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                                3,000,000 SHARES

                             CORNELL COMPANIES, INC.

                                  COMMON STOCK



                             UNDERWRITING AGREEMENT

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

                                                               November 26, 2001

Lehman Brothers Inc.
Jefferies & Company, Inc.
First Analysis Securities Corporation
As Representatives of the several
   Underwriters named in Schedule 1
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285

Dear Sirs:

         Cornell Companies, Inc., a Delaware corporation (the "COMPANY"),
proposes to sell 3,000,000 shares (the "FIRM STOCK") of the Company's Common
Stock, par value $0.001 per share (the "COMMON STOCK"). In addition, the
Company proposes to grant to the Underwriters named in SCHEDULE 1 (the
"UNDERWRITERS") an option to purchase up to 450,000 additional shares of the
Common Stock on the terms and for the purposes set forth in SECTION 2 (the
"OPTION STOCK"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "STOCK." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters.

     1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:

                  (a) A registration statement on Form S-3 (No. 333-91211) with
         respect to the Stock has (i) been prepared by the Company in conformity
         with the requirements of the United States Securities Act of 1933, as
         amended (the "SECURITIES ACT"), and the rules and regulations (the
         "RULES AND REGULATIONS") of the United States Securities and Exchange
         Commission (the "COMMISSION") thereunder, (ii) been filed with the
         Commission under the Securities Act, including the related preliminary
         prospectus, preliminary prospectus supplement and prospectus and
         prospectus supplement and (iii) become effective under the Securities
         Act. The Company has filed such post-effective amendments to such
         registration statement as may be required. Executed copies of such
         registration statement have been delivered by the Company to you as the
         representatives (the "REPRESENTATIVES") of the Underwriters. Promptly
         after execution and delivery of

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         this Agreement, the Company will prepare and file a prospectus and a
         prospectus supplement in accordance with the provisions of Rule 430A
         of the Rules and Regulations and paragraph (b) of Rule 424 of the
         Securities Act. As used in this Agreement, "EFFECTIVE TIME" means the
         date and the time as of which such registration statement, or the most
         recent post-effective amendment thereto, if any, was declared effective
         by the Commission; "EFFECTIVE DATE" means the date of the Effective
         Time; "PRELIMINARY PROSPECTUS" means the prospectus included in such
         registration statement as supplemented by the prospectus supplement
         filed with the Commission by the Company with the consent of the
         Representatives pursuant to Rule 424 of the Rules and Regulations and
         used prior to the filing of the Prospectus; "REGISTRATION STATEMENT"
         means such registration statement, as amended at the Effective Time,
         including the documents incorporated by reference therein and all
         information contained in the final prospectus and prospectus supplement
         filed with the Commission pursuant to Rule 424(b) of the Rules and
         Regulations in accordance with SECTION 5 and deemed to be a part of
         the registration statement as of the Effective Time pursuant to
         paragraph (b) of Rule 430A of the Rules and Regulations, and including
         any registration statement registering additional shares of Common
         Stock filed with the Commission pursuant to Rule 462(b) of the Rules
         and Regulations; and "PROSPECTUS" means such final prospectus and
         final prospectus supplement, including the documents incorporated by
         reference therein, as first filed with the Commission pursuant to
         Rule 424(b) of the Rules and Regulations. All references in this
         Agreement to financial statements and schedules and other information
         which is "contained," "included" or "stated" in the Registration
         Statement, any Preliminary Prospectus or the Prospectus (or other
         references of like import) shall be deemed to mean and include all
         such financial statements and schedules and other information which
         is incorporated by reference in the Registration Statement, any
         Preliminary Prospectus or the Prospectus, as the case may be; and all
         references in this Agreement to amendments or supplements to the
         Registration Statement, any Preliminary Prospectus or the Prospectus
         shall be deemed to mean and include the filing of any document under
         the Securities Exchange Act of 1934 which is incorporated by reference
         in the Registration Statement, such Preliminary Prospectus or the
         Prospectus, as the case may be. For purposes of this Agreement, all
         references to the Registration Statement, any Preliminary Prospectus,
         the Prospectus or any amendment or supplement to any of the foregoing
         shall be deemed to include the copy filed with the Commission pursuant
         to its Electronic Data Gathering, Analysis and Retrieval system. The
         Commission has not issued any order preventing or suspending the use
         of any Preliminary Prospectus or Prospectus.

                  (b) (i) On the Effective Date, the Registration Statement
         conformed, and the Prospectus and any further amendments or supplements
         to the Prospectus will, when they are filed with the Commission,
         conform in all material respects to the requirements of the Securities
         Act and the Rules and Regulations, (ii) the Registration Statement does
         not and did not, as of the Effective Date, contain an untrue statement
         of a material fact or omit to state a material fact required to be
         stated therein or necessary to make the statements therein not
         misleading and (iii) the Prospectus and any further amendment or
         supplement to the Prospectus does not and will not, as of the
         applicable filing date, contain an untrue statement of a material fact
         or omit to state a material fact required to be stated therein or
         necessary to make the statements therein, in light of the circumstances
         under which they

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         were made, not misleading; PROVIDED that no representation or warranty
         is made as to information contained in or omitted from the Registration
         Statement or the Prospectus or any further amendments or supplements
         to the Registration Statement or Prospectus, in reliance upon and in
         conformity with written information furnished to the Company through
         the Representatives by or on behalf of any Underwriter specifically
         for inclusion therein.

                  (c) The Company has been duly incorporated and is validly
         existing as a corporation in good standing under the laws of the State
         of Delaware, is duly qualified to do business and is in good standing
         as a foreign corporation in each jurisdiction in which the ownership or
         lease of property or the conduct of its business requires such
         qualification, except where the failure to be so qualified would not
         have a material adverse effect on the business, financial condition or
         results of operations of the Company and its subsidiaries taken as a
         whole, and has all corporate power and authority necessary to own or
         hold its properties and to conduct business as described in the
         Registration Statement and Prospectus.

                  (d) Each of the Company's subsidiaries has been duly
         incorporated or formed and is validly existing as a corporation or
         limited partnership in good standing under the laws of the jurisdiction
         of its incorporation or formation, is duly qualified to do business in
         each jurisdiction in which the ownership or lease of property or the
         conduct of its business requires such qualification, except where the
         failure to be so qualified would not have a material adverse effect on
         the business, financial condition or results of operations of the
         Company and its subsidiaries, taken as a whole, or materially impact
         the transactions contemplated by this Agreement (a "MATERIAL ADVERSE
         EFFECT").

                  (e) All of the outstanding shares of capital stock or other
         equity interest of each of the Company's subsidiaries have been duly
         and validly authorized and issued and are fully paid and non-assessable
         and are 100% owned by the Company, directly or indirectly through one
         or more subsidiaries, free and clear of any security interest, claim,
         lien, encumbrance or adverse interest of any nature.

                  (f) The Company has the capitalization as set forth in the
         Prospectus (except as modified by subsequent issuances of shares of
         capital stock of the Company, if any, contemplated under this
         Agreement, pursuant to reservations, agreements or employee benefit
         plans as set forth in the Prospectus or pursuant to the exercise of
         options or warrants as set forth in the Prospectus); all of the issued
         shares of capital stock of the Company have been duly and validly
         authorized and issued, are fully paid and non-assessable and conform to
         the description thereof contained in the Prospectus; and all of the
         issued shares of capital stock of the Company have been listed on the
         New York Stock Exchange ("NYSE").

                  (g) The unissued shares of the Stock to be issued and sold by
         the Company to the Underwriters hereunder have been duly and validly
         authorized and, when issued and delivered against payment therefor as
         provided herein, will be duly and validly issued, fully paid and
         non-assessable; and the Stock will conform to the description thereof
         obtained in the Prospectus.

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                  (h) This Agreement has been duly authorized, executed and
         delivered by the Company.

                  (i) The execution, delivery and performance of this Agreement
         by the Company, the compliance by the Company with all of the
         provisions of this Agreement and the consummation of the transactions
         contemplated hereby will not (i) conflict with or result in a breach or
         violation of any of the terms or provisions of, or constitute a default
         under, any indenture, mortgage, deed of trust, loan agreement or other
         agreement or instrument to which the Company or any of its subsidiaries
         is a party or by which the Company or any of its subsidiaries is bound
         or to which any of the property or assets of the Company or any of its
         subsidiaries is subject, except for such conflicts, breaches,
         violations or defaults that would not, individually or in the
         aggregate, have a Material Adverse Effect; (ii) conflict with or result
         in any violation of the provisions of the charter or bylaws of the
         Company or any of its subsidiaries; (iii) result in any violation of
         any statute or any order, rule or regulation of any court or
         governmental agency or body having jurisdiction over the Company or any
         of its subsidiaries or any of their respective properties or assets,
         except for such violations that would not, individually or in the
         aggregate, have a Material Adverse Effect; and (iv) except for such
         consents, approvals, authorizations, registrations or qualifications as
         may be required under the Securities Exchange Act of 1934, as amended
         (the "EXCHANGE ACT"), and applicable state securities laws in
         connection with the purchase and distribution of the Stock by the
         Underwriters, no consent, approval, authorization or order of, or
         filing or registration with, any such court or governmental agency or
         body is required for the execution, delivery and performance of this
         Agreement by the Company and the consummation of the transactions
         contemplated hereby.

                  (j) There are no contracts, agreements or understandings
         between the Company and any person granting such person the right
         (other than rights which have been waived or satisfied), with respect
         to any securities of the Company owned by such person, to require the
         Company to include such securities in the securities registered
         pursuant to the Registration Statement. There are no contracts,
         agreements or understandings between the Company and any person
         granting such person the right to require the Company to register or
         include securities pursuant to any other registration statement filed
         by the Company under the Securities Act.

                  (k) Except as described in the Prospectus, the Company has not
         sold or issued any shares of Common Stock during the six-month period
         preceding the date of the Prospectus, including any sales pursuant to
         Rule 144A under, or Regulations D or S of, the Securities Act, other
         than shares issued pursuant to employee benefit plans, qualified stock
         options plans or other employee compensation plans or pursuant to
         outstanding options, rights or warrants.

                  (l) Neither the Company nor any of its subsidiaries has
         sustained, since the date of the latest audited financial statements
         included in the Prospectus, any material loss or interference with its
         business from fire, explosion, flood or other calamity, whether or not
         covered by insurance, or from any labor dispute or court or
         governmental action, order or decree, otherwise than as set forth or
         contemplated in the Prospectus;

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         and, since such date, there has not been any material change in the
         capital stock or long-term debt of the Company and its subsidiaries
         taken as a whole, or any material adverse change in, or any development
         involving a prospective material adverse change in, the business,
         financial condition or results of operations of the Company and its
         subsidiaries taken as a whole, otherwise than as set forth or
         contemplated in the Prospectus.

                  (m) The financial statements (including the related notes and
         supporting schedules) filed as part of the Registration Statement and
         included in the Prospectus present fairly the financial condition and
         results of operations of the Company and its consolidated subsidiaries,
         at the dates and for the periods indicated, and have been prepared in
         conformity with U.S. generally accepted accounting principles applied
         on a consistent basis throughout the periods involved.

                  (n) Arthur Andersen LLP, who have certified certain financial
         statements of the Company, whose reports are incorporated by reference
         in the Prospectus and who have delivered the initial letter referred to
         in SECTION 7(f), are independent public accountants as required by the
         Securities Act and the Rules and Regulations.

                  (o) Each of the Company and its subsidiaries has good and
         marketable title to all personal property owned by it, free and clear
         of all liens, encumbrances and defects except such as are described in
         the Prospectus or such as do not materially affect the value of such
         property and do not materially interfere with the use made and proposed
         to be made of such property by the Company or such subsidiary and all
         real property and buildings held under lease by the Company and its
         subsidiaries are held by them under valid, subsisting and enforceable
         leases, with such exceptions as are not material and do not interfere
         with the use made and proposed to be made of such property and
         buildings by the Company or such subsidiary.

                  (p) Each of the Company and its subsidiaries carries, or is
         covered by, insurance in such amounts and covering such risks as is
         adequate for the conduct of its business and the value of its
         properties and as is customary for companies engaged in similar
         businesses in similar industries.

                  (q) There are no legal or governmental proceedings pending (i)
         to which the Company or any of its subsidiaries is a party or of which
         any property or assets of the Company or any of its subsidiaries is the
         subject and (ii) which, if determined adversely to the Company or any
         of its subsidiaries, are reasonably likely to have a Material Adverse
         Effect, and to the knowledge of the Company, no such proceedings are
         threatened or contemplated by governmental authorities or threatened by
         others.

                  (r) There are no contracts or other documents which are
         required to be described in the Prospectus or filed as exhibits to the
         Registration Statement by the Securities Act or by the Rules and
         Regulations which have not been described in the Prospectus or filed as
         exhibits to the Registration Statement.

                  (s) No relationship, direct or indirect, exists between or
         among the Company or any of its subsidiaries on the one hand, and the
         directors, officers, stockholders,

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         customers or suppliers of the Company or any of its subsidiaries on
         the other hand, which is required to be described in the Prospectus
         which is not so described.

                  (t) No labor disturbance by the employees of the Company or
         any of its subsidiaries exists or, to the knowledge of the Company, is
         imminent which would reasonably be expected to have a Material Adverse
         Effect.

                  (u) Each of the Company and its subsidiaries is in compliance
         in all material respects with all presently applicable provisions of
         the Employee Retirement Income Security Act of 1974, as amended,
         including the regulations and published interpretations thereunder
         ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
         with respect to any "pension plan" (as defined in ERISA) for which the
         Company or any of its subsidiaries would have any liability; none of
         the Company or any of its subsidiaries has incurred and none of them
         expects to incur liability under (i) Title IV of ERISA with respect to
         termination of, or withdrawal from, any "pension plan" or (ii) Sections
         412 or 4971 of the Internal Revenue Code of 1986, as amended, including
         the regulations and published interpretations thereunder (the "CODE");
         and each "pension plan" for which the Company and its subsidiaries
         would have any liability that is intended to be qualified under Section
         401(a) of the Code is so qualified in all material respects and nothing
         has occurred, whether by action or by failure to act, which would cause
         the loss of such qualification.

                  (v) Each of the Company and its subsidiaries has filed all
         federal, state and local income and franchise tax returns required to
         be filed through the date hereof and has paid all taxes due thereon,
         and no tax deficiency has been determined adversely to the Company or
         any of its subsidiaries which has had (nor does the Company have any
         knowledge of any tax deficiency which, if determined adversely to the
         Company, would reasonably be expected to have) a Material Adverse
         Effect.

                  (w) Since the date as of which information is given in the
         Prospectus through the date hereof, and except as may otherwise be
         disclosed in the Prospectus, the Company has not (i) issued or granted
         any securities, other than pursuant to its employee benefits plans,
         qualified stock option plans or other employee compensation plans
         existing on the date hereof or pursuant to outstanding options or
         rights, all of which are described in the Prospectus, (ii) incurred any
         liability or obligation, direct or contingent, other than liabilities
         and obligations which were incurred in the ordinary course of business,
         (iii) entered into any transaction not in the ordinary course of
         business or (iv) declared or paid any dividend on its capital stock.

                  (x) Each of the Company and its subsidiaries (i) makes and
         keeps accurate books and records and (ii) maintains internal accounting
         controls which provide reasonable assurance that (A) transactions are
         executed in accordance with management's authorization, (B)
         transactions are recorded as necessary to permit preparation of its
         financial statements and to maintain accountability for its assets, (C)
         access to its assets is permitted only in accordance with management's
         authorization and (D) the reported accountability for its assets is
         compared with existing assets at reasonable intervals.

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                  (y) Neither the Company nor any of its subsidiaries is in
         violation of its charter, bylaws or other formation documents, in
         default in any material respect, and no event has occurred which, with
         notice or lapse of time or both, would constitute such a default, in
         the due performance or observance of any term, covenant or condition
         contained in any material indenture, mortgage, deed of trust, loan
         agreement or other agreement or instrument to which it is a party or by
         which it is bound or to which any of its properties or assets is
         subject or in violation in any material respect of any law, ordinance,
         governmental rule, regulation or court decree to which it or its
         property or assets may be subject; and each of the Company and its
         subsidiaries has obtained all material licenses, permits, certificates,
         franchises or other governmental authorizations or permits necessary to
         the ownership of its property or to the conduct of its business.

                  (z) Neither the Company nor any of its subsidiaries nor any
         director or officer associated with or acting on behalf of the Company
         or any of its subsidiaries has used any corporate funds for any
         unlawful contribution, gift, entertainment or other unlawful expense
         relating to political activity; made any direct or indirect unlawful
         payment to any foreign or domestic government official or employee from
         corporate funds; violated or is in violation of any provision of the
         Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
         payoff, influence payment, kickback or other unlawful payment.

                  (aa) There has been no storage, disposal, generation,
         manufacture, refinement, transportation, handling or treatment of toxic
         wastes, medical wastes, hazardous wastes or hazardous substances by the
         Company or any of its subsidiaries (or, to the knowledge of the
         Company, any of its predecessors in interest) at, upon or from any of
         the property now or previously owned or leased by the Company or such
         subsidiary in violation of any applicable law, ordinance, rule,
         regulation, order, judgment, decree or permit or which would require
         remedial action under any applicable law, ordinance, rule, regulation,
         order, judgment, decree or permit, except for any violation or remedial
         action which would not have, or could not be reasonably likely to have,
         singularly or in the aggregate with all such violations and remedial
         actions, a Material Adverse Effect; there has been no material spill,
         discharge, leak, emission, injection, escape, dumping or release of any
         kind onto such property or into the environment surrounding such
         property of any toxic wastes, medical wastes, solid wastes, hazardous
         wastes or hazardous substances due to or caused by the Company or any
         of its subsidiaries or with respect to which the Company has knowledge,
         except for any such spill, discharge, leak, emission, injection,
         escape, dumping or release which would not have or would not be
         reasonably likely to have, singularly or in the aggregate with all such
         spills, discharges, leaks, emissions, injections, escapes, dumpings and
         releases, a Material Adverse Effect; and the terms "hazardous wastes,"
         "toxic wastes," "hazardous substances" and "medical wastes" shall have
         the meanings specified in any applicable local, state and federal laws
         or regulations with respect to environmental protection.

                  (bb) The Company is not, and after giving effect to the
         offering and sale of the Stock and the initial investment of the
         proceeds therefrom as contemplated under "Use of Proceeds" in the
         Prospectus, will not be an "investment company" within the meaning of
         such term under the Investment Company Act of 1940, as amended (the
         "INVESTMENT COMPANY ACT"), and the rules and regulations of the
         Commission thereunder.

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                  (cc) Except as otherwise expressly agreed to by the
         Representatives, the Company has obtained an agreement, in form and
         substance reasonably satisfactory to the Representatives, of each of
         its directors and officers and certain of its stockholders designated
         by you not to, during the period beginning on the date hereof and
         ending 90 days after the date of the Prospectus, (1) offer, pledge,
         announce the intention to sell, sell, contract to sell, sell any option
         or contract to purchase, purchase any option or contract to sell, grant
         any option, right or warrant to purchase, or otherwise transfer or
         dispose of, directly or indirectly, any Common Stock or any securities
         convertible into or exercisable or exchangeable for Common Stock
         (including without limitation, Common Stock or any securities
         convertible into or exercisable or exchangeable for Common Stock that
         may be deemed to be beneficially owned by the undersigned in accordance
         with the rules and regulations of the Commission), (2) enter into any
         swap or other agreement that transfers, in whole or in part, any of the
         economic consequences of ownership of any Common Stock, whether any
         such transaction described in clause (1) or (2) above is to be settled
         by delivery of Common Stock or such other securities, in cash or
         otherwise, or (3) make any demand for, or exercise any right with
         respect to, the registration of any shares of Common Stock or any
         security convertible into or exercisable or exchangeable for Common
         Stock; provided, however, that such persons may transfer Common Stock
         (i) as otherwise provided in the applicable agreement or (ii) as a gift
         or gifts to family members, trusts on behalf of family members, family
         limited partnerships, or charitable organizations, provided that any
         such donee thereof agrees in writing to be bound by the terms of the
         respective agreement.

                  (dd) The Company has applied for the listing of the Stock on
         the NYSE.

     2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 3,000,000 shares of
the Firm Stock to the several Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in SCHEDULE 1.

         In addition, the Company grants to the Underwriters an option to
purchase up to 450,000 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in SECTION 4. Shares of Option Stock shall be purchased severally
for the account of the Underwriters in proportion to the number of shares of
Firm Stock set opposite the name of such Underwriters in Schedule 1. The
respective purchase obligations of each Underwriter with respect to the Option
Stock shall be adjusted by the Representatives so that no Underwriter shall be
obligated to purchase Option Stock other than in 100 share amounts. The price of
both the Firm Stock and any Option Stock shall be $13.02 per share.

         The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), as the case may be,
except upon payment for all the Stock to be purchased on such Delivery Date
as provided herein.

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     3. OFFERING OF STOCK BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set
forth in the Prospectus.

     4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment for
the Firm Stock shall be made at the offices of Akin, Gump, Strauss, Hauer &
Feld, L.L.P., 1900 Pennzoil Place, South Tower, 711 Louisiana Street,
Houston, Texas 77002 at 9:00 a.m., New York City time, on the fourth full
business day following the date of this Agreement or at such other date or
place as shall be determined by agreement between the Representatives and the
Company. This date and time are sometimes referred to as the "FIRST DELIVERY
DATE." On the First Delivery Date, the Company shall deliver or cause to be
delivered the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Company of the
purchase price by wire transfer in immediately available funds. Time shall be
of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names
and in such denominations as the Representatives shall request in writing not
less than two full business days prior to the First Delivery Date. If
requested by the Representatives, the Company shall make the certificates
representing the Firm Stock available for inspection by the Representatives
in New York, New York, not later than 2:00 p.m., New York City time, on the
business day prior to the First Delivery Date.

         The option granted in SECTION 2 will expire 30 days after the date
of this Agreement and may be exercised in whole or in part from time to time
by written notice being given to the Company by the Representatives. If the
option is exercised in part, the Underwriters shall purchase on a pro rata
basis from the Company that number of shares of Option Stock offered by the
Company pursuant to SECTION 2. Such notice shall set forth the aggregate
number of shares of Option Stock as to which the option is being exercised,
the names in which the shares of Option Stock are to be registered, the
denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of
Option Stock are to be delivered; PROVIDED, HOWEVER, that this date and time
shall not be earlier than (but may be at the same time as) the First Delivery
Date nor earlier than the second full business day after the date on which
the option shall have been exercised unless agreed to by the parties nor
later than the fifth full business day after the date on which the option
shall have been exercised. The date and time the shares of Option Stock are
delivered are sometimes referred to as a "SECOND DELIVERY DATE" and the First
Delivery Date and any Second Delivery Date are sometimes each referred to as
a "DELIVERY DATE."

         Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this SECTION
4 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 9:00 a.m., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver
or cause to be delivered the Option Stock to the Representatives for the
account of each Underwriter against payment of the purchase price by wire
transfer in immediately available funds to or upon the order of the Company.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in
the aforesaid written

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notice. If requested by the Representatives, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 p.m., New York
City time, on the business day prior to such Second Delivery Date.

     5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:

                  (a) To prepare the Prospectus in a form approved by the
         Representatives and to file such Prospectus pursuant to Rule 424(b)
         under the Securities Act not later than the Commission's close of
         business on the second business day following the execution and
         delivery of this Agreement or, if applicable, such earlier time as may
         be required by Rule 430A(a)(3) under the Securities Act; to make no
         further amendment or any supplement to the Registration Statement or to
         the Prospectus except as permitted herein; to advise the
         Representatives, promptly after it receives notice thereof, of the time
         when any amendment to the Registration Statement has been filed or
         becomes effective or any supplement to the Prospectus or any amended
         Prospectus has been filed and to furnish the Representatives with
         copies thereof; to advise the Representatives, promptly after it
         receives notice thereof, of the issuance by the Commission of any stop
         order or of any order preventing or suspending the use of any
         Preliminary Prospectus or the Prospectus, of the suspension of the
         qualification of the Stock for offering or sale in any jurisdiction, of
         the initiation or threatening of any proceeding for any such purpose,
         or of any request by the Commission for the amending or supplementing
         of the Registration Statement or the Prospectus or for additional
         information; and, in the event of the issuance of any stop order or of
         any order preventing or suspending the use of any Preliminary
         Prospectus or the Prospectus or suspending any such qualification, to
         use promptly its best efforts to obtain its withdrawal;

                  (b) To furnish promptly to each of the Representatives and to
         counsel for the Underwriters a signed copy of the Registration
         Statement as originally filed with the Commission, and each amendment
         thereto filed with the Commission, including all consents and exhibits
         filed therewith;

                  (c) To deliver promptly to the Representatives such number of
         the following documents as the Representatives shall reasonably
         request: (i) conformed copies of the Registration Statement as
         originally filed with the Commission and each amendment thereto (in
         each case including exhibits other than this Agreement and the
         computation of per share earnings) and (ii) each Preliminary
         Prospectus, the Prospectus and any amended or supplemented Prospectus;
         and, if the delivery of a prospectus is required at any time after the
         Effective Time in connection with the offering or sale of the Stock or
         any other securities relating thereto and if at such time any event
         shall have occurred as a result of which the Prospectus as then amended
         or supplemented would include an untrue statement of a material fact or
         omit to state any material fact necessary in order to make the
         statements therein, in the light of the circumstances under which they
         were made when such Prospectus is delivered, not misleading, or, if for
         any other reason it shall be necessary to amend or supplement the
         Prospectus in order to comply with the Securities Act, to notify the
         Representatives and, upon their request, to file such amended or
         supplemented prospectus and to prepare and furnish without charge to
         each Underwriter

                                       10
<Page>

         and to any dealer in securities as many copies as the Representatives
         may from time to time reasonably request of an amended or supplemented
         Prospectus which will correct such statement or omission or effect
         such compliance;

                  (d) To file promptly with the Commission any amendment to the
         Registration Statement or the Prospectus or any supplement to the
         Prospectus that may, in the judgment of the Company or the
         Representatives, be required by the Securities Act or requested by the
         Commission;

                  (e) Prior to filing with the Commission any amendment to the
         Registration Statement or supplement to the Prospectus or any
         Prospectus pursuant to Rule 424 of the Rules and Regulations, to
         furnish a copy thereof to the Representatives and counsel for the
         Underwriters and obtain the consent of the Representatives to the
         filing;

                  (f) As soon as practicable after the Effective Date, but in
         any event not later than 18 months after the Effective Date of the
         Registration Statement, to make generally available to the Company's
         security holders and to deliver to the Representatives an earnings
         statement of the Company (which need not be audited) complying with
         Section 11(a) of the Securities Act and the Rules and Regulations
         (including, at the option of the Company, Rule 158);

                  (g) For a period of five years following the Effective Date,
         to furnish to the Representatives upon request copies of all materials
         furnished by the Company to its stockholders and all public reports and
         all reports and financial statements furnished by the Company to the
         principal national securities exchange upon which the Common Stock may
         be listed pursuant to requirements of or agreements with such exchange
         or to the Commission pursuant to the Exchange Act or any rule or
         regulation of the Commission thereunder;

                  (h) Promptly, from time to time, to take such action as the
         Representatives may reasonably request to qualify the Stock for
         offering and sale under the securities laws of such jurisdictions as
         the Representatives may request and to comply with such laws so as to
         permit the continuance of sales and dealings therein in such
         jurisdictions for as long as may be necessary to complete the
         distribution of the Stock; provided that in connection therewith the
         Company shall not be required to qualify as a foreign corporation or to
         file a general consent to service of process in any jurisdiction;

                  (i) For a period of 90 days from the date of the Prospectus,
         not to, directly or indirectly, (1) issue, offer, sell, contract to
         sell, pledge, grant any option to purchase, make any short sale or
         otherwise dispose of (or enter into any transaction or device which is
         designed to, or could be expected to, result in the disposition by any
         person at any time in the future of) any shares of Common Stock or any
         options, rights or warrants to purchase any shares of Common Stock, or
         any securities convertible into, exchangeable for or that represent the
         right to receive shares of Common Stock or file a registration
         statement with respect to any of the foregoing (other than the Stock
         and shares issued pursuant to employee benefit plans, qualified stock
         option plans or other employee compensation plans existing on the date
         hereof or pursuant to currently outstanding

                                       11
<Page>

         options, warrants or rights, or other than the grant of options
         pursuant to option plans existing on the date hereof), or (2) enter
         into any hedging or other transaction which is designed to or could
         reasonably be expected to lead to or result in a direct or indirect
         sale or disposition or otherwise transfers the economic consequences
         of ownership of such shares of Common Stock, whether any such
         transaction described in clause (1) or (2) above is to be settled by
         delivery of Common Stock or other securities, in cash or otherwise, in
         each case without the prior written consent of Lehman Brothers Inc.;

                  (j) To use its best efforts to complete the listing of the
         Stock on the NYSE, subject only to official notice of issuance and
         evidence of satisfactory distribution, prior to the First Delivery
         Date;

                  (k) To take such steps as shall be necessary to ensure that
         the Company shall not become an "investment company" within the meaning
         of such term under the Investment Company Act and the rules and
         regulations of the Commission thereunder;

                  (l) To use the net proceeds received by it from the sale of
         the Stock pursuant to this Agreement in the manner set forth in the
         Prospectus under the caption "Use of Proceeds"; and

                  (m) If necessary or appropriate, use its best efforts to file
         a registration statement pursuant to Rule 462(b) under the Securities
         Act by 10:00 p.m. on the date hereof but in any event not later than by
         8:00 a.m. on the date immediately following the date hereof.

     6.  EXPENSES. The Company agrees to pay (a) the costs incident to the
registration, authorization, issuance, sale and delivery of the Stock and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement
and any amendments and exhibits thereto; (c) the costs of printing and
distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in
each case, exhibits), any Preliminary Prospectus, the Prospectus and any
amendment or supplement to the Prospectus, all as provided in this Agreement;
(d) the costs of producing and distributing this Agreement, any Agreement
among Underwriters, closing documents, including any compilation thereof, and
any other related documents in connection with the offering, purchase, sale
and delivery of the Stock; (e) the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc.
("NASD") of the terms of sale of the Stock; (f) any applicable listing or
other fees; (g) the fees and expenses of qualifying the Stock under the
securities laws of the several jurisdictions as provided in SECTION 5(h) and
of preparing, printing and distributing any Blue Sky surveys and of securing
any required review by the NASD (including related fees and expenses of
counsel to the Underwriters); (h) all fees and expenses in connection with
listing the Stock on the NYSE; (i) fees and expenses of any transfer agent or
registrar for the Stock; (j) the preparation, issuance and delivery of the
certificates for the Stock to the Representatives, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the stock to the Representatives; (k) the expenses of
the Company relating to the "roadshow" or other investor presentations for
the offering and other marketing activities associated therewith; and (l) all
other costs and expenses incident to the performance of

                                       12
<Page>

the obligations of the Company under this Agreement; PROVIDED that, except as
provided in this SECTION 6 and in SECTION 11, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of their
counsel, any transfer taxes on the Stock which they may sell and the expenses
of advertising any offering of the Stock made by the Underwriters.

     7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on
each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:

                  (a) The Prospectus shall have been timely filed with the
         Commission in accordance with SECTION 5(a); no stop order suspending
         the effectiveness of the Registration Statement or any part thereof
         shall have been issued and no proceeding for that purpose shall have
         been initiated or threatened by the Commission; and any request of the
         Commission for inclusion of additional information in the Registration
         Statement or the Prospectus or otherwise shall have been complied with.

                  (b) No Underwriter shall have discovered and disclosed to the
         Company on or prior to such Delivery Date that the Registration
         Statement or the Prospectus or any amendment or supplement to the
         Registration Statement or the Prospectus contains any untrue statement
         of a fact which, in the opinion of the Representatives, is material or
         omits to state any fact which, in the opinion of the Representatives,
         is material and is required to be stated therein or is necessary to
         make the statements therein not misleading.

                  (c) All corporate proceedings and other legal matters incident
         to the authorization, form and validity of this Agreement, the Stock,
         the Registration Statement and the Prospectus, and all other legal
         matters relating to this Agreement and the transactions contemplated
         hereby shall be reasonably satisfactory in all material respects to the
         Representatives, and the Company shall have furnished to counsel to the
         Underwriters all documents and information that they may reasonably
         request to enable them to advise the Underwriters as to such matters.

                  (d) Locke Liddell & Sapp LLP shall have furnished to the
         Representatives its written opinion, as counsel to the Company,
         addressed to the Underwriters and dated such Delivery Date, in form and
         substance reasonably satisfactory to the Representatives, to the effect
         that:

                           (i) The Company has been duly incorporated and is
                  validly existing as a corporation in good standing under the
                  laws of the State of Delaware, and is duly qualified to do
                  business and is in good standing as a foreign corporation in
                  each jurisdiction in which its ownership or lease of property
                  or the conduct of its business requires such qualification,
                  except where the failure to be so qualified would not have a
                  material adverse effect on the business, financial condition
                  or results of operations of the Company and its subsidiaries
                  taken as a whole, and has all corporate power and authority
                  necessary to own or hold its properties and

                                       13
<Page>

                  conduct its business as described in the Registration
                  Statement and the Prospectus;

                           (ii) Each of the Company's subsidiaries has been duly
                  incorporated or formed and is validly existing as a
                  corporation or limited partnership in good standing under the
                  laws of the jurisdiction of its incorporation or formation, is
                  duly qualified to do business in each jurisdiction in which
                  the ownership or lease of property or the conduct of its
                  business requires such qualification, except where the failure
                  to be so qualified would not have a material adverse effect on
                  the business, financial condition or results of operations of
                  the Company and its subsidiaries taken as a whole;

                           (iii) The Company has the capitalization as set forth
                  in the Prospectus (except as modified by subsequent issuances
                  of shares of capital stock of the Company, if any,
                  contemplated under this Agreement, pursuant to reservations,
                  agreements or employee benefit plans as set forth in the
                  Prospectus or pursuant to the exercise of options or warrants
                  as set forth in the Prospectus), and the issued shares of
                  capital stock of the Company (a) issued on or after October
                  17, 1997 (including the shares of Stock being delivered on
                  such Delivery Date) have been duly and validly authorized and
                  issued, are fully paid and non-assessable and conform to the
                  description thereof contained in the Prospectus and (b) issued
                  prior to October 17, 1997, to such counsel's knowledge, have
                  been duly and validly authorized and issued, are fully paid
                  and non-assessable and conform to the description thereof
                  contained in the Prospectus;

                           (iv) All of the issued shares of capital stock,
                  partnership interests or other equity interests of each of the
                  Company's subsidiaries are 100% owned by the Company, directly
                  or indirectly through one or more subsidiaries, free and clear
                  of any security interest, claim, lien, encumbrance or adverse
                  interest of any nature;

                           (v) To such counsel's knowledge, there are no legal
                  or governmental proceedings pending (i) to which the Company
                  or any of its subsidiaries is a party or of which any property
                  or assets of the Company or any of its subsidiaries is the
                  subject and (ii) which, if determined adversely to the Company
                  or any of its subsidiaries, are reasonably likely to have a
                  Material Adverse Effect, and, to such counsel's knowledge, no
                  such proceedings are threatened or contemplated by
                  governmental authorities or threatened by others;

                           (vi) The Registration Statement was declared
                  effective under the Securities Act as of the date and time
                  specified in such opinion, the Prospectus was filed with the
                  Commission pursuant to the subparagraph of Rule 424(b) of the
                  Rules and Regulations as of the date specified in such opinion
                  and, to such counsel's knowledge after due inquiry, no stop
                  order suspending the effectiveness of the Registration
                  Statement has been issued and, to such counsel's knowledge
                  after due inquiry, no proceeding for that purpose is pending
                  or threatened by the Commission;

                                       14
<Page>

                           (vii) The Registration Statement and the Prospectus
                  and any further amendments or supplements to the Registration
                  Statement or the Prospectus made by the Company prior to such
                  Delivery Date (other than the financial statements, financial
                  data and related schedules therein, as to which such counsel
                  need express no opinion) comply as to form in all material
                  respects with the requirements of the Securities Act and the
                  Rules and Regulations;

                           (viii) To such counsel's knowledge, there are no
                  contracts or other documents that are required to be described
                  in the Prospectus or filed as exhibits to the Registration
                  Statement by the Securities Act or by the Rules and
                  Regulations that have not been described or filed as exhibits
                  to the Registration Statement;

                           (ix) This Agreement has been duly authorized,
                  executed and delivered by the Company;

                           (x) The execution, delivery and performance of this
                  Agreement by the Company, the compliance by the Company with
                  all of the provisions of this Agreement and the consummation
                  of the transactions contemplated hereby will not (i) conflict
                  with or result in a breach or violation of any of the terms or
                  provisions of, or constitute a default under, any indenture,
                  mortgage, deed of trust, loan agreement or other agreement or
                  instrument to which the Company or any of its subsidiaries is
                  a party or by which the Company or any of its subsidiaries is
                  bound or to which any of the property or assets of the Company
                  or any of its subsidiaries is subject, except for such
                  conflicts, breaches, violations or defaults that wound not,
                  individually or in the aggregate, have a Material Adverse
                  Effect; (ii) conflict with or result in any violation of the
                  provisions of the charter or bylaws of the Company or any of
                  its subsidiaries; (iii) result in any violation of any statute
                  or any order, rule or regulation of any court or governmental
                  agency or body having jurisdiction over the Company or any of
                  its subsidiaries or any of their respective properties or
                  assets, except for such violations that would not,
                  individually or in the aggregate, have a Material Adverse
                  Effect; and (iv) except for such consents, approvals,
                  authorizations, registrations or qualifications as may be
                  required under the Exchange Act and applicable state
                  securities laws in connection with the purchase and
                  distribution of the Stock by the Underwriters, no consent,
                  approval, authorization or order of, or filing or registration
                  with, any such court or governmental agency or body is
                  required for the execution, delivery and performance of this
                  Agreement by the Company and the consummation of the
                  transactions contemplated hereby;

                           (xi) The Company is not, and after giving effect to
                  the offering and sale of the Stock and assuming the initial
                  investment of the proceeds therefrom as contemplated under
                  "Use of Proceeds" in the Prospectus, will not be, an
                  "investment company" within the meaning of such term under the
                  Investment Company Act and the rules and regulations of the
                  Commission thereunder; and

                                       15
<Page>

                           (xii) To such counsel's knowledge, there are no
                  contracts, agreements or understandings between the Company
                  and any person granting such person the right (other than
                  rights which have been waived or satisfied) to require the
                  Company to include securities in the securities registered
                  pursuant to the Registration Statement. To such counsel's
                  knowledge, there are no contracts, agreements or
                  understandings between the Company and any person granting
                  such person the right to require the Company to register or
                  include securities pursuant to any other registration
                  statement filed by the Company under the Securities Act.

                  In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the federal laws of the United
States of America, the laws of the State of Texas and the General Corporation
Law of the State of Delaware. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and dated
such Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that:

                  "In connection with the preparation of the Registration
         Statement and the Prospectus, we have participated in conferences with
         officers and other representatives of the Company, representatives of
         the independent public or certified public accountants for the Company
         and with representatives of the Underwriters, including their counsel,
         at which the contents of the Registration Statement and Prospectus were
         discussed and reviewed. We have not independently verified and
         accordingly, are not passing upon and do not assume any responsibility
         for the accuracy, completeness or fairness of the statements contained
         in the Registration Statement or the Prospectus and any amendments or
         supplements to the Registration Statement or the Prospectus (except as
         and to the extent stated in Section 7(d)(iii)). On the basis of the
         foregoing, in the course of such participation, review and discussion,
         nothing has come to our attention which has caused us to believe that
         the Registration Statement at the time such Registration Statement
         became effective 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 or any amendments or supplements thereto at the date of such
         Prospectus, amendment or supplement, and at the date hereof, 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, in light of the circumstances under which they were made, not
         misleading (it being understood we express no opinion with respect to
         the financial statements and schedules and other financial data and
         statistical data included in the Registration Statement or
         Prospectus)."

                  (e) The Representatives shall have received from Akin, Gump,
         Strauss, Hauer & Feld, L.L.P., counsel for the Underwriters, such
         opinion or opinions, dated such Delivery Date, with respect to the
         issuance and sale of the Stock, the Registration Statement, the
         Prospectus and other related matters as the Representatives may
         reasonably require, and the Company shall have furnished to such
         counsel such documents as they reasonably request for the purpose of
         enabling them to pass upon such matters.

                                       16
<Page>

                  (f) At the time of execution of this Agreement, the
         Representatives shall have received from Arthur Andersen LLP a letter,
         in form and substance reasonably satisfactory to the Representatives,
         addressed to the Underwriters and dated the date hereof (i) confirming
         that they are independent public accountants within the meaning of the
         Securities Act and are in compliance with the applicable requirements
         relating to the qualification of accountants under Rule 2-01 of
         Regulation S-X of the Commission, and (ii) stating, as of the date
         hereof (or, with respect to matters involving changes or developments
         since the respective dates as of which specified financial information
         is given in the Prospectus, as of a date not more than five days prior
         to the date hereof), the conclusions and findings of such firm with
         respect to the financial information and other matters ordinarily
         covered by accountants' "comfort letters" to Underwriters in connection
         with registered public offerings.

                  (g) With respect to the letter of Arthur Andersen LLP referred
         to in the preceding paragraph and delivered to the Representatives
         concurrently with the execution of this Agreement (the "INITIAL
         LETTER"), the Company shall have furnished to the Representatives a
         letter (the "BRING-DOWN LETTER") of such accountants, addressed to the
         Underwriters and dated such Delivery Date (i) confirming that they are
         independent public accountants within the meaning of the Securities Act
         and are in compliance with the applicable requirements relating to the
         qualification of accountants under Rule 2-01 of Regulation S-X of the
         Commission, (ii) stating, as of the date of the bring-down letter (or,
         with respect to matters involving changes or developments since the
         respective dates as of which specified financial information is given
         in the Prospectus, as of a date not more than five days prior to the
         date of the bring-down letter), the conclusions and findings of such
         firm with respect to the financial information and other matters
         covered by the initial letter and (iii) confirming in all material
         respects the conclusions and findings set forth in the initial letter.

                  (h) The Company shall have furnished to the Representatives a
         certificate, dated such Delivery Date, of (1) its Chief Executive
         Officer and (2) its Chief Financial Officer, stating that the
         representations, warranties and agreements of the Company in SECTION 1
         are true and correct as of such Delivery Date; the Company has complied
         with all its agreements contained herein; and the conditions set forth
         in SECTIONS 7(a) and 7(i) have been fulfilled.

                  (i) Neither the Company nor any of its subsidiaries shall have
         sustained, since the date of the latest audited financial statements
         included in the Prospectus, any material loss or interference with its
         business from fire, explosion, flood or other calamity, whether or not
         covered by insurance, or from any labor dispute or court or
         governmental action, order or decree, otherwise than as set forth or
         contemplated in the Prospectus; and, since such date, there shall not
         have been any material change in the capital stock or long-term debt of
         the Company and its subsidiaries taken as a whole, or any material
         adverse change in, or any development involving a prospective material
         adverse change in, the business, financial condition or results of
         operations of the Company and its subsidiaries taken as a whole,
         otherwise than as set forth or contemplated in the Prospectus.

                                       17
<Page>

                  (j) Subsequent to the execution and delivery of this Agreement
         there shall not have occurred any of the following: (i) trading in
         securities generally on the NYSE, the American Stock Exchange or on The
         Nasdaq Stock Market, Inc.'s National Market shall have been suspended
         or minimum prices shall have been established on any such exchange or
         such market by the Commission, by such exchange or by any other
         regulatory body or governmental authority having jurisdiction, (ii) a
         banking moratorium shall have been declared by Federal or state
         authorities, (iii) the United States shall have become engaged in
         hostilities, there shall have been an escalation in hostilities
         involving the United States or there shall have been a declaration of a
         national emergency or war by the United States or any other substantial
         national or international calamity or emergency if, in the judgment of
         a majority in interest of the several Underwriters, the effect of any
         such outbreak, escalation, declaration, calamity or emergency makes it
         impracticable or inadvisable to proceed with the public offering or
         delivery of the Stock being delivered on such Delivery Date on the
         terms and in the manner contemplated in the Prospectus or (iv) there
         shall have occurred such a material adverse change in general economic,
         political or financial conditions (or the effect of international
         conditions on the financial markets in the United States shall be such)
         as to make it, in the judgment of a majority in interest of the several
         Underwriters, impracticable or inadvisable to proceed with the public
         offering or delivery of the Stock being delivered on such Delivery Date
         on the terms and in the manner contemplated in the Prospectus.

                  (k) the NYSE shall have approved the Stock for listing,
         subject only to official notice of issuance and evidence of
         satisfactory distribution.

                  All opinions, letters, evidence and certificates mentioned
         above or elsewhere in this Agreement shall be deemed to be in
         compliance with the provisions hereof only if they are in form and
         substance reasonably satisfactory to the Representatives.

     8. INDEMNIFICATION AND CONTRIBUTION.

                  (a) The Company shall indemnify and hold harmless each
         Underwriter, its officers and employees and each person, if any, who
         controls any Underwriter within the meaning of the Securities Act, from
         and against any loss, claim, damage or liability, joint or several, or
         any action in respect thereof (including, but not limited to, any loss,
         claim, damage, liability or action relating to purchases and sales of
         Stock), to which that Underwriter, officer, employee or controlling
         person may become subject, under the Securities Act or otherwise,
         insofar as such loss, claim, damage, liability or action arises out of,
         or is based upon, (i) any untrue statement or alleged untrue statement
         of a material fact contained (A) in any Preliminary Prospectus, the
         Registration Statement or the Prospectus or in any amendment or
         supplement thereto, or (B) in any written or electronically produced
         materials or information provided to investors by, or with the approval
         of, the Company in connection with the marketing of the offering of the
         Stock ("MARKETING MATERIALS"), including any roadshow or investor
         presentations made to investors by the Company, (ii) the omission or
         alleged omission to state in any Preliminary Prospectus, the
         Registration Statement or the Prospectus, or in any amendment or
         supplement thereto, or in any Blue Sky Application or in any Marketing

                                       18
<Page>

         Materials, any material fact required to be stated therein or necessary
         to make the statements therein not misleading or (iii) any act or
         failure to act or any alleged act or failure to act by any Underwriter
         in connection with, or relating in any manner to, the Stock or the
         offering contemplated hereby, and which is included as part of or
         referred to in any loss, claim, damage, liability or action arising out
         of or based upon matters covered by clause (i) or (ii) above (provided
         that the Company shall not be liable under this clause (iii) to the
         extent that it is determined in a final judgment by a court of
         competent jurisdiction that such loss, claim, damage, liability or
         action resulted directly from any such acts or failures to act
         undertaken or omitted to be taken by such Underwriter through its gross
         negligence or willful misconduct), and shall reimburse each Underwriter
         and each such officer, employee or controlling person promptly upon
         demand for any legal or other expenses reasonably incurred by that
         Underwriter, officer, employee or controlling person in connection with
         investigating or defending or preparing to defend against any such
         loss, claim, damage, liability or action as such expenses are incurred;
         PROVIDED, HOWEVER, that the Company shall not be liable in any such
         case to the extent that any such loss, claim, damage, liability or
         action arises out of, or is based upon, any untrue statement or alleged
         untrue statement or omission or alleged omission made in any
         Preliminary Prospectus, the Registration Statement or the Prospectus,
         or in any such amendment or supplement, in reliance upon and in
         conformity with written information concerning such Underwriter
         furnished to the Company through the Representatives by or on behalf of
         any Underwriter specifically for inclusion therein, which information
         consists solely of the information specified in SECTION 8(e). The
         foregoing indemnity agreement is in addition to any liability which the
         Company may otherwise have to any Underwriter or to any officer,
         employee or controlling person of that Underwriter.

                  (b) Each Underwriter, severally and not jointly, shall
         indemnify and hold harmless the Company, the Company's directors,
         officers and employees, and each person, if any, who controls the
         Company within the meaning of the Securities Act, from and against any
         loss, claim, damage or liability, joint or several, or any action in
         respect thereof, to which the Company or any such director, officer,
         employee or controlling person may become subject, under the Securities
         Act or otherwise, insofar as such loss, claim, damage, liability or
         action arises out of, or is based upon, (i) any untrue statement or
         alleged untrue statement of a material fact contained (A) in any
         Preliminary Prospectus, the Registration Statement or the Prospectus or
         in any amendment or supplement thereto, or (B) in any Blue Sky
         Application or (ii) the omission or alleged omission to state in any
         Preliminary Prospectus, the Registration Statement or the Prospectus,
         or in any amendment or supplement thereto, or in any Blue Sky
         Application any material fact required to be stated therein or
         necessary to make the statements therein not misleading, but in each
         case only to the extent that the untrue statement or alleged untrue
         statement or omission or alleged omission was made in reliance upon and
         in conformity with written information concerning such Underwriter
         furnished to the Company through the Representatives by or on behalf of
         that Underwriter specifically for inclusion therein, and shall
         reimburse the Company and any such director, officer, employee or
         controlling person for any legal or other expenses reasonably incurred
         by the Company or any such director, officer, employee or controlling
         person in connection with investigating or defending or preparing to
         defend against any such loss, claim, damage,

                                       19
<Page>

         liability or action as such expenses are incurred. The foregoing
         indemnity agreement is in addition to any liability which any
         Underwriter may otherwise have to the Company or any such director,
         officer, employee or controlling person under applicable law.

                  (c) Promptly after receipt by an indemnified party under this
         SECTION 8 of notice of any claim or the commencement of any action, the
         indemnified party shall, if a claim in respect thereof is to be made
         against the indemnifying party under this SECTION 8, notify the
         indemnifying party in writing of the claim or the commencement of that
         action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
         party shall not relieve it from any liability which it may have under
         this SECTION 8 except to the extent it has been materially prejudiced
         by such failure and, PROVIDED FURTHER, that the failure to notify the
         indemnifying party shall not relieve it from any liability which it may
         have to an indemnified party otherwise than under this SECTION 8. If
         any such claim or action shall be brought against an indemnified party,
         and it shall notify the indemnifying party thereof, the indemnifying
         party shall be entitled to participate therein and, to the extent that
         it wishes, jointly with any other similarly notified indemnifying
         party, to assume the defense thereof with counsel reasonably
         satisfactory to the indemnified party. After notice from the
         indemnifying party to the indemnified party of its election to assume
         the defense of such claim or action, the indemnifying party shall not
         be liable to the indemnified party under this SECTION 8 for any legal
         or other expenses subsequently incurred by the indemnified party in
         connection with the defense thereof other than reasonable costs of
         investigation; PROVIDED, HOWEVER, that the Representatives shall have
         the right to employ counsel to represent jointly the Representatives
         and those other Underwriters and their respective officers, employees
         and controlling persons who may be subject to liability arising out of
         any claim in respect of which indemnity may be sought by the
         Underwriters against the Company under this SECTION 8 if, in the
         reasonable judgment of the Representatives, it is advisable for the
         Representatives and those Underwriters, officers, employees and
         controlling persons to be jointly represented by separate counsel, and
         in that event the fees and expenses of such separate counsel shall be
         paid by the Company. No indemnifying party shall (i) without the prior
         written consent of the indemnified parties (which consent shall not be
         unreasonably withheld), settle or compromise or consent to the entry of
         any judgment with respect to any pending or threatened claim, action,
         suit or proceeding in respect of which indemnification or contribution
         may be sought hereunder (whether or not the indemnified parties are
         actual or potential parties to such claim or action) unless such
         settlement, compromise or consent includes an unconditional release of
         each indemnified party from all liability arising out of such claim,
         action, suit or proceeding, or (ii) be liable for any settlement of any
         such action effected without its written consent (which consent shall
         not be unreasonably withheld), but if settled with the consent of the
         indemnifying party or if there be a final judgment for the plaintiff in
         any such action, the indemnifying party agrees to indemnify and hold
         harmless any indemnified party from and against any loss or liability
         by reason of such settlement or judgment.

                  (d) If the indemnification provided for in this SECTION 8
         shall for any reason be unavailable to or insufficient to hold harmless
         an indemnified party under SECTION 8(a) in respect of any loss, claim,
         damage or liability, or any action in respect thereof, referred to
         therein, then each indemnifying party shall, in lieu of indemnifying
         such indemnified

                                       20
<Page>

         party, contribute to the amount paid or payable by such indemnified
         party as a result of such loss, claim, damage or liability, or action
         in respect thereof, (i) in such proportion as shall be appropriate to
         reflect the relative benefits received by the Company on the one hand
         and the Underwriters on the other from the offering of the Stock or
         (ii) if the allocation provided by clause (i) above is not permitted
         by applicable law, in such proportion as is appropriate to reflect not
         only the relative benefits referred to in clause (i) above but also
         the relative fault of the Company on the one hand and the Underwriters
         on the other with respect to the statements or omissions which
         resulted in such loss, claim, damage or liability, or action in respect
         thereof, as well as any other relevant equitable considerations. The
         relative benefits received by the Company on the one hand and the
         Underwriters on the other with respect to such offering shall be
         deemed to be in the same proportion as the total net proceeds from the
         offering of the Stock purchased under this Agreement (before deducting
         expenses) received by the Company, on the one hand, and the total
         underwriting discounts and commissions received by the Underwriters
         with respect to the shares of the Stock purchased under this Agreement,
         on the other hand, bear to the total gross proceeds from the offering
         of the shares of the Stock under this Agreement, in each case as set
         forth in the table on the cover page of the Prospectus. The relative
         fault shall be determined by reference to whether the untrue or alleged
         untrue statement of a material fact or omission or alleged omission to
         state a material fact relates to information supplied by the Company
         or the Underwriters, the intent of the parties and their relative
         knowledge, access to information and opportunity to correct or prevent
         such statement or omission. The Company and the Underwriters agree
         that it would not be just and equitable if contributions pursuant to
         this SECTION 8(d) were to be determined by pro rata allocation (even
         if the Underwriters were treated as one entity for such purpose) or
         by any other method of allocation which does not take into account the
         equitable considerations referred to herein. The amount paid or payable
         by an indemnified party as a result of the loss, claim, damage or
         liability, or action in respect thereof, referred to above in this
         SECTION 8(d) shall be deemed to include, for purposes of this
         SECTION 8(d), any legal or other expenses reasonably incurred by such
         indemnified party in connection with investigating or defending any
         such action or claim. Notwithstanding the provisions of this
         SECTION 8(d), no Underwriter shall be required to contribute any amount
         in excess of the amount by which the total price at which the Stock
         underwritten by it and distributed to the public was offered to the
         public exceeds the amount of any damages which such Underwriter has
         otherwise paid or become liable to pay by reason of any 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 Securities Act) shall be entitled to contribution
         from any person who was not guilty of such fraudulent
         misrepresentation. The Underwriters' obligations to contribute as
         provided in this SECTION 8(d) are several in proportion to their
         respective underwriting obligations and not joint.

                  (e) The Underwriters severally confirm and the Company
         acknowledges that the statements with respect to the public offering of
         the Stock by the Underwriters set forth on the cover page of, and the
         list of Underwriters and their respective participation in the sale of
         the Stock and the concession and reallowance figures appearing under
         the caption "Underwriting" in, the Prospectus are correct and
         constitute the only information

                                       21
<Page>

         concerning such Underwriters furnished in writing to the Company by
         or on behalf of the Underwriters specifically for inclusion in the
         Registration Statement and the Prospectus.

     9. DEFAULTING UNDERWRITERS. If, on either Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set forth opposite the name of each remaining non-defaulting
Underwriter in SCHEDULE 1 bears to the total number of shares of the Firm
Stock set forth opposite the names of all the remaining non-defaulting
Underwriters in SCHEDULE 1; PROVIDED, HOWEVER, that the remaining
non-defaulting Underwriters shall not be obligated to purchase any of the
Stock on such Delivery Date if the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on
such date exceeds 9.09% of the total number of shares of the Stock to be
purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the number of shares of
the Stock which it agreed to purchase on such Delivery Date pursuant to the
terms of Section 2. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them,
all the Stock to be purchased on such Delivery Date. If the remaining
Underwriters or other Underwriters satisfactory to the Representatives do not
elect to purchase the shares which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement (or, with
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Stock) shall terminate
without liability on the part of any non-defaulting Underwriter or the
Company, except that the Company will continue to be liable for the payment
of expenses to the extent set forth in SECTIONS 6 and 11. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
SCHEDULE 1 who, pursuant to this SECTION 9, purchases Firm Stock which a
defaulting Underwriter agreed but failed to purchase.

         Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default.
If other Underwriters are obligated or agree to purchase the Stock of a
defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement,
the Prospectus or in any other document or arrangement.

     10. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in SECTIONS 7(h) or 7(j) shall have
occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.

     11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Company shall fail
to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other

                                       22
<Page>

condition of the Underwriters' obligations hereunder required to be fulfilled
by the Company is not fulfilled, the Company will reimburse the Underwriters
for all reasonable out-of-pocket expenses (including fees and disbursements
of counsel) incurred by the Underwriters in connection with this Agreement
and the proposed purchase of the Stock, and upon demand the Company shall pay
the full amount thereof to the Representative(s). If this Agreement is
terminated pursuant to SECTION 9 by reason of the default of one or more
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.

     12. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:

         (a) if to the Underwriters, shall be delivered or sent by mail, telex
     or facsimile transmission to Lehman Brothers Inc., Three World Financial
     Center, New York, New York 10285, Attention: Syndicate Department, with a
     copy, in the case of any notice pursuant to SECTION 8(c), to the Director
     of Litigation, Office of the General Counsel, Lehman Brothers Inc., Three
     World Financial Center, 10th Floor, New York, NY 10285; or

         (b) if to the Company, shall be delivered or sent by mail, telex or
     facsimile transmission to the address of the Company set forth in the
     Registration Statement, Attention: Chief Executive Officer.

     13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company and their
respective personal representatives and successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and agreements
of the Company contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the Securities Act and (b) the indemnity
agreement of the Underwriters contained in SECTION 8(b) shall be deemed to be
for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement, employees of the Company and any person
controlling the Company within the meaning of Section 15 of the Securities
Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this SECTION 13, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.

     14. SURVIVAL. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or
on behalf of any of them or any person controlling any of them.

     15. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close and (b) "SUBSIDIARY" has the meaning set forth in

                                       23
<Page>

Rule 405 of the Rules and Regulations.

     16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of New York.

     17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.

     18. HEADINGS. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.


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                                       24
<Page>

         If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided that purpose below.


                           Very truly yours,

                           CORNELL COMPANIES, INC.


                           By: /s/ STEVEN W. LOGAN
                              ---------------------------------------------
                                   Steven W. Logan, Chairman of the Board,
                                     President and Chief Executive Officer


Accepted:

LEHMAN BROTHERS INC.
JEFFERIES AND COMPANY, INC.
FIRST ANALYSIS SECURITIES CORPORATION

For themselves and as Representatives
of the several Underwriters named
in Schedule 1

By: LEHMAN BROTHERS INC.


By: /s/ Arlene Salmonson
   --------------------------------
     Authorized Representative


<Page>

                                   SCHEDULE 1

<Table>
<Caption>
                                                           Number of Shares
Underwriters                                                of Firm Stock
- ------------                                                -------------
<S>                                                        <C>
Lehman Brothers Inc.                                           1,875,000
Jefferies & Company, Inc.                                        675,000
First Analysis Securities Corporation                            450,000
                                                              ----------
  Total                                                        3,000,000
                                                              ==========
</Table>

