<PAGE>

                                                                   EXHIBIT 10.11

            Contract Review Permanent Legislative Oversight Committee
                               Alabama State House
                            Montgomery, Alabama 36130
                             CONTRACT REVIEW REPORT
               (Separate review report required for each contract)

Name of State Agency: Alabama Department of Corrections
Name of Contractor: Prison Health Services, Inc.

<Table>
<S>                                                  <C>             <C>
Suite 200, 105 West Park Drive,                      Brentwood, TN   37027
Contractor's Physical Street Address (No P.O. Box)      City/ST       Zip
</Table>

Is contractor registered with the Alabama Secretary of State to do business as a
corporation in Alabama? YES   X   NO      If YES, in what state is the
                            -----    ----
Contractor incorporated? Delaware

Is Act 2001-955 Disclosure Form Included with this Contract? YES   X   NO
                                                                 -----    -----

Was a Lobbyist/Consultant Used to Secure this Contract? YES   X   NO
                                                            -----    -----
If Yes, Give Name: The Bloom Group

Contract Number: 04C005016
Contract/Amended Total: $143M (estimate if necessary)
% State Funds: 100% Federal Funds: ___________%  Other Funds: ___________**
**please Specify Source of Other Funds (Fees, Grants, etc.) ______________

Date Contract Effective: Upon signature of Governor Date Contract Ends: 3 years
Type of Contract: NEW:   XX   RENEWAL: ______  AMENDMENT: ________
                       -----

     If AMENDMENT, Complete A through C

     [A]  Original contract total               $_______________

     [B]  Amended total prior to this amendment $_______________

     [C]  Amended total after this amendment    $_______________

Was Contract Secured Through Bid Process? YES       NO   X
                                              -----    -----
Was Contract Secured Through RFP Process? YES   XX  NO
                                              -----    -----

Summary of Contract Services to be Provided: Provide medical care and treatment
to State inmates

Why Contract Necessary: To discharge State's duty to provide medical care and
treatment to State inmates.

I certify that the above information is correct.


/s/ Donal Campbell                      /s/ Jean Byassee
-------------------------------------   ----------------------------------------
Signature of Agency Head                Signature of Contractor


Donal Campbell, Commissioner            Jean Byassee
-------------------------------------   ----------------------------------------
Printed Name                            Printed Name

Agency Contact:                         Phone:
                ---------------------          ---------------------------------

Revised 11/07/02


/s/ Kay P. Hope
Notary Public
My comm. expires 3/31/04
<PAGE>

12/1/03

                            HEALTH SERVICES AGREEMENT

     THIS AGREEMENT between Alabama Department of Corrections, (hereinafter
referred to as the "ADOC"), and Prison Health Services, Inc., a Delaware
corporation, (hereinafter referred to as "PHS"), is entered into as of the ____
day of ______________ 2003. Services under this Agreement shall commence on
November 3, 2003, and shall continue in accordance with Section 7.1.

                                   WITNESSETH:

     WHEREAS, the ADOC is charged by law with the responsibility for obtaining
and providing reasonably necessary health care for inmates at Alexander City
Work Release Center, Atmore Work Release Center, Bibb Correctional Facility,
Birmingham Work Release Center, Bullock Correctional Facility, Bullock Work
Release Center, Camden Work Release Center, Childersburg WR/Boot Camp, Decatur
Work Release Center, Donaldson Correctional Facility, Draper Correctional
Facility, Easterling Correctional Facility, Elba Work Release Center, Elmore
Correctional Facility, Farquhar Cattle Ranch, Fountain Correctional Facility,
Frank Lee Youth Center, Hamilton Aged & Infirmed, Hamilton Work Release Center,
Holman Correctional Facility, J.O. Davis Correctional Facility, Kilby
Correctional Facility, Limestone Correctional Facility, Loxley Work
Release/Community Work Center, Mobile Work Release Center, Montgomery Work
Release Center, Red Eagle Honor Farm, St. Clair Correctional Facility, Staton
Correctional Facility, Tutwiler Prison for Women, Tutwiler Annex (Edwina
Mitchell), Ventress Correctional Facility (hereinafter called "Facilities"); and

     WHEREAS, the ADOC desires to provide for health care to inmates in
accordance with applicable law; and

     WHEREAS, the ADOC, which receives funding as approved by the State of
Alabama for the Facilities, desires to enter into this Agreement with PHS to
promote this objective; and

     WHEREAS, PHS is in the business of providing correctional health care
services and desires to provide such services for the DOC under the terms and
conditions hereof,

     NOW, THEREFORE, in consideration of the covenants and promises hereinafter
made, the parties hereto agree as follows:

                         ARTICLE I: HEALTH CARE SERVICES

     1.1 General Engagement. The ADOC hereby contracts with PHS to provide for
the delivery of reasonable and necessary health care as set forth herein to
individuals under the physical custody and control of the ADOC and housed within
the Facilities, unless otherwise excluded herein, and PHS enters into this
Agreement according to the terms and provisions hereof.

<PAGE>

     1.2 Scope of General Services. The responsibility of PHS to deliver the
health care set forth herein to an inmate commences with the intake and physical
placement of said inmate into one of the Facilities. PHS shall provide the
health care and medical management services set forth in the ADOC Request for
Proposal ("RFP"), PHS' proposal dated September 10, 2003 and subsequent letters
dated September 26, 2003 and October 6, 2003 all of these documents are
incorporated herein and made part hereof by reference, and such services being
provided in accordance with the Performance-Based Standards for Correctional
Healthcare in Adult Correctional Institutions, American Correctional Association
(ACA), and the National Commission on Correctional Health Care (NCCHC), subject
to the terms of this Agreement. In the event of an inconsistency or conflict
between this Agreement, the Alabama Department of Corrections' Request for
Proposal No. 5-03 (RFP), the PHS proposal dated September 10, 2003 (Proposal),
and the PHS letters dated September 26, 2003 and October 6, 2003, the order of
control shall be: 1) this Agreement, 2) the RFP subject to PHS' exceptions 3)
the letter of October 6, 2003, 4) the letter of September 26, 2003, and 5) the
Proposal.

     Additionally, staff employed by the ADOC at any one of the Facilities shah
be provided first aid within that facility for emergency injuries and/or
illnesses upon request of the ADOC.

     1.3 Annual Aggregate Limit. PHS shall be responsible for all medical
related costs as required under this Agreement subject to an annual aggregate
limit, as set forth below, for all off-site services and pharmacy services, and
as otherwise limited in the Agreement. Cost to be applied to the annual
aggregate limit for off-site and pharmacy expenses shall include, but not be
limited to: hospitalizations, emergency room visits, all emergency
transportation expenses, off-site and mobile surgery services, outpatient
consultants, specialist fees, off-site and on-site dialysis treatment, off-site
diagnostic procedures, all formulary and over the counter medications (OTC), all
nonformulary medications, psychotropic medications, HTV+ medications, HCV
medications, back-up pharmacy expenses, courier service cost as applicable only
for back-up pharmacy services, and the pharmacy management fee as outlined
below.

     A management fee per prescription will be applied to the aggregate limit.
The management fee shall cover all dispensing, administrative, clinical support,
disposal/destruction of expired medication and shipping fees associated with
each prescription dispensed. The management fee (also referred to as a
"dispensing fee") per prescription shall be $3.40 for the initial eighteen (18)
months of the agreement. At the end of this initial eighteen (18) months the
parties shall review the management fee in conjunction with pharmacy trends,
including CPI and PHS' actual data and make reasonably appropriate and mutually
agreeable adjustments for the next eighteen (18) months.

     All medications utilized in the treatment of an ADOC inmate will be applied
to the annual aggregate limits at PHS' pharmacy provider's Wholesale Acquisition
Cost. Original pharmaceutical manufacturers invoice will be made available for
ADOC upon request for audit and compliance purposes.

     Medications that are patient specific and are approved by the laws and
statutes of the State of Alabama, the Alabama Board of Pharmacy, and the Federal
Food and Drug Administration as


                                       2

<PAGE>

eligible for return and reuse will be credited back to the aggregate limit at a
rate of 100% of the original acquisition cost to the ADOC.

     If annual off-site services and pharmacy services costs are less than the
annual aggregate limit, then 80% of the savings shall be refunded to the ADOC
and PHS shall retain 20%. If annual off-site services and pharmacy services
costs are greater than the annual aggregate limit, PHS and the ADOC shall each
share these excess costs on a 50/50 basis up the defined annual aggregate total,
which is set forth below. The ADOC shall be responsible for all costs in excess
of the annual aggregate total. In the event this Agreement should terminate
prior to the end of the then current contract period, the annual aggregate will
be prorated accordingly based on the fractional portion of the total contract
period during which PHS actually provided services.

<TABLE>
<CAPTION>
ANNUAL AGGREGATE LIMIT   ANNUAL AGGREGATE TOTAL
----------------------   ----------------------
<S>                      <C>
Year One $11,500,000           $15,500,000
Year Two $12,075,000           $16,275,000
Year Three $12,650,000         $17,050,000
</TABLE>

     1.4 Reconciliation of Aggregate Caps. In order to manage monthly working
capital requirements, which tend to vary as a result of utilization trends, the
parties shall perform a quarterly reconciliation of the annual aggregate based
on a cumulative year-to-date estimate reflecting incurred expenditures under
annual aggregate.

<TABLE>
<S>           <C>
1st Quarter   3/12th of the aggregate cap
2nd Quarter   6/12th of the aggregate cap
3rd Quarter   9/12th of the aggregate cap
4th Quarter   Full aggregate limit
</TABLE>

     PHS shall provide quarterly documentation to support expenditures, which
shall include but not be limited to, reports, and copies of bills as are
available, invoices, and checks issued. Any adjustments, based upon such
quarterly documentation, shall be applied to the subsequent month's invoice in
the form of a credit to the ADOC or as additional reimbursement to PHS. PHS will
provide a final reconciliation within 120 days from the end of the annual term.
The yearly reconciliation shall take into account the impact of all prior
quarterly reconciliations. Adjustments shall be applied to either the subsequent
month's invoice in the form of a credit to the ADOC or additional reimbursement
to PHS. Should there be no subsequent month's invoice; adjustments shall be in
the form of a payment to the ADOC or as additional reimbursement to PHS.

     1.5 Psychotropic Medications. PHS shall procure, package and deliver
psychotropic medications as prescribed by both PHS physicians and the ADOC's
mental health provider. The costs for psychotropic medications includes the
medication cost at Wholesale Acquisition Cost (WAC), and a management fee per
prescription of $3.40, subject to section 1.3 ("Psychotropic Cost").
Psychotropic medications prescribed by PHS physicians and the Psychotropic Cost
are


                                       3

<PAGE>

included in the annual base price set forth in section 9.1, which costs shall be
applied toward the corresponding annual aggregate set forth in section 1.3

     Psychotropic medications prescribed by the ADOC's mental health provider
and the Psychotropic Cost are not included in the annual base price set forth in
section 9.1. PHS shall separately track all Psychotropic medications prescribed
by the ADOC mental health provider, along with Psychotropic Cost, and regularly
report this information to the ADOC. The ADOC shall pay PHS for all of these
Psychotropic Costs, such payment being in addition to the annual base price set
forth in section 9.1. Payment shall be made twice monthly (on the 15th and last
day of each month as set forth in section 9.1, base compensation payment). PHS
shall provide the ADOC, on a monthly basis, a listing of such psychotropic
medications as prescribed by the mental health staff.

     1.6 Exceptions to Health Care.

     a.   PHS will not be financially responsible for any costs incurred after
          an inmate is released from the ADOC's physical custody.

     b.   PHS will not be financially responsible for any care provided without
          their prior knowledge and approval, except in the event of emergency
          situations wherein such notification and approval is not practicable
          or constitutes a risk to the safety and well-being of the patient. In
          the event of such emergency, PHS staff will be notified as soon as
          practicable.

     c.   PHS shall not be responsible for the costs or furnishing of any
          abortions unless medically necessary.

     d.   PHS will not be responsible for obtaining samples, which are forensic
          in nature, unless required by state law or pursuant to court order.

     1.7 Inmates Outside the Facilities. Health care services are intended only
for those inmates in the actual physical custody of one of the Facilities. This
includes inmates under guard in outside hospitals and whose care PHS is
managing. Such inmates will be included in the resident daily population count.
No other inmates, including, but not limited to, those in outside hospitals who
are not under guard, shall be the responsibility of PHS, nor shall such inmates
be included in the resident daily population count.

     Inmates on any sort of temporary release, including, but not limited to,
inmates temporarily released for the purpose of attending funerals or other
family emergencies, inmates on escape status, inmates on pass, parole or
supervised custody who do not sleep in one of the Facilities at night, will not
be included in the daily population count, and will not be the responsibility of
PHS with respect to the payment or furnishing of health care services.

     Inmates in the custody of other penal jurisdictions for any reason are
likewise excluded from the population count and are not the responsibility of
PHS for the furnishing or payment of health care services.


                                       4

<PAGE>

     1.8 Elective Medical Care. PHS will not be responsible for providing
elective medical care to inmates. For purposes of the Agreement, "elective
medical care" means medical care which, if not provided, would not, in the
opinion of PHS' Medical Director, cause the inmate's health to deteriorate or
cause definite harm to the inmate's well being. Such decisions concerning
medical care shall be consistent with general NCCHC standards. Any referral of
inmates for elective medical care must be reviewed and approved by the ADOC
prior to provision of such services. PHS will assist in arranging ADOC approved
elective care, but PHS shall have no financial responsibility for such care. Any
disagreement with respect to "elective medical care" may be subject to review by
ADOC in consultation with PHS.

     1.9 Transportation Services. To the extent any inmate requires off-site
nonemergency (i.e., non life-threatening) health care treatment including, but
not limited to, hospitalization care and specialty services, the ADOC will, upon
request by PHS, its agents, employees or contractors, provide transportation as
reasonably available. When medically necessary, PHS shall arrange all emergency
(i.e., life threatening) ambulance transportation of inmates.

                              ARTICLE II: PERSONNEL

     2.1 Staffing. PHS shall provide medical, technical and support personnel as
necessary for the rendering of the health care services required under this
Agreement. The chart attached as Exhibit A includes the agreed-upon staffing
pattern necessary to provide the health care services required by the Facilities
with a total inmate population as set forth in section 9.2.

     This staffing pattern in Exhibit A is based on the guaranteed average
population levels as follows:

     -    25,500 year one

     -    27,000 year two and

     -    28,500 year three.

     Should the inmate population increase to a level greater than guaranteed
average daily population on a monthly basis, PHS will charge a variable monthly
rate as set for in section 9.2 below, to cover the incremental variable costs of
providing services to this additional population (this monthly rate does not
reflect any additional staffing costs which may become necessary if there are
continuing and significant population increases at certain sites).

     2.2 Licensure, Certification and Registration of Personnel. All personnel
provided or made available by PHS to render services hereunder shall be
licensed, certified or registered, as appropriate, in their respective areas of
expertise as required by applicable Alabama law.

     2.3 ADOC's Satisfaction with Health Care Personnel. If the ADOC becomes
dissatisfied with any health care personnel provided by PHS hereunder, or by any
independent contractor, subcontractors or assignee, PHS, in recognition of the
sensitive nature of correctional services, shall, following receipt of written
notice from the ADOC of the grounds for such dissatisfaction and in
consideration of the reasons therefore, exercise its best efforts to resolve the
problem. If the


                                       5

<PAGE>

problem is not resolved satisfactorily to the ADOC, PHS shall remove or shall
cause any independent contractor, subcontractor, or assignee to remove the
individual about whom the DOC has expressed dissatisfaction. Should removal of
an individual become necessary, PHS will be allowed reasonable time, not to
exceed thirty (30) days, to find an acceptable replacement, without penalty or
any prejudice to the interests of PHS.

     2.4 Use of Inmates in the Provision of Health Care Services. Inmates shall
not be employed or otherwise engaged by either PHS or the ADOC in the direct
rendering of any health care services. Upon prior written approval of the ADOC,
inmates may be used in positions not involving the rendering of healthcare
services directly to inmates.

     2.5 Subcontracting and Delegation. In order to discharge its obligations
hereunder, PHS will engage certain health care professionals as independent
contractors rather than as employees. The ADOC may request to approve such
professionals, but approval will not be unreasonably withheld. Subject to the
approval described above, the ADOC consents to such subcontracting or
delegation. As the relationship between PHS and these health care professionals
will be that of independent contractor, PHS will not be considered or deemed to
be engaged in the practice of medicine or other professions practiced by these
professionals. PHS will not exercise control over the manner or means by which
these independent contractors perform their professional medical duties.
However, PHS shall exercise administrative supervision over such professionals
necessary to ensure the strict fulfillment of the obligations contained in this
Agreement. For each agent and subcontractor, including all medical
professionals, physicians, dentists and nurses performing duties as agents or
independent contractors of PHS under this Agreement, PHS shall provide the ADOC
proof, if requested, that there is in effect a professional liability or medical
malpractice insurance policy, as the case may be, in an amount of at least one
million dollars ($1,000,000) coverage per occurrence and three million dollars
($3,000,000) aggregate.

     2.6 Discrimination. During the performance of this Agreement, PHS, the
ADOC, its employees, agents, subcontractors, and assignees agree as follows:

     (a)  None will discriminate against any employee or applicant for
          employment because of race, religion, color, sex or national origin,
          except where religion, sex or national origin is a bona fide
          occupational qualification reasonably necessary to the normal
          operation of the contractor. Each will agree to post in conspicuous
          places, available to employees and applicants for employment, notices
          setting forth the provisions of this nondiscrimination clause.

     (b)  In all solicitations or advertisements for employees, each will state
          that it is an equal opportunity employer.

     (c)  Notices; advertisements and solicitations placed in accordance with
          federal law, rule or regulation shall be deemed sufficient for the
          purpose of meeting the requirements of this section.


                                       6

<PAGE>

     2.7 Training. All full-time contracted personnel shall be required to
complete 16 hours of orientation to the ADOC provided by ADOC training
personnel. Part-time and temporary contracted staff shall be required to
complete 8 hours of orientation. Training hours shall be appropriately
documented. Time spent in training shall be considered as on-duty time.

     2.8 Compliance With Rules. All contracted staff shall comply with
applicable state, federal and local laws, regulations, court orders,
administrative regulations, administrative directives, and policies and
procedures of the ADOC and PHS, including amendments thereto. Violation of
regulations, particularly those involving institutional security, may result in
the personnel being denied access to the institution. In the event of personnel
being denied access to the institution, PHS shall provide appropriate personnel
to cover the position. Unless impracticable to do so for security or other valid
reason, ADOC will provide PHS reasonable notice of such violations prior to
denying such access to PHS personnel.

     2.9 Rejection of Personnel. The ADOC reserves the right to reject any PHS
personnel, whether employees or subcontractors, whether employed now or in the
future. Any such rejections shall be given to the Contractor in writing and
shall not be unreasonably exercised by the ADOC. ADOC shall conduct background
investigations, at ADOC's expense, on PHS employees and job applicants. In the
event that ADOC rejects any PHS job applicant, employee or subcontractor, ADOC
agrees to inform PHS, on a confidential basis, the reason for rejection. Due to
the sensitive nature of the prison environment, PHS agrees that in the event the
ADOC is dissatisfied with any of the personnel provided under this contract, the
ADOC may deny such personnel access into the correctional facility. ADOC will
give PHS written notice of the facts and reasons for such denial. PHS shall
remove such personnel from the programs herein and cover the position within a
reasonable time until an approved replacement is in place.

     2.10 TB Testing. All contract employees must receive an annual TB test or
follow-up, if appropriate.

                   ARTICLE III: STANDARD AND SCOPE OF SERVICE

     3.1 Obligation of PHS. PHS' services shall be provided in accordance with
the healthcare standards promulgated by the ACA and NCCHC and in accordance with
the scope of services as specified in the RFP No. 5-03 dated May 23,
2003(Attached hereto as Exhibit B), including, but not limited to those
requirements set forth in Sections 5.1 through 5.40, 6.1 through 6.10, 7.1, 8.5
and addendums 1 through 12, subject to any exceptions as filed by PHS.

                         ARTICLE IV: REPORTS AND RECORDS

     4.1 Medical Records. PHS shall cause and require to be maintained complete
and accurate medical records for each inmate housed in any of the Facilities who
has received health care services during the term of this Agreement. Each
medical record will be maintained in accordance with applicable laws, NCCHC and
ACA standards and the ADOC's policies and procedures. The medical records shall
be kept separate from the inmate's confinement record. A


                                       7

<PAGE>

complete legible copy of the applicable medical record shall be available at all
times. A medical transfer sheet shall accompany each inmate who is transferred
from any of the Facilities to another location for off-site services or
transferred to another institution. Medical records shall be kept confidential.
Subject to applicable law regarding confidentiality of such records, PHS shall
comply with the ADOC's policy with regard to access by inmates and any of the
Facilities' staff to medical records. No information contained in the medical
records. shall be released by PHS except as provided by the ADOC's policy, by a
court order; or otherwise in accordance with the applicable law. PHS shall, at
its own cost, provide all medical records, forms, jackets, and other materials
necessary to maintain the medical records. At the termination of this Agreement,
all medical records shall be delivered to and remain with the ADOC. However, the
ADOC shall provide PHS with reasonable ongoing access to all medical records
even after the termination of this Agreement for the purposes of defending
actual and threatened litigation. Inmate medical records are the property of the
ADOC.

     4.2 Regular Reports by PHS to the ADOC. PHS shall provide to the ADOC, on a
date and in a form mutually acceptable to PHS and the ADOC, monthly and annual
reports relating to services rendered under this Agreement.

     4.3 Inmate Information. Subject to applicable law, in order to assist PHS
in providing the best possible health care services to inmates, the ADOC will
provide PHS with information pertaining to inmates that PHS and the ADOC
mutually identify as reasonable and necessary for PHS to adequately perform its
obligations hereunder.

     4.4 PHS Records Available to the ADOC with Limitations on Disclosure. PHS
shall make available to the ADOC, at the ADOC's request, all records, documents
and other papers relating to the direct delivery of health care services to
inmates hereunder. The ADOC understands that many of the systems, methods,
procedures, written materials and other controls employed by PHS in the
performance of its obligations hereunder are proprietary in nature and will
remain the property of PHS. Information concerning such may not, at any time, be
used, distributed, copied or otherwise utilized by the ADOC, except in
connection with the delivery of health care services hereunder, or as permitted
or required by law, unless such disclosure is approved in advance, and in
writing, by PHS.

     4.5 ADOC's Records Available to PHS with Limitations on Disclosure. During
the term of this Agreement and for a reasonable time thereafter, the ADOC will
provide PHS, at PHS' request, the ADOC's records relating to the provision of
health care services to inmates as may be reasonably requested by PHS or as are
pertinent to the investigation or defense of any claim related to PHS' conduct..
Consistent with applicable law, the ADOC will make available to PHS such records
as are maintained by the ADOC, hospitals and other outside health care providers
involved in the care or treatment of inmates (to the extent the ADOC has any
control over those records) as PHS may reasonably request. Any such information
provided by the ADOC to PHS that the ADOC considers confidential shall be kept
confidential by PHS and shall not, except as may be required bylaw, be
distributed to any third party without the prior written approval of the ADOC.


                                       8

<PAGE>

     4.6 HIPAA Compliance. PHS shall comply with all Health Insurance
Portability and Accountability Act of 1996 (HIPAA) requirements relating to PHS'
responsibilities under this Agreement.

                               ARTICLE V: SECURITY

     5.1 General. PHS and the ADOC understand that adequate security services
are necessary for the safety of the agents, employees and subcontractors of PHS
as well as for the security of inmates and ADOC's staff, consistent with the
correctional setting. The ADOC will provide sufficient security to enable PHS to
safely and adequately provide the health care services described in this
Agreement. Nothing herein shall be construed to make the ADOC, his deputies or
employees a guarantor of the safety of PHS employees, agents or subcontractors,
including their employees.

     5.2 Loss of Equipment and Supplies. The ADOC shall not be liable for loss
of or damage to equipment and supplies of PHS, its agents, employees or
subcontractors unless such loss or damage was caused by the negligence of the
ADOC or its employees.

     5.3 Security During Transportation Off-Site. The ADOC will provide security
as necessary and appropriate in connection with the transportation of any inmate
between any of the Facilities and any other location for off-site services as
contemplated herein.

          ARTICLE VI: OFFICE SPACE, EQUIPMENT, INVENTORY AND SUPPLIES

     6.1 General. At each of the Facilities the ADOC agrees to provide PHS with
office space, reasonable facilities to perform the services called for herein,
equipment, utilities (including all local telephone costs, but excluding long
distance telephone costs which PHS shall reimburse monthly to the ADOC). The
ADOC will provide necessary maintenance and housekeeping of the office spaces
and facilities. ADOC shall be responsible for providing substitute space should
the designated facilities become unsafe for any reason.

     6.2 Delivery of Possession. The ADOC will continue to provide to PHS,
beginning on the date of commencement of this Agreement, possession and control
of all ADOC medical and office equipment and supplies in place at the Facilities
health care units. At the termination of this or any subsequent Agreement, PHS
will return to the ADOC possession and control of all supplies, medical and
office equipment, in working order, reasonable wear and tear excepted, which
were in place at the Facilities health care units prior to the commencement, of
services under this Agreement.

     6.3 Maintenance and Replenishment. PHS will maintain all ADOC equipment
necessary for the performance of this contract by PHS in working order during
the term of this Agreement. If PHS requires additional equipment and instruments
during the term of this Agreement, PHS shall first discuss such needs with the
ADOC. PHS has budgeted up to $250,000 year one, $150,000 in year two and
$150,000 in year three (this yearly amount referred to as the Aggregate
Equipment Amount) toward purchase of such items. Once PHS has expended its
Aggregate Equipment



                                       9

<PAGE>

Amount, the ADOC shall be responsible for paying any additional amounts.
Similarly, if there is a remaining balance in the Aggregate Equipment Amount at
year-end, this amount shall either be rebated to the ADOC or applied towards the
following year's Aggregate Equipment Amount. Equipment purchased with funds from
the Aggregate Equipment Amount shall belong to the ADOC. At the end of this
Agreement, or upon termination thereof, ADOC shall be entitled to purchase any
PHS equipment at PHS' actual cost or depreciated value, whichever shall be the
lesser amount. Instruments, supplies, medications, and pharmaceutical supplies
that are in place at the Facilities health care units shall become the property
of the ADOC.

     6.4 General Maintenance Services. The ADOC will provide for each inmate
receiving health care services the same services and facilities provided by the
ADOC for all inmates at the Facilities including, but not limited to, daily
housekeeping services, dietary services, building maintenance services, personal
hygiene supplies and services, and linen supplies.

                 ARTICLE VII: TERM AND TERMINATION OF AGREEMENT

     7.1 Term. This Agreement shall commence at 12:01am on November 3, 2003. The
initial term of this Agreement shall be through 11:59 pm on October 31, 2006,
and may be extended for two (2) additional one (1) year terms, if mutually
agreed to in writing and signed by both parties. Any extension must be agreed to
no later than ninety (90) days prior to the termination of the then existing
term.

     7.2 Termination. This Agreement may be terminated as otherwise provided in
this Agreement or as follows:

     (a)  Termination by Agreement. In the event that each of the parties
          mutually agrees in writing, this Agreement may be terminated on the
          terms and date stipulated therein.

     (b)  Termination by Cancellation. The ADOC may cancel this Agreement if PHS
          fails to cure any breach after proper notification in accordance with
          this Agreement.

     (c)  Annual Appropriations and Funding. ADOC and PHS agree that, in the
          event the Alabama State Legislature fails to provide the necessary
          appropriations for the performance of this Agreement, or in the event
          that such appropriations are exhausted prior to the expiration of the
          Agreement term, or in the event that the State General Fund Budget
          goes into proration and such proration causes insufficient funds to be
          available for the performance of this Agreement, PHS or ADOC may, at
          either party's option, be relieved of performance hereunder, upon
          thirty (30) days written notice.

     (d)  Termination for Convenience. Notwithstanding any other provision to
          the contrary herein, either party hereto may terminate this Agreement
          upon the giving of ninety days' (90) written notice to the other
          party.


                                       10

<PAGE>

     (e)  Option to Continue. In the event this Agreement is terminated for any
          cause or under any paragraph herein, PHS, at the option and request of
          the ADOC, shall continue to furnish an Administrator of the system,
          full-time, for thirty (30) days and, during this period, said
          Administrator shall assist the ADOC to continue to provide healthcare
          services to inmates. It shall be understood that PHS shall not be
          responsible for the care being provided in such circumstances. ADOC
          shall pay PHS the actual cost of such service plus eight percent (8%).
          The provisions of this paragraph shall not apply if ADOC contracts
          with another provider for healthcare services to inmates following
          termination of the Agreement.

     7.3 Responsibility for Inmate Health Care. Upon termination of this
Agreement, all responsibility for providing health care services to all inmates,
including inmates receiving health care services at sites outside the
facilities, will be transferred from PHS to the ADOC.

                              ARTICLE VIII: DEFAULT

     8.1 Default by PHS: The following described events shall constitute a
default by the PHS:

     (a)  PHS shall violate any of the other terms, conditions or covenants to
          be performed or observed by PHS in this contract and fails to remedy
          the same within thirty (30) days after written notice thereof is given
          to PHS by the ADOC, or, if such default cannot reasonably cured within
          thirty (30) days, fails to commence to remedy the same and thereafter
          diligently pursue such remedy to completion as soon as practicable;

     (b)  In the event that a petition in bankruptcy or for similar relief is
          filed by or' against PHS and, if filed against the PHS, the petition
          is not dismissed within sixty (60) days after the filing thereof, or
          in the event PHS is adjudged a bankrupt;

     (c)  In the event that an assignment for the benefit of a creditor in
          connection with bankruptcy, receivership or other similar proceedings,
          is made by PHS;

     (d)  In the event of the appointment of a receiver of PHS' property unless
          such receivership is dismissed within sixty (60) days after such
          appointment;

     (e)  In the event that PHS fails to promptly notify ADOC of any substantial
          damage to any facility of which it is aware, and if such damage is
          caused by PHS or its agents, subcontractors, or employees, PHS fails
          to remedy such damage within a reasonable time; or


                                       11

<PAGE>

     (f)  PHS, or any assignee or successor is dissolved or otherwise ceases to
          exist.

Upon the occurrence of any one or more of the events as described in this
section, ADOC shall have the right to terminate this Agreement immediately upon
giving written notice to PHS of such termination. Any and all rights and
remedies in the event of such default shall be cumulative, in addition to, and
without waiver of or in derogation of, any right or remedy given to the ADOC
under any law now or hereafter in effect.

     8.2 Default by ADOC. The following described events shall constitute a
default by ADOC:

     (a)  ADOC shall fail to pay, within thirty (30) days after written notice
          and demand for payment thereof is given to ADOC by PHS, any amounts
          that DOC has agreed to pay pursuant to the terms of this Agreement;

     (b)  ADOC shall violate any of the terms, conditions or covenants to be
          performed or observed by it in this Agreement and fails to remedy the
          same, within (30) days after written notice thereof is given to DOC by
          PHS, or if such default cannot reasonably be cured within thirty (30)
          days, fails to commence to remedy the same and thereafter diligently
          pursue such remedy to completion as soon as practicable;

     (c)  ADOC fails, after twelve (12) hours written notice by PHS, to provide
          security services in accordance with paragraph 5.1 hereof or to move
          PHS's employees to a secure section of an institution (the word
          "institution" as used herein includes any designated institution or
          other facility where healthcare services are provided by PHS).

Upon the occurrence of any one or more of the events described in this section,
PHS shall have the right to terminate this Agreement immediately upon giving
written notice to ADOC of such termination. Any and all rights and remedies in
the event of such default shall be cumulative, in addition to, and without
waiver of or in derogations of, any right or remedy given to PHS under any law
now or hereafter in effect.

          ARTICLE IX: COMPENSATION, ADJUSTMENTS AND LIQUIDATED DAMAGES

     9.1 Base Compensation and Payment. The ADOC will pay to PHS the annual base
price, payable in equal semi-monthly installments as indicated below.

<TABLE>
<S>          <C>
Year One     $44,244,471
Year Two     $47,371,380
Year Three   $51,039,930
</TABLE>

     PHS will invoice the ADOC thirty (30) days in advance of the month of
service. The ADOC agrees to pay PHS twice monthly. Payments shall be made on the
l5th and last day of each


                                       12

<PAGE>

month for services in arrears of the previous two weeks. Such invoice and
payment shall be based on the average monthly inmate population set forth in
section 9.2. There shall be monthly reconciliation of any staffing and average
daily population per month adjustments from the prior month. In the event this
Agreement should commence or terminate on a date other than the first or last
day of any calendar month, compensation to PHS will be prorated accordingly for
the shortened month.

     9.2 Increases in Inmate Population. The parties agree that an annual base
price is calculated based upon the guaranteed average inmate monthly population
(AMP) of 25,500 in year one, 27,000 in year two and, 28,500 in year three. If
the AMP is exceeded in any month, then the compensation payable to PHS by the
ADOC shall be increased by a monthly rate for each inmate in excess of the base
population (AMP) as follows:

     _    Year One: $16.63

     _    Year Two: $18.39

     _    Year Three: $20.41

     The AMP shall be determined and recorded by the ADOC. The ADOC shall
regularly provide this information to PHS.

     This additional monthly rate is intended to reflect only those variable
costs incurred due to instances of minor, short-term increases in the inmate
population that result in the higher utilization of routine supplies and
services. However, the additional monthly rate is not intended to provide for
any additional fixed costs, such as new staffing positions, which might prove
necessary if the inmate population grows significantly and if the population
increase is sustained and/or specific to a small number of ADOC facilities. In
such case, PHS and the ADOC shall review the existing staffing complement,
determine mutually agreeable changes and adjust the contract price in order to
continue to provide services to the increased number of inmates and maintain the
quality of care.

     9.3 Inmates from Other Jurisdictions. Medical care rendered within any of
the Facilities to inmates from other jurisdictions housed in any of the
Facilities pursuant to contracts between the ADOC and such other jurisdictions
will be the responsibility of PHS, as limited by Section 1.7. PHS will arrange
for medical care that is not rendered in any of the Facilities, but PHS shall
have no financial responsibility for such services rendered outside any of the
Facilities.

     9.4 Changes in the Law, Standard of Care or Scope of Services. The prices
in Sections 9.1 and 9.2 reflect the scope of services as outlined herein and the
current community standard of care with regard to health care services. Should
there be any change in or modification of inmate distribution or population,
standards of care, scope of services, cost of goods or services, available
workforce pool that results in material increase in costs, or if any statute,
rule or regulation is passed or any order issued or any statute or guideline
adopted materially increasing the cost to PHS of providing health care services
hereunder, the increased costs related to such, change or modification are not
covered in this Agreement and will be negotiated with the ADOC, provided,
however, that if the parties are unable to agree on appropriate compensation,
the parties will follow the dispute resolution procedures set forth in section
11.13, below


                                       13

<PAGE>

     9.5 Payment. If the ADOC fails to make any payment to PHS hereunder within
fifteen (15) days following PHS' notice to the ADOC of non-payment, PHS, among
any other rights and remedies pursuant to this Agreement or otherwise available
at law or in equity, shall have the right to terminate this Agreement
immediately. Failure to terminate this Agreement shall not waive any breach of
this Agreement. A waiver of any breach of this Agreement shall not constitute a
waiver of any future breaches of this Agreement, whether of a similar or
dissimilar nature.

     9.6 Late Payments. The ADOC shall pay PHS interest on all undisputed
payments hereunder that are not paid when due. Interest shall accrue from the
date the original payment was due at the rate permitted by state law or one
percent (1%) per month, whichever shall be the lesser amount, until the payment
is made in full. The ADOC shall bear the costs of any legal or collection fees
and expenses incurred by PHS in attempting to enforce ADOC's payment obligations
hereunder.

     9.7 In the event the PHS shall fail to maintain agreed upon staffing levels
or shall have been deficient in the performance of its duties, responsibilities
or standards of care as required by this Agreement, the ADOC may make monetary
payment adjustments and/or assess liquidated damages in accordance with Section
7.1 of the RFP No. 5-03 dated May 23, 2003, subject to exceptions as filed by
PHS.

                    ARTICLE X: LIABILITY AND RISK MANAGEMENT

     10.1 Insurance. Prior to the start of this Agreement, PHS shall provide the
ADOC with certificates of insurance, listing the ADOC as an additional insured.
At all times during this Agreement, PHS shall maintain professional liability
insurance covering PHS, its employees and its officers in the minimum amount of
at least one million dollars ($1,000,000) per occurrence and three million
dollars ($3,000,000) in the aggregate. PHS shall also maintain commercial
general liability insurance in the minimum amount of at least one million
dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) in the
aggregate. In the event that the coverage changes, PHS shall notify the ADOC in
writing. PHS shall also notify the ADOC, in writing, of any reduction in policy
amounts or cancellation of insurance coverage.

     10.2 Lawsuits. In the event that any lawsuit (whether frivolous or
otherwise) is filed against either the ADOC, its employees, its elected
officials, employees and agents based on or containing allegations concerning
medical care of inmates or on the performance of PHS's employees, agents,
subcontractors or assignees, the parties agree that PHS, its employees, agents,
subcontractors, assignees or independent contractors, as the case may be, may be
joined as parties defendant in any such lawsuit and shall be responsible for
their own defense and any judgments rendered against them. Nothing herein shall
prohibit any of the parties to this Agreement from joining the remaining parties
hereto as defendants in lawsuits filed by third parties.

     10.3 Indemnification. PHS agrees to defend, indemnify and hold harmless the
State of Alabama, ADOC, its officers, agents, servants and employees from any
and all claims, actions, lawsuits, damages, judgments or liabilities of any kind
whatsoever arising out of the operation and maintenance of the aforesaid program
of health care services as conducted by PHS, PHS employees


                                       14

<PAGE>

or agents, it being the express understanding of the parties hereto that PHS
shall provide the actual health care services set forth herein, and have
complete responsibility for such health care services provided by its employees
or agents and any lawsuit arising solely out of such delivery of healthcare. The
ADOC shall immediately notify PHS of any incident, claim or lawsuit of which the
ADOC becomes aware and shall fully cooperate in the defense of such claim, but
PHS shall retain sole control of the defense while the action is pending.

                            ARTICLE XI: MISCELLANEOUS

     11.1 Independent Contractor Status. The parties acknowledge that PHS is an
independent contractor. Nothing in this Agreement is intended nor shall be
construed to create an agency relationship, an employer/employee relationship,
or a joint venture relationship among the parties.

     11.2 Assignment and Subcontracting. PHS shall not assign this Agreement to
any other corporation without the express written consent of the ADOC, pursuant
to Section 41-16-29, Code of Alabama (1975), which consent shall not be
unreasonably withheld. Any such assignment or subcontract shall include the
obligations contained in this Agreement. Any assignment or subcontract shall not
relieve PHS of its independent obligation to provide the services and be bound
by the requirements of this Agreement.

     11.3 Notice. Unless otherwise provided herein, all notices or other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if sent by certified
mail, return receipt requested, postage prepaid, and addressed to the
appropriate party at the following address or to any other person at any other
address as may be designated in writing by the parties:

               (a) DOC             Alabama Department of Corrections
                                   Commissioner's Office
                                   101 South Union St
                                   Montgomery, AL 36130

               (b) PHS             President
                                   Prison Health Services, Inc.
                                   105 Westpark Drive, Suite 200
                                   Brentwood, Tennessee 37027

                   With a copy to:
                                   General Counsel
                                   Prison Health Services
                                   105 West Park Drive, Suite 200
                                   Brentwood, Tennessee 37027

     Notices shall be effective upon receipt.


                                       15

<PAGE>

     11.4 Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be governed by, and construed according to, the laws of the
State of Alabama, except as specifically noted.

     11.5 Entire Agreement. This Agreement constitutes the complete
understanding and entire agreement between the parties with respect to the terms
and conditions set forth herein, and is intended as a complete and exclusive
statement of the promises, representations, negotiations, discussions and
agreements that have been made in connection with the subject matter hereof and
supersede all previous written or oral agreements and representations not
specifically incorporated herein. No modifications or amendments to this
Agreement shall be binding upon the parties unless the same is in writing and
signed by the respective parties hereto. All prior negotiations, agreements and
understandings with respect to the subject matter of this Agreement are
superseded hereby.

     11.6 Amendment. This Agreement may be amended or revised only in writing
and signed by all parties.

     11.7 Waiver of Breach. The waiver by either party of a breach or violation
of any provision of this Agreement shall not operate as, or be construed to be,
a waiver of any subsequent breach of the same or other provision hereof.

     11.8 Other Contracts and Third-Party Beneficiaries. The parties agree that
the ADOC shall take all reasonable steps necessary to insure availability of
third party reimbursement. ADOC understands and agrees that if, during the
course of' treatment of an inmate in the ADOC's Facilities, an outside payment
source is identified for the inmate's care outside the ADOC's Facilities, the
source of such outside care payment may be investigated by PHS and pursued if
appropriately available under the laws of the state and the United States. The
parties agree that they have not entered into this Agreement for the benefit of
any third person or persons, and it is their express intention that the
Agreement is intended to be for their respective benefit only and not for the
benefit of others who might otherwise be deemed to constitute third-party
beneficiaries hereof.

     11.9 Severability. In the event any provision of this Agreement is held to
be unenforceable for any reason, the unenforceability thereof shall not affect
the remainder of the Agreement, which shall remain in full force and effect and
enforceable in accordance with its terms.

     11.10 Force Majeure. Neither party shall be held responsible for any delay
or failure in performance (other than payment obligations) to the extent that
such delay or failure is caused by fire, flood, hurricane, explosion, war,
strike, labor action, terrorism, embargo, government regulation, riot, civil or
military authority, act of God, acts or omissions of carriers or other similar
causes beyond its control.

     11.11 Trial Duty. In the event PHS' personnel are required to devote time
with regard to litigation or threatened litigation, by or on behalf of ADOC
and/or at the request of DOC, such shall be part of their service time pursuant
to this agreement.


                                       16

<PAGE>

     11.12 Performance Guaranty. PHS shall provide the performance guaranty, as
set forth in the Proposal, in the amount of $3,000,000.

     11.13 Remedy and Alternative Dispute Resolution. It is agreed that the
terms and commitments contained herein shall not be constituted as a debt of the
State of Alabama in violation of Article I, Section 213 of the Constitution of
Alabama of 1901, as amended by Amendment Number 26. It is further agreed that if
any provision of this Agreement shall contravene any statute of Constitutional
provision or amendment, either now in effect or which may, during the course of
this Agreement, be enacted, then that conflicting provision in the contract,
shall be deemed null and void. PHS's sole remedy for the settlement of any and
all disputes arising under the terms of this Agreement are by Alabama Law
limited to the filing of a claim with the Board of Adjustment for the State of
Alabama.

     For any and all disputes arising under. the terms of this Agreement, the
parties hereto agree, in compliance 'with the recommendation of the Governor and
the Attorney General, when considering settlement of such disputes, to utilize
appropriate forms of non-binding alternative dispute resolution including, but
not limited to, mediation by and through the Attorney General's Office of
Administrative hearings or where appropriate, private mediators. Either party
may request mediation by providing the other party with thirty days (30) notice
of their desire to mediate. If the parties cannot agree upon a mediator, then
the parties will request the Alabama Bar Association to identify the names of
mediators knowledgeable in contract and healthcare issues and to make a random
selection of a mediator. The parties will share equally the cost of such
mediation.

     11.14 Medical Advisory Committee. The Medical Advisory Committee of ADOC
shall review and evaluate healthcare services provided by the Contractor in the
designated institutions on a periodic basis or as deemed appropriate and
necessary by the Committee or ADOC. PHS shall have representation at MAC
meetings and shall provide any pertinent medical information necessary for the
committee to review and evaluate the healthcare services provided by PHS. Said
committee may conduct meetings, or portions of meetings, in Executive Session,
during which PHS may not have representation. Minutes of all MAC meetings shall
be provided to PHS promptly upon completion and on a routine basis. Minutes of
any Executive Session may be provided to PHS at the discretion of the Medical
Advisory Committee.

     11.15 Contract Monitor. In order to evaluate and insure that all applicable
standards are being met and that PHS is in full compliance with terms and
responsibilities contained in the Agreement, the ADOC may employ, at is
discretion and at its expense, the services of a Contract Monitor. To the extent
permitted by law, PHS shall provide the Contract Monitor ongoing, comprehensive,
and expeditious access to all clinical files and all corporate files (to the
extent that such files are related to the provision of healthcare services to
inmates in the system) to include but not limited to, payroll records, on-site
licensure certification records, physician billing, attendance records, sign-in
sheets, hospital or other outside service invoices, or any other contract(s)
entered into by PHS for the purposes of carrying out the requirements of the
contract. The Contract Monitor shall perform, but is not limited to, the
following responsibilities:


                                       17

<PAGE>

     (a)  Review of service levels, quality of care, and administrative
          practices as specified in the Agreement;

     (b)  Meet on a regular basis with PHS' representative(s) and ADOC to
          address Agreement issues;

     (c)  Assist in the development of future change requests as needed.

     (d)  Review PHS documentation to ensure compliance with contractual
          obligations.

     (e)  Review of PHS personnel work schedules, time sheets and wage forms to
          ensure compliance with staffing levels and contractual obligations.

     (f)  Review of files, records, and reports pertinent to the provision of
          inmate healthcare services.

     (g)  Review of medical billings to determine appropriateness to contract
          specifications and cost effectiveness to ADOC.

     (h)  Review the collection of third party reimbursement of certain
          services, if any.

     (i)  Conduct site visits, interviews, and inspections, announced or
          unannounced, as required to perform an ongoing healthcare services
          program; such shall not unreasonably interfere with PHS' provision of
          services under this Agreement. The Contract Monitor shall operate
          independently of PHS and shall be directly accountable to the ADOC.
          The Contract Monitor shall submit a monthly report of provider
          services and fulfillment of contractual obligations to the ADOC. The
          ADOC shall review these reports and notify the PHS' representative of
          the findings. Discrepancies and/or deficiencies in contracted services
          shall be assessed and adjusted according to the terms of the RFP,
          subject to exceptions filed by PHS. PHS shall submit a written
          response within' fifteen (15) calendar days to the ADOC detailing
          corrective actions. Failure to perform corrective action or meet
          contractual obligations within thirty (30) calendar days of notice
          shall constitute default of the Agreement.

     11.16 Inmate Medical Co-pay. ADOC Administrative Regulation 601 allows for
the establishment of a co-pay program. ADOC shall charge inmates a co-pay for
each primary visit initiated by the inmate to a facility sick call. Contractor
shall be responsible for entering the chargeable visit, per ADOC guidelines, the
co-pay program. The amount of such co-pay shall be determined by the ADOC.

     11.17 Public Information. PHS shall not publish any findings based upon
data obtained from the operation of this contract without the prior written
permission of' the ADOC, whose written consent shall not be unreasonably
withheld. The ADOC may release without consent of PHS any document or data
subject to release pursuant to the State of Alabama Open Records Act, requests
by the State Legislature, or any other allied state agency.


                                       18

<PAGE>

     11.18 Research. No research projects involving inmates, other than projects
limited to the use of information from records compiles in the ordinary delivery
of inmate activities, shall be conducted without the prior written consent from
the ADOC Commissioner's Office. The conditions under which the research is
conducted shall be agreed upon by PHS and the DOC. Research shall be governed by
applicable federal and state law and written guidelines. In every case, the
written informed consent of each inmate who is a subject of a research project
shall be obtained prior to the inmate's participation.

     11.19 Food Service Personnel. PHS, upon advanced request, shall provide the
ADOC personnel with need-to-know information concerning the health status of
prospective food service inmate personnel and shall conduct health clearance
examinations for food service inmate personnel. An approved form shall be used
to designate the status of the inmate.

     11.20 Immunization. PHS shall provide medical staff for the administration
of vaccination and/or immunization in the general health plan for each inmate.
ADOC shall provide vaccines, serums, etc. and apparatus for such administration.

     11.21 Accounts To Be Timely Paid. PHS shall ensure that a procedure is in
place for timely payment of all of its accounts payable. Bill paying practices
that reflect negatively on the ADOC shall require review by the ADOC. ADOC
reserves the right to pay such bills which are over sixty (60) days past due and
which are uncontested by PHS and to withhold such payments from the next
semi-monthly payment due PHS.

                           ARTICLE XII: NEW FACILITIES

     12.1 It is understood by the parties that this contract applies only to the
designated institutions. In the event the ADOC elects to add new facilities to
the correctional system, PHS will be compensated at a rate to be mutually agreed
upon by the parties.

     IN WITNESS WHEREOF, the parties have executed this Agreement in their
official capacities with legal authority to do so.

ADOC                                    PRISON HEALTH SERVICES, INC.


By: /s/ Donal Campbell                  By: /s/ Trey Hartman
    ---------------------------------       ------------------------------------
Date: 12/10/03                          Date: 12/04/03

ATTEST: Kay P. Hope                     ATTEST:
        Notary                                  --------------------------------
        My Comm.
        Exp 3/31/04


                                       19

<PAGE>


                                        By: /s/ Richard D. Wright - President
-------------------------------------       ------------------------------------
                                            Officer of Corporation

Date:                                   Date: 12/4/03
      -------------------------------


/s/ Bob Riley
-------------------------------------
GOVERNOR of the State of Alabama


N/A
-------------------------------------
FINANCE DIRECTOR, State of Alabama

                                        (SEAL)


                                         Alabama Legislature

                                         /s/ Dianne Harper
                                         -------------------
                                         04C005016
<PAGE>

                                State of Alabama

(STAMP)                       Disclosure Statement

                           (Required by Act 2001-955)

ENTITY COMPLETING FORM
Prison Health Services, Inc.

ADDRESS
105 Westpark Drive, Suite 200

<Table>
<S>                 <C>
CITY, STATE, ZIP    TELEPHONE NUMBER
Brentwood TN 37209   (615) 373-3100
</Table>

STATE AGENCY/DEPARTMENT THAT WILL RECEIVE GOODS, SERVICES, OR IS RESPONSIBLE FOR
GRANT AWARD
Department of Corrections

ADDRESS
______________________________________________________________________________

CITY. STATE. ZIP           TELEPHONE NUMBER
________________________    (____________)

This form is provided with:

[X] Contract [ ] Proposal [ ] Request for Proposal [ ] Invitation to Bid
[ ] Grant Proposal

Have you or any of your partners, divisions, or any related business units
previously performed work or provided goods to any State Agency/Department in
the current or last fiscal year?
[ ] Yes [X] No

If yes, identify below the State Agency/Department that received the goods or
services, the type(s) of goods or services previously provided, and the amount
received far the provision of such goods or services.

<TABLE>
<CAPTION>
STATE AGENCY/DEPARTMENT   TYPES OF GOODS/SERVICES   AMOUNT RECIEVED
-----------------------   -----------------------   ---------------
<S>                       <C>                       <C>

</TABLE>

Have you or any of your partners, divisions, or any related business units
previously applied and received any grants from any State Agency/Department in
the current or last fiscal year?
[ ] Yes [X] No

If yes, identify the State Agency/Department that awarded the grant, the date
such grant was awarded, and the amount of the grant.

<TABLE>
<CAPTION>
STATE AGENCY/DEPARTMENT   DATE GRANT AWARDED   AMOUNT OF GRANT
-----------------------   ------------------   ---------------
<S>                       <C>                  <C>

</TABLE>

1.   List below the name(s) and address(es) of all public officials/public
     employees with whom you, members of your immediate family, or any of your
     employees have a family relationship and who may directly personally
     benefit financially from the proposed transaction. Identify the State
     Department/Agency for which the public officials/public employees work.
     (Attach additional sheets if necessary.)

<TABLE>
<CAPTION>
NAME OF PUBLIC OFFICAL/EMPLOYEE   ADDRESS   STATE AGENCY/DEPARTMENT
-------------------------------   -------   -----------------------
<S>                               <C>       <C>

</TABLE>

                                      OVER

<PAGE>

2.   List below the name(s) and address(es) of all family members of public
     officials/public employees with whom you, members of your immediate family,
     or any of your employees have a family relationship and who may directly
     personally benefit financially from the proposed transaction. Identify the
     public officials/public employees and State Department/Agency for which the
     public officials/public employees work. (Attach additional sheets if
     necessary.)

<TABLE>
<CAPTION>
    NAME                               NAME OF PUBLIC       STATE DEPARTMENT/AGENCY
FAMILY MEMBER        ADDRESS      OFFICAL/PUBLIC EMPLOYEE         WHERE EMPLOYED
-------------   ---------------   -----------------------   -------------------------
<S>             <C>               <C>                       <C>
Laura Ferrell   3206 Highway 59        Jerry L. Ferrell     Department of Corrections
                Uriah AL 36480
</TABLE>

If you identified individuals in items one and/or two above, describe in detail
below the direct financial benefit to be gained by the public officials, public
employees, and/or their family members as the result of the contract, proposal,
request for proposal, invitation to bid, or grant proposal. (Attach additional
sheets if necessary.)

Laura Ferrell has been an employee of PHS since 9/27/01. Ms. Ferrell will be
overseeing the provisions of correctional healthcare services to the Alabama
Department of Corrections. As an employee of PHS, Ms. Ferrell will be paid a
salary and be entitled to applicable company benefits.

Describe in detail below any indirect financial benefits to be gained by any
public official, public employee, and/or family members of the public official
or public employee as the result of the contract, proposal, request for
proposal, invitation to bid, or grant proposal. (Attach additional sheets if
necessary.)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

List below the name(s) and address(es) of all paid consultants and/or lobbyists
utilized to obtain the contract, proposal, request for proposal, invitation to
bid, or grant proposal:

<TABLE>
<CAPTION>
  NAME OF PAID
CONSULTANT/LOBBYIST                             ADDRESS
-------------------                             -------
<S>                       <C>
The Bloom Company, Inc.   401 Adams Avenue, Ste. 710, Montgomery, AL 36104
</TABLE>

By signing below, I certify under oath and penalty of perjury that all
statements on or attached to this form are true and correct to the best of my
knowledge. I further understand that a civil penalty of ten percent (10%) of the
amount of the transaction, not to exceed $10,000.00, is applied for knowingly
providing incorrect or misleading information.


/s/ Jean Byassee                        12/15/03
-------------------------------------   Date
Signature


/s/ Rachelle D. Payne                   12/15/03   3/31/07
-------------------------------------   Date       Date Notary Expires
Notary's Signature

Act 2001-955 requires the disclosure statement to be completed and filed with
all proposals, bids, contracts, or grant proposals to the State of Alabama in
excess of $5,000.00.

                                     (STAMP)