contain
the entire understanding of the Purchasers, the Company, their affiliates and
persons acting on their behalf with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Purchasers make any representation, warranty, covenant or
undertaking with respect to such matters.  No provision of this Agreement may be
waived other than by an instrument in writing signed by the party to be charged
with enforcement and no provision of this Agreement may be amended other than by
an instrument in writing signed by the Company and the Purchasers.

	Notices.  Any notices required or permitted to be
given under the terms of this Agreement shall be sent by certified or registered
mail (return receipt requested) or delivered personally, by responsible
overnight carrier or by confirmed facsimile, and shall be effective five (5)
days after being placed in the mail, if mailed, or upon receipt or refusal of
receipt, if delivered personally or by responsible overnight carrier or
confirmed facsimile, in each case addressed to a party.  The addresses for such
communications shall be:

	
If to the Company:

	 
	
SangStat Medical Corporation

                   6300 Dumbarton Circle

                   Fremont, California 94555

                   Facsimile: (510) 789-4493

                   Attn: General Counsel

	
With a copy simultaneously transmitted by like means to:

	 
	
Gray Cary Ware & Friedenrich

                   4365 Executive Drive

                   Suite 1600

                   San Diego, CA 92121

                   Facsimile: (858) 677-1477

                   Attn: Paul B. Johnson, Esquire

If to a Purchaser, to the address set forth under the
Purchaser's name on the execution page hereto.

Each party shall provide notice to the other party of any
change in address.

	Successors and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
assigns.  The Company may not assign this Agreement or any rights or obligations
hereunder.  The Purchasers may assign and transfer some or all of their rights
hereunder and some or all of the Shares without the prior consent of the
Company; provided that such transfer must include at least 100,000 Shares (as
adjusted for stock splits, consolidations and similar transactions).
Notwithstanding anything to the contrary contained in this Agreement or the
Registration Rights, the Shares may be pledged and all rights of the Purchasers
under this Agreement or any other agreement or document related to the
transactions contemplated hereby may be assigned, without further consent of the
Company, to a bona fide pledgee in connection with the Purchasers' margin or
brokerage account.

	Third Party Beneficiaries.  This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.

	Survival.  The representations and warranties and
the agreements and covenants set forth in Sections 2, 3, 4, 5 and 8 hereof shall
survive for three years following the Closing notwithstanding any due diligence
investigation conducted by or on behalf of the Purchasers.  Moreover, none of
the representations and warranties made by one party herein shall act as a
waiver of any rights or remedies the other party may have under applicable U.S.
federal or state securities laws.  The Company shall indemnify and hold harmless
the Purchasers and each of the Purchasers' officers, directors, employees,
partners, members, agents and affiliates for all losses or damages arising as a
result of or related to any breach or alleged breach by the Company of any of
its representations or covenants set forth herein, including advancement of
expenses as they are incurred.

	Publicity.  The Company and the Purchasers shall
have the right to approve before issuance any press releases, SEC or NASD
filings, or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of the Purchasers, to make any press
release or SEC or NASD filings with respect to such transactions as is required
by applicable law and regulations (although the Purchasers shall be consulted by
the Company in connection with any such press release and filing prior to its
release and shall be provided with a copy thereof).

	Further Assurances.  Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

	Termination.  In the event that the Closing shall
not have occurred on or before June 18, 2001 unless the parties agree
otherwise, this Agreement shall terminate at the close of business on such date.
Notwithstanding any termination of this Agreement, any party not in breach of
this Agreement shall preserve all rights and remedies it may have against
another party hereto for a breach of this Agreement prior to or relating to the
termination hereof.

	Joint Participation in Drafting.  Each party to
this Agreement has participated in the negotiation and drafting of this
Agreement and the Registration Rights Agreement.  As such, the language used
herein and therein shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction will
be applied against any party to this Agreement.

	Equitable Relief.  The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Purchasers by vitiating the intent and purpose of the transactions contemplated
hereby.  Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations hereunder (including, but not limited to, its
obligations pursuant to Section 5 hereof) will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this
Agreement (including, but not limited to, its obligations pursuant to Section 5
hereof), that the Purchasers shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate issuance and transfer of the Shares, without the necessity of showing
economic loss and without any bond or other security being required.

	For purposes hereof, "Business Day" means any day
except Saturday, Sunday or other day on which commercial banks in the City of
New York are authorized or required to close by law.

IN WITNESS WHEREOF, the undersigned Purchaser and the Company
have caused this Agreement to be duly executed as of the date first above
written.

SANGSTAT MEDICAL CORPORATION

 

    By: /s/ Jean-Jacques Bienaimé

    Name:Jean-Jacques Bienaimé

    Title:Chairman, CEO & President

 

 

PURCHASER:

NARRAGANSETT I, LP

 

By:/s/ Joseph L. Dowling III

      Name: Joseph L. Dowling III

      Title: Managing Member

RESIDENCE:

ADDRESS:153 E. 53rd Street

26th Floor
New York, NY 10022

Telecopy:  (222) 521-5029
             
             
   

Attention:  Mary Trotter

With a copy to:

Klehr, Harrison, Harvey, Branzburg & Ellers LLP

260 South Broad Street

Philadelphia, Pennsylvania 19102

Telecopy:  (215) 568-6603

Attention: Stephen T. Burdumy, Esquire

IN WITNESS WHEREOF, the undersigned Purchaser and the Company
have caused this Agreement to be duly executed as of the date first above
written.

SANGSTAT MEDICAL CORPORATION

 

    By: /s/ Jean-Jacques Bienaimé

    Name:Jean-Jacques Bienaimé

    Title:Chairman, CEO & President

 

 

PURCHASER:

NARRAGANSETT OFFSHORE, LTD.

 

By: /s/ Joseph L. Dowling III

      Name: Joseph L. Dowling III

      Title: Managing Member

RESIDENCE:

ADDRESS:153 E. 53rd Street

26th Floor
New York, NY 10022

Telecopy:  (222) 521-5029
             
             
   

Attention:  Mary Trotter

With a copy to:

Klehr, Harrison, Harvey, Branzburg & Ellers LLP

260 South Broad Street

Philadelphia, Pennsylvania 19102

Telecopy:  (215) 568-6603

Attention:  Stephen T. Burdumy, Esquire

IN WITNESS WHEREOF, the undersigned Purchaser and the Company
have caused this Agreement to be duly executed as of the date first above
written.

 

SANGSTAT MEDICAL CORPORATION

    By: /s/ Jean-Jacques Bienaimé

    Name:Jean-Jacques Bienaimé

    Title:Chairman, CEO & President

 

PURCHASER:

ROYAL BANK OF CANADA

by its agent RBC Dominion Securities Corporation

 

By: /s/ Mark A. Standish

      Name: Mark A. Standish

      Title:   Managing Director

By:/s/ Steven C. Miller

      Name:  Steven C. Miller

      Title:    Managing Director

RESIDENCE: Toronto, Canada

ADDRESS:One Liberty Plaza
165 Broadway, 2nd Floor

New York, New York 10006-1404

Telephone: (212) 858-7200

Telecopy: (212) 858-7437

Attention: Daniel J. Glusker, Esq.

With a copy to:

Klehr, Harrison, Harvey, Branzburg & Ellers LLP

260 South Broad Street

Philadelphia, Pennsylvania 19102

Telecopy:  (215) 568-6603

Attention:  Stephen T. Burdumy, Esquire

IN WITNESS WHEREOF, the undersigned Purchaser and the Company
have caused this Agreement to be duly executed as of the date first above
written.

 

SANGSTAT MEDICAL CORPORATION

    By: /s/ Jean-Jacques Bienaimé

    Name:Jean-Jacques Bienaimé

    Title:Chairman, CEO & President

 

 

PURCHASERS:

S.A.C. CAPITAL ASSOCIATES, LLC

By:S.A.C. Capital Advisors, LLC

By:/s/ Peter Nussbaum

      Name:  Peter Nussbaum

      Title:    General Counsel

RESIDENCE:Anquilla

ADDRESS:c/o S.A.C. Capital Advisors,
LLC  
777 Long Ridge Road
             
       

Stanford, CT 06902
             
           

Telecopy:  203-614-2393
             
             
   

Attention:  General Counsel
             
             
   

With a copy to:

Klehr, Harrison, Harvey, Branzburg & Ellers LLP

260 South Broad Street

Philadelphia, Pennsylvania 19102

Telecopy:  (215) 568-6603

Attention:  Stephen T. Burdumy, Esquire

IN WITNESS WHEREOF, the undersigned Purchaser and the Company
have caused this Agreement to be duly executed as of the date first above
written.

 

SANGSTAT MEDICAL CORPORATION

    By: /s/ Jean-Jacques Bienaimé

    Name:Jean-Jacques Bienaimé

    Title:Chairman, CEO & President

 

PURCHASER:

SOCIÉTÉ GÉNÉRALE

 

 

 

By:

      Name: Guillaume Pollet

      Title:   Managing Director

RESIDENCE: Paris, France

ADDRESS:1221 Avenue of the Americas

6th Floor

New York, N.Y. 10020
212-278-5260

With a copy to:

Klehr, Harrison, Harvey, Branzburg & Ellers LLP

260 South Broad Street

Philadelphia, Pennsylvania 19102

Telecopy:  (215) 568-6603

Attention:  Stephen T. Burdumy, Esquire

SCHEDULE I

	

Name of Purchaser
	
Number of Shares Being Purchased
	

Purchase Price
	
Price 

Per Share

	
Narragansett I, LP
	
170,000
	
$1,870,000
	
$11.00

	
Narragansett Offshore, Ltd.
	
330,000
	
$3,630,000
	
$11.00 

	
Royal Bank of Canada
	
330,000
	
$3,630,000
	
$11.00

	
S.A.C. Capital Associates, LLC
	
450,000
	
$4,950,000
	
$11.00

	
Société Générale
	
83,635
	
$919,985
	
$11.00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00026-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00026-of-00352.parquet"}]]