Document:

exv10w1

 

Exhibit 10.1

SEVERANCE AGREEMENT AND RELEASE

     This Severance Agreement and Release (the “Agreement”) is effective on the date described in
Section 17. This Agreement is made as a mutually agreed compromise among the Parties for the
complete and final settlement of all claims, differences, and causes of action existing between
them as of the Effective Date of this Agreement.

Parties

     The parties to this Agreement are PetroQuest Energy, Inc., a Delaware corporation (the
“Company”) and Ralph J. Daigle, an individual (“Employee”). Employee and the Company are
collectively referred to as the “Parties.”

Preamble

     WHEREAS, Employee previously served as a director of the Company and was previously employed
as an officer and employee of the Company, to perform work at the Company’s workplace in Lafayette,
Louisiana and Houston, Texas, pursuant to an Employment Agreement dated September 1, 1998, and
subsequently amended (the “Employment Agreement”);

     WHEREAS, Employee and the Company also entered into a Termination Agreement dated December 16,
1998, and subsequently amended (the “Termination Agreement”);

     WHEREAS, Employee and the Company also entered into an Indemnification Agreement dated
December 16, 1998 (the “Indemnification Agreement”);

     WHEREAS, Employee held certain other positions as an employee, officer or director of certain
subsidiaries and affiliates of the Company;

     WHEREAS, Employee desires to resign from the Company and/or its Affiliates effective March 31,
2005;

     WHEREAS, the Parties intend that this Agreement shall govern all issues related to Employee’s
employment with and separation from the Company and/or its Affiliates;

     WHEREAS, Employee has had at least 21 days to consider this Agreement;

     WHEREAS, the Company has advised Employee in writing to consult with a lawyer;

     WHEREAS, Employee has had an opportunity to consult with independent counsel with respect to
the terms, meaning and effect of this Agreement; and

     WHEREAS, Employee understands that the Company regards the above representations as material
and that the Company is relying on these representations in entering into this Agreement.

 

 

Agreement

     NOW THEREFORE in consideration of the mutual promises exchanged in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:

     1. Definitions. When used in this Agreement, “Company and/or its Affiliates” shall mean and
include PetroQuest Energy, Inc., a Delaware corporation, and all of its predecessors, successors,
parents, subsidiaries, divisions or other affiliated companies, partners, partnerships, assigns,
present and former officers, directors, employees, shareholders, agents, employee benefit plans and
plan fiduciaries, whether in their individual or official capacities.

     2. Termination Date. Employee’s employment with the Company ended effective March 31, 2005
(the “Termination Date”). Employee hereby resigns all positions he holds as an employee, officer
or director of the Company and/or its Affiliates, effective as of the Termination Date, and agrees
to provide a letter of resignation to the Company in the form attached as Exhibit “A”.

     3. Pay Through Termination Date. Not later than thirty (30) days after the Effective Date,
the Company will pay Employee the sum of $5,000.00. Employee agrees that this payment includes all
accrued employment benefits payable to Employee, including without limitation all salary, wages,
and accrued and unpaid vacation leave, sick time or other paid time off earned before the
Termination Date.

     4. Severance Pay. As consideration for Employee’s release, the Company further agrees to pay
Employee, his successors and assigns the sum of $180,000.00 (the “Severance Pay”), representing
twelve (12) months’ pay. The Company will pay this additional amount, commencing April 15, 2005,
in equal payments over twenty-four (24) months, at the same time and in the same manner that the
Company pays its other employees as part of its normal payroll process. Employee agrees that the
Severance Pay is in addition to anything of value to which Employee already is entitled from the
Company, and that the Severance Pay is in satisfaction of any claim for unpaid, deferred or reduced
salary, wages or compensation of any sort, including without limitation any agreements by Employee
with the Company, whether oral or written, to forego salary and bonuses payable to Employee under
the Employment Agreement or otherwise in 2003 and prior years.

     5. Additional Severance Benefits. As additional consideration for Employee’s release, and
provided that Employee is eligible for and timely elects COBRA continuation coverage, the Company
will pay 100% of applicable COBRA insurance premiums for the benefit of Employee and Employee’s
spouse under Employee’s current group plan election (the “Additional Severance Benefits”), until
the earlier of (a) eighteen (18) months after the Termination Date; or (b) the date Employee
obtains other employment and becomes eligible for benefits through such subsequent employment; or
(c) the date any such group plan is terminated. As further consideration for this Agreement,
Employee will receive from the Company the furniture and equipment identified on Exhibit “B-1”.

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     6. Office Furniture and Files. Employee, for and in consideration of the sum of $11,000.00
hereby sells and delivers to the Company the office furniture listed on Exhibit B-2 hereto and
Employee hereby transfers and quitclaims to the Company any other furniture, furnishings or
equipment of Employee in the Company’s possession. Files, data and other materials of Employee
remaining with the Company after the Termination Date and not removed by Employee will be
maintained by the Company for a period for one (1) year after the Termination Date and available to
the Employee for copying; thereafter, such materials shall be surrendered by the Employee and shall
become the property of the Company. The Company will have no obligation to keep or maintain such
files and materials thereafter

     7. Withholding. All amounts paid pursuant to this Agreement will be reduced by withholdings
required, in the Company’s reasonable discretion, by applicable local, state or federal law.

     8. Release by Employee. (a) In consideration of the Severance Pay and the Additional
Severance Benefits, all described above, Employee, individually and on behalf of Employee’s spouse,
life partner, heirs, administrators, executors, guardians, assigns and agents, irrevocably,
unconditionally, fully and forever waives, releases, discharges, agrees to hold harmless, and
promises not to sue the Company and/or its Affiliates, from and for any claim, action or right of
any sort, known or unknown, arising on or before the Effective Date.

     (a) This release includes, but is not limited to, any claim arising out of or related
to the following: any claim for any wages, salary, compensation, sick time, vacation time,
paid leave or other remuneration of any kind; any claim for additional or different
compensation or benefits of any sort, including any participation in any severance pay plan;
any claim of discrimination or retaliation on the basis of race, sex, religion, marital
status, sexual preference, national origin, handicap or disability, veteran status, or
special disabled veteran status; any claim arising under Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, the
Family and Medical Leave Act, the Fair Labor Standards Act of 1938, the Louisiana Employment
Discrimination Law, the Louisiana Wage Payment Law, the Texas Commission on Human Rights
Act, Chapter 451 of the Texas Labor Code, or the Texas Payday Law, as such statutes may be
amended from time to time; any other claim based on any statutory prohibition; any claim
arising out of or related to an express or implied employment contract, any other contract
affecting terms and conditions of employment, or a covenant of good faith and fair dealing;
any tort claim or other claim for personal injury, death or property damage or loss; any
claim for fraud or misrepresentation; and any personal gain with respect to any claim
arising under any whistleblower or qui tam provisions of any state or federal law.

     (b) Employee represents that Employee has read and understands this release provision
and that (i) rights and claims under the Age Discrimination in Employment Act of 1967 are
among the rights and claims against the Company and/or its Affiliates that Employee is
releasing and (ii) Employee is not releasing any rights or claims arising after the
Effective Date.

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     (c) Notwithstanding anything to the contrary in this Section, Employee is not releasing
any right to (i) any vested benefit under any employee benefit plan, as defined by the
Employee Retirement Income Security Act of 1974, as amended, (ii) any rights to COBRA
continuation coverage, (iii) any rights provided in the Indemnification Agreement, which
shall continue in effect in accordance with its terms, or (iv) any rights provided in this
Agreement.

     9. Termination of Previous Agreements. The Parties agree that the Employment Agreement is
hereby terminated and of no further force and effect as of the Termination Date, except that the
following identified portions of the Employment Agreement shall survive termination, in accordance
with their terms: Section 8 (regarding Employee’s Confidentiality Obligation), Section 9 (regarding
Disclosure of Information, etc.), Section 10 (regarding Ownership of Information, etc.), Subsection
12.7 (regarding Injunctive Relief). The Parties further agree that the Termination Agreement is
hereby terminated and of no further force and effect as of the Termination Date.

     10. Non-Competition. In consideration of the Severance Pay and the Additional Severance
Benefits, as described above, Employee and the Company agree to terminate Section 11 of the
Employment Agreement, regarding Employee’s Non-Competition Obligation, and replace it with the
following:

     (a) The Company is engaged in the business of generating, developing acquiring and
operating oil and gas properties onshore and offshore in the United States Gulf coast
region, East Texas and the Arkoma Basin (the “Business”). The Company presently carries on
business in the parishes, municipalities and geographic areas included on Exhibit “C” hereto
(the “Areas of Interest”):

     (b) In order to maintain its competitive advantage relative to others in the Business,
the Company gathers, keeps and maintains certain Confidential Information (as defined in
Section 8 of the Employment Agreement). Employee acknowledges and agrees that Employee has
learned such Confidential Information during his employment with the Company.

     (c) Employee acknowledges that the Company could not protect the Confidential
Information against unauthorized use or disclosure and could not readily insure compliance
with this Agreement and the surviving provisions of the Employment Agreement if Employee
held any interest in a competitor in the Business or enabled the Company’s personnel or
customers to become personnel or customers of a competitor in the Business.

     (d) In order to protect against unauthorized disclosure, and in addition to the other
rights of the Company created or retained hereunder with respect to the Confidential
Information, Employee agrees that, for a period of one (1) year following the Termination
Date, Employee shall not, acting alone or in conjunction with others, without prior written
notice to the Company and an offer by Employee to the Company for the Company to participate
with Employee in such activities on the same basis and terms as Employee, unless agreed
otherwise, directly or indirectly, in any of the Areas of

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Interest in which the Company and/or its Affiliates is presently or at the Termination
Date carrying on Business, (i) acquire or secure the right to acquire any mineral rights,
interests or oil and gas properties or operate any oil and gas properties within the Areas
of Interest unless it is by, through or under the Company or for the benefit of the Company,
or (ii) invest or engage, directly or indirectly, in any business which is similar to that
of the Company’s Business or accept employment with or render services to such a similar
business as a director, officer, agent, employee, consultant, independent contractor or
otherwise, or (iii) take any action inconsistent with the fiduciary relationship of an
employee to his employer; provided, however, that the beneficial ownership by Employee of up
to three percent of the voting stock of any corporation subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended, shall not violate this
Section 10.

     (e) Within sixty (60) days of the Effective Date, the Parties agree to negotiate in
good faith for a consulting agreement between the Company and Employee providing for an
arrangement whereby Employee, under terms to be provided therein, originates and develops
projects within the geographical areas listed on Exhibit “D” hereto and provides the Company
with a right of first refusal with respect to those projects. In the event the Parties
execute such consulting agreement with respect to the geographical areas listed on Exhibit
“D”, the areas listed on Exhibit “D” will be excluded from Section 10(d) of this Agreement
and the terms of the consulting agreement will control.

     (f) In addition to the other obligations agreed to by Employee in this Agreement,
Employee agrees that, for a period of one year following the Termination Date, Employee
shall not at any time, directly or indirectly, (i) induce, entice or solicit any employee of
the Company and/or its Affiliates to leave such employment, (ii) without the express prior
written consent of the Company, pursue, solicit, participate in, invest in, operate or
otherwise acquire any interest or rights whatsoever in any oil and gas prospect or
acquisition prospect or opportunity presented to or considered by the Company and/or its
Affilitates prior to the Termination Date, or (iii) in any other manner use any printed or
electronic material or other information of the Company and/or its Affilitates relating
thereto, whether or not such information is Confidential Information.

     (g) The Parties agree that the provisions of this Section are reasonable in time,
geographic scope and scope of activity restrained and are intended to protect the
Confidential Information, the Business, business goodwill and other business interests of
the Company. In the event that any court or other tribunal of competent jurisdiction finds
that any limitation contained in this Section 10 as to time, geographic area or scope of
activity restrained is overbroad under applicable law, such court or tribunal shall reform
the affected covenant to have the broadest limitation possible to enforce any affected
provision of this Section 10.

     11. Future Employment. Employee acknowledges that the Company and/or its Affiliates are not
obligated to offer employment to Employee, now or in the future.

     12. No Other Claims. Employee represents that Employee has not filed or authorized the filing
of any complaints, charges or lawsuits against the Company and/or its Affiliates with

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any federal, state or local court, governmental agency, or administrative agency, and that if,
unbeknownst to Employee, any such complaint has been filed on Employee’s behalf, Employee will use
Employee’s best efforts to cause it to be withdrawn immediately and dismissed with prejudice.

     13. Confidentiality. Employee shall keep strictly confidential all the terms and conditions,
including amounts, in the Agreement and shall not disclose them to any person other than Employee’s
spouse and legal and/or financial advisors (who are informed by Employee of this confidentiality
provision and agree to abide by it), government officials who seek such information in the course
of their official duties, or individuals at the Company responsible for implementing the Agreement,
unless compelled to do so by law or regulation, or business necessity (including U.S. Securities
and Exchange Commission or tax reporting obligations). Nothing in this Section is intended to
prevent Employee from disclosing the fact that he was employed by the Company and/or its Affiliates
or from describing his employment duties. If any person or entity requests or demands, by subpoena
or otherwise, that Employee disclose or produce this Agreement, any terms or conditions in it, or
any other information designated confidential in this Section, then Employee shall immediately
notify the Company in writing. Employee shall provide the Company an opportunity to respond to
such notice before taking any action or making any decision in connection with such request or
subpoena. In the event of such notice, the Company may assert all applicable rights and privileges
with regard to this Agreement, at its sole discretion, and this paragraph does not require the
Company to assert any such rights or privileges.

     14. Litigation Support. In the event and for so long as the Company and/or its Affiliates is
actively contesting or defending against any action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand brought against (a) the Company and/or its Affiliates or (b)
the Employee in his capacity of employee, director or officer of the Company and/or its Affiliates
in connection with any fact, situation, circumstance, status, condition, activity practice, plan,
occurrence, event, incident, action, failure to act, or transaction involving the Company and/or
its Affiliates, then Employee will reasonably cooperate with the Company and/or its Affiliates or
their counsel in the contest or defense, and provide such testimony and access to his books and
records as shall be reasonably necessary in connection with the contest or defense, all at the sole
cost and expense of the Company. Employee further agrees to not provide assistance of any kind,
other than as required by law, to any party to assist in pursuing any currently pending or
threatened claim, litigation, arbitration, mediation, administrative hearing or other legal
proceedings against the Company and/or its Affiliates.

     15. Remedies for Breach. The Company and the Employee agree that a breach of any term of this
Agreement by the Employee would cause irreparable damage to the Company and that, in the event of
such breach, the Company shall have, in addition to any and all remedies of law, the right to any
injunction, specific performance, and other equitable relief to prevent or to redress the violation
of the Employee’s obligations hereunder. In the event of a breach of this Agreement by the
Employee, the Company shall have the right, at its option, to terminate or suspend the payment of
Severance Pay.

     16. No Oral Representations; Authority. The Parties warrant that no representations have been
made other than those contained in the written provisions of this Agreement, and that

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they do not rely on any representations not stated in this Agreement. The Parties further
warrant that they or their undersigned representatives are legally competent and fully authorized
to execute and deliver this Agreement.

     17. Revocation of Agreement; Effective Date. Employee, at Employee’s sole discretion, may
revoke this Agreement on or before the expiration of seven calendar days after signing it.
Revocation shall be in writing and effective upon dispatch to the Company at the address specified
in Section 19(h). If Employee elects to revoke the Agreement, all of the provisions of the
Agreement shall be void and unenforceable. If Employee does not so elect, the Agreement shall
become effective at the expiration of the revocation period (i.e., on the eighth day after Employee
signs the Agreement) (the “Effective Date”).

     18. Return of Company Materials. Employee agrees to deliver promptly to the Company all
originals and copies of any information, data or materials (whether in written, electronic or other
form) in the Employee’s possession, custody, or control containing confidential information of the
Company.

     19. Miscellaneous.

     (a) This Agreement, the surviving paragraphs of the Employment Agreement, and
agreements and documents related to stock options, and other benefit plans constitute the
entire agreement between the Parties. This Agreement may be executed in identical
counterparts, each of which shall constitute an original and all of which shall constitute
one and the same agreement.

     (b) The Parties further warrant that they or their undersigned representatives are
legally competent and fully authorized to execute and deliver this Agreement.

     (c) The Parties confirm they have had the opportunity to have this Agreement explained
to them by attorneys of their choice, and that they execute this Agreement freely, knowingly
and voluntarily. The Company is relying on its own judgment and on the advice of its
attorneys and not upon any recommendation of Employee or his agents, attorneys or other
representatives. Likewise, Employee is relying on his own judgment and on the advice of his
attorneys, and not upon any recommendation of the Company or its directors, officers,
employees, agents, attorneys or other representatives. By voluntarily executing this
Agreement, both Parties confirm their competence to understand and do hereby accept the
terms of this Agreement as resolving fully all differences, disputes and claims that may
exist within the scope of this Agreement.

     (d) This Agreement may not be modified or amended except by a writing signed by all
Parties. No waiver of this Agreement or of any of the promises, obligations, terms, or
conditions contained in it shall be valid unless it is in writing signed by the Party
against whom the waiver is to be enforced.

     (e) If any part or any provision of this Agreement shall be finally determined to be
invalid or unenforceable under applicable law by a court of competent jurisdiction, that
part shall be ineffective to the extent of such invalidity or unenforceability only,

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without in any way affecting the remaining parts of said provision or the remaining
provisions of the Agreement.

     (f) The Parties have cooperated in the preparation of this Agreement. Hence, the
Agreement shall not be interpreted or construed against or in favor of any Party by virtue
of the identity, interest, or affiliation of its preparer.

     (g) This Agreement is made and shall be enforced pursuant to the laws of the State of
Louisiana, without regard to its law governing conflicts of law.

     (h) All notices and other communications required or permitted by this Agreement or
necessary or convenient in connection with it shall be in writing and shall be deemed to
have been given when delivered by hand or mailed by registered or certified mail, return
receipt requested, as follows:

	 	 	 	 	 
	

	 	To the Company:
	 	To Employee:
	 
	 	 	 	 
	

	 	PetroQuest Energy, Inc.	 	 
	

	 	Attn: General Counsel
	 	Ralph J. Daigle
	

	 	400 E. Kaliste Saloom Road, Suite 6000
	 	106 Running Deer
	

	 	Lafayette, Louisiana 70508
	 	Lafayette, Louisiana 70503

Either Party may change his or its name or address for notice in the manner specified in
this Section 19(h).

     20. Dispute Resolution. Any dispute arising out of or relating to this Agreement, or any
breach thereof, shall be resolved by binding arbitration in Lafayette, Louisiana, in accordance
with the Employment Arbitration Rules of the American Arbitration Association then in effect, as
amended by this Agreement, and judgment on the award rendered by the arbitrator may be entered in
any court of competent jurisdiction. The Parties agree that the arbitrator shall have no power or
authority to make awards or issue orders of any kind except as expressly permitted by this
Agreement. The arbitrator’s decision shall follow the plain meaning of the relevant documents,
apply Louisiana law, and shall be final and binding. The location of such arbitration in Lafayette,
Louisiana, shall be selected by the Company in its sole and absolute discretion. All costs and
expenses, including attorneys’ fees, relating to the resolution of any such dispute shall be borne
by the party incurring such costs and expenses. Notwithstanding anything in this Section 20 to the
contrary, the Parties acknowledge that either of them may seek emergency or temporary injunctive
relief, but absolutely no other relief, in any court of competent jurisdiction. All other
disputes, claims and remedies shall be settled by arbitration in accordance with this Section.

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	RALPH J. DAIGLE	 	PETROQUEST ENERGY, INC.
	(“Employee”)	 	(“Company”)
	 
	 	 	 	 	 	 
	By:

	 	     /s/ Ralph J. Daigle
	 	By:
	 	     /s/ Charles T. Goodson
	

	 	 
	 	 	 	 
	Printed Name: Ralph
J. Daigle	 	Printed Name: Charles T. Goodson
	

	 	 	 	Title:
	 	Chairman, Chief Executive Officer &
	Date: March 31, 2005	 	 	 	President
	

	 	 	 	Date:
	 	March 31, 2005

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION

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Exhibit “A”

Resignation Letter

March 31, 2005

PetroQuest Energy, Inc.

Attn: Chairman of the Board

400 E. Kaliste Saloom Road, Suite 6000

Lafayette, Louisiana 70508

Gentlemen:

     Please accept this letter as notice of my resignation from all positions as an employee,
officer and director of PetroQuest Energy, Inc., and all its subsidiaries (including without
limitation, PetroQuest Energy, L.L.C., PetroQuest Oil & Gas, L.L.C. and Pittrans, Inc.), effective
March 31, 2005.

Sincerely,

Ralph J. Daigle

 

 

EXHIBIT “B-1”

Dell Latitude C800  - laptop computer

Docking Station

HP 2230 Printer

View Sonic LCD Monitor

 

 

EXHIBIT “B-2”

Desk

Credenza

Large desk chair

 

 

EXHIBIT “C”

     (a) in Louisiana, the parishes of Acadia, Ascension, Caddo, Calcasieu, Cameron, Claiborne,
DeSoto, East Feliciana, Iberia, Iberville, Jefferson, Lafayette, Lafourche, Plaquemines, Pointe
Coupee, St. Bernard, St. Charles, St. Helena, St. Martin, St. Mary, Tangipahoa, Terrebonne and
Vermilion;

     (b) the Federal Outer Continental Shelf of the Gulf of Mexico adjacent to the states of Texas,
Louisiana, Mississippi and Alabama, specifically including but not limited to those areas that are
offshore and adjacent to the following Louisiana parishes: St. Bernard, Plaquemines, Jefferson,
Lafourche, St. Mary, Terrebonne, Iberia, Vermilion and Cameron, and those that are offshore and
adjacent to the following Texas counties: Jefferson, Chambers, Galveston, Harris, Brazoria,
Matagorda, Calhoun, Aransas, Nueces, Kleberg; Kenedy, Willacy and Cameron, and those that are
offshore and adjacent to the following Mississippi counties: Hancock, Harrison and Jackson;

     (c) in Texas, the counties of Anderson, Cherokee, DeWitt, Matagorda, Panola, Freestone and
Shelby; and

     (d) in Oklahoma, the counties of Atoka, McClain, McIntosh and Pittsburg, Coal, Haskell,
Hughes, Latimer, LeFlore, McIntosh, Pittsburg and Pushmataha.

 

 

EXHIBIT “D”

In Louisiana, the parishes of Acadia, Iberia, Iberville, Lafayette, Lafourche, St. Martin, St.
Mary, Terrebonne and Vermilion.<PAGE>
                                                                     Exhibit 4.2

                                                                  Execution Copy

                          REGISTRATION RIGHTS AGREEMENT

                           Dated as of April 21, 2005
                                  by and among

                             Parker Drilling Company

                                    as Issuer

                          the Guarantors listed herein

                                       and

                              Lehman Brothers Inc.

                            as the Initial Purchaser
<PAGE>
            This Registration Rights Agreement (this "Agreement") is dated as of
April 21, 2005, by and among Parker  Drilling  Company,  a Delaware  corporation
(the  "Company"),  the  subsidiaries  listed on Schedule A attached  hereto (the
"Guarantors"),  and Lehman  Brothers  Inc. (the  "Initial  Purchaser"),  who has
agreed to purchase $50.0 million in aggregate  principal amount of the Company's
9 5/8% Senior Notes due 2013 (the  "Notes")  pursuant to the Purchase  Agreement
(as defined below).

            This Agreement is made pursuant to the Purchase Agreement,  dated as
of April 14, 2005 (the  "Purchase  Agreement"),  by and among the  Company,  the
Guarantors and the Initial  Purchaser.  In order to induce the Initial Purchaser
to purchase the Notes, the Company and the Guarantors have agreed to provide the
registration  rights set forth in this Agreement.  The execution and delivery of
this Agreement is a condition to the  obligations  of the Initial  Purchaser set
forth in Section 6 of the Purchase Agreement.  The Notes constitute  "additional
notes"  under the  indenture,  dated as of October 10,  2003 (the  "Indenture"),
among the  Company,  the  Guarantors  and JPMorgan  Chase Bank,  as Trustee (the
"Trustee").  The Company  has  previously  issued  $175.0  million in  aggregate
principal amount of 9 5/8% Senior Notes due 2013 under the Indenture. As used in
this  Agreement,  the terms  "Notes"  refers only to the 9 5/8% Senior Notes due
2013  purchased  pursuant to the  Purchase  Agreement  and does not refer to any
notes previously  issued under the Indenture.  Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to them in the Indenture.

            The parties hereby agree as follows:

SECTION 1.  DEFINITIONS

            As used in this  Agreement,  the following  capitalized  terms shall
have the following meanings:

            Act:  The U.S. Securities Act of 1933, as amended.

            Affiliate:  As defined in Rule 144 of the Act.

            Broker-Dealer:  Any broker or dealer  registered  under the Exchange
Act.

            Certificated  Securities:   Definitive  Notes,  as  defined  in  the
Indenture.

            Closing Date:  The date of this Agreement.

            Commission:  The U.S. Securities and Exchange Commission.

            Consummate:  An  Exchange  Offer shall be deemed  "Consummated"  for
purposes  of  this   Agreement  upon  the  occurrence  of  (a)  the  filing  and
effectiveness  under  the  Act  of the  Exchange  Offer  Registration  Statement
relating  to the  Exchange  Notes to be issued in the  Exchange  Offer,  (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required  pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the  Registrar  under the  Indenture  of  Exchange  Notes in the same  aggregate
principal amount as the

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<PAGE>
aggregate  principal amount of Notes tendered by Holders thereof pursuant to the
Exchange Offer.

            Consummation Deadline: As defined in Section 3(b) hereof.

            Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.

            Exchange Act: The U.S. Securities Exchange Act of 1934, as amended.

            Exchange  Notes:  The  Company's  9  5/8%  Senior  Notes  due  2013,
registered  under the Act, to be issued  pursuant to the  Indenture:  (a) in the
Exchange Offer or (b) as contemplated by Section 4 hereof.

            Exchange  Offer:  The  exchange  and  issuance  by the  Company of a
principal  amount of Exchange  Notes (which shall be registered  pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Notes that are tendered by such Holders in connection  with such exchange and
issuance.

            Exchange Offer Registration  Statement:  The Registration  Statement
relating to the Exchange Offer, including the related Prospectus.

            Exempt  Resales:  The  transactions  in which the Initial  Purchaser
proposes to sell the Notes to certain "qualified  institutional buyers," as such
term is defined in Rule 144A under the Act, and  pursuant to  Regulation S under
the Act.

            Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.

            Holders: As defined in Section 2 hereof.

            Interest  Payment  Date:  As defined  in the Notes and the  Exchange
Notes.

            Person: As defined in the Indenture.

            Prospectus:  The prospectus included in a Registration  Statement at
the time such  Registration  Statement  is  declared  effective,  as  amended or
supplemented by any prospectus  supplement and by all other amendments  thereto,
including post-effective  amendments, and all material incorporated by reference
into such Prospectus.

            Recommencement Date: As defined in Section 6(e) hereof.

            Registration Default: As defined in Section 5 hereof.

            Registration  Statement:  Any registration  statement of the Company
and the  Guarantors  relating to (a) an  offering of Exchange  Notes and related
Subsidiary  Guarantees pursuant to an Exchange Offer or (b) the registration for
resale of Transfer  Restricted  Securities  pursuant  to the Shelf  Registration
Statement,  in each case (i) that is filed  pursuant to the  provisions  of this
Agreement and (ii) including the Prospectus included therein, all amendments

                                       3
<PAGE>
and supplements thereto (including  post-effective  amendments) and all exhibits
and material incorporated by reference therein.

            Regulation S: Regulation S promulgated under the Act.

            Rule 144: Rule 144 promulgated under the Act.

            Shelf Registration Statement: As defined in Section 4(a) hereof.

            Subsidiary  Guarantees:  The  guarantees  of the Notes and  Exchange
Notes of the Guarantors under the Indenture, as amended from time to time.

            Suspension Notice: As defined in Section 6(e) hereof.

            TIA:  The  U.S.  Trust  Indenture  Act of 1939  (15  U.S.C.  Section
77aaa-77bbbb) as in effect on the date of the Indenture.

            Transfer  Restricted  Securities:  (a)  Each  Note  and the  related
Subsidiary Guarantees, until the earliest to occur of (i) the date on which such
Note has been exchanged by a Person other than a  Broker-Dealer  for an Exchange
Note in the  Exchange  Offer and is  entitled to be resold to the public by such
Person without complying with the prospectus  delivery  requirements of the Act,
(ii) the date on which such Note has been  effectively  registered under the Act
and disposed of in accordance with the Shelf  Registration  Statement,  or (iii)
the date on which such Note is eligible to be distributed to the public pursuant
to Rule  144(k)  under  the Act,  and (b)  each  Exchange  Note and the  related
Subsidiary  Guarantees  acquired by a  Broker-Dealer  in the Exchange Offer of a
Note for such Exchange Note,  until the date on which such Exchange Note is sold
to a purchaser who receives from such  Broker-Dealer  on or prior to the date of
such sale a copy of the Prospectus  contained in the Exchange Offer Registration
Statement.

SECTION 2.  HOLDERS

            A Person is deemed to be a holder of Transfer Restricted  Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.

SECTION 3.  REGISTERED EXCHANGE OFFER

            (a) Unless the Exchange  Offer shall not be permitted by  applicable
federal  law (after  the  procedures  set forth in Section  6(a) below have been
complied  with),  the Company and the  Guarantors  shall (i) cause the  Exchange
Offer  Registration  Statement  to be  filed  with  the  Commission  as  soon as
practicable after the Closing Date, but in no event later than 90 days after the
Closing  Date  (such  90th day  being  the  "Filing  Deadline"),  (ii) use their
commercially  reasonable best efforts to cause such Exchange Offer  Registration
Statement to become  effective at the earliest  possible  time,  but in no event
later  than  180  days  after  the  Closing  Date  (such  180th  day  being  the
"Effectiveness Deadline"),  (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective,  (B) file, if applicable,  a
post-effective  amendment to such Exchange Offer Registration Statement pursuant
to Rule  430A  under the Act and (C) cause all  necessary  filings,  if any,  in
connection with the registration  and  qualification of the Exchange

                                       4
<PAGE>
Notes to be made under the Blue Sky laws of such  jurisdictions as are necessary
to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of
such Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer.  The  Exchange  Offer shall be on the  appropriate  form  permitting  (I)
registration  of the Exchange Notes to be offered in exchange for the Notes that
are  Transfer  Restricted  Securities  and (II)  resales  of  Exchange  Notes by
Broker-Dealers   that  tendered   into  the  Exchange   Offer  Notes  that  such
Broker-Dealer  acquired  for  its own  account  as a  result  of  market  making
activities or other trading  activities (other than Notes acquired directly from
the Company or any of its Affiliates) as contemplated by Section 3(c) below.

            (b) The  Company  and the  Guarantors  shall use their  commercially
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective  continuously,  and shall keep the Exchange Offer open for a period of
not less than the minimum  period  required under  applicable  federal and state
securities laws to Consummate the Exchange Offer; provided,  however, that in no
event  shall such  period be less than 20  business  days.  The  Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable  federal
and state  securities  laws. No securities other than the Exchange Notes and the
Subsidiary  Guarantees  shall be included  in the  Exchange  Offer  Registration
Statement.   The  Company  and  the  Guarantors  shall  use  their  commercially
reasonable  best efforts to cause the Exchange  Offer to be  Consummated  on the
earliest  practicable date after the Exchange Offer  Registration  Statement has
become  effective,  but in no event later than 30 business days thereafter (such
30th business day being the "Consummation Deadline").

            (c) The  Company  and  the  Guarantors  shall  include  a  "Plan  of
Distribution"  section  in  the  Prospectus  contained  in  the  Exchange  Offer
Registration  Statement and indicate  therein that any  Broker-Dealer  who holds
Transfer  Restricted  Securities  that were  acquired  for the  account  of such
Broker-Dealer  as  a  result  of  market-making   activities  or  other  trading
activities (other than Notes acquired directly from the Company or any Affiliate
of the Company),  may exchange such Transfer  Restricted  Securities pursuant to
the Exchange Offer.  Such "Plan of Distribution"  section shall also contain all
other  information  with respect to such sales by such  Broker-Dealers  that the
Commission may require in order to permit such sales pursuant thereto,  but such
"Plan of  Distribution"  shall not name any such  Broker-Dealer  or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer,  except
to the  extent  required  by the  Commission  as a result of a change in policy,
rules or regulations after the date of this Agreement.

            Because  such  Broker-Dealer  may be deemed  to be an  "underwriter"
within the meaning of the Act and must, therefore,  deliver a prospectus meeting
the  requirements of the Act in connection with its initial sale of any Exchange
Notes received by such  Broker-Dealer in the Exchange Offer, the Company and the
Guarantors  shall  permit the use of the  Prospectus  contained  in the Exchange
Offer  Registration  Statement by such  Broker-Dealer to satisfy such prospectus
delivery  requirement.  To the extent  necessary  to ensure that the  prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Exchange Notes by  Broker-Dealers,  the Company and the Guarantors  agree to use
their   commercially   reasonable  best  efforts  to  keep  the  Exchange  Offer
Registration Statement continuously effective, supplemented, amended and current
as required by and subject to the  provisions of Section 6(a) and (c) hereof and
in conformity with the requirements of this Agreement, the Act and the

                                       5
<PAGE>
policies,  rules and  regulations  of the  Commission as announced  from time to
time,  for a period  of one year from the date on which  the  Exchange  Offer is
Consummated or such shorter period as will terminate when such Broker-Dealers no
longer  own any  Transfer  Restricted  Securities.  The  Company  shall  provide
sufficient   copies  of  the  latest   version  of  such   Prospectus   to  such
Broker-Dealers,  promptly upon request,  and in no event later than one business
day after such request, at any time during such period.

SECTION 4.  SHELF REGISTRATION

            (a) Shelf  Registration.  If (i) the Exchange Offer is not permitted
by  applicable  law or Commission  policy (after the Company and the  Guarantors
have complied with the  procedures  set forth in Section 6(b) hereof) or (ii) if
any Holder of Transfer  Restricted  Securities shall notify the Company prior to
the 20th business day following the  Consummation of the Exchange Offer that (A)
such  Holder  was  prohibited  by  applicable  law  or  Commission  policy  from
participating  in the  Exchange  Offer or (B) such  Holder  may not  resell  the
Exchange  Notes  acquired  by it in the  Exchange  Offer to the  public  without
delivering  a prospectus  and the  Prospectus  contained  in the Exchange  Offer
Registration  Statement is not appropriate or available for such resales by such
Holder or (C) such Holder is a Broker-Dealer  and holds Notes acquired  directly
from the Company or any of its  Affiliates,  then the Company and the Guarantors
shall:

            (I) use their commercially reasonable best efforts to file, or cause
to be filed,  on or prior to 60 days after the  earlier of (i) the date on which
the Company determines that the Exchange Offer Registration  Statement cannot be
filed as a result of clause  (a)(i) of this  Section  and (ii) the date on which
the Company receives the notice specified in clause (a)(ii) of this Section (the
60th day after such earlier date, the "Filing  Deadline"),  a shelf registration
statement  pursuant to Rule 415 under the Act (which may be an  amendment to the
Exchange Offer  Registration  Statement (the "Shelf  Registration  Statement")),
relating to all Transfer Restricted Securities; and

            (II) use their  commercially  reasonable  best efforts to cause such
Shelf Registration  Statement to become effective at the earliest possible time,
but in no event  later  than 180 days after the  Filing  Deadline  for the Shelf
Registration Statement (such 180th day the "Effectiveness Deadline").

            If, after the Company has and the Guarantors  have filed an Exchange
Offer  Registration  Statement that satisfies the  requirements  of Section 3(a)
above, the Company is and the Guarantors are required to file and make effective
a  Shelf  Registration  Statement  solely  because  the  Exchange  Offer  is not
permitted under  applicable  federal law (i.e.,  clause (a)(i) of this Section),
then the filing of the Exchange Offer Registration  Statement shall be deemed to
satisfy the requirements of clause (I) above;  provided that, in such event, the
Company and the  Guarantors  shall remain  obligated  to meet the  Effectiveness
Deadline set forth in clause (II) above.

            To the  extent  necessary  to  ensure  that the  Shelf  Registration
Statement  is  available  for sales of  Transfer  Restricted  Securities  by the
Holders  thereof  entitled  to the  benefit of this  Section  4(a) and the other
securities  required  to be  registered  therein  pursuant  to Section

                                       6
<PAGE>
6(b)(ii)  hereof,  the Company and the Guarantors  shall use their  commercially
reasonable  best efforts to keep any Shelf  Registration  Statement  required by
this Section 4(a) continuously effective,  supplemented,  amended and current as
required by and subject to the provisions of Sections 6(b) hereof and (c) hereof
and in  conformity  with the  requirements  of this  Agreement,  the Act and the
policies,  rules and  regulations  of the  Commission as announced  from time to
time,  for a period  of at least  two years (as  extended  pursuant  to  Section
6(c)(i)  hereof)  following  the Closing  Date,  or such shorter  period as will
terminate  when  all  Transfer  Restricted  Securities  covered  by  such  Shelf
Registration Statement have been sold pursuant thereto.

            (b) Provision by Holders of Certain  Information in Connection  with
the Shelf Registration  Statement.  No Holder of Transfer Restricted  Securities
may include any of its Transfer Restricted  Securities in any Shelf Registration
Statement  pursuant to this Agreement  unless and until such Holder furnishes to
the Company in writing,  within 20 days after receipt of a request therefor, the
information  specified in Item 507 or 508 of Regulation  S-K, as applicable,  of
the  Act  for  use in  connection  with  any  Shelf  Registration  Statement  or
Prospectus or preliminary  Prospectus  included  therein.  No Holder of Transfer
Restricted  Securities  shall be  entitled  to  liquidated  damages  pursuant to
Section 5 hereof  unless and until such  Holder  shall  have  provided  all such
information.  By its acceptance of Transfer Restricted  Securities,  each Holder
agrees to promptly furnish  additional  information  required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not materially misleading.

SECTION 5.  LIQUIDATED DAMAGES

            If (a) any Registration  Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (b) any
such Registration Statement has not been declared effective by the Commission on
or prior to the applicable  Effectiveness  Deadline,  (c) the Exchange Offer has
not  been  Consummated  on or  prior  to the  Consummation  Deadline  or (d) any
Registration  Statement  required  by  this  Agreement  is  filed  and  declared
effective  but shall  thereafter  cease to be effective or fail to be usable for
its intended  purpose  without  being  succeeded  within two business  days by a
post-effective  amendment to such Registration Statement that cures such failure
and that is itself declared  effective  within five business days of filing such
post-effective  amendment  to  such  Registration  Statement  (each  such  event
referred to in clauses  (a) through  (d), a  "Registration  Default"),  then the
Company and the  Guarantors  hereby  jointly and severally  agree to pay to each
Holder of Transfer Restricted  Securities affected thereby liquidated damages in
an amount  equal to $.05 per week per  $1,000 in  principal  amount of  Transfer
Restricted   Securities  held  by  such  Holder  for  the  first  90-day  period
immediately following the occurrence of such Registration Default. The amount of
the liquidated  damages shall increase by an additional $.05 per week per $1,000
in  principal  amount of Transfer  Restricted  Securities  with  respect to each
subsequent 90-day period until all Registration  Defaults have been cured, up to
a maximum amount of liquidated  damages of $.50 per week per $1,000 in principal
amount of  Transfer  Restricted  Securities;  provided  that the Company and the
Guarantors shall in no event be required to pay liquidated damages for more than
one  Registration  Default at any given  time.  Notwithstanding  anything to the
contrary set forth herein,  (i) upon filing of the Exchange  Offer  Registration
Statement (and/or, if applicable, the Shelf Registration Statement),

                                       7
<PAGE>
in the case of (a) above,  (ii) upon the  effectiveness  of the  Exchange  Offer
Registration Statement (and/or, if applicable the Shelf Registration Statement),
in the case of (b) above,  (iii) upon Consummation of the Exchange Offer, in the
case of (c) above, or (iv) upon the filing of a post-effective  amendment to the
Registration  Statement or an additional  Registration Statement that causes the
Exchange  Offer  Registration  Statement  (and/or,  if  applicable,   the  Shelf
Registration  Statement) to again be declared  effective or made usable,  in the
case of (d) above,  the liquidated  damages payable with respect to the Transfer
Restricted  Securities  as a result of such  clause  (a),  (b),  (c) or (d),  as
applicable, shall cease.

            All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each  Interest  Payment  Date,  as more fully set forth in the Indenture and the
Notes and the Exchange Notes.  Notwithstanding  the fact that any securities for
which liquidated damages are due cease to be Transfer Restricted Securities, all
obligations  of the Company and the  Guarantors to pay  liquidated  damages with
respect to securities  shall survive  until such time as such  obligations  with
respect to such securities shall have been satisfied in full.

SECTION 6.  REGISTRATION PROCEDURES

            (a) Exchange Offer  Registration  Statement.  In connection with the
Exchange  Offer,  the  Company  and the  Guarantors  shall (i)  comply  with all
applicable  provisions  of  Section  6(c)  below,  (ii) use  their  commercially
reasonable  best  efforts to effect  such  exchange  and to permit the resale of
Exchange  Notes by any  Broker-Dealer  that tendered Notes in the Exchange Offer
that such  Broker-Dealer  acquired for its own account as a result of its market
making  activities  or other  trading  activities  (other  than  Notes  acquired
directly  from the Company or any of its  Affiliates)  being sold in  accordance
with the intended  method or methods of distribution  thereof,  and (iii) comply
with all of the following provisions:

                  (A) If,  following the date hereof there has been  announced a
            change in Commission  policy with respect to exchange offers such as
            the Exchange Offer, that in the reasonable opinion of counsel to the
            Company  raises a  substantial  question as to whether the  Exchange
            Offer is  permitted by  applicable  federal law, the Company and the
            Guarantors  hereby  agree  to  seek  a  no-action  letter  or  other
            favorable decision from the Commission  allowing the Company and the
            Guarantors  to  Consummate  an  Exchange  Offer  for  such  Transfer
            Restricted  Securities.  The Company and the Guarantors hereby agree
            to pursue the  issuance of such a decision to the  Commission  staff
            level.  In  connection  with  the  foregoing,  the  Company  and the
            Guarantors  hereby  agree to take all such  other  actions as may be
            requested by the Commission or otherwise required in connection with
            the issuance of such  decision,  including  without  limitation  (I)
            participating in telephonic  conferences with the Commission  staff,
            (II)  delivering  to the  Commission  staff an analysis  prepared by
            counsel to the Company  setting forth the legal bases,  if any, upon
            which such counsel has concluded  that such an Exchange Offer should
            be permitted and (III) diligently  pursuing a resolution (which need
            not be favorable) by the Commission staff.

                  (B) As a condition to its participation in the Exchange Offer,
            each Holder of Transfer Restricted  Securities  (including,  without
            limitation,  any Holder who is a Broker Dealer) shall furnish,  upon
            the  request  of  the  Company,

                                       8
<PAGE>
            prior  to  the   Consummation  of  the  Exchange  Offer,  a  written
            representation  to the  Company  and the  Guarantors  (which  may be
            contained in the letter of transmittal  contemplated by the Exchange
            Offer  Registration  Statement)  to the effect that (I) it is not an
            Affiliate  of the  Company,  (II) it is not engaged in, and does not
            intend to engage in, and has no  arrangement or  understanding  with
            any person to participate  in, a distribution  of the Exchange Notes
            to be issued in the  Exchange  Offer and (III) it is  acquiring  the
            Exchange Notes in its ordinary course of business. Each Holder using
            the Exchange Offer to participate in a distribution  of the Exchange
            Notes will be required to acknowledge and agree that, if the resales
            are of Exchange  Notes obtained by such Holder in exchange for Notes
            acquired directly from the Company or an Affiliate  thereof,  it (1)
            could not, under Commission  policy as in effect on the date of this
            Agreement,  rely on the  position of the  Commission  enunciated  in
            Exxon  Capital  Holdings  Corporation  (available  May 13, 1988) and
            Morgan  Stanley  and  Co.,  Inc.   (available   June  5,  1991),  as
            interpreted in the Commission's  letter to Shearman & Sterling dated
            July  2,  1993,  and  similar  no-action  letters   (including,   if
            applicable,  any no-action  letter  obtained  pursuant to clause (A)
            above),  and (2) must comply with the  registration  and  prospectus
            delivery  requirements  of the Act in  connection  with a  secondary
            resale transaction and that such a secondary resale transaction must
            be covered by an effective  Registration  Statement  containing  the
            selling security holder information  required by Item 507 or 508, as
            applicable, of Regulation S-K.

                  (C) Prior to effectiveness of the Exchange Offer  Registration
            Statement,   the  Company  and  the   Guarantors   shall  provide  a
            supplemental  letter to the  Commission (I) stating that the Company
            and the Guarantors are registering the Exchange Offer in reliance on
            the position of the Commission  enunciated in Exxon Capital Holdings
            Corporation  (available  May 13,  1988) and Morgan  Stanley and Co.,
            Inc.  (available June 5, 1991),  as interpreted in the  Commission's
            letter  to  Shearman  &  Sterling  dated  July  2,  1993,   and,  if
            applicable,  any no-action  letter  obtained  pursuant to clause (A)
            above, (II) including a representation  that neither the Company nor
            any Guarantor has entered into any arrangement or understanding with
            any Person to  distribute  the Exchange  Notes to be received in the
            Exchange  Offer  and  that,  to the best of the  Company's  and each
            Guarantor's information and belief, each Holder participating in the
            Exchange  Offer is  acquiring  the  Exchange  Notes in its  ordinary
            course of business and has no arrangement or understanding  with any
            Person to  participate  in the  distribution  of the Exchange  Notes
            received  in the  Exchange  Offer  and  (III)  including  any  other
            undertaking  or  representation  required by the  Commission  as set
            forth in any no-action letter obtained pursuant to clause (A) above,
            if applicable.

            (b)  Shelf  Registration  Statement.  In  connection  with the Shelf
Registration Statement, the Company and the Guarantors shall:

            (i) comply with all the  provisions  of Section  6(c) and 6(d) below
      and  use  their  commercially  reasonable  best  efforts  to  effect  such
      registration  to permit  the sale of the  Transfer  Restricted  Securities
      being  sold  in  accordance   with  the  intended  method  or  methods  of
      distribution  thereof (as  indicated in the  information  furnished to the
      Company

                                       9
<PAGE>
      pursuant to Section 4(b) hereof), and pursuant thereto the Company and the
      Guarantors  will  prepare  and file  with the  Commission  a  Registration
      Statement  relating to the  registration on any appropriate form under the
      Act, which form shall be available for the sale of the Transfer Restricted
      Securities  in  accordance   with  the  intended   method  or  methods  of
      distribution  thereof  within the time periods and otherwise in accordance
      with the provisions hereof; and

            (ii)  issue,  upon the request of any Holder or  purchaser  of Notes
      covered  by  any  Shelf  Registration   Statement   contemplated  by  this
      Agreement,  Exchange Notes having an aggregate  principal  amount equal to
      the  aggregate  principal  amount  of Notes  sold  pursuant  to the  Shelf
      Registration  Statement and  surrendered to the Company for  cancellation;
      the Company  and the  Guarantors  shall  register  Exchange  Notes and the
      related Subsidiary Guarantees on the Shelf Registration Statement for this
      purpose and issue the Exchange  Notes to the  purchaser(s)  of  securities
      subject  to  the  Shelf  Registration  Statement  in  the  names  as  such
      purchaser(s) shall designate.

            (c)  General   Provisions.   In  connection  with  any  Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:

            (i)  use  their   commercially   reasonable  efforts  to  keep  such
      Registration  Statement  continuously  effective and provide all requisite
      financial statements for the period specified in Section 3 or 4 hereof, as
      applicable.  Upon the  occurrence  of any event that would  cause any such
      Registration  Statement or the Prospectus contained therein (A) to contain
      an untrue  statement of material  fact or omit to state any material  fact
      necessary to make the  statements  therein not misleading or (B) not to be
      effective and usable for resale of Transfer  Restricted  Securities during
      the period  required by this  Agreement,  the  Company and the  Guarantors
      shall  file  promptly  an  appropriate   amendment  to  such  Registration
      Statement curing such defect,  and, if Commission review is required,  use
      their  commercially  reasonable best efforts to cause such amendment to be
      declared  effective as soon as practicable.  If at any time the Commission
      shall  issue  any  stop  order   suspending  the   effectiveness   of  any
      Registration  Statement,  or any  state  securities  commission  or  other
      regulatory  authority shall issue an order suspending the qualification or
      exemption from qualification of the Transfer  Restricted  Securities under
      state  securities or Blue Sky laws, the Company and the  Guarantors  shall
      use their commercially reasonable best efforts to obtain the withdrawal or
      lifting of such order at the earliest possible time;

            (ii)  prepare  and file  with the  Commission  such  amendments  and
      post-effective  amendments to the applicable Registration Statement as may
      be  necessary  to  keep  such  Registration  Statement  effective  for the
      applicable  period set forth in Section 3 or 4 hereof, as the case may be;
      cause  the  Prospectus  to be  supplemented  by  any  required  Prospectus
      supplement,  and as so supplemented to be filed pursuant to Rule 424 under
      the Act, and to comply fully with Rules 424, 430A and 462, as  applicable,
      under the Act in a timely  manner;  and comply with the  provisions of the
      Act with  respect to the  disposition  of all  securities  covered by such
      Registration Statement during the applicable period in accordance with the
      intended  method or methods of  distribution  by the  sellers  thereof set
      forth in such Registration Statement or supplement to the Prospectus;

                                       10
<PAGE>
            (iii) in connection with any sale of Transfer Restricted  Securities
      that will result in such  securities no longer being  Transfer  Restricted
      Securities,   cooperate   with  the  Holders  to  facilitate   the  timely
      preparation and delivery of certificates  representing Transfer Restricted
      Securities  to be sold and not bearing  any  restrictive  legends;  and to
      register such Transfer  Restricted  Securities in such  denominations  and
      such names as the selling  Holders may request at least two business  days
      prior to such sale of Transfer Restricted Securities;

            (iv) use their  commercially  reasonable  best  efforts to cause the
      disposition  of  the  Transfer   Restricted   Securities  covered  by  the
      Registration  Statement  to be  registered  with or approved by such other
      governmental  agencies or  authorities  as may be  necessary to enable the
      seller or sellers  thereof to consummate the  disposition of such Transfer
      Restricted Securities; provided, however, that neither the Company nor any
      Guarantor   shall  be  required  to  register  or  qualify  as  a  foreign
      corporation  where it is not now so  qualified  or to take any action that
      would subject it to the service of process in suits or to taxation,  other
      than  as  to  matters  and  transactions   relating  to  the  Registration
      Statement, in any jurisdiction where it is not now so subject;

            (v) provide a CUSIP  number for all Transfer  Restricted  Securities
      not later than the effective  date of a  Registration  Statement  covering
      such  Transfer  Restricted  Securities  and provide the Trustee  under the
      Indenture with certificates for the Transfer  Restricted  Securities which
      are in a form eligible for deposit with The Depository Trust Company;

            (vi)  otherwise use their  commercially  reasonable  best efforts to
      comply with all applicable  rules and regulations of the  Commission,  and
      make  generally  available  to its  security  holders  with  regard to any
      applicable Registration Statement, as soon as practicable,  a consolidated
      earnings statement meeting the requirements of Rule 158 (which need not be
      audited) covering a twelve-month period beginning after the effective date
      of the registration statement (as such term is defined in paragraph (c) of
      Rule 158 under the Act); and

            (vii) cause the  Indenture to be  qualified  under the TIA not later
      than the effective date of the first  Registration  Statement  required by
      this  Agreement and, in connection  therewith,  cooperate with the Trustee
      and the Holders to effect such changes to the Indenture as may be required
      for such Indenture to be so qualified in accordance  with the terms of the
      TIA;  and execute and use their  commercially  reasonable  best efforts to
      cause the Trustee to execute, all documents that may be required to effect
      such changes and all other forms and  documents  required to be filed with
      the  Commission  to enable such  Indenture  to be so qualified in a timely
      manner.

            (d)   Additional   Provisions   Applicable  to  Shelf   Registration
Statements and Certain  Exchange  Offer  Prospectuses.  In connection  with each
Shelf Registration Statement,  and each Exchange Offer Registration Statement if
and to the extent that the Initial Purchaser has notified the Company that it is
a holder of Exchange Notes that are Transfer Restricted  Securities (for so long
as such  Exchange  Notes are Transfer  Restricted  Securities  or for the period
provided  in  Section 3 hereof,  whichever  is  shorter),  the  Company  and the
Guarantors shall:

                                       11
<PAGE>
            (i) advise each Holder  promptly  and, if  requested by such Holder,
      confirm such advice in writing,  (A) when the Prospectus or any Prospectus
      supplement or  post-effective  amendment has been filed, and, with respect
      to any applicable  Registration Statement or any post-effective  amendment
      thereto,  when the same has become  effective,  (B) of any  request by the
      Commission for amendments to the  Registration  Statement or amendments or
      supplements  to the  Prospectus  or for  additional  information  relating
      thereto,  (C) of  the  issuance  by  the  Commission  of  any  stop  order
      suspending the  effectiveness of the Registration  Statement under the Act
      or  of  the  suspension  by  any  state   securities   commission  of  the
      qualification of the Transfer  Restricted  Securities for offering or sale
      in any  jurisdiction,  or the  initiation of any proceeding for any of the
      preceding  purposes,  (D) of the existence of any fact or the happening of
      any  event  that  makes  any  statement  of a  material  fact  made in the
      Registration  Statement,  the  Prospectus,  any  amendment  or  supplement
      thereto or any document  incorporated by reference therein untrue, or that
      requires  the making of any  additions  to or changes in the  Registration
      Statement in order to make the statements therein not misleading,  or that
      requires the making of any  additions to or changes in the  Prospectus  in
      order to make the statements  therein,  in the light of the  circumstances
      under which they were made, not misleading;

            (ii) if any fact or event  contemplated by Section  6(d)(i)(D) above
      shall  exist or have  occurred,  prepare a  supplement  or  post-effective
      amendment  to the  Registration  Statement  or related  Prospectus  or any
      document  incorporated  therein by  reference  or file any other  required
      document so that,  as thereafter  delivered to the  purchasers of Transfer
      Restricted Securities, the Prospectus will not contain an untrue statement
      of a material  fact or omit to state any material  fact  necessary to make
      the statements therein, in the light of the circumstances under which they
      were made, not misleading;

            (iii)  furnish to each Holder in  connection  with such  exchange or
      sale,  if  any,  before  filing  with  the   Commission,   copies  of  any
      Registration  Statement or any  Prospectus  included  therein  (except the
      Prospectus  included in the Exchange Offer  Registration  Statement at the
      time it was declared  effective) or any  amendments or  supplements to any
      such  Registration   Statement  or  Prospectus  (including  all  documents
      incorporated  by reference  after the initial filing of such  Registration
      Statement),  which  documents will be subject to the review and comment of
      such  Holders in  connection  with such sale,  if any,  for a period of at
      least  five  business  days,  and the  Company  will  not  file  any  such
      Registration Statement or Prospectus or any amendment or supplement to any
      such  Registration  Statement or Prospectus  (including all such documents
      incorporated by reference) to which such Holders shall  reasonably  object
      within  five  business  days after the receipt  thereof a Holder  shall be
      deemed to have  reasonably  objected to such  filing if such  Registration
      Statement, amendment, Prospectus or supplement, as applicable, as proposed
      to be filed,  contains an untrue  statement of a material fact or omits to
      state any  material  fact  necessary  to make the  statements  therein not
      misleading or fails to comply with the applicable requirements of the Act;

            (iv)  promptly  prior to the  filing of any  document  that is to be
      incorporated  by reference  into a  Registration  Statement or Prospectus,
      provide  copies of such  document to each Holder in  connection  with such
      exchange  or  sale,  if  any,  make  the  Company's

                                       12
<PAGE>
      and the  Guarantors'  representatives  available  for  discussion  of such
      document  and other  customary  due  diligence  matters,  and include such
      information  in such document  prior to the filing thereof as such Holders
      may reasonably request;

            (v) make  available,  at reasonable  times,  for  inspection by each
      Holder and any  attorney  or  accountant  retained  by such  Holders,  all
      financial and other records,  pertinent corporate documents of the Company
      and the Guarantors and cause the Company's and the  Guarantors'  officers,
      directors and employees to supply all information  reasonably requested by
      any  such  Holder,   attorney  or  accountant  in  connection   with  such
      Registration Statement or any post-effective  amendment thereto subsequent
      to the filing thereof and prior to its effectiveness;

            (vi) if requested by any Holders in connection with such exchange or
      sale,  promptly  include  in any  Registration  Statement  or  Prospectus,
      pursuant to a supplement or  post-effective  amendment if necessary,  such
      information  as such  Holders  may  reasonably  request  to have  included
      therein, including, without limitation,  information relating to the "Plan
      of  Distribution"  of the  Transfer  Restricted  Securities;  and make all
      required filings of such Prospectus supplement or post-effective amendment
      as soon as practicable  after the Company is notified of the matters to be
      included in such Prospectus supplement or post-effective amendment;

            (vii)  furnish to each Holder in  connection  with such  exchange or
      sale without charge, at least one copy of the Registration  Statement,  as
      first filed with the Commission,  and of each amendment thereto, including
      all  documents   incorporated  by  reference   therein  and  all  exhibits
      (including exhibits incorporated therein by reference);

            (viii) deliver to each Holder without charge,  as many copies of the
      Prospectus  (including each  preliminary  prospectus) and any amendment or
      supplement thereto as such Holders reasonably may request; the Company and
      the Guarantors  hereby consent to the use (in accordance  with law) of the
      Prospectus and any amendment or supplement  thereto by each selling Holder
      in  connection  with the offering and the sale of the Transfer  Restricted
      Securities  covered  by the  Prospectus  or any  amendment  or  supplement
      thereto;

            (ix) upon the  request of any  Holder,  enter  into such  agreements
      (including  underwriting  agreements)  and make such  representations  and
      warranties  and take all such other  actions in  connection  therewith  in
      order to expedite or facilitate the disposition of the Transfer Restricted
      Securities pursuant to any applicable  Registration Statement contemplated
      by  this  Agreement  as may be  reasonably  requested  by  any  Holder  in
      connection with any sale or resale pursuant to any applicable Registration
      Statement. In such connection, the Company and the Guarantors shall:

                  (A) upon  request of any  Holder,  furnish  (or in the case of
            paragraphs  (2) and (3),  use  their  commercially  reasonable  best
            efforts to cause to be furnished) to each Holder,  upon Consummation
            of the  Exchange  Offer  or  upon  the  effectiveness  of the  Shelf
            Registration Statement, as the case may be:

                                       13
<PAGE>
                        (1) a certificate,  dated such date, signed on behalf of
                  the Company and each  Guarantor  by (x) the  President  or any
                  Vice  President  and (y) a principal  financial or  accounting
                  officer of the Company and such Guarantor,  confirming,  as of
                  the date  thereof,  the matters set forth in Section  6(f) and
                  (g) of the Purchase  Agreement and such other similar  matters
                  as such Holders may reasonably request;

                        (2) an opinion,  dated the date of  Consummation  of the
                  Exchange  Offer  or the  date of  effectiveness  of the  Shelf
                  Registration Statement, as the case may be, of counsel for the
                  Company covering matters similar to those set forth in Section
                  6(a) of the Purchase  Agreement and such other matters as such
                  Holder may reasonably  request,  and in any event  including a
                  statement to the effect that such counsel has  participated in
                  conferences  with  officers and other  representatives  of the
                  Company and the Guarantors, representatives of the independent
                  registered  public  accounting  firm for the  Company  and the
                  Guarantors  and has  considered  the  matters  required  to be
                  stated therein and the statements contained therein,  although
                  such  counsel has not  independently  verified  the  accuracy,
                  completeness  or  fairness of such  statements;  and that such
                  counsel advises that, on the basis of the foregoing,  no facts
                  came to such  counsel's  attention that caused such counsel to
                  believe that the  applicable  Registration  Statement,  at the
                  time  such  Registration   Statement  or  any   post-effective
                  amendment  thereto  became  effective  and, in the case of the
                  Exchange  Offer  Registration  Statement,  as of the  date  of
                  Consummation  of  the  Exchange  Offer,  contained  an  untrue
                  statement  of a  material  fact or omitted to state a material
                  fact  required to be stated  therein or  necessary to make the
                  statements  therein  not  misleading,  or that the  Prospectus
                  contained in such  Registration  Statement as of its date and,
                  in the case of the opinion dated the date of  Consummation  of
                  the Exchange Offer, as of the date of Consummation,  contained
                  an untrue  statement of a material  fact or omitted to state a
                  material  fact  necessary  in  order  to make  the  statements
                  therein,  in the light of the  circumstances  under which they
                  were made,  not  misleading.  Without  limiting the foregoing,
                  such counsel may state  further  that such counsel  assumes no
                  responsibility  for, and has not independently  verified,  the
                  accuracy,   completeness   or   fairness   of  the   financial
                  statements,  notes  and  schedules  and other  financial  data
                  included in any  Registration  Statement  contemplated by this
                  Agreement or the related Prospectus; and

                        (3) a  customary  comfort  letter,  dated  the  date  of
                  Consummation  of the  Exchange  Offer,  or as of the  date  of
                  effectiveness of the Shelf Registration Statement, as the case
                  may be,  from  the  Company's  independent  registered  public
                  accounting firm, in the customary form and covering matters of
                  the  type   customarily   covered   in   comfort   letters  to
                  underwriters in connection with  underwritten  offerings,  and
                  affirming  the  matters  set  forth  in  the  comfort  letters
                  delivered pursuant to Section 6(d) of the Purchase  Agreement;
                  and

                                       14
<PAGE>
                  (B) deliver such other  documents and  certificates  as may be
            reasonably  requested by the selling Holders to evidence  compliance
            with the matters  covered in clause (A) above and with any customary
            conditions  contained in any  agreement  entered into by the Company
            and the Guarantors pursuant to this clause (ix);

            (x) prior to any public offering of Transfer Restricted  Securities,
      cooperate  with the selling  Holders and their counsel in connection  with
      the registration and qualification of the Transfer  Restricted  Securities
      under the securities or Blue Sky laws of such jurisdictions as the selling
      Holders may request and do any and all other acts or things  necessary  or
      advisable to enable the disposition in such  jurisdictions of the Transfer
      Restricted  Securities covered by the applicable  Registration  Statement;
      provided,  however,  that neither the Company nor any  Guarantor  shall be
      required to register or qualify as a foreign  corporation  where it is not
      now so  qualified  or to take any  action  that  would  subject  it to the
      service of process in suits or to  taxation,  other than as to matters and
      transactions relating to the Registration  Statement,  in any jurisdiction
      where it is not now so subject; and

            (xi) provide  promptly to each Holder,  upon request,  each document
      filed with the Commission  pursuant to the  requirements  of Section 13 or
      Section 15(d) of the Exchange Act.

            (e) Restrictions on Holders. Each Holder's acquisition of a Transfer
Restricted  Security  constitutes such Holder's  agreement that, upon receipt of
the notice  referred to in Section  6(d)(i)(C) or any notice from the Company of
the existence of any fact of the kind described in Section 6(d)(i)(D) hereof (in
each case,  a  "Suspension  Notice"),  such  Holder will  forthwith  discontinue
disposition  of  Transfer  Restricted  Securities  pursuant  to  the  applicable
Registration  Statement  until  (i)  such  Holder  has  received  copies  of the
supplemented or amended  Prospectus  contemplated by Section 6(d)(ii) hereof, or
(ii) such  Holder is  advised  in  writing  by the  Company  that the use of the
Prospectus  may be  resumed,  and  has  received  copies  of any  additional  or
supplemental  filings that are  incorporated  by reference in the Prospectus (in
each case, the "Recommencement Date"). Each Holder receiving a Suspension Notice
shall be required to either (I) destroy any  Prospectuses,  other than permanent
file copies,  then in such  Holder's  possession  that have been replaced by the
Company with more recently dated Prospectuses or (II) deliver to the Company (at
the Company's  expense) all copies,  other than permanent  file copies,  then in
such Holder's  possession of the Prospectuses  covering such Transfer Restricted
Securities  that were current at the time of receipt of the  Suspension  Notice.
The time period regarding the effectiveness of such  Registration  Statement set
forth in Section 3 or 4 hereof, as applicable,  shall be extended by a number of
days equal to the number of days in the period  from and  including  the date of
delivery of the Suspension Notice to the date of delivery of the  Recommencement
Date.

SECTION 7.  REGISTRATION EXPENSES

            (a) All  expenses  incident  to the  Company's  and the  Guarantors'
performance  of or compliance  with this Agreement will be borne by the Company,
regardless of whether a  Registration  Statement  becomes  effective,  including
without limitation:  (i) all registration and

                                       15
<PAGE>
filing fees and expenses;  (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including  certificates  for the  Exchange  Notes to be issued in the  Exchange
Offer  and  printing  of  Prospectuses,  messenger  and  delivery  services  and
telephone);  (iv) all fees and  disbursements  of counsel for the  Company,  the
Guarantors  and one counsel for the  Holders of Transfer  Restricted  Securities
(which shall be Simpson  Thacher & Bartlett LLP or such other  counsel as may be
selected by a majority of such Holders);  (v) all application and filing fees in
connection with listing the Exchange Notes on a national  securities exchange or
automated  quotation  system pursuant to the requirements  hereof;  and (vi) all
fees and  disbursements of the independent  registered public accounting firm of
the Company and the Guarantors  (including the expenses of any special audit and
comfort letters required by or incident to such performance).

            The  Company  will,  in any  event,  bear  its and  the  Guarantors'
internal expenses (including,  without limitation,  all salaries and expenses of
its officers and employees  performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person,  including  special
experts, retained by the Company or the Guarantors.

            (b) In connection with any Registration  Statement  required by this
Agreement  (including,  without  limitation,  the  Exchange  Offer  Registration
Statement and the Shelf Registration Statement),  the Company and the Guarantors
will  reimburse  the Initial  Purchaser  and the Holders of Transfer  Restricted
Securities  who are  tendering  Notes in the Exchange  Offer  and/or  selling or
reselling  Notes or  Exchange  Notes  pursuant  to the  "Plan  of  Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable,  for the reasonable fees and disbursements of not more
than one counsel  (who shall be Simpson  Thacher & Bartlett  LLP unless  another
firm shall be chosen by the  Holders of a majority  in  principal  amount of the
Transfer Restricted Securities for whose benefit such Registration  Statement is
being prepared).

SECTION 8.  INDEMNIFICATION

            (a) The Company and the Guarantors agree, jointly and severally,  to
indemnify  and hold  harmless  each  Holder,  its  directors,  officers and each
Person,  if any,  who  controls  (within the meaning of Section 15 of the Act or
Section  20 of the  Exchange  Act) such  Holder,  from and  against  any and all
losses, claims, damages, liabilities or judgments (including without limitation,
any  legal or other  expenses  incurred  in  connection  with  investigating  or
defending  any  matter,  including  any action  that could give rise to any such
losses,  claims,  damages,  liabilities  or  judgments)  caused  by  any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
Registration  Statement,  preliminary prospectus or Prospectus (or any amendment
or supplement  thereto) provided by the Company to any Holder or any prospective
purchaser of Exchange  Notes or registered  Notes,  or caused by any omission or
alleged  omission to state therein a material fact required to be stated therein
or necessary to make the statements  therein not  misleading,  except insofar as
such losses, claims,  damages,  liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information  relating to any of the Holders  furnished in writing to the Company
by any of the Holders.

                                       16
<PAGE>
            (b) By its  acquisition  of  Transfer  Restricted  Securities,  each
Holder of Transfer Restricted  Securities agrees,  severally and not jointly, to
indemnify and hold harmless the Company and the Guarantors, and their respective
directors  and  officers,  and each Person,  if any,  who  controls  (within the
meaning of Section 15 of the Act or Section 20 of the Exchange  Act) the Company
or the Guarantors to the same extent as the foregoing indemnity from the Company
and the Guarantors set forth in Section 8(a) hereof,  but only with reference to
information  relating to such Holder furnished in writing to the Company by such
Holder  expressly for use in any Registration  Statement.  In no event shall any
Holder, its directors, officers or any Person who controls such Holder be liable
or responsible  for any amount in excess of the amount by which the total amount
received  by  such  Holder  with  respect  to its  sale of  Transfer  Restricted
Securities  pursuant to a Registration  Statement exceeds (i) the amount paid by
such Holder for such Transfer  Restricted  Securities and (ii) the amount of any
damages that such  Holder,  its  directors,  officers or any Person who controls
such  Holder has  otherwise  been  required  to pay by reason of such  untrue or
alleged untrue statement or omission or alleged omission.

            (c) In case any action  shall be commenced  involving  any Person in
respect of which  indemnity may be sought pursuant to Section 8(a) or (b) hereof
(the  "indemnified  party"),  the  indemnified  party shall promptly  notify the
Person against whom such indemnity may be sought (the "indemnifying  person") in
writing  and the  indemnifying  party shall  assume the defense of such  action,
including the employment of counsel  reasonably  satisfactory to the indemnified
party and the  payment of all fees and  expenses  of such  counsel,  as incurred
(except  that in the case of any  action in respect  of which  indemnity  may be
sought  pursuant to both  Sections  8(a) and (b) hereof,  a Holder  shall not be
required to assume the defense of such action pursuant to this Section 8(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel,  except as provided below, shall be at the expense
of the Holder).  Any  indemnified  party shall have the right to employ separate
counsel in any such action and participate in the defense thereof,  but the fees
and expenses of such counsel  shall be at the expense of the  indemnified  party
unless  (i)  the  employment  of  such  counsel  shall  have  been  specifically
authorized in writing by the indemnifying  party,  (ii) the  indemnifying  party
shall  have  failed to  assume  the  defense  of such  action or employ  counsel
reasonably  satisfactory to the indemnified  party or (iii) the named parties to
any such action  (including any impleaded  parties) include both the indemnified
party and the  indemnifying  party,  and the  indemnified  party shall have been
advised by such counsel that there may be one or more legal  defenses  available
to it  which  are  different  from  or  additional  to  those  available  to the
indemnifying  party (in which  case the  indemnifying  party  shall not have the
right to assume the defense of such action on behalf of the indemnified  party).
In any such case, the  indemnifying  party shall not, in connection with any one
action or  separate  but  substantially  similar or related  actions in the same
jurisdiction  arising out of the same general  allegations or circumstances,  be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Holders,  in the case of the parties indemnified
pursuant to Section 8(a) hereof,  and by the Company and the Guarantors,  in the
case of parties  indemnified  pursuant to Section 8(b) hereof.  The indemnifying
party shall indemnify and hold harmless the  indemnified  party from and against
any and all losses, claims, damages,  liabilities and judgments by reason of any
settlement of any action (A) effected  with its written  consent or (B) effected
without its written  consent if the  settlement is

                                       17
<PAGE>
entered into more than twenty business days after the  indemnifying  party shall
have received a request from the  indemnified  party for  reimbursement  for the
fees and  expenses of counsel (in any case where such fees and  expenses  are at
the  expense  of the  indemnifying  party)  and,  prior  to  the  date  of  such
settlement,  the  indemnifying  party  shall  have  failed to  comply  with such
reimbursement  request.  No indemnifying party shall,  without the prior written
consent of the  indemnified  party,  effect any  settlement or compromise of, or
consent to the entry of judgment  with  respect  to, any  pending or  threatened
action in respect of which the  indemnified  party is or could have been a party
and indemnity or contribution  may be or could have been sought hereunder by the
indemnified party,  unless such settlement,  compromise or judgment (I) includes
an unconditional  release of the indemnified  party from all liability on claims
that are or could have been the subject  matter of such action and (II) does not
include a statement as to or an admission of fault,  culpability or a failure to
act, by or on behalf of the indemnified party.

            (d) To the  extent  that the  indemnification  provided  for in this
Section 8 is  unavailable  to an  indemnified  party in respect  of any  losses,
claims,  damages,  liabilities  or  judgments  referred  to  therein,  then each
indemnifying  party,  in lieu of  indemnifying  such  indemnified  party,  shall
contribute to the amount paid or payable by such  indemnified  party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative  benefits  received by the Company and
the Guarantors on the one hand, and the Holders,  on the other hand,  from their
initial sale of Transfer Restricted Securities (or in the case of Exchange Notes
that are Transfer  Restricted  Securities,  the sale of the Notes for which such
Exchange  Notes were  exchanged)  or (ii) if the  allocation  provided by clause
8(d)(i)  above is not  permitted by  applicable  law, in such  proportion  as is
appropriate to reflect not only the relative benefits referred to in such clause
8(d)(i) but also the relative  fault of the Company and the  Guarantors,  on the
one  hand,  and of the  Holder,  on the  other  hand,  in  connection  with  the
statements  or  omissions  which  resulted  in  such  losses,  claims,  damages,
liabilities   or   judgments,   as  well  as  any   other   relevant   equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the  omission or alleged  omission to state a material  fact  relates to
information  supplied by the Company or such  Guarantor,  on the one hand, or by
the Holder,  on the other hand,  and the parties'  relative  intent,  knowledge,
access to  information  and  opportunity to correct or prevent such statement or
omission.  The  amount  paid or  payable  by a party as a result of the  losses,
claims, damages,  liabilities and judgments referred to above shall be deemed to
include,  subject to the limitations set forth in Section 8(c) hereof, any legal
or other fees or expenses  reasonably  incurred by such party in connection with
investigating or defending any action or claim.

            The Company,  the  Guarantors  and, by its  acquisition  of Transfer
Restricted Securities, each Holder agree that it would not be just and equitable
if  contribution  pursuant  to this  Section  8(d) were  determined  by pro rata
allocation  (even if the Holders were treated as one entity for such purpose) or
by any other method of  allocation  which does not take account of the equitable
considerations  referred to in the immediately  preceding paragraph.  The amount
paid or  payable  by an  indemnified  party as a result of the  losses,  claims,
damages,  liabilities  or  judgments  referred to in the  immediately  preceding
paragraph  shall be deemed to  include,  subject  to the  limitations  set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with  investigating or defending any matter,  including any action

                                       18
<PAGE>
that could  have given rise to such  losses,  claims,  damages,  liabilities  or
judgments.  Notwithstanding  the  provisions  of this Section 8, no Holder,  its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute,  in the aggregate, any amount in excess of the amount by
which the total  received by such  Holder  with  respect to the sale of Transfer
Restricted  Securities  pursuant  to a  Registration  Statement  exceeds (i) the
amount paid by such Holder for such Transfer Restricted  Securities and (ii) the
amount of any damages  which such Holder has  otherwise  been required to pay by
reason of such  untrue or  alleged  untrue  statement  or  omission  or  alleged
omission. No Person guilty of fraudulent  misrepresentation  (within the meaning
of Section 11(f) of the Act) shall be entitled to  contribution  from any Person
who  was  not  guilty  of  such  fraudulent   misrepresentation.   The  Holders'
obligations  to  contribute  pursuant  to  this  Section  8(d)  are  several  in
proportion to the respective principal amount of Transfer Restricted  Securities
held by each Holder hereunder and not joint.

SECTION 9.  RULE 144A AND RULE 144

            The Company and each Guarantor agrees with each Holder,  for so long
as any Transfer  Restricted  Securities remain outstanding and during any period
in which the Company or such Guarantor (a) is not subject to Section 13 or 15(d)
of the  Exchange  Act,  to  make  available,  upon  request  of any  Holder,  or
beneficial owner of Transfer  Restricted  Securities in connection with any sale
thereof and any  prospective  purchaser of such Transfer  Restricted  Securities
designated by such Holder or beneficial owner, the information  required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer  Restricted
Securities  pursuant to Rule 144A,  and (b) is subject to Section 13 or 15(d) of
the Exchange  Act, to make all filings  required  thereby in a timely  manner in
order to permit resales of such Transfer Restricted  Securities pursuant to Rule
144.

SECTION 10. FUTURE SUBSIDIARY GUARANTEES

            If, prior to the  Consummation of the Exchange Offer or prior to the
effectiveness  of the  Shelf  Registration  Statement,  as the case may be,  any
subsidiary of the Company executes a Subsidiary Guarantee in accordance with the
terms and provisions of the Indenture,  the Company shall cause such  subsidiary
to execute and deliver to the parties  hereto a  counterpart  signature  page to
this Agreement and such subsidiary  shall be bound by all the provisions of this
Agreement as a "Guarantor."

SECTION 11. MISCELLANEOUS

            (a) Remedies.  The Company and the Guarantors  acknowledge and agree
that any  failure by the  Company  and/or the  Guarantors  to comply  with their
respective  obligations  under  Sections 3 and 4 hereof  may result in  material
irreparable injury to the Initial Purchaser or the Holders for which there is no
adequate remedy at law, that it will not be possible to measure damages for such
injuries  precisely  and that,  in the event of any such  failure,  the  Initial
Purchaser  or  any  Holder  may  obtain  such  relief  as  may  be  required  to
specifically  enforce  the  Company's  and  the  Guarantors'  obligations  under
Sections 3 and 4 hereof.  The Company and the Guarantors  further agree to waive
the defense in any action for specific performance that a remedy at law would be
adequate.

                                       19
<PAGE>
            (b) No Inconsistent Agreements.  The Company and the Guarantors will
not,  on or after the date of this  Agreement,  enter  into any  agreement  with
respect to their  respective  securities  that is  inconsistent  with the rights
granted  to the  Holders  in this  Agreement  or  otherwise  conflicts  with the
provisions  hereof.  The Company and the Guarantors have not previously  entered
into any  agreement  granting  any  registration  rights  with  respect to their
respective  securities  to any Person that would  require such  securities to be
included in any Registration  Statement filed  hereunder.  The rights granted to
the Holders  hereunder do not in any way conflict with and are not  inconsistent
with the rights  granted to the  holders of the  Company's  and the  Guarantors'
securities under any agreement in effect on the date hereof.

            (c) Amendments and Waivers. The provisions of this Agreement may not
be  amended,  modified  or  supplemented,  and  waivers  of  or  consents  to or
departures from the provisions hereof may not be given unless (i) in the case of
Section 5 hereof and this Section 11(c)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted Securities and (ii) in
the case of all other  provisions  hereof,  the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted  Securities  (excluding  Transfer  Restricted  Securities held by the
Company  or its  Affiliates).  Notwithstanding  the  foregoing,  a waiver  of or
consent to departure from the provisions hereof that relates  exclusively to the
rights of  Holders  whose  Transfer  Restricted  Securities  are being  tendered
pursuant to the Exchange Offer,  and that does not affect directly or indirectly
the rights of other Holders whose Transfer  Restricted  Securities are not being
tendered  pursuant  to such  Exchange  Offer,  may be given by the  Holders of a
majority of the outstanding  principal amount of Transfer Restricted  Securities
subject to such Exchange Offer.

            (d)  Third  Party  Beneficiary.  The  Holders  shall be third  party
beneficiaries  to the  agreements  made  hereunder  between  the Company and the
Guarantors,  on the one hand, and the Initial Purchaser,  on the other hand, and
shall have the right to enforce such agreements  directly to the extent they may
deem such enforcement necessary or advisable to protect their rights hereunder.

            (e) Notices.  All notices and other  communications  provided for or
permitted hereunder shall be made in writing by hand-delivery,  first-class mail
(registered or certified,  return receipt requested),  telex, telecopier, or air
courier guaranteeing overnight delivery:

            (i)   if to a Holder, at the address set forth on the records
      of the Registrar under the Indenture, with a copy to the Registrar
      under the Indenture; and

            (ii)  if to the Company or any of the Guarantors:

                    Parker Drilling Company
                    1401 Enclave Parkway, Suite 600
                    Houston, Texas  77077
                    Attention: General Counsel
                    Facsimile: (281) 406-2000

                                       20
<PAGE>
            All such  notices  and  communications  shall be deemed to have been
duly given at the time  delivered  by hand,  when  receipt is  acknowledged,  if
telecopied;  and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery.

            Copies of all such notices, demands or other communications shall be
concurrently  delivered  by the  Person  giving  the same to the  Trustee at the
address specified in the Indenture.

            (f)  Successors  and  Assigns.  This  Agreement  shall  inure to the
benefit  of and be  binding  upon  the  successors  and  assigns  of each of the
parties,  including  without  limitation  and  without  the need for an  express
assignment, subsequent Holders; provided, that nothing herein shall be deemed to
permit any  assignment,  transfer or other  disposition  of Transfer  Restricted
Securities in violation of the terms hereof or of the Purchase  Agreement or the
Indenture.  If any  transferee of any Holder shall acquire  Transfer  Restricted
Securities  in any  manner,  whether  by  operation  of law or  otherwise,  such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement,  and by taking and holding such Transfer  Restricted  Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable,  the Purchase  Agreement,
and such Person shall be entitled to receive the benefits hereof.

            (g)  Counterparts.  This  Agreement may be executed in any number of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and all of which  taken
together shall constitute one and the same agreement.

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

            (i)  Governing  Law.  THIS  AGREEMENT  SHALL  BE  GOVERNED  BY,  AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

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

            (k) Entire Agreement. This Agreement is intended by the parties as a
final  expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the  subject  matter  contained  herein.  There are no  restrictions,  promises,
warranties  or  undertakings,  other than those set forth or  referred to herein
with  respect to the  registration  rights  granted with respect to the Transfer
Restricted  Securities.  This  Agreement  supersedes  all prior  agreements  and
understandings between the parties with respect to such subject matter.

                         [Signatures on following page]

                                       21
<PAGE>
            IN WITNESS  WHEREOF,  the parties have executed this Agreement as of
the date first written above.

                              PARKER DRILLING COMPANY

                              By: /s/ W. Kirk Brassfield
                                 _________________________________________
                                 Name: W. Kirk Brassfield
                                 Title: Vice President & Controller

                              GUARANTORS:

                              ANACHORETA, INC.
                              CANADIAN RIG LEASING, INC.
                              CHOCTAW INTERNATIONAL RIG CORP.
                              CREEK INTERNATIONAL RIG CORP.
                              DGH, INC.
                              INDOCORP OF OKLAHOMA, INC.
                              PARDRIL, INC.
                              PARKER AVIATION, INC.
                              PARKER DRILLING (KAZAKSTAN), LTD.
                              PARKER DRILLING COMPANY EASTERN HEMISPHERE, LTD.
                              PARKER DRILLING COMPANY INTERNATIONAL, INC.
                              PARKER DRILLING COMPANY INTERNATIONAL LIMITED
                              PARKER DRILLING COMPANY LIMITED (NEVADA)
                              PARKER DRILLING COMPANY NORTH AMERICA, INC.
                              PARKER DRILLING COMPANY OF ARGENTINA, INC.
                              PARKER DRILLING COMPANY OF BOLIVIA, INC.
                              PARKER DRILLING COMPANY OF NEW GUINEA, INC.
                              PARKER DRILLING COMPANY OF NIGER
                              PARKER DRILLING COMPANY OF OKLAHOMA, INCORPORATED
                              PARKER DRILLING COMPANY OF SINGAPORE, LTD.
                              PARKER DRILLING COMPANY OF SOUTH AMERICA, INC.
                              PARKER DRILLING OFFSHORE CORPORATION
                              PARKER DRILLING OFFSHORE INTERNATIONAL, INC.
                              PARKER NORTH AMERICA OPERATIONS, INC.
                              PARKER TECHNOLOGY, INC.
                              PARKER TECHNOLOGY, L.L.C.
                              PARKER USA DRILLING COMPANY
                              PARKER-VSE, INC.
                              QUAIL USA, LLC
                              SELECTIVE DRILLING CORPORATION
                              UNIVERSAL RIG SERVICE CORP.

                              By: /s/ David W. Tucker
                                 _________________________________________
                                 Name:  David W. Tucker
                                 Title: Vice President
<PAGE>
                              PARKER DRILLING COMPANY OF MEXICO, L.L.C.
                              PARKER DRILLING OFFSHORE USA, LLC

                              By:/s/ Bruce J. Korver
                                 _________________________________________
                                 Name:  Bruce J. Korver
                                 Title: Vice President

                              PARKER DRILLING MANAGEMENT SERVICES, INC.

                              By: /s/ David W. Tucker
                                 _________________________________________
                                 Name:  David W. Tucker
                                 Title: President

                              PARKER OFFSHORE RESOURCES, L.P.

                              By:/s/ David W. Tucker
                                 _________________________________________
                                 Name:  David W. Tucker
                                 Title: President, Parker Drilling Management
                                 Services, Inc., General Partner

                              PARKER TOOLS, L.L.C.

                              By:/s/ Tom Junk
                                 _________________________________________
                                 Name:  Tom Junk
                                 Title: President

                              PARKER USA RESOURCES, L.L.C.

                              By:/s/ Tom Junk
                                 _________________________________________
                                 Name:  Tom Junk
                                 Title: President
<PAGE>
                              PD MANAGEMENT RESOURCES, L.P.

                              By:/s/ David W. Tucker
                                 _________________________________________
                                 Name:  David W. Tucker
                                 Title: President, Parker Drilling Management
                                        Services, Inc., General Partner

                              QUAIL TOOLS, L.P.

                              By:/s/ David W. Tucker
                                 _________________________________________
                                 Name:  David W. Tucker
                                 Title: Vice President, Quail USA,LLC,
                                        General Partner
<PAGE>
LEHMAN BROTHERS INC.

By:/s/ J. Scott Schlossel
   _________________________________________
   Name:
   Title:
<PAGE>
                                   Schedule A

Guarantors

Anachoreta, Inc.
Canadian Rig Leasing, Inc.
Choctaw International Rig Corp.
Creek International Rig Corp.
DGH, Inc.
Indocorp of Oklahoma, Inc.
Pardril, Inc.
Parker Aviation, Inc.
Parker Drilling (Kazakstan), Ltd.
Parker Drilling Company Eastern Hemisphere, Ltd.
Parker Drilling Company International, Inc.
Parker Drilling Company International Limited
Parker Drilling Company Limited
Parker Drilling Company North America, Inc.
Parker Drilling Company of Argentina, Inc.
Parker Drilling Company of Mexico, LLC
Parker Drilling Company of New Guinea, Inc.
Parker Drilling Company of Niger
Parker Drilling Company of Oklahoma, Incorporated
Parker Drilling Company of Singapore, Ltd.
Parker Drilling Company of South America, Inc.
Parker Drilling Management Services, Inc.
Parker Drilling Offshore USA, LLC
Parker Drilling Offshore Corporation
Parker Drilling Offshore International, Inc.
Parker North America Operations, Inc.
Parker Offshore Resources, L.P.
Parker Technology, Inc.
Parker Technology,  LLC
Parker Tools, LLC
Parker USA Drilling Company
Parker USA Resources, LLC
Parker-VSE, Inc.
PD Management Resources, L.P.
Quail Tools, LP
Quail USA, LLC
Selective Drilling Corporation
Universal Rig Service Corp.

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