<PAGE>
                                                                    EXHIBIT 10.3


                            MASTER AGREEMENT TO LEASE

                                     BETWEEN

                   CPT OPERATING PARTNERSHIP L.P., LANDLORD

                                       AND

                  COMMUNITY EDUCATION CENTERS, INC., TENANT

                                DATED: May , 2003
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 PAGE

<S>                                                                              <C>
Article I SEPARATE LEASE AGREEMENTS: PREMISE, AND TERM......................       2
      1.01  Separate Lease Agreements.......................................       2
      1.02  Leased Property.................................................       2
      1.03  Term............................................................       3
      1.04  Holding Over....................................................       3
      1.05  Surrender.......................................................       3
      1.06  Affiliates as Tenant............................................       3
Article II RENT.............................................................       4
      2.01  Base Rent.......................................................       4
      2.02  Base Rent Escalation............................................       4
      2.03  Additional Rent.................................................       4
      2.04  Place(s) of Direct Payment of Base Rent and Additional Rent.....       4
      2.05  Net Lease.......................................................       4
      2.06  No Termination, Abatement, etc..................................       4
Article III IMPOSITIONS AND UTILITIES.......................................       5
      3.01  Payment of Impositions..........................................       5
      3.02  Definition of Impositions.......................................       6
      3.03  Utilities.......................................................       7
      3.04  Escrow of Impositions...........................................       7
      3.05  Discontinuance of Utilities.....................................       8
Article IV INSURANCE........................................................       8
      4.01  Property Insurance..............................................       8
      4.02  Liability Insurance.............................................       9
      4.03  Insurance Requirements..........................................       9
      4.04  Replacement Cost................................................      10
      4.05  Blanket Policy..................................................      10
      4.06  No Separate Insurance...........................................      10
      4.07  Waiver of Subrogation...........................................      11
      4.08  Mortgages.......................................................      11
Article V INDEMNITY; HAZARDOUS SUBSTANCES; DANGEROUS CONDITIONS.............      11
      5.01  Tenant's Indemnification........................................      11
      5.02  Hazardous Materials.............................................      12
      5.03  Tenant's Compliance.............................................      12
      5.04  Definitions.....................................................      14
      5.05  Limitation of Landlord's Liability..............................      14
      5.06  Dangerous Condition.............................................      15
Article VI USE AND ACCEPTANCE OF LEASED PROPERTY............................      15
      6.01  Use of Leased Property..........................................      15
      6.02  Acceptance of Leased Property...................................      15
      6.03  Conditions of Use and Occupancy.................................      16
      6.04  Financial Statements and Other Information......................      16
      6.05  Representations of Tenant.......................................      16
</TABLE>
<PAGE>
<TABLE>
<S>                                                                              <C>
Article VII REPAIR; MAINTENANCE RESERVE; COMPLIANCE WITH LAWS;
      MECHANICS' OR CONSTRUCTION LIENS; MAINTENANCE OF SERVICE CONTRACTS....      17
      7.01  Repair and Maintenance..........................................      17
      7.02  Maintenance Reserve.............................................      17
      7.03  Compliance with Laws............................................      19
      7.04  Required Alterations............................................      19
      7.05  Mechanics' or Construction Liens................................      20
      7.06  Replacements of Fixtures........................................      20
      7.07  Maintenance of Service Agreements...............................      20
Article VIII ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL
      ADDITIONS TO THE LEASED PROPERTY......................................      21
      8.01  Tenant's Right to Construct.....................................      21
      8.02  Scope of Right..................................................      21
      8.03  Cooperation of Landlord.........................................      22
      8.04  Commencement of Construction....................................      22
      8.05  Rights in Tenant Improvements...................................      23
      8.06  Personal Property...............................................      23
      8.07  Requirements for Personal Property..............................      24
      8.08  Signs...........................................................      25
      8.09  Financings of Capital Additions to a Leased Property............      25
Article IX DEFAULTS AND REMEDIES............................................      27
      9.01  Events of Default...............................................      27
      9.02  Remedies........................................................      29
      9.03  Right of Set-Off................................................      31
      9.04  Performance of Tenant's Covenants...............................      31
      9.05  Interest on past Due Payments...................................      31
      9.06  Litigation; Attorneys' Fees.....................................      31
      9.07  Remedies Cumulative.............................................      32
      9.08  Escrows and Application of Payments.............................      32
      9.09  Power of Attorney...............................................      32
Article X DAMAGE AND DESTRUCTION............................................      32
      10.01 General.........................................................      32
      10.02 Landlord's Inspection...........................................      33
      10.03 Landlord's Costs................................................      34
      10.04 Rent Abatement..................................................      34
      10.05 Substantial Damage During Lease Term............................      34
      10.06 Damage Near End of Term.........................................      35
Article XI CONDEMNATION.....................................................      35
      11.01 Definition......................................................      35
      11.02 Apportionment of Compensation...................................      35
      11.03 Effect on Lease Obligations.....................................      36
      11.04 Condemnation Caused by Default of Tenant........................      36
      11.05 Restoration of Premises.........................................      37
      11.06 Landlord's Inspection...........................................      37
Article XII TENANT'S RIGHT OF FIRST REFUSAL.................................      38
      12.01 Rights of First Refusal.........................................      38
      12.02 Restriction on Exercise of Purchase Refusal Right...............      39
</TABLE>


                                       ii
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<TABLE>
<S>                                                                              <C>
      12.03 Prohibition on Certain Transfers................................      39
Article XIII ASSIGNMENT and SUBLETTING; ATTORNMENT..........................      39
      13.01 Prohibition Against Subletting and Assignment...................      39
      13.02 Changes of Control..............................................      40
      13.03 Service Agreements..............................................      41
      13.04 Permitted Subleases.............................................      42
      13.05 Affect of Assignment............................................      43
      13.06 REIT Limitations................................................      43
      13.07 Attornment......................................................      43
Article XIV ARBITRATION.....................................................      44
      14.01 Controversies...................................................      44
      14.02 Appointment of Arbitrators......................................      44
      14.03 Arbitration Procedure...........................................      44
      14.04 Expenses........................................................      44
      14.05 Enforcement of the Arbitration Award............................      45
Article XV QUIET ENJOYMENT; SUBORDINATION, ATTORNMENT and ESTOPPEL
      CERTIFICATES..........................................................      45
      15.01 Quiet Enjoyment.................................................      45
      15.02 Landlord Mortgages: Subordination...............................      45
      15.03 Attornment: Non-Disturbance.....................................      45
      15.04 Estoppel Certificate............................................      46
Article XVI MISCELLANEOUS...................................................      47
      16.01 Notices.........................................................      47
      16.02 Advertisement of Leased Property................................      48
      16.03 Landlord's Access...............................................      48
      16.04 Entire Agreement................................................      48
      16.05 Severability....................................................      48
      16.06 Captions and Headings...........................................      49
      16.07 Governing Law...................................................      49
      16.08 Memorandum of Lease.............................................      49
      16.09 Waiver..........................................................      49
      16.10 Binding Effect..................................................      49
      16.11 Authority.......................................................      49
      16.12 Transfer of Permits, Etc........................................      49
      16.13 Modification....................................................      50
      16.14 Incorporation by Reference......................................      50
      16.15 No Merger.......................................................      50
      16.16 Laches..........................................................      50
      16.17 Waiver of Jury Trial............................................      50
      16.18 Permitted Contests..............................................      50
      16.19 Construction of Lease...........................................      51
      16.20 Counterparts....................................................      51
      16.21 Relationship of Landlord and Tenant.............................      51
      16.22 Landlord's Status as a REIT.....................................      51
      16.23 Appraisal.......................................................      51
      16.24 Liability of General Partner of Landlord........................      52
      16.25 Warranties......................................................      53
</TABLE>


                                      iii
<PAGE>
      SCHEDULES

<TABLE>
<S>                     <C>
      Schedule A        The Facilities
      Schedule B        Personal Property
      Schedule C        Tenant's Proprietary Property
      Schedule D        Permitted Exceptions
</TABLE>


                                       iv
<PAGE>
                            MASTER AGREEMENT TO LEASE

      This Master Agreement to Lease (this "AGREEMENT") is entered into and
dated as of the ___________ day of May, 2003, by and between CPT OPERATING
PARTNERSHIP L.P., a Delaware limited partnership ("LANDLORD"), and COMMUNITY
EDUCATION CENTERS, INC., a Delaware corporation ("TENANT").

                                    RECITALS

      A. Community Corrections Urban Renewal Corporation, a New Jersey
corporation ("URBAN RENEWAL"), an affiliate of Tenant, has concurrently conveyed
to Landlord all that certain real property, and the equipment and fixtures
affixed thereto and included in the real property, known and designated on the
official tax map of the City of Newark, County of Essex, State of New Jersey as
Block 5060, Lot 154, commonly known as Delaney Hall, 451-479 Doremus Avenue,
Newark, New Jersey (the "PROPERTY") and Tenant has concurrently conveyed to
Landlord certain equipment, furniture, fixtures and other amenities located
thereon and therein and owned by Tenant and upon which Tenant engages in the
business of the development and management of a certain correctional and
detention facility known as Delaney Hall (the "FACILITY").

      B.    Landlord and Tenant desire to provide for the lease by Landlord
back to the Tenant of the Property and the Facility.

      C. In the event Landlord acquires from Tenant or any other owner/operator
other correctional and detention facilities, Landlord may from time to time
lease such additional properties that Landlord may acquire to Tenant on the same
terms and conditions as set forth in this Agreement.

      D. Landlord and Tenant desire that each of the properties listed on
Schedule A and each additional property that Landlord may lease to Tenant shall
be the subject of a separate and individual lease agreement describing said
property, the rent and various other terms of said lease (each such lease
agreement referred to individually as a "LEASE," and the property that is the
subject of an individual Lease, as more fully described in Section 1.02 below,
being referred to as a "LEASED PROPERTY" and collectively as the "LEASED
PROPERTIES").

      E. Landlord and Tenant desire to set forth in this Agreement certain terms
and conditions applicable to all Leases of all Leased Properties, except as any
individual Lease with respect to a particular Leased Property may otherwise
provide.

      NOW, THEREFORE, in consideration of the Leased Properties and the
covenants and conditions set forth in the individual Lease and this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, Landlord and
Tenant agree as follows:
<PAGE>
                                    ARTICLE I
                 SEPARATE LEASE AGREEMENTS: PREMISE, AND TERM

                  1.01 SEPARATE LEASE AGREEMENTS. Landlord and Tenant are
concurrently entering into a separate Lease for each of the Leased Properties
referred to in Schedule A hereto, and may in the future enter into one or more
additional separate Leases for one or more additional Leased Properties. Except
as specifically set forth in a separate Lease, or any amendment, supplement,
schedule or exhibit thereto, all of the provisions of this Agreement shall be
deemed to be incorporated into and made a part of each such separate Lease made
between the Landlord as landlord (or Lessor) and the Tenant as tenant (or
Lessee) during the term of such separate Lease.

                  1.02 LEASED PROPERTY. Except as set forth in an individual
Lease (including any schedule or exhibit thereto), the property that is the
subject of each Lease and that shall be considered as leased by the Landlord to
the Tenant thereunder shall consist of:

                  (a) The land described in the Lease, together with all rights,
titles, appurtenant interests, covenants, licenses, privileges and benefits
thereto belonging, and any easements, rights-,of-way, rights of ingress or
egress or other interests in, on, or to any land, highway, street, road or
avenue, open or proposed, in, on, across, in front of, abutting or adjoining
such real property including, without limitation, any strips and gores adjacent
to or lying between such real property and any adjacent real property (the
"LAND");

                  (b) All buildings, improvements, structures and fixtures now
located or to be located or to be constructed on the Land, including, without
limitation, landscaping, parking lots and structures, roads, drainage and all
above ground and underground utility structures, and other so-called
"infrastructure" improvements (the "IMPROVEMENTS");

                  (c) All equipment, machinery, fixtures, and other items of
real and/or personal property, including all components thereof, located in, on
or used in connection with, and permanently affixed to or incorporated into, the
Improvements, including, without limitation, all furnaces, boilers, heaters,
electrical equipment, electronic security equipment, heating, plumbing,
lighting, ventilating, refrigerating, incineration, air and water pollution
control, waste disposal, air-cooling and air-conditioning systems and apparatus,
sprinkler systems and fire and theft protection equipment, and similar systems
or as such property may be more particularly itemized in a schedule attached to
an individual Lease and incorporated herein and therein by reference, all of
which, to the greatest extent permitted by law, are hereby deemed to constitute
real estate, together with all replacements, modifications, alterations and
additions thereto (collectively the "FIXTURES");

                  (d) All furniture, equipment, inventory and other personal
property identified on Schedule B attached to an individual Lease, if any, and
incorporated herein and therein by reference (collectively, the "PERSONAL
PROPERTY"). For purposes hereof, Personal Property shall not include certain
proprietary property of Tenant or other Person (as defined below), all as set
forth on Schedule C attached hereto or to any individual Lease.

The Land, Improvements, Fixtures and Personal Property are hereinafter referred
to as the "LEASED PROPERTY."


                                       2
<PAGE>
      SUBJECT, HOWEVER, to the easements, liens, encumbrances, restrictions,
agreements, and other title matters listed or specifically referred to in
Schedule D attached hereto or to any individual Lease ("PERMITTED EXCEPTIONS").

                  1.03 TERM. The term of each Lease shall be as set forth in the
individual Lease for a particular Leased Property (the "TERM").

                  1.04 HOLDING OVER. Should Tenant, without the express consent
of Landlord, continue to hold and occupy the Leased Property after the
expiration of the Term, such holding over beyond the Term and the acceptance or
collection of Rent (as defined below) by the Landlord shall operate and be
construed as creating a tenancy from month-to-month and not for any other term
whatsoever. Tenant shall be liable for all damages incurred by Landlord as a
result of any such holdover, and, in addition to such damages, during any such
holdover period, Tenant shall pay to Landlord for each month (or portion
thereof) Tenant remains in the Leased Property, two hundred percent (200%) of
the Base Rent in effect on the expiration date and all Additional Rent
applicable to such holdover period. Such month-to-month tenancy may be
terminated by Landlord by giving Tenant thirty (30) days written notice, and at
any time after such termination, Landlord may re-enter and take possession of
the Leased Property in accordance with Applicable Law (as defined below).

                  1.05 SURRENDER. Subject to Landlord's option to purchase
Tenant's personal property in accordance with Section 8.06 and except as a
result of (i) Tenant Improvements and Capital Additions (as such terms are
defined in Section 8.01 hereof); (ii) normal and reasonable wear and tear
(subject to the obligation of Tenant to maintain the Leased Property in good
order and repair during the Term); and (iii) casualty, taking or other damage
and destruction not required to be repaired by Tenant, Tenant shall surrender
and deliver up the Leased Property, including all Personal Property and
replacements thereof required to be provided by Tenant pursuant to the terms of
Sections 8.06 and 8.07 hereof, at the expiration or termination of the Term,
broom clean, free of all Tenant's personal property (but not the Personal
Property), and in good order and condition.

                  1.06 AFFILIATES AS TENANT. Subject to the Landlord's
reasonable right to approve the terms of any subleases in accordance with the
provisions of Article XIII and the receipt by Landlord of such certifications
and opinions of counsel as Landlord may reasonably require, any Affiliate of
Tenant may become a party to this Agreement and any Lease as a Tenant (each an
"ALTERNATE TENANT") with respect to an individual Leased Property, and shall be
liable (jointly and severally with Tenant) for all obligations of the tenant or
lessee under this Master Lease and any and all applicable Leases. The form and
content of any such certifications and/or opinions shall be set forth in the
respective Lease applicable to such Alternative Tenant. The foregoing
notwithstanding, (a) Tenant shall remain fully liable for all obligations as
Tenant with respect to each Leased Property, and (b) Tenant shall have the right
to give any notice, consent or waiver, or to exercise any option permitted under
any Lease and to agree to any amendment or modification with respect to this
Agreement or any individual Lease with respect to a Leased Property, as and on
behalf of the tenant or lessee with respect to each such Leased Property (and
each Alternate Tenant hereby grants to Tenant an irrevocable power of attorney,
coupled with an interest, to take any such actions) and any other party to this
Agreement, any Lease or to any related and associated agreements shall be fully
protected in relying on any such actions taken by Tenant or (with respect to the
applicable Leased Property) by any Alternate


                                       3
<PAGE>
Tenant. For purposes of this Section 1.06, "AFFILIATE" shall mean Education and
Health Centers of America, Inc., a New Jersey non-profit corporation
("Education") or any Person directly or indirectly controlling, controlled by,
or under common control with Tenant. Landlord acknowledges that Education is not
controlling, controlled by or under common control with Tenant and has been
defined as an Affiliate of Tenant herein solely for purposes of this Agreement.
A "PERSON" as used herein shall mean and include natural persons, corporations,
limited partnerships, limited liability companies, limited liability
partnerships, general partnerships, joint stock companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governmental bodies and agencies and political subdivisions
thereof.

                                   ARTICLE II
                                      RENT

                  2.01 BASE RENT. Unless otherwise provided in an individual
Lease, Tenant shall pay Landlord annual base rent for each Leased Property that
is the subject of a Lease without notice, demand, set-off or counterclaim, in
advance, in lawful money of the United States of America in the amount specified
therein (the "BASE RENT") for the Term in consecutive monthly installments
payable in advance on the Commencement Date (as defined in each Lease) of each
Lease and thereafter on the twenty-fifth (25th) calendar day of each month
during the Term, in accordance with the Base Rent Schedule set forth in or
attached to each individual Lease.

                  2.02  BASE RENT ESCALATION.  Base Rent shall increase, if
at all, as set forth in the applicable Lease for each Leased Facility.

                  2.03 ADDITIONAL RENT. In addition to Base Rent, Tenant shall
pay all other amounts, liabilities, obligations and Impositions (as hereinafter
defined ) which Tenant assumes or agrees to pay under this Agreement or any
Lease and any fine, penalty, interest, charge and cost which may be added for
nonpayment or late payment of such items (collectively the "ADDITIONAL RENT").

                  2.04 PLACE(S) OF DIRECT PAYMENT OF BASE RENT AND ADDITIONAL
RENT. The Base Rent and Additional Rent are hereinafter collectively referred to
as "RENT." Landlord shall have all legal, equitable and contractual rights,
powers and remedies provided either in this Agreement, in any Lease or by
statute, rule or regulation or otherwise with respect to nonpayment of the Rent.
Tenant shall make all payments of Base Rent at Landlord's principal place of
business or as Landlord may otherwise from time to time direct in writing, and
all payments of Additional Rent directly to the person or persons to whom such
amount is owing at the time and times when such payments are due, and shall give
to Landlord such evidence of such direct payments as Landlord shall request.

                  2.05 NET LEASE. Each Lease shall be deemed and construed to be
an "absolute net lease" or "triple net lease," and Tenant shall pay all Rent,
Impositions, and other charges and expenses in connection with each Leased
Property throughout the Term, without abatement, deduction or set-off.

                  2.06 NO TERMINATION, ABATEMENT, ETC. Except as otherwise
specifically provided in this Agreement or a particular Lease, Tenant shall
remain bound by this


                                       4
<PAGE>
Agreement and such Lease in accordance with its terms. Except as otherwise
specifically provided in this Agreement or a particular Lease, Tenant shall not,
without the prior written consent of Landlord, modify, surrender or terminate
this Agreement or any such Lease, nor seek nor be entitled to any abatement,
deduction, deferment or reduction of Rent, or set-off against the Rent. Except
as specifically provided in this Agreement or a particular Lease, the
obligations of Landlord and Tenant shall not be affected by reason of (i) the
lawful or unlawful prohibition of, or restriction upon, Tenant's use of the
Leased Property, or any part thereof, the interference with such use by any
Person, corporation, partnership or other entity, or by reason of eviction by
paramount title; (ii) any claim which Tenant has or might have against Landlord
or by reason of any default or breach of any warranty by Landlord under this
Agreement or a particular Lease or any other agreement between Landlord and
Tenant, or to which Landlord and Tenant are parties; (iii) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding up or other proceeding affecting Landlord or any assignee or transferee
of Landlord; (iv) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceeding affecting
Tenant, any Affiliate, any Alternative Tenant or any assignee or transferee of
Tenant; or (v) any other cause, whether similar or dissimilar to any of the
foregoing, other than a discharge of Tenant from any such obligations as a
matter of law. Except as otherwise specifically provided in this Agreement or a
particular Lease, and to the maximum extent permitted by law, Tenant hereby
specifically waives all rights, including, but not limited to, any rights under
any statute relating to rights of tenants in any state in which any Leased
Property is located, arising from any occurrence whatsoever, which may now or
hereafter be conferred upon it by law (a) to modify, surrender or terminate any
Lease or quit or surrender the Leased Property or any portion thereof; or (b)
entitling Tenant to any abatement, reduction, suspension or deferment of the
Rent or other sums payable by Tenant hereunder. The obligations of Landlord and
Tenant hereunder shall be separate agreements and the Rent and all other sums
shall continue to be payable in all events unless the obligations to pay the
same shall be terminated pursuant to the express provisions of this Agreement or
a particular Lease or by termination of this Agreement or a particular Lease in
writing signed by both Landlord and Tenant, other than termination by Landlord
by reason of an Event of Default.

                                   ARTICLE III
                            IMPOSITIONS AND UTILITIES

                  3.01 PAYMENT OF IMPOSITIONS. Subject to the adjustments set
forth herein, Tenant shall pay, as Additional Rent, all Impositions (as defined
below) that may be levied or become a lien on the Leased Property or any part
thereof at any time (whether prior to or during the Term), without regard to
prior ownership of the Leased Property, before the same become delinquent.
Tenant shall furnish to Landlord on an annual basis copies of official receipts
or other satisfactory proof evidencing such payments. Tenant's obligation to pay
such Impositions shall be deemed absolutely fixed upon the date such Impositions
become a lien upon the Leased Property or any part thereof. Tenant, at its
expense, shall prepare and file all tax returns and reports in respect of any
Imposition as may be required by governmental authorities; provided, however,
Landlord shall be responsible for the preparation and filing of any such tax
returns or reports in respect of any real or personal property owned by
Landlord. Tenant shall be entitled to any refund due from any taxing authority
if no Event of Default (as hereinafter defined) shall have occurred hereunder
and be continuing. Landlord shall be entitled to any refund from any taxing
authority if an Event of Default has occurred and is continuing. Landlord


                                       5
<PAGE>
and Tenant shall, upon request of the other, provide such data as is maintained
by the party to whom the request is made with respect to the Leased Property as
may be necessary to prepare any required returns and reports. In the event
governmental authorities classify any property covered by this Lease as personal
property, Landlord and Tenant shall file all personal property tax returns in
such jurisdictions where it may legally so file with respect to their respective
owned personal property. Landlord, to the extent it possesses the same, and
Tenant, to the extent it possess the same, will provide the other party, upon
request, with cost and depreciation records necessary for filing returns for any
property so classified as personal property. Where Landlord is legally required
to file personal property tax returns, Tenant will be provided with copies of
assessment notices indicating a value in excess of the reported value in
sufficient time for Tenant to file a protest. Tenant may, upon notice to
Landlord, at Tenant's option and at Tenant's sole cost and expense, protest,
appeal, or institute such other proceedings as Tenant may deem appropriate to
effect a reduction of real estate or personal property assessments and Landlord,
at Tenant's expense as aforesaid, shall fully cooperate with Tenant in such
protest, appeal, or other action. Tenant shall provide Landlord copies of all
materials filed or presented in connection with any such proceeding. Tenant
shall promptly reimburse Landlord for all personal property taxes paid by
Landlord upon receipt of billings accompanied by copies of a bill therefor and
payments thereof which identify the personal property with respect to which such
payments are made. Impositions imposed in respect to the tax-fiscal period
during which the Term commences and terminates shall be adjusted and prorated
between Landlord and Tenant on a per diem basis, with Tenant being obligated to
pay its pro rata share from and including the Commencement Date to and including
the expiration or termination date of the Term, whether or not such Imposition
is imposed before or after such commencement or termination, and Tenant's
obligation to pay its prorated share thereof shall survive such termination;
provided, however, with respect to any Leased Property that Landlord purchases
from Tenant or an Alternative Tenant, Tenant or such Alternative Tenant shall be
liable for all Impositions due for any period in which the Commencement Date
occurs, whether or not such Imposition was due on, before or after such
Commencement Date.

            Tenant shall also pay to Landlord a sum equal to the amount which
Landlord may be caused to pay of any privilege tax, sales tax, gross receipts
tax, rent tax, occupancy tax or like tax (excluding any income tax payable with
respect to Landlord's business operations), hereinafter levied, assessed, or
imposed by any federal, state, county or municipal governmental authority, or
any subdivision thereof, upon or measured by rent or other consideration
required to be paid by Tenant under this Agreement.

                  3.02 DEFINITION OF IMPOSITIONS. "Impositions" means,
collectively, the following: (a) taxes (including, without limitation, all real
estate and personal property ad valorem (whether assessed as part of the real
estate or separately assessed as unsecured personal property), sales and use,
business or occupation, single business, gross receipts, transaction, privilege,
rent or similar taxes, but not including income or excise taxes payable with
respect to Landlord's receipt of Rent); (b) assessments (including without
limitation, all assessments for public improvements or benefits, whether or not
commenced or completed prior to the date hereof and whether or not to be
completed within the Term); (c) ground rents, water, sewer or other rents, fees
and charges, excises, tax levies, and fees (including, without limitation,
license, permit, inspection, authorization and similar fees); (d) to the extent
they may become a lien on the Leased Property, all taxes imposed on Tenant's
operation of the Leased Property, including, without limitation, employee
withholding taxes, income taxes and intangible taxes; (e) any taxes


                                       6
<PAGE>
arising out of or incurred as a result of any sale, transfer, assignment or
other disposition by Tenant of its interest in the Leased Property or this
Agreement, whether or not permitted under this Agreement; and (f) all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Leased Property or any part thereof and/or the Rent (including all interest and
penalties thereon due to any failure in payment by Tenant), which at any time
prior to, during or in respect of the Term hereof may be assessed or imposed on
or in respect of or be a lien upon any of the following: (i) Landlord or
Landlord's interest in the Leased Property or any part thereof; (ii) the Leased
Property or any part thereof or any rent therefrom or any estate, right, title
or interest therein; or (iii) any occupancy, operation, use or possession of, or
sales from, or activity conducted on, or in connection with the Leased Property
or the leasing or use of the Leased Property or any part thereof. Tenant shall
not, however, be required to pay (y) any tax based on net income (whether
denominated as a franchise or capital stock or other tax) imposed on Landlord,
or (z) any income, franchise, transfer, documentary stamp, intangible, gross
receipts, inheritance, devolution, gift, estate, payroll, stamp act, or
reassessment or supplemental assessments of ad valorem real or personal property
taxes due to the sale, transfer, assignment or other disposition of the title,
estate or interest of Landlord in the Leased Property or this Agreement;
provided, however, that if any tax, assessment, tax levy or charge that Tenant
is obligated to pay pursuant to the first sentence of this definition and that
is in effect at any time during the Term hereof is totally or partially
repealed, and a tax, assessment, tax levy or charge set forth in clause (y) or
(z) immediately above is levied, assessed or imposed expressly in lieu thereof,
Tenant shall then pay such tax, levy, or charge set forth in clause (y) and/or
(z).

                  3.03 UTILITIES. Tenant shall contract for, in its own name,
and will pay, as Additional Rent all taxes, assessments, charges/deposits, fees
and bills for utilities, including, without limitation, charges for water, gas,
oil, sanitary and storm sewer, electricity, telephone service, trash collection,
internet access and all other utilities that may be charged against any occupant
or user of the Improvements during the Term. Tenant shall at all times maintain
that amount of heat necessary to ensure against the freezing of water lines.
Tenant shall indemnify, defend, save and hold Landlord harmless of, from and
against any and all liability or damages, including, but not limited to, damages
to the utility systems and the Leased Property, that may result from Tenant's
failure to maintain sufficient heat in the Improvements.

                  3.04 ESCROW OF IMPOSITIONS. In the event Tenant fails to
timely pay any or all of the Impositions with respect to any Leased Facility two
(2) times in any one (1) tax period or three (3) times in any two (2)
consecutive tax periods, then, upon ten (10) days written notice from Landlord
to Tenant, Tenant shall thereafter deposit with Landlord on the first day of
each month during the remaining Term hereof and any extended Term, a sum equal
to one-twelfth (1/12th) of Landlord's estimate of the Impositions assessed or to
be assessed against such Leased Property during the tax year of the then
applicable Lease Year, which sum shall be used by Landlord toward payment of
such Impositions. If at the end of any applicable tax year, any such funds held
by Landlord are insufficient to make full payment of taxes or other Impositions
for which such funds are held, Tenant, on demand, shall pay to Landlord any
additional funds necessary to pay and discharge the obligations of Tenant
pursuant to the provisions of this Article III. If, however, at the end of any
applicable tax year, such funds held by Landlord are in excess of the total
payment required to satisfy taxes or other Impositions for which such funds are
held, Landlord shall apply such excess amounts to Tenant's tax and Imposition
escrow fund for the next tax year. If any such excess exists following the
expiration or earlier termination of


                                       7
<PAGE>
any Lease, and subject to Section 9.08 below, Landlord shall promptly refund
such excess amounts to Tenant. The receipt by Landlord of the payment of such
Impositions by and from Tenant shall only be as an accommodation to Tenant and
the taxing authorities, and shall not be construed as rent or income to
Landlord, and shall not be deemed as the assumption by Landlord to pay such
Impositions or be deemed a waiver by Landlord of Tenant's obligation to pay such
Impositions, Landlord serving, if at all, only as a conduit for delivery
purposes.

                  3.05 DISCONTINUANCE OF UTILITIES. Landlord will not be liable
for damages to person or property or for injury to, or interruption of,
business, whether the business of Tenant or any other Person, for any
discontinuance of utilities nor will such discontinuance in any way be construed
as an eviction of Tenant or cause an abatement of Rent or operate to release
Tenant from any of Tenant's obligations under this Lease.

                                   ARTICLE IV
                                    INSURANCE

                  4.01 PROPERTY INSURANCE. Tenant, at Tenant's expense, shall
keep the Improvements, Fixtures, and other components of the Leased Property
insured against the following risks:

                  (a) Loss or damage by fire, vandalism and malicious mischief
earthquake, sprinkler leakage and all other physical loss perils commonly
covered by "All Risk" insurance in an amount not less than one hundred percent
(100%) of the then full replacement cost thereof (as hereinafter defined). Such
policy shall include an agreed-amount endorsement if available at a reasonable
cost. Such policy shall also include endorsements for contingent liability for
operation of building and zoning laws, demolition costs, and increased cost of
construction.

                  (b) Loss or damage by explosion of steam boilers, pressure
vessels, or similar apparatus, now or hereafter installed on the Leased
Property, in commercially reasonable amounts acceptable to Landlord.

                  (c) Loss of rent under a rental value or business interruption
insurance policy covering risk of loss during the first six (6) months of
reconstruction necessitated by the occurrence of any hazards described in
Sections 4.01(a) or 4.01(b), above, and which causes an abatement of Rent as
provided in Article X hereof, in an amount sufficient to prevent Landlord or
Tenant from becoming a co-insurer, containing endorsements for extended period
of indemnity and premium adjustment, and written with an agreed-amount clause.

                  (d) If the Land is located in whole or in part within a
designated flood plain area, loss or damage caused by flood in commercially
reasonable amounts acceptable to Landlord.

                  (e) Loss or damage commonly covered by blanket crime insurance
including employee dishonesty, loss of money orders or paper currency,
depositor's forgery, and loss of property accepted by Tenant for safekeeping, in
commercially reasonable amounts acceptable to Landlord.


                                       8
<PAGE>
                  (f) In connection with any repairs or rebuilding by Tenant
under Article X hereof, Tenant shall maintain (or cause its contractor to
maintain) appropriate builder's risk insurance covering any loss or casualty to
the subject Improvements during the course of such repairs or rebuilding.

                  4.02  LIABILITY INSURANCE.  Tenant shall, at Tenant's
expense, maintain during the Term liability insurance against the following:

                  (a) Claims for personal injury or property damage commonly
covered by comprehensive general liability insurance with endorsements for
blanket, contractual, personal injury, owner's protective liability, real
property, fire damage, legal liability, broad form property damage, and extended
bodily injury, with commercially reasonable amounts for bodily injury and
property damage acceptable to Landlord, but with a combined single limit of not
less than Five Million Dollars ($5,000,000.00) per occurrence and Ten Million
Dollars ($10,000,000.00) in the aggregate.

                  (b) Claims commonly covered by worker's compensation insurance
for all persons employed by Tenant on the Leased Property. Such worker's
compensation insurance shall be in accordance with the requirements of all
applicable local, state, and federal law.

                  4.03 INSURANCE REQUIREMENTS. The following provisions shall
apply to all insurance coverage required under this Agreement, including, but
not limited to, the insurance required under Sections 4.01 and 4.02 above:

                  (a) The carriers of all .policies shall have a Best's Rating
of "A-" or better and a Best's Financial Category of XII or larger and shall be
authorized to do business in and licensed to issue insurance policies of the
type so issued to Tenant in the state in which the Leased Property is located.

                  (b) Tenant shall be the "named insured" and Landlord and any
mortgagee of Landlord shall be an "additional named insured" on each liability
insurance policy required under Section 4.01, except that if such coverage is
under a blanket policy, Landlord and its mortgagee shall each be designated an
"additional named insured" only with respect to the particular Leased Property
covered under any such policy or policies and the operations and services
conducted thereon. Landlord and any mortgagee of Landlord shall be designated
"loss payee" or "mortgagee loss payee" on each property insurance policy
required under Section 4.01 except that if such coverage is under a blanket
insurance policy, each shall be designated a "loss payee" or "mortgagee loss
payee" only with respect to the particular Leased Property covered thereunder.

                  (c) Tenant shall deliver to Landlord certificates or policies
showing the required coverage and endorsements. The policies of insurance shall
provide that the policy may not be canceled or not renewed, and no material
change or reduction in coverage may be made, without at least thirty (30) days'
prior written notice to Landlord.

                  (d) The policies shall contain a severability of interest
and/or -cross-liability endorsement, providing that the acts or omissions of
Tenant will not invalidate the


                                       9
<PAGE>
Landlord's coverage, and providing that Landlord shall not be responsible for
payment of premiums.

                  (e) All loss adjustment shall require the written consent of
Landlord and Tenant, as their interests may appear.

                  (f) At least ten (10) days prior to the expiration of each
policy, Tenant shall deliver to Landlord a certificate showing renewal of such
policy and payment of the annual premium therefor.

      Landlord shall have the right to review the insurance coverage required
hereunder with Tenant from time to time with respect to such insurance coverage
required hereunder from time to time, to obtain the input of third party
professional insurance advisors (at Landlord's expense except if an Event of
Default shall have occurred and then be continuing) with respect to such
insurance coverage, and to consult with Tenant in Tenant's annual review and
renewal of such insurance coverage. If, as a result of such review, Landlord
shall determine that the minimum insurance requirements set forth in Section
4.02(a) above should be increased, at Landlord's request, Tenant shall increase
the limits of liability under such insurance policies as reasonably requested by
Landlord. All insurance coverage hereunder shall be in such form, substance and
amounts as are customary or standard in Tenant's industry.

                  4.04 REPLACEMENT COST. The term "full replacement cost" means
the actual replacement cost thereof from time to time, including increased cost
of construction, with no reductions or deductions. If, as reasonably determined
by Landlord after consultation with Landlord's third party professional
insurance advisors, there has been an increase in the replacement cost of the
Improvements, then, upon request of Landlord, Tenant shall, not later than
thirty (30) days after the anniversary of each applicable insurance policy,
adjust the amount of the replacement cost endorsement to reflect any such
increase. If Tenant makes any Permitted Alterations (as defined below) to the
Leased Property, Landlord may have such full replacement cost re-determined at
any time after such Permitted Alterations are made, regardless of when the full
replacement cost was last determined.

                  4.05 BLANKET POLICY. Tenant may carry the insurance required
by this Article under a blanket policy of insurance, provided that the coverage
afforded Tenant will not be reduced or diminished or otherwise be different from
that which would exist under a separate policy meeting all of the requirements
of this Agreement.

                  4.06 NO SEPARATE INSURANCE. Tenant shall not take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article IV, or increase the amounts of any then existing
insurance pertaining to a particular Leased Property by securing an additional
policy or additional policies with respect to such Leased Property, unless all
parties having an insurable interest in the subject matter of the insurance,
including Landlord and any mortgagees, are included therein as additional named
insureds or loss payees, the loss is payable under such insurance in the same
manner as losses are payable under this Agreement, and such additional insurance
is not prohibited by the existing policies of insurance. Tenant shall
immediately notify Landlord of the taking out of such separate insurance or the
increasing of any of the amounts of the existing insurance by securing an
additional policy


                                       10
<PAGE>
or additional policies. The term "mortgages" as used in this Agreement includes
deeds of trust and the term "mortgagees" includes trustees and beneficiaries
under a Deed of Trust.

                  4.07 WAIVER OF SUBROGATION. Each party hereto hereby waives
any and every claim that arises or may arise in its favor and against the other
party hereto during the Term or any extension or renewal thereof, for any and
all loss of or damage to, any of its property located within or upon, or
constituting a part of, the Leased Property, which loss or damage is covered by
valid and collectible insurance policies, to the extent that such loss or damage
is recoverable under such policies. This mutual waiver shall be in addition to,
and not in limitation or derogation of any other waiver or release contained in
this Lease with respect to any loss or damage to property of the parties hereto.
Inasmuch as such waivers will preclude the assignment of any such claim by way
of subrogation (or otherwise) to an insurance company (or any other person),
each party hereto agrees immediately to give each insurance company which has
issued to it policies of insurance, written notice of the terms of such mutual
waivers, and to have such insurance policies properly endorsed, if necessary, to
prevent the invalidation of such insurance coverage by reason of such waivers,
so long as such endorsement is available at a reasonable cost.

                  4.08 MORTGAGES. The following provisions shall apply if
Landlord now or hereafter places a mortgage on the Leased Property or any part
thereof: (i) Tenant shall obtain a standard form of mortgagee clause insuring
the interest of the mortgagee; (ii) Tenant shall deliver evidence of insurance
to such mortgagee; (iii) loss adjustment shall require the consent of the
mortgagee; and (iv) Tenant shall obtain such other coverage and provide such
other information and documents as may be reasonably required by the mortgagee.

                                    ARTICLE V
            INDEMNITY; HAZARDOUS SUBSTANCES; DANGEROUS CONDITIONS

                  5.01 TENANT'S INDEMNIFICATION. Subject to Section 4.07 and
other than for circumstances involving Landlord's gross negligence or
intentional misconduct, Tenant shall indemnify, defend, save and hold harmless
Landlord, its agents, partners, managers and employees of, from and against any
and all demands, claims, causes of action, fines, penalties, damages (including,
but not limited to, incidental and consequential damages), losses, liabilities
(including, but not limited to, strict liability), judgments, and expenses
(including, without limitation, reasonable attorneys' fees and expenses, court
costs, and the costs set forth in Section 9.06) incurred in connection with or
arising from any of the following: (a) the use, condition, operation or
occupancy of each Leased Property, including, but not limited to, the presence
of any Dangerous Condition (as described in Section 5.06 below) on any Leased
Property; (b) any activity, work, or thing done, or permitted or suffered by or
through Tenant in or about the Leased Property; (c) any acts, omissions, or
negligence of Tenant or any person claiming under Tenant, or the contractors,
agents, employees, invitees, or visitors of Tenant or any such Person; (d) any
claim of any person incarcerated, held or detained in the Leased Property,
including claims alleging breach or violation of such person's civil or legal
rights; (e) any breach, violation, or nonperformance by Tenant or any person
claiming under Tenant or the employees, agents, contractors, invitees, or
visitors of Tenant or of any such Person, of any term, covenant, or provision of
this Agreement or any Lease or any law, ordinance, rule, regulation or
governmental requirement of any kind; (f) any injury or damage to the person,
property or business of Tenant, its employees, agents, contractors, invitees,
visitors, or any other person


                                       11
<PAGE>
entering upon the Leased Property under the express or implied invitation of
Tenant; and (g) and any accident, injury to or death of persons or loss or
damage to any item of property occurring at the Leased Property. If any action
or proceeding is brought against Landlord, its employees, partners, managers or
agents by reason of any such claim, Tenant, upon notice from Landlord, will
defend the claim at Tenant's sole cost and expense with counsel reasonably
satisfactory to Landlord and Tenant. In the event Landlord reasonably determines
that its or its employees', partners', managers' or agents' interests and the
interests of Tenant in any such action or proceeding are not substantially the
same and that Tenant's counsel cannot adequately represent the interests of
Landlord or such persons therein, Landlord shall have the right to hire separate
counsel in any such action or proceeding and the costs and expenses thereof,
including all attorneys' fees and expenses, shall be paid for by Tenant.

                  5.02 HAZARDOUS MATERIALS. If the Leased Property was owned or
operated by Tenant prior to the date Landlord acquired such Leased Property,
then Tenant, subject to the facts disclosed in any Phase I environmental report
obtained by Landlord with respect to the acquisition of the respective Leased
Property, warrants and represents to Landlord as of the date of this Agreement
and as of the Commencement Date of each Lease the following: (a) no Hazardous
Materials (as hereinafter defined) have been installed, used, generated,
manufactured, treated, handled, refined, produced, processed, stored or disposed
of, or otherwise present in, on or under the Leased Property by or to Tenant's
knowledge; (b) no activity has been undertaken on the Leased Property by Tenant
or to Tenant's knowledge which would cause (i) the Leased Property to become a
hazardous waste treatment, storage or disposal facility within the meaning of,
or otherwise bring the Leased Property within the ambit of, any Hazardous
Materials Law (as hereinafter defined), (ii) a release or threatened release of
Hazardous Materials from the Leased Property within the meaning of, or otherwise
bring the Leased Property within the ambit of, any Hazardous Materials Law or
(iii) the discharge of Hazardous Materials into any watercourse, body of surface
or subsurface water or wetland, or the discharge into the atmosphere of any
Hazardous Materials which would require a permit under any Hazardous Materials
Law; (c) no activity has been undertaken with respect to the Leased Property by
Tenant or to Tenant's knowledge which would cause a violation or support a claim
under any Hazardous Materials Law; (d) no investigation, administrative order,
litigation or settlement with respect to any Hazardous Materials is in existence
with respect to the Leased Property, nor, to Tenant's knowledge, is any of the
foregoing threatened; (e) no notice has been received by Tenant from any Person
claiming any violation of any Hazardous Materials Law, or requiring compliance
with any Hazardous Materials Law, or demanding payment or contribution for
environmental damage or injury to natural resources; (f) Tenant has not obtained
and, to Tenant's knowledge, is not required to obtain, and Tenant has no
knowledge of any reason Landlord will be required to obtain, any permits,
licenses, or similar authorizations to occupy, operate or use the Improvements
or any part of the Leased Property by reason of any Hazardous Materials Law.

                  5.03  TENANT'S COMPLIANCE.

                  (a) During the Term, Tenant will not store, use, or dispose of
any Hazardous Materials, except in such quantities as allowed and in such
containers as permitted under and only in accordance with all applicable
Hazardous Materials Laws. Notwithstanding the foregoing, Tenant anticipates
using, storing and disposing of certain Hazardous Materials in connection with
the operation of correctional or detention facilities on the Leased Property,


                                       12
<PAGE>
which activities are not in violation of Hazardous Materials Laws. Such
substances include, but are not limited to the following: medical wastes, diesel
fuel, maintenance and janitorial supplies, and waste from reprographic
activities. Upon request by Landlord, Tenant shall submit to Landlord annual
reports regarding Tenant's use, storage, and disposal of any of the Hazardous
Materials, such reports to include information regarding continued Hazardous
Materials inspections, personal interviews, and federal, state and local agency
listings. In addition, Tenant shall execute affidavits, representations and the
like from time to time at Landlord's request concerning Tenant's best knowledge
and belief regarding the presence or absence of Hazardous Materials on the
Leased Property. Tenant shall indemnify, defend, save and hold Landlord harmless
of, from and against any and all claims, costs, and liabilities, including, but
not limited to, reasonable attorneys' fees and expenses and costs of litigation,
incurred as a result of a release or threatened release on the Leased Property
of Hazardous Materials or the violation, or the alleged violation, by Tenant of
any law, ordinance, regulation, order, permit, decree or similar items,
including, but not limited to any Hazardous Materials Laws, relating to
hazardous substances, human health or the environment (collectively,
"ENVIRONMENTAL LAWS") (irrespective of whether there has occurred any violation
of any Environmental Law ), in respect of the Leased Property, including, but
not limited to, the following: (a) liability for response costs and for costs of
removal and remedial action incurred by the United States Government, any state
or local governmental or quasi-governmental body, agency, board or unit or any
other person or entity, or damages from injury to or destruction or loss of
natural resources, including the reasonable costs of assessing such injury,
destruction or loss, incurred pursuant to any Environmental Law, (b) liability
for costs and expenses of abatement, investigation, removal, remediation,
correction or clean-up, fines, damages, response costs or penalties which arise
from the provisions of any Environmental Law, (c) liability for personal injury
or property damage arising under any statutory or common-law tort theory,
including damages assessed for the maintenance of a public or private nuisance
or for carrying on of a dangerous activity or (d) by reason of a breach of an
environmental representation or warranty given by Tenant to Landlord. The
foregoing indemnification of Landlord by Tenant includes, without limitation,
all costs incurred by or imposed upon Landlord in connection with any judgments,
damages, penalties, fines, liabilities or losses (including, without limitation,
diminution in value of the Leased Property, damages for the loss or restriction
on use of any space or of any amenity in or around the Leased Property, and sums
paid in settlement of claims, reasonable attorneys' fees and costs, reasonable
consultant fees and reasonable expert fees) or in connection with the
investigation of site conditions or any clean-up, or remedial removal or
restoration work required by any federal, state or local governmental agency or
political subdivision occurring as a result of the presence of any Hazardous
Material in, on or under the Leased Property caused or permitted by Tenant or
for which Tenant is legally liable. To the fullest extent obtainable in the
jurisdiction in which the Leased Property is located, Tenant further agrees to
maintain insurance to cover such claims, costs, and liabilities, in amounts and
with coverage and insurance carriers satisfactory to Landlord, in Landlord's
reasonable judgment. Tenant's obligations under this Section 5.03 will survive
the termination or early expiration of this Agreement or the respective Lease.
Any default under this Section 5.03 shall be a material default enabling
Landlord to exercise any of the remedies set forth in this Agreement or the
respective Lease.

                  (b) With respect to any Leased Property located in the State
of New Jersey, Tenant shall comply with the provisions of the New Jersey
Industrial Site Recovery Act, N.J.S.A. 13:1k-6 et seq. ("ISRA"), if applicable,
or other similar applicable laws, prior to its termination of any activities in
the Leased Property or the expiration of the term of this


                                       13
<PAGE>
Agreement or the respective Lease, whichever is earlier. If ISRA is not
applicable, Tenant will obtain a Letter of Non-applicability from the New Jersey
Department of Environmental Protection prior to its termination of any
activities in the Leased Property or the expiration of the term of this
Agreement or the respective Lease, whichever is earlier. If in connection with a
sale, transfer, or mortgage of the Leased Property by Landlord or other
transaction by the Landlord where Landlord is required or deems it desirable to
comply with ISRA, Tenant will cooperate with Landlord and provide any
information reasonably requested by Landlord to comply with ISRA or to obtain a
Letter of Non-applicability, at Landlord's cost and expense except if an Event
of Default shall have occurred and is then continuing.

                  (c) Subject to the provisions of Section 16.03, Landlord or
any representatives, contractors or agents of Landlord may inspect, including,
but not limited to, if Landlord determines the same is warranted, causing a
Phase I and/or Phase II environmental assessment to be performed at, the Leased
Property from time to time to determine compliance by Tenant with the
environmental representations and covenants set forth in this Section 5.03, and
Tenant will cooperate with such inspections. Unless an Event of Default has
occurred, Landlord shall provide Tenant not less than twenty-four (24) hours
prior notice of the date and time of any Phase II environmental drilling,
sampling or testing involving intrusive procedures and coordinate with Tenant
such procedures so that they do not unreasonably interfere with Tenant's
operations at the Facility. All such inspections shall be performed in
accordance with all Environmental Laws.

                  5.04 DEFINITIONS. Without limitation, "HAZARDOUS MATERIALS"
for the purpose of this Article V shall include any substances regulated by any
local, state or federal law relating to environmental conditions and industrial
hygiene, including, without limitation, the Resource Conservation and Recovery
Act of 1976 ("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Hazardous Materials Transportation
Act, the Federal Water Pollution Control Act, the Clean Air Act, the Clean Water
Act, the Toxic Substances Control Act, the Safe Drinking Water Act, ISRA and all
similar federal, state and local environmental statutes, ordinances and the
regulations, orders, or decrees now or hereafter promulgated thereunder
(collectively, "HAZARDOUS MATERIALS LAW").

                  5.05 LIMITATION OF LANDLORD'S LIABILITY. Landlord, its agents,
partners, managers and employees, will not be liable for any loss, injury,
death, or damage (including consequential damages) to persons, property, or
Tenant's business occasioned by theft, act of God, public enemy, terroristic
threat or act, injunction, riot, strike, insurrection, war, court order,
requisition, order of governmental body or authority, fire, explosion, falling
objects, steam, water, rain or snow, leak or flow of water (including water from
the elevator system), rain or snow from any Leased Property or into any Leased
Property or from the roof, street, subsurface or from any other place, or by
dampness or from the breakage, leakage, obstruction, or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting
fixtures of the Leased Property, or from construction, repair, or alteration of
the Leased Property or from any acts or omissions of any other occupant or
visitor of the Leased Property, or from the presence or release of any hazardous
substance or material on or from the Leased Property or from any other cause
beyond Landlord's reasonable control.


                                       14
<PAGE>
                  5.06 DANGEROUS CONDITION. Tenant shall keep the Leased
Property free from mold, mildew, lead based paint and any and all other
bacteria, fungi, substances and materials in quantities or concentrations that
have been or could be found to be harmful to the health or safety of any
occupants or inmates at the Facility or any employees or other invitees of
Tenant or any other person coming onto or in the Facility (any of the same being
a "Dangerous Condition").

                                   ARTICLE VI
                      USE AND ACCEPTANCE OF LEASED PROPERTY

                  6.01 USE OF LEASED PROPERTY. Each Leased Property shall be
used and occupied exclusively as a correctional or detention facility together
with uses related or incidental to the operation of a correctional or detention
facility or required pursuant to any governmental operating agreement, support
agreement or sublease, including, but not limited to, any Service Agreements (as
defined below), or any other purpose for which the Leased Property is being used
at the Commencement Date of the Term, and for no other purpose without the prior
written consent of the Landlord, which may be withheld by Landlord for any
reason in Landlord's sole discretion. Tenant shall obtain and maintain all
approvals, licenses, and consents needed to use and operate each Leased Property
for such purposes. Tenant shall promptly deliver to Landlord complete copies of
surveys, examinations, certification and licensure inspections, compliance
certificates, and other similar reports issued to Tenant by any governmental
agency for the use and occupancy of the Leased Property.

                  6.02 ACCEPTANCE OF LEASED PROPERTY. Except as otherwise
specifically provided in this Agreement or in any individual Lease, Tenant
acknowledges that (i) Tenant and its agents have had an opportunity to inspect
the Leased Property, (ii) Tenant has found the Leased Property fit for Tenant's
use, (iii) delivery of the Leased Property to Tenant is in an "as-is" condition,
(iv) Landlord is not obligated to make any improvements or repairs to the Leased
Property, and (v) the roof, walls, foundation, heating, ventilating, air
conditioning, telephone, sewer, electrical, mechanical, utility, plumbing,
Fixtures, Improvements and other portions of the Leased Property are in good
working order. Tenant waives any claim or action against Landlord with respect
to the condition of the Leased Property, including, but not limited to, the
presence of any Dangerous Condition or Hazardous Materials on, under or in the
Leased Properties.

LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF
THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, OR THE PRESENCE OR ABSENCE OF
ANY DEFECT THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO
BE BORNE BY TENANT.


                                       15
<PAGE>
                  6.03 CONDITIONS OF USE AND OCCUPANCY. During the Term, Tenant
shall use and keep the Leased Property in a careful, safe and proper manner; not
injure, overload, deface, damage or otherwise commit any nuisance or suffer any
waste thereon; not use or occupy the Leased Property for any unlawful purposes;
not use or occupy the Leased Property or permit the same to be used or occupied,
for any purpose or business deemed extra hazardous on account of fire or
potential fire or other hazard or otherwise; keep the Leased Property in such
repair and condition as may be required by the local board of health, fire
marshal, or other city, state or federal authorities, free of all cost to
Landlord; not permit any acts to be done that will cause the cancellation,
invalidation, or suspension of any insurance policy; and permit Landlord and its
agents to enter upon the Leased Property at all reasonable times to examine the
condition thereof.

                  6.04 FINANCIAL STATEMENTS AND OTHER INFORMATION. Tenant shall
provide Landlord at least annually Tenant's consolidated audited financial
statements, including the consolidation schedule for Tenant's operation of the
Leased Properties and the Facilities located thereon. If Tenant's stock becomes
publicly traded at any time during the term of this Lease, within ten (10) days
following Tenant's filing of quarterly and annual reports with the Securities
and Exchange Commission (the "SEC"), Tenant shall deliver to Landlord copies of
such reports and filings. Tenant shall provide Landlord at least quarterly, and,
if Tenant's stock becomes publicly traded, at the same time Tenant provides
copies of its quarterly and annual reports to the SEC, (or more often as may be
reasonably requested by Landlord in writing), the following additional financial
information for each calendar quarter hereafter, with respect to each Leased
Property: gross revenues, net operating income and expenses, EBITDA, average
occupancy levels, a schedule of the expiration dates for all operating and other
contracts applicable to the Facility, including, but not limited to the Service
Agreements, and total cash flow (i.e., operating income plus depreciation and
amortization plus Base Rent plus Additional Rent due under this Agreement).
Tenant shall include, with the delivery of such financial information and, if
applicable, annual and quarterly reports, a certification of any officer of the
Tenant as to whether any Event of Default (as hereinafter defined) has occurred
or is continuing under a Lease or whether any event has occurred under a Lease
which would, with the lapse of time, giving of notice or both, constitute an
Event of Default. Tenant shall also deliver to Landlord such additional
financial information as Landlord may reasonably request, provided the same is
of a type normally maintained by Tenant or can be obtained without undue cost or
burden on Tenant's personnel and does not constitute information which Tenant
reasonably determines to be proprietary or confidential. Additionally, upon
Landlord's request, Tenant shall provide Landlord with copies of Tenant's annual
capital expenditure budgets for each Leased Property and any reports generated
by Tenant regarding maintenance and repairs of the Leased Property.

                  6.05  REPRESENTATIONS OF TENANT.

                  (a) Tenant makes the following representations and warranties
to Landlord, each of which are true and correct in all material respects as of
the date of this Master Lease and each subsequent Lease and each of which shall
remain true and correct in all material respects during the entire term of this
Lease:

                        (i)   Neither Tenant (nor any Affiliate of Tenant or
Alternative Tenant in cases where a Lease is executed by such Affiliate or
Alternative Tenant) is now in default in any payment of principal or interest on
any obligations for borrowed money having a


                                       16
<PAGE>
principal balance of Three Million Dollars ($3,000,000.00) or more in the
aggregate (excluding obligations which are limited in recourse to specific
property of Tenant provided that such property is not a substantial portion of
the assets of Tenant and excluding any debt which is denominated as
"subordinated debt"), or in the performance of any other provision contained in
any instrument under which any such obligation is created or secured (including
the breach of any covenant thereunder), where an effect of such default is that
the holders of such obligation have the right to cause such obligation to become
due prior to its stated maturity; and

                        (ii)  There has not been rendered against Tenant (or
an Affiliate of Tenant or Alternative Tenant in cases where a Lease is executed
by such Affiliate or Alternative Tenant) any final, non-appealable judgment or
judgments for the payment of money in excess of One Million Five Hundred
Thousand Dollars ($1,500,000.00) in the aggregate not fully covered (excluding
deductibles) by insurance, which judgment remains undischarged, unvacated,
unbounded or unstayed for a period of thirty (30) consecutive days after its
entry.

                  (b) If, during the Term of this Master Lease facts or
circumstances occur which would make any representation set forth in this
Section 6.5 untrue in any material respect, Tenant shall immediately notify
Landlord in writing of the facts and circumstances with respect to such
representation.

                                   ARTICLE VII
              REPAIR; MAINTENANCE RESERVE; COMPLIANCE WITH LAWS;
      MECHANICS' OR CONSTRUCTION LIENS; MAINTENANCE OF SERVICE CONTRACTS

                  7.01 REPAIR AND MAINTENANCE. Tenant shall maintain each Leased
Property in good order, repair and appearance, and repair each Leased Property,
including without limitation, all interior and exterior, structural and
nonstructural repairs and replacements to the roof, foundations, exterior walls,
building systems, HVAC systems, parking areas, sidewalks, water, sewer and gas
connections, pipes, and mains. Tenant shall pay as Additional Rent the full cost
of maintenance, repairs, and replacements to the Leased Property and all
Fixtures, Equipment and Improvements. Tenant shall maintain all drives,
sidewalks, parking areas, and lawns on or about the Leased Property in a clean
and orderly condition, free of accumulations of dirt, rubbish, snow and ice.
Tenant shall permit Landlord or any representatives or agents of Landlord to
inspect the Leased Property as provided in Section 16.03 and shall implement all
reasonable suggestions of the Landlord as to the maintenance and replacement of
the Leased Property; provided, however, that any suggested repair or maintenance
item that does not adversely impact (in the reasonable judgment of Landlord)
Tenant's operation of the Facility will be deemed reasonable.

                  7.02 MAINTENANCE RESERVE. (a) If at any time during the Term
of any Lease, Landlord, in the exercise of Landlord's reasonable discretion
shall determine that any maintenance or repair required to be performed by
Tenant pursuant to Section 7.01 above has not been completed to the reasonable
satisfaction of Landlord, Landlord shall give Tenant written notice of the
uncompleted or incomplete maintenance or repair item(s) (the "MAINTENANCE
NOTICE") and, except in the case of any maintenance or repair item which
threatens the health, safety or welfare of any inmates or detainees housed in
the Facility, in which event no cure period shall apply, Tenant shall have ten
(10) days (the "MAINTENANCE CURE PERIOD") to


                                       17
<PAGE>
complete such maintenance or repair item; provided, however, that Landlord shall
not be required to give a Maintenance Notice and Tenant shall not have the
benefit of a Maintenance Cure Period more than two (2) times in any twelve (12)
month period.

                  (b) If Tenant does not complete the maintenance or repair
items set forth in the Maintenance Notice within the Maintenance Cure Period,
notwithstanding any other right that Landlord may have with respect thereto,
including all rights of Landlord pursuant to Article IX below, Landlord shall
have the right to establish a maintenance reserve, which shall be established,
funded and maintained in accordance with the following (the "MAINTENANCE
RESERVE"):

                        (i)   If Landlord desires to establish a Maintenance
Reserve in accordance with this Section 7.02, Landlord shall give Tenant written
notice (the "RESERVE NOTICE") of the estimated cost to complete the maintenance
or repair items set forth in any and all applicable Maintenance Notices (the
"COMPLETION COST"), which estimates shall be determined in the exercise of
Landlord's reasonable business judgment. Within ten (10) days after receipt of
the Reserve Notice, Tenant shall deliver to Landlord the initial reserve payment
equal to two hundred percent (200%) of the Completion Cost (the "INITIAL
AMOUNT"). The Maintenance Reserve shall be disbursed and replenished as set
forth in this Section 7.03.

                        (ii)  From and after the establishment of the
Maintenance Reserve pursuant to Section 7.02(b)(i) above, Landlord shall have
the right to deliver to Tenant a Reserve Notice with respect to all subsequent
failures by Tenant to complete any maintenance or repair items and, upon receipt
of such subsequent Reserve Notice, Tenant shall deliver to Landlord the Initial
Amount with respect to such subsequent Reserve Notice, which amounts shall be
added to the Maintenance Reserve.

                        (iii) Commencing on the first day of the calendar
month following the date any Reserve Notice is received by Tenant, Tenant, in
addition to all payments of Rent due hereunder and all previously determined
Monthly Reserve Payments (as defined below), shall pay to Landlord an amount
equal to one-twelfth (1/12) of the Initial Amount payable pursuant to such
Reserve Notice (the "MONTHLY RESERVE PAYMENT"), which payments shall be added to
the Maintenance Reserve as the same are received by Landlord. Landlord shall
have the right, which may be exercised, in the exercise of Landlord's sole
judgment, not more often than once during each twelve (12) month period during
the Term, to increase the Monthly Reserve Payment by an amount not to exceed the
product of 1.04 times the total of all Monthly Reserve Payments payable pursuant
to this Section 7.02(b)(iii) for the preceding twelve month period.

                        (iv)  Annually, Landlord shall analyze the
Maintenance Reserve to determine whether, in Landlord's reasonable judgment, the
Maintenance Reserve is sufficient with respect to the next ensuing year, and, if
determined by Landlord that the Maintenance Reserve should be increased, Tenant
shall deliver to Landlord, upon written demand, the amount set forth in
Landlord's demand notice to supplement the Maintenance Reserve. If as a result
of such annual review, Landlord determines in the exercise of Landlord's
reasonable business judgment, that the Maintenance Reserve may be decreased,
Landlord shall deliver to Tenant within thirty (30) days after completion of
such review the reduction amount.


                                       18
<PAGE>
                        (v)   The Maintenance Reserve shall not be separately
held and no interest shall accrue thereon.

                  (c) Notwithstanding any other provision of this Lease, if
Tenant has not completed any maintenance or repair item required to be completed
by Tenant pursuant to Section 7.01 above, Landlord shall have the right, but not
the obligation, following expiration of any applicable Maintenance Cure Period
or immediately if no Maintenance Cure Period shall apply, to complete such
maintenance and/or repair and to deduct the costs and expenses incurred by
Landlord to complete the same from the Maintenance Reserve. Upon receipt by
Tenant of written demand, Tenant shall deliver to Landlord an amount sufficient
to replenish the Maintenance Reserve.

                  (d) So long as no Event of Default has occurred and is
continuing, at the end of the Lease Term, any amount left in the Maintenance
Reserve, after taking into consideration all Rent and other sums due from Tenant
under this Agreement or any Lease, shall be returned to Tenant within thirty
(30) days after the end of the Lease Term.

                  7.03 COMPLIANCE WITH LAWS. Tenant shall comply with all laws,
ordinances, orders, rules, regulations, and other governmental requirements
relating to the use, condition, or occupancy of each Leased Property, whether
now or hereafter enacted and in force including without limitation, (a)
licensure requirements for operation as a correctional or detention facility or
any other use permitted hereunder, (b) requirements of any board of casualty
insurance underwriters or insurance service office or any other similar body
having jurisdiction over the Leased Property, and (c) all zoning and building
codes and Environmental Laws. At Landlord's request, from time to time, Tenant
shall deliver to Landlord copies of certificates or permits evidencing
compliance with such laws, including, without limitation, copies of the
correctional or detention facility licenses, certificates of occupancy and
building permits. Tenant shall promptly provide Landlord with copies of any
notice from any governmental authority alleging any non-compliance by Tenant or
any Leased Property with any of the foregoing requirements and such evidence as
Landlord may reasonably require with respect to Tenant's remediation thereof.
Tenant shall indemnify, defend, save and hold Landlord harmless of, from and
against any and all loss, liability (including, but not limited to, strict
liability), claim, damage (including, but not limited to, incidental and
consequential damages), cost and expense (including, but not limited to,
attorneys' fees and expenses) resulting from any failure by Tenant to comply
with any laws, ordinances, rules, regulations, and other governmental or
quasi-governmental requirements.

                  7.04 REQUIRED ALTERATIONS. Tenant shall, at Tenant's sole cost
and expense, make any additions, changes, improvements or alterations to each
Leased Property, including structural alterations, which may be required by any
governmental authorities, including those required to continue licensure of the
Improvements as a correctional or detention facility and all alterations and
additions necessary to make the Leased Properties compliant under the Americans
with Disabilities Act and all applicable state and local laws, ordinances and
regulations governing the accessibility of the Leased Properties to persons with
disabilities, whether such changes are required by Tenant's use, changes in the
law, ordinances, or governmental regulations, defects existing as of the date of
this Lease, or any other cause whatsoever. Tenant shall provide prior written
notice to Landlord of any changes to each Leased Property pursuant to this
Section 7.03 which involve changes to the structural integrity of such


                                       19
<PAGE>
Leased Property or materially affect the operational capabilities or rated
capacity of the Leased Property. All such additions, changes, improvements or
alterations shall be deemed to be a Tenant Improvement (as defined below) and
shall comply with all laws requiring such alterations and with the provisions of
Section 8.01.

                  7.05 MECHANICS' OR CONSTRUCTION LIENS. Tenant shall have no
authority to permit or create a lien against Tenant's (except as specifically
permitted under the terms of any Lease) or Landlord's interest in the Leased
Property, and Tenant shall post notices or file such documents as may be
required to protect Landlord's interest in the Leased property against liens.
Tenant shall indemnify, defend, save and hold Landlord harmless of, from and
against any and all mechanics' or construction liens filed against the Leased
Property by reason of work, labor services or materials supplied or claimed to
have been supplied on or to the Leased Property. Tenant shall immediately
remove, bond-off, or otherwise obtain the release of any mechanics' or
construction lien filed against the Leased Property. Tenant shall pay all cost
and expenses in connection therewith, whether incurred by Landlord or Tenant,
including, without limitation, damages, interest, court costs and reasonable
attorneys' fees and expenses.

                  7.06 REPLACEMENTS OF FIXTURES. Tenant shall not remove
Fixtures from any Leased Property except to replace the Fixtures by other
similar items of equal quality and value. Items being replaced by Tenant may be
removed and shall become the property of Tenant and items replacing the same
shall be and remain the property of the Landlord. Tenant shall execute, upon
written request from Landlord, any and all documents necessary to evidence
Landlord's ownership of the Fixtures and replacements therefor. Tenant may
finance replacements for the Fixtures by equipment lease or by a security
agreement and financing statement; provided, however, that for any item of
Fixtures or Personal Property having a cost greater than or equal to Ten
Thousand Dollars ($10,000.00), Tenant may not finance replacements by security
agreement or equipment lease unless (a) Landlord has consented to the terms and
conditions of the equipment lease or security agreement, including, without
limitation, the amount to be financed and the amortization schedule regarding
the principal amount of any such financing, (b) the equipment lessor or lender
has entered into a non-disturbance agreement with the Landlord upon terms and
conditions acceptable to Landlord, including without limitation, the following:
(i) Landlord shall have the right (but not the obligation) to assume such
security agreement or equipment lease upon the occurrence of an Event of Default
by Tenant under any Lease, (ii) the equipment lessor or lender shall notify
Landlord of any default by Tenant under the equipment lease or security
agreement and give Landlord a reasonable opportunity to cure such default, and
(iii) Landlord shall have the right to assign its rights under the equipment
lease, security agreement, or non-disturbance agreement, and (c) Tenant shall,
within thirty (30) days after receipt of an invoice from Landlord, reimburse
Landlord for all costs and expenses incurred in reviewing and approving the
equipment lease, security agreement, and non-disturbance agreement, including
without limitation, attorneys' fees, expenses and costs.

                  7.07 MAINTENANCE OF SERVICE AGREEMENTS. During the Term of
this Agreement and any applicable Lease, Tenant shall keep in full force and
effect and shall perform all material obligations required to be performed by
Tenant or any subcontractor performing the obligations of Tenant under, any and
all contracts, agreements, leases, or commitments or documents applicable to the
Leased Property or the operation of the Facility, including but not limited to,
Service Agreements (as defined below). Tenant shall immediately notify Landlord
in writing if Tenant or any other party to any such contract, agreement, lease,
or commitment or


                                       20
<PAGE>
document applicable to the Leased Property or the operation of the Facility,
including, but not limited to, the Service Agreements, is in material default
thereunder, or if any Service Agreement has been terminated by any party thereto
or by operation of law or otherwise, has lapsed or has expired by its terms.

                                  ARTICLE VIII
                  ALTERATIONS AND SIGNS; TENANT'S PROPERTY;
                   CAPITAL ADDITIONS TO THE LEASED PROPERTY

                  8.01 TENANT'S RIGHT TO CONSTRUCT. During the Term of this
Agreement, so long as no Event of Default shall have occurred and be continuing
as to the Leased Property that is the subject of such improvements, Tenant may
make Capital Additions (as defined herein), or other alterations, additions,
changes and/or improvements to any Leased Property as deemed necessary or useful
by Tenant to operate the Leased Property as a correctional or detention facility
or other approved use (the "PRIMARY INTENDED USE") (individually, a "TENANT
IMPROVEMENT," or collectively, "TENANT IMPROVEMENTS"). "CAPITAL ADDITIONS" shall
mean the construction of one or more new buildings or one or more additional
structures annexed to any portion of any of the Improvements on a particular
Leased Property, which are constructed on any parcel of land or portion of the
Land of a particular Leased Property during the Term of any individual Lease,
including the construction of a new floor, or the repair, replacement,
restoration, remodeling or rebuilding of the Improvements or any portion thereof
on any Leased Property, which are not normal, ordinary or recurring in order to
maintain the Leased Property. Except as otherwise agreed to by Landlord in
writing pursuant to Section 8.09 below, any such Tenant Improvement shall be
made at Tenant's sole expense and shall become the property of Landlord upon
termination of this Lease. Unless made on an emergency basis to prevent injury
to person or property, Tenant will submit plans to Landlord for Landlord's prior
approval, such approval not to be unreasonably withheld or delayed, for any
Tenant Improvement which is not a Capital Addition and which has a cost of more
than $25,000 or a cost which, when aggregated with the costs of all such Tenant
Improvements for any individual Leased Facility in the same Lease Year, would
cause the total costs of all such Tenant Improvements to exceed $50,000. Such
$25,000 and $50,000 amounts shall be increased by three percent (3%) per annum,
cumulatively for each subsequent Lease Year. Additionally, in connection with
any Tenant Improvement, including any Capital Addition, Tenant shall provide
Landlord with copies of any plans and specification therefor, Tenant's budget
relating thereto, any required government permits or approvals, any construction
contracts or agreements relating thereto, and any other information relating to
such Tenant Improvement as Landlord shall reasonably request.

                  8.02 SCOPE OF RIGHT. Subject to Section 8.01 herein and
Section 7.04 concerning required alterations, at Tenant's cost and expense,
Tenant shall have the exclusive right to do the following:

                  (a) seek any governmental approvals, including building
permits, licenses, conditional use permits and any certificates of need that
Tenant requires to construct any Tenant Improvement;


                                       21
<PAGE>
                  (b) erect upon the Leased Property such Tenant Improvements as
Tenant deems desirable including but not limited to new facilities or expansions
to existing facilities;

                  (c)   make additions, alterations, changes and improvements
in any Tenant Improvement so erected; and

                  (d) engage in any other lawful activities that Tenant
determines are necessary or desirable for the development of the Leased Property
in accordance with its Primary Intended Use;

provided, however, Tenant shall not make any Tenant Improvement which would, in
Landlord's reasonable judgment impair the value or Primary Intended Use of any
Leased Property without Landlord's prior written consent and provided further
that Tenant shall not be permitted to create a mortgage, lien or any other
encumbrance on any individual Leased Property without Landlord's prior written
consent.

                  8.03 COOPERATION OF LANDLORD. Landlord shall cooperate with
Tenant and take such actions, including the execution and delivery to Tenant of
any applications or other documents, reasonably requested by Tenant in order to
obtain any governmental approvals sought by Tenant that have either been
approved by Landlord or for which Landlord's approval is not required to
construct any Tenant Improvement within ten (10) business days following the
later of (a) the date Landlord receives Tenant's request together with all
information reasonably requested by Landlord regarding the Tenant Improvements,
or (b) the date of delivery of any such application or document to Landlord
together with all information reasonably requested by Landlord regarding the
Tenant Improvements, so long as the taking of such action, including the
execution of such applications or documents, shall be without cost to Landlord
(or if there is a cost to Landlord, such cost shall be reimbursed by Tenant),
and will not cause Landlord to be in violation of any law, ordinance, rule or
regulation.

                  8.04  COMMENCEMENT OF CONSTRUCTION.  Tenant shall perform
all of the following in connection with the Tenant Improvements:

                  (a)   Tenant shall diligently seek all governmental
approvals relating to the construction of any Tenant Improvement;

                  (b) Once Tenant begins the construction of any Tenant
Improvement, Tenant shall diligently prosecute any such construction to
completion in accordance with applicable insurance requirements, the
requirements of any governmental approval or permit relating thereto and the
laws, rules and regulations of all governmental bodies or agencies having
jurisdiction over the Leased Property;

                  (c) Landlord shall have the right at any time and from time to
time to post and maintain upon the Leased Property such notices as may be
necessary to protect Landlord's interest from mechanics' liens, materialmen's
liens, construction liens, or liens of a similar nature;

                  (d) Tenant shall not suffer or permit any mechanics' or
construction liens or any other claims or demands arising from the work or
construction of any Tenant


                                       22
<PAGE>
Improvement to be enforced against the Leased Property or any part thereof, and
Tenant shall indemnify, defend, save and hold Landlord and the respective Leased
Property harmless of, from and against any and all liability from any such
liens, claims or demands, together with all costs and expenses in connection
therewith, including, but not limited to, attorneys' fees and expenses;

                  (e)   All work shall be performed in a good and workmanlike
manner consistent with standards in the industry; and

                  (f) Subject to Section 8.09 in the case of Capital Additions,
Tenant shall not secure any construction or other financing for the Tenant
Improvements that is secured by a portion of the Leased Property or Tenant's
interest therein without Landlord's prior written consent, and any such
financing (i) shall not exceed the cost of the Tenant Improvements, (ii) shall
be subordinate to any mortgage or encumbrance now existing or hereinafter
created by Landlord with respect to the Leased Property, and (iii) shall be
limited solely to Tenant's interest in the Leased Property that is the subject
of the improvements.

                  8.05 RIGHTS IN TENANT IMPROVEMENTS. Notwithstanding anything
to the contrary in this Lease, all Tenant Improvements constructed pursuant to
section 8.01 (other than a Capital Addition purchased or financed by Landlord),
any and all subsequent additions thereto and alterations and replacements
thereof, shall be the sole and absolute property of Landlord upon completion
thereof; provided, however, that, upon the expiration of this Agreement or the
respective Lease, at the option of Landlord, Tenant shall remove such Tenant
Improvements and restore the Leased Property to its condition immediately prior
to installation of such Tenant Improvements. Upon the expiration or early
termination of any Lease, all such Tenant Improvements shall become the property
of Landlord. Without limiting the generality of the foregoing, Tenant shall be
entitled to all federal and state income tax benefits associated with any Tenant
Improvement (other than a Capital Addition purchased or financed by Landlord)
during the Term of this Agreement.

                  8.06 PERSONAL PROPERTY. Tenant shall install, place, and use
on the Leased Property such fixtures, furniture, equipment, inventory and other
personal property in addition to the Fixtures as may be required to effectively
operate the Leased Property as a correctional or detention facility or other
permitted use or as Tenant may, from time to time, locate on the Leased Property
and deem useful or desirable in the operation of such permitted use. Upon (a)
the expiration of a Lease and upon at least thirty (30) days notice prior to
such expiration or (b) the earlier termination of a Lease due to an Event of
Default or otherwise and upon notice delivered within five (5) business days
after the delivery of notice of such earlier termination by Landlord or Tenant
(as the case may be), Landlord shall have the right to exercise an option (the
"PERSONAL PROPERTY PURCHASE OPTION") to purchase all or part of such personal
property (except for Tenant's proprietary property described on Schedule C) at
an amount (the "PERSONAL PROPERTY PURCHASE PRICE") equal to (y) the appraised
fair market value (as determined by an appraisal performed by a qualified MAI
appraiser selected by Landlord) minus (z) the sum of (i) the estimated cost of
removal and transportation of such personal property from the Leased Property to
the nearest storage facility of Tenant and (ii) any estimated repair and
restoration costs relating to any damage which would have occurred on or to the
Leased Property in connection with the removal of such personal property from
the Leased Property by Tenant. In the event of an early termination of a Lease
due to an Event of Default or otherwise, Landlord reserves the right to offset
the Personal Property Purchase Price from any sums due and owing to


                                       23
<PAGE>
Landlord by Tenant pursuant to the terms of such Lease and this Agreement. It is
also expressly agreed and understood by Landlord and Tenant that,
notwithstanding anything to the contrary provided in a Lease or this Agreement,
Landlord, without the prior consent or approval of Tenant, may assign its rights
and interests in the Personal Property Purchase Option. Landlord, however,
agrees that such option to purchase may be subject to a governmental entity's
superior right to acquire all or a portion of such personal property of Tenant
under the terms of its prison operating agreement with Tenant.

                  8.07  REQUIREMENTS FOR PERSONAL PROPERTY.  Tenant shall
comply with all of the following requirements in connection with the Personal
Property

                  (a) With respect to each Leased Property, Tenant shall notify
Landlord within one hundred twenty (120) days after each Lease Year of any
additions, substitutions, or replacements of an item of Personal Property at
such Leased Property which individually has a cost of more than $10,000.00 per
item or an aggregate cost of more than $50,000 for similar items of Personal
Property purchased in one or more lots and shall furnish Landlord with such
other information as Landlord may reasonably request from time to time.

                  (b) The Personal Property shall be installed in a good and
workmanlike manner, in compliance with all governmental laws, ordinances, rules,
and regulations and all insurance requirements set forth in this Agreement, and
shall be installed free and clear of any mechanics' or construction liens.

                  (c) Tenant shall, at Tenant's sole cost and expense, maintain,
repair, and replace the Personal Property;

                  (d) Tenant shall, at Tenant's sole cost and expense, keep all
Personal Property insured against loss or damage by fire, vandalism and
malicious mischief sprinkler leakage, and other physical loss perils commonly
covered by fire and extended coverage, boiler and machinery, and difference in
conditions insurance in an amount not less than one hundred percent (100%) of
the then full replacement cost thereof. Tenant shall use the proceeds from any
such policy for the repair and replacement of the Personal Property. The
insurance required under this Section 8.07(d) shall meet the requirements of
Section 4.03 above.

                  (e) Tenant shall pay all taxes applicable to the Personal
Property.

                  (f) If the Personal Property is damaged or destroyed by fire
or any other hazard or cause, Tenant shall promptly repair or replace such
Personal Property unless Tenant is entitled to and elects to terminate the Lease
pursuant to Section 10.05.

                  (g) Unless an Event of Default (or any event which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default) has occurred and remains uncured beyond any applicable grace period,
Tenant may remove Tenant's personal property from the Leased Property from time
to time provided that (i) the items removed are not required to operate the
Leased Property as a licensed correctional or detention facility or other
permitted use (unless such items are being replaced by Tenant); and (ii) Tenant
repairs any damage to the Leased Property resulting from the removal of such
personal property.


                                       24
<PAGE>
                  (h) Tenant shall remove any of Tenant's personal property, but
not any Personal Property, upon the termination or expiration of the Lease
(unless and to the extent the same shall be purchased by Landlord pursuant to
Section 8.06) and shall repair any damage to the Leased Property resulting from
the removal of Tenant's personal property. If Tenant fails to remove Tenant's
personal property within thirty (30) days after the termination or expiration of
the Lease, then Tenant shall be deemed to have abandoned Tenant's personal
property, Tenant's personal property shall become the property of Landlord (at
no cost to Landlord), and Landlord may remove, store and dispose of Tenant's
personal property. In such event, Tenant shall have no claim or right against
Landlord for such property or the value thereof regardless of the disposition
thereof by Landlord. Tenant shall pay Landlord, upon demand, all expenses
incurred by Landlord in removing, storing, and disposing of Tenant's personal
property and repairing any damage to the Leased Property caused by such removal.
Tenant's obligations hereunder shall survive the termination or expiration of
the Lease and this Agreement.

                  (i) Tenant shall perform its obligations under any equipment
lease or security agreement for any of the Personal Property.

                  8.08 SIGNS. Tenant may, at its own expense, erect and maintain
identification signs at the Leased Property, provided such signs comply with all
laws, ordinances, rules, permits, approvals and regulations. On the termination
or expiration of the applicable Lease, Tenant, within thirty (30) days after
notice from Landlord, shall remove the signs and repair any damage to the Leased
Property resulting from such removal.

                  8.09  FINANCINGS OF CAPITAL ADDITIONS TO A LEASED PROPERTY.

                  (a) Landlord may, but shall be under no obligation to, provide
or arrange construction, permanent or other financing for a Capital Addition
proposed to be made to any Leased Property by Tenant. Within thirty (30) days
after receipt of such a request from Tenant, Landlord shall notify Tenant as to
whether it will finance the proposed Capital Addition and, if so, the terms and
conditions upon which it would do so, including the terms of any amendment to an
individual Lease or a new lease agreement for such proposed Capital Addition.

                  (b) If Landlord agrees to finance the proposed Capital
Addition of Tenant, Tenant shall provide Landlord with the following:

                        (i)   all customary or other required loan
documentation which may be required;

                        (ii)  any information, certificates, licenses,
permits or documents requested by either Landlord or any lender with whom
Landlord has agreed or may agree to provide financing, which are necessary to
confirm that Tenant will be able to use the Capital Addition upon completion
thereof in accordance with the Primary Intended Use, including all required,
federal, state or local government licenses, permits and approvals;

                        (iii) a certificate from Tenant's architect, setting
forth in reasonable detail the projected (or actual, if available) cost of
the proposed Capital Addition;

                        (iv)  an amendment to this Lease, or a new lease
agreement, duly executed and acknowledged, in form and substance satisfactory to
Landlord, and containing


                                       25
<PAGE>
such provisions as may be necessary or appropriate, including without
limitation, any appropriate changes in the legal description of the Land, the
Rent, any security deposit or other escrow required hereunder or under any
applicable Lease and other changes with respect to the Capital Addition;

                        (v)   a deed conveying title to Landlord to any land
acquired for the purpose of constructing the Capital Addition, free and clear of
any liens or encumbrances except those approved by Landlord and, both prior to
and following completion of the Capital Addition, an as-built survey thereof
satisfactory to Landlord;

                        (vi)  endorsements to any outstanding policy of title
insurance covering the Leased Property or a supplemental policy of title
insurance covering the Leased Property satisfactory in form and substance to
Landlord (A) updating the same without any additional exceptions, except as may
be permitted by Landlord; and (B) increasing the coverage thereof by an amount
equal to the fair market value of the Capital Addition;

                        (vii) if required by Landlord, (A) an owner's policy
of title insurance insuring fee simple title to any land conveyed to Landlord
pursuant to Section 8.09(b)(v), free and clear of all liens and encumbrances
except those approved by Landlord and (B) a lender's policy of title insurance
satisfactory in form and substance to Landlord and any lending institution
advancing a portion of the cost of the Capital Addition;

                        (viii) if required by Landlord, upon completion of the
Capital Addition; an MAI appraisal of the Leased Property indicating that the
value of the Leased Property upon completion of the Capital Addition exceeds the
fair market value of the Leased Property prior thereto by an amount not less
than ninety-five percent (95%) of the cost of such Capital Addition; and

                        (ix)  such other certificates (including, but not
limited to, endorsements, increasing the insurance coverage, if any, at the time
required), documents, opinions of counsel, appraisals, surveys, certified copies
of duly adopted resolutions of the board of directors of Tenant authorizing the
execution and delivery of all loan documents and any amendment to an individual
Lease or new lease agreement and any other instruments as may be reasonably
required by Landlord and any lending institution advancing any portion of the
cost of the Capital Addition.

                  (c) Upon making a request to finance a Capital Addition,
whether or not such financing is actually consummated, Tenant shall pay or agree
to pay, upon demand, all reasonable costs and expenses of Landlord and any
lending institution which has committed to finance such Capital Addition which
have been paid or incurred by them in connection with the financing of the
Capital Addition, including, but not limited to, (i) the fees and expenses of
their respective counsel, (ii) all printing expenses, (iii) the amount of any
filing, registration and recording taxes and fees, (iv) documentary stamp taxes,
if any, (v) title insurance charges, (vi) appraisal fees, if any, (vii) rating
agency fees, if any, (viii) commitment fees, if any, and (ix) costs of obtaining
regulator and governmental approvals for the construction, operation, use or
occupancy of the Capital Addition.

                  (d) (i) if Landlord and Tenant are unable to agree on the
terms of the financing of a Capital Addition by Landlord, Tenant may undertake
the cost of any such


                                       26
<PAGE>
Capital Addition and seek construction, permanent or other financing from other
sources. Landlord shall cooperate with Tenant in obtaining all necessary
approvals for such Capital Additions, at no cost or expense to Landlord.

                        (ii)  In the event Tenant shall construct any Capital
Addition and shall have obtained construction, permanent or other financing in
connection therewith from sources other than Landlord, as set forth in the
foregoing Section 8.09(d)(i), Landlord shall have the option to acquire such
Capital Addition at any time during the Term. The price at which Landlord may
acquire such Capital Addition shall be an amount equal to 105% (or such lower
percentage as may be agreed to by the Tenant) of the then present value of the
aggregate costs related to the acquisition, development, design, construction,
equipment and start-up of such Capital Addition, which in the case of goods or
services provided by the Tenant, will not exceed the costs which would be paid
therefor if purchased from a third party in an arm's-length transaction
("Tenant's Cost"). Landlord's exercise of such option shall require Landlord to
acquire such Capital Addition on such terms and conditions as Landlord and
Tenant shall reasonably agree, which shall be generally consistent with the
terms and conditions of Landlord's initial acquisition of the related Leased
Property from Tenant or other Person. Upon such acquisition, Landlord shall
lease such Capital Addition to Tenant on the terms and conditions set forth
herein, and Landlord and Tenant shall execute a new Lease, or an amendment to
the existing Lease, with respect thereto. In such case, the Base Rent shall be
the fair market rental value of the Capital Addition, as reasonably and mutually
determined by Landlord and Tenant or, if Landlord and Tenant fail to agree, as
determined through an appraisal in accordance with Section 16.23. Regardless of
whether the foregoing option is exercised, all Capital Additions shall become
the property of Landlord upon the expiration or termination of this Lease.

                                   ARTICLE IX
                              DEFAULTS AND REMEDIES

                  9.01 EVENTS OF DEFAULT. The occurrence of any one or more of
the following shall be an event of default ("Event of Default") hereunder and
under any Lease:

                  (a) Landlord does not receive in full any installment of Rent,
Initial Amount or Monthly Reserve Payment or any other monetary obligation
payable by Tenant to Landlord under this Agreement or a Lease within five (5)
calendar days after the same is due;

                  (b) Tenant fails to observe and perform any other covenant,
condition or agreement under this Agreement or a Lease to be performed by Tenant
(except those described in Section 9.01(a) of this Agreement) and such failure
continues for a period of thirty (30) days after written notice thereof is given
to Tenant by Landlord; or if, by reason of the nature of such default, the same
cannot with due diligence be remedied within thirty (30) days, such failure will
not be deemed to continue if Tenant commences such cure within such thirty (30)
day period and thereafter proceeds promptly and with due diligence to remedy the
failure and diligently completes the remedy thereof on a best efforts basis;
provided, however, such cure period will not extend beyond thirty (30) days if
the facts or circumstances giving rise to the default are creating a further
harm to Landlord or the Leased Property and Landlord makes a good faith
determination that Tenant is not undertaking remedial steps that Landlord would
cause to be taken if such Lease were then to terminate;


                                       27
<PAGE>
                  (c) If Tenant: (i) admits in writing its inability to pay its
debts generally as they become due, (ii) files a petition in bankruptcy or a
petition to take advantage of any insolvency act, (iii) makes an assignment for
the benefit of its creditors, (iv) is unable to pay its debts as they mature,
(v) consents to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or (vi) files a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state thereof;

                  (d) If Tenant, on a petition in bankruptcy filed against it,
is adjudicated as bankrupt or a court of competent jurisdiction enters an order
or decree appointing, without the consent of Tenant, a receiver of Tenant of the
whole or substantially all of its property, or approving a petition filed
against it seeking reorganization or arrangement of Tenant under the federal
bankruptcy laws or any other applicable law or statute of the United States of
America or any state thereof' and such judgment, order or decree is not vacated
or set aside or stayed within sixty (60) days from the date of the entry
thereof;

                  (e) If the estate or interest of Tenant in any Leased Property
or any part thereof is levied upon or attached in any proceeding and the same is
not vacated or discharged within the earlier of sixty (60) days after
commencement thereof or thirty (30) days after receipt by Tenant of notice
thereof from Landlord (unless Tenant is contesting such lien or attachment in
accordance with this Agreement);

                  (f) Any representation or warranty made by Tenant (or an
Affiliate of Tenant or Alternative Tenant in cases where a Lease is executed by
such Affiliate or Alternative Tenant) in this Agreement or any Lease or in any
certificate, demand or request made pursuant to any Lease proves to be incorrect
in any material respect and any adverse effect on Landlord of any such
misrepresentation or breach of warranty has not been corrected to Landlord's
satisfaction within thirty (30) days after Tenant becomes aware of, or is
notified by the Landlord of the fact of, such misrepresentation or breach of
warranty;

                  (g) If any Leased Facility houses less than seventy (70)
inmates or detainees for a continuous period of thirty (30) days or more; or

                  (h) The occurrence of a Service Agreement Default as defined
in any applicable Lease that is not cured within any specific cure period set
forth in such Lease.

      Notwithstanding the foregoing, an Event of Default under the foregoing
subsections (a), (c) or (d) shall constitute an Event of Default under all of
the Leases and an Event of Default under the foregoing subsections (b), (e),
(f), (g) and (h) shall constitute an Event of Default only with respect to the
specific Lease and Leased Property to which such Event of Default applies.
Provided, (1) with respect to the Events of Default under the foregoing
subsections (b), (e), (f), (g) and (h), or (2) with respect to any defaults by
Tenant which are not cured within the applicable grace period under any Service
Agreements in effect with respect to 50% or more of the inmate beds at an
individual Leased Property (each a "NONMONETARY DEFAULT" and collectively,
"NONMONETARY DEFAULTS"), if all such Nonmonetary Defaults shall at any time be
applicable to Leased Properties which, in the aggregate, represent a combined
acquisition cost equal to twenty five percent (25%) or more of the acquisition
cost for all of the Leased


                                       28
<PAGE>
Properties, then such Nonmonetary Default shall constitute an Event of Default
under all of the Leases.

                  9.02 REMEDIES. To the extent any Event of Default is
applicable only to a specific Lease or Leases, or a specific Leased Property or
Leased Properties (in accordance with Section 9.01 above), the remedies set
forth herein shall be exercisable solely with respect to such Lease or Leases,
or Leased Property or Leased Properties, and shall not be exercisable with
respect to any other Leases or Leased Property. To the extent any Event of
Default constitutes an Event of Default under all of the Leases (in accordance
with Section 9.01 above), the remedies set forth herein shall be exercisable
with respect to all of the Leases and all of the Leased Properties. Subject to
the foregoing provisions, Landlord in its own name or through a designee or
assignee, including, but not limited to, Landlord's mortgagee (the "Landlord
Designee"), may exercise any one or more of the following remedies upon the
occurrence of an Event of Default:

                  (a) Landlord may terminate the applicable Lease, exclude
Tenant from possession of the subject Leased Property and use reasonable efforts
to lease such Leased Property to others, including any Landlord Designee. If any
Lease is terminated pursuant to the provisions of this Section 9.02(a), Tenant
will remain liable to Landlord for damages in an amount equal to the Rent and
other sums which would have been owing by Tenant under such Lease for the
balance of the Term if the Lease had not been terminated, less the net proceeds,
if any, of any re-letting of the subject Leased Property by Landlord subsequent
to such termination, after deducting all of Landlord's expenses in connection
with such re-letting, including without limitation; the expenses set forth in
Section 9.02(b)(2) below. Landlord will be entitled to collect such damages from
Tenant monthly on the days on which the Rent and other amounts would have been
payable under the subject Lease if such Lease had not been terminated and
Landlord will be entitled to receive such damages from Tenant on each such day.
Alternatively, at the option of Landlord, if such Lease is terminated, and at
any time thereafter, Landlord will be entitled, in lieu of proceeding to collect
damages on a monthly basis as set forth in the preceding sentence, to recover
from Tenant (i) all unpaid Rent then due and payable, and (ii) the worth at the
time of the award (as hereafter defined) of the Rent which would have been due
and payable from the date of termination through the Expiration Date as if the
Lease had not been terminated. The "WORTH AT THE TIME OF AWARD" of the amount
referred to in clause (ii) is computed at "PRESENT VALUE" using New York Prime
Rate (as defined below). For purposes of this Agreement, "NEW YORK PRIME RATE"
shall mean that rate of interest identified as prime or national prime by the
Wall Street Journal, or if not published or found, then the rate of interest
charged by a United States nationally chartered bank with the greatest number of
assets on ninety (90) day unsecured notes to its preferred customers. For the
purpose of determining unpaid Rent under clause (ii), the Rent reserved in the
Lease will be deemed to be the sum of the following: (A) the Base Rent computed
pursuant to Section 2.01 and 2.02; and (B) the Additional Rent computed pursuant
to Section 2.03. Such computation of Additional Rent shall be based on the
Additional Rent paid for the Lease Year preceding the date of termination,
increased by four (4%) percent per year thereafter. Following payments by Tenant
of the foregoing amounts, Landlord shall deliver and pay over to Tenant all
rent, income, and other proceeds of any nature realized from the sale, lease or
other disposition or utilization of the Leased Property, if any, actually
received by Landlord, up to the amounts so paid by Tenant less Landlord's
reasonably incurred costs and expenses of maintaining and re-leasing or selling
the Leased Property.


                                       29
<PAGE>
                  (b) (i) Without demand or notice, Landlord or Landlord's
Designee may re-enter and take possession of the applicable Leased Property or
any part of such Leased Property; and repossess such Leased Property as of the
Landlord's former estate; and expel the Tenant and those claiming through or
under Tenant from such Leased Property; and, remove the effects of both or
either, without being deemed guilty of any manner of trespass and without
prejudice to any remedies for arrears of Rent or preceding breach of covenants
or conditions. If Landlord or Landlord's Designee elects to re-enter the Leased
Property as provided in this Section 9.02(b) or if Landlord or Landlord's
Designee takes possession of such Leased Property pursuant to legal proceedings
or pursuant to any notice provided by law, Landlord or Landlord's Designee, from
time to time, without terminating the subject Lease, may re-let such Leased
Property or any part of such Leased Property, either alone or in conjunction
with other portions of the Improvements of which such Leased Property are a
part, in Landlord's or Landlord's Designee's name but for the account of Tenant,
for such term or terms (which may be greater or less than the period which would
otherwise have constituted the balance of the Term of this Lease) and on such
terms and conditions (which may include concessions of free rent, and the
alteration and repair of such Leased Property) as Landlord or Landlord's
Designee, in its uncontrolled discretion, may determine. Landlord or Landlord's
Designee may collect and receive the rents, including the Rent, for such Leased
Property. Landlord or Landlord's Designee will not be responsible or liable for
any failure to re-let such Leased Property, or any part of such Leased Property,
or for any failure to collect any rent, including the Rent, due upon such
re-letting. No such re-entry or taking possession of such Leased Property by
Landlord or Landlord's Designee will be construed as an election on Landlord's
or Landlord's Designee's part to terminate this Lease unless a written notice of
such intention is given to Tenant. No notice from Landlord or Landlord's
Designee under this Lease or under a forcible entry and detainer statute or
similar law will constitute an election by Landlord to terminate this Lease
unless such notice specifically so states. Landlord and/or Landlord's Designee
reserves the right following any such re-entry or re-letting, or both, to
exercise its right to terminate this Lease by giving Tenant such written notice,
and, in that event such Lease will terminate as specified in such notice.

                        (ii)  If Landlord or Landlord's Designee elects to
take possession of such Leased Property according to this Section 9.02(b)
without terminating such Lease, Tenant will pay Landlord (A) the Rent,
Additional Rent and other sums which would be payable under such Lease if such
repossession had not occurred, less (B) the net proceeds, if any, of any
re-letting of such Leased Property after deducting all of Landlord's or
Landlord's Designee's expenses incurred in connection with such re-letting,
including without limitation, all repossession costs, brokerage commissions,
legal expense, attorneys' fees and expenses, expense of employees, alteration,
remodeling and repair costs, and expenses of preparation for such re-letting.
If, in connection with any re-letting, the new lease term extends beyond the
existing Term or such Leased Property covered by such re-letting includes areas
which are not part of such Leased Property, a fair apportionment of the rent
received from such re-letting and the expenses incurred in connection with such
re-letting will be made in determining the net proceeds received from such
re-letting. In addition, in determining the net proceeds from such re-letting
over the term of the Lease, any rent concessions will be apportioned over the
term of the new lease. Tenant will pay such amounts to Landlord monthly on the
days on which the Rent and all other amounts owing under this Agreement or such
Lease would have been payable if possession had not been retaken, and Landlord
or Landlord's Designee will be entitled to receive the Rent and other amounts
from Tenant on each such day.


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<PAGE>
                  (c) Landlord or Landlord's Designee may re-enter the
applicable Leased Property and have, repossess and enjoy such Leased Property as
if such Lease had not been made, and in such event, Tenant and its successors
and assigns shall remain liable for any contingent or unliquidated obligations
or sums owing at the time of such repossession.

                  (d) Landlord may exercise any remedy with respect to any
collateral given by Tenant or its Affiliates in connection with this Agreement
or any Lease, including, but not limited to, exercise any rights under any
collateral assignment under and pursuant to Section 13.03(d) below.

                  (e) Landlord or Landlord's Designee may take whatever action
at law or in equity as may appear necessary or desirable to collect the Rent and
other amounts payable under the applicable Lease then due and thereafter to
become due, or to enforce performance and observance of any obligations,
agreements or covenants of Tenant under such Lease.

                  (f)   Landlord or Landlord's Designee may exercise any
remedy specifically provided for in any Lease.

                  9.03 RIGHT OF SET-OFF. Landlord may, and is hereby authorized
by Tenant, at any time and from time to time, after advance notice to Tenant, to
set-off and apply any and all sums held by Landlord, including all sums held in
any escrow for Impositions, any indebtedness of Landlord to Tenant, any sums
held in the Maintenance Reserve, and any claims by Tenant against Landlord,
against any obligations of Tenant under this Agreement or any Lease and against
any claims by Landlord against Tenant, whether or not Landlord has exercised any
other remedies hereunder. The rights of Landlord under this Section 9.03 are in
addition to any other rights and remedies Landlord may have against Tenant.

                  9.04 PERFORMANCE OF TENANT'S COVENANTS. Except in cases of
emergency, in which event Landlord may proceed without notice, Landlord may, but
is not obligated to, perform any obligation of Tenant which Tenant has failed to
perform within ten (10) days after Landlord has sent a written notice to Tenant
informing it of its specific failure (provided no such notice shall be required
if such failure is covered under the provisions of Section 9.01). Tenant shall
reimburse Landlord on demand, as Additional Rent, for any expenditures thus
incurred by Landlord and shall pay interest thereon at the New York Prime Rate.

                  9.05 INTEREST ON PAST DUE PAYMENTS. Any payment not made by
Tenant for more than five (5) days after the same is due shall bear interest at
the rate of one percent (1%) per month from the due date thereof through the
date such payment is actually received by Landlord.

                  9.06 LITIGATION; ATTORNEYS' FEES. Within ten (10) days after
Tenant has knowledge of any material litigation or other proceeding that may be
instituted against Tenant, against any Leased Property to secure or recover
possession thereof, or that may affect the title to or the interest of Landlord
in such Leased Property, Tenant shall give written notice thereof to Landlord.
Within ten (10) days after Landlord's presentation of an invoice, Tenant shall
pay all reasonable costs and expenses incurred by Landlord in enforcing or
presenting Landlord's rights under this Agreement and each Lease, whether or not
an Event of Default has actually occurred or has been declared and thereafter
cured, including without limitation, (i) the


                                       31
<PAGE>
fees, expenses, and costs of any litigation, receivership, administrative,
bankruptcy, insolvency or other similar proceeding; (ii) reasonable attorney,
paralegal, consulting and witness fees and disbursements incurred by Landlord
whether or not any suit or proceeding has commenced; and (iii) the expenses,
including without limitation, lodging, meals, and transportation, of Landlord
and its employees, agents, attorneys, and witnesses in preparing for litigation,
administrative, bankruptcy, insolvency or other similar proceedings and
attendance at hearings, depositions, and trials in connection therewith. All
such costs, charges and fees as incurred shall be deemed to be Additional Rent
under this Agreement. For purposes hereof, "MATERIAL LITIGATION" instituted
against Tenant shall be determined in accordance with then applicable GAAP
accounting standards.

                  9.07  REMEDIES CUMULATIVE.  The remedies of Landlord herein
are cumulative to and not in lieu of any other remedies available to Landlord
at law or in equity.  The use of any one remedy shall not be taken to exclude
or waive the right to use any other remedy.

                  9.08 ESCROWS AND APPLICATION OF PAYMENTS. As security for the
performance of its obligations hereunder, Tenant hereby assigns to Landlord all
its right, title and interest in and to all monies escrowed with Landlord under
this Agreement or under any Lease and all deposits with utility companies,
taxing authorities, and insurance companies; provided, however, that Landlord
shall not exercise its rights hereunder until an Event of Default has occurred.
Any payments received by Landlord under any provisions of this Agreement or
under any Lease during the existence, or continuance of an Event of Default
shall be applied to Tenant's obligations in the order that Landlord may
determine.

                  9.09 POWER OF ATTORNEY. Tenant hereby irrevocably and
unconditionally appoints Landlord, or Landlord's authorized officer, agent,
employee or designee, as Tenant's true and lawful attorney-in-fact, to act,
after an Event of Default, for Tenant in Tenant's name, place , and stead, and
for Tenant's and Landlord's use and benefit, to execute, deliver and file all
applications and any and all other necessary documents or things, to effect a
transfer, reinstatement, renewal and/or extension of any and all licenses and
other governmental authorizations issued to Tenant in connection with Tenant's
operation of any Leased Property, and to do any and all other acts incidental to
any of the foregoing. Tenant irrevocably and unconditionally grants to Landlord
as its attorney-in-fact full power and authority to do and perform, after an
Event of Default, every act necessary and proper to be done in the exercise of
any of the foregoing powers as fully as Tenant might or could do if personally
present or acting, with full power of substitution, hereby ratifying and
confirming all that such attorney shall lawfully do or cause to be done by
virtue hereof. This power of attorney is coupled with an interest and is
irrevocable prior to the full performance of the Tenant's obligations under this
Agreement and each Lease.

                                    ARTICLE X
                             DAMAGE AND DESTRUCTION

                  10.01 GENERAL. Tenant shall notify Landlord if any of the
Leased Property is damaged or destroyed by reason of fire or any other casualty
or cause. Tenant shall promptly repair, rebuild, or restore the Leased Property,
at Tenant's expense, so as to make the Leased Property at least equal in value
to the Leased Property existing immediately prior to such


                                       32
<PAGE>
occurrence and as nearly similar to it in character as is practicable and
reasonable. Tenant will begin such repairs or rebuilding and will prosecute the
repairs and rebuilding to completion with diligence, subject, however, to
strikes, lockouts, acts of God, embargoes, governmental restrictions, and other
causes beyond Tenant's reasonable control. So long as no Event of Default has
occurred, Landlord will make available to Tenant the net proceeds of any fire or
other casualty insurance received by Landlord (and not payable to or paid to
Landlord's mortgagee pursuant to any mortgage recorded against the applicable
Leased Property) for any such repair or rebuilding after deduction of any costs
of collection, including attorneys' fees and expenses. Before beginning such
repairs or rebuilding, or letting any contracts in connection with such repairs
or rebuilding that are estimated to exceed in the aggregate $75,000 (which
amount shall be increased by three percent (3%) per annum cumulatively for each
subsequent Lease Year ("SUBSTANTIAL REPAIRS"), Tenant will submit for Landlord's
approval, which approval Landlord will not unreasonably withhold or delay,
complete and detailed plans and specifications for such Substantial Repairs.
Payment on account of Substantial Repairs will be made, as work satisfactorily
progresses, against properly certified vouchers of a competent architect in
charge of the work, who is licensed in the jurisdiction in which the Leased
Property is located, and approved by Landlord. Prior to commencing Substantial
Repairs, Tenant shall deliver to Landlord for Landlord's approval a schedule
setting forth the estimated monthly draws for such work. Landlord will
contribute to payments on account of Substantial Repairs out of the insurance
proceeds an amount equal to the proportion that the total net amount received by
Landlord from insurers bears to the total estimated cost of the rebuilding or
repairing, multiplied by the payment by Tenant on account of such work. Landlord
may, however, withhold ten percent (10%) from each payment on account of
Substantial Repairs until (a) the work of repairing or rebuilding is completed
and proof has been furnished to Landlord that no lien or liability has attached
or will attach to the Leased Property or to Landlord in connection with such
repairing or rebuilding, including, but not limited to, any mechanic' or
construction lien, (b) Tenant has obtained a certificate of use and occupancy
(or its functional equivalent) for the portion of the Leased Property repaired
or rebuilt, and (c) if Tenant has an agreement with any governmental authority
for the detention of inmates at such Leased Property which requires such
governmental authority to approve such repairs or rebuilding, such approval
shall have been obtained. Upon the completion of rebuilding or repairing and the
furnishing of such proof, the balance of the net proceeds of such insurance
payable to Tenant on account of such repairing or rebuilding will be paid to
Tenant. Tenant will obtain and deliver to Landlord a temporary or final
certificate of occupancy before the Leased Property is reoccupied for any
purpose. Tenant shall complete all such repairs or rebuilding free and clear of
mechanic's, construction or other liens, and in accordance with the building
codes and all applicable laws, ordinances, rules, regulations, or orders of any
state, municipal, or other public authority affecting or with jurisdiction over
the Leased Property and such repairs or rebuilding, and also in accordance with
all requirements of the insurance rating organization, or similar body,
affecting the Leased Property. So long as no Event of Default has occurred, any
remaining proceeds of insurance after such restoration will be Tenant's
property.

                  10.02 LANDLORD'S INSPECTION. During the progress of
Substantial Repairs, Landlord and its architects and engineers, from time to
time, may inspect the Leased Property and will be furnished, if required by
them, with copies of all plans, shop drawings, and specifications relating to
such repairs or rebuilding. Tenant will keep all plans, shop drawings, and
specifications available, and Landlord and its architects and engineers may
examine them at all reasonable times, at the Leased Property or such other
location as Landlord and Tenant shall


                                       33
<PAGE>
agree. If, during such repairs or rebuilding, Landlord and its architects and
engineers determine that the repairs or rebuilding are not being done in
accordance with the approved plans and specifications, Landlord will give prompt
notice in writing to Tenant, specifying in detail the particular deficiency;
omission, or other respect in which Landlord claims such repairs or rebuilding
do not accord with the approved plans and specifications. Upon the receipt of
any such notice, Tenant will cause corrections to be made to any deficiencies,
omissions, or such other respect. Tenant's obligations to supply builder's risk
insurance, according to Article IV, will be applicable to any repairs or
rebuilding under this Article X.

                  10.03 LANDLORD'S COSTS. Tenant shall, within thirty (30) days
after receipt of an invoice from Landlord, pay the reasonable costs, expenses,
and fees of any architect or engineer employed by Landlord to review any plans
and specifications and to supervise and approve any construction, or for any
services rendered by such architect or engineer to Landlord as contemplated by
any of the provisions of this Agreement, or for any services performed by
Landlord's attorneys in connection therewith; provided, however, that Landlord
will consult with Tenant and notify Tenant of the estimated amount of such
expenses.

                  10.04 RENT ABATEMENT. In the event that the provisions of
Section 10.01 above shall become applicable, the Rent, real estate taxes and
other Impositions shall be abated or reduced proportionately during any period
in which, by reason of such damage or destruction, there is substantial
interference with the operation of the business of Tenant in the Leased
Property, having regard to the extent to which Tenant may be required to
discontinue its business in the Leased Property, and such abatement or reduction
shall continue for the period commencing with such destruction or damage and
ending with the substantial completion (defined below) by Tenant of such work or
repair and/or reconstruction. In the event that only a portion of any Leased
Property is rendered untenantable or incapable of such use, the Base Rent and
all real estate taxes and other Impositions payable hereunder shall be reduced
on a pro rata basis in the same proportion as the number of inmate; or patient
beds in the Leased Property after the damage or destruction bears to the number
of inmate or patient beds in the Leased Property immediately prior thereto. For
purposes of this Section 10.04, "SUBSTANTIAL COMPLETION" shall occur upon the
earlier of (i) nine (9) months from the date of the first disbursement of
insurance proceeds, or (ii) the issuance of a certificate of occupancy for the
Substantial Repairs to the Leased Property. Notwithstanding any other provision
hereof, such rental abatement shall be limited to the amount of any rental or
business interruption insurance proceeds actually received by Landlord.

                  10.05 SUBSTANTIAL DAMAGE DURING LEASE TERM. Provided Tenant
has fully complied with Section 4.01 hereof (`including actually maintaining in
effect rental value insurance or business interruption insurance provided for in
clause (c) thereof), if at any time during the Term of the particular Lease, the
Leased Property is so damaged by fire or otherwise that more than fifty percent
(50%) of the inmate beds at the Leased Property are rendered unusable, Tenant
may, within sixty (60) days after such damage, give notice of its election to
terminate the Lease subject to the particular Leased Property and, subject to
the further provisions of this Section 10.05, such Lease will cease on the tenth
(10th ) day after the delivery of such notice. If the Lease is so terminated,
Tenant will have no obligation to repair, rebuild or replace the Leased
Property, but will have the obligation to pay to Landlord upon demand the amount
of any deductible or uninsured loss arising in connection therewith and the
entire


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<PAGE>
insurance proceeds will belong to Landlord. If the Lease is not so terminated,
Tenant shall rebuild the Leased Property in accordance with Section 10.01.

                  10.06 DAMAGE NEAR END OF TERM. Notwithstanding any provisions
of Section 10.01 to the contrary, if damage to or destruction of the Leased
Property occurs during the last twenty-four (24) months of the Term, and if such
damage or destruction cannot be fully repaired and restored within six (6)
months immediately following the date of loss, either party shall have the right
to terminate this Lease by giving notice to the other within thirty (30) days
after the date of damage or destruction, in which event Landlord shall be
entitled to retain the insurance proceeds and Tenant shall pay to Landlord on
demand the amount of any deductible or uninsured loss arising in connection
therewith; provided, however, that any such notice given by Landlord shall be
void and of no force and effect if Tenant exercises an available option to
extend the Term pursuant to provisions of the Lease for such Leased Property
within thirty (30) days following receipt of such termination notice.

                                   ARTICLE XI
                                  CONDEMNATION

                  11.01 DEFINITION. For purposes of this Agreement; the term
"CONDEMNATION" shall mean . the permanent or temporary taking of the Leased
Property, or any portion thereof, by right of eminent domain, or by conveyance
made in response to a threat of the exercise of such right, or by conveyance in
settlement of eminent domain litigation.

                  11.02 APPORTIONMENT OF COMPENSATION. In the event of
Condemnation of the Leased Property, or any part thereof, Landlord shall be
entitled to all compensation payable by the condemning authority under
applicable law (hereinafter referred to as an "AWARD") for (a) the real
property, or part thereof taken, (b) for all improvements thereto which are
taken (except Tenant Improvements which are not Capital Additions purchased or
financed by Landlord and then, only the portion of any award therefor allocable
to the remaining Term of the Lease), (c) for all severance damages to the
remainder property caused by the Condemnation, including severance damages to
the Fixtures and the Personal Property, and (d) attorneys fees and expenses,
expert fees and costs. Tenant shall be entitled to all compensation payable by
the condemning authority under applicable law, if any, for (w) personal property
of Tenant; trade fixtures of Tenant and Tenant Improvements taken (subject to
the limitations set forth above), (x) the value of Tenant's leasehold interest,
(y) business damages suffered by Tenant, and (z) attorneys fees and expenses,
expert fees and costs, so long as such award to Tenant does not decrease the
award otherwise payable under such applicable laws to Landlord. The foregoing
notwithstanding, in the event of a temporary taking by Condemnation for a period
of six (6) months or less, compensation payable by the condemning authority
shall be payable solely to the Tenant, subject to Tenant having paid to Landlord
all rent payable under the Lease for the period of the temporary taking. In the
event the condemning authority is not required under applicable law to pay
compensation for an element of damage or loss suffered by a party hereto, that
party, to that extent, shall be without a remedy, unless otherwise expressly and
specifically provided herein, it being the intent of the parries that, in the
absence of an express and specific agreement to the contrary, no party hereto
shall be obligated to compensate the other for any damage or loss suffered as a
consequence of Condemnation that is not compensable by the condemning authority
under applicable law. No party shall have the right to negotiate a settlement of
any claim for compensation made or possessed by another party, nor may any party
enter into an


                                       35
<PAGE>
agreement with a condemning authority which waives or limits, expressly or
implicitly, the entitlement of another party to full compensation in accordance
with the provisions hereof.

                  11.03 EFFECT ON LEASE OBLIGATIONS.

                  (a) Total Taking. In the event of Condemnation of the entire
Leased Property, the Lease shall remain in effect, with the condemning authority
taking the Leased Property subject to the Lease, unless the condemning authority
shall have condemned the leasehold interest of Tenant. In the event of
condemnation of the entire Leased Property and the leasehold interest of Tenant,
the parties shall be relieved from continuing performance under the Lease to the
extent performance is rendered impractical or impossible, or is deemed excused
as a matter of law, and Tenant shall be relieved from payment of Rent or other
charges as of the date of change of ownership and termination of such leasehold
estate due to Condemnation. The parties shall perform those obligations accruing
under the Lease prior to the change in ownership, including payment of Rent and
other charges which become payable prior to the change in ownership. To the
extent Rent has been paid in advance, Landlord shall refund to the Tenant a
prorated portion thereof based on the number of days of Tenant's occupancy under
the Lease for the rental period in question, compared to the number of days in
the rental period for which Rent was paid in advance.

                  (b) Partial Taking. In the event the Condemnation is of a
portion of the Leased Property, or of an easement or similar interest in the
Leased Property, the obligations of the parties under the Lease shall be
unaffected unless the effect of the Condemnation is to render the Leased
Property unsuitable for its Primary Intended Use. The Leased Property shall be
deemed "UNSUITABLE FOR ITS PRIMARY INTENDED USE" if the state or condition of
the Leased Property has been so affected by the Condemnation that, in the good
faith judgment of Tenant, reasonably exercised, the Leased Property cannot be
operated on a commercially practicable basis as a correctional or detention
facility. For purposes of this Agreement, if such taking is for less than
twenty-five percent (25%) of the total land area of the Leased Property, such
taking shall be deemed to not make the Leased Property unsuitable for its
Primary Intended Use. .If Condemnation renders the Leased Property unsuitable
for its Primary Intended Use, Tenant may terminate the Lease as of the date of
the taking, or as of the date of loss of occupancy of the condemned portion (if
the date for vacating the Leased Property is different from the date of taking),
or within thirty (30) days following either the date of taking or the date of
loss of occupancy of the condemned portion. Termination of the Lease hereunder
shall not affect the apportionment of compensation as otherwise agreed
hereinabove.

                  (c) Temporary Taking. In the event all or any part of the
Leased Property is temporarily condemned for a period of six (6) months or less,
the parties shall be relieved from their obligations under the Lease only to the
extent performance is rendered impracticable or impossible and Tenant shall
remain obligated to pay rent to Landlord for the period of such temporary
taking. In the event of such a temporary taking, the entire amount of
compensation payable for the temporary taking, whether paid by the condemning
authority as damages, rent or otherwise, shall be payable to Tenant, subject to
Tenant having paid to Landlord all Rent payable under the Lease for the period
of such temporary taking. .

                  11.04 CONDEMNATION CAUSED BY DEFAULT OF TENANT. In the event
Condemnation is the result of Tenant having defaulted in performance of Tenant's
obligations


                                       36
<PAGE>
under the Lease including Tenant's obligation to maintain the Leased Property,
Tenant's failure to pay any Imposition or having defaulted under Tenant's
operating agreement with the applicable governmental authority, whether or not
the same constitutes a default hereunder, Tenant shall be liable for any damage
or loss suffered by Landlord which is not compensated by the condemning
authority.

                  11.05 RESTORATION OF PREMISES. If there is a partial taking of
any Leased Property and the subject Lease remains in full force and effect
pursuant to Section 11.02, and so long as no Event of Default has occurred,
Landlord shall furnish to Tenant the amount of the Award actually received by
Landlord (and not payable to and paid to Landlord's mortgagee pursuant to any
mortgage recorded against the applicable Leased Property), as provided herein,
in order for Tenant to accomplish all necessary restoration. If Tenant receives
an Award under Section 11.02, Tenant shall repair or restore any Tenant
Improvements up to but not exceeding the amount of the Award payable to Tenant
therefor. Before beginning such restoration, or letting any contracts in
connection with such restoration, Tenant will submit for Landlord's approval,
which approval Landlord will not unreasonably withhold or delay, complete and
detailed plans and specifications for such restoration. Promptly after receiving
Landlord's approval of the plans and specifications, Tenant will begin such
restoration and will prosecute the repairs and rebuilding to completion with
diligence, subject, however, to strikes, lockouts, acts of God, embargoes,
governmental restrictions, terroristic threats or actions, and other causes
beyond Tenant's reasonable control. Landlord will make available to Tenant the
net proceeds of any Award paid to Landlord for such restoration, after deduction
of any costs of collection, including attorneys' fees and expenses. Payment will
be made against properly certified vouchers of a competent architect in charge
of the work and approved by Landlord. Prior to commencing the restoration,
Tenant shall deliver to Landlord for Landlord's approval a schedule setting
forth the estimated monthly draws for such work. Landlord, however, may withhold
ten percent (10%) from each payment until the work of restoration is completed
and proof has been furnished to Landlord that no lien, including, but not
limited to any mechanics' or construction lien, or liability has attached or
will attach to the Leased Property or to Landlord in connection with such
restoration. Upon the completion of restoration and the furnishing of such
proof, the balance of the Award will be paid to Tenant. Tenant will obtain and
deliver to Landlord a temporary or final certificate of occupancy before the
Leased Property is reoccupied for any purpose. Tenant shall complete such
restoration free and clear of mechanic's, construction or other liens, and in
accordance with the building codes and all applicable laws, ordinances, rules,
regulations, permits, approvals or orders of any state, municipal, or other
public authority affecting the restoration, and also in accordance with all
requirements of the insurance rating organization, or similar body applicable to
the Leased Property. Any remaining proceeds of the Award otherwise payable to
Tenant (and not payable to and paid to Landlord's mortgagee pursuant to any
mortgage recorded against the applicable Leased Property) after such restoration
is completed will be Tenant's property.

                  11.06 LANDLORD'S INSPECTION. During the progress of such
restoration, Landlord and its architects and engineers may, from time to time,
inspect the Leased Property and will be furnished, if required by them, with
copies of all plans, shop drawings, and specifications relating to such
restoration. Tenant will keep all plans, shop drawings, and specifications
available, and Landlord and its architects and engineers may examine them at all
reasonable times. If, during such restoration, Landlord and its architects and
engineers determine that the restoration is not being done in accordance with
the approved plans and specifications,


                                       37
<PAGE>
Landlord will give prompt notice in writing to Tenant, specifying in detail the
particular deficiency, omission, or other respect in which Landlord claims such
restoration does not accord with the approved plans and specifications. Upon the
receipt of any such notice, Tenant will cause corrections to be made to any
deficiencies, omissions, or such other respect. Tenant's obligations to supply
insurance, according to Article IV, will be applicable to any restoration under
this Article XI.

                                   ARTICLE XII
                         TENANT'S RIGHT OF FIRST REFUSAL

                  12.01 RIGHTS OF FIRST REFUSAL. Subject to the terms and
conditions set forth in this Section 12.01 and provided that no Event of Default
under Sections 9.01(a), (c), (d), (e), (g) or (h) with respect to the subject
Leased Property has occurred (and with respect solely to an Event of Default
under Section 9.01(a), is continuing at the time of such exercise or at the
expiration of this Agreement or the individual Lease), Tenant shall have a right
of first refusal (the "PURCHASE REFUSAL RIGHT") to purchase any Leased Property
(including any Leased Property owned by an Affiliate of Landlord). So long as no
Event of Default under Sections 9.01(a), (c), (d), (e), (g) or (h) with respect
to the subject Leased Property has occurred (and with respect solely to an Event
of Default under Section 9.01(a), is continuing at the time of such exercise or
at the expiration of this Agreement or the individual Lease), if, during the
Term or any Renewal Term and for a period of thirty (30) days following
termination of a Lease (other than as a result of the exercise by Landlord of
its rights or remedies under this Agreement), Landlord or any Affiliate of
Landlord receives a bona fide third party offer to transfer any Leased Property,
then, prior to accepting such third party offer, Landlord shall send written
notice and a copy thereof to Tenant and, if the Lease applicable to such Leased
Property so provides, to any other party so designated by Tenant ("LANDLORD'S
NOTICE"). Tenant shall have thirty (30) days after receipt of Landlord's Notice
to exercise Tenant's Purchase Refusal Right, by giving Landlord written notice
thereof. Failure of Tenant to exercise the Purchase Refusal Right within such
time period set forth above shall be deemed to extinguish the Purchase Refusal
Right and thereafter, Landlord or its Affiliates may transfer such Leased
Property; provided, however, that the transfer of the Leased Property is at a
price equal to or greater than the price contained in the Landlord's Notice, and
otherwise consistent in all material respects with the terms and conditions set
forth in Landlord's Notice. Tenant's Purchase Refusal Right shall revive in the
event that Landlord fails to transfer the Leased Property within one year
following the date of Landlord's Notice. In the event that Tenant elects to
exercise the Purchase Refusal Right and to acquire the Leased Property thereby,
(a) Tenant shall acquire such Leased Property on the same terms and conditions
and subject to all time periods and other limitations as provided in Landlord's
Notice (provided, however, Tenant shall in all events have not less than one
hundred twenty (120) days to close its acquisition of the Leased Property
following its written notice exercising its Purchase Refusal Right), and (b)
concurrently with such acquisition, the Lease of such Leased Property shall
terminate (but Tenant shall remain liable to pay any accrued Rent due and
payable on the closing date with respect to such Leased Property and all
indemnifications and other provisions that survive the expiration of the
individual Lease or of this Agreement shall continue in effect), and this
Agreement shall be appropriately amended to reflect the termination of such
Lease.


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<PAGE>
      Notwithstanding the foregoing provisions, the Purchase Refusal Right shall
not be applicable to any transfer of a Leased Property to any Affiliate of
Landlord, so long as such Affiliate acquires such Leased Property subject to the
Purchase Refusal Right.

      A "TRANSFER" is any direct or indirect sale, conveyance or other
disposition, including any transfer of a controlling ownership interest in any
owning partnership, limited liability company or corporation, and including any
lease with a term in excess of five (5) years.

                  12.02 RESTRICTION ON EXERCISE OF PURCHASE REFUSAL RIGHT.
Notwithstanding any other provision of this Article XII, Landlord shall not be
required to transfer any Leased Property, or any portion thereof, which is a
real estate asset as defined in Section 856(e)(5)(B), or functionally equivalent
successor provision, of the Internal Revenue Code (the "CODE"), to Tenant if
Landlord's independent counsel advises Landlord that such transfer may not
qualify as a sale of property described in Section 857(b)(6)(C), or functionally
equivalent successor provision of the Code. If Landlord determines not to
transfer such property pursuant to the above sentence, Tenant's right, if any,
to acquire any or all of such property shall continue and be exercisable, upon
and subject to all applicable terms and conditions set forth in this Lease, at
such time as the transaction, upon the advice of Landlord's independent tax
counsel would qualify as a sale of property described in Section 857(b)(6)(C) of
the Code, or functionally equivalent successor provision, and until such time
Tenant shall lease the Leased Property for the lesser of the rent otherwise
called for in the Lease or fair market rental. If the transfer of the Leased
Property is delayed pursuant to this section, Landlord will use its reasonable
best efforts to transfer such Leased Property to Tenant as soon as practicable
in the next calendar year.

                  12.03 PROHIBITION ON CERTAIN TRANSFERS. So long as no Event of
Default has occurred and is continuing and so long as Tenant is in full
compliance with the terms of this Agreement and all Leases, Landlord will not
transfer the ownership of, or mortgage its interest in, any Leased Property to a
Person whose primary business is the operation of similar correctional or
detention facilities, without the prior written consent of Tenant, which consent
may be withheld in Tenant's sole discretion.

                                  ARTICLE XIII
                      ASSIGNMENT AND SUBLETTING; ATTORNMENT

                  13.01 PROHIBITION AGAINST SUBLETTING AND ASSIGNMENT. Subject
to Sections 13.02(e), 13.03, 13.04 and 1.06, and to the specific terms of any
applicable Lease, Tenant shall not, without the prior written consent of
Landlord (which consent Landlord may grant or withhold in its sole and absolute
discretion), sublease, assign, mortgage, pledge, hypothecate, encumber or
otherwise transfer this Agreement or any Lease or any interest herein or
therein, or all or any part of the Leased Property, or suffer or permit any
Lease or the leasehold estate created thereby or any other rights arising
hereunder or under any Lease to be assigned, transferred, mortgaged, pledged,
hypothecated or encumbered, in whole or in part, whether voluntarily,
involuntarily or by operation of law. For purposes of this Section 13.01, any
Change of Control of Tenant shall be deemed an assignment of this Agreement or
any Lease hereunder. No assignment shall in any way impair the continuing
primary liability of Tenant hereunder.


                                       39
<PAGE>
                  13.02 CHANGES OF CONTROL.  A "CHANGE OF CONTROL" requiring
the consent of Landlord shall mean the following:

                  (a) the issuance of additional stock or ownership interest in
Tenant thereby changing, or the transfer, assignment and/or sale (whether by
operation of law or otherwise) of, a Controlling Interest in Tenant to a Person
(including, but not limited to, the purchase or redemption of the stock or
ownership interest in Tenant by Tenant which results in a change in the
Controlling Interest in Tenant), other than a distribution by any stockholder,
member or interest holder of Tenant to such member's, holder's or stockholder's
owners or shareholders, or the distribution of stock or ownership interest in
Tenant pursuant to a registered public offering. A "CONTROLLING INTEREST" shall
mean, as applied to any Person, the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise;

                  (b)   the sale, conveyance or other transfer of all or
substantially all of the assets of Tenant (whether by operation of law or
otherwise);

                  (c)   any transaction pursuant to which Tenant is merged or
consolidated with another entity and Tenant is not the surviving entity; or

                  (d) John J. Clancy ("Clancy") ceases to be the President and
Chief Executive Officer of Tenant or, while any Service Agreement between Tenant
and Education is in full force and effect, the President and Chief Executive
Officer of Education, and Tenant or Education, as the case may be, within ninety
(90) days after Clancy ceases to be such President and Chief Executive Officer,
does not replace Clancy with another President and Chief Executive Officer
reasonably acceptable to Landlord.

                  (e) The provisions of Section 13.01 and this Section 13.02
notwithstanding, a Controlling Interest in Tenant may, without Landlord's
consent, be transferred to or acquired by (including by means of a transaction
described in Sections 13.02(b) or Section 13.02(c) above) a corporation or other
entity organized under the laws of the United States or of any State thereof,
provided that such corporation or other entity meets the following
qualifications:

                        (i)   Such corporation or other entity is primarily
engaged in the business of the operation of correctional or detention
facilities or health care facilities;

                        (ii)  The stock or other ownership interests of such
corporation or other entity are publicly traded on a national securities
exchange or the NASDAQ National Market;

                        (iii) Such corporation or other entity has common
stockholders equity or comparable equity of at least $75,000,000, or such lesser
amount as Landlord may approve in its sole and absolute discretion;

                        (iv)  Such corporation or other entity meets the
eligible operator or lease party requirements of any mortgage, credit agreement
or mortgagee of or applicable to the Leased Properties and any requisite
approval of any such mortgagee has been obtained; and


                                       40
<PAGE>
                        (v)   such corporation or other entity assumes all of
Tenant's obligations under this Agreement and under any Lease hereunder.

No such transfer or acquisition shall relieve Tenant of its obligations under
this Agreement or under any Lease.

                  13.03 SERVICE AGREEMENTS.

                  (a) Permitted Agreements. Tenant, without Landlord's prior
approval, shall be permitted to enter into certain government operating
agreements, support agreements and/or service agreements (or amendments thereto)
in connection with the housing or detention of inmates or detainees at all or
any portions of any Leased Property, including, but not limited to those service
agreements, government operating agreements and support agreements specifically
described in the respective Lease and in effect as of the Commencement Date of
such Lease (collectively, the "SERVICE AGREEMENTS"); and to enter into
agreements with various licensees in connection with Tenant's operation of
correctional or detention facilities as is customarily associated with or
incidental to the operation of such Leased Property, which agreements may be in
the nature of a sublease agreement (the "SUBLEASE AGREEMENTS"), provided such
Service Agreements or Sublease Agreements or any amendments thereto are
consistent with the requirements of this Section 13.03.

                  (b) Terms of Agreements. Each Service Agreement or Sublease
Agreement concerning any of the Leased Properties shall be subject and
subordinate to the provisions of this Agreement and the applicable Lease. No
permitted Service Agreement or Sublease Agreement made as permitted by Section
13.03(a) shall affect or reduce any of the obligations of Tenant hereunder, and
all such obligations shall continue in full force and effect as if no agreement
had been made. No Service Agreement or Sublease Agreement shall impose any
additional obligations on Landlord under the applicable Lease.

                  (c) Copies. Tenant, within ten (10) days after the execution
and delivery of any Service Agreement or Sublease Agreement or any amendments
thereto permitted by Section 13.03(a), shall deliver a duplicate original
thereof to Landlord.

                  (d) Assignment of Rights in Service Agreements and Sublease
Agreements. As security for performance of its obligations under this Agreement
and each Lease, and subject to any specified rights of third parties
specifically set forth in the respective Lease, Tenant hereby grants, conveys
and assigns to and for the benefit of Landlord and Landlord's Designee and each
of their respective successors and assigns, including, but not limited to, any
person or entity to whom Landlord or Landlord's Designee re-lets the Leased
Property, all right, title and interest of Tenant in and to all Service
Agreements and Sublease Agreements now in existence or hereinafter entered into
for any or all of the applicable Leased Properties, including, but not limited
to, all Service Agreements defined in each Lease and applicable to each Leased
Property covered thereby, and all extensions, modifications and renewals thereof
and all rents, issues and profits therefrom, to the extent the same are
assignable by Tenant thereunder and under applicable law and to the extent
Landlord, Landlord's Designee or any such successor or assignee meets the
requirements of E&H or any governmental bodies or agencies party to or having
consent rights under such Service Agreements or under applicable law. Prior to
execution of any Lease for any Leased Property, Tenant shall obtain the consent


                                       41
<PAGE>
and agreement of each non-governmental party to any and all Service Agreements
governing the use and operation of the Facility located on such Leased Property
in effect as of the commencement of such Lease to the collateral assignment of
such Service Agreements to Landlord or Landlord's Designee pursuant to this
Agreement and shall obtain any and all consents of each governmental party with
consent rights thereto, either under such Governmental Agreements or under
applicable law, of the transactions contemplated by this Agreement and the
applicable Lease. Landlord hereby grants to Tenant a license to collect and
enjoy all payments, fees, rents and/or other sums of money payable under any
such Service Agreements and Sublease Agreements concerning any of such Leased
Properties; provided, however, that Landlord or Landlord's Designee shall have
the absolute right at any time after the occurrence and continuance of an Event
of Default upon notice to Tenant and any vendors or licensees to revoke such
license and to collect such fees, charges, rents and sums of money and to retain
the same. Tenant shall not (i) after the occurrence and continuance of an Event
of Default, consent to, cause or allow any material modification or alteration
of any of the terms, conditions or covenants of any of the agreements or the
termination thereof, without the prior written approval of Landlord, nor (ii)
accept any rents or other prepaid sums (other than customary security deposits)
more than thirty (30) days in advance of the accrual thereof, nor (iii) permit
anything to be done, the doing of which, nor omit or refrain from doing
anything, the omission of which, will or could be a breach of or default in the
terms of any of the agreements or otherwise fail to timely perform all of its
obligations thereunder.

                  (e) Licenses, Etc. For purposes of this Section 13.03, the
Sublease Agreements shall mean and include any licenses, concession
arrangements, or other arrangements relating to the possession and/or use of all
or any part of any Leased Property but specifically excluding any Service
Agreement or other agreement for the housing or detention of inmates or
detainees.

                  13.04 PERMITTED SUBLEASES. Landlord acknowledges that from
time to time Tenant intends to respond to requests for proposal ("RFP'S") from
governmental entities seeking Service Agreements or Sublease Agreements for the
housing or detention of inmates or detainees at the Leased Property. Landlord
agrees to cooperate with Tenant in promptly reviewing any RFP which requires
that a sublease or a right to assume a sublease be granted to the governmental
entity in connection with the proposed award of any Service Agreement or
Sublease Agreement and will not unreasonably withhold or delay consent thereto
provided the terms of such Service Agreement or Sublease Agreement, including
any amendments thereto, are in accordance with the requirements of Section
13.03(b), (c) and (d) and Section 13.07. If the terms of such sublease or rights
to assume a sublease do not comply with all of the provisions of Section
13.03(b) and Section 13.07 but are nonetheless acceptable to Landlord, in the
exercise of Landlord's sole discretion, Landlord agrees to execute and deliver,
at Tenant's request, a non-disturbance and attornment agreement in favor of such
governmental entity, in form reasonably satisfactory to Landlord. In either
event, Landlord's decision to approve a sublease shall be made in writing and
any such sublease shall thereafter constitute a "PERMITTED SUBLEASE" hereunder.
The provisions of this Section 13.04 shall also apply to a lease which is
already in existence as of the date an individual Lease is entered into between
Landlord and Tenant (and any such pre-existing lease shall also be referred to
as, and deemed to constitute, a Permitted Sublease hereunder), as well as to any
amendments to any Permitted Sublease which may be entered into in the future.
Tenant agrees that a Service Agreement or Sublease Agreement or any amendment to
a Service Agreement or Sublease Agreement shall be deemed a sublease for


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<PAGE>
purposes of this Section 13.04 (and Landlord's written consent thereto shall be
required) if such Service Agreement or Sublease Agreement contains provisions
(whether or not set forth in a separate sublease agreement) granting the
governmental entity a right to use or occupy the Leased Property or to designate
a successor operator to Tenant in the event of termination of Tenant's rights
under such Service Agreement or Sublease Agreement. Tenant agrees to deliver to
Landlord copies of all Service Agreements or Sublease Agreements in effect with
respect to any Leased Property, together with any amendments thereof and any
notices of termination or default received from the relevant contracting
governmental entities, regardless of whether any such Service Agreement or
Sublease Agreement is deemed a sublease hereunder.

                  13.05 AFFECT OF ASSIGNMENT. No assignment or sublease shall in
any way impair the continuing primary liability of Tenant hereunder, and no
consent to any assignment or sublease in a particular instance shall be deemed
to be a waiver of the prohibition set forth in this Article XIII. Any assignment
shall be solely of Tenant's entire interest in the subject Lease. Any
assignment, sublease or other transfer of all or any portion of Tenant's
interest herein or in any Lease in contravention of this Article XIII shall be
voidable at Landlord's option.

                  13.06 REIT LIMITATIONS. Anything contained in this Agreement
to the contrary notwithstanding, Tenant shall not (a) sublet or assign any
Leased Property or any Lease on any basis such that the rental or other amounts
to be paid by the sublessee or assignee thereunder would be based, in whole or
in part, on the income or profits derived by any person from the Leased Property
or by the business activities of the sublessee or assignee; (b) sublet or assign
any Leased Property or any Lease to any person, directly or indirectly, in which
Landlord owns (by applying constructive ownership rules set forth in Section
856(d)(5) of the Code) a ten percent (10%) or greater interest as defined by
Section 856(d)(2)(B) of the Code; or (c) sublet or assign any Leased Property or
any Lease in any other manner or otherwise derive any income which could cause
any portion of the amounts received by Landlord pursuant to any Lease or any
sublease to fail to qualify as "rents from real property" within the meaning of
Section 856(d) of the Code, or which could cause any other income received by
Landlord to fail to qualify as income described in Section 856(c) (2) of the
Code. The requirements of this Section 13.05 shall likewise apply to any further
subleasing by any subtenant.

                  13.07 ATTORNMENT. Unless otherwise agreed by Landlord under
Section 13.04, Tenant shall insert in each new Sublease entered into after the
date hereof provisions to the effect that (a) such sublease is subject and
subordinate to all of the terms and provisions of the applicable Lease
(including this Agreement) and to the rights of Landlord hereunder, (b) in the
event such Lease shall terminate before the expiration of such sublease, the
sublessee thereunder will, at Landlords' option, attorn to Landlord and waive
any right the sublessee may have to terminate the sublease, or to surrender
possession thereunder, as a result of the termination of such Lease (except that
such waiver of a right of termination shall not be required in connection with a
Service Agreement or Sublease Agreement that is deemed a sublease for purposes
of Section 13.04, (c) a concurrent copy of any notice of default required or
permitted to be given under the Sublease will be given to Landlord, (d) any
amendment to such sublease shall be subject to Landlord's prior consent in
accordance with the provisions of Section 13.03 and Section 13.04, as
applicable, and (d) in the event the sublessee receives a written notice from
Landlord or Landlord's assignees, if any, stating that Tenant is in default
under such Lease, the sublessee shall thereafter be obligated to pay all rentals
accruing under such sublease directly to


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<PAGE>
the party giving such notice, or as such party may direct. All rentals received
from the sublessee by Landlord or Landlord's assignees, if any, as the case may
be, shall be credited against the amounts owing by Tenant under such Lease.

                                   ARTICLE XIV
                                   ARBITRATION

                  14.01 CONTROVERSIES. Except with respect to the payment of
Rent hereunder, which shall be subject to the provisions of Section 9.02, in the
case a controversy arises between the parties as to any of the requirements of
this Agreement or of any individual Lease or the performance thereunder which
the parties are unable to resolve, the parties agree to waive the remedy of
litigation (except for extraordinary relief in an emergency situation) and agree
that such controversy or controversies shall be determined by arbitration as
hereafter provided in this Article.

                  14.02 APPOINTMENT OF ARBITRATORS. The party or parties
requesting arbitration shall serve upon the other a demand therefor, in writing,
specifying in detail the controversy and matter(s) to be submitted to
arbitration. The selection of arbitrators shall be conducted pursuant to the
rules for resolution of commercial disputes promulgated by the American
Arbitration Association. The party or parties giving notice shall request a
listing of available arbitrators from the American Arbitration Association, and
each party shall respond in the selection process within fifteen (15) days after
each receipt of such listings until a panel of three (3) arbitrators has been
designated. If either party fails to respond within fifteen (15) days, it is
agreed that the American Arbitration Association may make such selections as are
necessary to complete the panel of three (3) arbitrators.

                  14.03 ARBITRATION PROCEDURE. Within fifteen (15) days after
the selection of the arbitration panel, the arbitrators shall give written
notice to each party as to the time and the place of each meeting, which shall
be held in West Palm Beach, Florida, at which the parties may appear and be
heard, which shall be no later than sixty (60) days after certification of the
arbitration panel. The parties waive the applicability of rules of evidence or
rules of procedure in the proceedings. The applicable rules shall be those in
effect at the time for the resolution of commercial disputes promulgated by the
American Arbitration Association. Notwithstanding the foregoing, the substantive
law governing the arbitration shall be the laws of the State of Florida. The
arbitrators shall take such testimony and make such examination and
investigations as the arbitrators reasonably deem necessary. The decision of the
arbitrators shall be in writing signed by a majority of the panel which decision
shall be final and binding upon the parties to the controversy; provided,
however, in rendering their decisions and making awards, the arbitrators shall
not add to, subtract from or otherwise modify the provisions of this Agreement.

                  14.04 EXPENSES. The expenses of the arbitration shall be
assessed by the arbitrators and specified in the written decision. In the
absence of a determination or assessment of expenses of the arbitration
procedure in the award, all of the expenses of such arbitration shall be divided
equally between Landlord and Tenant. Except to the extent that such decision is
in favor of Landlord and the applicable remedy provided in Article IX of this
Agreement permits Landlord to recover its attorneys' fees and expenses from
Tenant on account of a breach of this Agreement or any Lease by Tenant, in which
event Tenant shall be responsible for and pay all


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<PAGE>
fees, costs and expenses of both its and Landlord's counsel, each party in
interest shall be responsible for and pay the fees, costs and expenses of its
own counsel, unless the arbitration award provides for an assessment of
reasonable attorneys' fees and costs.

                  14.05 ENFORCEMENT OF THE ARBITRATION AWARD. There shall be no
appeal from the decision of the arbitrators, and upon the rendering of an award,
any party thereto may file the arbitrators' decision in either the United States
District Court for the Southern District of Florida, the United States District
Court for the District of New Jersey or any other court of competent
jurisdiction for enforcement as provided by applicable law.

                                   ARTICLE XV
                         QUIET ENJOYMENT; SUBORDINATION,
                      ATTORNMENT AND ESTOPPEL CERTIFICATES

                  15.01 QUIET ENJOYMENT. So long as Tenant performs all of its
obligations under this Agreement and each Lease, Tenant's possession of the
Leased Property will not be disturbed by or through Landlord.

                  15.02 LANDLORD MORTGAGES: SUBORDINATION. Subject to Sections
12.03 and 15.03, without the consent of Tenant, Landlord may, from time to time,
directly or indirectly, create or otherwise cause to exist any lien,
encumbrances or title retention agreement on the Leased Properties, or any
portion thereof or any interest therein, whether to secure any borrowing or
other means of financing or refinancing. So long as Landlord obtains a
non-disturbance agreement in accordance with Sections 12.03 and 15.03 and
substantially in the form attached to the applicable Lease, this Agreement and
each Lease and Tenant's rights under this Agreement and each Lease shall be
subordinate to any ground lease or underlying lease, first mortgage, first deed
of trust, or other first lien against any Leased Property, together with any
renewal, consolidation, extension, modification or replacement thereof, which
now or at any subsequent time affects any Leased Property or any interest of
Landlord in any Leased Property, except to the extent that any such instrument
expressly provides that this Agreement and each Lease is superior. This
provision will be self-operative, and no further instrument or subordination
will be required in order to effect it. However, Tenant shall execute,
acknowledge and deliver to Landlord, at any time and from time to time upon
demand by Landlord, such documents as may be requested by Landlord or any
mortgagee or any holder of any mortgage or other instrument described in this
Section, to confirm or effect any such subordination. If Tenant fails or refuses
to execute, acknowledge, and deliver any such document within twenty (20) days
after written demand, and Landlord is not in breach of this Agreement, Landlord
may execute, acknowledge and deliver any such document on behalf of Tenant as
Tenant's attorney-in-fact: Tenant hereby constitutes and irrevocably appoints
Landlord, its successors and assigns, as Tenant's attorney-in-fact to execute,
acknowledge, and deliver on behalf of Tenant any documents described in this
Section. This power of attorney is coupled with an interest and is irrevocable.

                  15.03 ATTORNMENT: NON-DISTURBANCE. If any holder of any
mortgage, indenture, deed of trust, or other similar instrument described in
Section 15.02 succeeds to Landlord's interest in any Leased Property, Tenant
will pay to such holder all Rent subsequently payable under the subject Lease.
Tenant, upon request of any Person succeeding to the interest of Landlord,
including any Landlord's Designee, shall automatically become the tenant of, and


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<PAGE>
attorn to, such successor in interest without changing such Lease. A successor
in interest who is not an Affiliate of Landlord will not be bound by (a) any
payment of Rent for more than one (1) month in advance, (b) any amendment or
modification of such Lease made without its written consent, provided such party
shall first have afforded Tenant with written notice of its interest, including
an address to which the required request for written consent may be sent, (c)
any claim against Landlord arising prior to the date on which the successor
succeeded to Landlord's interest, or (d) any claim or offset of Rent against the
Landlord. Upon request by Landlord, Landlord's Designee or such successor in
interest, Tenant will execute, acknowledge and deliver a subordination
non-disturbance and attornment agreement substantially in the form attached to
the respective Lease. If Tenant fails or refuses to execute, acknowledge, and
deliver any such document within twenty (20) days after written demand, and
Landlord is not in breach of this Agreement, Landlord may execute, acknowledge
and deliver any such document on behalf of Tenant as Tenant's attorney-in-fact:
Tenant hereby constitutes and irrevocably appoints Landlord, Landlord's Designee
and each of their respective successors and assigns, as Tenant's
attorney-in-fact to execute, acknowledge, and deliver on behalf of Tenant any
documents described in this Section. This power of attorney is coupled with an
interest and is irrevocable. Landlord shall use reasonable efforts to obtain a
non-disturbance agreement from any such party referred to above which provides
that in the event such party succeeds to Landlord's interest under the Lease and
provided that no Event of Default by Tenant exists, such party will not disturb
Tenant's possession, use or occupancy of the Leased Property in accordance with
the provisions of this Agreement and will otherwise honor the Lease unchanged
except as expressly set forth in any subordination agreement execute by Tenant.

                  15.04 ESTOPPEL CERTIFICATE.

                  (a) At the request of Tenant or Landlord, the other party
shall execute, acknowledge and deliver an estoppel certificate, in recordable
form and substantially in the form attached to and incorporated in the
respective Lease, in favor of the requesting party and, if applicable, such
requesting party's lender, mortgagee or purchaser, as the case may be,
pertaining to matters reasonably and customarily requested in such certificates,
including, but not limited to, the following:

                        (i)   that the subject Lease is unmodified and in
full force and effect, or if there have been modifications that the same is in
full force and effect as modified and stating the modifications;

                        (ii)  the date to which Rent and other charges have
been paid;

                        (iii) that the requesting party is not in default nor
is there any fact or condition which, with notice or lapse of time, or both,
would constitute a default, if that be the case, or specifying any existing
default;

                        (iv)  if applicable, that the Tenant has accepted and
occupies such Leased Property;

                        (v)   if applicable, that Tenant has no defenses,
set-off's, deductions, credits, or counterclaims against Landlord, if that be
the case, or specifying such that exist;


                                       46
<PAGE>
                        (vi)  if applicable, that the Landlord has no
outstanding construction or repair obligations; and

                        (vii) such other information as may reasonably be
requested by the requesting party or any lender, mortgagee or purchaser.

                  (b)   Any purchaser, lender or mortgagee may rely on this
estoppel certificate.

                  (c) If Tenant fails to deliver the estoppel certificates to
Landlord within ten (10) days after the request of the Landlord, then Tenant
shall be deemed to have certified that the facts set forth in the certificate
are true and correct. Further, if Tenant fails or refuses to execute,
acknowledge, and deliver any such document within twenty (20) days after written
demand, and Landlord is not in breach of this Agreement, Landlord may execute,
acknowledge and deliver any such document on behalf of Tenant as Tenant's
attorney-in-fact: Tenant hereby constitutes and irrevocably appoints Landlord,
Landlord's Designee and each of their respective successors and assigns, as
Tenant's attorney-in-fact to execute, acknowledge, and deliver on behalf of
Tenant any documents described in this Section. This power of attorney is
coupled with an interest and is irrevocable.

                  (d) If Landlord fails to deliver the estoppel certificates to
Tenant within ten (10) days after the request of the Tenant, then Landlord shall
be deemed to have certified that the facts set forth in the certificate are true
and correct. Further, if Landlord fails or refuses to execute, acknowledge, and
deliver any such document within twenty (20) days after written demand, and
Tenant is not in breach of this Agreement or any Lease, Tenant may execute,
acknowledge and deliver any such document on behalf of Landlord as Landlord's
attorney-in-fact, Landlord hereby constitutes and irrevocably appoints Tenant as
Landlord's attorney-in-fact solely for the limited and exclusive purpose to
execute, acknowledge, and deliver on behalf of Landlord the estoppel certificate
described in this Section 15.03(d). This power of attorney is coupled with an
interest and is irrevocable.

                                   ARTICLE XVI
                                  MISCELLANEOUS

                  16.01 NOTICES. Landlord and Tenant hereby agree that all
notices, demands, requests, and consents (hereinafter "Notices") required to be
given pursuant to the terms of this Lease shall be in writing and shall be
addressed as follows:

      If to Tenant:     Community Education Centers, Inc.
                        75 Livingston Avenue
                        Roseland, New Jersey 07068
                        Attention:  John Clancy, President & CEO

      With a copy to:   Richard M. Slotkin, Esquire
                        Sills Cummis Radin Tischman Epstein & Gross P.A.
                        One Riverfront Plaza
                        Newark, New Jersey 07102


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<PAGE>
      If to Landlord:   CPT Operating Partnership, L.P.
                        Gardens Plaza, Suite 750
                        3300 PGA Boulevard
                        Palm Beach Gardens, Florida 33410-4243
                        Attention: Mr. Charles R. Jones

      With a copy to:   Goren, Cherof, Doody and Ezrol, P.A.
                        3009 East Commercial Boulevard, Suite 200
                        Ft. Lauderdale, Florida  33308
                        Attention:  Donald J. Doody, Esquire

and shall be served by (i) personal delivery, (ii) certified mail, return
receipt requested, postage prepaid, or (iii) nationally recognized overnight
courier. All notices shall be deemed to be given upon the earlier of actual
receipt or three (3) days after mailing, or one (1) business day after deposit
with the overnight courier. Any notices meeting the requirements of this Section
shall be effective, regardless of whether or not actually received. Landlord or
Tenant may change its notice address at any time by giving the other party
notice of such charge.

                  16.02 ADVERTISEMENT OF LEASED PROPERTY. In the event the
parties hereto have not executed a renewal lease of any Leased Property within
one (1) year prior to the expiration of the Term, then Landlord or its agent
shall have the right to enter such Leased Property at all reasonable times and
in accordance with Section 16.03 for the purpose of exhibiting such Leased
Property to others.

                  16.03 LANDLORD'S ACCESS. Landlord shall have the right to
enter upon the Leased Property, upon reasonable prior notice to Tenant and at
reasonable times so as not to interrupt Tenant's operation of the Leased
Property, for purposes of inspecting the same and assuring Tenant's compliance
with this Agreement; provided, any such entry by Landlord shall be subject to
all reasonable rules, guidelines and procedures prescribed by Tenant, and
delivered to Landlord in writing not less than thirty (30) days prior to their
effective date, in connection therewith. So long as no Event of Default has
occurred, all such inspections shall be at Landlord's sole cost and expense. So
long as no Event of Default has occurred, if, pursuant to this Section 16.03,
Landlord's inspections are completed through an agent or contractor of Landlord,
Landlord shall require such agent or contractor to obtain and maintain general
liability insurance in an amount not less than $1,000,000 per occurrence, naming
Landlord and Tenant as additional insureds at all times while such inspections
are conducted. Landlord shall deliver evidence of such insurance to Tenant prior
to commencing such inspections. Landlord shall not be allowed entry to the
Leased Property unless accompanied by such of Tenant's personnel as Tenant shall
require.

                  16.04 ENTIRE AGREEMENT. This Agreement and the individual
Leases contain the entire agreement between Landlord and Tenant with respect to
the subject matter hereof and thereof. No representations, warranties, and
agreements have been made by Landlord except as set forth in this Agreement and
the Leases.

                  16.05 SEVERABILITY. If any term or provision of this Agreement
or any Lease is held or deemed by Landlord to be invalid or unenforceable, such
holding shall not affect the remainder of this Agreement or any Lease and the
same shall remain in full force and effect,


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<PAGE>
unless such holding substantially deprives Tenant of the use of the Leased
Property or Landlord of the Rents therefor, in which event the Lease for such
Leased Property shall forthwith terminate as if by expiration of the Term.

                  16.06 CAPTIONS AND HEADINGS. The captions and headings are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Agreement or the intent of any provision
hereof.

                  16.07 GOVERNING LAW. This Agreement and each of the Leases, to
the extent permitted under the laws of the jurisdiction in which the Leased
Property is located, shall be construed under the laws of the State of Florida.

                  16.08 MEMORANDUM OF LEASE. Landlord and Tenant agree that a
memorandum of this Agreement or any Lease in the form attached to the respective
Lease may be recorded by either party, with such modifications as may be
approved by Landlord and Tenant with respect to each Leased Property.

                  16.09 WAIVER. No waiver by either party of any condition or
covenant herein contained, or of any breach of any such condition or covenant,
shall be held or taken to be a waiver of any subsequent breach of such covenant
or condition, or to permit or excuse its continuance or any future breach
thereof or of any condition or covenant, nor shall the acceptance of Rent by
Landlord at any time when Tenant is in default in the performance or observance
of any condition or covenant herein be construed as a waiver of such default, or
of Landlord's right to terminate this Agreement or any Lease or exercise any
other remedy granted herein on account of such existing default

                  16.10 BINDING EFFECT.  This Agreement and each Lease will
be binding upon and inure to the benefit of the heirs, successors, personal
representatives, and permitted assigns of Landlord and Tenant.

                  16.11 AUTHORITY. The persons executing this Agreement or any
Lease on behalf of Tenant warrant that (a) Tenant has the power and authority to
enter into this Agreement or such Lease; (b) Tenant is qualified to do business
in the state in which the Leased Property is located; and (c) such persons are
authorized to execute this Agreement and each Lease on behalf of Tenant. Tenant
shall, at the request of Landlord, provide evidence satisfactory to Landlord
confirming these representation.

                  16.12 TRANSFER OF PERMITS, ETC. Upon the expiration or earlier
termination of the Term of any Lease (whether pursuant to the provisions of this
Agreement or of such Lease), Tenant shall, at the option of Landlord, transfer
to and relinquish to Landlord or Landlord's Designee and cooperate with Landlord
or Landlord's Designee in connection with the processing by Landlord or
Landlord's Designee of all licenses, operating permits, and other governmental
authorization and all contracts, including without limitation, the correctional
or detention facility license, all Service Agreements and any other contracts
with governmental or quasi-governmental entities which may be necessary or
appropriate for the operation by Landlord or Landlord's Designee of the subject
Leased Property for the purposes of operating a correctional or detention
facility; provided that the costs and expenses of any such transfer or the
processing of any such application shall be paid by Landlord or Landlord's
Designee. Any such permits, licenses, certificates and contracts which are held
in Landlord's name now or at the


                                       49
<PAGE>
termination of such Lease shall remain the property of Landlord or Landlord's
Designee. To the extent permitted by law, Tenant hereby irrevocably appoints
Landlord, its successors and assigns and any nominee or nominees specifically
designated by Landlord or any successor or assign as Tenant's attorney-in-fact
to execute, acknowledge, deliver and file all documents appropriate to such
transfer or processing of any such application on behalf of Tenant. This power
of attorney is coupled with an interest and is irrevocable.

                  16.13 MODIFICATION.  This Agreement and any Lease may only
be modified by a writing signed by both Landlord and Tenant.

                  16.14 INCORPORATION BY REFERENCE. All schedules and exhibits
referred to in this Agreement are incorporated into this Agreement, and all
schedules and exhibits referred to in any Lease (as well as the provisions of
this Agreement, except to the extent specifically excluded from or inconsistent
with the terms of such Lease) are incorporated into such Lease.

                  16.15 NO MERGER. The surrender of this Agreement or of any
Lease by Tenant or the cancellation of this Agreement or of any Lease by
agreement of Tenant and Landlord or the termination of this Agreement or of any
Lease on account of Tenant's default will not work a merger, and will, at
Landlord's option, except as otherwise expressly provided, terminate any
subleases or operate as an assignment to Landlord of any subleases. Landlord's
option under this paragraph will be exercised by notice to Tenant and all known
subtenants of any applicable Leased Property.

                  16.16 LACHES. No delay or omission by either party hereto to
exercise any right or power accruing upon any noncompliance or default by the
other party with respect to any of the terms hereof shall impair any such right
or power or be construed to be a waiver thereof.

                  16.17 WAIVER OF JURY TRIAL. To the extent that there is any
claim by one party against the other that is not to be settled by arbitration as
provided in Article XIV hereof, Landlord and Tenant waive trial by jury in any
action, proceeding or counterclaim brought by either of them against the other
on all matters arising out of this Agreement or the use and occupancy of the
Leased Property (except claims for personal injury or property damage).

                  16.18 PERMITTED CONTESTS. Tenant, on its own or on Landlord's
behalf (or in Landlord's name), but at Tenant's expense, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Imposition or
any legal requirement or insurance requirement or any lien, attachment, levy,
encumbrance, charge or claim provided that, (a) in the case of an unpaid
Imposition, lien, attachment, levy, encumbrance, charge or claim, the
commencement and continuation of such proceedings shall suspend the collection
thereof from Landlord and from the Leased Property, (b) neither the Leased
Property nor any Rent therefrom nor any part thereof or interest therein would
be in any immediate danger of being sold, forfeited, attached or lost, (c) in
the case of a legal requirement, Landlord would not be in any immediate danger
of civil or criminal liability for failure to comply therewith pending the
outcome of such proceedings, (d) in the event that any such contest shall
involve a sum of money or potential loss in excess of Twenty-five Thousand
Dollars ($25,000.00), Tenant shall deliver to Landlord and its counsel an


                                       50
<PAGE>
opinion of Tenant's counsel to the effect set forth in clauses (a), (b) and (c),
to the extent applicable, (e) in the case of a legal requirement and/or an
Imposition, lien, encumbrance, or charge, Tenant shall give such reasonable
security as may be demanded by Landlord to insure ultimate payment of the same
and to prevent any sale or forfeiture of the affected Leased Property or the
Rent by reason of such nonpayment or noncompliance; provided, however, the
provisions of this Section shall not be construed to permit Tenant to contest
the payment, of Rent (except as to contests concerning the method of computation
or the basis of levy of any Imposition) or any other sums payable by Tenant to
Landlord hereunder. (f) in the case of an insurance requirement, the coverage
required by Article IV shall be maintained, and (g) if such contest be finally
resolved against Tenant, Tenant, as Additional Rent due hereunder, shall
promptly pay the amount required to be paid, together with all interest and
penalties accrued thereon, or comply with the applicable legal requirement or
insurance requirement. Landlord, at Tenant's expense, shall execute and deliver
to Tenant such authorizations and other documents as may be reasonably required
in any such contest, and, if reasonably requested by Tenant or if Landlord so
desires, Landlord shall join as a party therein. Tenant shall indemnify, defend,
save and hold Landlord harmless of, from and against any and all liability, cost
or expense of any kind, including, but not limited to, attorneys' fees and
expenses, that may be imposed upon Landlord in connection with any such contest
and any loss resulting therefrom.

                  16.19 CONSTRUCTION OF LEASE. This Agreement and each of the
Leases for Leased Properties have been reviewed by Landlord and Tenant and their
respective professional advisors. Landlord, Tenant, and their advisors believe
that this Agreement and such Leases are the product of all their efforts, that
they express their agreement, and agree that they shall not be interpreted in
favor of either Landlord or Tenant or against either Landlord or Tenant merely
because of any party's efforts in preparing such documents.

                  16.20 COUNTERPARTS. This Agreement and each Lease may be
executed in duplicate counterparts, each of which shall be deemed an original
hereof or thereof and all of which, when taken together, shall be deemed one and
the same instrument.

                  16.21 RELATIONSHIP OF LANDLORD AND TENANT.  The
relationship of Landlord and Tenant is the relationship of lessor and
lessee.  Landlord and Tenant are not partners, joint venturers, or associates.

                  16.22 LANDLORD'S STATUS AS A REIT. Tenant acknowledges that
Landlord intends to elect to be taxed as a real estate investment trust ("REIT")
under the Code. Tenant shall not do anything that would adversely affect
Landlord's status as a REIT. Tenant hereby agrees to and shall execute and
deliver to Landlord upon request, modifications of this Agreement that do not
materially adversely affect Tenant's rights and liabilities if such
modifications are required to retain or clarify Landlord's status as a REIT.

                  16.23 APPRAISAL. If it becomes necessary to determine the fair
market rental of a Capital Addition in connection with the exercise by the
Landlord of an option to purchase with respect thereto or the entire Leased
Property due to the restrictions on transfer contained in Section 12.02, the
Landlord and Tenant shall attempt to agree upon a single appraiser to make such
determination within thirty (30) days after a demand for an appraisal has been
made by either the Landlord or Tenant in accordance with this Section 16.23. If
the Landlord and Tenant are unable to agree upon a single appraiser within
thirty (30) days


                                       51
<PAGE>
thereafter, then the party giving the notice of demand for appraisal shall give
notice to the other of a person selected to act as appraiser on its behalf.
Within ten (10) days after such notice, the Landlord (or Tenant, as the case may
be) shall by notice to the Tenant (or the Landlord, as the case may be) appoint
a second person as appraiser on its behalf. The appraisers thus appointed, each
of whom must be a member of the American Institute of Real Estate Appraisers (or
any successor organization thereto) and experienced in appraising correction and
detention facilities (or reasonably similar facilities), shall, within
forty-five (45) days after the date of the notice appointing the first
appraiser, proceed to appraise the relevant Capital Addition or the Leased
Property, as the case may be, to determine the fair market rental thereof as of
the relevant date (giving effect to the impact, if any, of inflation from the
date of their decision to the relevant date); provided, however, that if only
one appraiser has been so appointed, or if two appraisers have been so appointed
but only one such appraiser has made such determination within the later to
occur of ten (10) business days following the delivery of such appraisal to the
other party or fifty (50) days after the making of Tenant's or Landlord's
request, then the determination of such appraiser shall be final and binding
upon the parties. If two appraisers have been appointed and have made their
determinations within the respective requisite periods set forth above and if
the difference between the amounts so determined does not exceed ten percent
(10%) of the lesser of such amounts, then the fair market rental shall be an
amount equal to fifty percent (50%) of the sum of the amounts so determined. If
the difference between the amounts so determined exceeds ten percent (10%) of
the lesser of such amounts, then such two appraisers shall have twenty (20) days
to appoint a third appraiser. If no such appraiser has been appointed within
such twenty (20) days or within ninety (90) days of the original request for a
determination of fair market value or fair market rental, whichever is earlier,
either Landlord or Tenant may apply to any court having jurisdiction to have
such appointment made by such court. Any appraiser appointed by the original
appraisers or by such court shall be instructed to determine the fair market
rental within forty-five (45) days after appointment of such appraiser. The
determination of the appraiser which differs most in terms of dollar amount from
the determinations of the other two appraisers shall be excluded, and the
average of the sum of the remaining two determinations shall be final and
binding upon Landlord and Tenant as the fair market rental of the Capital
Addition or the Leased Property, as the case may be. This provision for
determining by appraisal shall be specifically enforceable to the extent such
remedy is available under applicable law, and any determination hereunder shall
be final and binding upon the parties and judgment may be entered upon such
determination in any court having jurisdiction of the matter. The Landlord and
Tenant shall each pay the fees and expenses of the appraiser appointed by it and
each shall pay one-half (1/2) of the fees and expenses of the third appraiser
and one-half (1/2) of all other costs and expenses incurred in connection with
each appraisal.

                  16.24 LIABILITY OF GENERAL PARTNER OF LANDLORD. Tenant
acknowledges that Landlord has disclosed that the general partner of Landlord
(the "GENERAL PARTNER") is a Maryland real estate investment trust formed
pursuant to a Declaration of Trust, as amended, a copy of which is duly filed
with the Department of Assessments and Taxation of the State of Maryland, which
provides that no trustee, officer, shareholder, employee or agent of the General
Partner shall be held personally liable under any written instrument creating an
obligation of, or claim against, the General Partner and that all persons
dealing with the General Partner, in any way, shall look only to the assets of
the General Partner for the payment of any sum or the performance of any
obligation. Tenant agrees that any liability of the General Partner or any
trustee, officer, shareholder, employee or agent acting on behalf of the General
Partner arising


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<PAGE>
out of this Agreement or the performance by Landlord of its obligations
hereunder is limited to the assets of the General Partner in accordance with the
above Declaration of Trust.

                  16.25 WARRANTIES. Notwithstanding the assignment to Landlord
of the construction and manufacturers' warranties with respect to the Leased
Property or any Capital Addition in connection with the acquisition thereof from
Tenant, Landlord shall cooperate with Tenant in Tenant's enforcement, at
Tenant's sole cost and expense, of any express or implied warranties or
guaranties of workmanship or materials given by contractors, subcontractors,
architects, draftsmen, materialmen or manufacturers that guarantee or warrant
against defective design, workmanship or materials in connection with the
construction of, or any alteration or improvement to, the Leased Property.
Landlord will execute such documents as Tenant may reasonably require in order
to evidence the authority of Tenant to enforce such guaranties and warranties in
Landlord's name or on Landlord's behalf:

      IN WITNESS WHEREOF, the parties hereto have executed this Lease or caused
the same to be executed by their respective duly authorized officers as of the
date first set forth above.

WITNESSES:                          TENANT:

                                    COMMUNITY EDUCATION CENTERS, INC.


                                    By: _____________________________________
                                          John J. Clancy
                                          President & Chief Executive Officer


                                    LANDLORD:

                                    CPT OPERATING PARTNERSHIP, L.P.

                                    By:  Correctional Properties Trust, its
                                            general partner

                                          By:_______________________________
                                                Charles R. Jones, President


                                       53
<PAGE>
                                   SCHEDULE A

                                 THE FACILITIES

<TABLE>
<CAPTION>
      Facility Name                             Location (City, State)
      -------------                             ----------------------

<S>                                             <C>
      Delaney Hall                              Newark (Essex County), New Jersey
</TABLE>
<PAGE>
                                   SCHEDULE B

                                PERSONAL PROPERTY

<TABLE>
<CAPTION>
      Facility Name, Location (City, State)                 Personal Property
      -------------------------------------                 -----------------

<S>                                                         <C>
      Delaney Hall, Newark, New Jersey                      None
</TABLE>
<PAGE>
                                   SCHEDULE C

                          TENANT'S PROPRIETARY PROPERTY

<TABLE>
<CAPTION>
      Facility Name, Location (City, State)           Personal Property
      -------------------------------------           -----------------
<S>                                                   <C>
      Delaney Hall, Newark, New Jersey                Not applicable
</TABLE>
<PAGE>
                                   SCHEDULE D

                              PERMITTED EXCEPTIONS

With respect to Delaney Hall:

      Subsurface conditions and/or encroachments not disclosed by an instrument
of record.

      2. Rights as contained in Deed Book 2970, Page 114.

      3. Terms and Conditions of Contract for Sale for Private Development by
and between The Housing Authority of the City of Newark and T.W.Z. Urban Renewal
and Development Company, Inc. in Deed Book 5061, Page 828 and Deed Book 5063,
Page 299.

      4. Declaration of Environmental Restrictions as contained in Deed Book
5371, Page 91.