Document:

EXHIBIT 10.1

                                                                [EXECUTION COPY]

          ************************************************************

                             CORNELL COMPANIES, INC.
                  (formerly known as Cornell Corrections, Inc.)

                                       and

                              SUBSIDIARY GUARANTORS

                         ATLANTIC FINANCIAL GROUP, LTD.

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

                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

                            Dated as of July 21, 2000

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

                             ING (U.S.) CAPITAL LLC,
                             as Administrative Agent

                             BANK OF AMERICA, N.A.,
                              as Syndication Agent

                   SUNTRUST EQUITABLE SECURITIES CORPORATION,
                             as Documentation Agent
                                 and Co-Arranger

                                ING BARINGS LLC,
                         as Lead Arranger and Bookrunner

          ************************************************************

<PAGE>
                                TABLE OF CONTENTS

      This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.

                                                                           Page

SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS................................1

      1.01  Certain Defined Terms............................................1
      1.02  Accounting Terms and Determinations.............................20
      1.03  Classes and Types of Loans......................................21

SECTION 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS........................21

      2.01  Loans...........................................................21
      2.02  Borrowings of Loans.............................................22
      2.03  Changes of Commitments..........................................22
      2.04  Commitment Fee..................................................23
      2.05  Lending Offices.................................................23
      2.06  Several Obligations; Remedies Independent.......................23
      2.07  Notes...........................................................24
      2.08  Optional Prepayments and Conversions or Continuations of Loans..24
      2.09  Mandatory Prepayments...........................................24
      2.10  Letters of Credit...............................................27

SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST...............................30

      3.01  Repayment of Loans..............................................30
      3.02  Interest........................................................31

SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC..................32

      4.01  Payments........................................................32
      4.02  Pro Rata Treatment..............................................33
      4.03  Computations....................................................33
      4.04  Minimum Amounts.................................................33
      4.05  Certain Notices.................................................33
      4.06  Non-Receipt of Funds by the Administrative Agent................34
      4.07  Sharing of Payments, Etc........................................34

SECTION 5. YIELD PROTECTION, ETC............................................35

      5.01  Additional Costs................................................35
      5.02  Limitation on Types of Loans....................................38
      5.03  Illegality......................................................38
      5.04  Treatment of Eurodollar Loans...................................38
      5.05  Compensation....................................................39
      5.06  Substitution of Lenders.........................................39
      5.07  Additional Costs in Respect of Letters of Credit................39

SECTION 6. GUARANTEE........................................................40

      6.01  The Guarantee...................................................40
      6.02  Obligations Unconditional.......................................40
      6.03  Reinstatement...................................................41

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      6.04  Subrogation.....................................................41
      6.05  Remedies........................................................41
      6.06  Instrument for the Payment of Money.............................41
      6.07  Continuing Guarantee............................................41
      6.08  Rights of Contribution..........................................41
      6.09  General Limitation on Guarantee Obligations.....................42

SECTION 7. CONDITIONS PRECEDENT.............................................42

      7.01  Effectiveness of Fourth Amendment and Restatement...............42
      7.02  Capital Expenditures; Eligible Acquisitions.....................44
      7.03  Synthetic Lease Loans...........................................47
      7.04  Initial and Subsequent Extensions of Credit.....................47

SECTION 8. REPRESENTATIONS AND WARRANTIES...................................47

      8.01  Corporate Existence.............................................47
      8.02  Financial Condition.............................................47
      8.03  Litigation......................................................48
      8.04  No Breach.......................................................48
      8.05  Action..........................................................48
      8.06  Approvals.......................................................48
      8.07  Use of Credit...................................................48
      8.08  ERISA...........................................................48
      8.09  Taxes...........................................................49
      8.10  Investment Company Act..........................................49
      8.11  Public Utility Holding Company Act..............................49
      8.12  Material Agreements and Liens...................................49
      8.13  Environmental Matters...........................................49
      8.14  Capitalization..................................................51
      8.15  Subsidiaries, Etc...............................................51
      8.16  Title to Assets.................................................52
      8.17  True and Complete Disclosure....................................52
      8.18  Real Property...................................................52

SECTION 9. COVENANTS OF THE COMPANY.........................................52

      9.01  Financial Statements; Etc.......................................52
      9.02  Litigation......................................................55
      9.03  Existence, Etc..................................................55
      9.04  Insurance.......................................................56
      9.05  Prohibition of Fundamental Changes..............................57
      9.06  Limitation on Liens.............................................58
      9.07  Indebtedness....................................................59
      9.08  Investments.....................................................59
      9.09  Dividend Payments...............................................60
      9.10  EBITDA Ratio I..................................................60
      9.11  EBITDA Ratio II.................................................60
      9.12  Net Worth.......................................................61
      9.13  Interest Coverage Ratio.........................................61
      9.14  Fixed Charges Ratio.............................................62
      9.15  Capital Expenditures............................................62
      9.16  The Cornell Cox Group, L.P......................................62
      9.17  Sale Lease-back Transactions....................................62

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      9.18  Discount of Accounts............................................63
      9.19  Interest Rate Protection Agreements.............................63
      9.20  Lines of Business...............................................63
      9.21  Transactions with Affiliates....................................63
      9.22  Use of Proceeds.................................................63
      9.23  Certain Obligations Respecting Subsidiaries.....................64
      9.24  Modifications of Certain Documents..............................64
      9.25  Post-closing Real Property......................................64

SECTION 10. THE LESSOR; EXERCISE OF REMEDIES UNDER LEASE....................65

      10.01 Covenants of Lessor.............................................65
      10.02 Lessor Obligations Nonrecourse; Payment from Certain Lease
            Obligations and Certain Proceeds of Leased Property Only........66
      10.03 Exercise of Remedies Under the Lease............................67

SECTION 11. EVENTS OF DEFAULT...............................................68

      11.01 Events of Default...............................................68
      11.02 Lease-Related Events of Default.................................71

SECTION 12. THE ADMINISTRATIVE AGENT........................................73

      12.01 Appointment, Powers and Immunities..............................73
      12.02 Reliance by Agent...............................................73
      12.03 Defaults........................................................73
      12.04 Rights as a Lender..............................................73
      12.05 Indemnification.................................................74
      12.06 Non-Reliance on Administrative Agent and Other Lenders..........74
      12.07 Failure to Act..................................................74
      12.08 Resignation or Removal of Administrative Agent..................74
      12.09 Consents under Other Basic Documents............................75

SECTION 13. MISCELLANEOUS...................................................75

      13.01 Waiver..........................................................75
      13.02 Notices.........................................................75
      13.03 Expenses, Etc...................................................76
      13.04 Amendments, Etc.................................................76
      13.05 Successors and Assigns; Obligations under Operative Documents...77
      13.06 Assignments and Participations..................................77
      13.07 Survival........................................................79
      13.08 Captions........................................................79
      13.09 Counterparts....................................................79
      13.10 Governing Law; Submission to Jurisdiction.......................79
      13.11 Waiver of Jury Trial............................................79
      13.12 Confidentiality.................................................79

SCHEDULE I    -    Material Agreements and Liens
SCHEDULE II   -    Environmental Matters
SCHEDULE III  -    Subsidiaries and Investments
SCHEDULE IV   -    Real Property
SCHEDULE V    -    Capital Stock, Equity Rights and Registration Rights
SCHEDULE VI   -    Existing Property, Indebtedness and Liabilities of The
                   Cornell Cox Group, L.P.

                                      iii
<PAGE>
SCHEDULE VII  -    Loans to David Cornell and Steven Logan

EXHIBIT A-1   -    Form of Company Note
EXHIBIT A-2   -    Form of Lessor Note
EXHIBIT B-1   -    Form of Opinion of Texas Counsel to the Obligors
EXHIBIT B-2   -    Form of Opinion of New York Counsel to ING
EXHIBIT C-1   -    Form of Existing Security Agreement
EXHIBIT C-2   -    Form of Amendment to Security Agreement
EXHIBIT D     -    Form of Confidentiality Agreement
EXHIBIT E     -    Form of Assignment Agreement
EXHIBIT F     -    Form of Master Agreement

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<PAGE>
            FOURTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 21,
2000 (as further amended, supplemented or modified from time to time, this
"AGREEMENT") among: CORNELL COMPANIES, INC. (formerly known as Cornell
Corrections, Inc.), a corporation duly organized and validly existing under the
laws of the State of Delaware (the "COMPANY"); each of the Subsidiaries of the
Company identified under the caption "SUBSIDIARY GUARANTORS" on the signature
pages hereto (individually, a "SUBSIDIARY GUARANTOR" and, collectively, the
"SUBSIDIARY GUARANTORS"; and the Subsidiary Guarantors collectively with the
Company, the "OBLIGORS"); ATLANTIC FINANCIAL GROUP, LTD., a Texas limited
partnership (the "LESSOR"); each of the lenders that is a signatory hereto
identified under the caption "LENDERS" on the signature pages hereto or that,
pursuant to SECTION 13.06(B) hereof, shall become a "Lender" hereunder
(individually, a "LENDER" and, collectively, the "LENDERS"); and ING (U.S.)
CAPITAL LLC, a Delaware limited liability company, as agent for the Lenders (in
such capacity, together with its successors in such capacity, the
"ADMINISTRATIVE AGENT").

            The Company, the Administrative Agent and the Lenders are parties to
a Third Amended and Restated Credit Agreement, dated as of December 3, 1998 (as
amended and in effect immediately prior to the date hereof, the "THIRD AMENDED
AND RESTATED CREDIT AGREEMENT"), and the Company, the Administrative Agent and
the Lenders wish to amend and restate the Third Amended and Restated Credit
Agreement in its entirety, and the Lessor wishes to become a party to this
Agreement. Accordingly, the Company, the Subsidiary Guarantors, the Lessor, the
Administrative Agent and the Lenders agree that, subject to the terms and
conditions of this Agreement, the Third Amended and Restated Credit Agreement is
hereby amended and restated in its entirety to read as follows:

            SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS.

            1.01 CERTAIN DEFINED TERMS. As used herein, the following terms
shall have the following meanings (all terms defined in this SECTION 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and VICE VERSA):

            "A COLLATERAL CONTRIBUTION" shall have the meaning given to that
term in clause (d) of the definition of "Synthetic Lease Financing" in this
SECTION 1.01.

            "A LENDER" shall have the meaning given to that term in clause (b)
of the definition of "Synthetic Lease Financing" in this SECTION 1.01.

            "A PERCENTAGE" shall have the meaning given to that term in the
Master Agreement.

            "AFFILIATE" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company and,
if such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, "CONTROL" (including, with its correlative meanings,
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise). Notwithstanding the foregoing,
(a) no individual shall be an Affiliate solely by reason of his or her being a
director, officer or employee of the Company or any of its Subsidiaries, (b)
none of the Wholly Owned Subsidiaries of the Company shall be Affiliates and (c)
neither the Administrative Agent, the Lessor, nor any of the Lenders shall be an
Affiliate.

            "APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or such
other office of such Lender (or of an affiliate of such Lender) as such Lender
may from time to time specify to the Administrative Agent and the Company as the
office by which its Loans of such Type are to be made and maintained.

<PAGE>
            "APPLICABLE MARGIN" shall mean 2.00% for Base Rate Loans and 3.00%
for Eurodollar Loans; PROVIDED that if EBITDAR Ratio II as at the last day of
any fiscal quarter of the Company after the first six months from the Closing
Date shall fall within any of the ranges set forth in Schedule A below then,
subject to the delivery to the Administrative Agent of a certificate of a senior
financial officer of the Company demonstrating such fact, the "Applicable
Margin" shall be reduced to the applicable percentage set forth in Schedule A
below opposite such range (where "X" is EBITDAR Ratio II) as of the fifth
Business Day following delivery of such certificate through the fifth Business
Day following the date of delivery of such a certificate with respect to the
next succeeding fiscal quarter (except that notwithstanding the foregoing, the
Applicable Margin shall not as a consequence of this PROVISO be reduced at any
time (i) prior to the six-month anniversary of the Closing Date, or (ii) during
which a Default shall have occurred and be continuing):

                                   Schedule A

                                   APPLICABLE MARGIN    APPLICABLE MARGIN FOR
                                   FOR LOANS THAT ARE      LOANS THAT ARE
           EBITDAR RATIO II         BASE RATE LOANS       EURODOLLAR LOANS

            X > 4.00                     2.00%                  3.00%
              -

            4.00 > X > 3.50              1.75%                  2.75%
                     -

            3.50 > X > 3.00              1.50%                  2.50%
                     -

            3.00 > X > 2.50              1.25%                  2.25%
                     -

            X < 2.50                     1.00%                  2.00%

            "B AND C COLLATERAL CONTRIBUTION" shall have the meaning given to
that term in clause (e) of the definition of "Synthetic Lease Financing" in this
SECTION 1.01.

            "B LOAN" shall have the meaning given to that term in the Master
Agreement.

            "BANKRUPTCY CODE" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time.

            "BASE RATE" shall mean, for any day, a rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.

            "BASE RATE LOANS" shall mean Loans that bear interest at rates based
upon the Base Rate.

            "BASIC DOCUMENTS" shall mean, collectively, this Agreement, the
Notes, the Guaranty Agreement, the Security Documents and the Letter of Credit
Documents.

            "BUILDINGS" shall have the meaning given to that term in the Master
Lease.

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<PAGE>
            "BUSINESS DAY" shall mean (a) any day on which commercial banks are
not authorized or required to close in New York City or Houston, Texas and (b)
if such day relates to a borrowing of, a payment or prepayment of principal of
or interest on, a Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such borrowing, payment,
prepayment, Conversion or Interest Period, any day on which dealings in Dollar
deposits are carried out in the London interbank market.

            "CAPITAL EXPENDITURES" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant, furniture, fixtures
and equipment (including renewals, improvements and replacements thereof, but
excluding repairs made in the ordinary course of business) during such period
computed in accordance with GAAP.

            "CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.

            "CASUALTY EVENT" shall mean, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds, or proceeds of a condemnation award or other compensation.

            "CHANGE OF CONTROL" means the occurrence of any of the following:

            (a) if any person (as such term is used in section 13(d) and section
      14(d)(2) of the Securities Exchange Act as in effect on the Closing Date)
      or related persons constituting a group (as such term is used in Rule
      13d-5 under the Securities Exchange Act) become the "beneficial owners"
      (as such term is used in Rule 13d-3 under the Securities Exchange Act as
      in effect on the Closing Date), directly or indirectly, of more than forty
      percent (40%) of the issued and outstanding common stock or the total
      voting power of the Company; or

            (b) the failure of Initial Directors to constitute a majority of the
      board of directors of the Company.

            "CLOSING DATE" shall mean the date hereof.

            "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

            "COLLATERAL ACCOUNT" shall have the meaning assigned to such term in
Section 4.1 of the Security Agreement.

            "COLLATERAL SHARING DOCUMENTATION" shall mean the Intercreditor and
Collateral Agency Agreement, dated as of July 15, 1998, among ING, as Collateral
Administrative Agent, the Administrative Agent and the holders of the Senior
Notes, as the same shall be modified and supplemented and in effect from time to
time.

            "COLLATERAL SHARING DOCUMENTATION AMENDMENT" shall mean an amendment
or other modification to the Collateral Sharing Documentation, in form and
substance satisfactory to the Administrative Agent, providing that, irrespective
of the respective priorities of the Liens of the Administrative Agent, the
Lenders and the holders of the Senior Notes in the Property of the Company and
its Subsidiaries,

                                       3
<PAGE>
            (x) subject to the A Collateral Contribution, the Liens of the
      Administrative Agent, the Lenders, the holders of the Senior Notes and the
      A Lenders in such Property shall, as between the Administrative Agent, the
      Lenders, the holders of the Senior Notes and the A Lenders, rank PARI
      passu, and

            (y) subject to the B and C Collateral Contribution, the Liens of the
      Administrative Agent, the Lenders, the holders of the Senior Notes and the
      B Lenders, and the interest of the Lessor, in such Property shall, as
      between the Administrative Agent, the Lenders, the holders of the Senior
      Notes, the B Lenders and the Lessor, rank PARI PASSU.

            "COMMITMENTS" shall mean the Revolving Credit Commitments and the
Synthetic Lease Loan Commitments.

            "COMPLETION DATE" shall have the meaning given to that term in the
Master Agreement.

            "CONSTRUCTION" shall have the meaning given to that term in the
Master Agreement.

            "CONSTRUCTION AGENCY AGREEMENT" shall have the meaning given to that
term in the Master Agreement.

            "CONSTRUCTION FAILURE PAYMENT" shall have the meaning given to that
term in the Master Agreement.

            "CONSTRUCTION LAND INTEREST" shall have the meaning given to that
term in the Master Agreement.

            "CONSTRUCTION TERM" shall have the meaning given to that term in the
Master Agreement.

            "CONSTRUCTION TERM EXPIRATION DATE" shall have the meaning given to
that term in the Master Agreement.

            "CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to SECTION 2.08 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.

            "CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion
pursuant to SECTION 2.08 hereof of one Type of Loan into another Type of Loan,
which may be accompanied by the transfer by a Lender (at its sole discretion) of
a Loan from one Applicable Lending Office to another.

            "CORRECTIONAL AND DETENTION FACILITY CONTRACT" shall mean any
contract with a municipal, state or federal government, or agency,
instrumentality or political subdivision thereof, relating to the management by
the Company or its Subsidiaries of a correctional and/or detention facility or
to other related lines of business, as amended or modified from time to time.

            "DEBT SERVICE" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all payments of principal of
Indebtedness (including, without limitation, the principal component of any
payments in respect of Capital Lease Obligations) scheduled to be made during
such period PLUS (b) all Interest Expense for such period.

            "DEFAULT" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.

                                       4
<PAGE>
            "DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any Property, other than any disposition in connection with a
Municipal Transaction (whether now owned or hereafter acquired) by the Company
or any of its Subsidiaries to any other Person excluding any sale, assignment,
transfer or other disposition of any Property sold or disposed of in the
ordinary course of business and on commercially reasonable terms.

            "DIVIDEND PAYMENT" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of the Company or any of its Subsidiaries), but excluding
dividends payable solely in shares of common stock of the Company.

            "DOLLARS" and "$" shall mean lawful money of the United States of
America.

            "EBITDAR" means, for any period, the sum of the following for the
Company and its Subsidiaries (determined without duplication in accordance with
GAAP):

            (a) net income for such period, LESS extraordinary gains for such
      period to the extent included in net income for such period, PLUS

            (b) Interest Expense for such period, PLUS

            (c) provisions for federal, state, local and foreign income taxes
      (other than taxes on extraordinary gains), whether paid or deferred, made
      during such period, to the extent deducted in determining net income for
      such period, PLUS

            (d) the aggregate amount of depreciation and amortization expense
      for such period, to the extent deducted in determining net income for such
      period, PLUS

            (e) the aggregate amount of (i) accretion expense with respect to
      options or rights to acquire the Company's common stock and (ii) any
      write-off of expenses arising in connection with the Loans, in each case
      to the extent deducted in determining net income for such period, PLUS

            (f) the net income of any Person that is accounted for by the equity
      method of accounting, but only to the extent of dividends paid to the
      Company or any of its Subsidiaries, PLUS

            (g) the aggregate amount of non-cash expense for such period
      associated with the closure and post-closure reserves of a plant or
      facility owned by the Company or any of its Subsidiaries, PLUS

            (h) the aggregate amount of all other non-cash expenses for such
      period, to the extent not specifically described above in this definition,
      PLUS

            (i) the aggregate amount of Rent Expense for such period; PLUS

            (j) the aggregate amount of Pre-opening Expenses and Start-up
      Expenses for such period;

      PROVIDED, that with respect to:

            (i) any Eligible Acquisition made during such period, "EBITDAR"
      shall include the actual EBITDAR attributable to the business acquired in
      such Eligible Acquisition for the 12 month period

                                       5
<PAGE>
      ending on the last day of such period, including, if necessary, EBITDAR
      prior to consummation of such Eligible Acquisition so that it represents
      the equivalent of 12 months of EBITDAR (and may reflect Pro Forma
      Adjustments); and

            (ii) any Eligible New Contract entered into by the Company or any of
      its Subsidiaries during such period, "EBITDAR" shall include the
      following:

                    (x) if the Company or such Subsidiary has provided services
            pursuant to such Eligible New Contract for less than three calendar
            months after the end of the Start-up Period, an amount equal to the
            estimated "EBITDAR" attributable to the operations resulting from
            such Eligible New Contract (and may reflect Pro Forma Adjustments)
            for the 12-month period beginning on the date on which the Company
            or such Subsidiary began providing services pursuant to such
            Eligible New Contract, or

                    (y) if the Company or such Subsidiary has provided services
            pursuant to such Eligible New Contract for three calendar months or
            more after the end of the Start-up Period, an amount equal to actual
            EBITDAR attributable to the operations resulting from such Eligible
            New Contract for each complete month that has elapsed since the date
            three months after the end of the Start-up Period (such amount to be
            annualized so that it represents the equivalent of 12 months of
            EBITDAR).

            "EBITDAR RATIO I" shall mean, at any date, the ratio of the
      following:

            (a) all Indebtedness of the Obligors on such date (other than the B
      Guarantee and any Subordinated Notes), to

            (b) EBITDAR for the period of 12 consecutive months ending on or
      most recently ended prior to such date.

            "EBITDAR RATIO II" shall mean, at any date, the ratio of the
      following:

            (a) all Indebtedness of the Obligors on such date, to

            (b) EBITDAR for the period of 12 consecutive months ending on or
      most recently ended prior to such date.

            "ELIGIBLE ACQUISITION" shall mean any acquisition by any Obligor
(regardless of the structure of the transaction) of the capital stock of, or all
or substantially all of the assets of, any Person (or of a line of business or
business segment of any Person) that was, immediately prior to such acquisition,
engaged primarily in the business of operating correctional and/or detention
facilities, juvenile facilities, pre-release facilities and substance abuse
rehabilitation facilities or related lines of business.

            "ELIGIBLE NEW CONTRACT" shall mean any acquired (or to be acquired)
Correctional and Detention Facility Contract, a newly executed Correctional and
Detention Facility Contract, an amendment to an existing Correctional and
Detention Facility Contract or an expansion under an existing Correctional and
Detention Facility Contract.

            "ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"CLAIM") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release

                                       6
<PAGE>
into the environment, of any Hazardous Material at any location, whether or not
owned by such Person, or (ii) circumstances forming the basis of any violation,
or alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

            "ENVIRONMENTAL LAWS" shall mean any and all applicable, currently
published and enforceable Federal, state, local and foreign laws, codes, rules
or regulations, and any orders, decrees, judgments or injunctions binding upon
Obligors, relating to the regulation or protection of human health, worker
safety and protection or the environment or to emissions, discharges, releases
or threatened releases of Hazardous Materials into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.

            "EQUITY ISSUANCE" shall mean (a) any issuance or sale by the Company
or any of its Subsidiaries after the date of the Third Amended and Restated
Credit Agreement of (i) any capital stock, (ii) any warrants or options
exercisable in respect of capital stock (other than any warrants or options
issued to directors, officers or employees of the Company or any of its
Subsidiaries pursuant to the Incentive Compensation Plan and any capital stock
of the Company issued upon the exercise of such warrants or options or (iii) any
other security or instrument representing an equity interest (or the right to
obtain any equity interest) in the Company or any of its Subsidiaries or (b) the
receipt by the Company or any of its Subsidiaries after the date of the Third
Amended and Restated Credit Agreement of any capital contribution (whether or
not evidenced by any equity security issued by the recipient of such
contribution); PROVIDED that Equity Issuance shall not include (A) any such
issuance or sale by any Subsidiary of the Company to the Company or any Wholly
Owned Subsidiary of the Company, or (B) any capital contribution by the Company
or any Wholly Owned Subsidiary of the Company to any Subsidiary of the Company.

            "EQUITY RIGHTS" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.

            "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

            "ERISA AFFILIATE" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Company is a member and (ii) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which the
Company is a member.

            "EURODOLLAR LOANS" shall mean Loans that bear interest at rates
based on rates referred to in the definition of "Eurodollar Rate" in this
SECTION 1.01.

            "EURODOLLAR RATE" shall mean, with respect to any Eurodollar Loan
for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%), reported, at 11:00 a.m. (London time) on
the date two Business Days prior to the first day of such Interest Period, on
Telerate Access Service Page 3750 (British Bankers Association Settlement Rate)
as the London Interbank Offered Rate for Dollar deposits having a term
comparable to such Interest Period and in an amount equal to or greater than
$1,000,000.

                                       7
<PAGE>
            "EVENT OF DEFAULT" shall have the meaning assigned to such term in
SECTION 11.01 hereof.

            "EXCESS CASH FLOW" shall mean, for any period, the excess of:

            (a) the sum of the following (without duplication): (i) EBITDAR for
      such period (calculated without reference to the PROVISO at the end of the
      definition thereof in SECTION 1.01 hereof), PLUS (ii) proceeds of business
      interruption or similar insurance received during such period, PLUS (iii)
      decreases in Working Capital of the Obligors for such period, PLUS (iv)
      all tax refunds received by the Obligors in cash during such period, OVER

            (b) the sum of the following (without duplication): (i) Debt Service
      for such period, PLUS (ii) Rent Expense for such period, PLUS (iii)
      Capital Expenditures made during such period, PLUS (iv) increases in
      Working Capital of the Obligors for such period, plus (v) the aggregate
      amount of cash taxes actually paid by the Obligors during such period.

For purposes of this definition of "Excess Cash Flow," "WORKING CAPITAL" shall
have the meaning given to that term by GAAP, PROVIDED that Working Capital shall
not include any Loans or any current maturities of any long-term debt.

            "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, PROVIDED that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average of quotations for such day on transactions, received by the
Administrative Agent (or any of its Affiliates) from three federal funds brokers
of recognized standing selected by it.

            "FF&E LEASE" shall mean the Lease Agreement dated as of November 23,
1999, among the Company and certain of its Subsidiaries, as Lessees, and First
Security Bank, National Association, as Owner Trustee, as Lessor, as the same
may be modified and supplemented and in effect from time to time, and any other
transaction entered into by the Obligors that is a lease of furniture, fixtures
and equipment.

            "FIXED CHARGES RATIO" shall mean, as at any date, the ratio of:

            (a) the sum of (i) EBITDAR for the period of 12-consecutive months
      ending on or most recently ended prior to such date, MINUS (ii) Capital
      Expenditures made by the Company and its Subsidiaries during such period
      pursuant to SECTION 9.15(A) hereof, MINUS (iii) taxes paid in cash during
      such period, TO

            (b) Debt Service for such period.

            "FUNDING PARTIES" shall have the meaning given to that term in the
Master Agreement.

            "FUTURE SYNTHETIC LEASE FINANCING" shall mean one or more Synthetic
Lease Financings entered into after the date of this Agreement.

            "GAAP" shall mean generally accepted accounting principles applied
on a basis consistent with those that, in accordance with the last sentence of
SECTION 1.02(A) hereof, are to be used in making the calculations for purposes
of determining compliance with this Agreement.

                                       8
<PAGE>
            "GUARANTEE" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "GUARANTEE" and "GUARANTEED" used as a verb shall
have a correlative meaning.

            "GUARANTY AGREEMENT" shall have the meaning given to that term in
the Master Agreement.

            "HAZARDOUS MATERIAL" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and polychlorinated biphenyls
("PCB'S") and (b) any chemicals or other materials or substances that are
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants", or any similar
denomination intended to classify substances by reason of toxicity,
carcinogenicity, ignitability, corrosivity or reactivity; but shall not include
naturally occurring materials existing in background conditions.

            "IMPERMISSIBLE QUALIFICATION" shall mean any qualification,
exception or other statement in any opinion or certification of any independent
public accounts which either (a) is of a "going concern" or similar nature; or
(b) relates to the limited scope of examination of matters relevant to the
financial statements referred to in such opinion or certification not
customarily contained in a report of independent public accountants.

            "INCENTIVE COMPENSATION PLAN" shall mean a plan established by the
Company for the benefit of certain of its employees, or any other written
agreement to which the Company is a party, providing for the issuance to
employees of warrants or options in respect of the Company's capital stock,
PROVIDED that (a) the aggregate amount of capital stock that such warrants and
options would represent if exercised cannot exceed 20% of aggregate amount of
the Company's capital stock that would then be outstanding and (b) all other
terms and conditions of such plan or other written agreement shall be
satisfactory to the Majority Lenders.

            "INDEBTEDNESS" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person and, in the case of the Company, the
assumed principal component of the lease obligations under the FF&E Lease (net
of the amount of unamortized gain under the FF&E Lease); and (f) Indebtedness of
others Guaranteed by such Person. For the avoidance of doubt, the Synthetic
Lease Loans and the B Loans, together with the principal components of each
Future Synthetic Lease Financing, shall constitute "Indebtedness."

            "ING" shall mean ING (U.S.) Capital LLC.

                                       9
<PAGE>
            "INITIAL DIRECTORS" shall mean (i) a member of the board of
directors of the Company as of the Closing Date and (ii) a member of the board
of directors of the Company nominated by the vote of at least sixty percent
(60%) of the members of the board of directors of the Company as of the Closing
Date.

            "INTEREST COVERAGE RATIO" shall mean, as of any date, the ratio of
(a) EBITDAR for the period of 12 consecutive months ending on or most recently
ended prior to such date to (b) Interest Expense for such period.

            "INTEREST EXPENSE" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness (including, without limitation, the interest component
of any payments in respect of Capital Lease Obligations) accrued or capitalized
during such period (whether or not actually paid during such period), PLUS (b)
the net amount payable (or MINUS the net amount receivable) under Interest Rate
Protection Agreements during such period (whether or not actually paid or
received during such period), MINUS (c) direct reimbursements received by an
Obligor during such period by a party to a Correctional and Detention Facility
Agreement, to the extent that such reimbursements relate to interest expense of
the Company or one of its Subsidiaries, PLUS (d) the interest component of any
payments in respect of the 1998 Synthetic Lease Financing and any Future
Synthetic Lease Financing accrued or capitalized during such period (whether or
not actually paid during such period).

            "INTEREST PERIOD" shall mean, with respect to any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made or Converted
from a Base Rate Loan or the last day of the immediately preceding Interest
Period for such Loan and ending on the numerically corresponding day in the
first, second, third or sixth month thereafter, as the Company may select as
provided in SECTION 4.05 hereof (or such longer period as may be requested by
the Company and agreed to by all of the Lenders), except that each Interest
Period that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest
Period for any Revolving Credit Loan would otherwise end after the Revolving
Credit Commitment Termination Date, such Interest Period shall not be available;
(ii) if any Interest Period for any Synthetic Lease Loan would end after the
Synthetic Lease Loan Principal Payment Date, such Interest Period shall not be
available; (iii) no Interest Period may commence before and end after any
Revolving Credit Commitment Reduction Date unless, after giving effect thereto,
the aggregate principal amount of Revolving Credit Loans having Interest Periods
that end after such Revolving Credit Commitment Reduction Date shall be equal to
or less than the aggregate principal amount of Revolving Credit Loans scheduled
be outstanding after giving effect to the payments of principal required to be
made on such Revolving Credit Commitment Reduction Date, and (iv) each Interest
Period that would otherwise end on a day that is not a Business Day shall end on
the next succeeding Business Day (or, if such next succeeding Business Day falls
in the next succeeding calendar month, on the next preceding Business Day).

            "INTEREST RATE PROTECTION AGREEMENT" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.

            "INVESTMENT" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale); (b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of Property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person), but excluding any such
advance, loan or extension of credit having a term not exceeding 90 days
representing the purchase price of inventory or supplies sold by such Person in
the ordinary course of business); (c) the entering into of any Guarantee of, or
other contingent obligation with

                                       10
<PAGE>
respect to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person; or (d) the entering into of any Interest Rate Protection Agreement.

            "LAND" shall have the meaning given to that term in the Master
Agreement.

            "LEASE" shall have the meaning given to that term in the Master
Agreement.

            "LEASE-RELATED EVENT OF DEFAULT" shall have the meaning given to
that term in SECTION 11.02 hereof.

            "LEASE BALANCE" shall have the meaning given to that term in the
Master Agreement.

            "LEASED PROPERTY" shall have the meaning given to that term in the
Master Agreement.

            "LEASED PROPERTY BALANCE" shall have the meaning given to that term
in the Master Agreement.

            "LESSEE" shall have the meaning given to that term in the Master
Agreement.

            "LETTER OF CREDIT" shall have the meaning assigned to such term in
SECTION 2.10 hereof.

            "LETTER OF CREDIT DOCUMENTS" shall mean, with respect to any Letter
of Credit, collectively, any application therefor, any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations,
each as the same may be modified and supplemented and in effect from time to
time.

            "LETTER OF CREDIT INTEREST" shall mean, for each Revolving Credit
Lender, such Lender's participation interest (or, in the case of the Letter of
Credit Issuer, its retained interest) in the Letter of Credit Issuer's liability
under Letters of Credit and such Lender's rights and interests in Reimbursement
Obligations and fees, interest and other amounts payable in connection with
Letters of Credit and Reimbursement Obligations.

            "LETTER OF CREDIT ISSUER" shall mean ING as the issuer of Letters of
Credit under SECTION 2.10 hereof, together with its successors in such capacity.

            "LETTER OF CREDIT LIABILITY" shall mean, without duplication, at any
time and in respect of any Letter of Credit, the sum of (a) the undrawn face
amount of such Letter of Credit, PLUS (b) the aggregate unpaid principal amount
of all Reimbursement Obligations of the Company at such time due and payable in
respect of all drawings made under such Letter of Credit. For purposes of this
Agreement, a Revolving Credit Lender (other than the Letter of Credit Issuer)
shall be deemed to hold a Letter of Credit Liability in an amount equal to its
participation interest in the related Letter of Credit under SECTION 2.10
hereof, and the Letter of Credit Issuer shall be deemed to hold a Letter of
Credit Liability in an amount equal to its retained interest in the related
Letter of Credit after giving effect to the acquisition by the Revolving Credit
Lenders other than the Letter of Credit Issuer of their participation interests
under said SECTION 2.10.

            "LIEN" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Basic Documents, a Person
shall be deemed to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.

            "LOAN AGREEMENT" shall have the meaning given to that term in the
Master Agreement.

                                       11
<PAGE>
            "LOANS" shall mean, collectively, Revolving Credit Loans and
Synthetic Lease Loans.

            "MAJORITY LENDERS" shall mean Lenders holding at least 51% of the
sum of the following:

            (a) the Revolving Credit Commitments (or, if the Revolving Credit
      Commitments shall have terminated or expired, at least 51% of the
      aggregate unpaid principal amount of Revolving Credit Loans), PLUS

            (b) the Synthetic Lease Loan Commitments (or, if the Synthetic Lease
      Loan Commitments shall have terminated or expired, at least 51% of the
      aggregate unpaid principal amount of Synthetic Lease Loans).

            "MAJORITY REVOLVING CREDIT LENDERS" shall mean Revolving Credit
Lenders holding at least 51% of the aggregate amount of the Revolving Credit
Commitments (or, if the Revolving Credit Commitments shall have terminated or
expired, at least 51% of the aggregate unpaid principal amount of Revolving
Credit Loans).

            "MAJORITY SYNTHETIC LEASE A LENDERS" shall mean Synthetic Lease Loan
Lenders holding at least 51% of the Synthetic Lease Loan Commitments (or, if the
Synthetic Lease Loan Commitments shall have terminated or expired, at least 51%
of the aggregate unpaid principal amount of Synthetic Lease Loans).

            "MAJORITY SYNTHETIC LEASE B LENDERS" shall mean the "Required
Lenders," as that term is defined in the Master Agreement.

            "MAJORITY SYNTHETIC LEASE A AND B LENDERS" shall mean Synthetic
Lease Loan Lenders and holders of B Loans holding at least 51% of the Synthetic
Lease Loan Commitments and "B Loan Commitments" (as defined in the Master
Agreement), or, if the Synthetic Lease Loan Commitments and the "B Loan
Commitments" shall have terminated or expired, at least 51% of the aggregate
unpaid principal amount of Synthetic Lease Loans and B Loans).

            "MAJORITY SYNTHETIC LEASE LENDERS" shall mean the "Required Funding
Parties," as that term is defined in the Master Agreement.

            "MARGIN STOCK" shall mean "margin stock" within the meaning of
Regulations U and X.

            "MASTER AGREEMENT" shall mean the Amended and Restated Master
Agreement, dated as of July 21, 2000, among the Company, the Subsidiary
Guarantors, the Lessor, certain lenders and ING, as Administrative Agent, as the
same shall be modified and supplemented and in effect from time to time.

            "MASTER AGREEMENT EVENT OF DEFAULT" shall mean any "Event of
Default" as that term is defined in the Master Agreement.

            "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Company and its Subsidiaries taken as a
whole, (b) the ability of any Obligor to perform its obligations under any of
the Basic Documents to which it is a party or any of the Operative Documents to
which it is a party, (c) the validity or enforceability of any of the Basic
Documents or any of the Operative Documents, (d) the rights and remedies of the
Lenders and the Administrative Agent under any of the Basic Documents or any of
the Operative Documents or (e) the timely payment of the principal of or
interest on the Loans, Reimbursement Obligations or other amounts payable in
connection therewith.

            "MONTHLY DATE" shall mean the last Business Day of each calendar
month.

                                       12
<PAGE>
            "MORTGAGE" shall mean, in connection with any interest in real
property (whether a fee or a leasehold estate) acquired by any Obligor, an
Indenture or Instrument of Mortgage, Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing executed by such Obligor in favor of the
Administrative Agent and the Lenders (or, if applicable, in favor of a Trustee,
for the benefit of the Administrative Agent and the Lenders), in each case in
form and substance satisfactory to the Majority Lenders and covering such
interest in real property, as said instrument shall be modified and supplemented
and in effect from time to time.

            "MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by the Company
or any ERISA Affiliate and that is covered by Title IV of ERISA.

            "MUNICIPAL TRANSACTION" shall mean a transaction:

            (a) in which the Company or one or more of its Subsidiaries
      transfers one or more correctional and/or detention facilities (a
      "Transferred Facility") to a Person that is not a Subsidiary or Affiliate
      of the Company and that is created exclusively for purposes of
      consummating such transaction (an "SPV") for a consideration consisting of
      cash (a "Municipal Transaction Transfer");

            (b) in which such SPV incurs Indebtedness; and

            (c) in which the Company and such SPV enter into a management
      agreement, lease or similar arrangement pursuant to which the Company
      agrees to manage or lease-back such Transferred Facility;

PROVIDED that:

            (i) the Company shall have furnished to each of the Lenders copies
      of all of the documentation for such transaction;

            (ii) the Majority Lenders shall have approved such transaction
      (PROVIDED that the Lenders shall not condition their approval on the
      payment of a fee, such approval not to be unreasonably withheld); and

            (iii) the Company shall have complied with its obligations under
      Section 2.09(f) with respect to such transaction.

            "NET AVAILABLE PROCEEDS" shall mean:

             (i) in the case of any Disposition or any Municipal Transaction
      Transfer, the amount of Net Cash Payments received in connection with such
      Disposition or such Municipal Transaction Transfer;

             (ii) in the case of any Casualty Event, the aggregate amount of
      proceeds of insurance, condemnation awards and other compensation received
      by the Company and its Subsidiaries in respect of such Casualty Event net
      of (A) reasonable expenses incurred by the Company and its Subsidiaries in
      connection therewith and (B) contractually required repayments of
      Indebtedness and any income and transfer taxes payable by the Company or
      any of its Subsidiaries in respect of such Casualty Event;

             (iii) in the case of any incurrence of Indebtedness, the aggregate
      amount of all cash received by the Company and its Subsidiaries in respect
      of such incurrence net of fees and expenses incurred by Company and its
      Subsidiaries in connection therewith; and

                                       13
<PAGE>
             (iv) in the case of any Equity Issuance, the aggregate amount of
      all cash received by the Company and its Subsidiaries in respect of such
      Equity Issuance net of fees and expenses incurred by the Company and its
      Subsidiaries in connection therewith.

            "NET CASH PAYMENTS" shall mean, with respect to any Disposition or
any Municipal Transaction Transfer, the aggregate amount of all cash payments,
and the fair market value of any non-cash consideration, received by the Company
and its Subsidiaries directly or indirectly in connection with such Disposition
or any Municipal Transaction Transfer; PROVIDED that (a) Net Cash Payments shall
be net of (i) the amount of any legal, title and recording tax expenses,
commissions and other fees and expenses paid by the Company and its Subsidiaries
in connection with such Disposition or such Municipal Transaction Transfer, (ii)
any federal, state, local and foreign taxes estimated to be payable by the
Company and its Subsidiaries as a result of such Disposition or such Municipal
Transaction Transfer (but only to the extent that such estimated taxes are in
fact paid to the relevant Federal, state or local governmental authority within
three months of the date of such Disposition or such Municipal Transaction
Transfer) and (iii) any required deposits or hold backs (until such time as such
required deposit or hold back is released), (b) Net Cash Payments shall be net
of any repayments by the Company or any of its Subsidiaries of Indebtedness to
the extent that (i) such Indebtedness is secured by a Lien on the Property that
is the subject of such Disposition or such Municipal Transaction Transfer and
(ii) the transferee of (or holder of a Lien on) such Property requires that such
Indebtedness be repaid as a condition to the purchase of such Property and (c)
Net Cash Payments shall exclude the amount of any reasonable reserves
established by the Company or such Subsidiary, in accordance with GAAP, against
any liabilities retained by the Company or its Subsidiaries, which liabilities
are associated with the Property that is the subject of such Disposition or such
Municipal Transaction Transfer (but only during such period as such reserves are
actually maintained), including (without limitation) any indemnification
obligations, pension and other post-employment benefit liabilities, workers'
compensation liabilities, liabilities associated with retiree benefits,
liabilities relating to environmental matters and liabilities relating to any
Guarantee of Indebtedness secured by a Lien on such Property.

            "NET WORTH" shall mean, as at any date for any Person, the sum for
such Person and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:

            (a)   the amount of capital stock; PLUS

            (b)   the amount of surplus and retained earnings (or, in the case
                  of a surplus or retained earnings deficit, MINUS the amount of
                  such deficit); PLUS

            (c)   any warrant accretion expense (as that term is used in GAAP)
                  or any original issue discount accretion expense (as such term
                  is used in GAAP) arising after the date of the Third Amended
                  and Restated Credit Agreement; PLUS

            (d)   the value ascribed to any warrants issued to a Lender and the
                  cumulative effect of any change in the valuation of such
                  warrants;

PROVIDED that any predecessor basis adjustment required under GAAP shall be
disregarded in calculating "Net Worth."

            "1998 SYNTHETIC LEASE FINANCING" shall mean a Synthetic Lease
Financing in which (a) the A Lenders (as that term is defined in the definition
of "Synthetic Lease Financing" in this SECTION 1.01) are the Synthetic Lease
Lenders hereunder, and (b) the B Guarantee and the C Investment (as those terms
are defined in the definition of "Synthetic Lease Financing" in this SECTION
1.01) are not secured by the Collateral for the Loans and the Senior Notes, as
modified and increased as of the date hereof.

                                       14
<PAGE>
            "NOTES" shall mean the promissory notes provided for by SECTION
2.07(A) hereof and all promissory notes delivered in substitution or exchange
therefor, in each case as the same shall be modified and supplemented and in
effect from time to time.

            "OPERATIVE DOCUMENTS" shall have the meaning given to that term in
the Master Agreement.

            "PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.

            "PERMITTED INVESTMENTS" shall mean: (a) direct obligations of the
United States of America, or of any agency thereof, or obligations guaranteed as
to principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any Lender or by any
bank or trust company organized under the laws of the United States of America
or any state thereof and having capital, surplus and undivided profits of at
least $500,000,000, maturing not more than 90 days from the date of acquisition
thereof; (c) commercial paper rated A-1 or better or P-1 by Standard & Poor's
Corporation or Moody's Investors Services, Inc., respectively, maturing not more
than six months from the date of acquisition thereof; (d) commercial paper of
any Lender (or any Affiliate thereof located in the United States of America)
that is rated A-1 or better or P-1 by Standard and Poor's Corporation or Moody's
Investors Services, Inc., respectively, maturing not more than six months from
the date of acquisition thereof; (e) repurchase agreements entered into with any
Lender or with any bank or trust company satisfying the conditions of clause (b)
hereof that is secured by any obligation of the type described in clauses (a)
through (d) of this definition; and (f) money market funds acceptable to the
Majority Lenders.

            "PERSON" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).

            "PLAN" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.

            "POST-DEFAULT RATE" shall mean, in respect of any principal of any
Loan, any Reimbursement Obligation or any other amount under this Agreement, any
Note or any other Basic Document that is not paid when due (whether at stated
maturity, by acceleration, by optional or mandatory prepayment or otherwise), a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to 2% PLUS the
Base Rate as in effect from time to time PLUS the Applicable Margin for Base
Rate Loans (PROVIDED that, with respect to principal of a Eurodollar Loan, the
"Post-Default Rate" for such principal shall be, for the period from and
including such due date to but excluding the last day of such Interest Period,
2% PLUS the interest rate for such Loan as provided in SECTION 3.02 hereof and,
thereafter, the rate provided for above in this definition).

            "POTENTIAL LEASE-RELATED EVENT OF DEFAULT" shall mean any "Potential
Event of Default" as defined in the Master Agreement.

            "PRE-OPENING EXPENSES" shall mean operating expenses attributable to
the operations of an Eligible New Contract (including, but not limited to,
salaries and wages, fringe benefits, training costs, supplies, and professional
fees) incurred prior to the date on which the Company began providing services
pursuant to such Eligible New Contract, but only to the extent that such
expenses have been reviewed and approved by the Administrative Agent and are
determined in accordance with GAAP.

            "PRIME RATE" shall mean the arithmetic average of the rates of
interest publicly announced by The Chase Manhattan Bank, Citibank, N.A. and
Morgan Guaranty Trust Company of New York (or their respective

                                       15
<PAGE>
successors) as their respective prime commercial lending rates (or, as to any
such bank that does not announce such a rate, such bank's "base" or other rate
reasonably determined by the Administrative Agent to be the equivalent rate
announced by such bank), EXCEPT THAT, if any such bank shall, for any period,
cease to announce publicly its prime commercial lending (or equivalent) rate,
the Administrative Agent shall, during such period, reasonably determine the
"prime rate" based upon the commercial lending (or equivalent) rates announced
publicly by the other such banks.

            "PRO FORMA ADJUSTMENTS" shall mean reasonable adjustments for (a)
non-recurring or extraordinary expenses, (b) operating efficiencies, (c) census
levels and (d) per diem rates that have been reviewed and consented to by the
Administrative Agent.

            "PROPERTY" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.

            "QUARTERLY DATES" shall mean the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date of this Agreement.

            "REGULATIONS A, D, U AND X" shall mean, respectively, Regulations A,
D, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.

            "REGULATORY CHANGE" shall mean, with respect to any Lender, any
change after the date of this Agreement in Federal, state or foreign law or
regulations (including, without limitation, Regulation D) or the adoption or
making after the date of this Agreement of any interpretation, directive or
request applying to a class of banks including such Lender of or under any
Federal, state or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.

            "REIMBURSEMENT OBLIGATIONS" shall mean, at any time, the obligations
of the Company then outstanding, or that may thereafter arise in respect of all
Letters of Credit then outstanding, to reimburse amounts paid by the Letter of
Credit Issuer in respect of any drawings under a Letter of Credit.

            "RELEASE" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.

            "RELEASE DATE" shall have the meaning given to that term in the
Master Agreement.

            "RELEVANT CONTRACT" shall have the meaning set forth in SECTION
7.02(A)(II) hereof.

            "RELEVANT TRANSACTION" shall have the meaning set forth in SECTION
7.02(A) hereof.

            "RENT EXPENSE" shall mean, for any period:

            (a) the aggregate amount of rent payments made by the Obligors
      during such period in respect of any Synthetic Lease Financing (including,
      without limitation, the 1998 Synthetic Lease Financing); and

            (b) the aggregate amount of rent payments minus the amount of
      amortized gain made by the Obligors during such period in respect of the
      FF&E Lease.

                                       16
<PAGE>
For the avoidance of doubt, the parties agree that any other rent payments
(including rent payments in respect of any Municipal Transaction) shall not
constitute "Rent Expense" for purposes of this Agreement.

            "RESTRICTED ACCOUNT" shall have the meaning assigned to such term in
SECTION 2.09(G) hereof.

            "REVOLVING CREDIT COMMITMENT" shall mean, for each Revolving Credit
Lender, the obligation of such Lender to make Loans in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount set forth
opposite the name of such Lender on the signature pages hereof under the caption
"Revolving Credit Commitment" (as the same may be reduced from time to time
pursuant to SECTION 2.03 hereof). The original aggregate principal amount of the
Revolving Credit Commitments is $75,000,000.

            "REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean, with respect to
any Lender, the ratio of (a) the amount of the Revolving Credit Commitment of
such Lender to (b) the aggregate amount of the Revolving Credit Commitments of
all of the Lenders."

            "REVOLVING CREDIT COMMITMENT REDUCTION DATES" shall mean, each
January 24, each April 24, each July 24 and each October 24 in each year,
commencing with January 24, 2002 (or if any such day is not a Business Day, the
next succeeding Business Day.

             "REVOLVING CREDIT COMMITMENT TERMINATION DATE" shall mean the fifth
anniversary of the Closing Date.

            "REVOLVING CREDIT LENDERS" shall mean (a) on the date hereof,
Lenders having Revolving Credit Commitments on the signature pages hereof, and
(b) thereafter, Lenders from time to time holding Revolving Credit Loans and
Revolving Credit Commitments after giving effect to any assignments thereof
permitted by SECTION 13.06(B) hereof.

            "REVOLVING CREDIT LOANS" shall mean the revolving credit loans
provided for by SECTION 2.01(A) hereof, which may be Base Rate Loans and/or
Eurodollar Loans.

            "SECURITY AGREEMENT" shall mean the Security Agreement dated as of
March 14, 1995, as amended, between each Obligor and the Administrative Agent,
as amended by the Security Agreement Amendment, and as the same shall be further
modified and supplemented and in effect from time to time.

            "SECURITY AGREEMENT AMENDMENT" shall mean an Amendment to the
Security Agreement in substantially the form of Exhibit C hereto.

            "SECURITY DOCUMENTS" shall mean, collectively, the Security
Agreement, any Mortgage and all Uniform Commercial Code financing statements
required by this Agreement, the Security Agreement or any Mortgage to be filed
with respect to the security interests in personal Property and fixtures created
pursuant to the Security Agreement or any Mortgage.

            "SENIOR NOTES" shall mean, collectively, the following:

            (a) promissory notes of the Company, in an aggregate principal
      amount not to exceed $50,000,000, secured by a Lien upon substantially all
      of the Property of the Company and its Subsidiaries (the "1998 SENIOR
      NOTES"); and

            (b) additional Indebtedness of the Company, in an aggregate
      principal amount not to exceed $10,000,000, which may be secured by a Lien
      upon substantially all of the Property of the Company and its
      Subsidiaries, with terms and conditions, and pursuant to documentation,
      either (i) substantially similar

                                       17
<PAGE>
      to the terms and conditions of, and the documentation for, the 1998 Senior
      Notes or (ii) otherwise satisfactory to the Administrative Agent.

            "SENIOR NOTES DOCUMENTATION" shall mean any note purchase agreement,
promissory note or other document or instrument evidencing or governing the
Senior Notes.

            "START-UP EXPENSES" shall mean operating expenses attributable to
the operations of an Eligible New Contract incurred during the Start-up Period
therefor, net of the revenues recognized under such Eligible New Contract during
the Start-up Period, but only to the extent that such expenses have been
reviewed and approved by the Administrative Agent.

            "START-UP PERIOD" shall mean, with respect to any Eligible New
Contract, the period of time, not to exceed six months, commencing on the date
the Company began providing service pursuant to such Eligible New Contract until
the last day of the month in which 90% of the maximum occupancy under such
Eligible New Contract was reached and are determined in accordance with GAAP.

            "SUBORDINATED BRIDGE" shall mean Indebtedness of the Obligors under
the Subordinated Bridge Loan Agreement dated as of October 14, 1999 between the
Obligors, the Lenders referred to therein and ING as agent for said Lenders.

            "SUBORDINATED NOTES" shall mean Indebtedness of the Company
(including the 2000 Subordinated Notes), in an aggregate principal amount not to
exceed $50,000,000, which is not secured by any Property of the Company or any
Subsidiary Guarantor but which may be Guaranteed by each of the Subsidiaries of
the Company, and which is subordinated to the prior payment in full of the
principal of and interest on the Loans, on terms and conditions (including
subordination terms), and pursuant to documentation, that is (i) on market terms
at the time it is entered into and (ii) is otherwise satisfactory to the
Administrative Agent.

            "SUBORDINATED NOTES DOCUMENTATION" shall mean any note purchase
agreement, promissory note or other document or instrument evidencing or
governing the Subordinated Notes.

            "SUBSEQUENT SYNTHETIC LEASE FUNDING DATE" shall mean each
"Subsequent Funding Date" as defined in the Master Agreement.

            "SUBSIDIARY" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.

            "SYNTHETIC LEASE CLOSING DATE" shall mean a "Closing Date" as
defined in the Master Agreement.

            "SYNTHETIC LEASE FINANCING" shall mean transactions consisting of
the following (provided that any such transaction need not include the matters
described in clause (e) below):

            (a) the Company or one of its Subsidiaries enters into a lease (as
      lessee) of real Property and improvements (to be used for a correctional
      and/or detention facility) with another Person (the "LESSOR");

                                       18
<PAGE>
            (b) pursuant to a loan agreement (the "LOAN AGREEMENT"), the Lessor
      borrows money from one or more lenders denominated "A Lenders" (the "A
      LENDERS") and one or more lenders denominated "B Lenders" (the "B
      Lenders");

            (c) the Lessor (or another Person, which may be an Affiliate of the
      Lessor) makes an investment (the "C INVESTMENT") to pay a portion of the
      cost of such real Property and improvements;

            (d) the Company and its Subsidiaries enter into a Guarantee of the
      Lessor's obligations to the A Lenders under the Loan Agreement (the "A
      GUARANTEE"), and, as provided in the Collateral Sharing Documentation
      Amendment:

                    (x) the A Guarantee is secured by Liens on substantially all
            of the collateral for the Loans, Reimbursement Obligations and the
            Senior Notes, and

                    (y) the Loans, Reimbursement Obligations and the other
            obligations of the Company hereunder and under the other Basic
            Documents, together with the Senior Notes, are secured by Liens in
            any collateral securing the Lessor's obligations to the A Lenders
            under the Loan Agreement (the "A COLLATERAL CONTRIBUTION"); and

            (e) the Company and its Subsidiaries enter into a Guarantee of the
      Lessor's obligations to the B Lenders under the Loan Agreement (the "B
      GUARANTEE"), and, as provided in the Collateral Sharing Documentation
      Amendment:

                    (x) the B Guarantee and the C Investment is secured by Liens
            on substantially all of the collateral for the Loans and the Senior
            Notes, and

                     (y) the Loans, Reimbursement Obligations and the other
            obligations of the Company hereunder and under the other Basic
            Documents, together with the Senior Notes, are secured by Liens in
            any collateral securing the Lessor's obligations to the B Lenders
            under the Loan Agreement or securing the C Investment (the "B AND C
            COLLATERAL CONTRIBUTION").

            "SYNTHETIC LEASE DOCUMENTATION" shall mean any master agreement,
lease agreement, loan agreement or other document or instrument evidencing or
governing any Synthetic Lease Financing.

            "SYNTHETIC LEASE LOAN COMMITMENT" shall mean, for each Synthetic
Lease Loan Lender, the obligation of such Lender to make Synthetic Lease Loans
in an aggregate principal amount at any one time outstanding up to but not
exceeding the amount set forth opposite the name of such Lender on the signature
pages hereof under the caption "Synthetic Lease Loan Commitment" (as the same
may be reduced from time to time pursuant to SECTION 2.03 hereof). The original
aggregate principal amount of the Synthetic Lease Loan Commitments is
$81,389,954.67.

            "SYNTHETIC LEASE LOAN COMMITMENT TERMINATION DATE" shall mean the
fifth anniversary from the Closing Date.

            "SYNTHETIC LEASE LOAN LENDERS" shall mean (a) on the date hereof,
Lenders having Synthetic Lease Loan Commitments on the signature pages hereof,
and (b) thereafter, Lenders from time to time holding Synthetic Lease Loans and
Synthetic Lease Loan Commitments after giving effect to any assignments thereof
permitted by SECTION 13.06(B) hereof.

            "SYNTHETIC LEASE LOAN PRINCIPAL PAYMENT DATE" shall mean the Lease
Termination Date (as that term is defined in the Master Agreement).

                                       19
<PAGE>
            "SYNTHETIC LEASE LOANS" shall mean the loans provided for by SECTION
2.01(B) hereof, which may be Base Rate Loans and/or Eurodollar Loans.

            "2000 SUBORDINATED NOTES" shall mean Indebtedness evidenced by the
2000 Subordinated Notes Documents.

            "2000 SUBORDINATED NOTES DOCUMENTS" shall mean, collectively, (a)
the Note and Equity Purchase Agreement dated as of July 21 2000, among the
Company, its Subsidiaries listed on Annex B thereto, American Capital
Strategies, Ltd., a Delaware corporation and Teachers Insurance and Annuity
Association, a New York corporation, (b) the Note Documents (as that term is
defined in said Note and Equity Purchase Agreement) and (c) the 2000
Subordination Agreement.

            "2000 SUBORDINATION AGREEMENT" shall mean the Subordination
Agreement dated as of July 21, 2000 among the holders of the 2000 Subordinated
Notes, the Obligors, the Administrative Agent and the agent under the Master
Agreement, as the same may be modified and supplemented and in effect from time
to time.

            "TYPE" shall have the meaning assigned to such term in SECTION 1.03
hereof.

            "USE PERMIT" shall mean any permit issued by a municipal, state or
federal government, or agency, instrumentality or subdivision thereof, that is
required for the operation by the Company or its Subsidiaries of any
correctional or detention facility.

            "WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person,
any corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.

            1.02 ACCOUNTING TERMS AND DETERMINATIONS.

            (a) Except as otherwise expressly provided herein, all accounting
      terms used herein shall be interpreted, and all financial statements and
      certificates and reports as to financial matters required to be delivered
      to the Lenders hereunder shall (unless otherwise disclosed to the Lenders
      in writing at the time of delivery thereof in the manner described in
      subsection (b) below) be prepared, in accordance with generally accepted
      accounting principles applied on a basis consistent with those used in the
      preparation of the latest financial statements furnished to the Lenders
      hereunder (which, prior to the delivery of the first financial statements
      under SECTION 9.01 hereof, shall mean the audited financial statements as
      at December 31, 1999 referred to in SECTION 8.02 hereof). All calculations
      made for the purposes of determining compliance with this Agreement shall
      (except as otherwise expressly provided herein) be made by application of
      generally accepted accounting principles applied on a basis consistent
      with those used in the preparation of the latest annual or quarterly
      financial statements furnished to the Lenders pursuant to SECTION 9.01
      hereof (or, prior to the delivery of the first financial statements under
      SECTION 9.01 hereof, used in the preparation of the audited financial
      statements as at December 31, 1999 referred to in SECTION 8.02 hereof)
      unless (i) the Company shall have objected to determining such compliance
      on such basis at the time of delivery of such financial statements or (ii)
      the Majority Lenders shall so object in writing within 30 days after
      delivery of such financial statements, in either of which events such
      calculations shall be made on a basis consistent with those used in the
      preparation of the latest financial statements as to which such objection
      shall not have been made (which, if objection is made in respect of the
      first financial statements delivered under SECTION 9.01 hereof, shall mean
      the audited financial statements referred to in SECTION 8.02 hereof).

                                       20
<PAGE>
            (b) The Company shall deliver to the Lenders at the same time as the
      delivery of any annual or quarterly financial statement under SECTION 9.01
      hereof (i) a description in reasonable detail of any material variation
      between the application of accounting principles employed in the
      preparation of such statement and the application of accounting principles
      employed in the preparation of the next preceding annual or quarterly
      financial statements as to which no objection has been made in accordance
      with the last sentence of subsection (a) above and (ii) reasonable
      estimates of the difference between such statements arising as a
      consequence thereof.

            (c) To enable the ready and consistent determination of compliance
      with the covenants set forth in SECTION 9 hereof, the Company will not
      change the last day of its fiscal year from December 31 of each year, or
      the last days of the first three fiscal quarters in each of its fiscal
      years from March 31, June 30, September 30 and December 31 of each year,
      respectively.

            1.03 CLASSES AND TYPES OF LOANS. Loans hereunder are distinguished
by "Type". The "Type" of a Loan refers to whether such Loan is a Base Rate Loan
or a Eurodollar Loan, each of which constitutes a Type. Loans and Commitments
may also be distinguished by "Class." The "Class" of a Loan or Commitment refers
to whether such Loan is a Revolving Credit Loan or a Synthetic Lease Loan, each
of which constitutes a Class. Loans may be identified by both Type and Class.

            SECTION 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS.

            2.01 LOANS.

            (A) REVOLVING CREDIT LOANS MADE TO CORNELL. Each Revolving Credit
      Lender severally agrees, on the terms and conditions of this Agreement, to
      make loans to the Company in Dollars during the period from and including
      the Closing Date to but not including the Revolving Credit Commitment
      Termination Date in an aggregate principal amount at any one time
      outstanding up to but not exceeding the amount of the Revolving Credit
      Commitment of such Lender as in effect from time to time. Subject to the
      terms and conditions of this Agreement, during such period the Company may
      borrow, repay and reborrow the amount of the Revolving Credit Commitments
      by means of Base Rate Loans and Eurodollar Loans and may Convert Loans of
      one Type into Loans of the other Type (as provided in SECTION 2.08 hereof)
      or Continue Eurodollar Loans from one Interest Period to the next Interest
      Period (as provided in SECTION 2.08 hereof), PROVIDED that in no event
      shall the aggregate principal amount of all Loans, together with the
      aggregate amount of all Letter of Credit Liabilities, exceed the aggregate
      amount of the Revolving Credit Commitments as in effect from time to time.

            (B) SYNTHETIC LEASE LOANS MADE TO THE LESSOR. Each Synthetic Lease
      Loan Lender severally agrees, on the terms and conditions of this
      Agreement, to make loans to the Lessor in Dollars during the period from
      and including the Closing Date but not including the Synthetic Lease Loan
      Commitment Termination Date in an aggregate principal amount up to but not
      exceeding the amount of the Synthetic Lease Loan Commitment of such
      Synthetic Lease Loan Lender as in effect from time to time. Each Synthetic
      Lease Loan shall be made on each Synthetic Lease Closing Date and on each
      Subsequent Synthetic Lease Funding Date and in the amounts required under
      SECTION 2.2 of the Master Agreement. Each Synthetic Lease Loan made by a
      Synthetic Lease Loan Lender on any date shall be in an amount equal to
      such Synthetic Lease Loan Lender's pro rata share of the A Percentage of
      the aggregate amount to be funded by the Funding Parties on such date, and
      the duration of the respective Interest Periods for each such Synthetic
      Lease Loan shall be the same as the duration of the respective "Rent
      Periods" (as that term is defined in the Master Agreement) for the B Loan
      that corresponds to such Synthetic Lease Loan. Subject to the terms and
      conditions of this Agreement, the Company may Convert Synthetic Lease
      Loans

                                       21
<PAGE>
      of one Type into Loans of the other Type (as provided in Section 2.08
      hereof) or Continue Eurodollar Loans from one Interest Period to the next
      Interest Period (as provided in SECTION 2.08 hereof).

            (C) LIMIT ON EURODOLLAR LOANS. No more than six separate Interest
      Periods in respect of Eurodollar Loans from each Lender may be outstanding
      at any one time.

            2.02 BORROWINGS OF LOANS. The Company shall give the Administrative
Agent notice of each borrowing hereunder as provided in SECTION 4.05 hereof. Not
later than 1:00 p.m. New York time on the date specified for each borrowing of
Loans hereunder, each Lender shall make available the amount of the Loan or
Loans to be made by it on such date to the Administrative Agent, at account
number 066 297 311 (ABA No. 021000021) maintained by the Administrative Agent
with The Chase Manhattan Bank, in immediately available funds, for account of
the Company or the Lessor (as the case may be). The amount so received by the
Administrative Agent in respect of Revolving Credit Loans shall, subject to the
terms and conditions of this Agreement, be made available to the Company by
depositing the same, in immediately available funds, in an account of the
Company maintained with a bank in New York City, Houston, Texas or San
Francisco, California, designated by the Company. The amount so received by the
Administrative Agent in respect of Synthetic Lease Loans shall, subject to the
terms and conditions of this Agreement, be made available to, or on behalf of,
the Lessor as provided in the Master Agreement.

            2.03 CHANGES OF COMMITMENTS.

            (a) The aggregate amount of the Revolving Credit Commitments shall
      be automatically reduced on each Revolving Credit Commitment Reduction
      Date set forth below to the amount (subject to reduction pursuant to
      paragraph (d) below) set forth opposite such Revolving Credit Commitment
      Reduction Date:

       REVOLVING CREDIT COMMITMENT
         REDUCTION DATE FALLING                REVOLVING CREDIT COMMITMENTS
            ON OR NEAREST TO                 REDUCED TO THE FOLLOWING AMOUNTS
            ----------------                 --------------------------------

            January 24, 2002                          $72,321,428.63
            April 24, 2002                            $69,642,857.25
            July 24, 2002                             $66,964,285.88
            October 24, 2002                          $64,285,714.50

            January 24, 2003                          $61,607,143.13
            April 24, 2003                            $58,928,571.75
            July 24, 2003                             $56,250,000.38
            October 24, 2003                          $53,571,429.00

            January 24, 2004                          $50,892,857.63
            April 24, 2004                            $48,214,286.25
            July 24, 2004                             $45,535,714.88
            October 24, 2004                          $42,857,143.50

            January 24, 2005                          $40,178,572.13
            April 24, 2005                            $37,500,000.75

      The aggregate amount of the Revolving Credit Commitments shall be
      automatically reduced to zero on the Revolving Credit Commitment
      Termination Date.

                                       22
<PAGE>
            (b) the aggregate amount of the Synthetic Lease Loan Commitments
      shall automatically be reduced to zero on the Synthetic Lease Loan
      Commitment Termination Date.

            (c) The Company shall have the right at any time or from time to
      time (i) so long as no Revolving Credit Loans or Letter of Credit
      Liabilities are outstanding, to terminate the Revolving Credit
      Commitments, and (ii) to reduce the aggregate unused amount of the
      Revolving Credit Commitments (for which purpose use of the Revolving
      Credit Commitments shall be deemed to include the aggregate amount of
      Letter of Credit Liabilities); PROVIDED that (x) the Company shall give
      notice of each such termination or reduction as provided in SECTION 4.05
      hereof and (y) each partial reduction shall be in an aggregate amount at
      least equal to (x) in the case of Base Rate Loans, $25,000 (or a larger
      multiple of $25,000), and (y) in the case of Eurodollar Loans, $250,000
      (or a larger multiple of $25,000).

            (d) Each reduction (a "Non-scheduled Reduction") in the aggregate
      amount of the Revolving Credit Commitments pursuant to paragraph (c)
      above, or pursuant to SECTION 2.09 hereof, on any date shall result in an
      automatic and simultaneous reduction, in an amount equal to the amount of
      such Non-scheduled Reduction, in the maximum amount of the Revolving
      Credit Commitments (as set forth in paragraph (a) above) for each
      Revolving Credit Commitment Reduction Date occurring after such date.

            (e) The Commitments of any Class once terminated or reduced may not
      be reinstated.

            2.04 COMMITMENT FEE.

            (a) The Company shall pay to the Administrative Agent, for the
      account of each Revolving Credit Lender, a commitment fee on the daily
      average unused amount of such Lender's Revolving Credit Commitment (for
      which purpose the aggregate amount of any Letter of Credit Liabilities
      shall be deemed to be a pro rata (based on the Revolving Credit
      Commitments) use of each Lender's Revolving Credit Commitment), for the
      period from and including the date of this Agreement to (but not
      including) the date such Commitment is reduced to zero, at a rate per
      annum equal to 0.5%. Accrued commitment fees shall be payable on each
      Monthly Date and on the date the Revolving Credit Commitments are reduced
      to zero.

            (b) The Company shall pay to the Administrative Agent, for the
      account of each Synthetic Lease Loan Lender, a commitment fee on the daily
      average unused amount of such Lender's Synthetic Lease Loan Commitment,
      for the period from and including the date of this Agreement to (but not
      including) the date such Commitment is reduced to zero, at a rate per
      annum equal to 0.5%. Accrued commitment fees shall be payable on each
      Quarterly Date and on the date the Synthetic Lease Loan Commitments are
      reduced to zero.

            2.05 LENDING OFFICES. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.

            2.06 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The failure of any
Lender to make any Loan to be made by it on the date specified therefor shall
not relieve any other Lender of its obligation to make its Loan on such date,
but neither any Lender nor the Administrative Agent shall be responsible for the
failure of any other Lender to make a Loan to be made by such other Lender, and
no Lender shall have any obligation to the Administrative Agent or any other
Lender for the failure by such Lender to make any Loan required to be made by
such Lender. The amounts payable by the Company at any time hereunder and under
the Notes to each Lender shall be a separate and independent debt and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and the Notes, and it shall not be necessary for any other Lender or
the Administrative Agent to consent to, or be joined as an additional party in,
any proceedings for such purposes.

                                       23
<PAGE>
            2.07 NOTES.

            (a) (i) The Revolving Credit Loans made by each Lender shall be
      evidenced by a single promissory note of the Company substantially in the
      form of Exhibit A-1 hereto, dated the date hereof, payable to such Lender
      in a principal amount equal to the amount of its Revolving Credit
      Commitment as originally in effect and otherwise duly completed.

               (ii) The Synthetic Lease Loans made by each Lender shall be
            evidenced by a single promissory note of the Lessor substantially in
            the form of Exhibit A-2 hereto, dated the date hereof, payable to
            such Lender in a principal amount equal to the amount of its
            Synthetic Lease Loan Commitment as originally in effect and
            otherwise duly completed.

            (b) The date, amount, Type, interest rate and duration of Interest
      Period (if applicable) of each Loan made by each Lender to the Company or
      the Lessor (as the case may be), and each payment made on account of the
      principal thereof, shall be recorded by such Lender on its books and,
      prior to any transfer of the Note evidencing the Loans held by it,
      endorsed by such Lender on the schedule attached to such Note or any
      continuation thereof; PROVIDED that the failure of such Lender to make any
      such recordation or endorsement shall not affect the obligations of the
      Company or the Lessor (as the case may be) to make a payment when due of
      any amount owing hereunder or under such Note in respect of the Loans to
      be evidenced by such Note.

            (c) No Lender shall be entitled to have its Notes subdivided, by
      exchange for promissory notes of lesser denominations or otherwise, except
      in connection with a permitted assignment of all or any portion of such
      Lender's relevant Commitment, Loans and Notes pursuant to SECTION 13.06(B)
      hereof.

            2.08 OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS OF LOANS.

            (a) Subject to SECTION 4.04 hereof, the Company shall have the right
      to prepay Revolving Credit Loans, or to Convert Loans of one Type into
      Loans of another Type or to Continue Eurodollar Loans, at any time or from
      time to time, PROVIDED that the Company shall give the Administrative
      Agent notice of each such prepayment, Conversion or Continuation as
      provided in SECTION 4.05 hereof (and, upon the date specified in any such
      notice of prepayment, the amount to be prepaid shall become due and
      payable hereunder). Notwithstanding the foregoing, and without limiting
      the rights and remedies of the Lenders under SECTION 11 hereof, in the
      event that any Event of Default shall have occurred and be continuing, the
      Administrative Agent may (and at the request of the Majority Lenders
      shall) suspend the right of the Company to Convert any Base Rate Loan into
      a Eurodollar Loan, or to Continue any Loan as a Eurodollar Loan, in which
      event all Loans shall be Converted (on the last day(s) of the respective
      Interest Periods therefor) or Continued, as the case may be, as Base Rate
      Loans.

            (b) Except in conjunction with a payment by a Lessee of the Lease
      Balance, a Construction Failure Payment or a Leased Property Balance
      pursuant to the terms of the Lease or the Construction Agency Agreement,
      the Lessor shall not have the right to prepay Synthetic Lease Loans.

            2.09 MANDATORY PREPAYMENTS.

            (a) SALE OF ASSETS. Without limiting the obligation of the Company
      to obtain the consent of the Majority Lenders pursuant to SECTION 9.05
      hereof to any Disposition not otherwise permitted hereunder, in the event
      that the Net Available Proceeds of any Disposition (herein, the "CURRENT
      DISPOSITION"), and of all prior Dispositions as to which a prepayment has
      not yet been made under this SECTION 2.09(A), shall exceed $500,000 then,
      no later than five Business Days prior to the occurrence of the Current
      Disposition, the Company will deliver to the Lenders a statement,
      certified by the chief financial officer of the Company, in

                                       24
<PAGE>
      form and detail reasonably satisfactory to the Administrative Agent, of
      the amount of the Net Available Proceeds of the Current Disposition and of
      all such prior Dispositions and will prepay the Revolving Credit Loans
      (and/or provide cover for Letter of Credit Liabilities as specified in
      clause (g) below) in an aggregate amount equal to 100% of the Net
      Available Proceeds of the Current Disposition and such prior Dispositions.

            (b) DEBT ISSUANCE. Without limiting the obligation of the Company to
      obtain the consent of the Majority Lenders pursuant to SECTION 9.07 hereof
      to the incurrence of any Indebtedness not otherwise permitted hereunder,
      upon the receipt by the Company or any of its Subsidiaries of the proceeds
      of any Indebtedness incurred after the date of the Third Amended and
      Restated Credit Agreement (other than Indebtedness described in clause
      (d), (e), (f) or (g) of SECTION 9.07 hereof), the Company shall prepay the
      Revolving Credit Loans (and/or provide cover for Letter of Credit
      Liabilities as specified in clause (g) below), and, subject to SECTION
      2.09(F), in an aggregate amount equal to 100% of the Net Available
      Proceeds thereof.

            (c) EQUITY ISSUANCE. Upon any Equity Issuance, the Company shall
      prepay the Revolving Credit Loans (and/or provide cover for Letter of
      Credit Liabilities as specified in clause (f) below) in an aggregate
      amount equal to 50% of the Net Available Proceeds thereof, PROVIDED that

                  (1) if the chief financial officer of the Company certifies to
            the Administrative Agent that, without effecting an Equity Issuance,
            the Company will not be able to pay principal of or interest on the
            Loans when due, all Net Available Proceeds of such Equity Issuance
            shall be applied directly by the Person making the equity investment
            to the payment of such principal and/or interest;

                  (2) if the Majority Lenders shall have expressly approved an
            Investment or other acquisition by the Company or any of its
            Subsidiaries (which approval may be withheld by the Majority Lenders
            in their sole discretion) that was proposed by the Company to the
            Lenders and the written materials furnished to the Lenders
            describing such Investment or other acquisition described in
            reasonable detail an Equity Issuance that would be used to finance
            such Investment or acquisition, none of the Net Available Proceeds
            of such Equity Issuance shall be required to be applied to the
            prepayment of the Revolving Credit Loans or the reduction of the
            Revolving Credit Commitments; and

                  (3) the Company shall not be required to prepay any Revolving
            Credit Loan if (x) the obligation to make such Loan was subject to
            SECTION 7.02 and (y) such Loan was used to finance Capital
            Expenditures for the construction of fixed assets, plant, furniture,
            fixtures and equipment and such construction has not substantially
            been completed on the date of such Equity Issuance.

            (d) CASUALTY EVENTS. Not later than 60 days following the receipt by
      any Obligor of the proceeds of insurance, condemnation award or other
      compensation in respect of any Casualty Event affecting any Property
      (other than any Leased Property) of any such Obligor (or upon such earlier
      date as the Obligor shall have determined not to repair or replace the
      Property affected by such Casualty Event), or upon the receipt by any
      Obligor of the proceeds of any key-man life insurance policy, the Company
      shall prepay the Revolving Credit Loans (and/or provide cover for Letter
      of Credit Liabilities as specified in clause (f) below) in an aggregate
      amount, if any, equal to 100% of the Net Available Proceeds of such
      Casualty Event not theretofore applied to the repair or replacement of
      such Property or 100% of the proceeds of the key-man life insurance
      policy, as applicable. Nothing in this clause (d) shall be deemed to limit
      any obligation of any Obligor pursuant to any of the Security Documents to
      remit to a collateral or similar account (including, without limitation,
      the Collateral Account) maintained by the Administrative Agent

                                       25
<PAGE>
      pursuant to any of the Security Documents the proceeds of insurance,
      condemnation award or other compensation received in respect of any
      Casualty Event.

            (e) EXCESS CASH FLOW. Not later than the date 90 days after the end
      of each fiscal year, commencing with the fiscal year commencing on January
      1, 2000, the Company shall prepay the Revolving Credit Loans (and/or
      provide cover for Letter of Credit Liabilities as specified in clause (f)
      below) in an aggregate amount equal to 60% of Excess Cash Flow for such
      fiscal year (computed on the basis of the financial statements provided to
      the Administrative Agent pursuant to SECTION 9.01(D) hereof).

            (f) MUNICIPAL TRANSACTION. Upon receipt by the Company or any of its
      Subsidiaries of any Net Available Proceeds of any Municipal Transaction
      Transfer:

               (i) the Company shall (subject to clause (h) below) prepay the
            Revolving Credit Loans (and/or provide cover for Letter of Credit
            Liabilities as specified in clause (g) below) in an aggregate amount
            equal to the Net Available Proceeds of such Municipal Transaction
            Transfer;

               (ii) the aggregate amount of the Revolving Credit Commitments
            shall be reduced by an amount equal to the amount of the required
            prepayment of Revolving Credit Loans provided for in the foregoing
            clause (f)(i), provided that the aggregate Revolving Credit
            Commitments shall not, as a result of this SECTION 2.09(F)(II) be
            reduced to less than $45,000,000; and

               (iii) any such Net Available Proceeds in excess of the amount of
            the required prepayment described in the foregoing clause (f)(i) and
            the amount of any required prepayment of the 1998 Senior Notes as a
            result of such Municipal Transaction Transfer, shall be deposited
            into an interest-bearing account (at a bank designated by the
            Administrative Agent), subject to the Lien of the Security
            Agreement) to be used solely for the purposes hereinafter described
            (the "RESTRICTED ACCOUNT") (it being acknowledged and agreed that
            such Lien on the Restricted Account shall not secure any Synthetic
            Lease Financing or any interest thereon).

Amounts in the Restricted Account shall be released only in the following
circumstances:

            (x) Upon the request of the Company, amounts in the Restricted
      Account may be released to the Company for the purpose of financing an
      Eligible Acquisition or an Eligible New Contract, PROVIDED that the
      applicable conditions precedent in SECTION 7.02 hereof shall have been met
      as if the amount to be released from the Restricted Account was a
      Revolving Credit Loan being made to finance such Eligible Acquisition or
      such Eligible New Contract.

            (y) Upon the request of the Company, amounts in the Restricted
      Account may be applied to the prepayment of Revolving Credit Loans, any
      prepayment of the 1998 Senior Notes required as a result of such
      prepayment of Revolving Credit Loans, and any prepayment of any other
      Indebtedness (other than the Subordinated Notes) so long as (i) all
      Letters of Credit have been terminated and there are no outstanding Letter
      of Credit Liabilities, Revolving Credit Loans or Synthetic Lease Loans and
      (ii) no Default shall be continuing.

            (z) After the payment in full of principal of and interest on the
      Revolving Credit Loans and all other amounts payable hereunder, and the
      termination of the Revolving Credit Commitments, any balance in the
      Restricted Account shall be remitted to or on the order of the Company.

            (g) COVER FOR LETTER OF CREDIT LIABILITIES. In the event that the
      Company shall be required pursuant to this SECTION 2.09 to provide cover
      for Letter of Credit Liabilities, the Company shall effect the same by
      paying to the Administrative Agent immediately available funds in an
      amount equal to the

                                       26
<PAGE>
      required amount, which funds shall be retained by the Administrative Agent
      in the Collateral Account (as provided therein as collateral security in
      the first instance for Letter of Credit Liabilities) until such time as
      the Letter of Credit shall have been terminated and all of the Letter of
      Credit Liabilities paid in full.

            (h) RATABLE PREPAYMENT OF SENIOR NOTES. For purposes of SECTION
      2.09(A) and SECTION 2.09(F) hereof, if the Company is required, pursuant
      to the Senior Notes Documentation, to make an offer to prepay 1998 Senior
      Notes as a result of a Disposition or a Municipal Transaction Transfer,
      the amount of Net Available Proceeds required to prepay Revolving Credit
      Loans (and/or to provide cover for Letter of Credit Liabilities) with
      respect to such Disposition shall be reduced by an amount equal to the
      product of the following:

            (a) the Net Available Proceeds otherwise required to prepay
      Revolving Credit Loans (and/or to provide cover for Letter of Credit
      Liabilities), MULTIPLIED BY

            (b) the quotient of (x) the outstanding principal amount of 1998
      Senior Notes at such time, DIVIDED BY (y) the sum of the outstanding
      principal amount of the 1998 Senior Notes at such time plus the
      outstanding principal amount of Revolving Credit Loans and Letter of
      Credit Liabilities at such time.

            2.10 LETTERS OF CREDIT. Subject to the terms and conditions of this
Agreement, and subject to the prior consent of the Letter of Credit Issuer,
Revolving Credit Commitments may be utilized, upon the request of the Company,
in addition to the Revolving Credit Loans provided for by SECTION 2.01(A)
hereof, by the issuance by the Letter of Credit Issuer of letters of credit
(collectively, "LETTERS OF CREDIT") for account of the Company or any of its
Subsidiaries (as specified by the Company), PROVIDED that in no event shall the
aggregate amount of all Letter of Credit Liabilities exceed the lesser of (i)
$15,000,000 and (ii) together with the aggregate principal amount of the
Revolving Credit Loans, the aggregate amount of the Revolving Credit Commitments
as in effect from time to time. The following additional provisions shall apply
to Letters of Credit:

            (a) The Company shall give the Administrative Agent at least three
      Business Days' irrevocable prior notice (effective upon receipt)
      specifying the Business Day (which shall be no later than 30 days
      preceding the Revolving Credit Commitment Termination Date) each Letter of
      Credit is to be issued and the account party or parties therefor and
      describing in reasonable detail the proposed terms of such Letter of
      Credit (including the beneficiary thereof) and the nature of the
      transactions or obligations proposed to be supported thereby (including
      whether such Letter of Credit is to be a commercial letter of credit or a
      standby letter of credit). Upon receipt of any such notice, the
      Administrative Agent shall advise the Letter of Credit Issuer of the
      contents thereof.

            (b) On each day during the period commencing with the issuance by
      the Letter of Credit Issuer of any Letter of Credit and until such Letter
      of Credit shall have expired or been terminated, the Revolving Credit
      Commitment of each Lender shall be deemed to be utilized for all purposes
      of this Agreement in an amount equal to such Lender's Revolving Credit
      Commitment Percentage of the then undrawn face amount of such Letter of
      Credit. Each Revolving Credit Lender (other than the Letter of Credit
      Issuer) agrees that, upon the issuance of any Letter of Credit hereunder,
      it shall automatically acquire a participation in the Letter of Credit
      Issuer's liability under such Letter of Credit in an amount equal to such
      Lender's Revolving Credit Commitment Percentage of such liability, and
      each Revolving Credit Lender (other than the Letter of Credit Issuer)
      thereby shall absolutely, unconditionally and irrevocably assume, as
      primary obligor and not as surety, and shall be unconditionally obligated
      to the Letter of Credit Issuer to pay and discharge when due, its
      Revolving Credit Commitment Percentage of the Letter of Credit Issuer's
      liability under such Letter of Credit.

            (c) Upon receipt from the beneficiary of any Letter of Credit of any
      demand for payment under such Letter of Credit, the Letter of Credit
      Issuer shall promptly notify the Company (through the Administrative
      Agent) of the amount to be paid by the Letter of Credit Issuer as a result
      of such demand

                                       27
<PAGE>
      and the date on which payment is to be made by the Letter of Credit Issuer
      to such beneficiary in respect of such demand. Notwithstanding the
      identity of the account party of any Letter of Credit, the Company hereby
      unconditionally agrees to pay and reimburse the Administrative Agent for
      account of the Letter of Credit Issuer for the amount of each demand for
      payment under such Letter of Credit at or prior to the date on which
      payment is to be made by the Letter of Credit Issuer to the beneficiary
      thereunder, without presentment, demand, protest or other formalities of
      any kind.

            (d) Forthwith upon its receipt of a notice referred to in clause (c)
      of this SECTION 2.10, the Company shall advise the Administrative Agent
      whether or not the Company intends to borrow hereunder to finance its
      obligation to reimburse the Letter of Credit Issuer for the amount of the
      related demand for payment and, if it does, submit a notice of such
      borrowing as provided in SECTION 4.05 hereof. In the event that the
      Company fails to so advise the Administrative Agent, or if the Company
      fails to reimburse the Letter of Credit Issuer for a payment under a
      Letter of Credit by the date of such payment, the Administrative Agent
      shall give each Revolving Credit Lender prompt notice of the amount of the
      demand for payment, specifying such Lender's Revolving Credit Commitment
      Percentage of the amount of the related demand for payment.

            (e) Each Revolving Credit Lender (other than the Letter of Credit
      Issuer) shall pay to the Administrative Agent for account of the Letter of
      Credit Issuer at the Principal Office in Dollars and in immediately
      available funds, the amount of such Lender's Revolving Credit Commitment
      Percentage of any payment under a Letter of Credit upon notice by the
      Letter of Credit Issuer (through the Administrative Agent) to such Lender
      requesting such payment and specifying such amount. Each such Revolving
      Credit Lender's obligation to make such payment to the Administrative
      Agent for account of the Letter of Credit Issuer under this clause (e),
      and the Letter of Credit Issuer's right to receive the same, shall be
      absolute and unconditional and shall not be affected by any circumstance
      whatsoever, including, without limitation, the failure of any other Lender
      to make its payment under this clause (e), the financial condition of the
      Company (or any other account party), the existence of any Default or the
      termination of the Revolving Credit Commitments. Each such payment to the
      Letter of Credit Issuer shall be made without any offset, abatement,
      withholding or reduction whatsoever. If any Lender shall default in its
      obligation to make any such payment to the Administrative Agent for
      account of the Letter of Credit Issuer, for so long as such default shall
      continue the Administrative Agent may at the request of the Letter of
      Credit Issuer withhold from any payments received by the Administrative
      Agent under this Agreement or any Note for account of such Lender the
      amount so in default and, to the extent so withheld, pay the same to the
      Letter of Credit Issuer in satisfaction of such defaulted obligation.

            (f) Upon the making of each payment by a Revolving Credit Lender to
      the Letter of Credit Issuer pursuant to clause (e) above in respect of any
      Letter of Credit, such Lender shall, automatically and without any further
      action on the part of the Administrative Agent, the Letter of Credit
      Issuer or such Lender, acquire (i) a participation in an amount equal to
      such payment in the Reimbursement Obligation owing to the Letter of Credit
      by the Company hereunder and under the Letter of Credit Documents relating
      to such Letter of Credit and (ii) a participation in a percentage equal to
      such Lender's Revolving Credit Commitment Percentage in any interest or
      other amounts payable by the Company hereunder and under such Letter of
      Credit Documents in respect of such Reimbursement Obligation (other than
      the commissions, charges, costs and expenses payable to the Letter of
      Credit pursuant to clause (g) of this SECTION 2.10). Upon receipt by the
      Letter of Credit Issuer from or for account of the Company of any payment
      in respect of any Reimbursement Obligation or any such interest or other
      amount (including by way of setoff or application of proceeds of any
      collateral security) the Letter of Credit Issuer shall promptly pay to the
      Administrative Agent for account of each Lender entitled thereto, such
      Lender's Revolving Credit Commitment Percentage of such payment, each such
      payment by the Letter of Credit Issuer to be made in the same money and
      funds in which received by the Letter of Credit Issuer. In the event any
      payment received by the Letter of Credit Issuer and so paid to the
      Revolving Credit Lenders hereunder is

                                       28
<PAGE>
      rescinded or must otherwise be returned by the Letter of Credit Issuer,
      each Revolving Credit Lender shall, upon the request of the Letter of
      Credit Issuer (through the Administrative Agent), repay to the Letter of
      Credit Issuer (through the Administrative Agent) the amount of such
      payment paid to such Lender, with interest at the rate specified in clause
      (j) of this SECTION 2.10.

            (g) The Company shall pay to the Administrative Agent for account of
      each Revolving Credit Lender (ratably in accordance with their respective
      Revolving Credit Commitment Percentages) a letter of credit fee in respect
      of each Letter of Credit in an amount equal to the Applicable Margin for
      Revolving Credit Loans that are Eurodollar Loans per annum of the daily
      average undrawn face amount of such Letter of Credit for the period from
      and including the date of issuance of such Letter of Credit (i) in the
      case of a Letter of Credit that expires in accordance with its terms, to
      and including such expiration date and (ii) in the case of a Letter of
      Credit that is drawn in full or is otherwise terminated other than on the
      stated expiration date of such Letter of Credit, to but excluding the date
      such Letter of Credit is drawn in full or is terminated (such fee to be
      non-refundable, to be paid in arrears on each Monthly Date and on the
      Revolving Credit Commitment Termination Date and to be calculated for any
      day after giving effect to any payments made under such Letter of Credit
      on such day). In addition, the Company shall pay to the Administrative
      Agent for account of the Letter of Credit Issuer a fronting fee in respect
      of each Letter of Credit in an amount equal to 1/4 of 1% per annum of the
      daily average undrawn face amount of such Letter of Credit for the period
      from and including the date of issuance of such Letter of Credit (i) in
      the case of a Letter of Credit that expires in accordance with its terms,
      to and including such expiration date and (ii) in the case of a Letter of
      Credit that is drawn in full or is otherwise terminated other than on the
      stated expiration date of such Letter of Credit, to but excluding the date
      such Letter of Credit is drawn in full or is terminated (such fee to be
      non-refundable, to be paid in arrears on each Monthly Date and on the
      Revolving Credit Commitment Termination Date and to be calculated for any
      day after giving effect to any payments made under such Letter of Credit
      on such day) plus all commissions, charges, costs and expenses in the
      amounts customarily charged by the Letter of Credit Issuer from time to
      time in like circumstances with respect to the issuance of each Letter of
      Credit and drawings and other transactions relating thereto.

            (h) Promptly following the end of each calendar month, the Letter of
      Credit Issuer shall deliver (through the Administrative Agent) to each
      Revolving Credit Lender and the Company a notice describing the aggregate
      amount of all Letters of Credit outstanding at the end of such month. Upon
      the request of any Lender from time to time, the Letter of Credit Issuer
      shall deliver any other information reasonably requested by such Lender
      with respect to each Letter of Credit then outstanding.

            (i) The issuance by the Letter of Credit Issuer of each Letter of
      Credit shall, in addition to the conditions precedent set forth in SECTION
      7 hereof, be subject to the conditions precedent that (i) such Letter of
      Credit shall be in such form, contain such terms and support such
      transactions as shall be satisfactory to the Letter of Credit Issuer
      consistent with its then current practices and procedures with respect to
      letters of credit of the same type and (ii) the Company shall have
      executed and delivered such applications, agreements and other instruments
      relating to such Letter of Credit as the Letter of Credit Issuer shall
      have reasonably requested consistent with its then current practices and
      procedures with respect to letters of credit of the same type, PROVIDED
      that in the event of any conflict between any such application, agreement
      or other instrument and the provisions of this Agreement or any Security
      Document, the provisions of this Agreement and the Security Documents
      shall control.

            (j) To the extent that any Revolving Credit Lender shall fail to pay
      any amount required to be paid pursuant to clause (e) or (f) of this
      SECTION 2.10 on the due date therefor, such Lender shall pay interest to
      the Letter of Credit Issuer (through the Administrative Agent) on such
      amount from and including such due date to but excluding the date such
      payment is made, PROVIDED that if such Lender shall fail to make such
      payment to the Letter of Credit Issuer within three Business Days of such
      due date, then,

                                       29
<PAGE>
      retroactively to the due date, such Lender shall be obligated to pay
      interest on such amount at the Post-Default Rate.

            (k) The issuance by the Letter of Credit Issuer of any modification
      or supplement to any Letter of Credit hereunder shall be subject to the
      same conditions applicable under this SECTION 2.10 to the issuance of new
      Letters of Credit, and no such modification or supplement shall be issued
      hereunder unless either (i) the respective Letter of Credit affected
      thereby would have complied with such conditions had it originally been
      issued hereunder in such modified or supplemented form or (ii) each
      Revolving Credit Lender shall have consented thereto.

The Company hereby indemnifies and holds harmless each Revolving Credit Lender
and the Administrative Agent from and against any and all claims and damages,
losses, liabilities, costs or expenses that such Lender or the Administrative
Agent may incur (or that may be claimed against such Lender or the
Administrative Agent by any Person whatsoever) by reason of or in connection
with the execution and delivery or transfer of or payment or refusal to pay by
the Letter of Credit Issuer under any Letter of Credit; PROVIDED that the
Company shall not be required to indemnify any Lender or the Administrative
Agent for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (x) the willful misconduct or gross
negligence of the Letter of Credit Issuer in determining whether a request
presented under any Letter of Credit complied with the terms of such Letter of
Credit or (y) in the case of the Letter of Credit Issuer, such Lender's failure
to pay under any Letter of Credit after the presentation to it of a request
strictly complying with the terms and conditions of such Letter of Credit.
Nothing in this SECTION 2.10 is intended to limit the other obligations of the
Company, any Lender or the Administrative Agent under this Agreement.

            SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST.

            3.01 REPAYMENT OF LOANS.

            (a) The Company hereby promises to pay to the Administrative Agent
      for the account of each Revolving Credit Lender:

            (i) on each Revolving Credit Commitment Reduction Date, an amount
      equal to the excess (if any) of (x) the entire outstanding principal of
      such Lender's Revolving Credit Loans outstanding plus such Lender's Letter
      of Credit Liabilities over (y) the Revolving Credit Commitment of such
      Lender as reduced pursuant to SECTION 2.03(A) hereof on such Revolving
      Credit Commitment Reduction Date, and

            (ii) the entire outstanding principal of such Lender's Revolving
      Credit Loans outstanding, and each Revolving Credit Loan shall mature, on
      the Revolving Credit Commitment Termination Date.

            (b) The Lessor hereby agrees to pay to the Administrative Agent for
      the account of each Synthetic Lease Loan Lender the entire outstanding
      principal amount of such Synthetic Lease Loan Lender's Synthetic Lease
      Loans, and each Synthetic Lease Loan shall mature, on the Synthetic Lease
      Loan Principal Payment Date.

            3.02 INTEREST.

            (a) The Company hereby promises to pay to the Administrative Agent
      for account of each Lender interest on the unpaid principal amount of each
      Revolving Credit Loan made by such Lender for the period from and
      including the date of such Revolving Credit Loan to but excluding the date
      such Revolving Credit Loan shall be paid in full, at the following rates
      per annum:

                                       30
<PAGE>
            (i) during such periods as such Loan is a Base Rate Loan, the Base
      Rate (as in effect from time to time) PLUS the Applicable Margin;

            (ii) during such periods as such Loan is a Eurodollar Loan, for each
      Interest Period relating thereto, the Eurodollar Rate for such Loan for
      such Interest Period PLUS the Applicable Margin.

      Notwithstanding the foregoing, the Company hereby promises to pay to the
      Administrative Agent for account of each Lender interest at the applicable
      Post-Default Rate on any principal of any Revolving Credit Loan made by
      such Lender, on any Reimbursement Obligation held by such Lender, and on
      any other amount payable by the Company hereunder or under the Notes held
      by such Lender to or for account of such Lender, that shall not be paid in
      full when due (whether at stated maturity, by acceleration, by mandatory
      prepayment or otherwise), for the period from and including the due date
      thereof to but excluding the date the same is paid in full. Accrued
      interest on each Loan shall be payable (i) in the case of a Base Rate
      Loan, monthly on the Monthly Dates, (ii) in the case of a Eurodollar Loan,
      on the last day of each Interest Period therefor and, if such Interest
      Period is longer than three months, at three-month intervals following the
      first day of such Interest Period, and (iii) in the case of any Loan, upon
      the payment or prepayment thereof or the Conversion of such Loan to a Loan
      of another Type (but only on the principal amount so paid, prepaid or
      Converted), except that interest payable at the Post-Default Rate shall be
      payable from time to time on demand. Promptly after the determination of
      any interest rate provided for herein or any change therein, the
      Administrative Agent shall give notice thereof to the Lenders to which
      such interest is payable and to the Company.

            (b) The Lessor hereby promises to pay to the Administrative Agent
      for account of each Synthetic Lease Loan Lender interest on the unpaid
      principal amount of each Synthetic Lease Loan made by such Lender for the
      period from and including the date of such Loan to but excluding the date
      such Loan shall be paid in full, at the following rates per annum:

            (i) during such periods as such Loan is a Base Rate Loan, the Base
      Rate (as in effect from time to time) PLUS the Applicable Margin PLUS 1/4
      of 1%;

            (ii) during such periods as such Loan is a Eurodollar Loan, for each
      Interest Period relating thereto, the Eurodollar Rate for such Loan for
      such Interest Period PLUS the Applicable Margin PLUS 1/4 of 1%.

      Notwithstanding the foregoing, the Lessor hereby promises to pay to the
      Administrative Agent for account of each Synthetic Lease Loan Lender
      interest at the applicable Post-Default Rate on any principal of any
      Synthetic Lease Loan made by such Lender and on any other amount payable
      by the Lessor hereunder or under the Notes held by such Lender to or for
      account of such Lender, that shall not be paid in full when due (whether
      at stated maturity, by acceleration, by mandatory prepayment or
      otherwise), for the period from and including the due date thereof to but
      excluding the date the same is paid in full. Accrued interest on each
      Synthetic Lease Loan shall be payable (i) in the case of a Base Rate Loan,
      monthly on the Monthly Dates, (ii) in the case of a Eurodollar Loan, on
      the last day of each Interest Period therefor and, if such Interest Period
      is longer than three months, at three-month intervals following the first
      day of such Interest Period, and (iii) in the case of any Loan, upon the
      payment or prepayment thereof or the Conversion of such Loan to a Loan of
      another Type (but only on the principal amount so paid, prepaid or
      Converted), except that interest payable at the Post-Default Rate shall be
      payable from time to time on demand. Promptly after the determination of
      any interest rate provided for herein or any change therein, the
      Administrative Agent shall give notice thereof to the Lenders to which
      such interest is payable and to the Lessor.

                                       31
<PAGE>
            (c) Interest accruing on each Synthetic Lease Loan with respect to
      any Leased Property during the Construction Term of such Leased Property,
      and for the period from the Completion Date for such Leased Property to
      the 120th day after such Completion Date, shall, subject to the
      limitations set forth in SECTION 2.3(C) of the Master Agreement, be added
      to the principal amount of such Synthetic Lease Loan from time to time.
      Following the date each Synthetic Lease Loan is made (or in the case of
      Synthetic Lease Loans with respect to a Construction Land Interest, the
      Construction Term Expiration Date), interest on such Loan shall be payable
      in arrears as provided in SECTION 3.02(B) hereof.

            SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

            4.01 PAYMENTS.

            (a) Except to the extent otherwise provided herein, all payments of
      principal, interest, Reimbursement Obligations and other amounts to be
      made by the Company or the Lessor under this Agreement and the Notes, and,
      except to the extent otherwise provided therein, all payments to be made
      by the Obligors under any other Basic Document, shall be made in Dollars,
      in immediately available funds, without deduction, set-off or
      counterclaim, to the Administrative Agent at account number 066 297 311
      (ABA No. 021000021) maintained by the Administrative Agent with The Chase
      Manhattan Bank, not later than 2:00 p.m. New York time on the date on
      which such payment shall become due (each such payment made after such
      time on such due date to be deemed to have been made on the next
      succeeding Business Day).

            (b) Any Lender for whose account any such payment is to be made may
      (but shall not be obligated to) debit the amount of any such payment that
      is not made by such time to any ordinary deposit account of the Company
      with such Lender (with notice to the Company and the Administrative
      Agent).

            (c) The Company shall, at the time of making each payment under this
      Agreement or any Note for account of any Lender, specify to the
      Administrative Agent (which shall so notify the intended recipient(s)
      thereof) the Loans, Reimbursement Obligations or other amounts payable by
      the Company or the Lessor hereunder to which such payment is to be applied
      (and in the event that the Company fails to so specify, or if an Event of
      Default has occurred and is continuing, the Administrative Agent may
      distribute such payment to the Lenders for application in such manner as
      it or the Majority Lenders, subject to SECTION 4.02 hereof, may determine
      to be appropriate).

            (d) Each payment received by the Administrative Agent under this
      Agreement or any Note for account of any Lender shall be paid by the
      Administrative Agent promptly to such Lender, in immediately available
      funds, for account of such Lender's Applicable Lending Office for the Loan
      or other obligation in respect of which such payment is made.

            (e) If the due date of any payment under this Agreement or any Note
      would otherwise fall on a day that is not a Business Day, such date shall
      be extended to the next succeeding Business Day, and interest shall be
      payable for any principal so extended for the period of such extension.

            4.02 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each borrowing of Loans of either Class from the Lenders under
SECTION 2.01 hereof shall be made from the Lenders holding Commitments of such
Class, and each termination or reduction of the amount of the Revolving Credit
Commitments under SECTION 2.03 hereof, shall be applied to the respective
Commitments of such Class of the Lenders ratably in accordance with the amounts
of their respective Commitments of such Class, (b) each payment of a commitment
fee under SECTION 2.04 hereof in respect of Commitments of either Class shall be
made for account of the Lenders pro rata according to the amounts of their
respective Commitments of such Class; (c) the making, Conversion and

                                       32
<PAGE>
Continuation of Loans of a particular Type of either Class (other than
Conversions provided for by SECTION 5.04 hereof) shall be made pro rata among
the Lenders according to the amounts of their respective Commitments of such
Class (in the case of making of Loans) or their respective Loans of such Class
(in the case of Conversions and Continuations of Loans) and the then current
Interest Period for each Loan of such Class and such Type shall be coterminous;
(d) each payment or prepayment of principal of Loans of either Class shall be
made for account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of the Loans of such Class held by them; and (e) each
payment of interest on Loans of either Class shall be made for the account of
the Lenders pro rata in accordance with the amounts of interest on Loans of such
Class then due and payable to the Lenders.

            4.03 COMPUTATIONS. Except as otherwise provided herein, interest on
Loans and Reimbursement Obligations and commitment fees shall be computed on the
basis of a year of 360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.

            4.04 MINIMUM AMOUNTS. Except for mandatory prepayments made pursuant
to SECTION 2.09 hereof and Conversions or prepayments made pursuant to SECTION
5.04 hereof, each borrowing, Conversion and partial prepayment of principal of
Loans shall be in an aggregate amount at least equal to $500,000 (or $3,000,000
in the case of Eurodollar Loans) or a larger multiple of $500,000 (borrowings,
Conversions or prepayments of or into Loans of different Types or, in the case
of Eurodollar Loans, having different Interest Periods at the same time
hereunder to be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period).

            4.05 CERTAIN NOTICES. Notices by the Company to the Administrative
Agent of terminations or reductions of the Commitments, of borrowings,
Conversions, Continuations and optional prepayments of Loans, of Types of Loans
and of the duration of Interest Periods shall be irrevocable and shall be
effective only if received by the Administrative Agent not later than 11:00 a.m.
New York time on the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or prepayment or the
first day of such Interest Period specified below:

                                                          NUMBER OF
                                                        BUSINESS DAYS
      NOTICE                                             PRIOR NOTICE
      ------                                            -------------
      Termination or reduction of Commitments                 3

      Borrowing or prepayment of, or
      Conversions into, Base Rate Loans                    Same day

      Borrowing or prepayment of,
      Conversions into, Continuations as, or
      duration of Interest Period for,
      Eurodollar Loans                                        3

Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or optional prepayment shall specify the amount
(subject to SECTION 4.04 hereof), Type and Class of each Loan to be borrowed,
Converted, Continued or prepaid (and, in the case of a Conversion, the Type of
Loan to result from such Conversion) and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each such
notice of the duration of an Interest Period shall specify the Loans to which
such Interest Period is to relate. The Administrative Agent shall promptly
notify the Lenders of the contents of each such notice. In the event that the
Company fails to select the Type of Loan, or the duration of any Interest Period
for any Eurodollar Loan, within the time period and otherwise as provided in
this SECTION 4.05, such Loan (if outstanding as a Eurodollar Loan) will be
automatically

                                       33
<PAGE>
Converted into a Base Rate Loan on the last day of the then current Interest
Period for such Loan or (if outstanding as a Base Rate Loan) will remain as, or
(if not then outstanding) will be made as, a Base Rate Loan.

            4.06 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the
Administrative Agent shall have been notified by a Lender, the Company or the
Lessor (the "PAYOR") prior to the date on which the Payor is to make payment to
the Administrative Agent of (in the case of a Lender) the proceeds of a Loan to
be made by such Lender hereunder or (in the case of the Company or the Lessor) a
payment to the Administrative Agent for account of one or more of the Lenders
hereunder (such payment being herein called the "REQUIRED PAYMENT"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient(s) on such date; and, if the Payor has not in fact made
the Required Payment to the Administrative Agent, the recipient(s) of such
payment shall, on demand, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date (the "ADVANCE DATE") such amount was so made
available by the Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to the Federal Funds Rate for
such day and, if such recipient(s) shall fail promptly to make such payment, the
Administrative Agent shall be entitled to recover such amount, on demand, from
the Payor, together with interest as aforesaid, PROVIDED that if neither the
recipient(s) nor the Payor shall return the Required Payment to the
Administrative Agent within three Business Days of the Advance Date, then,
retroactively to the Advance Date, the Payor and the recipient(s) shall each be
obligated to pay interest on the Required Payment as follows:

            (i) if the Required Payment shall represent a payment to be made by
      the Company to the Lenders, the Company and the recipient(s) shall each be
      obligated retroactively to the Advance Date to pay interest in respect of
      the Required Payment at the Post-Default Rate (and, in case the
      recipient(s) shall return the Required Payment to the Administrative
      Agent, without limiting the obligation of the Company under SECTION 3.02
      hereof to pay interest to such recipient(s) at the Post-Default Rate in
      respect of the Required Payment) and

            (ii) if the Required Payment shall represent proceeds of a Loan to
      be made by the Lenders to the Company, the Payor and the Company shall
      each be obligated retroactively to the Advance Date to pay interest in
      respect of the Required Payment at the rate of interest provided for such
      Required Payment pursuant to SECTION 3.02 hereof (and, in case the Company
      shall return the Required Payment to the Administrative Agent, without
      limiting any claim the Company may have against the Payor in respect of
      the Required Payment).

            4.07 SHARING OF PAYMENTS, ETC.

            (a) The Company agrees that, in addition to (and without limitation
      of) any right of set-off, banker's lien or counterclaim a Lender may
      otherwise have, each Lender shall be entitled, at its option, to offset
      balances held by it for account of the Company at any of its offices, in
      Dollars or in any other currency, against any principal of or interest on
      any of such Lender's Loans, Reimbursement Obligations or any other amount
      payable to such Lender hereunder, that is not paid when due (regardless of
      whether such balances are then due to the Company), in which case it shall
      promptly notify the Company and the Administrative Agent thereof, PROVIDED
      that such Lender's failure to give such notice shall not affect the
      validity thereof.

            (b) If any Lender shall obtain from any Obligor or the Lessor
      payment of any principal of or interest on any Loan of either Class or
      Letter of Credit Liability owing to it or payment of any other amount
      under this Agreement or any other Basic Document through the exercise of
      any right of set-off, banker's lien or counterclaim or similar right or
      otherwise (other than from the Administrative Agent as

                                       34
<PAGE>
      provided herein), and, as a result of such payment, such Lender shall have
      received a greater percentage of the principal of or interest on the Loans
      of such Class, Letter of Credit Liabilities or such other amounts then due
      hereunder or thereunder by such Obligor or the Lessor to such Lender than
      the percentage received by any other Lender, it shall promptly purchase
      from such other Lenders participations in (or, if and to the extent
      specified by such Lender, direct interests in) the Loans of such Class,
      Letter of Credit Liabilities or such other amounts, respectively, owing to
      such other Lenders (or in interest due thereon, as the case may be) in
      such amounts, and make such other adjustments from time to time as shall
      be equitable, to the end that all the Lenders shall share the benefit of
      such excess payment (net of any expenses that may be incurred by such
      Lender in obtaining or preserving such excess payment) pro rata in
      accordance with the unpaid principal of and/or interest on the Loans of
      such Class, Letter of Credit Liabilities or such other amounts,
      respectively, owing to each of the Lenders. To such end all the Lenders
      shall make appropriate adjustments among themselves (by the resale of
      participations sold or otherwise) if such payment is rescinded or must
      otherwise be restored.

            (c) The Company agrees that any Lender so purchasing such a
      participation (or direct interest) may exercise all rights of set-off,
      banker's lien, counterclaim or similar rights with respect to such
      participation as fully as if such Lender were a direct holder of Loans or
      other amounts (as the case may be) owing to such Lender in the amount of
      such participation.

            (d) Nothing contained herein shall require any Lender to exercise
      any such right or shall affect the right of any Lender to exercise, and
      retain the benefits of exercising, any such right with respect to any
      other indebtedness or obligation of any Obligor. If, under any applicable
      bankruptcy, insolvency or other similar law, any Lender receives a secured
      claim in lieu of a set-off to which this SECTION 4.07 applies, such Lender
      shall, to the extent practicable, exercise its rights in respect of such
      secured claim in a manner consistent with the rights of the Lenders
      entitled under this SECTION 4.07 to share in the benefits of any recovery
      on such secured claim.

            SECTION 5. YIELD PROTECTION, ETC.

            5.01 ADDITIONAL COSTS.

            (a) The Company shall pay directly to each Lender from time to time
      such amounts as such Lender may determine to be necessary to compensate
      such Lender for any costs actually incurred by such Lender that such
      Lender determines are attributable to its making or maintaining of any
      Eurodollar Loans or its obligation to make any Eurodollar Loans hereunder,
      or any reduction in any amount receivable by such Lender hereunder in
      respect of any of such Loans or such obligation (such increases in costs
      and reductions in amounts receivable being herein called "ADDITIONAL
      COSTS"), resulting from any Regulatory Change that:

               (i) shall subject any Lender (or its Applicable Lending Office
            for any of such Loans) to any tax, duty or other charge in respect
            of such Loans or its Notes or changes the basis of taxation of any
            amounts payable to such Lender under this Agreement or its Notes in
            respect of any of such Loans (excluding (A) franchise taxes imposed
            on it or (B) changes in the rate of tax on the overall net income of
            such Lender or of such Applicable Lending Office, in each case, by
            the jurisdiction in which such Lender has its principal office or
            such Applicable Lending Office); or

               (ii) imposes or modifies any reserve, special deposit or similar
            requirements (other than, in the case of any Lender for any period
            as to which the Company is required to pay any amount under
            paragraph (e) below, the reserves and "Eurocurrency liabilities"
            under Regulation D referred to therein) relating to any extensions
            of credit or other assets of, or any deposits with or other
            liabilities of, such Lender (including, without limitation, any of
            such Loans or any deposits

                                       35
<PAGE>
            referred to in the definition of "Eurodollar Rate" in SECTION 1.01
            hereof), or any commitment of such Lender (including, without
            limitation, the Commitments of such Lender hereunder); or

               (iii) imposes any other condition affecting this Agreement or its
            Notes (or any of such extensions of credit or liabilities) or its
            Commitments.

If any Lender requests compensation from the Company under this SECTION 5.01(A),
the Company may, by notice to such Lender (with a copy to the Administrative
Agent), suspend the obligation of such Lender thereafter to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the
Regulatory Change giving rise to such request ceases to be in effect (in which
case the provisions of SECTION 5.04 hereof shall be applicable), PROVIDED that
such suspension shall not affect the right of such Lender to receive the
compensation so requested.

            (b) Without limiting the effect of the provisions of paragraph (a)
      of this SECTION 5.01, in the event that, by reason of any Regulatory
      Change, any Lender either (i) incurs Additional Costs based on or measured
      by the excess above a specified level of the amount of a category of
      deposits or other liabilities of such Lender that includes deposits by
      reference to which the interest rate on Eurodollar Loans is determined as
      provided in this Agreement or a category of extensions of credit or other
      assets of such Lender that includes Eurodollar Loans or (ii) becomes
      subject to restrictions on the amount of such a category of liabilities or
      assets that it may hold, then, if such Lender so elects by notice to the
      Company (with a copy to the Administrative Agent), the obligation of such
      Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar
      Loans hereunder shall be suspended until such Regulatory Change ceases to
      be in effect (in which case the provisions of SECTION 5.04 hereof shall be
      applicable).

            (c) Without limiting the effect of the foregoing provisions of this
      SECTION 5.01 (but without duplication), the Company shall pay directly to
      each Lender from time to time on request such amounts as such Lender may
      determine to be necessary to compensate such Lender (or, without
      duplication, the bank holding company of which such Lender is a
      subsidiary) for any costs actually incurred by such Lender that it
      determines are attributable to the maintenance by such Lender (or any
      Applicable Lending Office or such bank holding company), pursuant to any
      law or regulation or any interpretation, directive or request (whether or
      not having the force of law and whether or not failure to comply therewith
      would be unlawful) of any court or governmental or monetary authority (i)
      following any Regulatory Change or (ii) implementing any risk-based
      capital guideline or other requirement (whether or not having the force of
      law and whether or not the failure to comply therewith would be unlawful)
      heretofore or hereafter issued by any government or governmental or
      supervisory authority implementing at the national level the Basle Accord
      (including, without limitation, the Final Risk-Based Capital Guidelines of
      the Board of Governors of the Federal Reserve System (12 C.F.R. Part 208,
      Appendix A; 12 C.F.R. Part 225, Appendix A) and the Final Risk-Based
      Capital Guidelines of the Office of the Comptroller of the Currency (12
      C.F.R. Part 3, Appendix A)), of capital in respect of its Commitments or
      Loans (such compensation to include, without limitation, an amount equal
      to any reduction of the rate of return on assets or equity of such Lender
      (or any Applicable Lending Office or such bank holding company) to a level
      below that which such Lender (or any Applicable Lending Office or such
      bank holding company) could have achieved but for such law, regulation,
      interpretation, directive or request). For purposes of this SECTION
      5.01(C) and SECTION 5.06 hereof, "BASLE ACCORD" shall mean the proposals
      for risk-based capital framework described by the Basle Committee on
      Banking Regulations and Supervisory Practices in its paper entitled
      "International Convergence of Capital Measurement and Capital Standards"
      dated July 1988, as amended, modified and supplemented and in effect from
      time to time or any replacement thereof.

            (d) Each Lender shall notify the Company of any event occurring
      after the date of this Agreement entitling such Lender to compensation
      under paragraph (a) or (c) of this SECTION 5.01 as promptly as
      practicable, but in any event within 45 days, after such Lender obtains
      actual knowledge

                                       36
<PAGE>
      thereof; PROVIDED that (i) if any Lender fails to give such notice within
      45 days after it obtains actual knowledge of such an event, such Lender
      shall, with respect to compensation payable pursuant to this SECTION 5.01
      in respect of any costs resulting from such event, only be entitled to
      payment under this SECTION 5.01 for costs incurred from and after the date
      45 days prior to the date that such Lender does give such notice and (ii)
      each Lender will designate a different Applicable Lending Office for the
      Loans of such Lender affected by such event if such designation will avoid
      the need for, or reduce the amount of, such compensation and will not, in
      the sole opinion of such Lender, be disadvantageous to such Lender, except
      that such Lender shall have no obligation to designate an Applicable
      Lending Office located in the United States of America. Each Lender will
      furnish to the Company a certificate setting forth the basis and amount of
      each request by such Lender for compensation under paragraph (a) or (c) of
      this SECTION 5.01. Determinations and allocations by any Lender for
      purposes of this SECTION 5.01 of the effect of any Regulatory Change
      pursuant to paragraph (a) or (b) of this SECTION 5.01, or of the effect of
      capital maintained pursuant to paragraph (c) of this SECTION 5.01, on its
      costs or rate of return of maintaining Loans or its obligation to make
      Loans, or on amounts receivable by it in respect of Loans, and of the
      amounts required to compensate such Lender under this SECTION 5.01, shall
      be conclusive, absent demonstrable error, PROVIDED that such
      determinations and allocations are made and attributed on a reasonable
      basis.

            (e) Without limiting the effect of the foregoing, the Company shall
      pay to each Lender on the last day of each Interest Period so long as such
      Lender is maintaining reserves against "Eurocurrency liabilities" under
      Regulation D (or, unless the provisions of paragraph (b) above are
      applicable, so long as such Lender is, by reason of any Regulatory Change,
      maintaining reserves against any other category of liabilities which
      includes deposits by reference to which the interest rate on Eurodollar
      Loans is determined as provided in this Agreement or against any category
      of extensions of credit or other assets of such Lender (which includes any
      Eurodollar Loans)) an additional amount (determined by such Lender and
      notified to the Company through the Administrative Agent) equal to the
      product of the following for each Eurodollar Loan for each day during such
      Interest Period:

               (i) the principal amount of such Eurodollar Loan outstanding on
            such day; and

               (ii) the remainder of (x) the fraction the numerator of which is
            the rate (expressed as a decimal) at which interest accrues on such
            Eurodollar Loan for such Interest Period as provided in this
            Agreement (less the Applicable Margin) and the denominator of which
            is one MINUS the effective rate (expressed as a decimal) at which
            such reserve requirements are imposed on such Lender on such day
            MINUS (y) such numerator; and

               (iii) 1/360.

            (f) Notwithstanding anything in this SECTION 5.01 to the contrary,
      to the extent that any Lender does not charge all of its customers who are
      similarly situated to the Company in respect of any Additional Costs or
      other cost or compensation referred to this SECTION 5.01, such Lender
      shall not charge the Company for such Additional Cost or other cost or
      compensation.

            5.02 LIMITATION ON TYPES OF LOANS. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Eurodollar Rate for
any Interest Period:

            (a) the Administrative Agent determines, which determination shall
      be conclusive, that quotations of interest rates for the relevant deposits
      referred to in the definition of "Eurodollar Rate" in SECTION 1.01 hereof
      are not being provided in the relevant amounts or for the relevant
      maturities for purposes of determining rates of interest for Eurodollar
      Loans as provided herein; or

                                       37
<PAGE>
            (b) if the Majority Lenders determine, which determination shall be
      conclusive, and notify (or notifies, as the case may be) the
      Administrative Agent that the relevant rates of interest referred to in
      the definition of "Eurodollar Rate" in SECTION 1.01 hereof upon the basis
      of which the rate of interest for Eurodollar Loans for such Interest
      Period is to be determined do not adequately cover the cost to such
      Lenders of making or maintaining Eurodollar Loans for such Interest
      Period;

then the Administrative Agent shall give the Company and each Lender prompt
notice thereof and, so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Eurodollar Loans, to Continue
Eurodollar Loans or to Convert Base Rate Loans into Eurodollar Loans, and the
Company shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with SECTION 2.08 hereof.

            5.03 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder, then such Lender shall promptly notify the Company thereof
(with a copy to the Administrative Agent) and such Lender's obligation to make
or Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended until such time as such Lender may again make and maintain Eurodollar
Loans (in which case the provisions of SECTION 5.04 hereof shall be applicable).

            5.04 TREATMENT OF EURODOLLAR LOANS. If the obligation of any Lender
to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to SECTION 5.01 or 5.03 hereof,
such Lender's Eurodollar Loans shall be automatically Converted into Base Rate
Loans on the last day(s) of the then current Interest Period(s) for Eurodollar
Loans (or, in the case of a Conversion required by SECTION 5.01(B) or 5.03
hereof, on such earlier date as such Lender may specify to the Company with a
copy to the Administrative Agent) and, unless and until such Lender gives notice
as provided below that the circumstances specified in SECTION 5.01 or 5.03
hereof that gave rise to such Conversion no longer exist:

            (a) to the extent that such Lender's Eurodollar Loans have been so
      Converted, all payments and prepayments of principal that would otherwise
      be applied to such Lender's Eurodollar Loans shall be applied instead to
      its Base Rate Loans; and

            (b) all Loans that would otherwise be made or Continued by such
      Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
      Loans, and all Loans of such Lender that would otherwise be Converted into
      Eurodollar Loans shall be Converted instead into (or shall remain as) Base
      Rate Loans.

If such Lender gives notice to the Company with a copy to the Administrative
Agent that the circumstances specified in SECTION 5.01 or 5.03 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
SECTION 5.04 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, Types and Interest
Periods) in accordance with their respective Commitments.

            5.05 COMPENSATION. The Company shall pay to the Administrative Agent
for account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense actually incurred that such Lender determines is attributable to:

                                       38
<PAGE>
            (a) any payment, mandatory or optional prepayment or Conversion of a
      Eurodollar Loan made by such Lender for any reason (including, without
      limitation, the acceleration of the Loans pursuant to SECTION 10 hereof)
      on a date other than the last day of the Interest Period for such Loan; or

            (b) any failure by the Company for any reason (including, without
      limitation, the failure of any of the conditions precedent specified in
      SECTION 7 hereof to be satisfied) to borrow a Eurodollar Loan from such
      Lender on the date for such borrowing specified in the relevant notice of
      borrowing given pursuant to SECTION 2.02 hereof.

Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed (other than the portion thereof consisting of the
Applicable Margin) for the period from the date of such payment, prepayment,
Conversion or failure to borrow to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan that would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided for herein
over (ii) the amount of interest that otherwise would have accrued on such
principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market for Dollar
deposits of leading banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by such
Lender).

            5.06 SUBSTITUTION OF LENDERS. In the event that the Company becomes
obligated to pay additional amounts to any Lender pursuant to SECTION 5.01
hereof, then (unless such Lender has theretofore taken steps to remove or cure,
and has removed or cured, the conditions creating the cause for such obligation
to pay such additional amounts), then the Company may, so long as no Default
shall be continuing, within 60 days after the demand by such Lender for such
additional amounts, designate another bank which is acceptable to the
Administrative Agent and the Majority Lenders (such other bank being herein
called a "REPLACEMENT LENDER") to purchase all of the Loans of such Lender and
all of such Lender's rights and obligations hereunder (without recourse to or
warranty by, or expense to, such Lender) for a purchase price equal to the
outstanding principal amount of such Lender's Loans plus any accrued but unpaid
interest thereon and any accrued but unpaid fees in respect of such Lender's
Commitments and any other amounts then payable to such Lender hereunder, and to
assume all of the obligations of such Lender hereunder (except for such rights
as survive the repayment of the Loans) and, upon such purchase such Lender shall
no longer be a party hereto or have any rights hereunder (except for those that
survive repayment of the Loans) and shall be released from all of its
obligations hereunder, and the Replacement Lender shall succeed to the rights
and obligations of such Lender hereunder.

            5.07 ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT. Without
limiting the obligations of the Company under SECTION 5.01 hereof (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any government
or governmental or supervisory authority implementing at the national level the
Basle Accord there shall be imposed, modified or deemed applicable any tax,
reserve, special deposit, capital adequacy or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder and the result shall be to increase the cost to any Lender or
Lenders of issuing (or purchasing participations in) or maintaining its
obligation hereunder to issue (or purchase participations in) any Letter of
Credit hereunder or reduce any amount receivable by any Lender hereunder in
respect of any Letter of Credit (which increases in cost, or reductions in
amount receivable, shall be the result of such Lender's or Lenders' reasonable
allocation of the aggregate of such increases or reductions resulting from such
event), then, upon demand by such Lender or Lenders (through the Administrative
Agent), the Company shall pay immediately to the Administrative Agent for
account of such Lender or Lenders, from time to time as specified by such Lender
or Lenders (through the Administrative Agent), such additional amounts as shall
be sufficient to compensate such Lender or Lender (through the Administrative
Agent) for such increased costs or reductions in amount. A statement as to such
increased costs or reductions in amount incurred by

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<PAGE>
any such Lender or Lender, submitted by such Lender or Lenders to the Company
shall be conclusive in the absence of manifest error as to the amount thereof.

            SECTION 6. GUARANTEE.

            6.01 THE GUARANTEE. The Subsidiary Guarantors hereby jointly and
severally guarantee to each Lender and the Administrative Agent and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest on the Revolving Credit Loans made by the Revolving Credit Lenders to,
and the Notes held by each Revolving Credit Lender of, the Company and all other
amounts from time to time owing to the Lenders or the Administrative Agent by
the Company under this Agreement, the Notes or the Guaranty Agreement and by any
Obligor under any of the other Basic Documents, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "GUARANTEED OBLIGATIONS"). The Subsidiary Guarantors hereby further
jointly and severally agree that if the Company shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.

            6.02 OBLIGATIONS UNCONDITIONAL. The obligations of the Subsidiary
Guarantors under SECTION 6.01 hereof are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the Notes
or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this SECTION 6.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute and unconditional as described above:

            (i) at any time or from time to time, without notice to the
      Subsidiary Guarantors, the time for any performance of or compliance with
      any of the Guaranteed Obligations shall be extended, or such performance
      or compliance shall be waived;

            (ii) any of the acts mentioned in any of the provisions of this
      Agreement or the Notes or any other agreement or instrument referred to
      herein or therein shall be done or omitted;

            (iii) the maturity of any of the Guaranteed Obligations shall be
      accelerated, or any of the Guaranteed Obligations shall be modified,
      supplemented or amended in any respect, or any right under this Agreement
      or the Notes or any other agreement or instrument referred to herein or
      therein shall be waived or any other guarantee of any of the Guaranteed
      Obligations or any security therefor shall be released or exchanged in
      whole or in part or otherwise dealt with; or

            (iv) any lien or security interest granted to, or in favor of, the
      Administrative Agent or any Lender or Lenders as security for any of the
      Guaranteed Obligations shall fail to be perfected.

The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against the Company under this Agreement or the Notes or any other agreement or
instrument

                                       40
<PAGE>
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.

            6.03 REINSTATEMENT. The obligations of the Subsidiary Guarantors
under this SECTION 6 shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Subsidiary Guarantors jointly
and severally agree that they will indemnify the Administrative Agent and each
Lender on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by the Administrative Agent or such Lender
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.

            6.04 SUBROGATION. The Subsidiary Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments of
the Lenders under this Agreement they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in SECTION 6.01
hereof, whether by subrogation or otherwise, against the Company or any other
guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.

            6.05 REMEDIES. The Subsidiary Guarantors jointly and severally agree
that, as between the Subsidiary Guarantors and the Lenders, the obligations of
the Company under this Agreement and the Notes may be declared to be forthwith
due and payable as provided in SECTION 11 hereof (and shall be deemed to have
become automatically due and payable in the circumstances provided in said
SECTION 11) for purposes of SECTION 6.01 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the Company and that, in
the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by the Company) shall forthwith become due and payable by the Subsidiary
Guarantors for purposes of said SECTION 6.01.

            6.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor hereby
acknowledges that the guarantee in this SECTION 6 constitutes an instrument for
the payment of money, and consents and agrees that any Lender or the
Administrative Agent, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR SECTION 3213.

            6.07 CONTINUING GUARANTEE. The guarantee in this SECTION 6 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.

            6.08 RIGHTS OF CONTRIBUTION. The Subsidiary Guarantors hereby agree,
as between themselves, that if any Subsidiary Guarantor shall become an Excess
Funding Guarantor (as defined below) by reason of the payment by such Subsidiary
Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence),
pay to such Excess Funding Guarantor an amount equal to such Subsidiary
Guarantor's Pro Rata Share (as defined below and determined, for this purpose,
without reference to the Properties, debts and liabilities of such Excess
Funding Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any
Excess Funding Guarantor under this SECTION 6.08 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this SECTION 6 and such
Excess Funding Guarantor shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such obligations.

                                       41
<PAGE>
            For purposes of this SECTION 6.08, (i) "EXCESS FUNDING GUARANTOR"
shall mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor
that has paid an amount in excess of its Pro Rata Share of such Guaranteed
Obligations, (ii) "EXCESS PAYMENT" shall mean, in respect of any Guaranteed
Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro
Rata Share of such Guaranteed Obligations and (iii) "PRO RATA SHARE" shall mean,
for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the
amount by which the aggregate present fair saleable value of all Properties of
such Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all Properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Company and the Subsidiary Guarantors
hereunder) of the Company and all of the Subsidiary Guarantors, all as of the
Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Closing Date, then for purposes of this SECTION 6.08 such
subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Closing Date and the aggregate present fair saleable value
of the Properties, and the amount of the debts and liabilities, of such
Subsidiary Guarantor as of the Closing Date shall be deemed to be equal to such
value and amount on the date such Subsidiary Guarantor becomes a Subsidiary
Guarantor hereunder.

            6.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
SECTION 6.01 hereof would otherwise, taking into account the provisions of
SECTION 6.08 hereof, be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount
of its liability under said SECTION 6.01, then, notwithstanding any other
PROVISION hereof to the contrary, the amount of such liability shall, without
any further action by such Subsidiary Guarantor, any Lender, the Administrative
Agent or any other Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.

            SECTION 7. CONDITIONS PRECEDENT.

            7.01 EFFECTIVENESS OF FOURTH AMENDMENT AND RESTATEMENT. The
effectiveness of the amendment and restatement of the Third Amended and Restated
Credit Agreement is subject to the conditions precedent that the Administrative
Agent shall have received the following, each of which shall be satisfactory to
the Administrative Agent in form and substance:

            (a) CORPORATE DOCUMENTS. Certified copies of the charter and by-laws
      (or equivalent documents) of each Obligor and of all corporate authority
      for each Obligor (including, without limitation, board of director
      resolutions and evidence of the incumbency of officers) with respect to
      the execution, delivery and performance of such of the Basic Documents and
      the Operative Documents to which such Obligor is intended to be a party
      and each other document to be delivered by such Obligor from time to time
      in connection herewith and the extensions of credit hereunder (and the
      Administrative Agent and each Lender may conclusively rely on such
      certificate until it receives notice in writing from such Obligor to the
      contrary).

            (b) OFFICER'S CERTIFICATE. A certificate of a senior officer of the
      Company, dated the date hereof, to the effect set forth in the first
      sentence of SECTION 7.04 hereof.

            (c) OPINIONS OF TEXAS COUNSEL TO THE OBLIGORS. An opinion, dated the
      Closing Date, of Locke Liddell & Sapp LLP, counsel to the Obligors,
      substantially in the form of Exhibit B-1 hereto (and each

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<PAGE>
      Obligor hereby instructs such counsel to deliver such opinion to the
      Lenders and the Administrative Agent).

            (d) OPINIONS OF NEW YORK COUNSEL TO ING. An opinion, dated the
      Closing Date, of Mayer, Brown & Platt, special New York counsel to ING,
      substantially in the form of Exhibit B-2 hereto.

            (e) NOTES. The Notes duly completed and executed.

            (f) SECURITY AGREEMENT AMENDMENT. The Security Agreement Amendment,
      duly executed and delivered by the Administrative Agent and the Obligors.

            (g)  MASTER LEASE CONDITIONS.  Evidence that each of the conditions
      precedent set forth in Article III of the Master Agreement shall have been
      duly satisfied.

            (h) REPAYMENT OF SUBORDINATED BRIDGE. Evidence that the principal of
      and interest on, and all other amounts owing in respect of, the
      Subordinated Bridge shall have been (or shall be simultaneously) paid in
      full.

            (i) 2000 SUBORDINATED NOTES. Evidence that the 2000 Subordinated
      Notes Documents shall have been duly authorized, executed and delivered by
      the Company and that the promissory notes evidencing the 2000 Subordinated
      Notes shall have been issued at par, and the Administrative Agent shall
      have received copies of each of the 2000 Subordinated Notes Documents
      certified by a senior officer of the Company. In addition, the
      Administrative Agent shall have received a certificate of a senior
      financial officer of the Company to the effect that the Company shall have
      received net cash proceeds (prior to the payment of any transaction
      expenses) from the issuance of the 2000 Subordinated Notes in an aggregate
      amount at least equal to $40,000,000.

            (j) INSURANCE. Certificates of insurance evidencing the existence of
      all insurance required to be maintained by the Company pursuant to SECTION
      9.04 hereof and the designation of the Administrative Agent as the loss
      payee or additional named insured, as the case may be, thereunder to the
      extent required by said SECTION 9.04, such certificates to be in such form
      and contain such information as is specified in said SECTION 9.04. In
      addition, the Company shall have delivered a certificate of the chief
      financial officer of the Company setting forth the insurance obtained by
      it in accordance with the requirements of SECTION 9.04 and stating that
      such insurance is in full force and effect and that all premiums then due
      and payable thereon have been paid.

            (k) REPAYMENT OTHER DOCUMENTS. Such other documents as the
      Administrative Agent or any Lender or special New York counsel to ING may
      reasonably request.

The effectiveness of the amendment and restatement of the Third Amended and
Restated Credit Agreement and the obligation of any Lender to make an extension
of credit hereunder is also subject to the payment by the Company of such fees
and other consideration as the Company shall have agreed to pay or deliver to
any Lender or an affiliate thereof or the Administrative Agent in connection
herewith, including, without limitation, the reasonable fees and expenses of
Mayer, Brown & Platt, special New York counsel to ING in connection with the
negotiation, preparation, execution and delivery of this Fourth Amended and
Restated Credit Agreement and the Notes and the other Basic Documents required
in connection herewith and the extensions of credit hereunder (to the extent
that statements for such fees and expenses have been delivered to the Company).

            7.02 CAPITAL EXPENDITURES; ELIGIBLE ACQUISITIONS. The obligation of
any Revolving Credit Lender to make any Revolving Credit Loan the proceeds of
which will be used to make (x) an Eligible Acquisition or (y) Capital
Expenditures in respect of an Eligible New Contract (in each case, the "RELEVANT
TRANSACTION" for

                                       43
<PAGE>
such borrowing) is subject to the further conditions precedent that the
Administrative Agent shall have received the following, each of which shall be
satisfactory to the Administrative Agent (and to the extent specified below, to
the Majority Revolving Credit Lenders) in form and substance:

            (a) COMMON INFORMATION. With respect to any Relevant Transaction:

                    (i) CFO CERTIFICATE. A certificate of the chief financial
            officer of the Company (in such detail as the Administrative Agent
            may request) as to the good faith estimated amount of the
            consideration to be paid in connection with such Relevant
            Transaction.

                    (ii) RELEVANT CORRECTIONAL AND/OR DETENTION FACILITY
            Contracts. True and complete copies of the fully executed
            Correctional and Detention Facility Contract or Contracts (including
            all amendments thereto) to which such Relevant Transaction relates
            (the "RELEVANT CONTRACT" for such Relevant Transaction), together
            with a certificate of a senior officer of the Company to the effect
            that (x) all conditions to the effectiveness of the Relevant
            Contract for such borrowing shall have been met or waived; PROVIDED
            THAT any condition in such Relevant Contract that, if not met, could
            reasonably be expected to have a Material Adverse Effect shall not
            be waived by any Person without the consent of the Administrative
            Agent and the Majority Revolving Credit Lenders and (y) such
            Relevant Contract does not contain any provision permitting the
            other party to such Relevant Contract to terminate, cancel or
            otherwise modify such Relevant Contract upon the occurrence of any
            change in control (or similar event) with respect to any Obligor.
            Further, any condition in such Relevant Contract requiring the
            satisfaction of any Person shall be deemed for purposes of this
            SECTION 7.02(A) to require the satisfaction of the Administrative
            Agent and the Majority Revolving Credit Lenders if the failure to
            meet such condition could reasonably be expected to have a Material
            Adverse Effect.

                    (iii) USE PERMITS. A certificate of a senior officer of the
            Company to the effect that (x) attached thereto are true and
            complete copies of each Use Permit required in connection with such
            Relevant Transaction for such borrowing and that each such Use
            Permit is in full force and effect, or (y) no Use Permits are so
            required.

                     (iv) CORPORATE AUTHORIZATIONS. Evidence to the reasonable
            satisfaction of the Administrative Agent that such Relevant
            Transaction for such borrowing shall have been duly approved by the
            board of directors of each relevant Obligor and that the Relevant
            Contract therefor shall have been duly executed and delivered by the
            parties thereto and shall be in full force and effect. In addition,
            the Administrative Agent shall have received copies of all written
            information provided to the board of directors of any Obligor in
            connection with such Relevant Transaction at the same time such
            information was provided to such board of directors.

                    (v) FINANCIAL AND COMPLIANCE CERTIFICATE.  A certificate
            from the chief financial officer of the Company with respect to such
            Relevant Transaction

                        (A) providing the PRO FORMA consolidated statements of
                    income, cash flow and balance sheet of the Company,

                        (B) to the effect that immediately prior to such
                    Relevant Transaction, and after giving effect thereto, (x)
                    no Default shall have occurred and be continuing and (y)
                    each of the representations and warranties set forth in
                    SECTION 8 hereof, and by each Obligor in each of the other
                    Basic Documents to which it is a party, shall be true and
                    complete, and

                                       44
<PAGE>
                        (C) providing PRO FORMA financial projections (which may
                    reflect Pro Forma Adjustments) demonstrating or showing (x)
                    the sources and uses of funds in such Relevant Transaction,
                    (y) compliance with all financial covenants set forth in
                    SECTION 9 hereof after giving effect to such Relevant
                    Transaction and for the four consecutive fiscal quarters
                    after consummation of such Relevant Transaction and (z) the
                    Capital Expenditures to be incurred by the Company and its
                    Subsidiaries in connection with such Relevant Transaction
                    for the period beginning from the date on which such
                    Relevant Transaction is consummated and ending on the
                    Revolving Credit Commitment Termination Date.

                    (vi) GOVERNMENTAL CONSENT AND APPROVALS. A certificate of a
            senior officer of the Company to the effect that (i) any municipal,
            state or federal government (or agency, instrumentality or political
            subdivision thereof) that is a party to the Relevant Contract for
            such borrowing, and any such governmental entity granting a Use
            Permit in connection with such Relevant Contract, does not object to
            the financing of such Relevant Transaction with such borrowing on
            the terms and conditions set forth in this Agreement and the other
            Basic Documents, including (without limitation) the granting of
            security interests and pledges of stock by the Obligors under the
            Security Agreement and the guarantees provided the Subsidiary
            Guarantors in SECTION 6 hereof and (ii) all necessary licenses,
            permits and governmental and third-party consents and approvals
            relating to such Relevant Transaction have been obtained and remain
            in full force and effect.

                    (vii) ANALYSES. To the extent completed by or on behalf of
            any Obligor, any demographic, industry, competitive or other
            analysis performed by any industry consultant, and the
            Administrative Agent and the Lenders shall be named as beneficiaries
            of such report.

                    (viii) INSURANCE. Evidence to the satisfaction of the
            Administrative Agent that, after giving effect to the transactions
            contemplated by such borrowing, the insurance program of the
            Obligors, insofar as it relates to such Relevant Transaction for
            such Revolving Credit Loans, adequately protects the interests of
            the Administrative Agent and the Lenders and is comparable in all
            material respects with insurance carried by responsible owners and
            operators of Properties similar to those of the Obligors, including
            (without limitation) that the Administrative Agent shall have been
            named as loss payee and additional insured under any additional
            insurance policies (or with respect to any additional insurance
            acquired under existing insurance policies) acquired in connection
            with such Relevant Transaction.

                     (ix) ENVIRONMENTAL SURVEY AND QUESTIONNAIRE. If requested
            by the Administrative Agent, an environmental audit and/or review of
            any real property to be acquired or leased by any Obligor in
            connection with such Relevant Transaction, with the results and
            methodology thereof reasonably satisfactory to the Administrative
            Agent and performed by an engineer acceptable the Administrative
            Agent and the Company. In addition, if requested by the Majority
            Revolving Credit Lenders (through the Administrative Agent), the
            Company shall have completed (and delivered to each Revolving Credit
            Lender) an environmental risk questionnaire in a form provided to
            the Company by the Administrative Agent (and containing such
            inquiries with respect to environmental matters as shall have been
            requested by any Lender, through the Administrative Agent, to be
            included in such questionnaire), and the responses to such
            questionnaire (and the underlying facts and circumstances shown
            thereby) shall be in form and substance reasonably satisfactory to
            each Revolving Credit Lender.

                    (x) ADVERSE LITIGATION OR PROCEEDING. A certificate from the
            secretary of the Company, to the effect that (and the Administrative
            Agent shall be satisfied in its good faith

                                       45
<PAGE>
            judgment that) no litigation or proceeding shall exist or, to such
            officer's knowledge be threatened, with respect to consummation of
            such Relevant Transaction or that could have a Material Adverse
            Effect.

                    (xi) TRANSACTION DOCUMENTS. A true and complete copy of the
            fully executed transaction documents relating to such Relevant
            Transaction (or unsigned drafts thereof that conform in all material
            respects with the fully executed purchase agreement).

                    (xii) SECURITY INTEREST. Evidence to the satisfaction of the
            Administrative Agent that the Administrative Agent (on behalf of the
            Lenders) has a perfected security interest in the assets (including
            stock) related to such Relevant Transaction.

                    (xiii) OTHER DOCUMENTS. Such other documents as the
            Administrative Agent or any Revolving Credit Lender or special New
            York counsel to ING may reasonably request, and such other
            information regarding the financial condition, operations, business
            or prospects of the Obligors insofar as its relates to such
            Revolving Credit Loans and the Relevant Transaction related thereto.

            (b) ELIGIBLE ACQUISITION INFORMATION. With respect to any Relevant
      Transaction that is an Eligible Acquisition:

                    (i) LENDER APPROVAL. If the consideration to be paid for
            such Eligible Acquisition will exceed $20,000,000, the approval of
            the Majority Revolving Credit Lenders of such Eligible Acquisition,
            such approval not to be unreasonably withheld.

                    (ii) POSITIVE EBITDAR. Evidence to the satisfaction of the
            Administrative Agent that the EBITDAR of the business to be acquired
            in such Eligible Acquisition (based on actual results with Pro Forma
            Adjustments) for the period of 12 consecutive months most recently
            preceding the proposed date of such Eligible Acquisition is greater
            than $1.

                    (iii) MAXIMUM CONSIDERATION. Evidence to the satisfaction of
            the Administrative Agent that the consideration to be paid for such
            Eligible Acquisition (including any Indebtedness assumed) will not
            exceed the product of (x) EBITDAR with respect to the business to be
            acquired in such Eligible Acquisition (based on actual results with
            Pro Forma Adjustments) for the 12 month period ending on the
            proposed date of consummation of such Eligible Acquisition and (y)
            six.

            (c) ELIGIBLE NEW CONTRACT INFORMATION. With respect to any Relevant
      Transaction that is an Eligible New Contract:

                    (i) Evidence to the satisfaction of the Administrative Agent
            that the aggregate Revolving Credit Loans that would be used to
            finance Capital Expenditures in connection with such Eligible New
            Contract would not exceed the projected EBITDAR for such Eligible
            New Contract for the period beginning on the date on which such
            Eligible New Contract is entered into and ending on the earlier of
            (x) the last day of the original term of such Eligible New Contract
            (including any stated renewal options) and (y) the fifth anniversary
            of such Eligible New Contract.

                    (ii) If the principal amount of the Revolving Credit Loans
            to finance such Capital Expenditure would exceed $15,000,000, the
            Majority Revolving Credit Lenders shall have approved such Capital
            Expenditure, such approval not to be unreasonably withheld.

                                       46
<PAGE>
            7.03 SYNTHETIC LEASE LOANS. The obligation of any Synthetic Lease
Lender to make any Synthetic Lease Loan is subject to the further conditions
precedent that the conditions precedent set forth in SECTIONS 3.1 and 3.4 of the
Master Agreement shall have satisfied with respect to the borrowing of such
Synthetic Lease Loans.

            7.04 INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT. The obligation of
any Lender to make any Loan or otherwise extend credit to the Company upon the
occasion of each borrowing or other extension of credit hereunder is subject to
the further conditions precedent that, both immediately prior to the making of
such Loan or other extension of credit and also after giving effect thereto and
to the intended use thereof: (a) no Default shall have occurred and be
continuing; and (b) the representations and warranties made by the Company in
SECTION 8 hereof, and by each Obligor in each of the other Basic Documents to
which it is a party, shall be true and complete on and as of the date of the
making of such Loan or other extension of credit with the same force and effect
as if made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date).

            SECTION 8. REPRESENTATIONS AND WARRANTIES. Each Obligor, represents
and warrants to the Administrative Agent and the Lenders that:

            8.01 CORPORATE EXISTENCE. Each Obligor: (a) is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization; (b) has all
requisite corporate or other power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business and is in good standing in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary and where
failure so to qualify could reasonably be expected to (either individually or in
the aggregate) have a Material Adverse Effect.

            8.02 FINANCIAL CONDITION. The Obligors have heretofore furnished to
each of the Lenders the consolidated and consolidating balance sheets of the
Company and its Subsidiaries as at December 31, 1999 and the related
consolidated and consolidating statements of income, retained earnings and cash
flow of the Company and its Subsidiaries for the fiscal year ended on said date,
with the opinion thereon (in the case of said consolidated balance sheet and
statements) of Arthur Andersen LLP, and the unaudited consolidated and
consolidating balance sheets of the Company and its Subsidiaries as at March 31,
2000 and the related consolidated and consolidating statements of income and
retained earnings of the Company and its Subsidiaries for the three-month period
ended on such date. All such financial statements are complete and correct and
fairly present the consolidated financial condition of the Obligors, and (in the
case of said consolidating financial statements) the respective unconsolidated
financial condition of the Obligors, as at said dates and the consolidated and
unconsolidated results of their operations for the fiscal year and three-month
period ended on said dates (subject, in the case of such financial statements as
at March 31, 2000, to normal year-end audit adjustments), all in accordance with
generally accepted accounting principles and practices applied on a consistent
basis, except as otherwise indicated in the notes thereto. None of the Obligors
has on the date hereof any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, in each case, of a type required to be
reflected in a balance sheet prepared in accordance with GAAP, except as
referred to or reflected or provided for in said balance sheets as at said
dates. Since December 31, 1999, there has been no material adverse change in the
consolidated financial condition, operations, business or prospects taken as a
whole of the Obligors from that set forth in said financial statements as at
said date.

            8.03 LITIGATION. There are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Company) threatened against any Obligor
that, if adversely determined could be reasonably expected to (either
individually or in the aggregate) have a Material Adverse Effect.

                                       47
<PAGE>
            8.04 NO BREACH. None of the execution and delivery of this Agreement
and the Notes and the other Basic Documents and the Operative Documents, the
consummation of the transactions herein and therein contemplated or compliance
with the terms and provisions hereof and thereof will conflict with or result in
a breach of, or require any consent under, the charter or by-laws of any
Obligor, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any agreement or
instrument to which any Obligor is a party or by which any of them or any of
their Property is bound or to which any of them is subject, or constitute a
default under any such agreement or instrument, or (except for the Liens created
pursuant to the Security Documents) result in the creation or imposition of any
Lien upon any Property of the Obligors pursuant to the terms of any such
agreement or instrument.

            8.05 ACTION. Each Obligor has all necessary power, authority and
legal right to execute, deliver and perform its obligations under each of the
Basic Documents and each of the Operative Documents to which it is a party; the
execution, delivery and performance by each Obligor of each of the Basic
Documents and each of the Operative Documents to which it is a party have been
duly authorized by all necessary corporate action on its part (including,
without limitation, any required shareholder approvals); and this Agreement has
been duly and validly executed and delivered by each Obligor and constitutes,
and each of the Notes and the other Basic Documents and Operative Documents to
which it is a party when executed and delivered by such Obligor (in the case of
the Notes, for value) will constitute, its legal, valid and binding obligation,
enforceable against each Obligor in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors' rights and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

            8.06 APPROVALS. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by any Obligor of the Basic Documents or the Operative Documents to
which it is a party or for the legality, validity or enforceability hereof or
thereof, except for filings and recordings in respect of the Liens created
pursuant to the Security Documents.

            8.07 USE OF CREDIT. None of the Obligors is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or carrying Margin
Stock, and no part of the proceeds of any extension of credit hereunder will be
used to buy or carry any Margin Stock.

            8.08 ERISA. Each Plan, and, to the knowledge of each Obligor, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no event
or condition has occurred and is continuing as to which any Obligor would be
under an obligation to furnish a report to the Lenders under SECTION 9.01(H)
hereof.

            8.09 TAXES. The Obligors are members of an affiliated group of
corporations filing consolidated returns for Federal income tax purposes, of
which the Company is the "common parent" (within the meaning of Section 1504 of
the Code) of such group. Each Obligor has filed (either directly, or indirectly
through the Company) all Federal income tax returns and all other material tax
returns that are required to be filed by them and have paid (either directly, or
indirectly through Company) all taxes due pursuant to such returns or pursuant
to any assessment received by any Obligor, except for any taxes being contested
by an Obligor in good faith by proper proceedings as to which no Liens have been
created on any Property of any Obligor. The charges, accruals and reserves on
the books of the Obligors in respect of taxes and other governmental charges
are, in the opinion of the Obligors, adequate. The Company has not given or been
requested to give a waiver of the statute of limitations relating to the payment
of Federal, state, local and foreign taxes or other impositions.

                                       48
<PAGE>
            8.10 INVESTMENT COMPANY ACT. None of the Obligors is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.

            8.11 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Obligors is a
"holding company", or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

            8.12 MATERIAL AGREEMENTS AND LIENS.

            (a) Part A of Schedule I hereto is a complete and correct list, as
      of the date of this Agreement, of each credit agreement, loan agreement,
      indenture, purchase agreement, guarantee, letter of credit or other
      arrangement providing for or otherwise relating to any Indebtedness or any
      extension of credit (or commitment for any extension of credit) to, or
      guarantee by, any Obligor, and the aggregate principal or face amount
      outstanding or that may become outstanding under each such arrangement is
      correctly described in Part A of said Schedule I.

            (b) Part B of Schedule I hereto is a complete and correct list, as
      of the date of this Agreement, of each Lien securing Indebtedness of any
      Person and covering any Obligor, and the aggregate Indebtedness secured
      (or that may be secured) by each such Lien and the Property covered by
      each such Lien is correctly described in Part B of said Schedule I.

            8.13 ENVIRONMENTAL MATTERS. Each Obligor has obtained all
environmental, health and safety permits, licenses and other authorizations
required under all applicable Environmental Laws to carry on its business as now
being or as currently proposed to be conducted, except to the extent failure to
have any such permit, license or authorization would not (either individually or
in the aggregate) have a Material Adverse Effect. Each of such permits, licenses
and authorizations is in full force and effect and each of the Obligors is in
compliance with the terms and conditions thereof, and is also in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law, except to the extent failure to comply therewith would not
(either individually or in the aggregate) have a Material Adverse Effect.

            In addition, except as set forth in Schedule II hereto:

            (a) No notice, notification, demand, request for information,
      citation, summons or order has been issued to any Obligor or about which
      any Obligor has otherwise become aware, no complaint has been filed
      against any Obligor or about which any Obligor has otherwise become aware,
      no penalty has been assessed against any Obligor or about which any
      Obligor has otherwise become aware and no investigation or review is
      pending or, to the knowledge of any Obligor, threatened by any
      governmental authority or other entity with respect to any alleged failure
      by any Obligor to have any environmental, health or safety permit, license
      or other authorization required under any Environmental Law in connection
      with the conduct of the business of any Obligor or with respect to any
      generation, treatment, storage, recycling, transportation, discharge or
      disposal, or any Release of any Hazardous Materials generated by any
      Obligor, which has either not been resolved to the satisfaction of the
      issuing authority or which would not individually or in the aggregate have
      a Material Adverse Effect.

            (b) None of the Obligors owns, operates or leases a treatment,
      storage or disposal facility requiring a permit under the Resource
      Conservation and Recovery Act of 1976, as amended, or under any comparable
      state or local statute; and

                                       49
<PAGE>
                    (i)    no polychlorinated biphenyls (PCBs) are or have been
            present at any site or facility now or previously owned, operated or
            leased by any Obligor;

                    (ii) no asbestos or asbestos-containing materials that are
            friable or bear a reasonable chance of becoming friable are or have
            been present at any site or facility now or previously owned,
            operated or leased by any Obligor;

                    (iii) there are no underground storage tanks for Hazardous
            Materials, active or abandoned, at any site or facility now or
            previously owned, operated or leased by any Obligor that are not in
            material compliance with all applicable Environmental Laws, and
            there are no surface impoundments for Hazardous Materials, active or
            abandoned at any site or facility now or previously owned, operated
            or leased by any Obligor;

                    (iv) no Hazardous Materials have been Released at, on or
            under any site or facility now or previously owned, operated or
            leased by any Obligor in a reportable quantity established by any
            applicable Environmental Law; and

                    (v) no Hazardous Materials have been otherwise Released at,
            on or under any site or facility now or previously owned, operated
            or leased by any Obligor that would (either individually or in the
            aggregate) have a Material Adverse Effect.

            (c) None of the Obligors has transported or arranged for the
      transportation of any Hazardous Material to any location that is listed on
      the National Priorities List ("NPL") under the Comprehensive Environmental
      Response, Compensation and Liability Act of 1980, as amended ("CERCLA"),
      listed for possible inclusion on the NPL by the Environmental Protection
      Agency in the Comprehensive Environmental Response and Liability
      Information System, as provided for by 40 C.F.R.ss. 300.5 ("CERCLIS"), or
      on any similar state or local list or that is the subject of Federal,
      state or local enforcement actions or other investigations that may lead
      to Environmental Claims against the Company or any of its Subsidiaries,
      which individually or in the aggregate would have a Material Adverse
      Effect.

            (d) No Hazardous Material generated by the Company or any of its
      Subsidiaries has been recycled, treated, stored, disposed of or Released
      by any Obligor at any facility which is subject to an Environmental Claim
      which would reasonably be expected individually or in the aggregate to
      have a Material Adverse Effect.

            (e) No oral or written notification of a Release of a Hazardous
      Material has been filed by or on behalf of the Company or any of its
      Subsidiaries and no site or facility now or previously owned, operated or
      leased by any Obligor is listed or to the knowledge of any Obligor (upon
      due investigation) proposed for listing on the NPL, CERCLIS or any similar
      state list of sites requiring investigation or clean-up, in each case,
      which has either not been resolved to the satisfaction of the issuing
      authority or which would not individually or in the aggregate have a
      Material Adverse Effect.

            (f) No Liens have arisen under or pursuant to any Environmental Laws
      on any site or facility owned, operated or leased by any Obligor, and no
      government action has been taken or is in process that could subject any
      such site or facility to such Liens and none of the Obligors would be
      required to place any notice or restriction relating to the presence of
      Hazardous Materials at any site or facility owned by it in any deed to the
      real property on which such site or facility is located.

            (g) All investigations, studies, audits, tests, reviews or other
      analyses conducted by or that are in the possession of any Obligor
      relating to environmental matters at or affecting any site or facility now
      or previously owned, operated or leased by the any Obligor and that reveal
      facts, circumstances or conditions

                                       50
<PAGE>
      that could reasonably be expected to result in a Material Adverse Effect
      have been made available to the Lenders.

            8.14 CAPITALIZATION. Schedule V hereto correctly sets forth the
number of shares of authorized capital stock of the Company, the class of such
shares, the number of each such class outstanding and the par value thereof. All
of such outstanding shares are duly and validly issued and outstanding, and (to
the Company's knowledge) each of which shares is fully paid and nonassessable.
Schedule V hereto correctly sets forth, as of the date hereof, the names of the
Persons owning 5% or more of any class of such capital stock, the class or
classes of such capital stock owned by each such Person and percentage of the
total number of shares of such class owned by each such Person. As of the date
hereof, (x) except for those set forth in Schedule V hereto, there are no
outstanding Equity Rights with respect to the Company and (y) except for those
set forth in Schedule V hereto, there are no outstanding obligations of any
Obligor to repurchase, redeem, or otherwise acquire any shares of capital stock
of any Obligor to make payments to any Person, such as "phantom stock" payments,
where the amount thereof is calculated with reference to the fair market value
or equity value of any Obligor.

            8.15 SUBSIDIARIES, ETC.

            (a) Set forth in Part A of Schedule III hereto is a complete and
      correct list, as of the date hereof, of all of the Subsidiaries of the
      Company, together with, for each such Subsidiary, (i) the jurisdiction of
      organization of such Subsidiary, (ii) each Person holding ownership
      interests in such Subsidiary and (iii) the nature of the ownership
      interests held by each such Person and the percentage of ownership of such
      Subsidiary represented by such ownership interests. Except as disclosed in
      Part A of Schedule III hereto, (x) each of the Company and its
      Subsidiaries owns, free and clear of Liens (other than Liens created
      pursuant to the Security Documents), and has the unencumbered right to
      vote, all outstanding ownership interests in each Person shown to be held
      by it in Part A of Schedule III hereto, (y) all of the issued and
      outstanding capital stock of each such Person organized as a corporation
      is validly issued, fully paid and nonassessable and (z) there are no
      outstanding Equity Rights with respect to such Person.

            (b) Set forth in Part B of Schedule III hereto is a complete and
      correct list, as of the date of this Agreement, of all Investments (other
      than Investments disclosed in Part A of said Schedule III hereto) held by
      the Company or any of its Subsidiaries in any Person (other than
      Investments which are Permitted Investments or deposits maintained with
      banks in the ordinary course of business) and, for each such Investment,
      (x) the identity of the Person or Persons holding such Investment and (y)
      the nature of such Investment. Except as disclosed in Part B of Schedule
      III hereto, each of the Company and its Subsidiaries owns, free and clear
      of all Liens (other than Liens created pursuant to the Security
      Documents), all such Investments.

            8.16 TITLE TO ASSETS. Each Obligor owns and has on the date hereof,
and will own and have on the Closing Date, good and marketable title or valid
and subsisting leaseholds (subject only to Liens permitted by SECTION 9.06
hereof) to the Properties shown to be owned in the most recent financial
statements referred to in SECTION 8.02 hereof (other than Properties disposed of
in the ordinary course of business or otherwise permitted to be disposed of
pursuant to SECTION 9.05 hereof). Each Obligor (a) owns and has on the date
hereof (and will own and have on the Closing Date), good and marketable title
to, or has on the date hereof (and will have on the Closing Date) a valid and
subsisting leasehold estate in, and (b) enjoys on the date hereof (and will
enjoy on the Closing Date), peaceful and undisturbed possession of, all
Properties (subject only to Liens permitted by SECTION 9.06 hereof) that are
necessary for the operation and conduct of its businesses.

            8.17 TRUE AND COMPLETE DISCLOSURE. The information (other than
projections), reports, financial statements, exhibits and schedules furnished in
writing by or on behalf of the Obligors to the Administrative Agent or any
Lender in connection with the negotiation, preparation or delivery of this
Agreement and the other Basic Documents or included herein or therein or
delivered pursuant hereto or thereto, when taken as a

                                       51
<PAGE>
whole do not contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading. All projections
furnished by or on behalf of the Obligors in writing to the Administrative Agent
or any Lender for purposes of or in connection with this Agreement or the
transactions contemplated hereby were prepared by the Company in good faith
based on assumptions determined to be reasonable by the Company under the then
existing facts and circumstances. All written information furnished after the
date hereof by any Obligor to the Administrative Agent and the Lenders in
connection with this Agreement and the other Basic Documents and the
transactions contemplated hereby and thereby will be true, complete and accurate
in every material respect, or (in the case of projections) based on reasonable
assumptions, on the date, and under the facts and circumstances, as of which
such information is stated or certified. There is no fact actually known to any
Obligor that could have a Material Adverse Effect that has not been disclosed
herein, in the other Basic Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the Lenders
for use in connection with the transactions contemplated hereby or thereby.

            8.18 REAL PROPERTY. Set forth on Schedule IV hereto is a list, as of
the Closing Date, of all of the real property interests held by the Company and
its Subsidiaries, indicating in each case whether the respective Property is
owned or leased and the location of the respective Property.

            SECTION 9. COVENANTS OF THE COMPANY. The Company covenants and
agrees with the Lenders and the Administrative Agent that, so long as any
Commitment, Loan or Letter of Credit Liability is outstanding and until payment
in full of all amounts payable by the Company hereunder:

            9.01 FINANCIAL STATEMENTS; ETC. The Company shall deliver to each of
the Lenders (in such form as shall be satisfactory to the Administrative Agent):

            (a) no later than January 15 of each year, a budget (on a monthly
      basis) for the Company and its Subsidiaries for such year (including
      consolidating and consolidated statements of income, cash flow and balance
      sheets prepared in accordance with GAAP); and promptly after any material
      revision to such budget, such budget as so revised;

            (b) as soon as available and in any event within 30 days after the
      end of each month, consolidated and consolidating statements of income and
      retained earnings of the Company and its Subsidiaries for such month and
      for the period from the beginning of the respective fiscal year to the end
      of such month, and the related consolidated balance sheets of the Company
      and its Subsidiaries as at the end of such month, setting forth in each
      case in comparative form the corresponding consolidated and consolidating
      figures provided in the budget required under SECTION 9.01(A) hereof for
      such period, accompanied by a certificate of a senior financial officer of
      the Company, which certificate shall state that said consolidated
      financial statements fairly present the consolidated financial condition
      and results of operations of the Company and its Subsidiaries, and said
      consolidating financial statements fairly present the respective
      individual unconsolidated financial condition and results of operations of
      the Company and of each of its Subsidiaries, in each case in accordance
      with generally accepted accounting principles, consistently applied, as at
      the end of, and for, such month (subject to normal year-end audit
      adjustments with the absence of footnotes);

            (c) as soon as available and in any event within 45 days after the
      end of each quarterly fiscal period of each fiscal year of the Company,
      (i) a statement of occupancy rates at each of the facilities owned or
      maintained by the Company and its Subsidiaries as at the end of such
      period, and a statement of occupancy revenues and the direct costs of
      occupancy for each Correctional and Detention Facility Contract for such
      period and for the period from the beginning of the respective fiscal year
      to the end of such fiscal quarter, in each case setting forth in
      comparative form the corresponding figures for the corresponding periods
      in the budget required under SECTION 9.01(A) hereof (ii) an analysis of
      the chief

                                       52
<PAGE>
      financial officer of the financial condition of the Company and its
      Subsidiaries, on a consolidated and consolidating basis, as of the end of
      such period, including (without limitation) a reconciliation to the budget
      required under SECTION 9.01(A) hereof;

            (d) as soon as available and in any event within 90 days after the
      end of each fiscal year of the Company, consolidated and consolidating
      statements of income and retained earnings, and a consolidated statement
      of cash flow, of the Company and its Subsidiaries for such fiscal year and
      the related consolidated and consolidating balance sheets of the Company
      and its Subsidiaries as at the end of such fiscal year, setting forth in
      each case in comparative form the corresponding consolidated and
      consolidating figures for the preceding fiscal year, and accompanied (i)
      in the case of said consolidated statements and balance sheet of the
      Company, by an opinion thereon of independent certified public accountants
      of recognized national standing (which opinion shall not contain any
      Impermissible Qualification), which opinion shall state that said
      consolidated financial statements fairly present the consolidated
      financial condition and results of operations of the Company and its
      Subsidiaries as at the end of, and for, such fiscal year in accordance
      with generally accepted accounting principles, and by a management letter
      or similar letter submitted to the Company by such accountants and (ii) in
      the case of said consolidating statements and balance sheets, by a
      certificate of a senior financial officer of the Company, which
      certificate shall state that said consolidating financial statements
      fairly present the respective individual unconsolidated financial
      condition and results of operations of the Company and of each of its
      Subsidiaries, in each case in accordance with generally accepted
      accounting principles, consistently applied, as at the end of, and for,
      such fiscal year;

            (e) promptly upon their becoming available, copies of all
      registration statements and regular periodic reports, if any, that the
      Company shall have filed with the Securities and Exchange Commission (or
      any governmental agency substituted therefor) or any national securities
      exchange;

            (f) to the extent not previously furnished to the Lenders or the
      Administrative Agent in such capacity, promptly upon the mailing thereof
      to the shareholders of the Company generally, copies of all financial
      statements, reports and proxy statements so mailed;

            (g) without duplication of any provision of subsection (d) above,
      promptly after the receipt by the Company thereof, copies of each report
      submitted to any Obligor by independent accountants in connection with any
      annual, interim or special audit of the books of any Obligor made by such
      accountants, or any management letters or similar documents submitted to
      any Obligor by such accountants;

            (h) as soon as possible, and in any event within ten days after the
      Company knows or has reason to believe that any of the events or
      conditions specified below with respect to any Plan or Multiemployer Plan
      has occurred or exists, a statement signed by a senior financial officer
      of the Company setting forth details respecting such event or condition
      and the action, if any, that the Company or its ERISA Affiliate proposes
      to take with respect thereto (and a copy of any report or notice required
      to be filed with or given to PBGC by the Company or an ERISA Affiliate
      with respect to such event or condition):

                    (i) any reportable event, as defined in Section 4043(b) of
            ERISA and the regulations issued thereunder, with respect to a Plan,
            as to which PBGC has not by regulation waived the requirement of
            Section 4043(a) of ERISA that it be notified within 30 days of the
            occurrence of such event (PROVIDED that a failure to meet the
            minimum funding standard of Section 412 of the Code or Section 302
            of ERISA, including, without limitation, the failure to make on or
            before its due date a required installment under Section 412(m) of
            the Code or Section 302(e) of ERISA, shall be a reportable event
            regardless of the issuance of any waivers in accordance with

                                       53
<PAGE>
            Section 412(d) of the Code); and any request for a waiver under
            Section 412(d) of the Code for any Plan;

                    (ii) the distribution under Section 4041 of ERISA of a
            notice of intent to terminate any Plan or any action taken by the
            Company or an ERISA Affiliate to terminate any Plan;

                    (iii) the institution by PBGC of proceedings under Section
            4042 of ERISA for the termination of, or the appointment of a
            trustee to administer, any Plan, or the receipt by the Company or
            any ERISA Affiliate of a notice from a Multiemployer Plan that such
            action has been taken by PBGC with respect to such Multiemployer
            Plan;

                    (iv) the complete or partial withdrawal from a Multiemployer
            Plan by the Company or any ERISA Affiliate that results in liability
            under Section 4201 or 4204 of ERISA (including the obligation to
            satisfy secondary liability as a result of a purchaser default) or
            the receipt by the Company or any ERISA Affiliate of notice from a
            Multiemployer Plan that it is in reorganization or insolvency
            pursuant to Section 4241 or 4245 of ERISA or that it intends to
            terminate or has terminated under Section 4041A of ERISA;

                    (v) the institution of a proceeding by a fiduciary of any
            Multiemployer Plan against the Company or any ERISA Affiliate to
            enforce Section 515 of ERISA, which proceeding is not dismissed
            within 30 days; and

                    (vi) the adoption of an amendment to any Plan that, pursuant
            to Section 401(a)(29) of the Code or Section 307 of ERISA, would
            result in the loss of tax-exempt status of the trust of which such
            Plan is a part if the Company or an ERISA Affiliate fails to timely
            provide security to the Plan in accordance with the provisions of
            said Sections;

            (i) without prejudice as to whether an Event of Default has
      occurred, promptly after the Company knows or has reason to believe that
      any Default has occurred, a notice of such Default describing the same in
      reasonable detail and, together with such notice or as soon thereafter as
      possible, a description of the action that the Company has taken or
      proposes to take with respect thereto;

            (j) promptly after the termination or expiration of any Correctional
      and Detention Facility Agreement, PRO FORMA financial projections prepared
      by the Company demonstrating that after giving effect to such termination
      or expiration (and any replacement Correctional and Detention Facility
      Agreement therefor) the Company will be in compliance with its obligations
      under SECTIONS 9.10, 9.11, 9.12, 9.13, 9.14 and 9.15 hereof for the period
      commencing on the date of such termination and ending on the Commitment
      Termination Date; and

            (k) from time to time such other information regarding the financial
      condition, operations, business or prospects of the Company or any of its
      Subsidiaries (including, without limitation, any Plan or Multiemployer
      Plan and any reports or other information required to be filed under
      ERISA) available to the Company, as any Lender or the Administrative Agent
      may reasonably request.

The Company will furnish to each Lender, at the time it furnishes each set of
financial statements pursuant to paragraph (a), (b) or (c) above, a certificate
of a senior financial officer of the Company to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Company has taken or proposes to take with respect thereto). In addition, at the
time the Company furnishes to each Lender the financial statements required
pursuant to paragraph (c) above, the Company shall furnish to each Lender a
certificate of a senior financial officer setting forth in reasonable detail the
computations necessary to determine whether the Company is in compliance with
SECTIONS 9.10, 9.11, 9.12,

                                       54
<PAGE>
9.13, 9.14 and 9.15 hereof as of the date as of which such financial statements
have been provided. Further, upon the request of any Lender, at the time the
Company furnishes the financial statements required pursuant to paragraph (b)
above, the Company shall furnish to such Lender a certificate of a senior
financial officer setting forth in reasonable detail the computations necessary
to determine whether the Company is in compliance with SECTIONS 9.10, 9.11,
9.12, 9.13, 9.14 and 9.15 hereof as of date as of which such financial
statements have been provided.

            9.02 LITIGATION. The Company will promptly give to each Lender
notice of all legal or arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any of
its Subsidiaries, except proceedings that, if adversely determined, would not
(either individually or in the aggregate) have a Material Adverse Effect.

            9.03 EXISTENCE, ETC. The Company will, and will cause each of its
Subsidiaries to:

            (a) preserve and maintain its legal existence and all of its
      material rights, privileges, licenses and franchises;

            (b) comply with the requirements of all applicable laws, rules,
      regulations and orders of governmental or regulatory authorities if
      failure to comply with such requirements could be reasonably expected to
      (either individually or in the aggregate) have a Material Adverse Effect;

            (c) pay and discharge all taxes, assessments and governmental
      charges or levies imposed on it or on its income or profits or on any of
      its Property prior to the date on which penalties attach thereto, except
      for any such tax, assessment, charge or levy the payment of which is being
      contested in good faith and by proper proceedings and against which
      adequate reserves are being maintained;

            (d) maintain all of its Properties necessary to the conduct of its
      business in good working order and condition, ordinary wear and tear
      excepted;

            (e) keep adequate records and books of account, in which complete
      entries will be made in accordance with generally accepted accounting
      principles consistently applied; and

            (f) upon notice to the Company, permit representatives of any Lender
      or the Administrative Agent, during normal business hours, to examine,
      copy and make extracts from its books and records, to inspect any of its
      Properties, and to discuss its business and affairs with its officers, all
      to the extent reasonably requested by such Lender or the Administrative
      Agent (as the case may be).

            9.04 INSURANCE. The Company will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
usually maintained by corporations of comparable size engaged in the same or
similar business and similarly situated, against loss, damage and liability of
the kinds and in the amounts customarily maintained by such corporations. The
Company will in any event maintain (with respect to itself and each of its
Subsidiaries):

            (1) CASUALTY INSURANCE -- insurance against loss or damage covering
      all of the tangible real and personal Property and improvements of the
      Company and each of its Subsidiaries by reason of any Peril (as defined
      below) in such amounts (subject to such reasonable and customary
      deductibles as shall be satisfactory to the Majority Lenders) as shall be
      reasonable and customary and sufficient to avoid the insured named therein
      from becoming a co-insurer of any loss under such policy but in any event
      in an amount (i) in the case of fixed assets and equipment (including,
      without limitation, vehicles), at least equal to 100% of the actual
      replacement cost of such assets, subject to deductibles as aforesaid and
      (ii) in the case of inventory, not less than the fair market value
      thereof, subject to deductibles as aforesaid, PROVIDED that

                                       55
<PAGE>
      insurance in respect of Perils consisting of floods shall not be required
      to be obtained except upon 30 days' prior notice from the Administrative
      Agent.

            (2) AUTOMOBILE LIABILITY INSURANCE FOR BODILY INJURY AND PROPERTY
      DAMAGE -- insurance against liability for bodily injury and property
      damage in respect of all vehicles (whether owned, hired or rented by the
      Company or any of its Subsidiaries) at any time located at, or used in
      connection with, its Properties or operations in such amounts as are then
      customary for vehicles used in connection with similar Properties and
      businesses, but in any event to the extent required by applicable law.

            (3) COMPREHENSIVE GENERAL LIABILITY INSURANCE -- insurance against
      claims for bodily injury, death or Property damage occurring on, in or
      about the Properties (and adjoining streets, sidewalks and waterways) of
      the Company and its Subsidiaries, in such amounts as are then customary
      for Property similar in use in the jurisdictions where such Properties are
      located.

            (4) WORKERS' COMPENSATION INSURANCE -- workers' compensation
      insurance (including, without limitation, Employers' Liability Insurance)
      to the extent required by applicable law.

            (5) BUSINESS INTERRUPTION INSURANCE -- insurance against loss of
      operating income (up to an aggregate amount equal to $20,000,000 and
      subject to a deductible, or self-insured amount, not in excess of
      $100,000) by reason of any Peril.

            (6) PROFESSIONAL LIABILITY INSURANCE -- professional liability
      insurance in an amount equal to at least $10,000,000.

Such insurance shall be written by financially responsible companies selected by
the Company and (except for automobile insurance) having an A.M. Best rating of
"A" or better and being in a financial size category of VII or larger (or, with
respect to professional liability insurance only, an equivalent rating by a
European equivalent of A.M. Best), or by other companies acceptable to the
Majority Lenders, and (other than for workers' compensation) shall name the
Administrative Agent as loss payee (to the extent covering risk of loss or
damage to tangible property) and as an additional named insured as its interests
may appear (to the extent covering any other risk). Each policy referred to in
this SECTION 9.04 shall provide that it will not be canceled or reduced, or
allowed to lapse without renewal, except after not less than 30 days' notice to
the Administrative Agent and shall also provide that the interests of the
Administrative Agent and the Lenders shall not be invalidated by any act or
negligence of the Company or any Person having an interest in any Property
covered by the Mortgage nor by occupancy or use of any such Property for
purposes more hazardous than permitted by such policy nor by any foreclosure or
other proceedings relating to such Property. The Company will advise the
Administrative Agent promptly of any significant policy cancellation (other than
any such cancellation in connection with the replacement thereof), reduction or
amendment.

            On or before the Closing Date, the Company will deliver to the
Administrative Agent certificates of insurance satisfactory to the
Administrative Agent evidencing the existence of all insurance required to be
maintained by the Company hereunder setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage and showing
that such insurance will remain in effect through the December 31 falling at
least six months after the date hereof, subject only to the payment of premiums
as they become due. Thereafter, the Company will maintain all insurance required
to be maintained by the Company hereunder through the December 31 of each
subsequent calendar year as long as any Loans or Commitments are outstanding
under this Agreement, subject only to the payment of premiums as they become due
and the availability of such coverage. In addition, the Company will not modify
any of the provisions of any policy with respect to professional liability
insurance without delivering the original copy of the endorsement reflecting
such modification to the Administrative Agent accompanied by a written report of
Summit Global Partners, or any other firm of independent insurance brokers of
nationally recognized standing, stating that, in their opinion, such policy (as
so modified) adequately

                                       56
<PAGE>
protects the interests of the Lenders and the Administrative Agent, is in
compliance with the provisions of this SECTION 9.04, and is comparable in all
respects with insurance carried by responsible owners and operators of
businesses similar to those of the Company and its Subsidiaries. The Company
will not obtain or carry separate insurance concurrent in form or contributing
in the event of loss with that required by this SECTION 9.04 unless the
Administrative Agent is the named insured thereunder, with loss payable as
provided herein. The Company will immediately notify the Administrative Agent
whenever any such separate insurance is obtained and shall deliver to the
Administrative Agent the certificates evidencing the same.

            Without limiting the obligations of the Company under the foregoing
provisions of this SECTION 9.04, in the event the Company shall fail to maintain
in full force and effect insurance as required by the foregoing provisions of
this SECTION 9.04, then the Administrative Agent may (upon notice to the
Company), but shall have no obligation so to do, procure insurance covering the
interests of the Lenders and the Administrative Agent in such amounts and
against such risks as the Administrative Agent (or the Majority Lenders) shall
deem appropriate, and the Company shall reimburse the Administrative Agent in
respect of any premiums paid by the Administrative Agent in respect thereof.

            For purposes hereof, the term "PERIL" shall mean, collectively,
fire, lightning, flood, windstorm, hail, explosion, riot and civil commotion,
vandalism and malicious mischief, damage from aircraft, vehicles and smoke and
all other perils covered by the "all-risk" endorsement then in use in the
jurisdictions where the Properties of the Company and its Subsidiaries are
located.

            9.05 PROHIBITION OF FUNDAMENTAL CHANGES. The Company will not, nor
will it permit any of its Subsidiaries to, enter into any transaction of merger
or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution). The Company will not, nor will it permit
any of its Subsidiaries to, acquire any business or Property from, or capital
stock of, or be a party to any acquisition of, any Person except for (w)
purchases of inventory and other Property to be sold or used in the ordinary
course of business, (x) Investments permitted under SECTION 9.08 hereof, (y)
Capital Expenditures permitted under SECTION 9.15 hereof and (z) other
acquisitions so long as the aggregate consideration paid by the Obligors for all
such acquisitions does not exceed $250,000. The Company will not, nor will it
permit any of its Subsidiaries to, convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, any part of its
business or Property, whether now owned or hereafter acquired (including,
without limitation, receivables and leasehold interests, but excluding (i)
obsolete or worn-out Property, tools or equipment no longer used or useful in
its business, or any inventory or other Property sold or disposed of in the
ordinary course of business and on ordinary business terms (so long as the
aggregate fair market value of all such Property disposed of shall not exceed
(x) $3,000,000 and (y) $1,000,000 in any year), (ii) the granting of Liens to
secure the Senior Notes, the 1998 Synthetic Lease Financing and any Future
Synthetic Lease Financing, (iii) Municipal Transaction Transfers so long as (x)
the aggregate consideration received by the Obligors in connection with any
Municipal Transaction Transfer is not less than the depreciated book value of
the Property that is the subject of such Municipal Transaction Transfer, and (y)
the aggregate Net Available Proceeds of all Municipal Transaction Transfers does
not exceed $175,000,000, (iv) sale lease-back transactions that the Obligors are
permitted to enter into pursuant to SECTION 9.17 hereof, and (v) other
dispositions so long as the aggregate fair market value of all Property so
disposed of does not exceed $250,000).

            9.06 LIMITATION ON LIENS. The Company will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its Property, whether now owned or hereafter acquired, except
(without duplication):

            (a) Liens created pursuant to the Security Documents or the
      Operative Documents;

                                       57
<PAGE>
            (b) Liens in existence on the date hereof and listed in Part B of
      Schedule I hereto (excluding, however, following the making of the initial
      Loans hereunder, Liens securing Indebtedness to be repaid with the
      proceeds of such Loans, as indicated on said Schedule I);

            (c) Liens imposed by any governmental authority for taxes,
      assessments or charges not yet due or that are being contested in good
      faith and by appropriate proceedings if adequate reserves with respect
      thereto are maintained on the books of the Company or the affected
      Subsidiaries, as the case may be, in accordance with GAAP;

            (d) carriers', warehousemen's, mechanics', materialmen's,
      repairmen's or other like Liens arising in the ordinary course of business
      that are not overdue for a period of more than 30 days or that are being
      contested in good faith and by appropriate proceedings and Liens securing
      judgments but only to the extent for an amount and for a period not
      resulting in an Event of Default under SECTION 11.01(H) hereof;

            (e) pledges or deposits under worker's compensation, unemployment
      insurance and other social security legislation;

            (f) deposits to secure the performance of bids, trade contracts
      (other than for Indebtedness), leases, statutory obligations, surety and
      appeal bonds, performance bonds and other obligations of a like nature
      incurred in the ordinary course of business;

            (g) easements, rights-of-way, restrictions and other similar
      encumbrances incurred in the ordinary course of business and encumbrances
      consisting of zoning restrictions, easements, licenses, restrictions on
      the use of Property or minor imperfections in title thereto that, in the
      aggregate, are not material in amount, and that do not in any case
      materially detract from the value of the Property subject thereto or
      interfere with the ordinary conduct of the business of the Company or any
      of its Subsidiaries;

            (h) Liens upon real and/or tangible personal Property acquired after
      the date hereof (by purchase, construction or otherwise) by the Company or
      any of its Subsidiaries, each of which Liens either (A) existed on such
      Property before the time of its acquisition and was not created in
      anticipation thereof or (B) was created solely for the purpose of securing
      Indebtedness representing, or incurred to finance, refinance or refund,
      the cost (including the cost of construction) of such Property; PROVIDED
      that (i) no such Lien shall extend to or cover any Property of the Company
      or such Subsidiary other than the Property so acquired and improvements
      thereon and (ii) the principal amount of Indebtedness secured by any such
      Lien shall at no time exceed 80% of the fair market value (as determined
      in good faith by a senior financial officer of the Company) of such
      Property at the time it was acquired (by purchase, construction or
      otherwise);

            (i) Liens on the Property of a designated subsidiary securing
      Indebtedness permitted pursuant to SECTION 9.07(E) hereof;

            (j) Liens securing the Senior Notes that are PARI PASSU with the
      Liens in favor of the Administrative Agent and the Lenders under the
      Security Documents; and

            (k) Liens securing any Future Synthetic Lease Financing that are
      PARI PASSU with the Liens in favor of the Administrative Agent and the
      Lenders under the Security Documents.

            9.07 INDEBTEDNESS. The Company will not, nor will it permit any of
its Subsidiaries to, create, incur or suffer to exist any Indebtedness except
(without duplication):

            (a) Indebtedness to the Lenders hereunder;

                                       58
<PAGE>
            (b) Indebtedness outstanding on the date hereof and listed in Part A
      of Schedule I hereto;

            (c) Indebtedness of Subsidiaries of the Company to the Company or to
      other Subsidiaries of the Company;

            (d) Indebtedness of the Company and its Subsidiaries secured by
      Liens permitted under SECTION 9.06(H) hereof up to but not exceeding
      $1,000,000 at any one time outstanding;

            (e) Indebtedness of one or more newly-created Subsidiaries of the
      Company that the Company requests be permitted to incur Indebtedness under
      this SECTION 9.07(E), and the Majority Lenders agree shall be permitted to
      incur Indebtedness under this SECTION 9.07(E) (PROVIDED that the Lenders
      shall not condition their agreement on the payment of a fee), in an
      aggregate principal amount not to exceed $30,000,000 at any one time
      outstanding;

            (f) Indebtedness consisting of the Senior Notes, any Subordinated
      Notes, the 1998 Synthetic Lease Financing and any Future Synthetic Lease
      Financing; and

            (g) additional Indebtedness of the Company and its Subsidiaries
      (including, without limitation, Capital Lease Obligations) up to but not
      exceeding $2,000,000 at any one time outstanding.

            9.08 INVESTMENTS. The Company will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:

            (a) the loans identified in Part B of Schedule III hereto, with the
      terms and conditions set forth on Part B of Schedule III hereto, provided
      that the aggregate principal amount of such loans, together with accrued
      interest thereon, does not exceed $1,300,000;

            (b) operating deposit accounts with banks;

            (c) Permitted Investments;

            (d) Investments by the Company and its Subsidiaries in capital stock
      of Subsidiaries of the Company to the extent outstanding on the date of
      the financial statements of the Company and its Subsidiaries referred to
      in SECTION 8.02 hereof and advances by the Company and its Subsidiaries to
      Subsidiaries of the Company in the ordinary course of business or in
      connection with a Relevant Transaction financed with Loans;

            (e) Interest Rate Protection Agreements required to be maintained
      under SECTION 9.18 hereof;

            (f) additional Investments up to but not exceeding $200,000 in the
      aggregate;

            (g) existing and future Investments comprised of stocks, bonds and
      notes of existing or former account debtors of the Obligors if such
      Investment was received pursuant to the consummation of a bankruptcy plan
      of reorganization or similar proceedings of such account debtor; and

            (h) loans or advances by the Company or any of its Subsidiaries to
      employees in the ordinary course of business in an aggregate amount any
      one time outstanding not to exceed $250,000.

            9.09 DIVIDEND PAYMENTS. The Company will not, nor will it permit any
of its Subsidiaries to, declare or make any Dividend Payment at any time;
PROVIDED that the Company may (i) repurchase shares of its capital stock so long
as the aggregate amount paid by the Company for all such repurchases does not
exceed

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<PAGE>
$2,500,000 in any fiscal year of the Company and $7,500,000, in the aggregate
and (ii) declare or make stock splits which do not decrease the percentage
ownership of any Person in any class of the capital stock of the Company.

            9.10 EBITDAR RATIO I. The Company will not permit the EBITDAR Ratio
I with respect to any period ending on a date that falls within any period set
forth below under the column entitled "Period" to exceed the applicable ratio
set forth under the caption "Ratio" opposite such period:

            PERIOD                                RATIO
            ------                                -----
      Closing Date through and
      including March 31, 2001                    3.75 to 1

      April 1, 2001 through and
      including December 31, 2001                 3.50 to 1

      January 1, 2002 through and
      including June 30, 2002                     3.25 to 1

      July 1, 2002 through and
      including December 31, 2002                 3.00 to 1

      January 1, 2003 through and
      including June 30, 2003                     2.75 to 1

      July 1, 2003 through and
      including June 30, 2004                     2.50 to 1

      July 1, 2004 and all times thereafter       2.25 to 1

            9.11 EBITDAR RATIO II. The Company will not permit the EBITDAR Ratio
II with respect to any period ending on a date that falls within any period set
forth below under the column entitled "Period" to exceed the applicable ratio
set forth under the caption "Ratio" opposite such period:

            PERIOD                                RATIO
            ------                                -----
      Closing Date through and
      including March 31, 2001                    5.00 to 1

      April 1, 2001 through and
      including September 30, 2001                4.50 to 1

      October 1, 2001 through and
      including March 31, 2002                    4.25 to 1

      April 1, 2002 through and
      including September 30, 2002                4.00 to 1

      October 1, 2002 through and
      including March 31, 2003                    3.75 to 1

                                       60
<PAGE>
            PERIOD                                RATIO
            ------                                -----

      April 1, 2003 through and
      including June 30, 2004                     3.50 to 1

      July 1, 2004 and all times thereafter       3.25 to 1

            9.12 NET WORTH. The Company will not permit its Net Worth, as at the
last day of any fiscal quarter of the Company (a "CALCULATION DATE") to be less
than the sum of the following:

            (a) $90,000,000, PLUS

            (b) an amount equal to 50% of the aggregate net income of the
      Company and its Subsidiaries (determined on a consolidated basis in
      accordance with GAAP) for each fiscal quarter of the Company for which
      such net income is a positive number, commencing with the fiscal quarter
      ending on September 30, 2000 and ending with the fiscal quarter ending on
      the Calculation date, PLUS

            (c) an amount equal to the aggregate Net Available Proceeds received
      in respect of Equity Issuances during the period commencing on July 1,
      2000 and ending on the last day of such fiscal quarter.

            9.13 INTEREST COVERAGE RATIO. The Company will not permit the
Interest Coverage Ratio with respect to any period ending on a date that falls
within any period set forth below under the column entitled "Period" to be less
than the applicable ratio set forth under the caption "Ratio" opposite such
period:

            PERIOD                                RATIO
            ------                                -----
      Closing Date through and
      including March 31, 2003                    2.00 to 1

      April 1, 2003 through and
      including December 31, 2003                 2.25 to 1

      January 1, 2004 through and
      including June 30, 2004                     2.50 to 1

      July 1, 2004 and all times thereafter       2.75 to 1

            9.14 FIXED CHARGES RATIO. The Company will not permit the Fixed
Charges Ratio with respect to any period ending on a date that falls within any
period set forth below under the column entitled "Period" to be less than the
applicable ratio set forth under the caption "Ratio" opposite such period:

            PERIOD                                RATIO
            ------                                -----
      Closing Date through and
      including March 31, 2001                    1.55 to 1

      April 1, 2001 through and
      including June 30, 2003                     1.60 to 1

      July 1, 2003 and all times thereafter       1.50 to 1

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<PAGE>
            9.15 CAPITAL EXPENDITURES. The Company will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures at any time, except
for the following:

            (a) maintenance Capital Expenditures in an aggregate amount in any
      year not to exceed an amount equal to 3% of the total revenues of the
      Company and its Subsidiaries for such year; and

            (b) Capital Expenditures made in connection with Eligible
      Acquisitions and Eligible New Contracts as described pursuant to SECTION
      7.02 (A) (V) (C) (Z) hereof.

            9.16 THE CORNELL COX GROUP, L.P. The Cornell Cox Group, L.P., a
Delaware limited partnership, shall not hold or acquire any Property and shall
not incur any Indebtedness or other liabilities in addition to those in
existence as of the date hereof, which are correctly set forth on Schedule VI
hereto.

            9.17 SALE LEASE-BACK TRANSACTIONS. Except for Municipal
Transactions, the Company will not, and will not permit any of its Subsidiaries
to, enter into any arrangement with any Person whereby the Company or such
Subsidiary shall sell or otherwise transfer any of its Property, whether now
owned or hereafter acquired, and thereafter rent or lease such Property or
similar Property for substantially the same use or uses as the Property sold or
transferred UNLESS the following conditions are satisfied:

            (a) the consideration received by the Company or such Subsidiary in
      connection with such transfer is at least equal to the fair market value
      of the Property so transferred (as reasonably determined by the board of
      directors of the Company),

            (b) all of the net proceeds received by the Company or any of its
      Subsidiaries in connection with any such transaction are used by the
      Company, within 12 months of the receipt thereof, to either (i) acquire
      other Property in compliance with the term of this Agreement and/or (ii)
      repay or prepay Indebtedness of the Company or any of its Subsidiaries
      (other than any Subordinated Notes), and

            (c) the aggregate consideration received by the Obligors in
      connection with all such sale lease-back transactions entered into after
      the date of this Agreement shall not exceed $20,000,000.

            9.18 DISCOUNT OF ACCOUNTS. The Company will not, and will not permit
any of its Subsidiaries to, sell (with or without recourse) or discount any of
their accounts receivable.

            9.19 INTEREST RATE PROTECTION AGREEMENTS. The Company will, at all
times after the first date on which any of the following shall occur (a) the
aggregate principal amount of all Indebtedness of the Obligors that bears
interest at a fixed rate until its maturity is an amount less than 30% of the
aggregate principal amount of all Indebtedness of the Obligors on such date, or
(b) the three-month London interbank offered rate for amounts in excess of
$1,000,000 shall be greater than 9% per annum for at least 15 consecutive days,
or (c) any Event of Default shall have occurred, obtain and thereafter maintain
in full force and effect one or more Interest Rate Protection Agreements with
any Lender (or an affiliate of any Lender), that effectively enables the Company
(in a manner satisfactory to the Administrative Agent), as at any date, to
protect itself against fluctuations in interest rates.

            9.20 LINES OF BUSINESS. Neither the Company nor any of its
Subsidiaries will engage to any substantial extent in any line or lines of
business activity other than the business of operating correctional and/or
detention facilities, juvenile facilities, pre-release facilities and substance
abuse rehabilitation facilities and related lines of business.

            9.21 TRANSACTIONS WITH AFFILIATES. Except as expressly permitted by
this Agreement, the Company will not, nor will it permit any of its Subsidiaries
to, directly or indirectly: (a) make any Investment in an

                                       62
<PAGE>
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate (including,
without limitation, Guarantees and assumptions of obligations of an Affiliate);
PROVIDED that (x) any Affiliate who is an individual may serve as a director,
officer or employee of the Company or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity and (y) the
Company and its Subsidiaries may enter into transactions (other than extensions
of credit by the Company or any of its Subsidiaries to an Affiliate or the
payment of management or similar fees by the Company or a Subsidiary to an
Affiliate) providing for the leasing of Property, the rendering or receipt of
services or the purchase or sale of inventory and other Property in the ordinary
course of business if the monetary or business consideration arising therefrom
would be substantially as advantageous to the Company and its Subsidiaries as
the monetary or business consideration that would obtain in a comparable
transaction with a Person not an Affiliate.

            9.22 USE OF PROCEEDS.

            (a) The Company will use the proceeds of the Revolving Credit Loans
      solely:

                  (i)   to finance ongoing working capital purposes;

                  (ii)  to make principal and interest payments on Loans;

                  (iii) to finance acquisitions, the expansion of existing
                        facilities, the acquisition of new contracts, and other
                        Capital Expenditures, in each case subject to the terms
                        hereof; and

                  (iii) to refinance the Subordinated Bridge;

      PROVIDED that neither the Administrative Agent nor any Lender shall have
      any responsibility as to the use of any of such proceeds.

            (b) The Lessor will use the proceeds of the Synthetic Lease Loans
      solely to acquire Land and Buildings and fund Construction; PROVIDED that
      neither the Administrative Agent nor any Lender shall have any
      responsibility as to the use of any of such proceeds.

            9.23 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES.

            (a) The Company will, and will cause each of its Subsidiaries to,
      take such action from time to time as shall be necessary to ensure that
      each of its Subsidiaries is a Wholly Owned Subsidiary.

            (b) In the event that any additional shares of capital stock shall
      be issued by any Subsidiary of the Company, the respective Obligor agrees
      forthwith to deliver to the Administrative Agent pursuant to the Security
      Agreement the certificates evidencing such shares of stock, accompanied by
      undated stock powers executed in blank and to take such other action as
      the Administrative Agent shall request to perfect the security interest
      created therein pursuant to the Security Agreement.

            (c) The Company will take such action, and will cause each of its
      Subsidiaries to take such action, from time to time as shall be necessary
      to ensure that all Subsidiaries of the Company are Subsidiary Guarantors
      and, thereby, "Obligors" hereunder. Without limiting the generality of the
      foregoing, in the event that the Company or any of its Subsidiaries shall
      form or acquire any new Subsidiary, the Company or the respective
      Subsidiary will cause such new Subsidiary to become a "Subsidiary
      Guarantor" (and, thereby, an "Obligor") hereunder pursuant to a written
      instrument in form

                                       63
<PAGE>
      and substance satisfactory to each Lender and the Administrative Agent,
      and to deliver such proof of corporate action, incumbency of officers,
      opinions of counsel and other documents as any Lender or the
      Administrative Agent shall have requested.

            9.24 MODIFICATIONS OF CERTAIN DOCUMENTS. No Obligor will consent to
any material modification, supplement or waiver of any of the provisions of any
Correctional and Detention Facility Contract or any of the provisions of the
2000 Subordinated Notes Documentation (except to the extent permitted by Section
2.11 of the 2000 Subordination Agreement) or any other Subordinated Notes
Documentation.

            9.25 POST-CLOSING REAL PROPERTY. If any Obligor acquires any
interest in real property (whether in fee or a leasehold estate, but excluding
any Leased Properties) after the date of this Agreement, such Obligor shall
notify the Administrative Agent and shall do the following:

            (a) upon the request of the Administrative Agent and the Majority
      Lenders at any time thereafter, do the following:

                          (i) furnish to the Administrative Agent one or more
                  Mortgages covering such interest in real property (and, if
                  such property is a leasehold estate, appropriate estoppel
                  certificates from the respective landlords thereof), and

                          (ii) furnish to the Administrative Agent evidence to
                  the satisfaction of the Administrative Agent that the such
                  real property is not subject to any Lien (other than Liens
                  permitted under SECTION 9.06 HEREOF); and

            (b) during the continuance of any Default, do each of the following:

                          (i) obtain one or more mortgagee policies of title
                  insurance on forms of and issued by one or more title
                  companies satisfactory to each Lender (the "TITLE COMPANIES"),
                  insuring the validity and priority of the Liens created under
                  such Mortgage(s) for and in amounts satisfactory to each
                  Lender, subject only to such exceptions as are satisfactory to
                  the Majority Lenders;

                          (ii) furnish to the Administrative Agent as-built
                  surveys of recent date of such real property, showing such
                  matters as may be required by any Lender, which surveys shall
                  be in form and content acceptable to the Majority Lenders, and
                  certified to the Administrative Agent and to each Lender and
                  the Title Companies, and shall have been prepared by a
                  registered surveyor acceptable to the Majority Lenders; and

                          (iii) furnish to the Administrative Agent certified
                  copies of unconditional certificates of occupancy (or, if it
                  is not the practice to issue certificates of occupancy in the
                  jurisdiction in which the facilities to be covered by such
                  Mortgage(s) are located, then such other evidence reasonably
                  satisfactory to the Majority Lenders) permitting the fully
                  functioning operation and occupancy of each such facility and
                  of such other permits necessary for the use and operation of
                  each such facility issued by the respective governmental
                  authorities having jurisdiction over each such facility. In
                  addition, the Company shall have paid to the Title Companies
                  all expenses and premiums of the Title Companies in connection
                  with the issuance of such policies and in addition shall have
                  paid to the Title Companies an amount equal to the recording
                  and stamp

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                  taxes payable in connection with recording such Mortgage in
                  the appropriate county land office(s).

            9.26 PREPAYMENT OF 2000 SUBORDINATED DEBT. Neither the Company nor
any of its Subsidiaries shall purchase, redeem, retire or otherwise acquire for
value, or set apart any money for a sinking, defeasance or other analogous fund
for, the purchase, redemption, retirement or other acquisition of, or make any
voluntary payment or prepayment of the principal of or interest on, or any other
amount owing in respect of, any Subordinated Notes, except for regularly
scheduled payments of principal and interest in respect thereof required
pursuant to the instruments evidencing such Subordinated Notes; provided that
any such prepayments may be made so long as (i) all Letters of Credit have been
terminated and there are no outstanding Letter of Credit Liabilities, Revolving
Credit Loans or Synthetic Lease Loans and (ii) no Default shall be continuing.

            9.27 POST-CLOSING SEARCHES. By no later than the 60th day after the
Closing Date, the Company shall have furnished to the Administrative Agent
copies of Uniform Commercial Code search results, and United States tax lien
search results, each as of a recent date, with respect to each of the Obligors
in each of the respective jurisdictions set forth in Annex 6 to the Security
Agreement (as amended by the Security Agreement Amendment).

            SECTION 10. THE LESSOR; EXERCISE OF REMEDIES UNDER LEASE.

            10.01 COVENANTS OF LESSOR. So long as any Synthetic Lease Loan
Lender's Synthetic Lease Loan Commitment remains in effect, any Synthetic Lease
Loan remains outstanding and unpaid or any other amount is owing to any
Synthetic Lease Loan Lender with respect to its Funding Party Balances (as that
term is defined in the Master Agreement), subject to SECTION 10.02 hereof, the
Lessor will promptly pay all amounts payable by it under this Agreement and the
Notes issued by it in accordance with the terms hereof and thereof and shall
duly perform each of its obligations under this Agreement and the Notes. The
Lessor agrees to provide to the Administrative Agent a copy of each estoppel
certificate that the Lessor proposes to deliver pursuant to SECTION 17.13 of the
Lease at least five days prior to such delivery and to make any corrections
thereto reasonably requested by the Administrative Agent prior to such delivery.
The Lessor shall keep each Leased Property owned by it free and clear of all
Lessor Liens (as that term is defined in the Master Agreement). The Lessor shall
not reject any sale of any Leased Property pursuant to Section 14.6 of the Lease
unless all of the related Synthetic Lease Loans have been paid in full or the
Synthetic Lease Loan Lenders consent to such rejection. In the event that the
Synthetic Lease Loan Lenders reject any sale of any Leased Property pursuant to
Section 14.6 of the Lease, the Lessor agrees to take such action as the
Synthetic Lease Lenders request to effect a sale or other disposition of such
Leased Property, PROVIDED that (i) the Lessor shall not be required to expend
its own funds in connection therewith or take any action that would, in the
Lessor's reasonable judgment, expose the Lessor to expense, liability, loss or
damage unless the Synthetic Lease Lenders provide to the Lessor an indemnity,
in a form and substance reasonably acceptable to the Lessor, for such liability,
or expense, or unless and until the Synthetic Lease Lenders advance to the
Lessor an amount that is sufficient, in the Lessor's reasonable judgment, to
cover such liability, expense, loss or damage (excluding the Lessor's PRO RATA
share thereof, if any), (ii) Lessor shall not be required to undertake any
action that would be a violation of Applicable Law (as that term is defined in
the Master Agreement) and (iii) the Lessor shall not be required to under take
any such action that would cause the Lessor to violate, or be in default under,
any of its other agreements or contracts; provided that such other agreements or
contracts do not preclude any Synthetic Lease Lender from exercising any of its
remedies expressly set forth in the Operative Documents. In the event that the
Construction Administrative Agent returns any Leased Property to the Lessor
pursuant to Section 5.3(a) of the Construction Agency Agreement, unless all of
the related Synthetic Lease Loans are paid in full, the Lessor agrees to take
such action as the Synthetic Lease Lenders request to complete the Construction,
or to effect a sale or other disposition, of such Leased Property, PROVIDED that
(i) the Lessor shall not be required to expend its own funds in connection
therewith or take any action that would, in the Lessor's reasonable judgment,
expose the Lessor to expense, liability, loss or damage unless the Synthetic
Lease Lenders provide to the Lessor an indemnity,

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in a form and substance reasonably acceptable to the Lessor, for such liability,
or expense, or unless and until the Synthetic Lease Lenders advance to the
Lessor an amount that is sufficient, in the Lessor's reasonable judgment, to
cover such liability, expense, loss or damage (excluding the Lessor's PRO RATA
share thereof, if any), (ii) Lessor shall not be required to undertake any
action that would be a violation of Applicable Law (as that term is defined in
the Master Agreement) and (iii) the Lessor shall not be required to under take
any such action that would cause the Lessor to violate, or be in default under,
any of its other agreements or contracts; provided that such other agreements or
contracts do not preclude any Synthetic Lease Lender from exercising any of its
remedies expressly set forth in the Operative Documents. During the Construction
Term for each Leased Property, the Lessor agrees to assume liability for, and to
indemnify, protect, defend, save and hold harmless the Administrative Agent and
each Synthetic Lease Loan Lender, on an After-Tax Basis (as that term is defined
in the Master Agreement) from and against, any and all Claims (as that term is
defined in the Master Agreement) that may be imposed on, incurred by or asserted
or threatened to be asserted against the Administrative Agent or any Synthetic
Lease Loan Lender, in any way relating to or arising out of the circumstances
set forth in clauses (i) through (iv) of the first sentence of Section 3.3 of
the Construction Agency Agreement, PROVIDED that the Lessor shall only be
obligated pursuant to this sentence to the extent that the Lessor receives
payment from the Construction Administrative Agent (as defined in the Master
Agreement) or any other Person with respect to such Claim.

            10.02 LESSOR OBLIGATIONS NONRECOURSE; PAYMENT FROM CERTAIN LEASE
OBLIGATIONS AND CERTAIN PROCEEDS OF LEASED PROPERTY ONLY. All payments to be
made by the Lessor in respect of the Synthetic Lease Loans, the Notes and this
Agreement shall be made only from certain payments received under the Lease, the
Guaranty Agreement and the Construction Agency Agreement and certain proceeds of
the Leased Properties and only to the extent that the Lessor or the
Administrative Agent shall have received sufficient payments from such sources
to make payments in respect of the Synthetic Lease Loans in accordance with
Section 3 of the Loan Agreement. Each Synthetic Lease Loan Lender agrees that it
will look solely to such sources of payments to the extent available for
distribution to such Synthetic Lease Loan Lender as herein provided and that
neither the Lessor nor the Administrative Agent is or shall be personally liable
to any Synthetic Lease Loan Lender for any amount payable hereunder or under any
Note. Nothing in this Agreement, the Notes, any other Basic Document or any
Operative Document shall be construed as creating any liability (other than for
willful misconduct, gross negligence, misrepresentation or breach of contract
(other than the failure to make payments in respect of the Synthetic Lease
Loans)) of the Lessor individually to pay any sum or to perform any covenant,
either express or implied, in this Agreement, the Notes, any other Basic
Documents or any Operative Document (all such liability, if any, being expressly
waived by each Synthetic Lease Loan Lender) and that each Synthetic Lease Loan
Lender, on behalf of itself and its successors and assigns, agrees in the case
of any liability of the Lessor hereunder or thereunder (except for such
liability attributable to its willful misconduct, gross negligence,
misrepresentation or breach of contract (other than the failure to make payments
in respect of the Synthetic Lease Loans)) that it will look solely to those
certain payments received under the Lease, the Guaranty Agreement (as that term
is defined in the Master Agreement) and the Construction Agency Agreement and
those certain proceeds of the Leased Properties, PROVIDED, HOWEVER, that the
Lessor in its individual capacity shall in any event be liable with respect to
(i) the removal of Lessor's Liens (as that term is defined in the Master
Agreement) or involving its gross negligence, willful misconduct,
misrepresentation or breach of contract (other than the failure to make payments
in respect of the Synthetic Lease Loans) or (ii) failure to turn over payments
the Lessor has received in accordance with Section 3 of the Loan Agreement; and
PROVIDED FURTHER that the foregoing exculpation of the Lessor shall not be
deemed to be exculpations of the Company, any Lessee or any other Person.

            10.03 EXERCISE OF REMEDIES UNDER THE LEASE.

            (a) MASTER AGREEMENT EVENT OF DEFAULT. With respect to any Potential
      Event of Default (as that term is defined in the Master Agreement) as to
      which notice thereof by the Lessor to a Lessee or the Company is a
      requirement to cause such Potential Event of Default to become a Master
      Agreement Event of Default, the Lessor agrees to give such notice to such
      Lessee or the Company promptly upon receipt of a written request by any
      Synthetic Lease Loan Lender or the Administrative Agent. The Lessor shall
      not,

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      without the prior written consent of the Majority Synthetic Lease Lenders,
      waive any such Master Agreement Event of Default.

            (b) ACCELERATION OF LEASE BALANCE. When a Master Agreement Event of
      Default exists, the Lessor, upon the direction of the Majority Synthetic
      Lease Lenders, shall exercise remedies under Article XIII of the Lease to
      demand payment in full of the Lease Balance by the Lessees (the
      "ACCELERATION"). Following the Acceleration, the Lessor shall consult with
      the Synthetic Lease Loan Lenders regarding actions to be taken in response
      to such Master Agreement Event of Default. The Lessor:

                  (i) shall not, without the prior written consent of the
            Majority Synthetic Lease B Lenders, and

                  (ii) shall (subject to the provisions of this SECTION 10.03),
            if so directed by the Majority Synthetic Lease B Lenders,

      do any of the following: commence eviction or foreclosure proceedings, or
      file a lawsuit against any Lessee under the Lease, or sell the Leased
      Properties, or exercise other remedies against the Lessee under the
      Operative Documents in respect of such Master Agreement Event of Default;
      PROVIDED, HOWEVER, that any payments received by the Lessor shall (subject
      to the provisions of the Collateral Sharing Documentation) be distributed
      in accordance with Section 3 of the Loan Agreement. Notwithstanding any
      such consent, direction or approval by the Majority Synthetic Lease B
      Lenders of any such action or omission, the Lessor shall not have any
      obligation to follow such direction if the same would, in the Lessor's
      reasonable judgment, require the Lessor to expend its own funds or expose
      the Lessor to expense, unless Synthetic Lease Lenders and B Lenders
      provide to the Lessor an indemnity, in form and substance reasonably
      acceptable to the Lessor, for such liability, loss or damage or unless and
      until the Synthetic Lease Loan Lenders advance to the Lessor an amount
      which is sufficient, in the Lessor's reasonable judgment, to cover such
      liability, expense, loss or damage (excluding the Lessor's pro rata share
      thereof, if any). Notwithstanding the foregoing, on and after the related
      Release Date (and any application otherwise required under Section 3 of
      the Loan Agreement has been made): the Synthetic Lease Loan Lenders shall
      have no rights to such Leased Property or any proceeds thereof; the
      Synthetic Lease Loan Lenders shall have no rights to direct or give
      consent to any actions with respect to such Leased Property and the
      proceeds thereof; the Lessor shall have absolute discretion (but in all
      events subject to the terms of the Operative Documents) with respect to
      such exercise of remedies with respect to such Leased Property, and the
      proceeds thereof, including, without limitation, any foreclosure or sale
      of such Leased Property; and the Lessor shall have no liability to the
      Synthetic Lease Loan Lenders with respect to the Lessor's actions or
      failure to take any action with respect to such Leased Property.

            SECTION 11. EVENTS OF DEFAULT.

            11.01 EVENTS OF DEFAULT. If one or more of the following events
(herein called "EVENTS OF DEFAULT") shall occur and be continuing:

            (a) The Company shall: (i) default in the payment of any principal
      of any Loan or any Reimbursement Obligation when due (whether at stated
      maturity or at mandatory or optional prepayment); or (ii) default in the
      payment of any interest on any Loan, any fee or any other amount payable
      by it hereunder or under any other Basic Document when due and such
      default shall have continued unremedied for one Business Day; or

            (b) The Company or any of its Subsidiaries shall default in the
      payment when due of any principal of or interest on any of its other
      Indebtedness aggregating $1,000,000 or more, or in the payment when due of
      any amount under any Interest Rate Protection Agreement; or any event
      specified in any note,

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      agreement, indenture or other document evidencing or relating to any such
      Indebtedness or any event specified in any Interest Rate Protection
      Agreement shall occur if the effect of such event is to cause, or (with
      the giving of any notice or the lapse of time or both) to permit the
      holder or holders of such Indebtedness (or a trustee or agent on behalf of
      such holder or holders) to cause, such Indebtedness to become due, or to
      be prepaid in full (whether by redemption, purchase, offer to purchase or
      otherwise), prior to its stated maturity or, in the case of an Interest
      Rate Protection Agreement, to permit the payments owing under such
      Interest Rate Protection Agreement to be liquidated; or the Company shall
      be obligated to pay any "Recourse Deficiency Amount" (as that term is
      defined in the Master Agreement) in respect of the 1998 Synthetic Lease
      Financing (or any substantially similar payment in respect of any Future
      Synthetic Lease Financing); or any "Loan Event of Default" (as that term
      is defined in the Loan Agreement) shall be continuing; or

            (c) Any representation, warranty or certification made or deemed
      made herein or in any other Basic Document (or in any modification or
      supplement hereto or thereto) by any Obligor, or any certificate furnished
      to any Lender or the Administrative Agent pursuant to the provisions
      hereof or thereof, shall prove to have been false or misleading as of the
      time made or furnished in any material respect; or

            (d) The Company shall default in the performance of any of its
      obligations under any of SECTIONS 9.01(J), 9.05, 9.06, 9.07, 9.08, 9.09,
      9.10, 9.11, 9.12, 9.13, 9.14, 9.15, 9.17, 9.18, 9.19, 9.20, 9.22, 9.26 or
      9.27 hereof; or any Obligor shall default in the performance of any of its
      obligations under SECTION 4.2 or 5.2 of the Security Agreement; or "Event
      of Default" under any Mortgage; or any Obligor shall default in the
      performance of any of its other obligations in this Agreement or any other
      Basic Document and such default shall continue unremedied for a period of
      thirty or more days after notice thereof to the Company by the
      Administrative Agent or any Lender (through the Administrative Agent); or

            (e) The Company or any of its Subsidiaries shall admit in writing
      its inability to, or be generally unable to, pay its debts as such debts
      become due; or

            (f) The Company or any of its Subsidiaries shall (i) apply for or
      consent to the appointment of, or the taking of possession by, a receiver,
      custodian, trustee, examiner or liquidator of itself or of all or a
      substantial part of its Property, (ii) make a general assignment for the
      benefit of its creditors, (iii) commence a voluntary case under the
      Bankruptcy Code, (iv) file a petition seeking to take advantage of any
      other law relating to bankruptcy, insolvency, reorganization, liquidation,
      dissolution, arrangement or winding-up, or composition or readjustment of
      debts, (v) fail to controvert in a timely and appropriate manner, or
      acquiesce in writing to, any petition filed against it in an involuntary
      case under the Bankruptcy Code or (vi) take any corporate action for the
      purpose of effecting any of the foregoing; or

            (g) A proceeding or case shall be commenced, without the application
      or consent of such of the Company or any of its Subsidiaries as is
      affected thereby, in any court of competent jurisdiction, seeking (i) the
      reorganization, liquidation, dissolution, arrangement or winding-up, or
      the composition or readjustment of the debts of the Company or any of its
      Subsidiaries, (ii) the appointment of a receiver, custodian, trustee,
      examiner, liquidator or the like of the Company or any of its Subsidiaries
      or of all or any substantial part of its Property, or (iii) similar relief
      in respect of the Company or any of its Subsidiaries under any law
      relating to bankruptcy, insolvency, reorganization, winding-up, or
      composition or adjustment of debts, and such proceeding or case shall
      continue undismissed, or an order, judgment or decree approving or
      ordering any of the foregoing shall be entered and continue unstayed and
      in effect, for a period of 60 or more days; or an order for relief against
      the Company or any of its Subsidiaries shall be entered in an involuntary
      case under the Bankruptcy Code; or

            (h) A final judgment or judgments for the payment of money in an
      amount in excess of $100,000 shall be rendered by one or more courts,
      administrative tribunals or other bodies having jurisdiction against

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      the Company or any of its Subsidiaries and the same shall not be
      discharged (or provision shall not be made for such discharge), or a stay
      of execution thereof shall not be procured, within 30 days from the date
      of entry thereof and the Company or such Subsidiary (as the case may be)
      shall not, within said period of 30 days, or such longer period during
      which execution of the same shall have been stayed, appeal therefrom and
      cause the execution thereof to be stayed during such appeal; or

            (i) An event or condition specified in SECTION 9.01(I) hereof shall
      occur or exist with respect to any Plan or Multiemployer Plan and, as a
      result of such event or condition, together with all other such events or
      conditions, the Company or any ERISA Affiliate shall incur or in the
      opinion of the Majority Lenders shall be reasonably likely to incur a
      liability to a Plan, a Multiemployer Plan or PBGC (or any combination of
      the foregoing) that, in the determination of the Majority Lenders, would
      (either individually or in the aggregate) have a Material Adverse Effect;
      or

            (j) A reasonable basis shall exist for the assertion against the
      Company or any of its Subsidiaries, or any predecessor in interest of the
      Company or any of its Subsidiaries or Affiliates, of (or there shall have
      been asserted against the Company or any of its Subsidiaries) an
      Environmental Claim that, in the judgment of the Majority Lenders is
      reasonably likely to be determined adversely to the Company or any of its
      Subsidiaries, and the amount thereof (either individually or in the
      aggregate) is reasonably likely to have a Material Adverse Effect (insofar
      as such amount is payable by the Company or any of its Subsidiaries but
      after deducting any portion thereof that is reasonably expected to be paid
      by other creditworthy Persons jointly and severally liable therefor); or

            (k) The Liens created by the Security Documents shall at any time
      not constitute a valid and perfected Lien on the collateral stated to be
      covered thereby (to the extent perfection by filing, registration,
      recordation or possession is required herein or therein) in favor of the
      Administrative Agent, free and clear of all other Liens (other than Liens
      permitted under SECTION 9.06 hereof or under the respective Security
      Documents), or, except for expiration in accordance with its terms, any of
      the Security Documents shall for whatever reason be terminated or cease to
      be in full force and effect, or the enforceability thereof shall be
      contested by any Obligor; or

            (l) Any of the following:

                     (i) 15 Business Days shall have elapsed after any material
            Correctional and Detention Facility Contract shall have been
            terminated and shall not have been renewed on substantially the same
            terms or terms more favorable to the Obligors (unless during such 15
            Business Day period the Company shall have demonstrated to the
            satisfaction of the Administrative Agent and each Lender that such
            termination will not have a Material Adverse Effect); or

                    (ii) the payment terms of any material Correctional and
            Detention Facility Contract shall be modified or any other terms of
            any material Correctional and Detention Facility Contract shall be
            modified in any respect which the Majority Lenders determine could
            reasonably be expected to have a Material Adverse Effect; or

                   (iii)   any Obligor shall default in the performance of any
            of its material obligations under any material Correctional and
            Detention Facility Contract; or

                    (iv) any party to any Correctional and Detention Facility
            Contract (other than an Obligor) shall default in the performance of
            any of its material obligations thereunder; or

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                     (v) an event or condition of the type described in SECTION
            10(F) or 10(G) shall occur or exist with respect to any party to any
            material Correctional and Detention Facility Contract (other than an
            Obligor); or

                    (vi) any relevant legislature or administrative body shall
            fail to appropriate any material amount of funds in respect of any
            material Correctional and Detention Facility Contract

      (for purposes of this clause (l) and the following clause (m), a
      Correctional and Detention Facility Contract shall be deemed to be
      "material" if the failure of the Obligors to receive the amounts stated to
      be due and owing thereunder could reasonably be expected to have a
      Material Adverse Effect); or

            (m) Any Use Permit relating to a material Correctional and Detention
      Facility Agreement shall be revoked, withdrawn or otherwise terminated; or
      any Use Permit relating to a material Correctional and Detention Facility
      Agreement shall be modified, amended or supplemented in a way which the
      Majority Lenders determine could have a Material Adverse Effect; or

            (n) There shall have occurred a Change in Control;

THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this SECTION 11.01 with respect to any Obligor, (A) the
Administrative Agent may and, upon request of the Majority Lenders shall, by
notice to the Company, terminate the Commitments and they shall thereupon
terminate, and (B) the Administrative Agent may and, upon request of the
Majority Lenders shall by notice to the Company, declare the principal amount
then outstanding of, and the accrued interest on, the Loans, the Reimbursement
Obligations and all other amounts payable by the Obligors hereunder and under
the Notes to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by each
Obligor; and (2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this SECTION 11 with respect to any Obligor, the
Commitments shall automatically be terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans, the Reimbursement
Obligations and all other amounts payable by the Obligors hereunder and under
the Notes shall automatically become immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by each Obligor.

      In addition, upon the occurrence and during the continuance of any Event
of Default (if the Administrative Agent has declared the principal amount then
outstanding of, and accrued interest on, the Loans and all other amounts payable
by the Company hereunder and under the Notes to be due and payable), the Company
agrees that it shall, if requested by the Administrative Agent or the Majority
Lenders through the Administrative Agent (and, in the case of any Event of
Default referred to in clause (f) or (g) of this SECTION 11.01 with respect to
any Obligor, forthwith, without any demand or the taking of any other action by
the Administrative Agent or the Lenders) provide cover for the Letter of Credit
Liabilities by paying to the Administrative Agent immediately available funds in
an amount equal to the then aggregate undrawn face amount of all Letters of
Credit, which funds shall be held by the Administrative Agent in the Collateral
Account as collateral security in the first instance for the Letter of Credit
Liabilities and be subject to withdrawal only as therein provided.

            11.02 LEASE-RELATED EVENTS OF DEFAULT.

            (a) LEASE-RELATED EVENTS OF DEFAULT. Each of the following events
      shall constitute a Lease-related Event of Default (whether any such event
      shall be voluntary or involuntary or come about or be effected by
      operation of law or pursuant to or in compliance with any judgment, decree
      or order of any court or any order, rule or regulation of any Governmental
      Authority) and each such Lease-related Event of Default shall continue so
      long as, but only as long as, it shall not have been remedied:

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                  (i) Lessor shall fail to distribute in accordance with the
            provisions of Section 3 of the Loan Agreement any amount received by
            the Lessor pursuant to the Lease or the Master Agreement within two
            Business Days of receipt thereof if and to the extent that the
            Administrative Agent or the Synthetic Lease Loan Lenders are
            entitled to such amount or a portion thereof; or

                  (ii) the Lessor shall fail to pay to the Administrative Agent,
            within two Business Days of the Lessor's receipt thereof, any amount
            which a Lessee is required, pursuant to the Operative Documents, to
            pay to the Administrative Agent but erroneously pays to the Lessor;
            or

                  (iii) failure by the Lessor to perform in any material respect
            any other covenant or condition herein or in any other Operative
            Document to which the Lessor is a party, which failure shall
            continue unremedied for 30 days after receipt by the Lessor of
            written notice thereof from the Administrative Agent or any
            Synthetic Lease Loan Lender; or

                  (iv) any representation or warranty of the Lessor contained in
            any Operative Document or in any certificate required to be
            delivered thereunder shall prove to have been incorrect in a
            material respect when made and shall not have been cured within
            thirty days of receipt by the Lessor of written notice thereof from
            the Administrative Agent or any Synthetic Lease Loan Lender; or

                  (v) the Lessor or the General Partner (as that term is defined
            in the Master Agreement) shall become bankrupt or make an assignment
            for the benefit of creditors or consent to the appointment of a
            trustee or receiver; or a trustee or a receiver shall be appointed
            for the Lessor or the General Partner or for substantially all of
            its property without its consent and shall not be dismissed or
            stayed within a period of sixty days; or bankruptcy, reorganization
            or insolvency proceedings shall be instituted by or against the
            Lessor or the General Partner and, if instituted against the Lessor
            or the General Partner, shall not be dismissed or stayed for a
            period of 60 days; or

                  (vi) any "Event of Default" (as that term is defined in the
            Master Agreement) shall occur and be continuing.

            (b) REMEDIES.

                    (i) Upon the occurrence of a Lease-related Event of Default,

                        (a) if such event is a Lease-related Event of Default
                    specified in clause (v) of SECTION 11.02(A) hereof with
                    respect to the Lessor, automatically the Synthetic Lease
                    Loan Commitments shall terminate and the outstanding
                    principal of, and accrued interest on, the Synthetic Lease
                    Loans shall be immediately due and payable, and

                         (b) if such event is any other Lease-related Event of
                    Default, upon written request of the Majority Synthetic
                    Lease A and B Lenders, the Administrative Agent shall, by
                    notice of default to the Lessor, declare the Synthetic Lease
                    Loan Commitments of the Synthetic Lease Loan Lenders to be
                    terminated forthwith and the outstanding principal of, and
                    accrued interest on, the Synthetic Lease Loans to be
                    immediately due and payable, whereupon the Synthetic Lease
                    Loan Commitments of the Synthetic Lease Loan Lenders shall
                    immediately terminate and the outstanding principal of, and
                    accrued interest on, the Synthetic Lease Loans shall become
                    immediately due and payable.

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                    (ii) When a Lease-related Event of Default exists, the
            Administrative Agent may, and upon the written instructions of the
            Majority Synthetic Lease B Lenders shall, exercise any or all of the
            rights and powers and pursue any and all of the remedies available
            to it hereunder, under the Notes, or any provision of law. When a
            Lease-related Event of Default exists, the Administrative Agent may,
            and upon the written instructions of the Majority Synthetic Lease B
            Lenders shall, have the right to exercise all rights of the Lessor
            under the Lease pursuant to the terms and in the manner provided for
            in the Mortgages and the Assignments of Lease and Rents.

                    (iii) Except as expressly provided above, no remedy under
            this SECTION 11.02(B) is intended to be exclusive, but each shall be
            cumulative and in addition to any other remedy provided under this
            SECTION 11.02(B) or under the other Operative Documents or otherwise
            available at law or in equity. The exercise by the Administrative
            Agent or any Synthetic Lease Loan Lender of any one or more of such
            remedies shall not preclude the simultaneous or later exercise of
            any other remedy or remedies. No express or implied waiver by the
            Administrative Agent or any Synthetic Lease Loan Lender of any
            Lease-related Event of Default shall in any way be, or be construed
            to be, a waiver of any future or subsequent Lease-related Event of
            Default. The failure or delay of the Administrative Agent or any
            Synthetic Lease Loan Lender in exercising any rights granted it
            hereunder upon any occurrence of any of the contingencies set forth
            herein shall not constitute a waiver of any such right upon the
            continuation or recurrence of any such contingencies or similar
            contingencies and any single or partial exercise of any particular
            right by the Administrative Agent or any Synthetic Lease Loan Lender
            shall not exhaust the same or constitute a waiver of any other right
            provided herein.

            SECTION 12. THE ADMINISTRATIVE AGENT.

            12.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Basic Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and of the other Basic Documents, together with such other powers as
are reasonably incidental thereto. The Administrative Agent (which term as used
in this sentence and in SECTION 12.05 and the first sentence of SECTION 12.06
hereof shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement and in the
other Basic Documents, and shall not by reason of this Agreement or any other
Basic Document be a trustee for any Lender; (b) shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained in
this Agreement or in any other Basic Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, any
Note or any other Basic Document or any other document referred to or provided
for herein or therein or for any failure by the Company or any other Person to
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Basic Document; and (d) shall not be responsible
for any action taken or omitted to be taken by it hereunder or under any other
Basic Document or under any other document or instrument referred to or provided
for herein or therein or in connection herewith or therewith, except for its own
gross negligence or willful misconduct. The Administrative Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Administrative Agent, together
with the consent of the Company to such assignment or transfer (to the extent
provided in SECTION 13.06(B) hereof).

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            12.02 RELIANCE BY AGENT. The Administrative Agent shall be entitled
to rely upon any certification, notice or other communication (including,
without limitation, any thereof by telephone, telecopy, telex, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided for by this
Agreement or any other Basic Document, the Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder or
thereunder in accordance with instructions given by the Majority Lenders or, if
provided herein, in accordance with the instructions given all of the Lenders,
and such instructions of such Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.

            12.03 DEFAULTS. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received notice from a Lender or the Company specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to SECTION 12.07 hereof) take such action
with respect to such Default as shall be directed by the Majority Lenders,
PROVIDED that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of the Lenders except to
the extent that this Agreement expressly requires that such action be taken, or
not be taken, only with the consent or upon the authorization of the Majority
Lenders or all of the Lenders.

            12.04 RIGHTS AS A LENDER. With respect to its Commitments and the
Loans made by it, ING (and any successor acting as Administrative Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. ING (and any successor acting as Administrative Agent) and its
affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Obligors (and any of their
Subsidiaries or Affiliates) as if it were not acting as the Administrative
Agent, and ING and its affiliates may accept fees and other consideration from
the Obligors for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.

            12.05 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under SECTION 13.03 hereof,
but without limiting the obligations of the Company under said SECTION 13.03,
and including in any event any payments under any indemnity that the
Administrative Agent is required to issue to any bank referred to in Section
4.02 of the Security Agreement to which remittances in respect of Accounts, as
defined therein, are to be made) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against the Administrative Agent (including by any Lender) arising out of or by
reason of any investigation in or in any way relating to or arising out of this
Agreement or any other Basic Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses that the Company is
obligated to pay under SECTION 13.03 hereof, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, PROVIDED that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.

            12.06 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and its

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Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or under any other Basic Document. The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by any Obligor of this Agreement or any of the other
Basic Documents or any other document referred to or provided for herein or
therein or to inspect the Properties or books of the Company or any of its
Subsidiaries. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder or under the Security Documents, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Company or any of its Subsidiaries (or any of their affiliates) that may come
into the possession of the Administrative Agent or any of its affiliates.

            12.07 FAILURE TO ACT. Except for action expressly required of the
Administrative Agent hereunder and under the other Basic Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under SECTION 12.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.

            12.08 RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Company, and the Administrative Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, that shall be a financial
institution that has an office in New York, New York. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this SECTION 12
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent. The
Administrative Agent may at any time assign all of its rights and obligations
hereunder to any affiliate of the Administrative Agent by notice to the Company
and each Lender.

            12.09 CONSENTS UNDER OTHER BASIC DOCUMENTS. Except as otherwise
provided in SECTION 13.04 hereof with respect to this Agreement, the
Administrative Agent may, with the prior consent of the Majority Lenders (but
not otherwise), consent to any modification, supplement or waiver under any of
the Basic Documents, PROVIDED that, without the prior consent of each Lender,
the Administrative Agent shall not (except as provided herein or in the Security
Documents) release any collateral or otherwise terminate any Lien under any
Basic Document providing for collateral security, or agree to additional
obligations being secured by such collateral security, except that no such
consent shall be required, and the Administrative Agent is hereby authorized, to
release any Lien covering Property that is the subject of a disposition of
Property permitted hereunder or to which the Majority Lenders have consented.

            SECTION 13. MISCELLANEOUS.

            13.01 WAIVER. No failure on the part of the Administrative Agent or
any Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this

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Agreement or any Note shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement or any
Note preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

            Each Obligor irrevocably waives, to the fullest extent permitted by
applicable law, any claim that any action or proceeding commenced by the
Administrative Agent or any Lender relating in any way to this Agreement should
be dismissed or stayed by reason, or pending the resolution, of any action or
proceeding commenced by any Obligor relating in any way to this Agreement
whether or not commenced earlier. To the fullest extent permitted by applicable
law, the Obligors shall take all measures necessary for any such action or
proceeding commenced by the Administrative Agent or any Lender to proceed to
judgment prior to the entry of judgment in any such action or proceeding
commenced by any Obligor.

            13.02 NOTICES. All notices, requests and other communications
provided for herein and under the Security Documents (including, without
limitation, any modifications of, or waivers, requests or consents under, this
Agreement) shall be given or made in writing (including, without limitation, by
telex or telecopy), delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof (below the name
of the Company, in the case of any Subsidiary Guarantor); or, as to any party,
at such other address as shall be designated by such party in a notice to each
other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by telex
or telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.

            13.03 EXPENSES, ETC. The Company agrees to pay or reimburse each of
the Lenders and the Administrative Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Administrative Agent (including, without limitation,
the reasonable fees and expenses of Mayer, Brown & Platt, special New York
counsel to ING) in connection with (i) the negotiation, preparation, execution
and delivery of this Agreement and the other Basic Documents and the extension
of credit hereunder and (ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the other
Basic Documents (whether or not consummated); (b) all reasonable out-of-pocket
costs and expenses of the Lenders and the Administrative Agent (including,
without limitation, the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection proceedings
resulting therefrom, including, without limitation, all manner of participation
in or other involvement with (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory
proceedings and (z) workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction contemplated thereby
is consummated) and (ii) the enforcement of this SECTION 13.03; and (c) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any of the other Basic Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or perfection of any
security interest contemplated by any Basic Document or any other document
referred to therein.

            The Company hereby agrees to indemnify the Administrative Agent and
each Lender and their respective directors, officers, employees, attorneys and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them (including,
without limitation, any and all losses, liabilities, claims, damages or expenses
incurred by the Administrative Agent to any Lender, whether or not the
Administrative Agent or any Lender is a party thereto) arising out of or by
reason of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to the
Repurchase Transaction and the transactions contemplated thereby, the extensions
of credit hereunder or any actual or proposed use by the Company or any of its
Subsidiaries of the proceeds of any of the extensions of credit hereunder,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation or litigation or other
proceedings (but excluding any such losses, liabilities, claims,

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damages or expenses incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). Without limiting the generality of
the foregoing, the Company will (x) indemnify the Administrative Agent for any
payments that the Administrative Agent is required to make under any indemnity
issued to any bank referred to in Section 4.02 of the Security Agreement to
which remittances in respect to Accounts, as defined therein, are to be made and
(y) indemnify the Administrative Agent and each Lender from, and hold the
Administrative Agent and each Lender harmless against, any losses, liabilities,
claims, damages or expenses described in the preceding sentence arising under
any Environmental Law as a result of (i) the past, present or future operations
of the Company or any of its Subsidiaries (or any predecessor in interest to the
Company or any of its Subsidiaries), or (ii) the past, present or future
condition of any site or facility owned, operated or leased at any time by the
Company or any of its Subsidiaries (or any such predecessor in interest), or
(iii) any Release or threatened Release of any Hazardous Materials at or from
any such site or facility, including any such Release or threatened Release that
shall occur during any period when the Administrative Agent or any Lender shall
be in possession of any such site or facility following the exercise by the
Administrative Agent or any Lender of any of its rights and remedies hereunder
or under any of the Security Documents, PROVIDED THAT the Company shall not be
liable under this subclause (y) for any of the foregoing to the extent they
arise solely from the gross negligence or willful misconduct of the party to be
indemnified (or such party's employees or agents).

            13.04 AMENDMENTS, ETC. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or supplemented
only by an instrument in writing signed by the Company, the Administrative Agent
and the Majority Lenders, or by the Company and the Administrative Agent acting
with the consent of the Majority Lenders, and any provision of this Agreement
may be waived by the Majority Lenders or by the Administrative Agent acting with
the consent of the Majority Lenders; PROVIDED that: (a) no modification,
supplement or waiver shall, unless by an instrument signed by all of the Lenders
or by the Administrative Agent acting with the consent of all of the Lenders:
(i) increase, or extend the term of any of the Commitments, or extend the time
or waive any requirement for the reduction or termination of any of the
Commitments, (ii) extend the date fixed for the payment of principal of or
interest on any Loan, the Reimbursement Obligations or any fee hereunder, (iii)
reduce the amount of any such payment of principal, (iv) reduce the rate at
which interest is payable thereon or any fee is payable hereunder, (v) alter the
rights or obligations of the Company to prepay Loans, (vi) alter the terms of
this SECTION 13.04, (vii) modify the definition of the term "Majority Lenders,"
"Majority Revolving Credit Lenders," "Majority Synthetic Lease A Lenders,"
"Majority Synthetic Lease B Lenders," "Majority Synthetic Lease A and B
Lenders," "Majority Synthetic Lease Lenders" or modify in any other manner the
number or percentage of the Lenders required to make any determinations or waive
any rights hereunder or to modify any provision hereof, or (viii) waive any of
the conditions precedent set forth in SECTION 7.01 hereof; (b) any modification
or supplement of SECTION 7.02 hereof shall require the consent of all of the
Revolving Credit Lenders (and shall not require the consent of any of the
Synthetic Lease Loan Lenders); (c) any modification or supplement of SECTION 12
hereof shall require the consent of the Administrative Agent; (d) any
modification or supplement of SECTION 6 hereof shall require the consent of each
Subsidiary Guarantor; and (e) any modification or supplement of SECTION 9 hereof
(other than SECTION 9.19 (Interest Rate Protection Agreements) or SECTION 9.22
(Use of Proceeds)), any determination as to whether the events described in
clauses (i), (j), (l) or (m) of SECTION 11.01 hereof (ERISA matters,
environmental matters, matters related to Correctional and Detention Facility
Contracts and matters relating to Use Permits, respectively) have occurred, and
the giving of any consent by the Administrative Agent under, and any other
amendment of or modification to, the 2000 Subordination Agreement shall require
the consent of the holders of at least 51% of the sum of (a) the Revolving
Credit Commitments (or, after the termination of the Revolving Credit
Commitments, the outstanding principal amount of the Revolving Credit Loans),
(b) the Synthetic Lease Loan Commitments (or, after the termination thereof, the
outstanding principal amount of Synthetic Lease Loans), (c) the amount of the
commitments to make B Loans (or, after the termination of such commitments, the
outstanding amounts thereof), and (d) the amount of the commitment of the Lessor
to make investments in Leased Property (or, after the termination of such
commitment, the outstanding amount thereof).

            13.05 SUCCESSORS AND ASSIGNS; OBLIGATIONS UNDER OPERATIVE DOCUMENTS.

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            (a) This Agreement shall be binding upon and inure to the benefit of
      the parties hereto and their respective successors and permitted assigns.

            (b) The Synthetic Lease Lenders acknowledge and agree that they
      benefit from certain provisions of the Master Agreement and the other
      Operative Documents, and each Synthetic Lease Lender hereby severally
      agrees to comply with all of the obligations in the Master Agreement and
      the other Operative Documents stated therein to be performed by it.

            13.06 ASSIGNMENTS AND PARTICIPATIONS.

            (a) No Obligor may assign any of its rights or obligations hereunder
      or under the Notes without the prior consent of all of the Lenders and the
      Administrative Agent.

            (b) Each Lender may, with the consent of the Administrative Agent
      and (in the case of a Revolving Credit Lender) the Letter of Credit
      Issuer, assign any of its Loans, its Notes, its Letter of Credit
      Liabilities and its Commitments (and, in the case of its outstanding
      Commitments, only with the consent of the Company which consent shall not
      be unreasonably withheld); PROVIDED that (i) no such consent by the
      Company or the Administrative Agent shall be required in the case of any
      assignment to another Lender; (ii) any such partial assignment shall be in
      an amount at least equal to $5,000,000; (iii) each such assignment by a
      Lender of its Loans, Letter of Credit Liabilities or Commitment shall be
      made in such manner so that the same portion of its Loans, Letter of
      Credit Liabilities and Commitment is assigned to the respective assignee;
      and (iv) each such assignment by a Synthetic Lease Loan Lender of all or
      any portion of its Synthetic Lease Loan shall be made in such manner so
      that the same portion of its B Loan is assigned to the respective
      assignee. Upon execution and delivery by the assignor and the assignee to
      the Company and the Administrative Agent of an Assignment Agreement
      substantially in the form of Exhibit E hereto pursuant to which such
      assignee agrees to become a "Lender" hereunder (if not already a Lender)
      having the Commitment(s), Letter of Credit Liabilities and Loans specified
      in such Assignment Agreement, and upon consent thereto by the Company and
      the Administrative Agent, to the extent required above, the assignee shall
      have, to the extent of such assignment (unless otherwise provided in such
      assignment with the consent of the Company and the Administrative Agent),
      the obligations, rights and benefits of a Lender hereunder holding the
      Commitment(s), Letter of Credit Liabilities and Loans (or portion thereof)
      assigned to it (in addition to the Commitment(s), Letter of Credit
      Liabilities and Loans, if any, theretofore held by such assignee) and the
      assigning Lender shall, to the extent of such assignment, be released from
      the Commitment(s) (or portion(s) thereof) so assigned. Upon each such
      assignment, the assigning Lender shall pay the Administrative Agent an
      assignment fee of $3,000.

            (c) A Lender may sell or agree to sell to one or more other Persons
      a participation in all or any part of any Loans or Letter of Credit
      Interest held by it, or in its Commitments, in which event each purchaser
      of a participation (a "PARTICIPANT") shall be entitled to the rights and
      benefits of the provisions of SECTION 9.01(K) hereof with respect to its
      participation in such Loans, Letter of Credit Interest and Commitments as
      if (and the Company shall be directly obligated to such Participant under
      such provisions as if) such Participant were a "Lender" for purposes of
      said Section, but, except as otherwise provided in SECTION 4.07(C) hereof,
      shall not have any other rights or benefits under this Agreement or any
      Note or any other Basic Document (the Participant's rights against such
      Lender in respect of such participation to be those set forth in the
      agreements executed by such Lender in favor of the Participant). All
      amounts payable by the Company to any Lender under SECTION 5 hereof in
      respect of Loans and Letter of Credit Interest held by it, and its
      Commitments, shall be determined as if such Lender had not sold or agreed
      to sell any participations in such Loans, Letter of Credit Interest and
      Commitments, and as if such Lender were funding each of such Loan, Letter
      of Credit Interest and Commitments in the same way that it is funding the
      portion of such Loan and Commitments in which no participations have been
      sold. In no event shall a Lender that sells a participation agree with the
      Participant to take or refrain from taking any action

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      hereunder or under any other Basic Document except that such Lender may
      agree with the Participant that it will not, without the consent of the
      Participant, agree to (i) increase or extend the term, or extend the time
      or waive any requirement for the reduction or termination, of such
      Lender's related Commitment, (ii) extend the date fixed for the payment of
      principal of or interest on the related Loan or Loans, Reimbursement
      Obligations or any portion of any fee hereunder payable to the
      Participant, (iii) reduce the amount of any such payment of principal,
      (iv) reduce the rate at which interest is payable thereon, or any fee
      hereunder payable to the Participant, to a level below the rate at which
      the Participant is entitled to receive such interest or fee, (v) alter the
      rights or obligations of the Company to prepay the related Loans or (vi)
      consent to any modification, supplement or waiver hereof or of any of the
      other Basic Documents to the extent that the same, under SECTION 12.10 or
      13.04 hereof, requires the consent of each Lender.

            (d) In addition to the assignments and participations permitted
      under the foregoing provisions of this SECTION 13.06, any Lender may
      (without notice to the Company, the Administrative Agent or any other
      Lender and without payment of any fee) (i) assign and pledge all or any
      portion of its Loans and its Notes to any Federal Reserve Bank as
      collateral security pursuant to Regulation A and any Operating Circular
      issued by such Federal Reserve Bank and (ii) assign all or any portion of
      its rights under this Agreement and its Loans and its Notes to an
      affiliate. No such assignment shall release the assigning Lender from its
      obligations hereunder.

            (e) A Lender may furnish any information concerning the Company or
      any of its Subsidiaries in the possession of such Lender from time to time
      to assignees and participants (including prospective assignees and
      participants), subject, however, to the provisions of SECTION 13.12
      hereof.

            (f) Anything in this SECTION 13.06 to the contrary notwithstanding,
      no Lender may assign or participate any interest in any Loan or
      Reimbursement Obligation held by it hereunder to the Company or any of its
      Affiliates or Subsidiaries without the prior consent of each Lender.

            13.07 SURVIVAL. The obligations of the Company under SECTIONS 5.01,
5.05 and 13.03 hereof, the obligations of each Subsidiary Guarantor under
SECTION 6.03 hereof, and the obligations of the Lenders under SECTION 12.05
hereof, shall survive the repayment of the Loans and the Reimbursement
Obligations and the termination of the Commitments.

            13.08 CAPTIONS. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.

            13.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.

            13.10 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. Each Obligor hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Obligor irrevocably waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.

            13.11 WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT

                                       78
<PAGE>
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

            13.12 CONFIDENTIALITY. Each Lender and the Administrative Agent
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Company pursuant to this Agreement, PROVIDED that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the Lenders or the
Administrative Agent, (iii) to bank examiners, auditors or accountants, (iv) to
the Administrative Agent or any other Lender, (v) in connection with any
litigation to which any one or more of the Lenders or the Administrative Agent
is a party relating to any of the Obligors or the transactions contemplated
hereby, (vi) to a subsidiary or affiliate of such Lender or (vii) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) first executes
and delivers to the respective Lender a Confidentiality Agreement substantially
in the form of EXHIBIT C hereto; provided, FURTHER, that in no event shall any
Lender or the Administrative Agent be obligated or required to return any
materials furnished by the Company.

                                       79
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.

                              CORNELL COMPANIES, INC.

                              By __________________________________
                              Title:

                              Address for Notices:
                               Cornell Companies, Inc.
                               1700 West Loop South
                               Suite 1500
                               Houston, Texas 77027

                              Attention:  Mr. John L. Hendrix

                              Telecopier No.:  (713) 623-2853

                              Telephone No.:  (713) 235-9321

                                      S-1
<PAGE>
                              SUBSIDIARY GUARANTORS

                              CORNELL CORRECTIONS MANAGEMENT,
                               INC.

                              By_______________________________
                              Title:

                              CORNELL CORRECTIONS CONSULTING,
                               INC.

                              By_______________________________
                              Title:

                              CORNELL CORRECTIONS OF
                               RHODE ISLAND, INC.

                              By_______________________________
                              Title:

                              THE CORNELL COX GROUP, L.P.

                              By  CORNELL CORRECTIONS OF NORTH
                                  AMERICA, INC.

                              By_______________________________
                              Title:

                              CORNELL CORRECTIONS OF NORTH
                               AMERICA, INC.

                              By_______________________________
                              Title:

                              CORNELL CORRECTIONS OF
                               TEXAS, INC.

                              By_______________________________
                              Title:

                                      S-2
<PAGE>
                              CORNELL CORRECTIONS OF
                               CALIFORNIA, INC.

                              By_______________________________
                              Title:

                              CORNELL CORRECTIONS OF
                               ALASKA, INC.

                              By_______________________________
                              Title:

                              CORNELL CORRECTIONS OF
                               OKLAHOMA, INC.

                              By_______________________________
                              Title:

                              INTERNATIONAL SELF HELP
                               SERVICES, INC.

                              By_______________________________
                              Title:

                              WBP LEASING, INC.

                              By_______________________________
                              Title:

                              CORNELL ABRAXAS GROUP, INC.

                              By_______________________________
                              Title:

                              CORNELL INTERVENTIONS, INC.

                              By_______________________________

                                      S-3
<PAGE>
                              Title:

                              CORNELL CORRECTIONS OF GEORGIA, L.P.

                              By CCG I CORPORATION, its general partner

                              By_______________________________
                              Title:

                              CCG I CORPORATION

                              By_______________________________
                              Title:

                                      S-4
<PAGE>
                              LESSOR

                              ATLANTIC FINANCIAL GROUP, LTD.

                              By: Atlantic Financial Managers, Inc.
                                  its General Partner

                              By_______________________________
                              Title:

                              Address for Notices:
                               Atlantic Financial Group, Ltd.
                               1000 Ballpark Way
                               Suite 304
                               Arlington, Texas 76011

                              Attn: Mr. Stephen S. Brookshire

                              Telecopier No.: (817) 265-0537

                              Telephone No.:  (817) 265-1263

                                      S-5
<PAGE>
                              LENDERS

REVOLVING CREDIT COMMITMENT         ING (U.S.) CAPITAL LLC
$10,714,285.71

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$11,627,136.38                      Title:

                                    Lending Office for all Loans:
                                     ING Capital
                                     55 East 52nd Street
                                     New York, New York  10055

                                    Address for Notices:
                                     ING Capital
                                     55 East 52nd Street
                                     New York, New York  10055

                                    Attention: Merchant Banking Group --
                                     New York

                                    Telecopier No.:  (212) 409-5879

                                    Telephone No.:   (212) 409-1955

                                      S-6
<PAGE>
REVOLVING CREDIT COMMITMENT         BANK OF AMERICA, N.A.
$10,276,967.93

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$11,152,559.39                      Title:

                                    Lending Office for all Loans:

                                    Mail:
                                     Bank of America, N.A.
                                     P.O. Box 2518
                                     Houston, Texas  77252-2518

                                    Physical Delivery:
                                     Bank of America, N.A.
                                     700 Louisiana Street, 7th Floor
                                     Houston, Texas  77002

                                    Address for Notices:

                                    Mail:
                                     Bank of America, N.A.
                                     P.O. Box 2518
                                     Houston, Texas  77252-2518

                                    Physical Delivery:
                                     Bank of America, N.A.
                                     700 Louisiana Street, 7th Floor
                                     Houston, Texas  77002

                                    Attention:  Mr. Craig S. Wall

                                    Telecopier No.:  (713) 247-7748

                                    Telephone No.:  (713) 247-6559

                                      S-7
<PAGE>
REVOLVING CREDIT COMMITMENT         SUNTRUST BANK
$8,746,355.69

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$9,491,539.90                       Title:

                                    By_________________________
                                    Title:

                                    Lending Office for all Loans:
                                     SunTrust Bank
                                     3rd Floor
                                     Mail Code 1909
                                     201 4th Avenue North
                                     Nashville, Tennessee  37219

                                    Address for Notices:
                                     SunTrust Bank
                                     3rd Floor
                                     Mail Code 1909
                                     201 4th Avenue North
                                     Nashville, Tennessee  37219

                                    Attention: Mr. Bill Crawford

                                    Telecopier No.:  (615) 748-5269

                                    Telephone No.:  (615) 748-4629

                                      S-8
<PAGE>
REVOLVING CREDIT COMMITMENT         COMERICA BANK
$8,527,696.79

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$9,254,251.41                       Title:

                                    Lending Office for all Loans:
                                     Comerica Bank
                                     US Banking Department
                                     4100 Spring Valley Road
                                     Suite 400
                                     Dallas, Texas  75244

                                    Address for Notices:
                                     Comerica Bank
                                     US Banking Department
                                     4100 Spring Valley Road
                                     Suite 400
                                     Dallas, Texas  75244

                                    Attention: Mr. Brian O. Donley

                                    Telecopier No.:  (972) 361-2550

                                    Telephone No.:  (972) 361-2548

                                      S-9
<PAGE>
REVOLVING CREDIT COMMITMENT         GUARANTY FEDERAL BANK, F.S.B.
$8,527,696.79

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$9,254,251.41                       Title:

                                    Lending Office for all Loans:
                                     Guaranty Bank
                                     333 Clay Street, Suite 4430
                                     Houston, Texas  77002

                                    Address for Notices:
                                     Guaranty Bank
                                     333 Clay Street, Suite 4430
                                     Houston, Texas  77002

                                    Attention: Mr. Richard Menchaca

                                    Telecopier No.: (713) 759-0765

                                    Telephone No.:  (713) 759-9134

                                      S-10
<PAGE>
REVOLVING CREDIT COMMITMENT         FIRSTAR BANK, N.A.
$8,527,696.79

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$9,254,251.41                       Title:

                                    Lending Office for all Loans:
                                     Firstar Bank, N.A.
                                     One Firstar Plaza
                                     St. Louis, Missouri  63101

                                    Address for Notices:
                                     Firstar Bank, N.A.
                                     One Firstar Plaza
                                     St. Louis, Missouri  63101

                                    Attention: Mr. J. Eric Hartman

                                    Telecopier No.: (314) 418-3859

                                    Telephone No.:  (314) 418-2336

                                      S-11
<PAGE>
REVOLVING CREDIT COMMITMENT         BHF (USA) CAPITAL CORPORATION
$6,559,766.76

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$7,118,654.93                       Title:

                                    By_________________________
                                    Title:

                                    Lending Office for all Loans:
                                     BHF (USA) Capital Corporation
                                     590 Madison Avenue
                                     New York, New York  10022-2540

                                    Address for Notices:
                                     BHF (USA) Capital Corporation
                                     590 Madison Avenue
                                     New York, New York  10022-2540

                                     Attention:   Mr. Andrew Shipman

                                     Telecopier No.:  (212) 756-5536

                                     Telephone No.:  (212) 756-5988

                                      S-12
<PAGE>
REVOLVING CREDIT COMMITMENT         SOUTHTRUST BANK
$6,559,766.76

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$7,118,654.93                       Title:

                                    Lending Office for all Loans:
                                     SouthTrust Bank
                                     One Riverway, Suite 400
                                     Houston, Texas  77056

                                    Address for Notices:
                                     SouthTrust Bank
                                     One Riverway, Suite 400
                                     Houston, Texas  77056

                                     Attention:   Mr. John Elam

                                     Telecopier No.:  (713) 627-1492

                                     Telephone No.:  (713) 402-3603

                                      S-13
<PAGE>
REVOLVING CREDIT COMMITMENT         SUMMIT BANK
$6,559,766.76

SYNTHETIC LEASE LOAN COMMITMENT     By_________________________
$7,118,654.93                       Title:

                                    Lending Office for all Loans:
                                     Summit Bank
                                     250 Moore Street, 2nd Floor
                                     Hackensack, New Jersey  07601

                                    Address for Notices:
                                     Summit Bank
                                     210 Main Street
                                     Hackensack, New Jersey  07601

                                     Attention:   Ms. Lisa Cohen

                                     Telecopier No.:  (201) 488-6185

                                     Telephone No.:  (201) 646-5465

                                      S-14
<PAGE>
                                    ING (U.S.) CAPITAL LLC,
                                      as Administrative Agent

                                    By_______________________________
                                    Title:

                                    Address for Notices to ING as Administrative
                                     Agent:

                                     ING Capital
                                     55 East 52nd Street
                                     New York, New York  10055

                                     Attention:   Merchant Banking Group -- New
                                      York

                                     Telecopier No.:  (212) 409-5879

                                     Telephone No.:  (212) 409-1955

                                      S-15EXHIBIT 10.2

================================================================================

                      AMENDED AND RESTATED MASTER AGREEMENT

                            Dated as of July 21, 2000

                                      among

                            CORNELL COMPANIES, INC.,
                           as a Lessee and Guarantor,

                CERTAIN SUBSIDIARIES OF CORNELL COMPANIES, INC.,
                                   as Lessees,

                CERTAIN SUBSIDIARIES OF CORNELL COMPANIES, INC.,
                            as Subsidiary Guarantors,

                   ATLANTIC FINANCIAL GROUP, LTD., as Lessor,

                 CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,
                                  as B Lenders,

                             ING (U.S.) CAPITAL LLC,
                            as Administrative Agent,

                             BANK OF AMERICA, N.A.,
                              as Syndication Agent,

                                       and

                   SUNTRUST EQUITABLE SECURITIES CORPORATION,
                             as Documentation Agent

================================================================================
<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

ARTICLE I    DEFINITIONS; INTERPRETATION..................................    2

ARTICLE II   ACQUISITION, CONSTRUCTION AND LEASE;
             FUNDINGS;NATURE OF TRANSACTION...............................    2

      SECTION 2.1   Agreement to Acquire, Construct, Fund and Lease.......    2
                    (a) Land..............................................    2
                    (b) Building..........................................    2

      SECTION 2.2   Fundings of Purchase Price, Development Costs and
                    Construction Costs....................................    2
                    (a) Initial Funding and Payment of Purchase Price for
                        Land and Development Costs on Closing Date........    2
                    (b) Subsequent Fundings and Payments of Construction
                        Costs during Construction Term....................    3
                    (c) Aggregate Limits on Funded Amounts................    3
                    (d) Notice, Time and Place of Fundings................    4
                    (e) Lessee's Deemed Representation for Each Funding...    4
                    (f) Not Joint Obligations.............................    5
                    (g) Non-Pro Rata Fundings.............................    5
                    (h) Adjustments for New Commitment Percentages........    5
                    (i) Information Regarding Leased Property.............    5

      SECTION 2.3   Funded Amounts and Interest and Yield Thereon;
                    Facility Fee..........................................    5

      SECTION 2.4   Lessee Owner for Tax Purposes.........................    7

      SECTION 2.5   Amounts Due Under Lease...............................    7

ARTICLE III  CONDITIONS PRECEDENT; DOCUMENTS..............................    8

      SECTION 3.1   Conditions to the Obligations of the Funding Parties
                    on each Closing Date..................................    8
                    (a) Documents.........................................    8
                        (i)    Deed and Purchase Agreement................    8
                        (ii)   Lease Supplement...........................    8
                        (iii)  Mortgage and Assignment of Lease and Rents.    8
                        (iv)   Security Agreement and Assignment..........    8
                        (v)    Survey.....................................    9
                        (vi)   Title and Title Insurance..................    9
                        (vii)  Appraisal..................................   10
                        (viii) Environmental Audit and related
                               Reliance Letter............................   10
                        (ix)   Evidence of Insurance......................   10
                        (x)    UCC Financing Statement; Recording Fees;
                               Transfer Taxes.............................   10
                        (xi)   Opinions...................................   11

                                      -ii-
<PAGE>
                        (xii)  Good Standing Certificates.................   11
                    (b) Litigation........................................   11
                    (c) Legality..........................................   11
                    (d) No Events.........................................   11
                    (e) Representations...................................   12
                    (f) Cutoff Date.......................................   12
                    (g) Transaction Expenses..............................   12
                    (h) Approval..........................................   12
                    (i) California Property...............................   12

      SECTION 3.2   Additional Conditions for the Initial Closing Date....   12

      SECTION 3.3   Conditions to the Obligations of Lessee...............   13
                    (a) General Conditions................................   13
                    (b) Legality..........................................   14
                    (c) Purchase Agreement; Ground Lease..................   14

      SECTION 3.4   Conditions to the Obligations of the Funding Parties
                    on each Funding Date..................................   14
                    (a) Funding Request...................................   14
                    (b) Condition Fulfilled...............................   14
                    (c) Representations...................................   14
                    (d) No Bonded Stop Notice or Filed Mechanics Lien.....   14
                    (e) Lease Supplement..................................   15
                    (f) Funding Termination Date..........................   15
                    (g) Credit Agreement Conditions.......................   15
                    (h) Additional Requirements for Fundings to Finance
                        Construction......................................   15

      SECTION 3.5   Completion Date Conditions............................   15
                    (a) Title Policy Endorsements; Architect's
                         Certificate......................................   15
                    (b) Construction Completion...........................   16
                    (c) Construction Agent Certification..................   16

      SECTION 3.6   Addition of Lessees...................................   17

      SECTION 3.7   Reaffirmations of Operative Documents.................   18

      SECTION 3.8   Certain Deliveries....................................   18

ARTICLE IV   REPRESENTATIONS..............................................   18

      SECTION 4.1   Representations of Obligors...........................   18
                    (a) Corporate Existence...............................   18
                    (b) Financial Condition...............................   18
                    (c) Litigation........................................   19
                    (d) No Breach.........................................   19
                    (e) Action............................................   19

                                      -iii-
<PAGE>
                    (f) Approvals.........................................   20
                    (g) Use of Credit.....................................   20
                    (h) ERISA.............................................   20
                    (i) Taxes.............................................   20
                    (j) Investment Company Act............................   20
                    (k) Public Utility Holding Company Act................   21
                    (l) Material Agreements and Liens.....................   21
                    (m) Environmental Matters.............................   21
                    (n) Capitalization....................................   23
                    (o) Subsidiaries, Etc.................................   24
                    (p) Title to Assets...................................   24
                    (q) True and Complete Disclosure......................   25
                    (r) Real Property.....................................   25
                    (s) Purpose of Fundings...............................   25
                    (t) Hazardous Materials - Leased Properties...........   25
                    (u) Leased Property...................................   27

      SECTION 4.2   Survival of Representations and Effect of Fundings....   27
                    (a) Survival of Representations and Warranties........   27
                    (b) Each Funding a Representation.....................   27

      SECTION 4.3   Representations of the Lessor.........................   27
                    (a) Securities Act....................................   27
                    (b) Due Organization, etc.............................   27
                    (c) Due Authorization; Enforceability, etc............   28
                    (d) No Conflict.......................................   28
                    (e) Litigation........................................   28
                    (f) Lessor Liens......................................   28
                    (g) Employee Benefit Plans............................   28
                    (h) General Partner...................................   28
                    (i) Financial Information.............................   28
                    (j) No Offering.......................................   29

      SECTION 4.4   Representations of each Lender........................   29
                    (a) Securities Act....................................   29
                    (b) Employee Benefit Plans............................   29

                                      -iv-
<PAGE>
ARTICLE V    COVENANTS OF THE COMPANY AND THE LESSOR......................   29

      SECTION 5.1   Affirmative Covenants.................................   29
                    (a) Financial Statements, Etc.........................   29
                    (b) Litigation........................................   33
                    (c) Existence, Etc....................................   33
                    (d) Insurance.........................................   34
                    (e) Prohibition of Fundamental Changes................   36
                    (f) Limitation on Liens...............................   37
                    (g) Indebtedness......................................   38
                    (h) Investments.......................................   39
                    (i) Dividend Payments.................................   39
                    (j) EBITDAR Ratio I...................................   40
                    (k) EBITDAR Ratio II..................................   40
                    (l) Net Worth.........................................   41
                    (m) Interest Coverage Ratio...........................   41
                    (n) Fixed Charges Ratio...............................   42
                    (o) Capital Expenditures..............................   42
                    (p) Sale Lease-back Transactions......................   42
                    (q) Discount of Accounts..............................   43
                    (r) Lines of Business.................................   43
                    (s) Transactions with Affiliates......................   43
                    (t) Use of Proceeds...................................   43
                    (u) Certain Obligations Respecting Subsidiaries.......   43
                    (v) Modifications of Certain Documents................   44
                    (w) The Cornell Cox Group, L.P........................   44
                    (x) Prepayment of 2000 Subordinated Debt..............   44

      SECTION 5.2   Further Assurances....................................   44

      SECTION 5.3   Additional Required Appraisals........................   44

      SECTION 5.4   Lessors Covenants.....................................   45

ARTICLE VI   TRANSFERS BY LESSOR AND LENDERS..............................   46

      SECTION 6.1   Lessor Transfers......................................   46

      SECTION 6.2   Lender Transfers......................................   46

ARTICLE VII  INDEMNIFICATION..............................................   48

      SECTION 7.1   General Indemnification...............................   48

      SECTION 7.2   Environmental Indemnity...............................   49

      SECTION 7.3   Proceedings in Respect of Claims......................   51

      SECTION 7.4   General Tax Indemnity.................................   52

                                       -v-
<PAGE>
                    (a) Tax Indemnity.....................................   52
                    (b) Exclusions from General Tax Indemnity.............   53
                    (c) Contests..........................................   55
                    (d) Reimbursement for Tax Savings.....................   56
                    (e) Payments..........................................   57
                    (f) Reports...........................................   57
                    (g) Verification......................................   57

      SECTION 7.5   Increased Costs, etc..................................   58
                    (a) Sharing of Payments, Etc..........................   58
                    (b) Yield Protection, Etc.............................   59
                    (c) Limitation on Types of Advances...................   63
                    (d) Illegality........................................   63
                    (e) Treatment of Eurodollar Advances..................   64
                    (f) Compensation......................................   64
                    (g) Substitution of Funding Parties...................   65

      SECTION 7.6   End of Term Indemnity.................................   66

      SECTION 7.7   Guarantee.............................................   66
                    (a) The Guarantee.....................................   66
                    (b) Obligations Unconditional.........................   67
                    (c) Reinstatement.....................................   68
                    (d) Subrogation.......................................   68
                    (e) Remedies..........................................   68
                    (f) Instrument for the Payment of Money...............   68
                    (g) Continuing Guarantee..............................   68
                    (h) Rights of Contribution............................   68
                    (i) General Limitation on Guarantee Obligations.......   69

ARTICLE VIII MISCELLANEOUS................................................   70

      SECTION 8.1   Survival of Agreements................................   70

      SECTION 8.2   Notices...............................................   70

      SECTION 8.3   Counterparts..........................................   70

      SECTION 8.4   Amendments............................................   70

      SECTION 8.5   Headings, etc.........................................   72

      SECTION 8.6   Parties in Interest...................................   72

      SECTION 8.7   GOVERNING LAW.........................................   72

      SECTION 8.8   Expenses..............................................   72

      SECTION 8.9   Severability..........................................   73

      SECTION 8.10  Liabilities of the Funding Parties....................   73

                                      -vi-
<PAGE>
      SECTION 8.11  Submission to Jurisdiction; Waivers...................   73

      SECTION 8.12  Liabilities of the Administrative Agent; References...   73

                                      -vii-
<PAGE>

APPENDIX A        Definitions and Interpretation

                                     -viii-
<PAGE>
                                    SCHEDULES

SCHEDULE 2.2        Commitments
SCHEDULE 8.2        Notice Information

SCHEDULE I          Indebtedness; Liens
SCHEDULE II         Environmental Matters
SCHEDULE III        Subsidiaries; Investments
SCHEDULE IV         Real Property Interests
SCHEDULE V          Capital Stocks
SCHEDULE VI         Cornell Cox Group Property

                                    EXHIBITS

EXHIBIT A           Form of Funding Request
EXHIBIT B           Form of Assignment of Lease and Rents
EXHIBIT C           Form of Security Agreement and Assignment
EXHIBIT D           Form of Mortgage
EXHIBIT E           Form of Joinder Agreement
EXHIBIT F           Form of Assignment and Acceptance Agreement
EXHIBIT G           Forms of Opinions of Counsel
EXHIBIT H           Form of Certification of Construction Completion
EXHIBIT I           Form of Payment Date Notice

                                      -ix-
<PAGE>
                      AMENDED AND RESTATED MASTER AGREEMENT

      THIS AMENDED AND RESTATED MASTER AGREEMENT, dated as of July 21, 2000 (as
it may be further amended or modified from time to time in accordance with the
provisions hereof, and including the Original Master Agreement for as long as it
was in effect, this "MASTER AGREEMENT"), is among CORNELL COMPANIES, INC.
(formerly known as Cornell Corrections, Inc.), a Delaware corporation (the
"COMPANY"), certain Subsidiaries of the Company that are now, or pursuant to
Section 3.6 may hereafter become, parties hereto as lessees (individually,
together with the Company in its capacity as a lessee, a "LESSEE" and
collectively the "LESSEES"), each of the Subsidiaries of the Company identified
under the caption "SUBSIDIARY GUARANTORS" on the signature pages hereto
(individually, a "SUBSIDIARY GUARANTOR" and collectively, the "SUBSIDIARY
GUARANTORS"), ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the
"LESSOR"), certain financial institutions parties hereto as lenders (together
with any other financial institution that becomes a party hereto as a lender,
collectively referred to as "B LENDERS" and individually as a "B LENDER"), ING
(U.S.) CAPITAL LLC, a Delaware limited liability company (formerly known as ING
(U.S.) Capital Corporation), as administrative agent for the Lenders (in such
capacity, the "ADMINISTRATIVE AGENT"), BANK OF AMERICA, N.A., a national banking
association, as syndication agent (in such capacity, the "SYNDICATION AGENT")
and SUNTRUST EQUITABLE SECURITIES CORPORATION, a Tennessee corporation, as
documentation agent (the "DOCUMENTATION AGENT").

                              PRELIMINARY STATEMENT

      The Company, the Lessees, the Subsidiary Guarantors, the Lessor, certain
of the B Lenders, the Syndication Agent and the Documentation Agent are parties
to that certain Master Agreement, dated as of December 3, 1998 (the "ORIGINAL
MASTER AGREEMENT"), which Original Master Agreement the parties hereto desire to
amend and restate in its entirety.

      In accordance with the terms and provisions of this Master Agreement, the
Lease, the Loan Agreement and the other Operative Documents, (i) the Lessor
contemplates acquiring Land and, in certain cases, the Buildings thereon
identified by the Company from time to time, and leasing such Land and Buildings
thereon to a Lessee, (ii) the Company, as Construction Agent for the Lessor,
wishes, in certain instances, to construct Buildings on Land for the Lessor and,
when completed, the related Lessee wishes to lease such Buildings from the
Lessor as part of the Leased Properties under the Lease, (iii) the Company, as
agent for the Lessor, wishes to obtain, and the Lessor is willing to provide,
funding for the acquisition of the Land and Buildings, or, in certain instances,
the construction of Buildings, and (iv) the Lessor wishes to obtain, and the B
Lenders are willing to provide, from time to time, financing of a portion of the
funding of the acquisition of the Land and Buildings and, if applicable, the
construction of the Buildings.

      In consideration of the mutual agreements contained in this Master
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
<PAGE>
                                    ARTICLE I
                           DEFINITIONS; INTERPRETATION

      Unless the context shall otherwise require, capitalized terms used and not
defined herein shall have the meanings assigned thereto in APPENDIX A hereto for
all purposes hereof; and the rules of interpretation set forth in APPENDIX A
hereto shall apply to this Master Agreement.

                                   ARTICLE II
       ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;NATURE OF TRANSACTION

      SECTION 2.1. AGREEMENT TO ACQUIRE, CONSTRUCT, FUND AND LEASE.

            (a)    LAND. Subject to the terms and conditions of this Master
      Agreement, with respect to each parcel of Land identified by the Company,
      on the related Closing Date (i) the Lessor agrees to acquire such interest
      in the related Land, and any Building thereon, from the applicable Seller
      as is transferred, sold, assigned and conveyed to the Lessor pursuant to
      the applicable Purchase Agreement or to lease such interest in the related
      Land, and any Building thereon, from the applicable Ground Lessor as is
      leased to the Lessor pursuant to the applicable Ground Lease, (ii) the
      Lessor hereby agrees to lease, or sublease, as the case may be, such Land
      and any Building thereon to the related Lessee pursuant to the Lease, and
      (iii) the related Lessee hereby agrees to lease, or sublease, as the case
      may be, such Land, and any Building thereon, from the Lessor pursuant to
      the Lease.

            (b)    BUILDING. With respect to each parcel of Land on which a
      Building is to be constructed, subject to the terms and conditions of this
      Master Agreement, from and after the Closing Date relating to such Land
      (i) the Construction Agent agrees, pursuant to the terms of the
      Construction Agency Agreement, to construct and install the Building on
      such Land for the Lessor prior to the Scheduled Construction Termination
      Date, (ii) the B Lenders and the Lessor agree to fund the costs of such
      construction and installation (and interest and yield thereon), (iii) the
      Lessor shall lease, or sublease, as the case may be, such Building as part
      of such Leased Property to the related Lessee pursuant to the Lease, and
      (iv) the related Lessee shall lease, or sublease, as the case may be, such
      Building from the Lessor pursuant to the Lease.

      SECTION 2.2 FUNDINGS OF PURCHASE PRICE, DEVELOPMENT COSTS AND CONSTRUCTION
COSTS.

            (a)    INITIAL FUNDING AND PAYMENT OF PURCHASE PRICE FOR LAND AND
      DEVELOPMENT COSTS ON CLOSING DATE. Subject to the terms and conditions of
      this Master Agreement, on the Closing Date for any Land, and any Building
      thereon, each B Lender shall make available to the Lessor its initial B
      Loans with respect to such Land, and any Building thereon, in an amount
      equal to the product of such B Lenders Commitment Percentage times the
      purchase price for the Land, and any Building thereon, and the
      development, transaction and closing costs incurred by the Construction
      Agent, as agent, through such Closing Date (the "ACQUISITION COSTS" for
      such Land

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      and Building, if any), which funds the Lessor shall use, together with (1)
      the Lessor's own funds in an amount equal to the product of the Lessors
      Commitment Percentage times the Acquisition Costs for the related Land and
      any Building thereon, and (2) the proceeds of the Synthetic Lease Loans
      made to Lessor on such Closing Date pursuant to Section 2.01(b) of the
      Credit Agreement, which Synthetic Lease Loans shall be in an aggregate
      amount equal to the A Percentage of the Acquisition Costs for the related
      Land and any Building thereon, to purchase the Land, and any Building
      thereon, from the applicable Seller pursuant to the applicable Purchase
      Agreement or lease the Land and any Building thereon, from the applicable
      Ground Lessor pursuant to the applicable Ground Lease, as the case may be,
      and to pay to the Construction Agent the amount of such development,
      transaction and closing costs, and the Lessor shall lease, or sublease, as
      the case may be, such Land to the related Lessee pursuant to the Lease.

            (b)    SUBSEQUENT FUNDINGS AND PAYMENTS OF CONSTRUCTION COSTS DURING
      CONSTRUCTION TERM. Subject to the terms and conditions of this Master
      Agreement, if a Building is to be constructed on Land, on each Funding
      Date following the Closing Date for each such parcel of Land until the
      related Construction Term Expiration Date (provided that Fundings may be
      made with respect to each Leased Property not later than 120 days after
      the related Construction Term Expiration Date for Construction costs
      incurred for such Leased Property during such period), (i) each B Lender
      shall make available to the Lessor a B Loan in an amount equal to the
      product of such B Lenders Commitment Percentage times the amount of
      Funding requested by the Construction Agent for such Funding Date, which
      funds the Lessor hereby directs each B Lender to pay over to the
      Construction Agent as set forth in PARAGRAPH (D), (ii) the Lessor shall
      request, and shall pay over to the Construction Agent the proceeds of,
      Synthetic Lease Loans pursuant to the Credit Agreement in an aggregate
      amount equal to the product of the A Percentage times the amount of
      Funding requested by the Construction Agent for such Funding Date, and
      (iii) the Lessor shall pay over to the Construction Agent its own funds
      (which shall constitute a part of, and an increase in, the Lessors
      Invested Amount with respect to such Leased Property) in an amount equal
      to the product of the Lessors Commitment Percentage times the amount of
      Funding requested by the Construction Agent for such Funding Date.

            (c)    AGGREGATE LIMITS ON FUNDED AMOUNTS. The aggregate amount that
      the Funding Parties shall be committed to provide as Funded Amounts under
      this Master Agreement and the Loan Agreement, and as Synthetic Lease Loans
      under the Credit Agreement, shall not exceed (x) with respect to each
      Leased Property the costs of purchase and construction of such Leased
      Property and the related development, transaction and closing financing
      costs, or (y) $100,000,000 in the aggregate for all Leased Properties. In
      the event that a Lessee exercises a Partial Purchase Option, the
      Commitments shall be reinstated, PRO RATA among the Funding Parties, in
      the amount equal to the Leased Property Balance paid in connection with
      such Partial Purchase Option. The aggregate amount that any Operative
      Party shall be committed to fund under this Master Agreement and the Loan
      Agreement shall not exceed the lesser of (i) such Operative Party's
      Commitment and (ii) such Operative Partys Commitment Percentage of the
      aggregate Fundings requested under this Master Agreement. In no event
      shall the Funding Parties be committed to provide Funding for development,
      transaction or other soft costs related

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      to any Leased Property prior to the acquisition by the Lessor of the Land
      related thereto (it being understood that such costs may be included in a
      Funding for a Leased Property on or after the date that the related Land
      is acquired by the Lessor).

            (d)    NOTICE, TIME AND PLACE OF FUNDINGS. With respect to each
      Funding, Lessee or the Construction Agent, as the case may be, shall give
      the Lessor and the Agent an irrevocable prior written notice not later
      than 12:00 noon, New York City time, at least two Business Days prior to
      the proposed Closing Date or other Funding Date, as the case may be,
      pursuant, in each case, to a Funding Request in the form of EXHIBIT A (a
      "FUNDING REQUEST"), specifying the Closing Date or subsequent Funding
      Date, as the case may be, the amount of Funding requested, whether such
      Funding shall be a Eurodollar Advance or a Base Rate Advance or a
      combination thereof and the Rent Period(s) therefor (it being understood
      that the Funded Amounts, including the Synthetic Lease Loans, shall be
      allocated among Eurodollar Advances, including the Rent Periods therefor,
      and the Base Rate Advance, if any, on a pro rata basis). All documents and
      instruments required to be delivered on such Closing Date pursuant to this
      Master Agreement shall be delivered at the offices of Mayer, Brown &
      Platt, 190 South LaSalle Street, Chicago, Illinois 60603, or at such other
      location as may be determined by the Lessor, the Construction Agent and
      the Administrative Agent. Each Funding shall occur on a Business Day and
      shall be in an amount equal to $1,000,000 or an integral multiple of
      $100,000 in excess thereof. All remittances made by any B Lender and the
      Lessor for any Funding shall be made in immediately available funds by
      wire transfer to or, as is directed by, the Construction Agent, with
      receipt by the Construction Agent not later than 2:00 p.m., New York City
      time, on the applicable Funding Date, upon satisfaction or waiver of the
      conditions precedent to such Funding set forth in SECTION 3; such funds,
      together with the proceeds of the related Synthetic Lease Loans, shall (1)
      in the case of the initial Funding on a Closing Date, be used to pay the
      purchase price to the applicable Seller for the related Land and pay
      development, transaction and closing costs related to such Land, and (2)
      in the case of each subsequent Funding be paid to the Construction Agent,
      for the payment or reimbursement of Construction costs incurred through
      such Funding Date and not previously paid or reimbursed or to pay for
      Construction costs incurred not later than 120 days after the Completion
      Date for the related Leased Property.

            (e)    LESSEE'S DEEMED REPRESENTATION FOR EACH FUNDING. Each Funding
      Request by a Lessee or the Construction Agent shall be deemed a
      reaffirmation of each Lessees indemnity obligations in favor of the
      Indemnitees under the Operative Documents and a representation and
      warranty by such Lessee or the Construction Agent, as the case may be, to
      the Lessor, the Administrative Agent, the Synthetic Lease Loan Lenders and
      the B Lenders that on the proposed Closing Date or Funding Date, as the
      case may be, (i) the amount of Funding requested represents amounts owing
      in respect of the purchase price of the related Land, and any Building
      thereon, and development, transaction and closing costs in respect of the
      Leased Property (in the case of the initial Funding on a Closing Date) or
      amounts that are then due to third parties in respect of the Construction,
      or amounts paid by the Construction Agent to third parties in respect of
      the Construction for which the Construction Agent has not previously been
      reimbursed by a Funding (in the case of any Funding), or amounts for
      Construction costs incurred by the related Lessee not later than 120 days
      after the Completion Date for the related Leased Property, (ii) no

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      Event of Default or Potential Event of Default exists, and (iii) the
      representations and warranties of each Obligor set forth in SECTION 4.1
      are true and correct in all material respects as though made on and as of
      such Funding Date, except to the extent such representations or warranties
      relate solely to an earlier date, in which case such representations and
      warranties shall have been true and correct in all material respects on
      and as of such earlier date.

            (f)    NOT JOINT OBLIGATIONS. Notwithstanding anything to the
      contrary set forth herein or in the other Operative Documents, each B
      Lender's and the Lessor's commitments shall be several, and not joint. In
      no event shall any Funding Party be obligated to fund an amount in excess
      of such Funding Party's Commitment Percentage of any Funding, or to fund
      amounts in the aggregate in excess of such Funding Party's Commitment.

            (g)    NON-PRO RATA FUNDINGS. Notwithstanding anything to the
      contrary set forth in this Master Agreement, at the Administrative Agent's
      option, Fundings may be made by drawing on the Lessor's Commitment until
      such Commitment is fully funded before drawing on the Lenders'
      Commitments. In such event, when the Lessor's Commitment is fully funded,
      the B Lenders and the Synthetic Lease Loan Lenders will fund, on a pro
      rata basis as among themselves, 100% of the amount of the Fundings
      thereafter. In no event shall any Funding Party have any obligation to
      fund any amount in excess of the amount of such Funding Partys Commitment.

            (h)    ADJUSTMENTS FOR NEW COMMITMENT PERCENTAGES. On the first
      Payment Date to occur after the date hereof, each Lender that is a new
      Lender on such date, and each Lender that has increased its Commitment
      such that its new Commitment Percentage is greater than it was pursuant to
      the Original Master Agreement, shall fund or increase, as the case may be,
      its Loans, and the outstanding Loans of the existing Lenders shall be
      prepaid, without premium, penalty or fee, in each case, in such amounts
      that, after giving effect to such Funding and such prepayment, each
      Lenders outstanding Loans will be equal to its Commitment Percentage of
      the outstanding Funded Amounts on such date.

            (i)    INFORMATION REGARDING LEASED PROPERTY. The Construction Agent
      or the Lessee shall provide the Administrative Agent with a general
      description of each property that it proposes to include in the
      Transaction at least ten (10) Business Days prior to the proposed Closing
      Date therefor, and the Administrative Agent shall distribute such
      description to the Funding Parties on or before two (2) Business Days
      thereafter. The Construction Agent or the related Lessee shall deliver to
      the Administrative Agent copies of any and all contracts and documents
      related to such proposed Leased Property promptly upon receipt of a
      request therefor by the Administrative Agent or any Funding Party and the
      Administrative Agent shall distribute such copies to each Funding Party
      that requests such copies.

      SECTION 2.3 FUNDED AMOUNTS AND INTEREST AND YIELD THEREON; FACILITY FEE.

            (a)    The Lessor's Invested Amount for any Leased Property
      outstanding from time to time shall accrue yield ("YIELD") at the Lessor
      Rate, computed using the actual number of days

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      elapsed and a 360 day year. If all or a portion of the principal amount of
      or yield on the Lessor's Invested Amounts shall not be paid when due
      (whether at the stated maturity, by acceleration or otherwise), such
      overdue amount shall, without limiting the rights of the Lessor under the
      Lease, to the maximum extent permitted by law, accrue yield at the Overdue
      Rate, from the date of nonpayment until paid in full (both before and
      after judgment).

            (b)    Each B Lender's Funded Amount for any Leased Property
      outstanding from time to time shall accrue interest as provided in the
      Loan Agreement. Each Synthetic Lease Loan Lender's Funded Amount for any
      Leased Property outstanding from time to time shall accrue interest as
      provided in the Credit Agreement.

            (c)    During the Construction Term and for the period from the
      Completion Date to the 120th day after the Completion Date, in lieu of the
      payment of accrued interest, on each Payment Date, each Lender's Funded
      Amount in respect of a Construction Land Interest shall automatically be
      increased by the amount of interest accrued and unpaid on the related
      Loans pursuant to the Loan Agreement during the Rent Period ending
      immediately prior to such Payment Date (except to the extent that at any
      time such increase would cause such Lenders Funded Amount to exceed such
      Lender's Commitment, in which event the related Lessee shall pay such
      excess amount to such Lender in immediately available funds on such
      Payment Date). Similarly, in lieu of the payment of accrued Yield, on each
      Payment Date, the Lessor's Invested Amount in respect of a Construction
      Land Interest shall automatically be increased by the amount of Yield
      accrued on the Lessor's Invested Amount in respect of such Leased Property
      during the Rent Period ending immediately prior to such Payment Date
      (except to the extent that at any time such increase would cause the
      Lessor's Invested Amount to exceed the Lessor's Commitment, in which event
      the related Lessee shall pay such excess amount to the Lessor in
      immediately available funds on such Payment Date). Such increases in
      Funded Amounts shall occur without any disbursement of funds by the
      Funding Parties.

            (d)    Three Business Days prior to the last day of each Rent
      Period, the Company shall deliver to the Lessor and the Administrative
      Agent a notice substantially in the form of EXHIBIT I (each, a "PAYMENT
      DATE NOTICE"), appropriately completed, specifying the allocation of the
      Funded Amounts related to such Rent Period to Eurodollar Advances and Base
      Rate Advances and the Rent Periods therefor (IT BEING UNDERSTOOD that the
      Funded Amounts, including the Synthetic Lease Loans, shall be allocated
      among Eurodollar Advances and the Base Rate Advance, if any, on a pro rata
      basis), PROVIDED that no such allocation shall be in an amount less than
      $1,000,000. Each such Payment Date Notice shall be irrevocable. If no such
      notice is given, the Funded Amounts shall be allocated to a Eurodollar
      Advance with a Rent Period of three (3) months.

            (e)    The Company hereby agrees to pay to each B Lender a facility
      fee for each day from the date hereof until the Lease Termination Date
      equal to (i) 0.50% PER ANNUM TIMES (ii) the mount of such B Lender's
      Commitment, MINUS such B Lenders Funded Amount on such day, TIMES (iii)
      1/360. The Company hereby agrees to pay to the Lessor a facility fee for
      each day from the date hereof until the Lease Termination Date equal to
      (i) 0.50% PER ANNUM TIMES (ii) the

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amount of the Lessor's Commitment, MINUS the Lessor's Invested Amount on such
day, TIMES (iii) 1/360. Such facility fee shall be payable in arrears on each
Quarterly Date and on the date that such Commitments are reduced to zero.

      SECTION 2.4 LESSEE OWNER FOR TAX PURPOSES. With respect to each Leased
Property, it is the intent of the Lessees and the Funding Parties that for
federal, state and local tax and commercial law purposes the Lease shall be
treated as the repayment and security provisions of a loan by the Lessor to the
Lessees, and that the related Lessee shall be treated as the legal and
beneficial owner entitled to any and all benefits of ownership of such Leased
Property and all payments of Basic Rent during the Lease Term shall be treated
as payments of interest and, if applicable, principal. Each Lessee and each
Funding Party agree to file tax returns consistent with such intent.
Nevertheless, each of the Company and each Lessee acknowledges and agrees that
no Funding Party or any other Person has made any representations or warranties
concerning the tax, financial, accounting or legal characteristics or treatment
of the Operative Documents and that Lessee has obtained and relied solely upon
the advice of its own tax, accounting and legal advisors concerning the
Operative Documents and the accounting, tax, financial and legal consequences of
the transactions contemplated therein.

      SECTION 2.5 AMOUNTS DUE UNDER LEASE. With respect to each Leased Property,
anything else herein or elsewhere to the contrary notwithstanding, it is the
intention of the Lessees and the Funding Parties that: (i) subject to CLAUSES
(II) and (III) below, the amount and timing of Basic Rent due and payable from
time to time from the related Lessee under the Lease shall be equal to the
aggregate payments due and payable with respect to interest on the B Loans and
the Synthetic Lease Loans in respect of such Leased Property and Yield on the
Lessors Invested Amounts in respect of such Leased Property on each Payment
Date; (ii) if the related Lessee elects the Purchase Option with respect to a
Leased Property or becomes obligated to purchase such Leased Property under the
Lease, the Funded Amounts in respect of such Leased Property, all interest and
Yield thereon and all other obligations of the related Lessee owing to the
Funding Parties in respect of such Leased Property shall be paid in full by
Lessee, (iii) if the related Lessee properly elects the Remarketing Option, the
principal amount of, and accrued interest on, the Synthetic Lease Loans in
respect of the Leased Properties, will be paid out of the Recourse Deficiency
Amount, and the related Lessee shall only be required to pay to the B Lenders in
respect of the principal amount of the B Loans and to the Lessor in respect of
the Lessors Invested Amounts, the proceeds of the sale of the Leased Properties
in accordance with Section 14.6 of the Lease; and (iv) upon an Event of Default
resulting in an acceleration of the related Lessees obligation to purchase the
Leased Properties under the Lease, the amounts then due and payable by the
Lessees under the Lease shall include all amounts necessary to pay in full the B
Loans and the Synthetic Lease Loans, and accrued interest thereon, the Lessors
Invested Amounts and accrued Yield thereon and all other obligations of the
Lessees owing to the Funding Parties pursuant to the Operative Documents and the
Credit Agreement.

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                                   ARTICLE III
                         CONDITIONS PRECEDENT; DOCUMENTS

      SECTION 3.1 CONDITIONS TO THE OBLIGATIONS OF THE FUNDING PARTIES ON EACH
CLOSING DATE. The obligations of the Lessor and each B Lender to carry out their
respective obligations under SECTION 2 of this Master Agreement to be performed
on the Closing Date with respect to any Leased Property shall be subject to the
fulfillment to the reasonable satisfaction of, or waiver by, each such party
hereto (acting directly or through its counsel) on or prior to such Closing Date
of the following conditions precedent, PROVIDED that the obligations of any
Funding Party shall not be subject to any conditions contained in this SECTION
3.1 which are required to be performed by such Funding Party:

            (a)    DOCUMENTS. The following documents shall have been executed
      and delivered by the respective parties thereto:

                  (i) DEED AND PURCHASE AGREEMENT. The related original Deed
            duly executed by the applicable Seller and in recordable form, and
            copies of the related Purchase Agreement, assigned to the Lessor,
            shall each have been delivered to the Administrative Agent by the
            Company, with copies thereof to each other Funding Party or the
            related Ground Lease assigned to the Lessor shall have been
            delivered to the Administrative Agent, with copies thereof to each
            other Funding Party, as applicable (IT BEING UNDERSTOOD, that each
            Purchase Agreement and each Ground Lease shall be satisfactory in
            form and substance to the Lessor and the Lenders).

                  (ii) LEASE SUPPLEMENT. The original of the related Lease
            Supplement, duly executed by the related Lessee and the Lessor and
            in recordable form, shall have been delivered to the Administrative
            Agent by the related Lessee.

                  (iii) MORTGAGE AND ASSIGNMENT OF LEASE AND RENTS. Counterparts
            of the Mortgage (substantially in the form of EXHIBIT D attached
            hereto), duly executed by the Lessor and in recordable form, shall
            have been delivered to the Administrative Agent (which Mortgage
            shall secure all of the debt to the Lenders unless such mortgage is
            subject to a tax based on the amount of indebtedness secured
            thereby, in which case the amount secured will be limited to debt in
            an amount equal to 125% of the projected cost of acquisition and
            construction of such Leased Property); and the Assignment of Lease
            and Rents (substantially in the form of EXHIBIT B attached hereto)
            in recordable form, duly executed by the Lessor, shall have been
            delivered to the Administrative Agent by the Lessor.

                  (iv) SECURITY AGREEMENT AND ASSIGNMENT. If Buildings are to be
            constructed on the Land, counterparts of the Security Agreement and
            Assignment (substantially in the form of EXHIBIT C attached hereto),
            duly executed by the Construction Agent, with an acknowledgment and
            consent thereto satisfactory to

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            the Lessor and the Administrative Agent duly executed by the related
            General Contractor and the related Architect, as applicable, and
            complete copies of the related Construction Contract and the related
            Architect's Agreement certified by the Construction Agent, shall
            have been delivered to the Lessor and the Administrative Agent (it
            being understood and agreed that if no related Construction Contract
            or Architects Agreement exists on such Closing Date, such delivery
            shall not be a condition precedent to the Funding on such Closing
            Date, and in lieu thereof the Construction Agent shall deliver
            complete copies of such Security Agreement and Assignment and
            consents concurrently with the Construction Agents entering into
            such contracts).

                  (v) SURVEY. The related Lessee shall have delivered, or shall
            have caused to be delivered, to the Lessor and the Administrative
            Agent, at such Lessees expense, an accurate survey certified to the
            Lessor and the Administrative Agent in a form reasonably
            satisfactory to the Lessor and the Administrative Agent and showing
            no state of facts unsatisfactory to the Lessor or the Administrative
            Agent and prepared within ninety (90) days of such Closing Date by a
            Person reasonably satisfactory to the Lessor and the Administrative
            Agent. Such survey shall (1) be acceptable to the Title Insurance
            Company for the purpose of providing extended coverage to the Lessor
            and a lenders comprehensive endorsement to the Administrative Agent,
            (2) show no encroachments on such Land by structures owned by
            others, and no encroachments from any part of such Leased Property
            onto any land owned by others, and (3) disclose no state of facts
            reasonably objectionable to the Lessor, the Administrative Agent or
            the Title Insurance Company, and be reasonably acceptable to each
            such Person.

                  (vi) TITLE AND TITLE INSURANCE. On such Closing Date, the
            Lessor shall receive from a title insurance company acceptable to
            the Lessor and the Administrative Agent an ALTA Owners Policy of
            Title Insurance issued by such title insurance company and the
            Administrative Agent shall receive from such title insurance company
            an ALTA Mortgagee's Policy of Title Insurance issued by such title
            insurance company, in the amount of (A) the Lessor's Commitment
            Percentage of projected cost of acquisition and construction of such
            Leased Property, in the case of the ALTA Owner's Policy of Title
            Insurance and (B) the sum of the A Percentage and the B Percentage
            of the projected cost of acquisition and construction of such Leased
            Property, in the case of the ALTA Mortgagee's Policy of Title
            Insurance, in each case reasonably acceptable in form and substance
            to the Lessor and the Administrative Agent, respectively
            (collectively, the "TITLE POLICY"). The Title Policy shall be dated
            as of such Closing Date, and, to the extent permitted under
            Applicable Law, shall include such affirmative endorsements as the
            Lessor or the Administrative Agent shall reasonably request.

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                  (vii) APPRAISAL. Each Funding Party shall have received a
            report of the Appraiser (an "APPRAISAL"), paid for by the Company or
            the related Lessee, which shall meet the requirements of the
            Financial Institutions Reform, Recovery and Enforcement Act of 1989,
            shall be satisfactory to such Funding Party and shall state in a
            manner satisfactory to such Funding Party the estimated "as vacant"
            value of such Land and existing Buildings or any Building to be
            constructed thereon. Such Appraisal must show that the "as vacant"
            value of such Leased Property (if a Building is to be constructed on
            the Land, determined as if the Building had already been completed
            in accordance with the related Plans and Specifications and by
            excluding from such value the amount of assessments on such Leased
            Property) is at least 75% of the total cost of such Leased Property,
            including the trade fixtures, equipment and personal property
            utilized in connection with the Leased Property and to be funded by
            the Funding Parties. In the case of Land without any Building
            thereon or any Plans and Specifications for a Building on the
            related Closing Date, an Appraisal meeting the foregoing
            requirements need not be delivered on or prior to the Closing Date
            but shall be delivered on or before the 45th day following the
            development of Plans and Specifications for a Building thereon; if
            the "as vacant" value shown in the Appraisal so obtained by the
            Funding Parties fails to meet the requirement of the preceding
            sentence, such failure shall constitute an Event of Default.

                  (viii) ENVIRONMENTAL AUDIT AND RELATED RELIANCE LETTER. The
            Lessor and the Administrative Agent shall have received an
            Environmental Audit for such Leased Property, which shall be
            conducted in accordance with ASTM standards and shall not include a
            recommendation for further investigation and is otherwise
            satisfactory to the Lessor and the Administrative Agent; and the
            firm that prepared the Environmental Audit for such Leased Property
            shall have delivered to the Lessor and the Administrative Agent a
            letter stating that the Lessor, the Administrative Agent and the
            Lenders may rely upon such firm's Environmental Audit of such Land,
            IT BEING UNDERSTOOD that the Lessor's and the Administrative Agent's
            acceptance of any such Environmental Audit shall not release or
            impair Lessee's obligations under the Operative Documents with
            respect to any environmental liabilities relating to such Leased
            Property.

                  (ix) EVIDENCE OF INSURANCE. The Lessor and the Administrative
            Agent shall have received from the related Lessee certificates of
            insurance evidencing compliance with the provisions of Article VIII
            of the Lease (including the naming of the Lessor, the Administrative
            Agent and the Lenders as additional insured or loss payee with
            respect to such insurance, as their interests may appear), in form
            and substance reasonably satisfactory to the Lessor and the
            Administrative Agent.

                  (x) UCC FINANCING STATEMENT; RECORDING FEES; TRANSFER TAXES.
            Each Funding Party shall have received satisfactory evidence of (i)
            the execution and delivery to Administrative Agent of a UCC-1 and,
            if required by applicable law,

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            UCC-2 financing statement to be filed with the Secretary of State of
            the applicable State (or other appropriate filing office) and the
            county where the related Land is located, respectively, and such
            other Uniform Commercial Code financing statements as any Funding
            Party deems necessary or desirable in order to perfect such Funding
            Party's interests and (ii) the payment of all recording and filing
            fees and taxes with respect to any recordings or filings made of the
            related Deed, the Lease, the related Lease Supplement, the related
            Mortgage and the related Assignment of Lease and Rents.

                  (xi) OPINIONS. An opinion of local counsel for the related
            Lessee qualified in the jurisdiction in which such Leased Property
            is located, substantially in the form set forth in EXHIBIT G-2
            attached hereto, and containing such other matters as the parties to
            whom they are addressed shall reasonably request, shall have been
            delivered and addressed to each of the Lessor, the Administrative
            Agent and the Lenders. To the extent requested by the Administrative
            Agent, opinions supplemental to those delivered under Section
            3.2(vi) and reasonably satisfactory to the Administrative Agent
            shall have been delivered and addressed to each of the Lessor, the
            Administrative Agent and the Lenders.

                  (xii) GOOD STANDING CERTIFICATES. The Administrative Agent and
            the Company shall have received good standing certificates for the
            Lessor and the related Lessee from the appropriate offices of the
            state where the related Land is located.

            (b)    LITIGATION. No action or proceeding shall have been
      instituted or, to the knowledge of any Funding Party, threatened nor shall
      any governmental action, suit, proceeding or investigation be instituted
      or threatened before any Governmental Authority, nor shall any order,
      judgment or decree have been issued or proposed to be issued by any
      Governmental Authority, to set aside, restrain, enjoin or prevent the
      performance of this Master Agreement or any transaction contemplated
      hereby or by any other Operative Document or which could reasonably be
      expected to result in a Material Adverse Effect.

            (c)    LEGALITY. In the reasonable opinion of such Funding Party or
      its counsel, the transactions contemplated by the Operative Documents
      shall not violate any Applicable Law, and no change shall have occurred or
      been proposed in Applicable Law that would make it illegal for such
      Funding Party to participate in any of the transactions contemplated by
      the Operative Documents.

            (d)    NO EVENTS. (i) No Event of Default, Potential Event of
      Default, Event of Loss or Event of Taking relating to such Leased Property
      shall have occurred and be continuing, (ii) no action shall be pending or
      threatened by a Governmental Authority to initiate a Condemnation or an
      Event of Taking, and (iii) there shall not have occurred any

                                       11
<PAGE>
      event that could reasonably be expected to have a Material Adverse Effect
      since December 31, 1999.

            (e)    REPRESENTATIONS. Each representation and warranty of the
      parties hereto or to any other Operative Document contained herein or in
      any other Operative Document shall be true and correct in all material
      respects as though made on and as of such Closing Date, except to the
      extent such representations or warranties relate solely to an earlier
      date, in which case such representations and warranties shall have been
      true and correct in all material respects on and as of such earlier date.

            (f)    CUTOFF DATE. No Closing Date shall occur after the Funding
      Termination Date.

            (g)    TRANSACTION EXPENSES. The related Lessee shall have paid the
      transaction costs then accrued and invoiced which the Lessees have agreed
      to pay pursuant to SECTION 8.8.

            (h)    APPROVAL. The Administrative Agent shall have approved such
      Leased Property in writing for inclusion in the Transaction.

            (i)    CALIFORNIA PROPERTY. If such Leased Property is located in
      California, the related Lessee and the Company shall have entered into
      such amendments to the Operative Documents as reasonably requested by any
      Funding Party in order to mitigate the effects of the "one action" rule.

      SECTION 3.2 ADDITIONAL CONDITIONS FOR THE INITIAL CLOSING DATE. The
obligations of the Lessor and each B Lender to carry out their respective
obligations under SECTION 2 of this Master Agreement to be performed on the
first Funding Date to occur after the date of this Amended and Restated Master
Agreement shall be subject to the satisfaction of, or waiver by, each such party
hereto (acting directly or through its counsel) on or prior to the such date of
the following conditions precedent in addition to those set forth in SECTION
3.1, PROVIDED that the obligations of any Funding Party shall not be subject to
any conditions contained in this SECTION 3.2 which are required to be performed
by such Funding Party:

                  (i) B NOTE. A replacement B Note, duly executed by the Lessor,
            shall have been delivered to the Administrative Agent.

                  (ii) MASTER AGREEMENT. Counterparts of this Master Agreement,
            duly executed by the parties hereto, shall have been delivered to
            each of the parties hereto.

                  (iii) AMENDMENTS. Counterparts of the First Amendment to
            Construction Agency Agreement, First Amendment to Loan Agreement and
            First Amendment to Master Lease Agreement, each duly executed by the
            parties thereto shall have been delivered to each of the parties
            hereto.

                                       12
<PAGE>
                  (iv) CREDIT AGREEMENT. The Administrative Agent and the
            Funding Parties shall have received executed copies of the Credit
            Agreement.

                  (v) OBLIGOR'S RESOLUTIONS AND INCUMBENCY CERTIFICATE, ETC.
            Each of the Administrative Agent and the Lessor shall have received
            (x) a certificate of the Secretary or an Assistant Secretary of each
            Obligor on the date hereof, attaching and certifying as to (i) the
            Board of Directors (or appropriate committees) resolution duly
            authorizing the execution, delivery and performance by it of each
            Operative Document to which it is or will be a party, (ii) the
            incumbency and signatures of persons authorized to execute and
            deliver such documents on its behalf, (iii) its articles or
            certificate of incorporation, certified as of a recent date by the
            Secretary of State of the state of its incorporation and (iv) its
            by-laws, and (y) good standing certificates for such Obligor from
            the appropriate offices of the States of such Obligors incorporation
            and principal place of business.

                  (vi) OPINIONS OF COUNSEL. The opinion of Locke, Liddell & Sapp
            LLP, dated the date hereof, substantially in the form set forth in
            EXHIBIT G-1 attached hereto, and containing such other matters as
            the parties to whom it is addressed shall reasonably request, shall
            have been delivered and addressed to each of the Lessor, the
            Administrative Agent and the Lenders.

                  (vii) GOOD STANDING CERTIFICATE. The Administrative Agent and
            the Company shall have received a good standing certificate for the
            Lessor from the appropriate office of the State of Texas.

                  (viii) LESSOR'S CONSENTS AND INCUMBENCY CERTIFICATE, ETC. The
            Administrative Agent and the Company shall have received (A) a
            certificate of the Secretary or an Assistant Secretary of the
            General Partner of the Lessor attaching and certifying as to (i) the
            consents of the partners of the Lessor duly authorizing the
            execution, delivery and performance by it of each Operative Document
            to which it is or will be a party, (ii) the incumbency and
            signatures of persons authorized to execute and deliver such
            documents on its behalf, and (iii) the Partnership Agreement and (B)
            a certificate of limited partnership from the Secretary of State of
            Texas.

      SECTION 3.3 CONDITIONS TO THE OBLIGATIONS OF LESSEE. The obligations of
any Lessee to lease a Leased Property from the Lessor are subject to the
fulfillment on the related Closing Date to the satisfaction of, or waiver by,
such Lessee, of the following conditions precedent:

            (a)    GENERAL CONDITIONS. The conditions set forth in SECTIONS 3.1
      and 3.2 that require fulfillment by the Lessor or the Lenders shall have
      been satisfied, including the delivery of good standing certificates by
      the Lessor pursuant to SECTIONS 3.1(A)(XII) and 3.2(VIII) and the
      execution and delivery of the Operative Documents to be executed by the
      Lessor or the Lenders in connection with such Leased Property. The Lease
      shall be in full force and effect and enforceable against the Lessor.

                                       13
<PAGE>
            (b)    LEGALITY. In the opinion of such Lessee or its counsel, the
      transactions contemplated by the Operative Documents shall not violate any
      Applicable Law, and no change shall have occurred or been proposed in
      Applicable Law that would make it illegal for such Lessee to participate
      in any of the transactions contemplated by the Operative Documents.

            (c)    PURCHASE AGREEMENT; GROUND LEASE. The Purchase Agreement and,
      if applicable, the Ground Lease and all documents to be delivered under
      the Purchase Agreement or Ground Lease, including title insurance, survey
      and environmental audit, shall be reasonably satisfactory to such Lessee.

      SECTION 3.4. CONDITIONS TO THE OBLIGATIONS OF THE FUNDING PARTIES ON EACH
FUNDING DATE. The obligations of the Lessor and each B Lender to carry out their
respective obligations under SECTION 2 of this Master Agreement to be performed
on each Funding Date shall be subject to the fulfillment to the satisfaction of,
or waiver by, each such party hereto (acting directly or through their
respective counsel) on or prior to each such Funding Date of the following
conditions precedent, PROVIDED that the obligations of any Funding Party shall
not be subject to any conditions contained in this SECTION 3.4 which are
required to be performed by such Funding Party:

            (a)    FUNDING REQUEST. The Lessor and the Administrative Agent
      shall have received from the Construction Agent or a Lessee the Funding
      Request therefor pursuant to SECTION 2.2(D).

            (b)    CONDITION FULFILLED. As of such Funding Date, the condition
      set forth in SECTION 3.1(D)(I) shall have been satisfied.

            (c)    REPRESENTATIONS. As of such Funding Date, after giving effect
      to the Funding requested by the Construction Agent or a Lessee on such
      date, the representations and warranties that each Obligor is deemed to
      make pursuant to SECTION 2.2(E) shall be true and correct in all material
      respects on and as of such Funding Date as though made on and as of such
      Funding Date, except to the extent such representations or warranties
      relate solely to an earlier date, in which case such representations and
      warranties shall have been true and correct in all material respects on
      and as of such earlier date.

            (d)    NO BONDED STOP NOTICE OR FILED MECHANICS LIEN. As of such
      Funding Date, and as to any Funded Amount requested for any Leased
      Property on such Funding Date, (i) none of the Lessor, the Administrative
      Agent or any Lender has received (with respect to such Leased Property) a
      bonded notice to withhold Loan funds that has not been discharged by the
      related Lessee or the Construction Agent, and (ii) no mechanics liens or
      materialmens liens have been filed against such Leased Property that have
      not been discharged by the related Lessee, bonded over or around in a
      manner reasonably

                                       14
<PAGE>
      satisfactory to the Administrative Agent or insured over and around by the
      Title Insurance Company.

            (e)    LEASE SUPPLEMENT. If the Funding relates to a Building that
      will be leased under a Lease Supplement separate from the Lease Supplement
      for the related Land, the original of such separate Lease Supplement, duly
      executed by the related Lessee and the Lessor and in recordable form,
      shall have been delivered to the Administrative Agent.

            (f)    FUNDING TERMINATION DATE. The Funding Termination Date shall
      not have occurred.

            (g)    CREDIT AGREEMENT CONDITIONS. Each condition precedent to the
      making of Synthetic Lease Loans by the Synthetic Lease Loan Lenders on
      such date pursuant to the Credit Agreement shall have been satisfied.

            (h)    ADDITIONAL REQUIREMENTS FOR FUNDINGS TO FINANCE CONSTRUCTION.
      As of such Funding Date, and as to any Funded Amount requested for any
      Leased Property on such Funding Date the Administrative Agent shall have
      received the following: (i) a copy of each construction contract,
      architects agreement and similar agreement and all amendments to each with
      respect to such Leased Property;(ii) a project budget for the construction
      on the Leased Property certified by the chief financial officer of Lessee
      outlining amounts spent to date, current funding requirements and balance
      of budget available for completion; (iii) copies of all change orders for
      the construction on the Leased Property; (iv) copies of all requests for
      payment together with supporting documentation submitted by the architect
      or general contractor; (v) a down-date endorsement to the Title Policy for
      the Leased Property dated the date of the requested advance; (vi) a
      statement by the chief financial officer for the Lessee reconciling the
      budget previously delivered with the construction expenses to the date of
      the requested Advance; (vii) lien waivers from the General Contractor and
      the subcontractors that previous invoices have been paid and the only
      outstanding amount is the current request; and (viii) and such other
      supporting information as the Administrative Agent may reasonably request
      from time to time.

      SECTION 3.5 COMPLETION DATE CONDITIONS. The occurrence of the Completion
Date with respect to any Leased Property shall be subject to the fulfillment to
the satisfaction of, or waiver by, each party hereto (acting directly or through
its counsel) of the following conditions precedent:

            (a)    TITLE POLICY ENDORSEMENTS; ARCHITECT'S CERTIFICATE. The
      Construction Agent shall have furnished to each Funding Party (1) the
      following endorsements to the related Title Policy, if available under
      Applicable Law affecting the Title Insurance Company (each of which shall
      be subject to no exceptions other than those reasonably acceptable to the
      Administrative Agent): a date-down endorsement (redating and confirming
      the coverage provided under the Title Policy and each endorsement thereto)

                                       15
<PAGE>
      and a "Form 9" endorsement (if available in the applicable jurisdiction),
      in each case, effective as of a date not earlier than the date of
      completion of the Construction, and (2) a certificate of the Architect
      dated at or about the Completion Date, in form and substance reasonably
      satisfactory to the Administrative Agent, the Lessor and the B Lenders,
      and stating that (i) the related Building has been completed substantially
      in accordance with the Plans and Specifications therefor, and such Leased
      Property is ready for occupancy, (ii) such Plans and Specifications comply
      in all material respects with all Applicable Laws in effect at such time,
      and (iii) to the best of the Architects knowledge, such Leased Property,
      as so completed, complies in all material respects with all Applicable
      Laws in effect at such time. The Construction Agent shall also deliver to
      the Administrative Agent true and complete copies of: (A) an "as built" or
      "record" set of the Plans and Specifications, (B) an as-built survey of
      such Leased Property, and (C) copies of a certificate or certificates of
      occupancy for such Leased Property or other legally equivalent permission
      to occupy such Leased Property.

            (b)    CONSTRUCTION COMPLETION. Any related Construction shall have
      been completed substantially in accordance with the related Plans and
      Specifications, the related Deed and all Applicable Laws, and such Leased
      Property shall be ready for occupancy and operation.

            (c)    CONSTRUCTION AGENT CERTIFICATION. The Construction Agent
      shall have furnished the Lessor, the Administrative Agent and each Lender
      with a certification of the Construction Agent (substantially in the form
      of EXHIBIT H) that:

                  (i) all amounts owing to third parties for the related
            Construction have been paid in full (other than contingent
            obligations for which the Construction Agent has made adequate
            reserves), and no litigation or proceedings are pending, or to the
            best of the Construction Agents knowledge, are threatened, against
            such Leased Property or the Construction Agent or the related Lessee
            which could reasonably be expected to have a Material Adverse
            Effect;

                  (ii) all material consents, licenses and permits and other
            governmental authorizations or approvals required for such
            Construction of such Leased Property have been obtained and are in
            full force and effect;

                  (iii) such Leased Property has available all services of
            public facilities and other utilities necessary for use and
            operation of such Leased Property for its intended purposes
            including, without limitation, adequate water, gas and electrical
            supply, storm and sanitary sewerage facilities, telephone, other
            required public utilities and means of access between the related
            Building and public highways for pedestrians and motor vehicles;

                  (iv) all material agreements, easements and other rights,
            public or private, which are necessary to permit the lawful use and
            operation of such

                                       16
<PAGE>
            Leased Property as the related Lessee intends to use such Leased
            Property under the Lease and which are necessary to permit the
            lawful intended use and operation of all then intended utilities,
            driveways, roads and other means of egress and ingress to and from
            the same have been obtained and are in full force and effect and
            neither the Construction Agent nor the related Lessee has any
            knowledge of any pending modification or cancellation of any of the
            same; and the use of such Leased Property does not depend on any
            variance, special exception or other municipal approval, permit or
            consent that has not been obtained and is in full force and effect
            for its continuing legal use;

                  (v) all of the requirements and conditions set forth in
            SECTION 3.5(B) hereof have been completed and fulfilled with respect
            to such Leased Property and the related Construction; and

                  (vi) such Leased Property is in compliance in all material
            respects with all applicable zoning laws and regulations.

            SECTION 3.6 ADDITION OF LESSEES. After the date hereof, additional
      Subsidiaries of the Company may become Lessees hereunder and under the
      other Operative Documents upon satisfaction of the following conditions
      precedent:

            (a)    such Subsidiary and the Guarantor shall have executed and
      delivered to the Administrative Agent and the Lessor a Joinder Agreement,
      substantially in the form of EXHIBIT E;

            (b)    such Subsidiary shall have delivered to each of the
      Administrative Agent and the Lessor (x) a certificate of the Secretary or
      an Assistant Secretary of such Subsidiary, attaching and certifying as to
      (i) the Board of Directors resolution duly authorizing the execution,
      delivery and performance by it of each Operative Document to which it is
      or will be a party, (ii) the incumbency and signatures of persons
      authorized to execute and deliver such documents on its behalf, (iii) its
      certificate of incorporation, certified as of a recent date by the
      Secretary of State of its incorporation and (iv) its by-laws, and (y) good
      standing certificates from the appropriate offices of the States of such
      Subsidiarys incorporation and principal place of business;

            (c)    such Subsidiary shall have delivered an opinion of Locke,
      Liddell & Sapp, LLP, addressed to each of the Lessor, the Administrative
      Agent and the Lenders, substantially in the form set forth in EXHIBIT G-1;
      and

            (d)    the Administrative Agent, the Lessor and the Lenders shall
      have received such other documents, certificates and information as any of
      them shall have reasonably requested that are consistent with the type of
      such documentation delivered on the Initial Closing Date.

                                       17
<PAGE>
      SECTION 3.7 REAFFIRMATIONS OF OPERATIVE DOCUMENTS. The Company hereby
reaffirms that the Guaranty Agreement is in full force and effect, and the
Lessor and each Lessee hereby reaffirms that the Lease is in full force and
effect, in each case, after giving effect to this Amended and Restated Master
Agreement. The Agent and the Lenders hereby approve each of the First Amendment
to Construction Agency Agreement, the First Amendment to Loan Agreement and the
First Amendment to Master Lease Agreement, each dated as of the date hereof.

      SECTION 3.8 CERTAIN DELIVERIES. The Company hereby agrees to deliver to
the Administrative Agent within sixty (60) days of the date hereof (i) an
Appraisal of the Moshannon Leased Property meeting the requirements of SECTION
3.1(A)(VII) and (ii) amendments to the Title Policies relating to the Leased
Properties that are in the Transaction on the date hereof increasing the
coverage thereunder by an amount equal to (A) 60% TIMES (B) the A Percentage of
the Funded Amounts related thereto, if such Leased Property is completed, or of
the projected cost of acquisition and construction of such Leased Property, if
such Leased Property is still under construction.

                                   ARTICLE IV
                                 REPRESENTATIONS

      SECTION 4.1 REPRESENTATIONS OF OBLIGORS. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, each
Obligor represents and warrants to each of the other parties hereto as follows:

            (a)    CORPORATE EXISTENCE. Each Obligor: (i) is a corporation,
      partnership or other entity duly organized, validly existing and in good
      standing under the laws of the jurisdiction of its organization; (ii) has
      all requisite corporate or other power, and has all material governmental
      licenses, authorizations, consents and approvals necessary to own its
      assets and carry on its business as now being or as proposed to be
      conducted; and (iii) is qualified to do business and is in good standing
      in all jurisdictions in which the nature of the business conducted by it
      makes such qualification necessary and where failure so to qualify could
      reasonably be expected to (either individually or in the aggregate) have a
      Material Adverse Effect.

            (b)    FINANCIAL CONDITION. The Obligors have heretofore furnished
      to each of the Funding Parties the consolidated and consolidating balance
      sheets of the Company and its Subsidiaries as at December 31, 1999 and the
      related consolidated and consolidating statements of income, retained
      earnings and cash flow of the Company and its Subsidiaries for the fiscal
      year ended on said date, with the opinion thereon (in the case of said
      consolidated balance sheet and statements) of Arthur Andersen LLP, and the
      unaudited consolidated and consolidating balance sheets of the Company and
      its Subsidiaries as at March 31, 2000 and the related consolidated and
      consolidating statements of income and retained earnings of the Company
      and its Subsidiaries for the

                                       18
<PAGE>
      three-month period ended on such date. All such financial statements are
      complete and correct and fairly present the consolidated financial
      condition of the Obligors, and (in the case of said consolidating
      financial statements) the respective unconsolidated financial condition of
      the Obligors, as at said dates and the consolidated and unconsolidated
      results of their operations for the fiscal year and three-month period
      ended on said dates (subject, in the case of such financial statements as
      at March 31, 2000, to normal year-end audit adjustments), all in
      accordance with generally accepted accounting principles and practices
      applied on a consistent basis, except as otherwise indicated in the notes
      thereto. None of the Obligors has on the date hereof any material
      contingent liabilities, liabilities for taxes, unusual forward or
      long-term commitments or unrealized or anticipated losses from any
      unfavorable commitments, in each case, of a type required to be reflected
      in a balance sheet prepared in accordance with GAAP, except as referred to
      or reflected or provided for in said balance sheets as at said dates.
      Since December 31, 1999, there has been no material adverse change in the
      consolidated financial condition, operations, business or prospects taken
      as a whole of the Obligors from that set forth in said financial
      statements as at said date.

            (c)    LITIGATION. There are no legal or arbitral proceedings, or
      any proceedings by or before any governmental or regulatory authority or
      agency, now pending or (to the knowledge of the Company) threatened
      against any Obligor that, if adversely determined could be reasonably
      expected to (either individually or in the aggregate) have a Material
      Adverse Effect.

            (d)    NO BREACH. None of the execution and delivery of this Master
      Agreement and the other Operative Documents, the consummation of the
      transactions herein and therein contemplated or compliance with the terms
      and provisions hereof and thereof will conflict with or result in a breach
      of, or require any consent under, the charter or by-laws of any Obligor,
      or any applicable law or regulation, or any order, writ, injunction or
      decree of any court or governmental authority or agency, or any agreement
      or instrument to which any Obligor is a party or by which any of them or
      any of their Property is bound or to which any of them is subject (other
      than such consents as have been obtained and are in full force and
      effect), or constitute a default under any such agreement or instrument,
      or (except for the Liens created pursuant to the Operative Documents)
      result in the creation or imposition of any Lien upon any Property of the
      Obligors pursuant to the terms of any such agreement or instrument.

            (e)    ACTION. Each Obligor has all necessary power, authority and
      legal right to execute, deliver and perform its obligations under each of
      the Operative Documents to which it is a party; the execution, delivery
      and performance by each Obligor of each of the Operative Documents to
      which it is a party have been duly authorized by all necessary corporate
      action on its part (including, without limitation, any required
      shareholder approvals); and this Master Agreement has been duly and
      validly executed and delivered by each Obligor and constitutes, and each
      of the other Operative Documents to which it is a party when executed and
      delivered by such Obligor will

                                       19
<PAGE>
      constitute, its legal, valid and binding obligation, enforceable against
      each Obligor in accordance with its terms, except as such enforceability
      may be limited by (a) bankruptcy, insolvency, reorganization, moratorium
      or similar laws of general applicability affecting the enforcement of
      creditors rights and (b) the application of general principles of equity
      (regardless of whether such enforceability is considered in a proceeding
      in equity or at law).

            (f)    APPROVALS. No authorizations, approvals or consents of, and
      no filings or registrations with, any governmental or regulatory authority
      or agency, or any securities exchange, are necessary for the execution,
      delivery or performance by any Obligor of the Operative Documents to which
      it is a party or for the legality, validity or enforceability hereof or
      thereof, except for filings and recordings in respect of the Liens created
      pursuant to the Operative Documents.

            (g)    USE OF CREDIT. None of the Obligors is engaged principally,
      or as one of its important activities, in the business of extending credit
      for the purpose, whether immediate, incidental or ultimate, of buying or
      carrying Margin Stock, and no part of the proceeds of any extension of
      credit hereunder will be used to buy or carry any Margin Stock.

            (h)    ERISA. Each Plan, and, to the knowledge of each Obligor, each
      Multiemployer Plan, is in compliance in all material respects with, and
      has been administered in all material respects in compliance with, the
      applicable provisions of ERISA, the Code and any other Federal or State
      law, and no event or condition has occurred and is continuing as to which
      any Obligor would be under an obligation to furnish a report to the
      Funding Parties under SECTION 5.1(A)(VIII) hereof.

            (i)    TAXES. The Obligors are members of an affiliated group of
      corporations filing consolidated returns for Federal income tax purposes,
      of which the Company is the "common parent" (within the meaning of Section
      1504 of the Code) of such group. Each Obligor has filed (either directly,
      or indirectly through the Company) all Federal income tax returns and all
      other material tax returns that are required to be filed by them and have
      paid (either directly, or indirectly through the Company) all taxes due
      pursuant to such returns or pursuant to any assessment received by any
      Obligor, except for any taxes being contested by an Obligor in good faith
      by proper proceedings as to which no Liens have been created on any
      Property of any Obligor. The charges, accruals and reserves on the books
      of the Obligors in respect of taxes and other governmental charges are, in
      the opinion of the Obligors, adequate. The Company has not given or been
      requested to give a waiver of the statute of limitations relating to the
      payment of Federal, state, local and foreign taxes or other impositions.

            (j)    INVESTMENT COMPANY ACT. None of the Obligors is an
      "investment company", or a company "controlled" by an "investment
      company", within the meaning of the Investment Company Act of 1940, as
      amended.

                                       20
<PAGE>
            (k)    PUBLIC UTILITY HOLDING COMPANY ACT. None of the Obligors is a
      "holding company", or an "affiliate" of a "holding company" or a
      "subsidiary company" of a "holding company", within the meaning of the
      Public Utility Holding Company Act of 1935, as amended.

            (l)    Material Agreements and Liens.

                  (i) PART A of SCHEDULE I hereto is a complete and correct
            list, as of the date of this Master Agreement, of each credit
            agreement, loan agreement, indenture, purchase agreement, guarantee,
            letter of credit or other arrangement providing for or otherwise
            relating to any Indebtedness or any extension of credit (or
            commitment for any extension of credit) to, or guarantee by, any
            Obligor, and the aggregate principal or face amount outstanding or
            that may become outstanding under each such arrangement is correctly
            described in PART A of said SCHEDULE I.

                  (ii) PART B of SCHEDULE I hereto is a complete and correct
            list, as of the date of this Master Agreement, of each Lien securing
            Indebtedness of any Person and covering any Obligor, and the
            aggregate Indebtedness secured (or that may be secured) by each such
            Lien and the Property covered by each such Lien is correctly
            described in PART B of said SCHEDULE I.

            (m)    ENVIRONMENTAL MATTERS. Each Obligor has obtained all
      environmental, health and safety permits, licenses and other
      authorizations required under all applicable Environmental Laws to carry
      on its business as now being or as currently proposed to be conducted,
      except to the extent failure to have any such permit, license or
      authorization would not (either individually or in the aggregate) have a
      Material Adverse Effect. Each of such permits, licenses and authorizations
      is in full force and effect and each of the Obligors is in compliance with
      the terms and conditions thereof, and is also in compliance with all other
      limitations, restrictions, conditions, standards, prohibitions,
      requirements, obligations, schedules and timetables contained in any
      applicable Environmental Law, except to the extent failure to comply
      therewith would not (either individually or in the aggregate) have a
      Material Adverse Effect.

      In addition, except as set forth in SCHEDULE II hereto:

                  (i) No notice, notification, demand, request for information,
            citation, summons or order has been issued to any Obligor or about
            which any Obligor has otherwise become aware, no complaint has been
            filed against any Obligor or about which any Obligor has otherwise
            become aware, no penalty has been assessed against any Obligor or
            about which any Obligor has otherwise become aware and no
            investigation or review is pending or, to the knowledge of any
            Obligor, threatened by any governmental authority or other entity
            with respect to

                                       21
<PAGE>
            any alleged failure by any Obligor to have any environmental, health
            or safety permit, license or other authorization required under any
            Environmental Law in connection with the conduct of the business of
            any Obligor or with respect to any generation, treatment, storage,
            recycling, transportation, discharge or disposal, or any Release of
            any Hazardous Materials generated by any Obligor, which has either
            not been resolved to the satisfaction of the issuing authority or
            which would not individually or in the aggregate have a Material
            Adverse Effect.

                  (ii) None of the Obligors owns, operates or leases a
            treatment, storage or disposal facility requiring a permit under the
            Resource Conservation and Recovery Act of 1976, as amended, or under
            any comparable state or local statute; and

                        1) no polychlorinated biphenyls (PCBs) are or have been
                  present at any site or facility now or previously owned,
                  operated or leased by any Obligor;

                        2) no asbestos or asbestos-containing materials that are
                  friable or bear a reasonable chance of becoming friable are or
                  have been present at any site or facility now or previously
                  owned, operated or leased by any Obligor;

                        3) there are no underground storage tanks for Hazardous
                  Materials, active or abandoned, at any site or facility now or
                  previously owned, operated or leased by any Obligor that are
                  not in material compliance with all applicable Environmental
                  Laws, and there are no surface impoundments for Hazardous
                  Materials, active or abandoned at any site or facility now or
                  previously owned, operated or leased by any Obligor;

                        4) no Hazardous Materials have been Released at, on or
                  under any site or facility now or previously owned, operated
                  or leased by any Obligor in a reportable quantity established
                  by any applicable Environmental Law; and

                        5) no Hazardous Materials have been otherwise Released
                  at, on or under any site or facility now or previously owned,
                  operated or leased by any Obligor that would (either
                  individually or in the aggregate) have a Material Adverse
                  Effect.

                  (iii) None of the Obligors has transported or arranged for the
            transportation of any Hazardous Material to any location that is
            listed on the National Priorities List ("NPL") under the
            Comprehensive Environmental Response, Compensation and Liability Act
            of 1980, as amended ("CERCLA"),

                                       22
<PAGE>
            listed for possible inclusion on the NPL by the Environmental
            Protection Agency in the Comprehensive Environmental Response and
            Liability Information System, as provided for by 40 C.F.R. (ss)300.5
            ("CERCLIS"), or on any similar state or local list or that is the
            subject of Federal, state or local enforcement actions or other
            investigations that may lead to Environmental Claims against the
            Company or any of its Subsidiaries, which individually or in the
            aggregate would have a Material Adverse Effect.

                  (iv) No Hazardous Material generated by the Company or any of
            its Subsidiaries has been recycled, treated, stored, disposed of or
            Released by any Obligor at any facility which is subject to an
            Environmental Claim which would reasonably be expected individually
            or in the aggregate to have a Material Adverse Effect.

                  (v) No oral or written notification of a Release of a
            Hazardous Material has been filed by or on behalf of the Company or
            any of its Subsidiaries and no site or facility now or previously
            owned, operated or leased by any Obligor is listed or to the
            knowledge of any Obligor (upon due investigation) proposed for
            listing on the NPL, CERCLIS or any similar state list of sites
            requiring investigation or clean-up, in each case, which has either
            not been resolved to the satisfaction of the issuing authority or
            which would not individually or in the aggregate have a Material
            Adverse Effect.

                  (vi) No Liens have arisen under or pursuant to any
            Environmental Laws on any site or facility owned, operated or leased
            by any Obligor, and no government action has been taken or is in
            process that could subject any such site or facility to such Liens
            and none of the Obligors would be required to place any notice or
            restriction relating to the presence of Hazardous Materials at any
            site or facility owned by it in any deed to the real property on
            which such site or facility is located.

                  (vii) All investigations, studies, audits, tests, reviews or
            other analyses conducted by or that are in the possession of any
            Obligor relating to environmental matters at or affecting any site
            or facility now or previously owned, operated or leased by any
            Obligor and that reveal facts, circumstances or conditions that
            could reasonably be expected to result in a Material Adverse Effect
            have been made available to the Funding Parties.

            (n)    CAPITALIZATION. SCHEDULE V hereto correctly sets forth the
      number of shares of authorized capital stock of the Company, the class of
      such shares, the number of each such class outstanding and the par value
      thereof. All of such outstanding shares are duly and validly issued and
      outstanding, and (to the Companys knowledge) each of which shares is fully
      paid and nonassessable. SCHEDULE V hereto correctly sets forth, as of the
      date hereof, the names of the Persons owning 5% or more of any class of
      such

                                       23
<PAGE>
      capital stock, the class or classes of such capital stock owned by each
      such Person and percentage of the total number of shares of such class
      owned by each such Person. As of the date hereof, (x) except for those set
      forth in SCHEDULE V hereto, there are no outstanding Equity Rights with
      respect to the Company and (y) except for those set forth in SCHEDULE V
      hereto, there are no outstanding obligations of any Obligor to repurchase,
      redeem, or otherwise acquire any shares of capital stock of any Obligor to
      make payments to any Person, such as "phantom stock" payments, where the
      amount thereof is calculated with reference to the fair market value or
      equity value of any Obligor.

            (o)    SUBSIDIARIES, ETC.

                  (i) Set forth in PART A of SCHEDULE III hereto is a complete
            and correct list, as of the date hereof, of all of the Subsidiaries
            of the Company, together with, for each such Subsidiary, (i) the
            jurisdiction of organization of such Subsidiary, (ii) each Person
            holding ownership interests in such Subsidiary and (iii) the nature
            of the ownership interests held by each such Person and the
            percentage of ownership of such Subsidiary represented by such
            ownership interests. Except as disclosed in PART A of SCHEDULE III
            hereto, (x) each of the Company and its Subsidiaries owns, free and
            clear of Liens (other than Liens created pursuant to the Operative
            Documents), and has the unencumbered right to vote, all outstanding
            ownership interests in each Person shown to be held by it in PART A
            of SCHEDULE III hereto, (y) all of the issued and outstanding
            capital stock of each such Person organized as a corporation is
            validly issued, fully paid and nonassessable and (z) there are no
            outstanding Equity Rights with respect to such Person.

                  (ii) Set forth in PART B of SCHEDULE III hereto is a complete
            and correct list, as of the date of this Master Agreement, of all
            Investments (other than Investments disclosed in PART A of said
            SCHEDULE III hereto) held by the Company or any of its Subsidiaries
            in any Person (other than Investments which are Permitted
            Investments or deposits maintained with banks in the ordinary course
            of business) and, for each such Investment, (x) the identity of the
            Person or Persons holding such Investment and (y) the nature of such
            Investment. Except as disclosed in PART B of SCHEDULE III hereto,
            each of the Company and its Subsidiaries owns, free and clear of all
            Liens (other than Liens created pursuant to the Operative
            Documents), all such Investments.

            (p)    TITLE TO ASSETS. Each Obligor owns and has on the date hereof
      good and marketable title or valid and subsisting leaseholds (subject only
      to Liens permitted by SECTION 5.1(F) hereof) to the Properties shown to be
      owned in the most recent financial statements referred to in SECTION
      4.1(B) hereof (other than Properties disposed of in the ordinary course of
      business or otherwise permitted to be disposed of pursuant to SECTION
      5.1(E) hereof). Each Obligor (a) owns and has on the date hereof, good and
      marketable title to, or has on the date hereof a valid and subsisting
      leasehold estate in, and (b) enjoys

                                       24
<PAGE>
      on the date hereof (and will enjoy on the Initial Closing Date), peaceful
      and undisturbed possession of, all Properties (subject only to Liens
      permitted by SECTION 5.1(F) hereof) that are necessary for the operation
      and conduct of its businesses.

            (q)    TRUE AND COMPLETE DISCLOSURE. The information (other than
      projections), reports, financial statements, exhibits and schedules
      furnished in writing by or on behalf of the Obligors to the Administrative
      Agent or any Funding Party in connection with the negotiation, preparation
      or delivery of this Master Agreement and the other Operative Documents or
      included herein or therein or delivered pursuant hereto or thereto, when
      taken as a whole do not contain any untrue statement of material fact or
      omit to state any material fact necessary to make the statements herein or
      therein, in light of the circumstances under which they were made, not
      misleading. All projections furnished by or on behalf of the Obligors in
      writing to the Administrative Agent or any Funding Party for purposes of
      or in connection with this Agreement or the transactions contemplated
      hereby were prepared by the Company in good faith based on assumptions
      determined to be reasonable by the Company under the then existing facts
      and circumstances. All written information furnished after the date hereof
      by any Obligor to the Administrative Agent and the Operative Parties in
      connection with this Master Agreement and the other Operative Documents
      and the transactions contemplated hereby and thereby will be true,
      complete and accurate in every material respect, or (in the case of
      projections) based on reasonable assumptions, on the date, and under the
      facts and circumstances, as of which such information is stated or
      certified. There is no fact actually known to any Obligor that could have
      a Material Adverse Effect that has not been disclosed herein, in the other
      Operative Documents or in a report, financial statement, exhibit,
      schedule, disclosure letter or other writing furnished to the B Lenders
      for use in connection with the transactions contemplated hereby or
      thereby.

            (r)    REAL PROPERTY. Set forth on SCHEDULE IV hereto is a list, as
      of the date hereof, of all of the real property interests held by the
      Company and its Subsidiaries, indicating in each case whether the
      respective Property is owned or leased and the location of the respective
      Property.

            (s)    PURPOSE OF FUNDINGS. The proceeds of the Fundings shall be
      used by the Lessees to purchase the Land from the applicable Sellers and
      for Construction and related costs.

            (t)    HAZARDOUS MATERIALS - Leased Properties. (i) To the best
      knowledge of the related Lessee, on the Closing Date for each Leased
      Property, there are no Hazardous Materials present at, upon, under or
      within such Leased Property or released or transported to or from such
      Leased Property (except in compliance in all material respects with all
      Applicable Law).

                  (i) On the related Closing Date, no Governmental Actions have
            been taken or, to the best knowledge of the related Lessee, are in
            process or have been

                                       25
<PAGE>
            threatened, which could reasonably be expected to subject such
            Leased Property, any Lender or the Lessor to any Claims or Liens
            with respect to such Leased Property under any Environmental Law
            which would have a material adverse effect, or would have a Material
            Adverse Effect on the Lessor or any Lender.

                  (ii) The related Lessee has, or will obtain on or before the
            date required by Applicable Law, all Environmental Permits necessary
            to operate each Leased Property in accordance with Environmental
            Laws and is complying with and has at all times complied with all
            such Environmental Permits, except to the extent the failure to
            obtain such Environmental Permits or to so comply would not have a
            Material Adverse Effect.

                  (iii) Except as set forth in the related Environmental Audit
            or in any notice subsequently furnished by the related Lessee to the
            Administrative Agent and approved by the Administrative Agent in
            writing prior to the respective times that the representations and
            warranties contained herein are made or deemed made hereunder, no
            notice, notification, demand, request for information, citations,
            summons, complaint or order has been issued or filed to or with
            respect to such Lessee, no penalty has been assessed on such Lessee
            and no investigation or review is pending or, to its best knowledge,
            threatened by any Governmental Authority or other Person in each
            case relating to any Leased Property with respect to any alleged
            material violation or liability of such Lessee under any
            Environmental Law. To the best knowledge of such Lessee, no material
            notice, notification, demand, request for information, citations,
            summons, complaint or order has been issued or filed to or with
            respect to any other Person, no material penalty has been assessed
            on any other Person and no investigation or review is pending or
            threatened by any Governmental Authority or other Person relating to
            any Leased Property with respect to any alleged material violation
            or liability under any Environmental Law by any other Person.

                  (iv) Each Leased Property and each portion thereof are
            presently in compliance in all material respects with all
            Environmental Laws, and, to the best knowledge of the related
            Lessee, there are no present or past facts, circumstances,
            activities, events, conditions or occurrences regarding such Leased
            Property (including without limitation the release or presence of
            Hazardous Materials) that could reasonably be anticipated to (A)
            form the basis of a material Claim against such Leased Property, any
            Funding Party or such Lessee, (B) cause such Leased Property to be
            subject to any material restrictions on ownership, occupancy, use or
            transferability under any Environmental Law, (C) require the filing
            or recording of any notice or restriction relating to the presence
            of Hazardous Materials in the real estate records in the county or
            other appropriate municipality in which such Leased Property is
            located, or (D) prevent or materially interfere with the continued
            operation and maintenance of such Leased Property as contemplated by
            the Operative Documents.

                                       26
<PAGE>
            (u)    LEASED PROPERTY. Except as disclosed by the related Lessee to
      the Administrative Agent in writing and approved by the Administrative
      Agent in writing prior to the respective times that the representations
      and warranties contained herein are made or deemed made, the present
      condition of each Leased Property conforms in all material respects with
      all conditions or requirements of all existing material permits and
      approvals issued with respect to such Leased Property, and the related
      Lessees future intended use of such Leased Property under the Lease does
      not, in any material respect, violate any Applicable Law. To the best
      knowledge of the related Lessee, no material notices, complaints or orders
      of violation or non-compliance have been issued or threatened or
      contemplated by any Governmental Authority with respect to any Leased
      Property or any present or intended future use thereof. All material
      agreements, easements and other rights, public or private, which are
      necessary to permit the lawful use and operation of each Leased Property
      as the related Lessee intends to use such Leased Property under the Lease
      and which are necessary to permit the lawful intended use and operation of
      all presently intended utilities, driveways, roads and other means of
      egress and ingress to and from the same have been, or to such Lessees best
      knowledge will be, obtained and are or will be in full force and effect,
      and Lessee has no knowledge of any pending material modification or
      cancellation of any of the same.

SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND EFFECT OF FUNDINGS.

            (a)    SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
      representations and warranties made in SECTION 4.1 shall survive delivery
      of the Operative Documents and every Funding, and shall remain in effect
      until all of the Obligations are fully and irrevocably paid.

            (b)    EACH FUNDING A REPRESENTATION. Each Funding accepted by any
      Lessee or the Construction Agent shall be deemed to constitute a
      representation and warranty by each Obligor to the effect of SECTION 4.1.

      SECTION 4.3 REPRESENTATIONS OF THE LESSOR. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, in each
case, with respect to each of the Leased Properties, the Lessor represents and
warrants to the Administrative Agent, the Lenders, the Company and the Lessees
as follows:

            (a)    SECURITIES ACT. The interest being acquired or to be acquired
      by the Lessor in such Leased Property is being acquired for its own
      account, without any view to the distribution thereof or any interest
      therein, PROVIDED that the Lessor shall be entitled to assign, convey or
      transfer its interest in accordance with SECTION 6.1.

            (b)    DUE ORGANIZATION, ETC. The Lessor is a limited partnership
      duly organized and validly existing in good standing under the laws of
      Texas and each state in which a Leased Property is located and has full
      power, authority and legal right to execute, deliver and perform its
      obligations under the Lease, this Master Agreement and each other

                                       27
<PAGE>
      Operative Document to which it is or will be a party.

            (c)    DUE AUTHORIZATION; ENFORCEABILITY, ETC. This Master Agreement
      and each other Operative Document to which the Lessor is or will be a
      party have been or will be duly authorized, executed and delivered by or
      on behalf of the Lessor and are, or upon execution and delivery will be,
      legal, valid and binding obligations of the Lessor enforceable against it
      in accordance with their respective terms, except as such enforceability
      may be limited by applicable bankruptcy, insolvency, or similar laws
      affecting creditors rights generally and by general equitable principles.

            (d)    NO CONFLICT. The execution and delivery by the Lessor of the
      Lease, this Master Agreement and each other Operative Document to which
      the Lessor is or will be a party, are not or will not be, and the
      performance by the Lessor of its obligations under each will not be,
      inconsistent with its Partnership Agreement, do not and will not
      contravene any Applicable Law and do not and will not contravene any
      provision of, or constitute a default under, any Contractual Obligation of
      Lessor, do not and will not require the consent or approval of, the giving
      of notice to, the registration with or taking of any action in respect of
      or by, any Governmental Authority, except such as have been obtained,
      given or accomplished, and the Lessor possesses all requisite regulatory
      authority to undertake and perform its obligations under the Operative
      Documents.

            (e)    LITIGATION. There are no pending or, to the knowledge of the
      Lessor, threatened actions or proceedings against the Lessor before any
      court, arbitrator or administrative agency with respect to any Operative
      Document or that would have a material adverse effect upon the ability of
      the Lessor to perform its obligations under this Master Agreement or any
      other Operative Documents to which it is or will be a party.

            (f)    LESSOR LIENS. No Lessor Liens (other than those created by
      the Operative Documents) exist on any Closing Date on the Leased Property,
      or any portion thereof, and the execution, delivery and performance by the
      Lessor of this Master Agreement or any other Operative Document to which
      it is or will be a party will not subject any Leased Property, or any
      portion thereof, to any Lessor Liens (other than those created by the
      Operative Documents).

            (g)    EMPLOYEE BENEFIT PLANS. The Lessor is not and will not be
      making its investment hereunder, and is not performing its obligations
      under the Operative Documents, with the assets of an "employee benefit
      plan" (as defined in Section 3(3) of ERISA) which is subject to Title I of
      ERISA, or "plan" (as defined in Section 4975(e)(1)) of the Code.

            (h)    GENERAL PARTNER. The sole general partner of the Lessor is
      Atlantic Financial Managers, Inc.

            (i)    FINANCIAL INFORMATION. (A) The unaudited balance sheet of the
      Lessor as

                                       28
<PAGE>
      of December 31, 1999 and the related statements of income, partners
      capital and cash flows for the year then ended, copies of which have been
      delivered to the Administrative Agent and Lessee, fairly present, in
      conformity with sound accounting principles, the financial condition of
      the Lessor as of such date and the results of operations and cash flows
      for such period.

                  (B) Since December 31, 1999, there has been no event, act,
      condition or occurrence having a material adverse effect upon the
      financial condition, operations, performance or properties of the Lessor,
      or the ability of the Lessor to perform in any material respect its
      obligations under the Operative Documents.

            (j)   NO OFFERING. The Lessor has not offered the Notes to any
      Person in any manner that would subject the issuance thereof to
      registration under the Securities Act or any applicable state securities
      laws.

      SECTION 4.4 REPRESENTATIONS OF EACH LENDER. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, each B
Lender represents and warrants to the Lessor and to the Lessees as follows:

            (a)    SECURITIES ACT. Such B Lender has not assigned, conveyed or
      transferred its interest in the Loans in violation of the Securities Act.

            (b)    EMPLOYEE BENEFIT PLANS. Such B Lender is not and will not be
      making its investment hereunder, and is not performing its obligations
      under the Operative Documents, with the assets of an "employee benefit
      plan" (as defined in Section 3(3) of ERISA) which is subject to Title I of
      ERISA, or "plan" (as defined in Section 4975(e)(1)) of the Code.

                                   ARTICLE V
                     COVENANTS OF THE COMPANY AND THE LESSOR

      SECTION 5.1 AFFIRMATIVE COVENANTS. The Company covenants and agrees that:

            (a)    FINANCIAL STATEMENTS, ETC. The Company shall deliver to each
      of the Administrative Agent, the Lessor and the B Lenders (in such form as
      shall be satisfactory to the Administrative Agent):

                  (i) no later than January 15 of each year, a budget (on a
            monthly basis) for the Company and its Subsidiaries for such year
            (including consolidating and consolidated statements of income, cash
            flow and balance sheets prepared in accordance with GAAP); and
            promptly after any material revision to such budget, such budget as
            so revised;

                                       29
<PAGE>
                  (ii) as soon as available and in any event within 30 days
            after the end of each month, consolidated and consolidating
            statements of income and retained earnings of the Company and its
            Subsidiaries for such month and for the period from the beginning of
            the respective fiscal year to the end of such month, and the related
            consolidated balance sheets of the Company and its Subsidiaries as
            at the end of such month, setting forth in each case in comparative
            form the corresponding consolidated and consolidating figures
            provided in the budget required under SECTION 5.1(A)(I) hereof for
            such period, accompanied by a certificate of a senior financial
            officer of the Company, which certificate shall state that said
            consolidated financial statements fairly present the consolidated
            financial condition and results of operations of the Company and its
            Subsidiaries, and said consolidating financial statements fairly
            present the respective individual unconsolidated financial condition
            and results of operations of the Company and of each of its
            Subsidiaries, in each case in accordance with generally accepted
            accounting principles, consistently applied, as at the end of, and
            for, such month (subject to normal year-end audit adjustments with
            the absence of footnotes);

                  (iii) as soon as available and in any event within 45 days
            after the end of each quarterly fiscal period of each fiscal year of
            the Company, (A) a statement of occupancy rates at each of the
            facilities owned or maintained by the Company and its Subsidiaries
            as at the end of such period, and a statement of occupancy revenues
            and the direct costs of occupancy for each Correctional and
            Detention Facility Contract for such period and for the period from
            the beginning of the respective fiscal year to the end of such
            fiscal quarter, in each case setting forth in comparative form the
            corresponding figures for the corresponding periods in the budget
            required under SECTION 5.1(A)(I) hereof and (B) an analysis of the
            chief financial officer of the financial condition of the Company
            and its Subsidiaries, on a consolidated and consolidating basis, as
            of the end of such period, including (without limitation) a
            reconciliation to the budget required under SECTION 5.1(A)(I)
            hereof;

                  (iv) as soon as available and in any event within 90 days
            after the end of each fiscal year of the Company, consolidated and
            consolidating statements of income and retained earnings, and a
            consolidated statement of cash flow, of the Company and its
            Subsidiaries for such fiscal year and the related consolidated and
            consolidating balance sheets of the Company and its Subsidiaries as
            at the end of such fiscal year, setting forth in each case in
            comparative form the corresponding consolidated and consolidating
            figures for the preceding fiscal year, and accompanied (A) in the
            case of said consolidated statements and balance sheet of the
            Company, by an opinion thereon of independent certified public
            accountants of recognized national standing (which opinion shall not
            contain any Impermissible Qualification), which opinion shall state
            that said consolidated financial statements fairly present the
            consolidated financial condition and results of operations of the
            Company and its Subsidiaries as at the end of, and for, such fiscal
            year in accordance with generally accepted accounting principles,
            and by a management letter or similar letter submitted to the
            Company by such accountants and (B) in the case of said
            consolidating statements and balance sheets, by a certificate of a

                                       30
<PAGE>
            senior financial officer of the Company, which certificate shall
            state that said consolidating financial statements fairly present
            the respective individual unconsolidated financial condition and
            results of operations of the Company and of each of its
            Subsidiaries, in each case in accordance with generally accepted
            accounting principles, consistently applied, as at the end of, and
            for, such fiscal year;

                  (v) promptly upon their becoming available, copies of all
            registration statements and regular periodic reports, if any, that
            the Company shall have filed with the Securities and Exchange
            Commission (or any governmental agency substituted therefor) or any
            national securities exchange;

                  (vi) to the extent not previously furnished to the Lessor, the
            B Lenders or the Administrative Agent in such capacity, promptly
            upon the mailing thereof to the shareholders of the Company
            generally, copies of all financial statements, reports and proxy
            statements so mailed;

                  (vii) without duplication of any provision of SUBSECTION (IV)
            above, promptly after the receipt by the Company thereof, copies of
            each report submitted to any Obligor by independent accountants in
            connection with any annual, interim or special audit of the books of
            any Obligor made by such accountants, or any management letters or
            similar documents submitted to any Obligor by such accountants;

                  (viii) as soon as possible, and in any event within ten days
            after the Company knows or has reason to believe that any of the
            events or conditions specified below with respect to any Plan or
            Multiemployer Plan has occurred or exists, a statement signed by a
            senior financial officer of the Company setting forth details
            respecting such event or condition and the action, if any, that the
            Company or its ERISA Affiliate proposes to take with respect thereto
            (and a copy of any report or notice required to be filed with or
            given to PBGC by the Company or an ERISA Affiliate with respect to
            such event or condition):

                        1) any reportable event, as defined in Section 4043(b)
                  of ERISA and the regulations issued thereunder, with respect
                  to a Plan, as to which PBGC has not by regulation waived the
                  requirement of Section 4043(a) of ERISA that it be notified
                  within 30 days of the occurrence of such event (PROVIDED that
                  a failure to meet the minimum funding standard of Section 412
                  of the Code or Section 302 of ERISA, including, without
                  limitation, the failure to make on or before its due date a
                  required installment under Section 412(m) of the Code or
                  Section 302(e) of ERISA, shall be a reportable event
                  regardless of the issuance of any waivers in accordance with
                  Section 412(d) of the Code); and any request for a waiver
                  under Section 412(d) of the Code for any Plan;

                        2) the distribution under Section 4041 of ERISA of a
                  notice of intent to terminate any Plan or any action taken by
                  the Company or an

                                       31
<PAGE>
                  ERISA Affiliate to terminate any Plan;

                        3) the institution by PBGC of proceedings under Section
                  4042 of ERISA for the termination of, or the appointment of a
                  trustee to administer, any Plan, or the receipt by the Company
                  or any ERISA Affiliate of a notice from a Multiemployer Plan
                  that such action has been taken by PBGC with respect to such
                  Multiemployer Plan;

                        4) the complete or partial withdrawal from a
                  Multiemployer Plan by the Company or any ERISA Affiliate that
                  results in liability under Section 4201 or 4204 of ERISA
                  (including the obligation to satisfy secondary liability as a
                  result of a purchaser default) or the receipt by the Company
                  or any ERISA Affiliate of notice from a Multiemployer Plan
                  that it is in reorganization or insolvency pursuant to Section
                  4241 or 4245 of ERISA or that it intends to terminate or has
                  terminated under Section 4041A of ERISA;

                        5) the institution of a proceeding by a fiduciary of any
                  Multiemployer Plan against the Company or any ERISA Affiliate
                  to enforce Section 515 of ERISA, which proceeding is not
                  dismissed within 30 days; and

                        6) the adoption of an amendment to any Plan that,
                  pursuant to Section 401(a)(29) of the Code or Section 307 of
                  ERISA, would result in the loss of tax-exempt status of the
                  trust of which such Plan is a part if the Company or an ERISA
                  Affiliate fails to timely provide security to the Plan in
                  accordance with the provisions of said Sections;

                  (ix) without prejudice as to whether a Default has occurred,
            promptly after the Company knows or has reason to believe that any
            Default has occurred, a notice of such Default describing the same
            in reasonable detail and, together with such notice or as soon
            thereafter as possible, a description of the action that the Company
            has taken or proposes to take with respect thereto;

                  (x) promptly after the termination or expiration of any
            Correctional and Detention Facility Agreement, PRO FORMA financial
            projections prepared by the Company demonstrating that after giving
            effect to such termination or expiration (and any replacement
            Correctional and Detention Facility Agreement therefor) the Company
            will be in compliance with its obligations under SECTIONS 5.1(J),
            (K), (L), (M), (N) and (O) hereof for the period commencing on the
            date of such termination and ending on the Lease Termination Date;
            and

                  (xi) from time to time such other information regarding the
            financial condition, operations, business or prospects of the
            Company or any of its Subsidiaries (including,

                                       32
<PAGE>
            without limitation, any Plan or Multiemployer Plan and any reports
            or other information required to be filed under ERISA) available to
            the Company, as any B Lender, the Lessor or the Administrative Agent
            may reasonably request.

      The Company will furnish to each of the Lessor, each B Lender and the
Administrative Agent, at the time it furnishes each set of financial statements
pursuant to PARAGRAPH (II), (III) or (IV) above, a certificate of a senior
financial officer of the Company to the effect that no Default has occurred and
is continuing (or, if any Default has occurred and is continuing, describing the
same in reasonable detail and describing the action that the Company has taken
or proposes to take with respect thereto). In addition, at the time the Company
furnishes to each of the Lessor, each B Lender and the Administrative Agent, the
financial statements required pursuant to PARAGRAPH (III) above, the Company
shall furnish to each of the Lessor, each B Lender and the Administrative Agent,
a certificate of a senior financial officer setting forth in reasonable detail
the computations necessary to determine whether the Company is in compliance
with SECTIONS 5.1(I), (K), (L), (M),(N) and (O) hereof as of the date as of
which such financial statements have been provided. Further, upon the request of
any B Lender, at the time the Company furnishes the financial statements
required pursuant to paragraph (ii) above, the Company shall furnish to each of
the Lessor, each B Lender and the Administrative Agent, a certificate of a
senior financial officer setting forth in reasonable detail the computations
necessary to determine whether the Company is in compliance with SECTIONS
5.1(I), (K), (L), (M), (N) and (O) hereof as of date as of which such financial
statements have been provided.

            (b)    LITIGATION. The Company will promptly give to each B Lender
      and the Administrative Agent notice of all legal or arbitral proceedings,
      and of all proceedings by or before any governmental or regulatory
      authority or agency, and any material development in respect of such legal
      or other proceedings, affecting the Company or any of its Subsidiaries,
      except proceedings that, if adversely determined, would not (either
      individually or in the aggregate) have a Material Adverse Effect.

            (c)    EXISTENCE, ETC. The Company will, and will cause each of its
      Subsidiaries to:

                  (i) preserve and maintain its legal existence and all of its
            material rights, privileges, licenses and franchises;

                  (ii) comply with the requirements of all applicable laws,
            rules, regulations and orders of governmental or regulatory
            authorities if failure to comply with such requirements could be
            reasonably expected to (either individually or in the aggregate)
            have a Material Adverse Effect;

                  (iii) pay and discharge all taxes, assessments and
            governmental charges or levies imposed on it or on its income or
            profits or on any of its Property prior to the date on which
            penalties attach thereto, except for any such tax, assessment,
            charge or levy the payment of which is being contested in good faith
            and by proper proceedings and against which adequate reserves are
            being maintained;

                                       33
<PAGE>
                  (iv) maintain all of its Properties necessary to the conduct
            of its business in good working order and condition, ordinary wear
            and tear excepted;

                  (v) keep adequate records and books of account, in which
            complete entries will be made in accordance with generally accepted
            accounting principles consistently applied; and

                  (vi) upon notice to the Company, permit representatives of any
            B Lender, the Lessor or the Administrative Agent, during normal
            business hours, to examine, copy and make extracts from its books
            and records, to inspect any of its Properties, and to discuss its
            business and affairs with its officers, all to the extent reasonably
            requested by such B Lender, the Lessor or the Administrative Agent
            (as the case may be).

            (d)    INSURANCE. The Company will, and will cause each of its
      Subsidiaries to, maintain insurance with financially sound and reputable
      insurance companies, and with respect to Property and risks of a character
      usually maintained by corporations of comparable size engaged in the same
      or similar business and similarly situated, against loss, damage and
      liability of the kinds and in the amounts customarily maintained by such
      corporations. The Company will in any event maintain (with respect to
      itself and each of its Subsidiaries):

                  (i) CASUALTY INSURANCE -- insurance against loss or damage
            covering all of the tangible real and personal Property and
            improvements of the Company and each of its Subsidiaries by reason
            of any Peril (as defined below) in such amounts (subject to such
            reasonable and customary deductibles as shall be satisfactory to the
            Required Lenders) as shall be reasonable and customary and
            sufficient to avoid the insured named therein from becoming a
            co-insurer of any loss under such policy but in any event in an
            amount (A) in the case of fixed assets and equipment (including,
            without limitation, vehicles), at least equal to 100% of the actual
            replacement cost of such assets, subject to deductibles as aforesaid
            and (B) in the case of inventory, not less than the fair market
            value thereof, subject to deductibles as aforesaid, PROVIDED that
            insurance in respect of Perils consisting of floods shall not be
            required to be obtained except upon 30 days prior notice from the
            Administrative Agent.

                  (ii) AUTOMOBILE LIABILITY INSURANCE FOR BODILY INJURY AND
            PROPERTY DAMAGE -- insurance against liability for bodily injury and
            property damage in respect of all vehicles (whether owned, hired or
            rented by the Company or any of its Subsidiaries) at any time
            located at, or used in connection with, its Properties or operations
            in such amounts as are then customary for vehicles used in
            connection with similar Properties and businesses, but in any event
            to the extent required by applicable law.

                  (iii) COMPREHENSIVE GENERAL LIABILITY INSURANCE -- insurance
            against claims for bodily injury, death or Property damage occurring
            on, in or about the Properties (and adjoining streets, sidewalks and
            waterways) of the Company and its Subsidiaries, in such

                                       34
<PAGE>
            amounts as are then customary for Property similar in use in the
            jurisdictions where such Properties are located.

                  (iv) WORKERS COMPENSATION INSURANCE -- workers compensation
            insurance (including, without limitation, Employers Liability
            Insurance) to the extent required by applicable law.

                  (v) BUSINESS INTERRUPTION INSURANCE -- insurance against loss
            of operating income (up to an aggregate amount equal to $20,000,000
            and subject to a deductible, or self-insured amount, not in excess
            of $100,000) by reason of any Peril.

                  (vi) PROFESSIONAL LIABILITY INSURANCE -- professional
            liability insurance in an amount equal to at least $10,000,000.

Such insurance shall be written by financially responsible companies selected by
the Company and (except for automobile insurance) having an A.M. Best rating of
"A" or better and being in a financial size category of VII or larger (or, with
respect to professional liability insurance only, an equivalent rating by a
European equivalent of A.M. Best), or by other companies acceptable to the
Required Lenders, and (other than for workers compensation) shall name the
Administrative Agent as loss payee (to the extent covering risk of loss or
damage to tangible property) and as an additional named insured as its interests
may appear (to the extent covering any other risk). Each policy referred to in
this SECTION 5.1(D) shall provide that it will not be canceled or reduced, or
allowed to lapse without renewal, except after not less than 30 days notice to
the Administrative Agent and shall also provide that the interests of the
Administrative Agent and the Funding Parties shall not be invalidated by any act
or negligence of the Company or any Person having an interest in any Property
covered by the Mortgage (as defined in the Credit Agreement) nor by occupancy or
use of any such Property for purposes more hazardous than permitted by such
policy nor by any foreclosure or other proceedings relating to such Property.
The Company will advise the Administrative Agent promptly of any significant
policy cancellation (other than any such cancellation in connection with the
replacement thereof), reduction or amendment.

      On or before the Initial Closing Date, the Company will deliver to the
Administrative Agent certificates of insurance satisfactory to the
Administrative Agent evidencing the existence of all insurance required to be
maintained by the Company hereunder setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage and showing
that such insurance will remain in effect through the December 31 falling at
least six months after the date hereof, subject only to the payment of premiums
as they become due. Thereafter, the Company will maintain all insurance required
to be maintained by the Company hereunder through the December 31 of each
subsequent calendar year, subject only to the payment of premiums as they become
due and the availability of such coverage. In addition, the Company will not
modify any of the provisions of any policy with respect to professional
liability insurance without delivering the original copy of the endorsement
reflecting such modification to the Administrative Agent accompanied by a
written report of Summit Global Partners, or any

                                       35
<PAGE>
other firm of independent insurance brokers of nationally recognized standing,
stating that, in their opinion, such policy (as so modified) adequately protects
the interests of the Funding Parties and the Administrative Agent, is in
compliance with the provisions of this SECTION 5.1(D), and is comparable in all
respects with insurance carried by responsible owners and operators of
businesses similar to those of the Company and its Subsidiaries. The Company
will not obtain or carry separate insurance concurrent in form or contributing
in the event of loss with that required by this SECTION 5.1(D) unless the
Administrative Agent is the named insured thereunder, with loss payable as
provided herein. The Company will immediately notify the Administrative Agent
whenever any such separate insurance is obtained and shall deliver to the
Administrative Agent the certificates evidencing the same.

      Without limiting the obligations of the Company under the foregoing
provisions of this SECTION 5.1(D), in the event the Company shall fail to
maintain in full force and effect insurance as required by the foregoing
provisions of this SECTION 5.1(D), then the Administrative Agent may (upon
notice to the Company), but shall have no obligation so to do, procure insurance
covering the interests of the Lenders and the Administrative Agent in such
amounts and against such risks as the Administrative Agent (or the Required
Lenders) shall deem appropriate, and the Company shall reimburse the
Administrative Agent in respect of any premiums paid by the Administrative Agent
in respect thereof.

      For purposes hereof, the term "PERIL" shall mean, collectively, fire,
lightning, flood, windstorm, hail, explosion, riot and civil commotion,
vandalism and malicious mischief, damage from aircraft, vehicles and smoke and
all other perils covered by the "all-risk" endorsement then in use in the
jurisdictions where the Properties of the Company and its Subsidiaries are
located.

            (e) PROHIBITION OF FUNDAMENTAL CHANGES. The Company will not, nor
      will it permit any of its Subsidiaries to, enter into any transaction of
      merger or consolidation or amalgamation, or liquidate, wind up or dissolve
      itself (or suffer any liquidation or dissolution). The Company will not,
      nor will it permit any of its Subsidiaries to, acquire any business or
      Property from, or capital stock of, or be a party to any acquisition of,
      any Person except for (w) purchases of inventory and other Property to be
      sold or used in the ordinary course of business, (x) Investments permitted
      under SECTION 5.1(H) hereof, (y) Capital Expenditures permitted under
      SECTION 5.1(O) hereof and (z) other acquisitions so long as the aggregate
      consideration paid by the Obligors for all such acquisitions does not
      exceed $250,000. The Company will not, nor will it permit any of its
      Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of, in
      one transaction or a series of transactions, any part of its business or
      Property, whether now owned or hereafter acquired (including, without
      limitation, receivables and leasehold interests, but excluding (i)
      obsolete or worn-out Property, tools or equipment no longer used or useful
      in its business, or any inventory or other Property sold or disposed of in
      the ordinary course of business and on ordinary business terms (so long as
      the aggregate fair market value of all such Property disposed of shall not
      exceed (x) $3,000,000 in the aggregate and (y) $1,000,000 in any year),
      (ii) the granting of Liens to secure the Senior Notes, the Obligations and
      any Future Synthetic Lease Financing, (iii) Municipal Transaction
      Transfers so long as (x) the aggregate consideration received by the
      Obligors in connection with any Municipal Transaction Transfer is

                                       36
<PAGE>
      not less than the depreciated book value of the Property that is the
      subject of such Municipal Transaction Transfer, and (y) the aggregate Net
      Available Proceeds of all Municipal Transaction Transfer does not exceed
      $175,000,000, (iv) sale lease-back transactions that the Obligors are
      permitted to enter into pursuant to Section 5.1(p) hereof, and (v) other
      dispositions so long as the aggregate fair market value of all Property so
      disposed of does not exceed $250,000).

            (f)   LIMITATION ON LIENS. The Company will not, nor will it permit
      any of its Subsidiaries to, create, incur, assume or suffer to exist any
      Lien upon any of its Property, whether now owned or hereafter acquired,
      except (without duplication):

                  (i) Liens created pursuant to the Security Documents (as
            defined in the Credit Agreement) or the Operative Documents;

                  (ii) Liens in existence on the date hereof and listed in PART
            B of SCHEDULE I hereto;

                  (iii) Liens imposed by any governmental authority for taxes,
            assessments or charges not yet due or that are being contested in
            good faith and by appropriate proceedings if adequate reserves with
            respect thereto are maintained on the books of the Company or the
            affected Subsidiaries, as the case may be, in accordance with GAAP;

                  (iv) carriers', warehousemen's, mechanic's, materialmen's,
            repairmen's or other like Liens arising in the ordinary course of
            business that are not overdue for a period of more than 30 days or
            that are being contested in good faith and by appropriate
            proceedings and Liens securing judgments but only to the extent for
            an amount and for a period not resulting in an Event of Default
            under Section 10(h) hereof;

                  (v) pledges or deposits under worker's compensation,
            unemployment insurance and other social security legislation;

                  (vi) deposits to secure the performance of bids, trade
            contracts (other than for Indebtedness), leases, statutory
            obligations, surety and appeal bonds, performance bonds and other
            obligations of a like nature incurred in the ordinary course of
            business;

                  (vii) easements, rights-of-way, restrictions and other similar
            encumbrances incurred in the ordinary course of business and
            encumbrances consisting of zoning restrictions, easements, licenses,
            restrictions on the use of Property or minor imperfections in title
            thereto that, in the aggregate, are not material in amount, and that
            do not in any case materially detract from the value of the Property
            subject thereto or interfere with the ordinary conduct of the
            business of the Company or any of its Subsidiaries;

                  (viii) Liens upon real and/or tangible personal Property
            acquired after the date hereof (by purchase, construction or
            otherwise) by the Company or any of its

                                       37
<PAGE>
            Subsidiaries, each of which Liens either (A) existed on such
            Property before the time of its acquisition and was not created in
            anticipation thereof or (B) was created solely for the purpose of
            securing Indebtedness representing, or incurred to finance,
            refinance or refund, the cost (including the cost of construction)
            of such Property; PROVIDED that (i) no such Lien shall extend to or
            cover any Property of the Company or such Subsidiary other than the
            Property so acquired and improvements thereon and (ii) the principal
            amount of Indebtedness secured by any such Lien shall at no time
            exceed 80% of the fair market value (as determined in good faith by
            a senior financial officer of the Company) of such Property at the
            time it was acquired (by purchase, construction or otherwise);

                  (ix) Liens on the Property of a designated subsidiary securing
            Indebtedness permitted pursuant to SECTION 5.1(G)(V) hereof;

                  (x) Liens securing the Senior Notes that are PARI PASSU with
            the Liens under the Security Documents (as defined in the Credit
            Agreement); and

                  (xi) Liens securing any Future Synthetic Lease Financing that
            are PARI PASSU with the Liens under the Security Documents.

            (g)    INDEBTEDNESS. The Company will not, nor will it permit any of
      its Subsidiaries to, create, incur or suffer to exist any Indebtedness
      except (without duplication):

                  (i) Indebtedness arising pursuant to the Operative Documents
            and Indebtedness arising under the Credit Agreement;

                  (ii) Indebtedness outstanding on the date hereof and listed in
            PART A of SCHEDULE I hereto;

                  (iii) Indebtedness of Subsidiaries of the Company to the
            Company or to other Subsidiaries of the Company;

                  (iv) Indebtedness of the Company and its Subsidiaries secured
            by Liens permitted under SECTION 5.1(F) hereof up to but not
            exceeding $1,000,000 at any one time outstanding;

                  (v) Indebtedness of one or more newly-created Subsidiaries of
            the Company that the Company requests be permitted to incur
            Indebtedness under this SECTION 5.1(G)(V) and the Combined
            Determination Parties agree shall be permitted to incur Indebtedness
            under SECTION 5.1(G)(V) (provided that the Funding Parties shall not
            condition their agreement on the payment of a fee), in an aggregate
            principal amount not to exceed $30,000,000 at any one time
            outstanding;

                  (vi) Indebtedness consisting of the Senior Notes, any
            Subordinated Notes, the Obligations and any Future Synthetic Lease
            Financing; and

                                       38
<PAGE>
                  (vii) additional Indebtedness of the Company and its
            Subsidiaries (including, without limitation, Capital Lease
            Obligations) up to but not exceeding $2,000,000 at any one time
            outstanding.

            (h)    INVESTMENTS. The Company will not, nor will it permit any of
      its Subsidiaries to, make or permit to remain outstanding any Investments
      except:

                  (i) The loans identified in PART B of SCHEDULE III hereto,
            with the terms and conditions set forth in PART B of SCHEDULE III
            hereto, PROVIDED that the aggregate principal amount of such loans,
            together with accrued interest thereon, does not exceed $1,300,000;

                  (ii) operating deposit accounts with banks;

                  (iii) Permitted Investments;

                  (iv) Investments by the Company and its Subsidiaries in
            capital stock of Subsidiaries of the Company to the extent
            outstanding on the date of the financial statements of the Company
            and its Subsidiaries referred to in Section 4.1(B) hereof and
            advances by the Company and its Subsidiaries to Subsidiaries of the
            Company in the ordinary course of business or in connection with a
            Relevant Transaction financed with Loans;

                  (v) Interest Rate Protection Agreements required to be
            maintained under the Credit Agreement;

                  (vi) additional Investments up to but not exceeding $200,000
            in the aggregate;

                  (vii) existing and future Investments comprised of stocks,
            bonds and notes of existing or former account debtors of the
            Obligors if such Investment was received pursuant to the
            consummation of a bankruptcy plan of reorganization or similar
            proceedings of such account debtor

                  (viii) loans or advances by the Company or any of its
            Subsidiaries to employees in the ordinary course of business in an
            aggregate amount at anyone time outstanding not to exceed $250,000.

            (i)    DIVIDEND PAYMENTS. The Company will not, nor will it permit
      any of its Subsidiaries to, declare or make any Dividend Payment at any
      time; PROVIDED that the Company may (i) repurchase shares of its capital
      stock so long as the aggregate amount paid by the Company for all such
      repurchases does not exceed $2,500,000 in any fiscal year of the Company
      and $7,500,000 in the aggregate and (ii) declare or make stock splits
      which do not decrease the percentage ownership of any Person in any class
      of the capital stock of the Company.

                                       39
<PAGE>
            (j)    EBITDAR RATIO I. The Company will not permit the EBITDAR
      Ratio I with respect to any period ending on a date that falls within any
      period set forth below under the column entitled "Period" to exceed the
      applicable ratio set forth under the caption "Ratio" opposite such period:

      PERIOD                                               RATIO
      ------------------------------                      ---------
      The date hereof through and
      including March 31, 2001                            3.75 to 1

      April 1, 2001 through and
      including December 31, 2001                         3.50 to 1

      January 1, 2002 through and
      including June 30, 2002                             3.25 to 1

      July 1, 2002 through and
      including December 31, 2002                         3.00 to 1

      January 1, 2003 through and
      including June 30, 2003                             2.75 to 1

      July 1, 2003 through and
      including June 30, 2004                             2.50 to 1

      July 1, 2004 and all times
      thereafter                                          2.25 to 1

            (k)    EBITDAR RATIO II. The Company will not permit the EBITDAR
      Ratio II with respect to any period ending on a date that falls within any
      period set forth below under the column entitled "Period" to exceed the
      applicable ratio set forth under the caption "Ratio" opposite such period:

      PERIOD                                               RATIO
      ------------------------------                      ---------
      The date hereof through and
      including March 31, 2001                            5.00 to 1

      April 1, 2001 through and
      including September 30, 2001                        4.50 to 1

      October 1, 2001 through and
      including March 31, 2002                            4.25 to 1

                                       40
<PAGE>
      April 1, 2002 through and
      including September 30, 2002                        4.00 to 1

      October 1, 2002 through and
      including March 31, 2003                            3.75 to 1

      April 1, 2003 through and
      including June 30, 2004                             3.50 to 1

      July 1, 2004 and all times
      thereafter                                          3.25 to 1

            (l)    NET WORTH. The Company will not permit its Net Worth, as at
      the last day of any fiscal quarter of the Company (a "CALCULATION DATE")to
      be less than the sum of the following

                  (i) $90,000,000, PLUS

                  (ii) an amount equal to 50% of the aggregate net income of the
            Company and its Subsidiaries (determined on a consolidated basis in
            accordance with GAAP) for each fiscal quarter of the Company for
            which such net income is a positive number, commencing with the
            fiscal quarter ending on September 30, 2000 and ending with the
            fiscal quarter ending on the Calculation Date, PLUS

                  (iii) an amount equal to the aggregate Net Available Proceeds
            received in respect of Equity Issuances during the period commencing
            on July 1, 2000 and ending on the last day of such fiscal quarter.

            (m)    INTEREST COVERAGE RATIO. The Company will not permit the
      Interest Coverage Ratio with respect to any period ending on a date that
      falls within any period set forth below under the column entitled "Period"
      to be less than the applicable ratio set forth under the caption "Ratio"
      opposite such period:

      PERIOD                                               RATIO
      ------------------------------                      ---------
      the date hereof through and
      including March 31, 2003                            2.00 to 1

      April 1, 2003 through and
      including December 31, 2003                         2.25 to 1

      January 1, 2004 through and
      including June 30, 2004                             2.50 to 1

      July 1, 2004 and all times
      thereafter                                          2.75 to 1

                                       41
<PAGE>
            (n)    FIXED CHARGES RATIO. The Company will not permit the Fixed
      Charges Ratio with respect to any period ending on a date that falls
      within any period set forth below under the column entitled "Period" to be
      less than the applicable ratio set forth under the caption "Ratio"
      opposite such period:

      PERIOD                                               RATIO
      ------------------------------                      ---------
      The Date hereof through and
      including March 31, 2001                            1.55 to 1

      April 1, 2001 through and
      including June 30, 2003                             1.60 to 1

      July 1, 2003 and all times
      thereafter                                          1.50 to 1

            (o)    CAPITAL EXPENDITURES. The Company will not, and will not
      permit any of its Subsidiaries to, make any Capital Expenditures at any
      time, except for the following:

                  (i) maintenance Capital Expenditures in an aggregate amount in
            any year not to exceed an amount equal to 3% of the total revenues
            of the Company and its Subsidiaries for such year; and

                  (ii) Capital Expenditures made in connection with Eligible
            Acquisitions and Eligible New Contracts.

            (p)    SALE LEASE-BACK TRANSACTIONS. Except for Municipal
      Transactions, the Company will not, and will not permit any of its
      Subsidiaries to, enter into any arrangement with any Person whereby the
      Company or such Subsidiary shall sell or otherwise transfer any of its
      Property, whether now owned or hereafter acquired, and thereafter rent or
      lease such Property or similar Property for substantially the same use or
      uses as the Property sold or transferred unless the following conditions
      are satisfied: (1)the consideration received by the Company or such
      Subsidiary in connection with such transfer is at least equal to the fair
      market value of the Property so transferred (as reasonably determined by
      the board of directors of the Company), (2) all of the net proceeds
      received by the Company or any of its Subsidiaries in connection with any
      such transaction are used by the Company, within 12 months of the receipt
      thereof, to either (a) acquire other Property in compliance with the term
      of this Agreement and/or (b) repay or prepay Indebtedness of the Company
      or any of its Subsidiaries (other than any Subordinated Notes) and (3) the
      aggregate consideration received by the Obligors in connection with all
      such sale lease-back transactions entered into after the date hereof shall
      not exceed $20,000,000.

                                       42
<PAGE>
            (q)    DISCOUNT OF ACCOUNTS. The Company will not, and will not
      permit any of its Subsidiaries to, sell (with or without recourse) or
      discount any of their accounts receivable.

            (r)    LINES OF BUSINESS. Neither the Company nor any of its
      Subsidiaries will engage to any substantial extent in any line or lines of
      business activity other than the business of operating correctional and/or
      detention facilities, juvenile facilities, pre-release facilities and
      substance abuse rehabilitation facilities and related lines of business.

            (s)    TRANSACTIONS WITH AFFILIATES. Except as expressly permitted
      by this Master Agreement, the Company will not, nor will it permit any of
      its Subsidiaries to, directly or indirectly: (a) make any Investment in an
      Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
      Property to an Affiliate; (c) merge into or consolidate with or purchase
      or acquire Property from an Affiliate; or (d) enter into any other
      transaction directly or indirectly with or for the benefit of an Affiliate
      (including, without limitation, Guarantees and assumptions of obligations
      of an Affiliate); PROVIDED that (x) any Affiliate who is an individual may
      serve as a director, officer or employee of the Company or any of its
      Subsidiaries and receive reasonable compensation for his or her services
      in such capacity and (y) the Company and its Subsidiaries may enter into
      transactions (other than extensions of credit by the Company or any of its
      Subsidiaries to an Affiliate or the payment of management or similar fees
      by the Company or a Subsidiary to an Affiliate) providing for the leasing
      of Property, the rendering or receipt of services or the purchase or sale
      of inventory and other Property in the ordinary course of business if the
      monetary or business consideration arising therefrom would be
      substantially as advantageous to the Company and its Subsidiaries as the
      monetary or business consideration that would obtain in a comparable
      transaction with a Person not an Affiliate.

            (t)    USE OF PROCEEDS. The Lessees will use the proceeds of the
      Fundings solely to acquire Land and Buildings and fund Construction and
      related costs.

            (u)    Certain Obligations Respecting Subsidiaries.

                  (i) The Company will, and will cause each of its Subsidiaries
            to, take such action from time to time as shall be necessary to
            ensure that each of its Subsidiaries is a Wholly Owned Subsidiary.

                  (ii) In the event that any additional shares of capital stock
            shall be issued by any Subsidiary of the Company, the respective
            Obligor agrees forthwith to deliver to the Administrative Agent
            pursuant to the Security Agreement (as defined in the Credit
            Agreement) the certificates evidencing such shares of stock,
            accompanied by undated stock powers executed in blank and to take
            such other action as the Administrative Agent shall request to
            perfect the security interest created therein pursuant to the
            Security Agreement.

                  (iii) The Company will take such action, and will cause each
            of its Subsidiaries to take such action, from time to time as shall
            be necessary to ensure that all Subsidiaries

                                       43
<PAGE>
            of the Company are Subsidiary Guarantors and, thereby, "Obligors"
            hereunder. Without limiting the generality of the foregoing, in the
            event that the Company or any of its Subsidiaries shall form or
            acquire any new Subsidiary, the Company or the respective Subsidiary
            will cause such new Subsidiary to become a "Subsidiary Guarantor"
            (and, thereby, an "Obligor") hereunder pursuant to a written
            instrument in form and substance satisfactory to each Lender and the
            Administrative Agent, and to deliver such proof of corporate action,
            incumbency of officers, opinions of counsel and other documents as
            any Funding Party or the Administrative Agent shall have requested.

            (v)    MODIFICATIONS OF CERTAIN DOCUMENTS. No Obligor will consent
      to any material modification, supplement or waiver of any of the
      provisions of any Correctional and Detention Facility Contract or any of
      the subordination provisions of the 2000 Subordinated Notes Documentation
      (except to the extent permitted by Section 2.11 of the 2000 Subordination
      Agreement) or any other Subordinated Notes Documents.

            (w)    THE CORNELL COX GROUP, L.P. The Cornell Cox Group, L.P., a
      Delaware limited partnership, shall not hold or acquire any Property and
      shall not incur any Indebtedness or other liabilities in addition to those
      in existence as of the date hereof, which are correctly set forth on
      SCHEDULE VI hereto.

            (x)    PREPAYMENT OF 2000 SUBORDINATED DEBT. Neither the Company nor
      any of its Subsidiaries shall purchase, redeem, retire or otherwise
      acquire for value, or set apart any money for a sinking, defeasance or
      other analogous fund for, the purchase, redemption, retirement or other
      acquisition of, or make any voluntary payment or prepayment of the
      principal of or interest on, or any other amount owing in respect of, any
      Subordinated Notes, except for regularly scheduled payments of principal
      and interest in respect thereof required pursuant to the instruments
      evidencing such Subordinated Notes; provided that any such prepayments may
      be made so long as (i) no Funded Amounts are outstanding and (ii) no
      Default shall be continuing.

      SECTION 5.2 FURTHER ASSURANCES. Upon the written request of the Lessor or
the Administrative Agent, each Lessee, at its own cost and expense, will cause
all financing statements (including precautionary financing statements), fixture
filings and other similar documents, to be recorded or filed at such places and
times in such manner, as may be necessary to preserve, protect and perfect the
interest of the Lessor, the Administrative Agent and the B Lenders in the Leased
Properties as contemplated by the Operative Documents.

      SECTION 5.3 ADDITIONAL REQUIRED APPRAISALS. If, as a result of any change
in Applicable Law after the date hereof, an appraisal of all or any of the
Leased Properties is required during the Lease Term under Applicable Law with
respect to any Funding Partys interest therein, such Funding Partys Funded
Amount with respect thereto or the Operative Documents, then the related
Lessee(s) shall pay the reasonable cost of such appraisal, but no more than one
time during each 24 month period after the Initial Closing Date.

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<PAGE>
      SECTION 5.4 LESSOR'S COVENANTS. The Lessor covenants and agrees that,
unless the Administrative Agent, the Company, and the B Lenders shall have
otherwise consented in writing:

            (a)   the proceeds of the Loans received from the Lenders will be
      used by the Lessor solely to acquire the related Leased Property and to
      pay the Construction Agent or the related Lessee for certain closing,
      development and transaction costs associated therewith and, if applicable,
      for the costs of Construction (including capitalized interest and fees).
      No portion of the proceeds of the Loans will be used by the Lessor (i) in
      connection with, whether directly or indirectly, any tender offer for, or
      other acquisition of, stock of any corporation with a view towards
      obtaining control of such other corporation or (ii) directly or
      indirectly, for the purpose, whether immediate, incidental or ultimate, of
      purchasing or carrying any Margin Stock;

            (b)   it shall not engage in any business or activity, or invest
      in any Person, except for the Transaction and lease transactions similar
      to the Transaction;

            (c)   it will maintain tangible net worth in an amount no less
      than the sum of (i) $100,000 PLUS (ii) 3% of its total assets (calculated
      assuming no reduction in the value of any leased property from its
      original cost to the Lessor);

            (d)   it will deliver to the Administrative Agent and the
      Company, as soon as available and in any event within 90 days after the
      end of each fiscal year, a balance sheet of the Lessor as of the end of
      such fiscal year and the related statements of income, partners capital
      and cash flows for such fiscal year, setting forth in each case in
      comparative form the figures for the previous fiscal year, together with
      copies of its tax returns, all certified by an officer of the General
      Partner (and if the Lessor ever prepares audited financial statements, it
      shall deliver copies thereof to the Administrative Agent and the Company);

            (e)   it will permit the Administrative Agent, the Company and their
      respective representatives to examine, and make copies from, the Lessors
      books and records, and to visit the offices and properties of the Lessor
      for the purpose of examining such materials, and to discuss the Lessors
      performance hereunder with any of its, or its general partners, officers
      and employees;

            (f)    it shall not consent to the creation of any easement or other
      restriction against any Leased Property other than as permitted pursuant
      to Article VI of the Lease;

            (g)    it shall promptly discharge each Lessor Lien and shall
      indemnify and hold harmless the B Lenders and the Lessees for any costs or
      expenses related to a Lessor Lien and discharging such Lessor Lien,
      including, without limitation, any diminution in value of any Leased
      Property resulting from such Lessor Liens;

                                       45
<PAGE>
            (h)    it may not consolidate with or merge into any other Person or
      sell all or substantially all of its assets to any Person;

            (i)    it shall not sell, mortgage or encumber or assign or
      otherwise grant any Lien upon, its right, title, interest or obligations
      in the Leased Property or under any Operative Document, other than an
      assignment and security interest to the Administrative Agent and the B
      Lenders pursuant to the Loan Documents; and

            (j)    it shall comply with all of its obligations under the
      Operative Documents, except to the extent that compliance is prevented by
      any failure on the part of any Lessee or the Company to perform its
      obligations under the Lease.

                                   ARTICLE VI
                         TRANSFERS BY LESSOR AND LENDERS

      SECTION 6.1 LESSOR TRANSFERS. The Lessor shall not assign, convey or
otherwise transfer all or any portion of its right, title or interest in, to or
under any Leased Property or any of the Operative Documents without the prior
written consent of the Lenders and the Company. Any proposed transferee of the
Lessor shall make the representation set forth in SECTION 4.3 to the other
parties hereto.

      SECTION 6.2 LENDER TRANSFERS.

            (a)    Any B Lender may make, carry or transfer its B Loans at, to
      or for the account of, any of its branch offices or the office of an
      Affiliate of such B Lender.

            (b)    Each B Lender may assign all or a portion of its interests,
      rights and obligations under this Master Agreement and the Loan Agreement
      (including all or a portion of its Commitment and the B Loans at the time
      owing to it) to any Eligible Assignee; PROVIDED, HOWEVER, that (i) subject
      to Section 14.9(c) of the Lease, the Administrative Agent and, except
      during the continuance of a Default, the Company must give its prior
      written consent to such assignment (which consent shall not be
      unreasonably withheld or delayed) unless such assignment is to an
      Affiliate of the assigning B Lender, (ii) unless such B Lender is
      assigning all of its Commitment, after giving effect to such assignment,
      the Commitment of both the assignor and the assignee is at least
      $1,000,000,(iii) such B Lender will assign its Commitment hereunder and
      its commitment under the Credit Agreement, and its B Loans and its
      Synthetic Lease Loans, together, on a pro rata basis, and (iv) the parties
      to each such assignment shall execute and deliver to the Administrative
      Agent an Assignment and Acceptance, and, unless such assignment is to an
      Affiliate of such B Lender, a processing and recordation fee of $3,000. No
      Lessee shall be responsible for such processing and recordation fee or any
      costs or expenses incurred by any B Lender or the Administrative Agent in
      connection with such assignment. From and after the effective date
      specified in each Assignment and Acceptance, which effective date shall be
      at least five (5) Business Days after the execution thereof, the assignee
      thereunder shall be a party

                                       46
<PAGE>
      hereto and to the extent of the interest assigned by such Assignment and
      Acceptance, have the rights and obligations of a Lender under this Master
      Agreement and the Loan Agreement.

            (c)    Each B Lender may, without the consent of the Company or any
      Lessee, sell participations to one or more banks or other entities in all
      or a portion of its rights and obligations under this Master Agreement and
      the Loan Agreement (including all or a portion of its Commitment and the B
      Loans owing to it), PROVIDED, HOWEVER, that (i) such B Lenders obligations
      under this Master Agreement and the Loan Agreement shall remain unchanged,
      (ii) such B Lender shall remain solely responsible to the other parties
      hereto for the performance of such obligations, (iii) the participating
      bank or other entity shall not be entitled to any greater benefit than its
      selling Lender under the cost protection provisions contained in Section
      7.5 of this Master Agreement, and (iv) each Lessee, the Administrative
      Agent and the other Lenders shall continue to deal solely and directly
      with such B Lender in connection with such B Lenders rights and
      obligations under this Master Agreement and the other Operative Documents,
      and such B Lender shall retain the sole right to enforce the obligations
      of Lessor relating to the B Loans and to approve any amendment,
      modification or waiver of any provisions of this Master Agreement and the
      Loan Agreement (except that such Lender may permit the participant to
      approve any amendment, modification or waiver which would reduce the
      principal of or the interest rate on its B Loan, extend the term of such B
      Lenders Commitment, reduce the amount of any fees to which such
      participant is entitled or extend the final scheduled payment date of any
      B Loan). Any B Lender selling a participation hereunder shall provide
      prompt written notice to the Administrative Agent of the name of such
      participant.

            (d)    Any B Lender or participant may, in connection with the
      assignment or participation or proposed assignment or participation,
      pursuant to this Section, disclose to the assignee or participant or
      proposed assignee or participant any information relating to the Company
      or its Subsidiaries furnished to such B Lender by or on behalf of the
      Company. With respect to any disclosure of confidential, non-public,
      proprietary information, such proposed assignee or participant shall agree
      to use the information only for the purpose of making any necessary credit
      judgments with respect to this facility and not to use the information in
      any manner prohibited by any law, including without limitation, the
      securities laws of the United States. The proposed participant or assignee
      shall agree not to disclose any of such information except as permitted by
      this Master Agreement. The proposed participant or assignee shall further
      agree to return all documents or other written material and copies thereof
      received from any Lender, the Administrative Agent or Lessee relating to
      such confidential information unless otherwise properly disposed of by
      such entity.

            (e)    Any B Lender may at any time assign all or any portion of its
      rights under this Master Agreement and the Notes to a Federal Reserve
      Bank; PROVIDED that no such assignment shall release such B Lender from
      any of its obligations hereunder.

                                       47
<PAGE>
                                   ARTICLE VII
                                 INDEMNIFICATION

      SECTION 7.1 GENERAL INDEMNIFICATION. Each of the Company and each Lessee,
jointly and severally, agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and to
indemnify, protect, defend, save and hold harmless each Indemnitee, on an
After-Tax Basis, from and against, any and all Claims that may be imposed on,
incurred by or asserted, or threatened to be asserted, against such Indemnitee,
whether or not such Indemnitee shall also be indemnified as to any such Claim by
any other Person and whether or not such Claim arises or accrues prior to any
Closing Date or after the Lease Termination Date, in any way relating to or
arising out of:

            (a)    any of the Operative Documents or any of the transactions
      contemplated thereby, and any amendment, modification or waiver in respect
      thereof; or

            (b)    any Land, any Building or any part thereof or interest
      therein, including any Ground Lease;

            (c)    the purchase, design, construction, preparation,
      installation, inspection, delivery, non-delivery, acceptance, rejection,
      ownership, management, possession, operation, rental, lease, sublease,
      repossession, maintenance, repair, alteration, modification, addition,
      substitution, storage, transfer of title, redelivery, use, financing,
      refinancing, disposition, operation, condition, sale (including, without
      limitation, any sale pursuant to the Lease), return or other disposition
      of all or any part of any interest in any Leased Property or the
      imposition of any Lien, other than a Lessor Lien (or incurring of any
      liability to refund or pay over any amount as a result of any Lien, other
      than a Lessor Lien) thereon, including, without limitation: (i) Claims or
      penalties arising from any violation or alleged violation of law or in
      tort (strict liability or otherwise), (ii) latent or other defects,
      whether or not discoverable, (iii) any Claim based upon a violation or
      alleged violation of the terms of any restriction, easement, condition or
      covenant or other matter affecting title to any Leased Property or any
      part thereof, (iv) the making of any Alterations in violation of any
      standards imposed by any insurance policies required to be maintained by
      any Lessee pursuant to the Lease which are in effect at any time with
      respect to any Leased Property or any part thereof, (v) any Claim for
      patent, trademark or copyright infringement, (vi) Claims arising from any
      public improvements with respect to any Leased Property resulting in any
      charge or special assessments being levied against any Leased Property or
      any Claim for utility "tap-in" fees, and (vii) Claims for personal injury
      or real or personal property damage occurring, or allegedly occurring, on
      any Land, Building or Leased Property;

            (d)    the breach or alleged breach by any Lessee or the Company of
      any representation or warranty made by it or deemed made by it in any
      Operative Document or any certificate required to be delivered by any
      Operative Document;

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<PAGE>
            (e)    the retaining or employment of any broker, finder or
      financial advisor by the Company or any Lessee to act on its behalf in
      connection with this Master Agreement, or the incurring of any fees or
      commissions to which the Lessor, the Administrative Agent or any Lender
      might be subjected by virtue of their entering into the transactions
      contemplated by this Master Agreement (other than fees or commissions due
      to any broker, finder or financial advisor retained by the Lessor, the
      Administrative Agent or any Lender);

            (f)    the existence of any Lien (other than Lessor Liens) on or
      with respect to any Leased Property, the Construction, any Basic Rent or
      Supplemental Rent, title thereto, or any interest therein, including any
      Liens which arise out of the possession, use, occupancy, construction,
      repair or rebuilding of any Leased Property or by reason of labor or
      materials furnished or claimed to have been furnished to the Construction
      Agent, any Lessee, or any of its contractors or agents or by reason of the
      financing of any personalty or equipment purchased or leased by any Lessee
      or Alterations constructed by any Lessee;

            (g)    the transactions contemplated hereby or by any other
      Operative Document, in respect of the application of Parts 4 and 5 of
      Subtitle B of Title I of ERISA and any prohibited transaction described in
      Section 4975(c) of the Code; or

            (h)    any act or omission by the Company or any Lessee under any
      Purchase Agreement or any other Operative Document, and any breach of any
      requirement, condition, restriction or limitation in any Deed, Purchase
      Agreement or Ground Lease;

PROVIDED, HOWEVER, the neither the Company nor the Lessee shall be required to
indemnify any Indemnitee under this SECTION 7.1 for any Claim to the extent that
such Claim results from the willful misconduct, gross negligence or
misrepresentation of such Indemnitee, or from the failure of the Indemnitee to
comply with its obligations under any of the Operative Documents; and, PROVIDED,
FURTHER, that with respect to each Construction Land Interest, each Lessees
indemnity obligations with respect to such Leased Property shall be governed by
Section 3.3 of the Construction Agency Agreement during the Construction Term
therefor. It is expressly understood and agreed that the indemnity provided for
herein shall survive the expiration or termination of, and shall be separate and
independent from any other remedy under this Master Agreement, the Lease or any
other Operative Document.

      SECTION 7.2 ENVIRONMENTAL INDEMNITY. In addition to and without limitation
of SECTION 7.1 or Section 3.3 of the Construction Agency Agreement, each of the
Company and each Lessee, jointly and severally, agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all claims
(including without limitation third party claims for personal injury or real or
personal property damage), losses (including but not limited to any loss of
value of any Leased Property), damages, liabilities, fines, penalties, charges,
suits, settlements, demands, administrative and judicial proceedings (including
informal proceedings and investigations) and orders, judgments, remedial action,
requirements, enforcement actions of

                                       49
<PAGE>
any kind, and all reasonable costs and expenses actually incurred in connection
therewith (including, but not limited to, reasonable attorneys and/or paralegals
fees and expenses), including, but not limited to, all costs incurred in
connection with any investigation or monitoring of site conditions or any
clean-up, remedial, removal or restoration work by any federal, state or local
government agency, arising directly or indirectly, in whole or in part, out of

                  (i) the presence on or under any Land of any Hazardous
            Materials, or any releases or discharges of any Hazardous Materials
            on, under, from or onto any Land,

                  (ii) any activity, including, without limitation,
            construction, carried on or undertaken on or off any Land, and
            whether by a Lessee or any predecessor in title or any employees,
            agents, contractors or subcontractors of a Lessee or any predecessor
            in title, or any other Person, in connection with the handling,
            treatment, removal, storage, decontamination, clean-up, transport or
            disposal of any Hazardous Materials that at any time are located or
            present on or under or that at any time migrate, flow, percolate,
            diffuse or in any way move onto or under any Land,

                  (iii) loss of or damage to any property or the environment
            (including, without limitation, clean-up costs, response costs,
            remediation and removal costs, cost of corrective action, costs of
            financial assurance, fines and penalties and natural resource
            damages), or death or injury to any Person, and all expenses
            associated with the protection of wildlife, aquatic species,
            vegetation, flora and fauna, and any mitigative action required by
            or under Environmental Laws, in each case to the extent related to
            any Leased Property,

                  (iv) any claim concerning any Leased Propertys lack of
            compliance with Environmental Laws, or any act or omission causing
            an environmental condition on or with respect to any Leased Property
            that requires remediation or would allow any governmental agency to
            record a lien or encumbrance on the land records, or

                  (v) any residual contamination on or under any Land, or
            affecting any natural resources on any Land, and to any
            contamination of any property or natural resources arising in
            connection with the generation, use, handling, storage, transport or
            disposal of any such Hazardous Materials on or from any Leased
            Property; in each case irrespective of whether any of such
            activities were or will be undertaken in accordance with applicable
            laws, regulations, codes and ordinances;

in any case with respect to the matters described in the foregoing CLAUSES (I)
through (V) that arise or occur

            (w)    prior to or during the Lease Term,

                                       50
<PAGE>
            (x)    at any time during which a Lessee or any Affiliate thereof
      owns any interest in or otherwise occupies or possesses any Leased
      Property or any portion thereof, or

            (y)    during any period after and during the continuance of any
      Event of Default;

PROVIDED, HOWEVER, neither the Company nor any Lessee shall be required to
indemnify any Indemnitee under this SECTION 7.2 for any Claim to the extent that
such Claim results from the willful misconduct or gross negligence of such
Indemnitee. It is expressly understood and agreed that the indemnity provided
for herein shall survive the expiration or termination of and shall be separate
and independent from any other remedy under this Master Agreement, the Lease or
any other Operative Document.

      SECTION 7.3 PROCEEDINGS IN RESPECT OF CLAIMS. With respect to any amount
that a Lessee is requested by an Indemnitee to pay by reason of SECTION 7.1 or
7.2, such Indemnitee shall, if so requested by such Lessee and prior to any
payment, submit such additional information to such Lessee as such Lessee may
reasonably request and which is in the possession of, or under the control of,
such Indemnitee to substantiate properly the requested payment. In case any
action, suit or proceeding shall be brought against any Indemnitee, such
Indemnitee promptly shall notify the Company of the commencement thereof
(PROVIDED that the failure of such Indemnitee to promptly notify the Company
shall not affect the Companys or any Lessees obligation to indemnify hereunder
except to the extent that any Lessees ability to contest is materially
prejudiced by such failure), and a Lessee shall be entitled, at its expense, to
participate in, and, to the extent that a Lessee desires to, assume and control
the defense thereof with counsel reasonably satisfactory to such Indemnitee;
PROVIDED, HOWEVER, that such Indemnitee may pursue a motion to dismiss such
Indemnitee from such action, suit or proceeding with counsel of such Indemnitees
choice at the Lessees expense; and PROVIDED FURTHER that a Lessee may assume and
control the defense of such proceeding only if the Company shall have
acknowledged in writing its and each Lessees obligations to fully indemnify such
Indemnitee in respect of such action, suit or proceeding, Lessees shall pay all
reasonable costs and expenses related to such action, suit or proceeding as and
when incurred and the related Lessee shall keep such Indemnitee fully apprised
of the status of such action suit or proceeding and shall provide such
Indemnitee with all information with respect to such action suit or proceeding
as such Indemnitee shall reasonably request; and, PROVIDED FURTHER, that no
Lessee shall be entitled to assume and control the defense of any such action,
suit or proceeding if and to the extent that, (A) in the reasonable opinion of
such Indemnitee, (x) such action, suit or proceeding involves any possibility of
imposition of criminal liability or any material risk of civil liability on such
Indemnitee in excess of $5,000,000 or (y) the control of such action, suit or
proceeding would involve an actual or potential conflict of interest, (B) such
proceeding involves Claims not fully indemnified by the Lessees which the
Lessees and the Indemnitee have been unable to sever from the indemnified
claim(s), or (C) an Event of Default has occurred and is continuing. The
Indemnitee may participate in a reasonable manner at its own expense and with
its own counsel in any proceeding conducted by a Lessee in accordance with the
foregoing.

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<PAGE>
      If the Lessees fails to fulfill the conditions to a Lessees assuming the
defense of any claim after receiving notice thereof on or prior to the date that
is fifteen (15) days prior to the date that an answer or response is required,
the Indemnitee may undertake such defense, at the Lessees expense. No Lessee
shall enter into any settlement or other compromise with respect to any Claim
which is entitled to be indemnified under SECTION 7.1 or 7.2 that is in excess
of $1,000,000 or that acknowledges guilt or fault on the part of the related
Indemnitee without the prior written consent of the related Indemnitee, which
consent shall not be unreasonably withheld. Unless an Event of Default shall
have occurred and be continuing, no Indemnitee shall enter into any settlement
or other compromise with respect to any claim which is entitled to be
indemnified under SECTION 7.1 or 7.2 without the prior written consent of the
Company, which consent shall not be unreasonably withheld, unless such
Indemnitee waives its right to be indemnified under SECTION 7.1 or 7.2 with
respect to such Claim.

      Upon payment in full of any Claim by the Lessees pursuant to SECTION 7.1
or 7.2 to or on behalf of an Indemnitee, Lessees, without any further action,
shall be subrogated to any and all claims that such Indemnitee may have relating
thereto (other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be reasonably necessary
to preserve any such claims and otherwise cooperate with the Lessees and give
such further assurances as are reasonably necessary or advisable to enable
Lessees vigorously to pursue such claims.

      Any amount payable to an Indemnitee pursuant to SECTION 7.1 or 7.2 shall
be paid to such Indemnitee promptly upon, but in no event later than thirty (30)
days after, receipt of a written demand therefor from such Indemnitee,
accompanied by a written statement describing in reasonable detail the basis for
such indemnity and the computation of the amount so payable.

      If for any reason the indemnification provided for in SECTION 7.1 or 7.2
is unavailable to an Indemnitee or is insufficient to hold an Indemnitee
harmless, then each Lessee agrees to contribute to the amount paid or payable by
such Indemnitee as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnitee on the one hand and by each Lessee on the other hand but also
the relative fault of such Indemnitee as well as any other relevant equitable
considerations. It is expressly understood and agreed that the right to
contribution provided for herein shall survive the expiration or termination of
and shall be separate and independent from any other remedy under this Master
Agreement, the Lease or any other Operative Document.

      SECTION 7.4 GENERAL TAX INDEMNITY.

            (a)    TAX INDEMNITY. Except as otherwise provided in this
      SECTION 7.4, each of the Company and each Lessee, jointly and severally,
      shall pay on an After-Tax Basis, and on written demand shall indemnify and
      hold each Tax Indemnitee harmless from and against, any and all fees
      (including, without limitation, documentation, recording, license and
      registration fees), taxes

                                       52
<PAGE>
      (including, without limitation, income, gross receipts, sales, rental,
      use, turnover, value-added, property, excise and stamp taxes), levies,
      imposts, duties, charges, assessments or withholdings of any nature
      whatsoever, together with any penalties, fines or interest thereon or
      additions thereto (any of the foregoing being referred to herein as
      "TAXES" and individually as a "TAX" (for the purposes of this SECTION 7.4,
      the definition of "Taxes" includes amounts imposed on, incurred by, or
      asserted against each Tax Indemnitee as the result of any prohibited
      transaction, within the meaning of Section 406 or 407 of ERISA or Section
      4975(c) of the Code, arising out of the transactions contemplated hereby
      or by any other Operative Document)) imposed on or with respect to any Tax
      Indemnitee, any Lessee, the Company, any Leased Property or any portion
      thereof or any Land, or any sublessee or user thereof, by the United
      States or by any state or local government or other taxing authority in
      the United States in connection with or in any way relating to (i) the
      acquisition, financing, mortgaging, construction, preparation,
      installation, inspection, delivery, non-delivery, acceptance, rejection,
      purchase, ownership, possession, rental, lease, sublease, maintenance,
      repair, storage, transfer of title, redelivery, use, operation, condition,
      sale, return or other application or disposition of all or any part of any
      Leased Property or the imposition of any Lien (or incurrence of any
      liability to refund or pay over any amount as a result of any Lien)
      thereon, (ii) Basic Rent or Supplemental Rent or the receipts or earnings
      arising from or received with respect to any Leased Property or any part
      thereof, or any interest therein or any applications or dispositions
      thereof, (iii) any other amount paid or payable pursuant to the Notes or
      any other Operative Documents, (iv) any Leased Property, any Land or any
      part thereof or any interest therein (including, without limitation, all
      assessments payable in respect thereof, including, without limitation, all
      assessments noted on the related Title Policy), (v) all or any of the
      Operative Documents, any other documents contemplated thereby, any
      amendments and supplements thereto, and (vi) otherwise with respect to or
      in connection with the transactions contemplated by the Operative
      Documents.

            (b)    Exclusions from General Tax Indemnity. Section 7.4(a) shall
      not apply to:

                  (i) Taxes on, based on, or measured by or with respect to net
            income of the Lessor, the Administrative Agent and the Lenders
            (including, without limitation, minimum Taxes, capital gains Taxes,
            Taxes on or measured by items of tax preference or alternative
            minimum Taxes) other than (A) any such Taxes that are, or are in the
            nature of, sales, use, license, rental or property Taxes, and (B)
            withholding Taxes imposed by the United States or any state in which
            Leased Property is located (i) on payments with respect to the
            Notes, to the extent imposed by reason of a change in Applicable Law
            occurring after the date on which the holder of such Note became the
            holder of such Note or (ii) on Rent, to the extent the net payment
            of Rent after deduction of such withholding Taxes would be less than
            amounts currently payable with respect to the Funded Amounts;

                  (ii) Taxes on, based on, or in the nature of or measured by
            Taxes on doing business, business privilege, franchise, capital,
            capital stock, net worth, or mercantile license or similar taxes
            other than (A) any increase in such Taxes imposed on such Tax
            Indemnitee by any state in which Leased Property is located, net of
            any decrease in such taxes realized by such Tax Indemnitee, to the
            extent that such tax increase would not

                                       53
<PAGE>
            have occurred if on each Funding Date the Lessor and the Lenders had
            advanced funds to a Lessee or the Construction Agent in the form of
            loans secured by the Leased Property in an amount equal to the
            Funded Amounts funded on such Funding Date, with debt service for
            such loans equal to the Basic Rent payable on each Payment Date and
            a principal balance at the maturity of such loans in a total amount
            equal to the Funded Amounts at the end of the Lease Term, or (B) any
            Taxes that are or are in the nature of sales, use, rental, license
            or property Taxes relating to any Leased Property;

                  (iii) Taxes that are based on, or measured by, the fees or
            other compensation received by a Person acting as Administrative
            Agent (in its individual capacities) or any Affiliate of any thereof
            for acting as trustee under the Loan Agreement;

                  (iv) Taxes that result from any act, event or omission, or are
            attributable to any period of time, that occurs after the earlier of
            (A) the expiration of the Lease Term with respect to any Leased
            Property and, if such Leased Property is required to be returned to
            the Lessor in accordance with the Lease, such return and (B) the
            discharge in full of the Lessees' obligations to pay the Lease
            Balance, or any amount determined by reference thereto, with respect
            to any Leased Property and all other amounts due under the Lease,
            unless such Taxes relate to acts, events or matters occurring prior
            to the earlier of such times or are imposed on or with respect to
            any payments due under the Operative Documents after such expiration
            or discharge;

                  (v) Taxes imposed on a Tax Indemnitee that result from any
            voluntary sale, assignment, transfer or other disposition or
            bankruptcy by such Tax Indemnitee or any related Tax Indemnitee of
            any interest in any Leased Property or any part thereof, or any
            interest therein or any interest or obligation arising under the
            Operative Documents, or from any sale, assignment, transfer or other
            disposition of any interest in such Tax Indemnitee or any related
            Tax Indemnitee, it being understood that each of the following shall
            not be considered a voluntary sale: (A) any substitution,
            replacement or removal of any of the Leased Property by any Lessee,
            (B) any sale or transfer resulting from the exercise by any Lessee
            of any termination option, any purchase option or sale option, (C)
            any sale or transfer while an Event of Default shall have occurred
            and be continuing under the Lease, and (D) any sale or transfer
            resulting from the Lessors exercise of remedies under the Lease;

                  (vi) any Tax which is being contested in accordance with the
            provisions of SECTION 7.4(c), during the pendency of such contest;

                  (vii) any Tax that is imposed on a Tax Indemnitee as a result
            of such Tax Indemnitees gross negligence or willful misconduct
            (other than gross negligence or willful misconduct imputed to such
            Tax Indemnitee solely by reason of its interest in any Leased
            Property);

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<PAGE>
                  (viii) any Tax that results from a Tax Indemnitee engaging,
            with respect to any Leased Property, in transactions other than
            those permitted by the Operative Documents;

                  (ix) to the extent any interest, penalties or additions to tax
            result in whole or in part from the failure of a Tax Indemnitee to
            file a return or pay a Tax that it is required to file or pay in a
            proper and timely manner, unless such failure (A) results from the
            transactions contemplated by the Operative Documents in
            circumstances where Lessee did not give timely notice to such Tax
            Indemnitee of such filing or payment requirement that would have
            permitted a proper and timely filing of such return or payment of
            such Tax, as the case may be, or (B) results from the failure of a
            Lessee to supply information necessary for the proper and timely
            filing of such return or payment of such Tax, as the case may be,
            that was not in the possession of such Tax Indemnitee; and

                  (x) as to Lessor, any Tax that results from the breach by the
            Lessor of its representation and warranty made in SECTION 4.2(g) or
            as to any Lender the breach of such Lender of its representation and
            warranty made in SECTION 4.3(b).

            (c)    CONTESTS. If any claim shall be made against any Tax
      Indemnitee or if any proceeding shall be commenced against any Tax
      Indemnitee (including a written notice of such proceeding) for any Taxes
      as to which Lessees may have an indemnity obligation pursuant to SECTION
      7.4, or if any Tax Indemnitee shall determine that any Taxes as to which
      the Lessees may have an indemnity obligation pursuant to SECTION 7.4 may
      be payable, such Tax Indemnitee shall promptly notify the Company. The
      Company shall be entitled, at its expense, to participate in, and, to the
      extent that the Company desires to, assume and control the defense
      thereof; PROVIDED, HOWEVER, that the Company shall have acknowledged in
      writing its obligation to fully indemnify such Tax Indemnitee in respect
      of such action, suit or proceeding if the contest is unsuccessful; and,
      PROVIDED FURTHER, that the Company shall not be entitled to assume and
      control the defense of any such action, suit or proceeding (but the Tax
      Indemnitee shall then contest, at the sole cost and expense of the
      Company, on behalf of the Company with representatives reasonably
      satisfactory to the Company) if and to the extent that, (A) in the
      reasonable opinion of such Tax Indemnitee, such action, suit or proceeding
      involves any meaningful risk of imposition of criminal liability or any
      material risk of civil liability on such Tax Indemnitee in excess of
      $5,000,000,(B) such proceeding involves Claims not fully indemnified by
      the Lessees which the Company and the Tax Indemnitee have been unable to
      sever from the indemnified claim(s), (C) an Event of Default has occurred
      and is continuing, (D) such action, suit or proceeding involves matters
      which extend beyond or are unrelated to the Transaction and if determined
      adversely could be materially detrimental to the interests of such Tax
      Indemnitee notwithstanding indemnification by Lessees or (E) such action,
      suit or proceeding involves the federal or any state income tax liability
      of the Tax Indemnitee. With respect to any contests controlled by a Tax
      Indemnitee, (i) if such contest relates to the federal or any state income
      tax liability of such Tax Indemnitee, such Tax Indemnitee shall be
      required to conduct such contest only if the Company shall have provided
      to such Tax Indemnitee an opinion of independent tax counsel selected by
      the Tax Indemnitee and reasonably satisfactory to the Company stating that
      a reasonable basis exists to contest such claim or (ii) in the case of an
      appeal of an adverse

                                       55
<PAGE>
      determination of any contest relating to any Taxes, an opinion of such
      counsel to the effect that such appeal is more likely than not to be
      successful, PROVIDED, HOWEVER, such Tax Indemnitee shall in no event be
      required to appeal an adverse determination to the United States Supreme
      Court. The Tax Indemnitee may participate in a reasonable manner at its
      own expense and with its own counsel in any proceeding conducted by the
      Company in accordance with the foregoing.

            Each Tax Indemnitee shall at Lessees expense supply the Company with
      such information and documents in such Tax Indemnitees possession
      reasonably requested by the Company as are necessary or advisable for the
      Company to participate in any action, suit or proceeding to the extent
      permitted by this SECTION 7.4. Unless an Event of Default shall have
      occurred and be continuing, no Tax Indemnitee shall enter into any
      settlement or other compromise with respect to any Claim which is entitled
      to be indemnified under this SECTION 7.4 without the prior written consent
      of the Company, which consent shall not be unreasonably withheld, unless
      such Tax Indemnitee waives its right to be indemnified under this SECTION
      7.4 with respect to such Claim.

            Notwithstanding anything contained herein to the contrary, (a) a Tax
      Indemnitee will not be required to contest (and the Company shall not be
      permitted to contest except on its own behalf if it is subject thereto) a
      claim with respect to the imposition of any Tax if such Tax Indemnitee
      shall waive its right to indemnification under this SECTION 7.4 with
      respect to such claim (and any related claim with respect to other taxable
      years the contest of which is precluded as a result of such waiver) and
      (b) no Tax Indemnitee shall be required to contest any claim if the
      subject matter thereof shall be of a continuing nature and shall have
      previously been decided adversely, unless there has been a change in law
      which in the opinion of Tax Indemnitees counsel creates substantial
      authority for the success of such contest. Each Tax Indemnitee and the
      Company shall consult in good faith with each other regarding the conduct
      of such contest controlled by either.

            (d)    REIMBURSEMENT FOR TAX SAVINGS. If (x) a Tax Indemnitee shall
      obtain a credit or refund of any Taxes paid by the Company or any Lessee
      pursuant to this SECTION 7.4 or (y) by reason of the incurrence or
      imposition of any Tax for which a Tax Indemnitee is indemnified hereunder
      or any payment made to or for the account of such Tax Indemnitee by the
      Company or any Lessee pursuant to this SECTION 7.4, such Tax Indemnitee at
      any time realizes a reduction in any Taxes for which Lessees are not
      required to indemnify such Tax Indemnitee pursuant to this SECTION 7.4,
      which reduction in Taxes was not taken into account in computing such
      payment by Lessee to or for the account of such Tax Indemnitee, then such
      Tax Indemnitee shall promptly pay to the Company (xx) the amount of such
      credit or refund, together with the amount of any interest received by
      such Tax Indemnitee on account of such credit or refund or (yy) an amount
      equal to such reduction in Taxes, as the case may be; PROVIDED that no
      such payment shall be made so long as an Event of Default shall have
      occurred and be continuing and, PROVIDED, FURTHER, that the amount payable
      to the Company by any Tax Indemnitee pursuant to this SECTION 7.4(D) shall
      not at any time exceed the aggregate amount of all indemnity payments made
      by the Company and the Lessees under this SECTION 7.4 to such Tax
      Indemnitee with respect to the Taxes which gave rise to the credit or
      refund or with respect to the Tax which gave rise to the

                                       56
<PAGE>
      reduction in Taxes less the amount of all prior payments made to the
      Company by such Tax Indemnitee under this SECTION 7.4(D). Each Tax
      Indemnitee agrees to act in good faith to claim such refunds and other
      available Tax benefits, and take such other actions as may be reasonable
      to minimize any payment due from Lessees pursuant to this SECTION 7.4. The
      disallowance or reduction of any credit, refund or other tax savings with
      respect to which a Tax Indemnitee has made a payment to the Company under
      this SECTION 7.4(D) shall be treated as a Tax for which Lessees are
      obligated to indemnify such Tax Indemnitee hereunder without regard to
      SECTION 7.4(B) hereof.

            (e)    PAYMENTS. Any Tax indemnifiable under this SECTION 7.4 shall
      be paid by Lessees directly when due to the applicable taxing authority if
      direct payment is practicable and permitted. If direct payment to the
      applicable taxing authority is not permitted or is otherwise not made, any
      amount payable to a Tax Indemnitee pursuant to SECTION 7.4 shall be paid
      within thirty (30) days after receipt of a written demand therefor from
      such Tax Indemnitee accompanied by a written statement describing in
      reasonable detail the amount so payable, but not before the date that the
      relevant Taxes are due. Any payments made pursuant to SECTION 7.4 shall be
      made to the Tax Indemnitee entitled thereto or the Company, as the case
      may be, in immediately available funds at such bank or to such account as
      specified by the payee in written directions to the payor, or, if no such
      direction shall have been given, by check of the payor payable to the
      order of the payee by certified mail, postage prepaid at its address as
      set forth in this Master Agreement. Upon the request of any Tax Indemnitee
      with respect to a Tax that Lessees are required to pay, the Company shall
      furnish to such Tax Indemnitee the original or a certified copy of a
      receipt for Lessees payment of such Tax or such other evidence of payment
      as is reasonably acceptable to such Tax Indemnitee.

            (f)    REPORTS. If any Lessee knows of any report, return or
      statement required to be filed with respect to any Taxes that are subject
      to indemnification under this SECTION 7.4, such Lessee shall, if such
      Lessee is permitted by Applicable Law, timely file such report, return or
      statement (and, to the extent permitted by law, show ownership of the
      applicable Leased Property in such Lessee); PROVIDED, HOWEVER, that if
      such Lessee is not permitted by Applicable Law or does not have access to
      the information required to file any such report, return or statement,
      such Lessee will promptly so notify the appropriate Tax Indemnitee, in
      which case Tax Indemnitee will file such report. In any case in which the
      Tax Indemnitee will file any such report, return or statement, such Lessee
      shall, upon written request of such Tax Indemnitee, prepare such report,
      return or statement for filing by such Tax Indemnitee or, if such Tax
      Indemnitee so requests, provide such Tax Indemnitee with such information
      as is reasonably available to such Lessee.

            (g)    VERIFICATION. At the Company's request, the amount of any
      indemnity payment by Lessee or any payment by a Tax Indemnitee to the
      Company pursuant to this SECTION 7.4 shall be verified and certified by an
      independent public accounting firm selected by the Company and reasonably
      acceptable to the Tax Indemnitee. Unless such verification shall disclose
      an error in the Companys favor of 5% or more of the related indemnity
      payment, the costs of such verification shall be borne by the Company. In
      no event shall the Company have the right to

                                       57
<PAGE>
      review the Tax Indemnitee's tax returns or receive any other confidential
      information from the Tax Indemnitee in connection with such verification.
      The Tax Indemnitee agrees to cooperate with the independent public
      accounting firm performing the verification and to supply such firm with
      all information reasonably necessary to permit it to accomplish such
      verification, PROVIDED that the information provided to such firm by such
      Tax Indemnitee shall be for its confidential use. The parties agree that
      the sole responsibility of the independent public accounting firm shall be
      to verify the amount of a payment pursuant to this Master Agreement and
      that matters of interpretation of this Master Agreement are not within the
      scope of the independent accounting firms responsibilities.

            SECTION 7.5 Increased Costs, etc.

            (a)    SHARING OF PAYMENTS, ETC.

                  (i) The Company agrees that, in addition to (and without
            limitation of) any right of set-off, banker's lien or counterclaim a
            Funding Party may otherwise have, each Funding Party shall be
            entitled, at its option, to offset balances held by it for account
            of the Company at any of its offices, in Dollars or in any other
            currency, against any principal of or interest on any of such
            Funding Party's Funded Amounts or any other amount payable to such
            Funding Party hereunder, that is not paid when due (regardless of
            whether such balances are then due to the Company), in which case it
            shall promptly notify the Company and the Administrative Agent
            thereof, PROVIDED that such Funding Party's failure to give such
            notice shall not affect the validity thereof.

                  (ii) If any Funding Party shall obtain from any Obligor
            payment of any principal of or interest on any Funded Amount owing
            to it or payment of any other amount under this Master Agreement or
            any other Operative Document through the exercise of any right of
            set-off, bankers lien or counterclaim or similar right or otherwise
            (other than from the Administrative Agent as provided herein or in
            any other Operative Document), and, as a result of such payment,
            such Funding Party shall have received a greater percentage of the
            principal of or interest on such Funded Amounts or such other
            amounts then due hereunder or thereunder by such Obligor to such
            Funding Party than the percentage received by any other Funding
            Party, it shall promptly purchase from such other Funding Parties
            participations in (or, if and to the extent specified by such
            Funding Party, direct interests in) Funded Amounts or such other
            amounts, respectively, owing to such other Funding Parties (or in
            interest due thereon, as the case may be) in such amounts, and make
            such other adjustments from time to time as shall be equitable, to
            the end that all the Funding Parties shall share the benefit of such
            excess payment (net of any expenses that may be incurred by such
            Funding Party in obtaining or preserving such excess payment) pro
            rata in accordance with the unpaid principal of and/or interest on
            the Funded Amounts or such other amounts, respectively, owing to
            each of the Funding Parties. To such end all the Funding Parties
            shall make appropriate adjustments among themselves (by the resale
            of participations sold or otherwise) if such payment is rescinded or
            must otherwise be restored.

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<PAGE>
                  (iii) The Company agrees that any Funding Party so purchasing
            such a participation (or direct interest) may exercise all rights of
            set-off, banker's lien, counterclaim or similar rights with respect
            to such participation as fully as if such Funding Party were a
            direct holder of Funded Amounts or other amounts (as the case may
            be) owing to such Funding Party in the amount of such participation.

                  (iv) Nothing contained herein shall require any Funding Party
            to exercise any such right or shall affect the right of any Funding
            Party to exercise, and retain the benefits of exercising, any such
            right with respect to any other indebtedness or obligation of any
            Obligor. If, under any applicable bankruptcy, insolvency or other
            similar law, any Funding Party receives a secured claim in lieu of a
            set-off to which this SECTION 7.5(A) applies, such Funding Party
            shall, to the extent practicable, exercise its rights in respect of
            such secured claim in a manner consistent with the rights of the
            Funding Parties entitled under this SECTION 7.5(A) to share in the
            benefits of any recovery on such secured claim.

            (b)    Yield Protection, Etc.

                  (i) ADDITIONAL COSTS.

                              1) The Company shall pay directly to each Funding
                        Party from time to time such amounts as such Funding
                        Party may determine to be necessary to compensate such
                        Funding Party for any costs actually incurred by such
                        Funding Party that such Funding Party determines are
                        attributable to its making or maintaining of any
                        Eurodollar Advances or its obligation to make any
                        Eurodollar Advances under the Operative Documents, or
                        any reduction in any amount receivable by such Funding
                        Party under the Operative Documents in respect of any of
                        such Advances or such obligation (such increases in
                        costs and reductions in amounts receivable being herein
                        called "ADDITIONAL COSTS"), resulting from any
                        Regulatory Change that:

                                    (A) shall subject any Funding Party (or its
                              Applicable Lending Office for any of such
                              Advances) to any tax, duty or other charge in
                              respect of such Funded Amounts or changes the
                              basis of taxation of any amounts payable to such
                              Funding Party under the Operative Documents in
                              respect of any of such Funded Amounts (excluding
                              (A) franchise taxes imposed on it or (B) changes
                              in the rate of tax on the overall net income of
                              such Funding Party or of such Applicable Lending
                              Office, in each case, by the jurisdiction in which
                              such Funding Party has its principal office or
                              such Applicable Lending Office); or

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<PAGE>
                                    (B) imposes or modifies any reserve, special
                              deposit or similar requirements (other than, in
                              the case of any Funding Party for any period as to
                              which the Company is required to pay any amount
                              under PARAGRAPH 5) below, the reserves and
                              "Eurocurrency liabilities" under Regulation D
                              referred to therein) relating to any extensions of
                              credit or other assets of, or any deposits with or
                              other liabilities of, such Funding Party
                              (including, without limitation, any of such
                              Advances or any deposits referred to in the
                              definition of "Eurodollar Rate") or any commitment
                              of such Funding Party (including, without
                              limitation, the Commitments of such Funding Party
                              hereunder); or

                                    (C) imposes any other condition affecting
                              the Operative Documents (or any of such extensions
                              of credit or liabilities) or its Commitments.

      If any Funding Party requests compensation from the Company under this
SECTION 7.5(B), the Company may, by notice to such Funding Party (with a copy to
the Administrative Agent), suspend the obligation of such Funding Party
thereafter to make or continue Eurodollar Advances, or to convert Base Rate
Advances into Eurodollar Advances, until the Regulatory Change giving rise to
such request ceases to be in effect (in which case the provisions of SECTION
7.5(E) hereof shall be applicable), PROVIDED that such suspension shall not
affect the right of such Funding Party to receive the compensation so requested.

                              2) Without limiting the effect of the other
                        provisions of this SECTION 7.5(B), in the event that, by
                        reason of any Regulatory Change, any Funding Party
                        either (i) incurs Additional Costs based on or measured
                        by the excess above a specified level of the amount of a
                        category of deposits or other liabilities of such
                        Funding Party that includes deposits by reference to
                        which the interest rate on Eurodollar Advances is
                        determined as provided in this Master Agreement or a
                        category of extensions of credit or other assets of such
                        Funding Party that includes Eurodollar Advances or (ii)
                        becomes subject to restrictions on the amount of such a
                        category of liabilities or assets that it may hold,
                        then, if such Funding Party so elects by notice to the
                        Company (with a copy to the Administrative Agent), the
                        obligation of such Funding Party to make or continue, or
                        to convert Base Rate Advances into, Eurodollar Advances
                        hereunder shall be suspended until such Regulatory
                        Change ceases to be in effect (in which case the
                        provisions of SECTION 7.5(E) hereof shall be
                        applicable).

                              3) Without limiting the effect of the foregoing
                        provisions of this SECTION 7.5(B) (but without
                        duplication), the Company shall pay directly to each
                        Funding Party from time to time on request such amounts
                        as such Funding Party may determine to be necessary to
                        compensate such

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<PAGE>
                        Funding Party (or, without duplication, the bank holding
                        company of which such Funding Party is a subsidiary) for
                        any costs actually incurred by such Funding Party that
                        it determines are attributable to the maintenance by
                        such Funding Party (or any Applicable Lending Office or
                        such bank holding company), pursuant to any law or
                        regulation or any interpretation, directive or request
                        (whether or not having the force of law and whether or
                        not failure to comply therewith would be unlawful) of
                        any court or governmental or monetary authority (i)
                        following any Regulatory Change or (ii) implementing any
                        risk-based capital guideline or other requirement
                        (whether or not having the force of law and whether or
                        not the failure to comply therewith would be unlawful)
                        heretofore or hereafter issued by any government or
                        governmental or supervisory authority implementing at
                        the national level the Basle Accord (including, without
                        limitation, the Final Risk-Based Capital Guidelines of
                        the Board of Governors of the Federal Reserve System (12
                        C.F.R. Part 208, Appendix A; 12 C.F.R. Part 225,
                        Appendix A) and the Final Risk-Based Capital Guidelines
                        of the Office of the Comptroller of the Currency (12
                        C.F.R. Part 3, Appendix A)), of capital in respect of
                        its Commitments or Advances (such compensation to
                        include, without limitation, an amount equal to any
                        reduction of the rate of return on assets or equity of
                        such Funding Party (or any Applicable Lending Office or
                        such bank holding company) to a level below that which
                        such Funding Party (or any Applicable Lending Office or
                        such bank holding company) could have achieved but for
                        such law, regulation, interpretation, directive or
                        request). For purposes of this SECTION 7.5(B) and
                        SECTION 7.5(F) hereof, "BASLE ACCORD" shall mean the
                        proposals for risk-based capital framework described by
                        the Basle Committee on Banking Regulations and
                        Supervisory Practices in its paper entitled
                        "International Convergence of Capital Measurement and
                        Capital Standards" dated July 1988, as amended, modified
                        and supplemented and in effect from time to time or any
                        replacement thereof.

                              4) Each Funding Party shall notify the Company of
                        any event occurring after the date of this Master
                        Agreement entitling such Funding Party to compensation
                        under PARAGRAPH 1) or 3) of this SECTION 7.5(B) as
                        promptly as practicable, but in any event within 45
                        days, after such Funding Party obtains actual knowledge
                        thereof; PROVIDED that (i) if any Funding Party fails to
                        give such notice within 45 days after it obtains actual
                        knowledge of such an event, such Funding Party shall,
                        with respect to compensation payable pursuant to this
                        SECTION 7.5(B) in respect of any costs resulting from
                        such event, only be entitled to payment under this
                        SECTION 7.5(B) for costs incurred from and after the
                        date 45 days prior to the date that such Funding Party
                        does give such notice and (ii) each Funding Party will
                        designate a different Applicable Lending Office for the

                                       61
<PAGE>
                        Funded Amounts of such Funding Party affected by such
                        event if such designation will avoid the need for, or
                        reduce the amount of, such compensation and will not, in
                        the sole opinion of such Funding Party, be
                        disadvantageous to such Funding Party, except that such
                        Funding Party shall have no obligation to designate an
                        Applicable Lending Office located in the United States
                        of America. Each Funding Party will furnish to the
                        Company a certificate setting forth the basis and amount
                        of each request by such Funding Party for compensation
                        under PARAGRAPH 1) or 3) of this SECTION 7.5(B)
                        Determinations and allocations by any Funding Party for
                        purposes of this SECTION 7.5(B) of the effect of any
                        Regulatory Change pursuant to PARAGRAPH 1) or 3) of this
                        SECTION 7.5(B), or of the effect of capital maintained
                        pursuant to PARAGRAPH 3) of this SECTION 7.5(B), on its
                        costs or rate of return of maintaining Funded Amounts or
                        its obligation to make Funded Amounts, or on amounts
                        receivable by it in respect of Funded Amounts, and of
                        the amounts required to compensate such Funding Party
                        under this SECTION 7.7(B), shall be conclusive, absent
                        demonstrable error, PROVIDED that such determinations
                        and allocations are made and attributed on a reasonable
                        basis.

                              5) Without limiting the effect of the foregoing,
                        the Company shall pay to each Funding Party on the last
                        day of each Rent Period so long as such Funding Party is
                        maintaining reserves against "Eurocurrency liabilities"
                        under Regulation D (or, unless the provisions of
                        PARAGRAPH 2) above are applicable, so long as such
                        Funding Party is, by reason of any Regulatory Change,
                        maintaining reserves against any other category of
                        liabilities which includes deposits by reference to
                        which the interest rate on Eurodollar Advances is
                        determined as provided in the Operative Documents or
                        against any category of extensions of credit or other
                        assets of such Funding Party (which includes any
                        Eurodollar Advances) an additional amount (determined by
                        such Funding Party and notified to the Company through
                        the Administrative Agent) equal to the product of the
                        following for each Eurodollar Advance for each day
                        during such Rent Period:

                                    (A) the principal amount of such Eurodollar
                              Advance outstanding on such day; and

                                    (B) the remainder of (x) the fraction the
                              numerator of which is the rate (expressed as a
                              decimal) at which interest accrues on such
                              Eurodollar Advance for such Rent Period as
                              provided in this Master Agreement or the Loan
                              Agreement (less the Applicable Margin) and the
                              denominator of which is one MINUS the effective
                              rate (expressed as a decimal) at which such
                              reserve requirements

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<PAGE>
                              are imposed on such Funding Party on such day
                              MINUS (y) such numerator; and

                                    (C) 1/360.

                              6) Notwithstanding anything in this SECTION 7.7(B)
                        to the contrary, to the extent that any Funding Party
                        does not charge all of its customers who are similarly
                        situated to the Company in respect of any Additional
                        Costs or other cost or compensation referred to this
                        SECTION 7.7(B), such Funding Party shall not charge the
                        Company for such Additional Cost or other cost or
                        compensation.

            (c)    LIMITATION ON TYPES OF ADVANCES. Anything herein to the
      contrary notwithstanding, if, on or prior to the determination of any
      Eurodollar Rate for any Rent Period:

                  (i) the Administrative Agent determines, which determination
            shall be conclusive, that quotations of interest rates for the
            relevant deposits referred to in the definition of "Eurodollar Rate"
            are not being provided in the relevant amounts or for the relevant
            maturities for purposes of determining rates of interest for
            Eurodollar Advances as provided herein; or

                  (ii) if the Required Funding Parties determine, which
            determination shall be conclusive, and notify (or notifies, as the
            case may be) the Administrative Agent that the relevant rates of
            interest referred to in the definition of "Eurodollar Rate" upon the
            basis of which the rate of interest for Eurodollar Advances for such
            Rent Period is to be determined do not adequately cover the cost to
            such Funding Parties of making or maintaining Eurodollar Advances
            for such Rent Period;

then the Administrative Agent shall give the Company and each Funding Party
prompt notice thereof and, so long as such condition remains in effect, the
Funding Parties shall be under no obligation to make additional Eurodollar
Advances, to continue Eurodollar Advances or to convert Base Rate Advances into
Eurodollar Advances, and the Company shall, on the last day(s) of the then
current Rent Period(s) for the outstanding Eurodollar Advances, either prepay
such Advances or convert such Advances into Base Rate Advances in accordance
with SECTION 2.08 hereof.

            (d)    ILLEGALITY. Notwithstanding any other provision of this
      Master Agreement, in the event that it becomes unlawful for any Funding
      Party or its Applicable Lending Office to honor its obligation to make or
      maintain Eurodollar Advances hereunder, then such Funding Party shall
      promptly notify the Company thereof (with a copy to the Administrative
      Agent) and such Funding Party's obligation to make or continue, or to
      convert Base Rate Advances into, Eurodollar Advances shall be suspended
      until such time as such Funding Party may again make and maintain
      Eurodollar Advances (in which case the provisions of SECTION 7.5(E) hereof
      shall be applicable).

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            (e)    TREATMENT OF EURODOLLAR ADVANCES. If the obligation of any
      Funding Party to make Eurodollar Advances or to continue, or to convert
      Base Rate Advances into, Eurodollar Advances shall be suspended pursuant
      to SECTION 7.5(B) or 7.5(D) hereof, such Funding Party's Eurodollar
      Advances shall be automatically converted into Base Rate Advances on the
      last day(s) of the then current Rent Period(s) for Eurodollar Advances
      (or, in the case of a conversion required by SECTION 7.5(B) or 7.5(D)
      hereof, on such earlier date as such Funding Party may specify to the
      Company with a copy to the Administrative Agent) and, unless and until
      such Funding Party gives notice as provided below that the circumstances
      specified in SECTION 7.5(B) or 7.5(D) hereof that gave rise to such
      conversion no longer exist:

                  (i) to the extent that such Funding Party's Eurodollar
            Advances have been so converted, all payments and prepayments of
            principal that would otherwise be applied to such Funding Party's
            Eurodollar Advances shall be applied instead to its Base Rate
            Advances; and

                  (ii) all Advances that would otherwise be made or continued by
            such Funding Party as Eurodollar Advances shall be made or continued
            instead as Base Rate Advances, and all Advances of such Funding
            Party that would otherwise be converted into Eurodollar Advances
            shall be converted instead into (or shall remain as) Base Rate
            Advances.

      If such Funding Party gives notice to the Company with a copy to the
Administrative Agent that the circumstances specified in SECTION 7.5(B) or
7.5(D) hereof that gave rise to the conversion of such Funding Party's
Eurodollar Advances pursuant to this SECTION 7.5(E) no longer exist (which such
Funding Party agrees to do promptly upon such circumstances ceasing to exist) at
a time when Eurodollar Advances made by other Funding Parties are outstanding,
such Funding Party's Base Rate Advances shall be automatically converted, on the
first day(s) of the next succeeding Rent Period(s) for such outstanding
Eurodollar Advances, to the extent necessary so that, after giving effect
thereto, all Advances held by the Funding Parties holding Eurodollar Advances
and by such Funding Party are held pro rata (as to principal amounts, types and
Rent Periods) in accordance with their respective Commitments.

            (f)    COMPENSATION. The Company shall pay to the Administrative
      Agent for account of each Funding Party, upon the request of such Funding
      Party through the Administrative Agent, such amount or amounts as shall be
      sufficient (in the reasonable opinion of such Funding Party) to compensate
      it for any loss, cost or expense actually incurred that such Funding Party
      determines is attributable to:

                  (i) any payment, mandatory or optional prepayment or
            Conversion of a Eurodollar Advance made by such Funding Party for
            any reason on a date other than the last day of the Rent Period for
            such Loan; or

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                  (ii) any failure by the Company for any reason (including,
            without limitation, the failure of any of the conditions precedent
            specified in SECTION 3 hereof to be satisfied) to draw a Eurodollar
            Advance from such Funding Party on the date for such borrowing
            specified in the relevant notice of borrowing given pursuant to
            SECTION 2.02 hereof.

            Without limiting the effect of the preceding sentence, such
      compensation shall include an amount equal to the excess, if any, of (i)
      the amount of interest that otherwise would have accrued on the principal
      amount so paid, prepaid, converted or not funded (other than the portion
      thereof consisting of the Applicable Margin) for the period from the date
      of such payment, prepayment, conversion or failure to fund to the last day
      of the then current Rent Period for such Advance (or, in the case of a
      failure to fund, the Rent Period for such Advance that would have
      commenced on the date specified for such Funding) at the applicable rate
      of interest for such Advance provided for herein or in the Loan Agreement
      over (ii) the amount of interest that otherwise would have accrued on such
      principal amount at a rate per annum equal to the interest component of
      the amount such Funding Party would have bid in the London interbank
      market for Dollar deposits of leading banks in amounts comparable to such
      principal amount and with maturities comparable to such period (as
      reasonably determined by such Funding Party). Notwithstanding anything to
      the contrary set forth herein or in any of the other Operative Documents,
      neither any Lessee, any Guarantor or the Company shall have any obligation
      to pay or reimburse any other Person for breakage costs payable under this
      Master Agreement or any other Operative Document which arise solely by
      reason of acceleration of the maturity of Lessors obligations under the
      Loan Agreement at a time when no Event of Default exists.

            (g)    SUBSTITUTION OF FUNDING PARTIES. In the event that the
      Company becomes obligated to pay additional amounts to any Funding Party
      pursuant to SECTION 7.5(b) hereof, then (unless such Funding Party has
      theretofore taken steps to remove or cure, and has removed or cured, the
      conditions creating the cause for such obligation to pay such additional
      amounts), then the Company may, so long as no Default shall be continuing,
      within 60 days after the demand by such Funding Party for such additional
      amounts, designate another bank which is acceptable to the Administrative
      Agent and the Required Funding Parties (such other bank being herein
      called a "REPLACEMENT FUNDING PARTY") to purchase all of the Funded
      Amounts of such Funding Party and all of such Funding Party's rights and
      obligations hereunder (without recourse to or warranty by, or expense to,
      such Funding Party) for a purchase price equal to the outstanding
      principal amount of such Funding Party's Funded Amount plus any accrued
      but unpaid interest thereon and any accrued but unpaid fees in respect of
      such Funding Party's Commitments and any other amounts then payable to
      such Funding Party under the Operative Documents, and to assume all of the
      obligations of such Funding Party hereunder (except for such rights as
      survive the repayment of the Advances) and, upon such purchase such
      Funding Party shall no longer be a party hereto or have any rights
      hereunder (except for those that survive repayment of the Advances) and
      shall be released from all of its obligations under the Operative
      Documents, and the Replacement Funding Party shall succeed to the rights
      and obligations of such Funding Party under the Operative Documents.

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      SECTION 7.6. END OF TERM INDEMNITY. In the event that at the end of the
Lease Term for the Leased Properties: (i) the related Lessee elects the option
set forth in Section 14.6 of the Lease, and (ii) after the Lessor receives the
sales proceeds from the Leased Properties under Section 14.6 or 14.7 of the
Lease, together with Lessees' payment of the Recourse Deficiency Amount, the
Lessor shall not have received the entire Lease Balance, then, within 90 days
after the end of the Lease Term, the Lessor or the Administrative Agent may
obtain, at Lessees' sole cost and expense, a report from the Appraiser (or, if
the Appraiser is not available, another appraiser reasonably satisfactory to the
Lessor or the Administrative Agent, as the case may be, and approved by the
Company, such approval not to be unreasonably withheld) in form and substance
satisfactory to the Lessor and the Administrative Agent (the "REPORT") to
establish the reason for any decline in value of the Leased Properties from the
Lease Balance. Lessees, jointly and severally, shall promptly reimburse the
Lessor for the amount equal to such decline in value to the extent that the
Report indicates that such decline was due to

            (w)    extraordinary use, failure to maintain, to repair, to
      restore, to rebuild or to replace, failure to comply with all Applicable
      Laws, failure to use, good workmanship, method of installation or removal
      or maintenance, repair, rebuilding or replacement, or any other cause or
      condition within the power of a Lessee to control or effect resulting in
      the Building failing to be of the type and quality contemplated by the
      Appraisal (excepting in each case ordinary wear and tear), or

            (x)    any Alteration made to, or any rebuilding of, any Leased
      Property or any part thereof by any Lessee, or

            (y)    any restoration or rebuilding carried out by any Lessee or
      any condemnation of any portion of any Leased Property pursuant to Article
      X of the Lease, or

            (z)    any use of any Leased Property or any part thereof by any
      Lessee other than as permitted by the Lease, or any act or omission
      constituting a breach of any requirement, condition, restriction or
      limitation set forth in the related Deed or the related Purchase
      Agreement.

      SECTION 7.7. GUARANTEE.

            (a)    THE GUARANTEE. The Subsidiary Guarantors hereby jointly and
      severally guarantee to each Funding Party and the Administrative Agent and
      their respective successors and assigns the prompt payment in full when
      due (whether at stated maturity, by acceleration or otherwise) of the
      Obligations and all other amounts from time to time owing to the Funding
      Parties hereunder or under the other Operative Documents, in each case
      strictly in accordance with the terms thereof (such obligations being
      herein collectively called the "GUARANTEED OBLIGATIONS"). The Subsidiary
      Guarantors hereby further jointly and severally agree that if the Company
      shall fail to pay in full when due (whether at stated maturity, by
      acceleration or otherwise) any of the GUARANTEED OBLIGATIONS, the
      Subsidiary Guarantors will promptly pay the same, without any

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      demand or notice whatsoever, and that in the case of any extension of time
      of payment or renewal of any of the Guaranteed Obligations, the same will
      be promptly paid in full when due (whether at extended maturity, by
      acceleration or otherwise) in accordance with the terms of such extension
      or renewal.

            (b)    OBLIGATIONS UNCONDITIONAL. The obligations of the Subsidiary
      Guarantors under SECTION 7.7(A) hereof are absolute and unconditional,
      joint and several, irrespective of the value, genuineness, validity,
      regularity or enforceability of the obligations of the Company under this
      Master Agreement, or any other agreement or instrument referred to herein
      or therein, or any substitution, release or exchange of any other
      guarantee of or security for any of the Guaranteed Obligations, and, to
      the fullest extent permitted by applicable law, irrespective of any other
      circumstance whatsoever that might otherwise constitute a legal or
      equitable discharge or defense of a surety or guarantor, it being the
      intent of this SECTION 7.7(B) that the obligations of the Subsidiary
      Guarantors hereunder shall be absolute and unconditional, joint and
      several, under any and all circumstances. Without limiting the generality
      of the foregoing, it is agreed that the occurrence of any one or more of
      the following shall not alter or impair the liability of the Subsidiary
      Guarantors hereunder which shall remain absolute and unconditional as
      described above:

                  (i) at any time or from time to time, without notice to the
            Subsidiary Guarantors, the time for any performance of or compliance
            with any of the Guaranteed Obligations shall be extended, or such
            performance or compliance shall be waived;

                  (ii) any of the acts mentioned in any of the provisions of
            this Master Agreement or any other agreement or instrument referred
            to herein shall be done or omitted;

                  (iii) the maturity of any of the Guaranteed Obligations shall
            be accelerated, or any of the Guaranteed Obligations shall be
            modified, supplemented or amended in any respect, or any right under
            this Master Agreement or any other agreement or instrument referred
            to herein shall be waived or any other guarantee of any of the
            Guaranteed Obligations or any security therefor shall be released or
            exchanged in whole or in part or otherwise dealt with; or

                  (iv) any lien or security interest granted to, or in favor of,
            the Administrative Agent or any Lender or Lenders as security for
            any of the Guaranteed Obligations shall fail to be perfected.

      The Subsidiary Guarantors hereby expressly waive diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement that
the Administrative Agent, the Lessor or any Lender exhaust any right, power or
remedy or proceed against the Company under any Operative Document or any other
agreement or instrument referred to herein or therein, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.

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            (c)    REINSTATEMENT. The obligations of the Subsidiary Guarantors
      under this SECTION 7.7 shall be automatically reinstated if and to the
      extent that for any reason any payment by or on behalf of the Company in
      respect of the Guaranteed Obligations is rescinded or must be otherwise
      restored by any holder of any of the Guaranteed Obligations, whether as a
      result of any proceedings in bankruptcy or reorganization or otherwise and
      the Subsidiary Guarantors jointly and severally agree that they will
      indemnify the Administrative Agent, the Lessor and each Lender on demand
      for all reasonable costs and expenses (including, without limitation, fees
      of counsel) incurred by the Administrative Agent or such Lender in
      connection with such rescission or restoration, including any such costs
      and expenses incurred in defending against any claim alleging that such
      payment constituted a preference, fraudulent transfer or similar payment
      under any bankruptcy, insolvency or similar law.

            (d)    SUBROGATION. The Subsidiary Guarantors hereby jointly and
      severally agree that until the payment and satisfaction in full of all
      Guaranteed Obligations and the expiration and termination of the
      Commitments of the Funding Parties under this Master Agreement they shall
      not exercise any right or remedy arising by reason of any performance by
      them of their guarantee in SECTION 7.7(A) hereof, whether by subrogation
      or otherwise, against the Company or any other guarantor of any of the
      Guaranteed Obligations or any security for any of the Guaranteed
      Obligations.

            (e)    REMEDIES. The Subsidiary Guarantors jointly and severally
      agree that, as between the Subsidiary Guarantors and the Funding Parties,
      the obligations of the Lessee under the Lease may be declared to be
      forthwith due and payable as provided in Article XIII of the Lease (and
      shall be deemed to have become automatically due and payable in the
      circumstances provided in Article XIII) for purposes of SECTION 7.7(A)
      hereof notwithstanding any stay, injunction or other prohibition
      preventing such declaration (or such obligations from becoming
      automatically due and payable) as against the Company or any Lessee and
      that, in the event of such declaration (or such obligations being deemed
      to have become automatically due and payable), such obligations (whether
      or not due and payable by the Company) shall forthwith become due and
      payable by the Subsidiary Guarantors for purposes of said SECTION 7.7(A).

            (f)    INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor hereby
      acknowledges that the guarantee in this SECTION 7.7 constitutes an
      instrument for the payment of money, and consents and agrees that any
      Lender, the Lessor or the Administrative Agent, at its sole option, in the
      event of a dispute by such Guarantor in the payment of any moneys due
      hereunder, shall have the right to bring motion-action under New York CPLR
      Section 3213.

            (g)    CONTINUING GUARANTEE. The guarantee in this SECTION 7.7 a
      continuing guarantee, and shall apply to all Guaranteed Obligations
      whenever arising.

            (h)   RIGHTS OF CONTRIBUTION. The Subsidiary Guarantors hereby
      agree, as between themselves, that if any Subsidiary Guarantor shall
      become an Excess Funding Guarantor (as defined below) by reason of the
      payment by such Subsidiary Guarantor of any Guaranteed

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      Obligations, each other Subsidiary Guarantor shall, on demand of such
      Excess Funding Guarantor (but subject to the next sentence), pay to such
      Excess Funding Guarantor an amount equal to such Subsidiary Guarantor's
      Pro Rata Share (as defined below and determined, for this purpose, without
      reference to the Properties, debts and liabilities of such Excess Funding
      Guarantor) of the Excess Payment (as defined below) in respect of such
      Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor
      to any Excess Funding Guarantor under this SECTION 7.7(H) shall be
      subordinate and subject in right of payment to the prior payment in full
      of the obligations of such Subsidiary Guarantor under the other provisions
      of this SECTION 7.7 and such Excess Funding Guarantor shall not exercise
      any right or remedy with respect to such excess until payment and
      satisfaction in full of all of such obligations.

      For purposes of this SECTION 7.7(H), (i) "EXCESS FUNDING GUARANTOR" shall
mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has
paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) "EXCESS PAYMENT" shall mean, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations and (iii) "PRO RATA SHARE" shall mean, for any
Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the amount by
which the aggregate present fair saleable value of all Properties of such
Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all Properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Company and the Subsidiary Guarantors
hereunder) of the Company and all of the Subsidiary Guarantors, all as of the
Initial Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Initial Closing Date, then for purposes of this SECTION 7.7(H)
such subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Initial Closing Date and the aggregate present fair saleable
value of the Properties, and the amount of the debts and liabilities, of such
Subsidiary Guarantor as of the Initial Closing Date shall be deemed to be equal
to such value and amount on the date such Subsidiary Guarantor becomes a
Subsidiary Guarantor hereunder.

            (i) GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
SECTION 7.7(A) hereof would otherwise, taking into account the provisions of
SECTION 7.7(H) hereof, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under said SECTION 7.7(A), then, notwithstanding
any other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Subsidiary Guarantor, any Lender, the
Administrative Agent or any other Person, be automatically limited and reduced
to the highest

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amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.

                                  ARTICLE VIII
                                  MISCELLANEOUS

      SECTION 8.1. SURVIVAL OF AGREEMENTS. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Master Agreement and any of the other Operative Documents, the transfer of
any Land to the Lessor as provided herein (and shall not be merged into any
Deed), any disposition of any interest of the Lessor in any Leased Property, the
purchase and sale of the Note and any Fundings hereunder and shall be and
continue in effect notwithstanding any investigation made by any party hereto or
to any of the other Operative Documents and the fact that any such party may
waive compliance with any of the other terms, provisions or conditions of any of
the Operative Documents.

      SECTION 8.2. NOTICES. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be addressed to such parties at the addresses therefor as set forth
in SCHEDULE 8.2, or such other address as any such party shall specify to the
other parties hereto, and shall be deemed to have been given (i) the Business
Day after being sent, if sent by overnight courier service; (ii) the Business
Day received, if sent by messenger; (iii) the day sent, if sent by facsimile and
confirmed electronically or otherwise during business hours of a Business Day
(or on the next Business Day if otherwise sent by facsimile and confirmed
electronically or otherwise); or (iv) three Business Days after being sent, if
sent by registered or certified mail, postage prepaid.

      SECTION 8.3.COUNTERPARTS. This Master Agreement may be executed by the
parties hereto in separate counterparts (including by facsimile), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.

      SECTION 8.4. AMENDMENTS. No Operative Document nor any of the terms
thereof may be terminated, amended, supplemented, waived or modified with
respect to the Company, any Lessee or any Operative Party, except (a) in the
case of a termination, amendment, supplement, waiver or modification to be
binding on the Lessees, with the written agreement or consent of the Company,
and (b) in the case of a termination, amendment, supplement, waiver or
modification to be binding on the Operative Parties, with the written agreement
or consent of the Required Operative Parties; PROVIDED, HOWEVER, that

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            (w)    notwithstanding the foregoing provisions of this SECTION 8.4
      or CLAUSE (Y) below, the consent of each Operative Party affected thereby
      shall be required for any amendment, modification or waiver directly:

                  (i) modifying any of the provisions of this SECTION 8.4,
            changing the definition of "REQUIRED OPERATIVE PARTIES" or "REQUIRED
            LENDERS", or increasing the Commitment of such Operative Party;

                  (ii) amending, modifying, waiving or supplementing any of the
            provisions of SECTION 3 of the Loan Agreement or the representations
            of such Operative Party in SECTION 4.2 or 4.3 or the covenants of
            such Operative Party in SECTION 6 of this Master Agreement;

                  (iii) reducing any amount payable to such Operative Party
            under the Operative Documents or extending the time for payment of
            any such amount, including, without limitation, any Rent, any Funded
            Amount, any fees, any indemnity, any Leased Property Balance, the
            Lease Balance, any Funding Party Balance, the Recourse Deficiency
            Amount, interest or Yield; or

                  (iv) consenting to any assignment of the Lease or the
            extension of the Lease Term, releasing any of the collateral
            assigned to the Administrative Agent and the B Lenders pursuant to
            any Mortgage and any Assignment of Lease and Rents (but excluding a
            release of any rights that the B Lenders may have in any Leased
            Property, or the proceeds thereof as contemplated in the definition
            of "RELEASE DATE"), releasing any Lessee from its obligations in
            respect of the payments of Rent and the Lease Balance, releasing the
            Company from its payment obligations under the Operative Documents
            or changing the absolute and unconditional character of any such
            obligation; and

            (x)    no such termination, amendment, supplement, waiver or
      modification shall, without the written agreement or consent of the
      Lessor, the Administrative Agent and the Required Lenders, be made to the
      Lease or any Security Agreement and Assignment;

            (y)    subject to the foregoing CLAUSES (W) and (X), so long as no
      Event of Default has occurred and is continuing, the Lessor, the
      Administrative Agent and the B Lenders may not amend, supplement, waive or
      modify any terms of the Loan Agreement, the Note, the Mortgages and the
      Assignments of Lease and Rents without the consent of the Company (such
      consent not to be unreasonably withheld or delayed); PROVIDED that in no
      event may the Loan Agreement or the Note be amended so as to increase the
      amount of Basic Rent payable by the Lessees without the consent of the
      Company; and

            (z)    Notwithstanding the foregoing, (i) SECTIONS 5.1(A) through
      (S) and 5.1(U) through (W) may only be amended or waived with the consent
      of the Combined

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      Determination Parties, and any determination as to whether the events
      described in Article XII (j), (k), (l) or (m) of the Lease have occurred
      and the giving of any consent by the Administrative Agent under the 2000
      Subordination Agreement shall require the agreement of the Combined
      Determination Parties and (ii) the provisions of Section 3 of the Loan
      Agreement and any provisions of the Lease or any other Operative Document
      with respect to any amount payable to, or for the benefit of, any
      Synthetic Lease Loan Lender including, without limitation, any Basic Rent,
      any Funded Amount, any indemnity, any Leased Property Balance, the Lease
      Balance, any Funding Party Balance or the Recourse Deficiency Amount shall
      not be terminated, amended, supplemented, waived or modified with the
      consent of each affected Synthetic Lease Loan Lender.

      SECTION 8.5. HEADINGS, ETC. The Table of Contents and headings of the
various Articles and Sections of this Master Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.

      SECTION 8.6. PARTIES IN INTEREST. Except as expressly provided herein
(including as expressly provided herein with respect to the Synthetic Lease Loan
Lenders), none of the provisions of this Master Agreement is intended for the
benefit of any Person except the parties hereto and their respective successors
and permitted assigns. Each Synthetic Lease Lender is an intended and
third-party beneficiary of each provision of this Master Agreement that is
stated to be for the benefit of the Synthetic Lease Loan Lenders, the Lenders or
the Funding Parties.

      SECTION 8.7. GOVERNING LAW. THIS MASTER AGREEMENT HAS BEEN DELIVERED IN,
AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.

      SECTION 8.8. EXPENSES. Whether or not the transactions herein contemplated
are consummated, Lessees, jointly and severally agree to pay, all actual,
reasonable and documented out-of-pocket costs and expenses of the Lessor, the
Administrative Agent and the Lenders in connection with the preparation,
execution and delivery of the Operative Documents and the documents and
instruments referred to therein and any amendment, waiver or consent relating
thereto (including, without limitation, the reasonable fees and disbursements of
Mayer, Brown & Platt, but not including any fees and disbursements for any other
outside counsel representing any Lender) and of the Lessor, the Administrative
Agent and the Lenders in connection with endeavoring to enforce the Operative
Documents and the documents and instruments referred to therein (including,
without limitation, the reasonable fees actually incurred and disbursements of
counsel for the Lessor, the Administrative Agent and the Lenders). All
references in the Operative Documents to "ATTORNEYS FEES" or "REASONABLE
ATTORNEYS FEES" shall mean reasonable attorney's fees actually incurred, without
regard to any statutory definition thereof.

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      SECTION 8.9. SEVERABILITY. Any provision of this Master Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

      SECTION 8.10 LIABILITIES OF THE FUNDING PARTIES. No Funding Party shall
have any obligation to any other Funding Party or to the Company or any Lessee
with respect to the transactions contemplated by the Operative Documents except
those obligations of such Funding Party expressly set forth in the Operative
Documents or except as set forth in the instruments delivered in connection
therewith, and no Funding Party shall be liable for performance by any other
party hereto of such other partys obligations under the Operative Documents
except as otherwise so set forth. No Lender shall have any obligation or duty to
the Company or any Lessee, any other Funding Parties or any other Person with
respect to the transactions contemplated hereby except to the extent of the
obligations and duties expressly set forth in this Master Agreement or the Loan
Agreement.

      SECTION 8.11 SUBMISSION TO JURISDICTION; WAIVERS. Each party hereto hereby
irrevocably and unconditionally:

                  (i) submits for itself and its property in any legal action or
            proceeding relating to this Master Agreement or any other Operative
            Document, or for recognition and enforcement of any judgment in
            respect thereof, to the non-exclusive general jurisdiction of the
            Courts of the State of New York sitting in the Borough of Manhattan,
            the courts of the United States of America for the Southern District
            of New York, and appellate courts from any thereof;

                  (ii) consents that any such action or proceedings may be
            brought to such courts, and waives any objection that it may now or
            hereafter have to the venue of any such action or proceeding in any
            court or that such action or proceeding was brought in an
            inconvenient court and agrees not to plead or claim the same;

                  (iii) agrees that service of process in any such action or
            proceeding may be effected by mailing a copy thereof by registered
            or certified mail (or any substantially similar form of mail),
            postage prepaid, to such party at its address set forth in SCHEDULE
            8.2 or at such other address of which the other parties hereto shall
            have been notified pursuant to SECTION 8.2; and

                  (iv) agrees that nothing herein shall affect the right to
            effect service of process in any other manner permitted by law.

      SECTION 8.12 LIABILITIES OF THE ADMINISTRATIVE AGENT; REFERENCES. The
Administrative Agent shall have no duty, liability or obligation to any party to
this Master Agreement with respect to the transactions contemplated hereby
except those duties, liabilities or obligations

                                       73
<PAGE>
expressly set forth in this Master Agreement or the Loan Agreement, and any such
duty, liability or obligations of the Administrative Agent shall be as expressly
limited by this Master Agreement or the Loan Agreement, as the case may be. All
parties to this Master Agreement acknowledge that the Administrative Agent is
not, and will not be, performing any due diligence with respect to documents and
information received pursuant to this Master Agreement or any other Operative
Agreement including, without limitation, any Environmental Audit, Title Policy
or survey. The acceptance by the Administrative Agent of any such document or
information shall not constitute a waiver by any Funding Party of any
representation or warranty of the Company or any Lessee even if such document or
information indicates that any such representation or warranty is untrue. Each
reference to the "SYNDICATION AGENT" in the Operative Documents, other than this
Master Agreement, shall be deemed to be a reference to the Administrative Agent.

                                       74
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Master Agreement
to be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.

                                CORNELL COMPANIES, INC.,
                                as Guarantor and as a Lessee

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                WBP LEASING, INC.,
                                as a Lessee

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                SUBSIDIARY GUARANTORS

                                CORNELL CORRECTIONS MANAGEMENT, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CORNELL CORRECTIONS CONSULTING, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CORNELL CORRECTIONS OF RHODE ISLAND, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-75                    MASTER AGREEMENT
<PAGE>
                               THE CORNELL COX GROUP, L.P.

                                By  CORNELL CORRECTIONS OF NORTH AMERICA, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CORNELL CORRECTIONS OF GEORGIA, L.P.

                                By: CCG I Corporation

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CORNELL CORRECTIONS OF OKLAHOMA, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                WBP LEASING, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CORNELL CORRECTIONS OF NORTH  AMERICA, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-76                    MASTER AGREEMENT
<PAGE>
                                CORNELL CORRECTIONS OF CALIFORNIA, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CORNELL CORRECTIONS OF TEXAS, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                INTERNATIONAL SELF HELP SERVICES, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CCG I CORPORATION

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CORNELL CORRECTIONS OF ALASKA, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                CORNELL INTERVENTIONS, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-77                    MASTER AGREEMENT
<PAGE>
                                CORNELL ABRAXAS GROUP, INC.

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-78                    MASTER AGREEMENT

<PAGE>
                                ATLANTIC FINANCIAL GROUP, LTD.,  as Lessor

                                By: Atlantic Financial Managers, Inc., its
                                    General Partner

                                By _____________________________________________
                                Name Printed: Stephen Brookshire
                                Title: President

                                                            AMENDED AND RESTATED
                                      S-79                    MASTER AGREEMENT
<PAGE>
                                SUNTRUST BANK, as a B Lender

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                SUNTRUST EQUITABLE SECURITIES CORPORATION,
                                as Documentation Agent

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-80                    MASTER AGREEMENT
<PAGE>
                                ING (U.S.) CAPITAL LLC, as Administrative
                                Agent and as a B Lender

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-81                    MASTER AGREEMENT
<PAGE>
                                COMERICA BANK, as a B Lender

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-82                    MASTER AGREEMENT
<PAGE>
                                GUARANTY FEDERAL BANK, F.S.B., as a B Lender

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-83                    MASTER AGREEMENT
<PAGE>
                                FIRSTAR BANK, N.A., as a B Lender

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-84                    MASTER AGREEMENT
<PAGE>
                                BHF (USA) CAPITAL CORPORATION, as a B Lender

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-85                    MASTER AGREEMENT
<PAGE>
                                SOUTHTRUST BANK, as a B Lender

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-86                    MASTER AGREEMENT
<PAGE>
                                SUMMIT BANK, as a B Lender

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-87                    MASTER AGREEMENT
<PAGE>
                                BANK OF AMERICA, N.A., as a B Lender and as
                                Syndication Agent

                                By _____________________________________________
                                Name ___________________________________________
                                Title __________________________________________

                                                            AMENDED AND RESTATED
                                      S-88                    MASTER AGREEMENT
<PAGE>
                                  SCHEDULE 2.2

                    AMOUNT OF EACH FUNDING PARTY'S COMMITMENT

Lessor Commitment Percentage:           3.0%

Lessor Commitment:                      $3,500,000

B Lender Commitment Percentages:

   SunTrust Bank                                         1.7621%
   ING (U.S.) Capital LLC                                2.1586%
   Comerica Bank                                         1.7181%
   Guaranty Federal Bank                                 1.7181%
   Firstar Bank                                          1.7181%
   BHF (USA) Capital                                     1.3216%
   SouthTrust                                            1.3216%
   Summit Bank                                           1.3216%
   Bank of America                                       2.0705%

B Lender Commitments:
    SunTrust Bank                                  $1,762,104.41
    ING (U.S.) Capital LLC                         $2,158,577.90
    Comerica Bank                                  $1,718,051.80
    Guaranty Federal Bank                          $1,718,051.80
    Firstar Bank                                   $1,718,051.80
    BHF (USA) Capital                              $1,321,578.31
    SouthTrust                                     $1,321,578.31
    Summit Bank                                    $1,321,578.31
    Bank of America                                $2,070,472.68

       Total                                      $15,110,045.33

<PAGE>
Synthetic Lease Loan Lenders
Commitment Percentages:

    SunTrust Bank                                       9.4195%
    ING (U.S.) Capital LLC                             11.6271%
    Comerica Bank                                       9.2543%
    Guaranty Federal Bank                               9.2543%
    Firstar Bank                                        9.2543%
    BHF (USA) Capital                                   7.1187%
    SouthTrust                                          7.1187%
    Summit Bank                                         7.1187%
    Bank of America                                    11.1526%

Synthetic Lease Loan Lender Commitments:
    SunTrust Bank                                 $9,491,539.90
    ING (U.S.) Capital LLC                       $11,627,136.38
    Comerica Bank                                 $9,254,251.41
    Guaranty Federal Bank                         $9,254,251.41
    Firstar Bank                                  $9,254,251.41
    BHF (USA) Capital                             $7,118,654.93
    SouthTrust                                    $7,118,654.93
    Summit Bank                                   $7,118,654.93
    Bank of America                              $11,152,559.39

        Total                                    $81,389,954.67
<PAGE>
                                  SCHEDULE 8.2

                              ADDRESSES FOR NOTICES

Company:                Cornell Companies, Inc.
                        1700 West Loop South, Suite 1500
                        Houston, Texas 77027
                        Attn: Mr. John L. Hendrix
                        Facsimile:  713/623-2853
                        Telephone: 713/235-9321

                        with a copy to:

                        Liddell Sapp
                        600 Travis, Suite 3200
                        Houston, Texas 77002
                        Attn:  Brett Hamilton
                        Facsimile:   713/223-3717
                        Telephone:  713/226-1298

Lessor:                 Atlantic Financial Group, Ltd.
                        1000 Ballpark Way, Suite 304
                        Arlington, Texas 76011
                        Attn:  Stephen Brookshire
                        Facsimile: 817/265-0537
                        Telephone: 817/265-1263

B Lender:               SunTrust Bank
                        Corporate and Investment Banking
                        201 4th Avenue North
                        Nashville, Tennessee 37219
                        Attn: William Crawford
                        Facsimile:  615/748-5269
                        Telephone: 615/748-4629

                        with a copy to:

                        SunTrust Equitable Securities Corporation
                        303 Peachtree Street, 24th Floor
                        Mail Code 3943
                        Atlanta, Georgia 30308
                        Attn: Kevin Vermillion
                        Facsimile: 404/230-1344
<PAGE>
                        Telephone:  404/588-7844

B Lender and            ING (U.S) Capital LLC
Administrative Agent:   55 East 52nd Street
                        New York, New York  10055
                        Attn:   Merchant Banking Group - New York
                        Facsimile: 212/409-5879
                        Telephone: 212/409-1955

                        BANK OF AMERICA, N.A.
                        700 Louisiana Street, 7th Floor
                        Houston, Texas 77002
                        Attn: Craig S. Wall
                        Facsimile: 713/247-7748
                        Telephone: 713/247-6559

                        COMERICA BANK
                        US Bank Department
                        4100 Spring Valley Road, Ste. 400
                        Dallas, TX 75244
                        Attn: Brian O. Donley
                        Facsimile: 972/361-2550
                        Telephone: 972/361-2548

                        GUARANTY FEDERAL BANK, F.S.B.
                        333 Clay Street, Suite 4430
                        Houston, Texas 77002
                        Attn: Richard Menchaca
                        Facsimile: 713/759-0765
                        Telephone: 713/759-9134

                        FIRSTAR BANK, N.A.
                        One Firstar Plaza
                        St. Louis, MO 63101
                        Attn: J. Eric Hartman
                        Facsimile: 314/418-3859
                        Telephone: 314/418-2336

                        BHF (USA) CAPITAL CORPORATION
                        590 Madison Avenue
                        New York, NY 10022-2540
                        Attn: Andrew Shipman
                        Facsimile: 212/756-5536

<PAGE>
                        Telephone: 212/756-5988

                        SOUTHTRUST BANK
                        One Riverway, Suite 400
                        Houston, TX 77056
                        Attn: John Elam
                        Facsimile: 713/627-1492
                        Telephone: 713/402-3603

                        SUMMIT BANK
                        210 Main Street
                        Hackensack, NJ 07601
                        Attn: Lisa Cohen
                        Facsimile: 201/488-6185
                        Telephone: 201/646-5465
<PAGE>
                                   APPENDIX A
                                       to
                            Master Agreement, Lease,
                LOAN AGREEMENT AND CONSTRUCTION AGENCY AGREEMENT

                         DEFINITIONS AND INTERPRETATION

      A.    INTERPRETATION.  In each Operative Document, unless a clear
contrary intention appears:

            (i)  the singular number includes the plural number and VICE
      VERSA;

            (ii) reference to any Person includes such Person's successors and
      assigns but, if applicable, only if such successors and assigns are
      permitted by the Operative Documents;

            (iii)  reference to any gender includes each other gender;

            (iv) reference to any agreement (including any Operative Document),
      document or instrument means such agreement, document or instrument as
      amended, supplemented or modified and in effect from time to time in
      accordance with the terms thereof and, if applicable, the terms of the
      other Operative Documents and reference to any promissory note includes
      any promissory note which is an extension or renewal thereof or a
      substitute or replacement therefor;

            (v) reference to any Applicable Law means such Applicable Law as
      amended, modified, codified, replaced or reenacted, in whole or in part,
      and in effect from time to time, including rules and regulations
      promulgated thereunder and reference to any section or other provision of
      any Applicable Law means that provision of such Applicable Law from time
      to time in effect and constituting the substantive amendment,
      modification, codification, replacement or reenactment of such section or
      other provision;

            (vi) reference in any Operative Document to any ARTICLE, SECTION,
      APPENDIX, SCHEDULE or EXHIBIT means such ARTICLE or SECTION thereof or
      APPENDIX, SCHEDULE or EXHIBIT thereto;

            (vii) "hereunder", "hereof", "hereto" and words of similar import
      shall be deemed references to an Operative Document as a whole and not to
      any particular ARTICLE, SECTION, paragraph or other provision of such
      Operative Document;
<PAGE>
            (viii) "including" (and with correlative meaning "include") means
      including without limiting the generality of any description preceding
      such term;

            (ix)  "or" is not exclusive; and

            (x) relative to the determination of any period of time, "from"
      means "from and including" and "to" means "to but excluding".

      B. ACCOUNTING TERMS. (i) Except as otherwise expressly provided herein,
all accounting terms used in each Operative Document shall be interpreted, and
all financial statements and certificates and reports as to financial matters
required to be delivered to the Administrative Agent or the Operative Parties
under the Operative Documents shall (unless otherwise disclosed to the Operative
Parties in writing at the time of delivery thereof in the manner described in
SUBSECTION (Y) below) be prepared, in accordance with generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the latest financial statements furnished to the Administrative
Agent or the Operative Parties under the Master Agreement (which, prior to the
delivery of the first financial statements under Section 5.1(a) of the Master
Agreement shall mean the audited financial statements as at December 31, 1999).
All calculations made for the purposes of determining compliance with the Master
Agreement shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the latest annual or quarterly
financial statements furnished to the Administrative Agent or the Operative
Parties pursuant to Section 5.1(a) of the Master Agreement (or, prior to the
delivery of the first financial statements under Section 5.1(a) of the Master
Agreement, used in the preparation of the audited financial statements as at
December 31, 1999) unless (x) the Company shall have objected to determining
such compliance on such basis at the time of delivery of such financial
statements or (y) the Required Lenders shall so object in writing within 30 days
after delivery of such financial statements, in either of which events such
calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 5.1(a) of the Master Agreement
hereof, shall mean the audited financial statements as at December 31, 1999).

      (ii) The Company shall deliver to the Operative Parties at the same time
as the delivery of any annual or quarterly financial statement under Section
5.1(a) of the Master Agreement (i) a description in reasonable detail of any
material variation

                                       -2-
<PAGE>
between the application of accounting principles employed in the preparation of
such statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
SUBSECTION (I) above and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.

      (iii) To enable the ready and consistent determination of compliance with
the covenants set forth in Section 5.1 of the Master Agreement, the Company will
not change the last day of its fiscal year from December 31 of each year, or the
last days of the first three fiscal quarters in each of its fiscal years from
March 31, June 30, September 30 and December 31 of each year, respectively.

      C. CONFLICT IN OPERATIVE DOCUMENTS. If there is any conflict between any
Operative Documents, each such Operative Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Master Agreement shall
prevail and control.

      D. LEGAL REPRESENTATION OF THE PARTIES. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring any Operative Document to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.

      E. DEFINED TERMS. Unless a clear contrary intention appears, terms defined
herein have the respective indicated meanings when used in each Operative
Document.

      "A COLLATERAL CONTRIBUTION" shall have the meaning given to that term in
clause (d) of the definition of "Synthetic Lease Financing".

      "A LOAN" means the A Percentage of Fundings made pursuant to the Loan
Agreement, the Credit Agreement and the Master Agreement.

      "A PERCENTAGE" means (i) 79% with respect to Fundings related to the
Taylor Street Leased Property, (ii) 80% with respect to Fundings related to the
New Morgan Leased Property, (iii) 82% with respect to Fundings related to
Moshannon Leased Property and (iv) 85% with respect to all other Fundings.

      "ADDRESS" means with respect to any Person, its address set forth in
Schedule 8.2 to the Master Agreement or such other address as it shall have
identified to the parties to the Master

                                       -3-
<PAGE>
Agreement in writing in the manner provided for the giving of notices
thereunder.

      "ADMINISTRATIVE AGENT" means ING, in its capacity as administrative agent
under the Master Agreement and the Loan Agreement.

      "ADVANCE" means a Eurodollar Advance or a Base Rate Advance.

      "AFFILIATE" shall mean any Person that directly or indirectly controls, or
is under common control with, or is controlled by, the Company and, if such
Person is an individual, any member of the immediate family (including parents,
spouse, children and siblings) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition, "CONTROL" (including, with its correlative meanings, "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH") shall mean possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise). Notwithstanding the foregoing, (a) no individual shall
be an Affiliate solely by reason of his or her being a director, officer or
employee of the Company or any of its Subsidiaries, (b) none of the Wholly Owned
Subsidiaries of the Company shall be Affiliates and (c) neither the
Administrative Agent nor any of the Funding Parties shall be an Affiliate.

      "AFTER-TAX BASIS" means (a) with respect to any payment to be received by
an Indemnitee (which, for purposes of this definition, shall include any Tax
Indemnitee), the amount of such payment supplemented by a further payment or
payments so that, after deducting from such payments the amount of all Taxes
(net of any current credits, deductions or other Tax benefits arising from the
payment by the Indemnitee of any amount, including Taxes, for which the payment
to be received is made) imposed currently on the Indemnitee by any Governmental
Authority or taxing authority solely with respect to such payments, the balance
of such payments shall be equal to the original payment to be received and (b)
with respect to any payment to be made by any Indemnitee, the amount of such
payment supplemented by a further payment or payments so that, after increasing
such payment by the amount of any current credits or other Tax benefits realized
by the Indemnitee under the laws of any Governmental Authority or taxing
authority resulting solely from the making of such payments, the sum of such
payments (net of such credits or benefits) shall be equal to the original
payment to be made; PROVIDED, HOWEVER, for the purposes of this definition, and
for purposes of any payment to be made to either Lessee or an Indemnitee on an
after-tax basis, it shall be

                                       -4-
<PAGE>
assumed that (i) federal, state and local taxes are payable at the highest
combined marginal federal and state statutory income tax rate (taking into
account the deductibility of state income taxes for federal income tax purposes)
applicable to corporations from time to time and (ii) such Indemnitee or Lessee
has sufficient income to utilize any deductions, credits (other than foreign tax
credits, the use of which shall be determined on an actual basis) and other Tax
benefits arising from any payments described in CLAUSE (B) of this definition.

      "ALTERATIONS" means, with respect to any Leased Property, fixtures,
alterations, improvements, modifications and additions to such Leased Property.

      "APPLICABLE LAW" means all applicable laws (including Environmental Laws),
rules, regulations (including income tax regulations), statutes, treaties,
codes, ordinances, permits, certificates, orders and licenses of any
Governmental Authority, and applicable judgments, decrees, injunctions, writs or
orders of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction (including those
pertaining to health, safety or the environment (including, without limitation,
wetlands) and those pertaining to the construction, use or occupancy of any
Leased Property).

      "APPLICABLE LENDING OFFICE" shall mean, for each B Lender and for each
type of Advance, the "Lending Office" of such B Lender (or of an affiliate of
such B Lender) designated for such type of Advance (or, if no Lending Office is
so designated, the address for such B Lender specified) on Schedule 8.2 to the
Master Agreement or such other office of such B Lender (or of an affiliate of
such B Lender) as such B Lender may from time to time specify to the
Administrative Agent and the Company as the office by which its Advances of such
type are to be made and maintained.

      "APPLICABLE MARGIN" shall mean 2.50% for Base Rate Advances and 3.50% for
Eurodollar Advances; PROVIDED that if EBITDAR Ratio II as at the last day of any
fiscal quarter of the Company after the first six months from July 21, 2000
shall fall within any of the ranges set forth in Schedule A below then, subject
to the delivery to the Administrative Agent of a certificate of a senior
financial officer of the Company demonstrating such fact, the "Applicable
Margin" shall be reduced to the applicable percentage set forth in Schedule A
below opposite such range (where "x" is EBITDAR Ratio II) as of the fifth
Business Day following delivery of such certificate through the fifth Business
Day following the date of delivery of such a certificate with respect to the
next succeeding fiscal quarter (except that notwithstanding the foregoing, the
Applicable Margin shall not as a consequence of

                                       -5-
<PAGE>
this PROVISO be reduced at any time (i) prior to July 21, 2000 or (ii) during
which a Default shall have occurred and be continuing):

                                   Schedule A

                              APPLICABLE MARGIN FOR    APPLICABLE MARGIN FOR
                                ADVANCES THAT ARE        ADVANCES THAT ARE
        EBITDAR RATIO II       BASE RATE ADVANCES       EURODOLLAR ADVANCES
        ----------------      ---------------------    ---------------------
        x greater than or
          equal to 4.00               2.50%                     3.50%
        4.00 > X greater
          than or equal
          to 3.50                     2.25%                     3.25%
        3.50 > X greater
          than or equal
          to 3.00                     2.00%                     3.00%
        3.00 > X greater
          than or equal
          to 2.50                     1.75%                     2.75%
        X less than 2.50              1.50%                     2.50%

      "APPRAISAL" is defined in Section 3.1 of the Master Agreement.

      "APPRAISER" means an MAI appraiser reasonably satisfactory to the
Administrative Agent.

      "ARCHITECT" means with respect to any Leased Property the architect
engaged in connection with the construction of the related Building, if any, who
may be an employee of the General Contractor for such Leased Property.

      "ARCHITECT'S AGREEMENT" means, with respect to any Leased Property, the
architectural services agreement, if any, between a Lessee and the related
Architect.

      "ASSIGNMENT AND ASSUMPTION" means an assignment and assumption agreement,
substantially in the form of Exhibit F to the Master Agreement.

      "ASSIGNMENT OF LEASE AND RENTS" means, with respect to any Leased
Property, the Assignment of Lease and Rents, dated as of the related Closing
Date, from the Lessor to the Administrative Agent, substantially in the form of
Exhibit B to the Master Agreement.

      "AWARD" means any award or payment received by or payable to the Lessor or
a Lessee on account of any Condemnation or Event of Taking (less the actual
costs, fees and expenses, including reasonable attorneys' fees, incurred in the
collection thereof, for which the Person incurring the same shall be reimbursed
from such award or payment).

                                       -6-
<PAGE>
      "B AND C COLLATERAL CONTRIBUTION" shall have the meaning given to that
term in clause (e) of the definition of "Synthetic Lease Financing".

      "B LENDER" is defined in the preamble to the Master Agreement.

      "B LOAN" means the B Percentage of Fundings made pursuant to the Loan
Agreement and the Master Agreement.

      "B NOTE" is defined in Section 2.2 of the Loan Agreement.

      "B PERCENTAGE" means (i) 18% with respect to Fundings related to the
Taylor Street Leased Property, (ii) 17% with respect to Fundings related to the
New Morgan Leased Property, (iii) 15% with respect to Fundings related to the
Moshannon Leased Property and (iv) 12% with respect to all other Fundings.

      "BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as amended.

      "BASE RATE" shall mean, for any day, a rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the Prime Rate
for such day. Each change in any interest rate provided for herein based upon
the Base Rate resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.

      "BASE TERM" means, with respect to any Leased Property, (a) the period
commencing on the related Closing Date and ending on July 21, 2005 or (b) such
shorter period as may result from earlier termination of the Lease as provided
therein.

      "BASE RATE ADVANCE" means that portion of the Funded Amount bearing
interest at the Base Rate.

      "BASIC RENT" means the rent payable pursuant to Section 3.1 of the Lease,
determined in accordance with the following: each installment of Basic Rent
payable on any Payment Date shall be in an amount equal to the sum of (A) the
aggregate amount of Lender Basic Rent payable on such Payment Date, PLUS (B) the
aggregate amount of Lessor Basic Rent payable on such Payment Date, in each case
for the Leased Property or Properties that are then subject to the Lease.

      "BOARD" means the Board of Governors of the Federal Reserve System and any
successor thereto or to the functions thereof.

      "BOARD OF DIRECTORS", with respect to a corporation, means either the
Board of Directors or any duly authorized committee of

                                       -7-
<PAGE>
that Board which pursuant to the by-laws of such corporation has the same
authority as that Board as to the matter at issue.

      "BUILDING" means, with respect to any Leased Property, the buildings,
structures and improvements located or to be located on the related Land, along
with all fixtures used in connection with the operation of such Leased Property,
including, without limitation, all furnaces, boilers, compressors, elevators,
fittings, pipings, connectives, conduits, ducts, partitions, equipment and
apparatus of every kind and description now or hereafter affixed or attached to
the Building, equipment and goods, if any, financed by the Lessor and/or the
Lenders and all Alterations (including all restorations, repairs, replacements
and rebuilding of such buildings, improvements and structures) thereto (but in
each case excluding trade fixtures and equipment financed other than by the
Lessor or the Lenders).

      "BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which banks are required or authorized to be closed for business in Atlanta,
Georgia, New York, New York or Houston, Texas and, if the applicable Business
Day relates to a LIBOR Advance, on which trading is not carried on by and
between banks in the London interbank market.

      "CAPITAL EXPENDITURES" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant, furniture, fixtures
and equipment (including renewals, improvements and replacements thereof, but
excluding repairs made in the ordinary course of business) during such period
computed in accordance with GAAP.

      "CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of the Master Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

      "CASUALTY" means an event of damage or casualty relating to all or part of
any Leased Property that does not constitute an Event of Loss.

      "CASUALTY EVENT" shall mean, with respect to any Property of any Person,
any loss of or damage to, or any condemnation or other taking of, such Property
for which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.

                                      -8-
<PAGE>
      "CHANGE OF CONTROL" means the occurrence of any of the following:

            (a) if any person (as such term is used in section 13(d) and
      14(d)(2) of the Securities Exchange Act as in effect on the Closing Date)
      or related persons constituting a group (as such term is used in Rule
      13d-5 under the Securities Exchange Act) become the "beneficial owners"
      (as such term is used in Rule 13d-3 under the Securities Exchange Act as
      in effect on July 21, 2000), directly or indirectly, of more than forty
      percent (40%) of the issued and outstanding common stock or the total
      voting power of the Company; or

            (b) the failure of Initial Directors to constitute a majority of the
      board of directors of the Company.

      "CLAIMS" means liabilities, obligations, damages, losses, demands,
penalties, fines, claims, actions, suits, judgments, proceedings, settlements,
utility charges, costs, expenses and disbursements (including, without
limitation, reasonable legal fees and expenses) of any kind and nature
whatsoever.

      "CLOSING DATE" means, with respect to each parcel of Land, the date on
which such Land is acquired by the Lessor pursuant to a Purchase Agreement or
such Land is leased to the Lessor pursuant to a Ground Lease and the initial
Funding occurs with respect to such Land under the Master Agreement.

      "CODE" or "TAX CODE" means the Internal Revenue Code of 1986, as amended.

      "COLLATERAL SHARING DOCUMENTATION" shall mean the Intercreditor
Agreement.

      "COLLATERAL SHARING DOCUMENTATION AMENDMENT" shall mean an amendment or
other modification to the Collateral Sharing Documentation, in form and
substance satisfactory to the Administrative Agent, providing that, irrespective
of the respective priorities of the Liens of the Administrative Agent, the
Lenders (as defined in the Credit Agreement) and the holders of the Senior Notes
in the Property of the Company and its Subsidiaries.

            (x) subject to the A Collateral Contribution, the Liens of the
      Administrative Agent, the Lenders (as defined in the Credit Agreement),
      the holders of the Senior Notes and the A Lenders in such Property shall,
      as between the Administrative Agent, the Lenders (as defined in the Credit
      Agreement), the holders of the Senior Notes and the A Lenders, rank PARI
      PASSU, and

                                       -9-
<PAGE>
            (y) subject to the B and C Collateral Contribution, the Liens of the
      Administrative Agent, the Lenders (as defined in the Credit Agreement),
      the holders of the Senior Notes and the B Lenders, and the interest of the
      Lessor, in such Property shall, as between the Administrative Agent, the
      Lenders (as defined in the Credit Agreement), the holders of the Senior
      Notes, the B Lenders and the Lessor, rank PARI PASSU.

      "COMBINED DETERMINATION PARTIES" means, at any time, the Funding Parties
and the Revolving Credit Lenders (as defined in the Credit Agreement) holding an
aggregate outstanding principal amount of Funded Amounts (or Commitments prior
to the termination thereof) and Revolving Credit Loans (as defined in the Credit
Agreement) (or commitments prior to the termination thereof) equal to at least
51% of the aggregate Funded Amounts (or Commitments prior to the termination
thereof) and Revolving Credit Loans (or commitments prior to the termination
thereof).

      "COMMITMENT" means as to each Funding Party, its obligation to make
Fundings as investments in each Leased Property, or to make Loans to the Lessor,
in an aggregate amount not to exceed at any one time outstanding the amount set
forth for such Funding Party on Schedule 2.2 to the Master Agreement (as it may
be adjusted from time to time to reflect an assignment pursuant to Section 6 of
the Master Agreement) or, in the case of the Synthetic Lease Loan Lenders, the
Synthetic Lease Loan Commitment (as defined in the Credit Agreement).

      "COMMITMENT PERCENTAGE" means as to any Funding Party, at a particular
time, the percentage of the aggregate Commitments in effect at such time
represented by such Funding Party's Commitment, as such percentage is shown for
such Funding Party on Schedule 2.2 to the Master Agreement (as it may be
adjusted from time to time to reflect an assignment pursuant to Section 6 of the
Master Agreement or pursuant to Section 13.06 of the Credit Agreement, as the
case may be).

      "COMPANY" is defined in the preamble to the Master Agreement.

      "COMPLETION DATE" with respect to any Leased Property means the Business
Day on which the conditions specified in Section 3.5 of the Master Agreement
have been satisfied or waived with respect to such Leased Property.

      "CONDEMNATION" means any condemnation, requisition, confiscation, seizure
or other taking or sale of the use, occupancy or title to any Leased Property or
any part thereof in, by or on account of any actual eminent domain proceeding or
other action by any Governmental Authority or other Person under the

                                      -10-
<PAGE>
power of eminent domain or any transfer in lieu of or in anticipation thereof,
which in any case does not constitute an Event of Taking. A Condemnation shall
be deemed to have "occurred" on the earliest of the dates that use is prevented
or occupancy or title is taken.

      "CONSTRUCTION" means, with respect to any Leased Property, the
construction of the related Building pursuant to the related Plans and
Specifications and the preparation of such Leased Property for full operation.

      "CONSTRUCTION AGENCY AGREEMENT" means the Construction Agency Agreement,
dated as of December 3, 1998, between the Company and the Lessor.

      "CONSTRUCTION AGENCY EVENT OF DEFAULT" is defined in Section 5.1 of the
Construction Agency Agreement.

      "CONSTRUCTION AGENT" means the Company in its capacity as construction
agent pursuant to the Construction Agency Agreement.

      "CONSTRUCTION BUDGET" is defined in Section 2.4 of the Construction Agency
Agreement.

      "CONSTRUCTION CONDITIONS" means the conditions set forth in Section 3.5 of
the Master Agreement.

      "CONSTRUCTION CONTRACT" means, with respect to any Leased Property, that
certain construction contract, if any, between Lessee or the Construction Agent
and a General Contractor for the Construction of the related Building, provided
that such contract shall be collaterally assigned to the Lessor, and such
assignment shall be consented to by such General Contractor, pursuant to an
assignment of such construction contract substantially in the form of the
Security Agreement and Assignment set forth as Exhibit D to the Master
Agreement.

      "CONSTRUCTION FAILURE PAYMENT" with respect to any Leased Property means
an amount equal to the sum of (i) 100% of the acquisition cost of the related
Land, PLUS (ii) 89.9% of the Construction costs (including development and
transaction costs, but excluding any up-front structuring fees) related to such
Leased Property that have been incurred through the date of payment, PLUS (iii)
any amounts owed with respect to such Leased Property pursuant to Section 3.3 of
the Construction Agency Agreement or Section 7.2 or 7.5 of the Master Agreement,
PLUS (iv) the cost of tenant improvements that were not part of the Construction
Budget for such Leased Property.

      "CONSTRUCTION FORCE MAJEURE EVENT" means, with respect to any Leased
Property:

                                      -11-
<PAGE>
      (a)   an act of God arising after the related Closing Date, or

      (b)   any change in any state or local law, regulation or other legal
            requirement arising after such Closing Date and relating to the use
            of the Land or the construction of a building on the Land, or

      (c)   strikes, lockouts, labor troubles, unavailability of materials,
            riots, insurrections or other causes beyond Lessee's control

which prevents the Construction Agent from completing the Construction prior to
the Scheduled Construction Termination Date and which cannot be remedied by the
Construction Agent through the exercise of all commercially reasonable efforts.

      "CONSTRUCTION LAND INTEREST" means each parcel of Land for which the
Completion Date has not yet occurred.

      "CONSTRUCTION TERM" means, with respect to any Leased Property, the period
commencing on the related Closing Date and ending on the related Construction
Term Expiration Date, or such shorter period as may result from earlier
termination of the Lease as provided therein.

      "CONSTRUCTION TERM EXPIRATION DATE" means, with respect to any Leased
Property, the earliest of the following:

      (a)   the related Completion Date,

      (b)   the date on which the aggregate Funded Amounts equal the
            Commitments, and

      (c)   the related Scheduled Construction Termination Date.

      "CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any Securities issued by that Person or any indenture, mortgage, deed of trust,
contract, undertaking, agreement, instrument or other document to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject (including, without limitation, any
restrictive covenant affecting any of the properties of such Person).

      "CORRECTIONAL AND DETENTION FACILITY CONTRACT" shall mean any contract
with a municipal, state or federal government, or agency, instrumentality or
political subdivision thereof, relating to the management by the Company or its
Subsidiaries of a correctional and/or detention facility or to other related
lines of business, as amended or modified from time to time.

                                      -12-
<PAGE>
      "CREDIT AGREEMENT" means the Fourth Amended and Restated Credit Agreement,
dated as of July 21, 2000, among the Obligors, the lenders party thereto and the
Administrative Agent.

      "DEBT SERVICE" shall mean, for any period, the sum, for the Company and
its Subsidiaries, (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all payments of principal of
Indebtedness (including, without limitation, the principal component of any
payments in respect of Capital Lease Obligations) scheduled to be made during
such period PLUS (b) all Interest Expense for such period.

      "DEED" means, with respect to any Land, a General Warranty Deed (or, if
the related Title Policy is acceptable to Lessee and the Administrative Agent, a
Special or Limited Warranty Deed), dated the applicable Closing Date, from the
applicable Seller to the Lessor, conveying such Land.

      "DEFAULT" shall mean an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.

      "DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any Property, other than any disposition in connection with a
Municipal Transaction (whether now owned or hereafter acquired) by the Company
or any of its Subsidiaries to any other Person excluding any sale, assignment,
transfer or other disposition of any Property sold or disposed of in the
ordinary course of business and on commercially reasonable terms.

      "DIVIDEND PAYMENT" shall mean dividends (in cash, Property or obligations)
on, or other payments or distributions on account of, or the setting apart of
money for a sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of stock of the
Company or of any warrants, options or other rights to acquire the same (or to
make any payments to any Person, such as "phantom stock" payments, where the
amount thereof is calculated with reference to the fair market or equity value
of the Company or any of its Subsidiaries), but excluding dividends payable
solely in shares of common stock of the Company.

      "DOCUMENTATION AGENT" means SunTrust Equitable Securities Corporation, in
its capacity as Documentation Agent under the Master Agreement.

      "DOLLARS" and the sign "$" means lawful money of the United States of
America.

                                      -13-
<PAGE>
      "EBITDAR" means, for any period, the sum of the following for the Company
and its Subsidiaries (determined without duplication in accordance with GAAP):

            (a) net income for such period, LESS extraordinary gains for such
      period to the extent included in net income for such period, PLUS

            (b)   Interest Expense for such period, PLUS

            (c) provisions for federal, state, local and foreign income taxes
      (other than taxes on extraordinary gains), whether paid or deferred, made
      during such period, to the extent deducted in determining net income for
      such period, PLUS

            (d) the aggregate amount of depreciation and amortization expense
      for such period, to the extent deducted in determining net income for such
      period, PLUS

            (e) the aggregate amount of (i) accretion expense with respect to
      options or rights to acquire the Company's common stock and (ii) any
      write-off of expenses arising in connection with the Loans, in each case
      to the extent deducted in determining net income for such period, PLUS

            (f) the net income of any Person that is accounted for by the equity
      method of accounting, but only to the extent of dividends paid to the
      Company or any of its Subsidiaries, PLUS

            (g) the aggregate amount of non-cash expense for such period
      associated with the closure and post-closure reserves of a plant or
      facility owned by the Company or any of its Subsidiaries, PLUS

            (h) the aggregate amount of all other non-cash expenses for such
      period, to the extent not specifically described above in this definition;
      PLUS

            (i)   the aggregate amount of Rent Expense for such period; PLUS

            (j)   the aggregate amount of Pre-opening Expenses and Start-up
      Expenses for such period;

PROVIDED, that with respect to:

            (i) any Eligible Acquisition made during such period, "EBITDAR"
      shall include the actual EBITDAR attributable to the business acquired in
      such Eligible Acquisition for the

                                      -14-
<PAGE>
      12 month period ending on the last day of such period, including, if
      necessary, EBITDAR prior to consummation of such Eligible Acquisition so
      that is represents the equivalent of 12 months of EBITDAR (and may reflect
      Pro Forma Adjustments); and

            (ii) any Eligible New Contract entered into by the Company or any of
      its Subsidiaries during such period, "EBITDAR" shall include the
      following:

                  (x) if the Company or such Subsidiary has provided services
            pursuant to such Eligible New Contract for less than three calendar
            months after the end of the Start-up Period, an amount equal to the
            estimated "EBITDAR" attributable to the operations resulting from
            such Eligible New Contract (and may reflect Pro Forma Adjustments)
            for the 12-month period beginning on the date on which the Company
            or such Subsidiary began providing services pursuant to such
            Eligible New Contract, or

                  (y) if the Company or such Subsidiary has provided services
            pursuant to such Eligible New Contract for three calendar months or
            more after the end of the Start-up Period, an amount equal to actual
            EBITDAR attributable to the operations resulting from such Eligible
            New Contract for each complete month that has elapsed since the date
            three months after the end of the Start-up Period (such amount to be
            annualized so that it represents the equivalent of 12 months of
            EBITDAR).

      "EBITDAR RATIO I" shall mean, at any date, the ratio of the following:

            (a) all Indebtedness of the Obligors on such date (other than the B
      Guarantee (as defined in the definition of Synthetic Lease Financing) and
      any Subordinated Notes), to

            (b) EBITDAR for the period of 12 consecutive months ending on or
      most recently ended prior to such date.

      "EBITDAR RATIO II" shall mean, at any date, the ratio of the following:

            (a) all Indebtedness of the Obligors on such date, to

            (b) EBITDAR for the period of 12 consecutive months ending on or
      most recently ended prior to such date.

                                      -15-
<PAGE>
      "ELIGIBLE ACQUISITION" shall mean any acquisition by any Obligor
(regardless of the structure of the transaction) of the capital stock of, or all
or substantially all of the assets of, any Person (or of a line of business or
business segment of any Person) that was, immediately prior to such acquisition,
engaged primarily in the business of operating correctional and/or detention
facilities, juvenile facilities, pre-release facilities, substance abuse
rehabilitation facilities or related lines of business.

      "ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the laws
of the United States, or any state thereof, or any foreign bank that has a
branch or agency in the United States, having total assets in excess of
$1,000,000,000 or any commercial finance or asset based lending Affiliate of any
commercial bank and (ii) any Lender or any Affiliate of any Lender.

      "ELIGIBLE NEW CONTRACT" shall mean any acquired (or to be acquired)
Correctional and Detention Facility Contract, a newly executed Correctional and
Detention Facility Contract, an amendment to an existing Correctional and
Detention Facility Contract or an expansion under an existing Correctional and
Detention Facility Contract.

      "ENVIRONMENTAL AUDIT" means, with respect to each parcel of Land, a Phase
I Environmental Assessment, dated no more than 60 days prior to the related
Closing Date, by an environmental services firm reasonably satisfactory to the
Funding Parties and the related Lessee.

      "ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any written
or oral notice, claim, demand or other communication (collectively, a "CLAIM")
by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

                                      -16-
<PAGE>
      "ENVIRONMENTAL LAWS" means and include the Resource Conservation and
Recovery Act of 1976, (RCRA) 42 U.S.C. ss.ss. 6901-6987, as amended by the
Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. ss.ss. 9601-9657, (CERCLA), the
Hazardous Materials Transportation Act of 1975, 49 U.S.C. ss.ss. 1801-1812, the
Toxic Substances Control Act, 15 U.S.C. ss.ss. 2601-2671, the Clean Air Act, 42
U.S.C. ss.ss. 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. ss.ss. 136 et seq., and all similar federal, state and local
environmental laws, ordinances, rules, orders, statutes, decrees, judgments,
injunctions, codes and regulations, and any other federal, state or local laws,
ordinances, rules, codes and regulations, relating to the environment, human
health or natural resources or the regulation or control of or imposing
liability or standards of conduct concerning human health, the environment,
Hazardous Materials or the clean-up or other remediation of any Leased Property,
or any part thereof, as any of the foregoing may have been from time to time
amended, supplemented or supplanted.

      "ENVIRONMENTAL PERMITS" means all permits, licenses, authorizations,
certificates and approvals of Governmental Authorities required by Environmental
Laws.

      "EPA" shall mean the United States Environmental Protection Agency.

      "EQUITY ISSUANCE" shall mean (a) any issuance or sale by the Company or
any of its Subsidiaries after December 3, 1998 of (i) any capital stock, (ii)
any warrants or options exercisable in respect of capital stock (other than any
warrants or options issued to directors, officers or employees of the Company or
any of its Subsidiaries pursuant to the Incentive Compensation Plan and any
capital stock of the Company issued upon the exercise of such warrants or
options or (iii) any other security or instrument representing an equity
interest (or the right to obtain any equity interest) in the Company or any of
its Subsidiaries or (b) the receipt by the Company or any of its Subsidiaries
after December 3, 1998 of any capital contribution (whether or not evidenced by
any equity security issued by the recipient of such contribution); PROVIDED that
Equity Issuance shall not include (A) any such issuance or sale by any
Subsidiary of the Company to the Company or any Wholly Owned Subsidiary of the
Company, or (B) any capital contribution by the Company or any Wholly Owned
Subsidiary of the Company to any Subsidiary of the Company.

      "EQUITY RIGHTS" shall mean, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including, without limitation, any

                                      -17-
<PAGE>
stockholders' or voting trust agreements) for the issuance, sale, registration
or voting of, or securities convertible into, any additional shares of capital
stock of any class, or partnership or other ownership interests of any type in,
such Person.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time or any successor federal statute.

      "ERISA AFFILIATE" shall mean any corporation or trade or business that is
a member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which the Company is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the Company
is a member.

      "EURODOLLAR ADVANCE" means that portion of the Funded Amount bearing
interest at a rate based on the Eurodollar Rate.

      "EURODOLLAR RATE" shall mean, with respect to any Eurodollar Advance for
any Rent Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%), reported, at 11:00 a.m. (London time) on the date two
Business Days prior to the first day of such Rent Period, on Telerate Access
Service Page 3750 (British Bankers Association Settlement Rate) as the London
Interbank Offered Rate for Dollar deposits having a term comparable to such Rent
Period and in an amount equal to or greater than $1,000,000.

      "EVENT OF DEFAULT" means any event or condition designated as an "Event of
Default" in Article XII of the Lease.

      "EVENT OF LOSS" is defined in Section 10.1 of the Lease.

      "EVENT OF TAKING" is defined in Section 10.2 of the Lease.

      "EXCESS CASH FLOW" shall mean, for any period, the excess of:

            (i) the sum of the following (without duplication): (i) EBITDAR for
      such period (calculated without reference to the PROVISO at the end of the
      definition thereof), PLUS (ii) proceeds of business interruption or
      similar insurance received during such period, PLUS (iii) decreases in
      Working Capital of the Obligors for such period, PLUS (iv) all tax refunds
      received by the Obligors in cash during such period, OVER

                                      -18-
<PAGE>
            (ii) the sum of the following (without duplication): (i) Debt
      Service for such period, PLUS (ii) Rent Expense for such period, PLUS
      (iii) Capital Expenditures made during such period, PLUS (iv) increases in
      Working Capital of the Obligors for such Period, plus (v) the aggregate
      amount of cash taxes actually paid by the Obligors during such period.

For purposes of this definition of "Excess Cash Flow," "WORKING CAPITAL" shall
have the meaning given to that term by GAAP, PROVIDED that Working Capital shall
not include any loans under the Credit Agreement or any current maturities of
any long-term debt.

      "EXECUTIVE OFFICER" means with respect to any Person, the Chief Executive
Officer, President, Vice Presidents (if elected by the Board of Directors of
such Person), Chief Financial Officer, Treasurer, Secretary and any Person
holding comparable offices or duties (if elected by the Board of Directors of
such Person).

      "FAIR MARKET RENTAL VALUE" means, with respect to any Leased Property, the
fair market rent as determined by an independent appraiser chosen by the Lessor
or, so long as any Loans are outstanding, the Administrative Agent, and, unless
an Event of Default has occurred, reasonably acceptable to the related Lessee
that would be obtained in an arm's-length lease between an informed and willing
lessee and an informed and willing lessor, in either case under no compulsion to
lease, and neither of which is related to or affiliated with the Lessor or the
related Lessee for the lease of such Leased Property on the terms (other than
the amount of Basic Rent) set forth, or referred to, in the Lease. Such fair
market rent shall be calculated as the value for the use of such Leased Property
to be leased in place at the Land, assuming, in the determination of such fair
market rental value, that such Leased Property is in the condition and repair
required to be maintained by the terms of the Lease (unless such fair market
rental value is being determined for the purposes of Section 13.1 of the Lease
and except as otherwise specifically provided in the Lease, in which case this
assumption shall not be made).

      "FAIR MARKET SALES VALUE" means, with respect to any Leased Property or
any portion thereof, the fair market sales value as determined by an independent
appraiser chosen by the Lessor or, so long as any Loans are outstanding, the
Administrative Agent, and, unless an Event of Default has occurred, reasonably
acceptable to the related Lessee, that would be obtained in an arm's-length
transaction between an informed and willing buyer (other than a lessee currently
in possession) and an informed and willing seller, under no compulsion,
respectively, to buy or sell and neither of which is related to the Lessor or
the related

                                      -19-
<PAGE>
Lessee, for the purchase of such Leased Property. Such fair market sales value
shall be calculated as the value for such Leased Property, assuming, in the
determination of such fair market sales value, that such Leased Property is in
the condition and repair required to be maintained by the terms of the Lease
(unless such fair market sales value is being determined for purposes of Section
13.1 of the Lease and except as otherwise specifically provided in the Lease or
the Master Agreement, in which case this assumption shall not be made).

      "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, PROVIDED that (a) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day and (b) if such rate is not so published for any
Business Day, the Federal Funds Rate for such Business Day shall be the average
of quotations for such day on transactions, received by the Administrative Agent
(or any of its Affiliates) from three federal funds brokers of recognized
standing selected by it.

      "FF&E LEASE" shall mean the Lease Agreement, dated as of November 23,
1999, among the Company and certain of its Subsidiaries, as lessees, and First
Security Bank, National Association, as owner trustee, as lessor, as the same
may be modified and supplemented and in effect from time to time and any other
transaction entered into by the Obligors that is a lease of furniture, fixtures
and equipment.

      "FINAL RENT PAYMENT DATE" with respect to any Leased Property is defined
in Section 13.1(e) of the Lease.

      "FIXED CHARGES RATIO" shall mean, as at any date, the ratio of:

            (i) the sum of (i) EBITDAR for the period of 12-consecutive months
      ending on or most recently ended prior to such date, MINUS (ii) Capital
      Expenditures made by the Company and its Subsidiaries during such period
      pursuant to Section 5.1(o) of the Master Agreement, MINUS (iii) taxes paid
      in cash during such period, TO

            (ii)  Debt Service for such period.

                                      -20-
<PAGE>
      "FUNDED AMOUNT" means, as to the Lessor, the Lessor's Invested Amounts, as
to each B Lender, the outstanding principal amount of such B Lender's B Loans
and as to each Synthetic Lease Loan Lender, the outstanding principal amount of
such Synthetic Lease Loan Lender's Synthetic Lease Loans.

      "FUNDING" means any funding by the Funding Parties pursuant to Section 2.2
of the Master Agreement and Section 2.01(b) of the Credit Agreement.

      "FUNDING DATE" means each Closing Date and each other date during the
Construction Term on which a Funding occurs under Section 2 of the Master
Agreement.

      "FUNDING PARTIES" means the Lessor and the Lenders, collectively.

      "FUNDING PARTY BALANCE" means, with respect to any Leased Property, (i)
for the Lessor as of any date of determination, an amount equal to the sum of
the outstanding related Lessor's Invested Amount, all accrued and unpaid Yield
on such outstanding related Lessor's Invested Amount, all unpaid related fees
owing to the Lessor under the Operative Documents, and all other related amounts
owing to the Lessor by the Company or any Lessee under the Operative Documents,
(ii) for any B Lender as of any date of determination, an amount equal to the
sum of the outstanding related B Loans of such B Lender, all accrued and unpaid
interest thereon, all unpaid related fees owing to such B Lender under the
Operative Documents, and all other related amounts owing to such B Lender by the
Lessor, the Company or any Lessee under the Operative Documents and (iii) for
any Synthetic Lease Loan Lender as of any date of determination, an amount equal
to the sum of the outstanding related Synthetic Lease Loans of such Synthetic
Lease Loan Lender, all accrued and unpaid interest thereon, all unpaid related
fees owing to such Synthetic Lease Loan Lender under the Credit Agreement and
all other related amounts owing to such Synthetic Lease Loan Lender by the
Lessor, the Company or any Lessee under the Credit Agreement or the Operative
Documents.

      "FUNDING REQUEST" is defined in Section 2.2 of the Master Agreement.

      "FUNDING TERMINATION DATE" means July 21, 2005.

      "FUTURE SYNTHETIC LEASE FINANCING" means one or more Synthetic Lease
Financings entered into after the date of the Master Agreement.

      "GAAP" means generally accepted accounting principles applied on a basis
consistent with those that in accordance with

                                      -21-
<PAGE>
paragraph B of this Appendix A are to be used in making the calculations for
purposes of determining compliance with the Master Agreement.

      "GENERAL PARTNER" means Atlantic Financial Managers, Inc., a Texas
corporation.

      "GOVERNMENTAL ACTION" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, decrees,
licenses, exemptions, publications, filings, notices to and declarations of or
with, or required by, any Governmental Authority, or required by any Applicable
Law and shall include, without limitation, all environmental and operating
permits and licenses that are required for the use, occupancy, zoning and
operation of any Leased Property.

      "GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

      "GROUND LEASE" means, with respect to any Land, the ground lease between
the related Ground Lessor and the Lessor pursuant to which a leasehold estate is
conveyed in the Land to the Lessor.

      "GROUND LESSOR" means, as to any Land, the ground lessor of such Land.

      "GUARANTEE" shall mean a guarantee, an endorsement, a contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including,
without limitation, causing a bank or other financial institution to issue a
letter of credit or other similar instrument for the benefit of another Person,
but excluding endorsements for collection or deposit in the ordinary course of
business. The terms "GUARANTEE" and "GUARANTEED" used as a verb shall have a
correlative meaning.

      "GUARANTY AGREEMENT" means the Guaranty Agreement, dated as of December 3,
1998, issued by the Company.

                                      -22-
<PAGE>
      "HAZARDOUS MATERIAL" means any substance, waste or material which is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous, including petroleum, crude oil or any fraction
thereof, petroleum derivatives, by products and other hydrocarbons, or which is
or becomes regulated under any Environmental Law by any Governmental Authority,
including any agency, department, commission, board or instrumentality of the
United States, any jurisdiction in which a Leased Property is located or any
political subdivision thereof and also including, without limitation, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBS") and radon
gas.

      "IMPERMISSIBLE QUALIFICATION" shall mean any qualification, exception or
other statement in any opinion or certification of any independent public
accounts which either (a) is of a "going concern" or similar nature; or (b)
relates to the limited scope of examination of matters relevant to the financial
statements referred to in such opinion or certification not customarily
contained in a report of independent public accountants.

      "INCENTIVE COMPENSATION PLAN" shall mean a plan established by the Company
for the benefit of certain of its employees, or any other written agreement to
which the Company is a party, providing for the issuance to employees of
warrants or options in respect of the Company's capital stock, PROVIDED that (a)
the aggregate amount of capital stock that such warrants and options would
represent if exercised cannot exceed 20% of aggregate amount of the Company's
capital stock that would then be outstanding and (b) all other terms and
conditions of such plan or other written agreement shall be satisfactory to the
Combined Determination Parties.

      "INDEBTEDNESS" shall mean, for any Person: (a) obligations created, issued
or incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the respective
services are rendered; (c) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective indebtedness so secured
has been assumed by such Person; (d) obligations of such Person in respect of
letters of credit or similar instruments issued or accepted by banks and other
financial institutions for account of such Person and, in the case of the
Company, the assumed principal component of the

                                      -23-
<PAGE>
lease obligations under the FF&E Lease (net of the amount of unamortized gain
under the FF&E Lease); (e) Capital Lease Obligations of such Person; and (f)
Indebtedness of others Guaranteed by such Person. For the avoidance of doubt,
the Synthetic Lease Loans and the B Loans, together with the principal
components of each Synthetic Lease Financing entered into after July 21, 2000
shall constitute "Indebtedness".

      "INDEMNITEE" means the Administrative Agent (in its individual capacity
and in its capacity as Administrative Agent), each Lender and the Lessor, and
their respective Affiliates, successors, permitted assigns, permitted
transferees, employees, officers, directors and agents; PROVIDED, HOWEVER, that
in no event shall the Company or any Lessee be an Indemnitee.

      "INDEMNITEE GROUP" means the respective Affiliates, employees, officers,
directors and agents of the Administrative Agent (in its individual capacity),
each Lender or the Lessor, as applicable; PROVIDED, HOWEVER, that in no event
shall the Company or any Lessee be a member of the Indemnitee Group.

      "ING" shall mean ING (U.S.) Capital LLC, a Delaware limited liability
company.

      "INITIAL CLOSING DATE" means the Closing Date for the first Leased
Property acquired by the Lessor, which date was December 3, 1998.

      "INITIAL DIRECTORS" means (i) a member of the board of directors of the
Company as of July 21, 2000 and (ii) a member of the board of directors of the
Company nominated by the vote of at least sixty percent (60%) of the members of
the board of directors of the Company as of July 21, 2000.

      "INTEREST COVERAGE RATIO" shall mean, as of any date, the ratio of (a)
EBITDAR for the period of 12 consecutive months ending on or most recently ended
prior to such date to (b) Interest Expense for such period.

      "INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral Agency
Agreement, dated as of July 15, 1998 by and among ING, as collateral agent and
as Administrative Agent for the lenders under the Credit Agreement and the
holders of the Senior Notes.

      "INTEREST EXPENSE" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest in respect of
Indebtedness (including, without limitation, the interest component of any
payments in respect of Capital Lease Obligations) accrued or

                                      -24-
<PAGE>
capitalized during such period (whether or not actually paid during such
period), PLUS (b) the net amount payable (or MINUS the net amount receivable)
under Interest Rate Protection Agreements during such period (whether or not
actually paid or received during such period), MINUS (c) direct reimbursements
received by an Obligor during such period by a party to a Correctional and
Detention Facility Agreement, to the extent that such reimbursements relate to
interest expense of the Company or one of its Subsidiaries, PLUS (d) the
interest component of any payments in respect of any Synthetic Lease Financing
accrued or capitalized during such period (whether or not actually paid during
such period)."

      "INTEREST RATE PROTECTION AGREEMENT" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.

      "INVESTMENT" shall mean, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such sale); (b)
the making of any deposit with, or advance, loan or other extension of credit
to, any other Person (including the purchase of Property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such Property to such Person), but excluding any such advance, loan or extension
of credit having a term not exceeding 90 days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business);
(c) the entering into of any Guarantee of, or other contingent obligation with
respect to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person; or (d) the entering into of any Interest Rate Protection Agreement.

      "JOINDER AGREEMENT" means an agreement substantially in the form of
Exhibit E to the Master Agreement pursuant to which a Subsidiary of the Company
shall become a Lessee.

      "LAND" means the land described in the related Lease Supplement.

      "LAWS" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, treaties or decrees of any Governmental Authority, or of any
court.

                                      -25-
<PAGE>
      "LEASE" means the Master Lease Agreement, dated as of December 3, 1998
together with each Lease Supplement thereto, among the Lessees and the Lessor.

      "LEASE BALANCE" means, with respect to all of the Leased Properties, as of
any date of determination, an amount equal to the aggregate sum of the
outstanding Funded Amounts of all Funding Parties, all accrued and unpaid
interest on the Loans, all accrued and unpaid Yield on the Lessor's Invested
Amounts, all unpaid fees owing to the Funding Parties under the Operative
Documents and, to the extent related to the Synthetic Lease Loan Lenders in
their capacity as such, under the Credit Agreement and the other Basic Documents
(as defined in the Credit Agreement), plus all other amounts owing to the
Funding Parties by the Company or any Lessee under the Operative Documents.

      "LEASE SUPPLEMENT" is defined in Section 2.1 of the Lease.

      "LEASE TERM" means (a) the Base Term, as it may be renewed pursuant to
Section 14.9 of the Lease or (b) such shorter period as may result from earlier
termination of the Lease as provided therein.

      "LEASE TERMINATION DATE" means the last day of the Lease Term.

      "LEASED PROPERTY" means Land and the related Building(s). For purposes of
the Lease, a "Leased Property" means the Land identified in a Lease Supplement
and the Buildings related thereto, unless the context provides otherwise.

      "LEASED PROPERTY BALANCE" means, with respect to any Leased Property, as
of any date of determination, an amount equal to the aggregate sum of the
outstanding related Funded Amounts of all Funding Parties, all accrued and
unpaid interest on the related Loans, all accrued and unpaid Yield on the
related Lessor Invested Amounts, all related unpaid fees owing to the Funding
Parties under the Operative Documents or, to the extent related to the Synthetic
Lease Loan Lenders in their capacity as such, the Credit Agreement and the other
Basic Documents (as defined in the Credit Agreement), and all other amounts
owing to the Funding Parties by the related Lessee under the Operative Documents
with respect to such Leased Property.

      "LENDER BASIC RENT" means, for any Rent Period under the Lease, the sum of
(i) the aggregate amount of interest accrued on the B Loans pursuant to Section
2.4 of the Loan Agreement during such Rent Period, PLUS (ii) the aggregate
amount of interest accrued on the Synthetic Lease Loans pursuant to Section
3.02(b) of the Credit Agreement during such Rent Period.

                                      -26-
<PAGE>
      "LENDERS" means the B Lenders and the Synthetic Lease Loan Lenders.

      "LENDING OFFICE" for each B Lender means the office such B Lender
designates in writing from time to time to the Company and the Administrative
Agent or, if no such office is designated, the office listed for such B Lender
on Schedule 8.2 to the Master Agreement.

      "LESSEE" is defined in the preamble to the Master Agreement. The "related"
Lessee with respect to any Leased Property means the Lessee that is a party to
the Lease Supplement for such Leased Property.

      "LESSOR" is defined in the preamble to the Master Agreement.

      "LESSOR BASIC RENT" means, for any Rent Period under the Lease, the
aggregate amount of Yield accrued and unpaid on the Lessor's Invested Amounts
pursuant to Section 2.3(a) of the Master Agreement during such Rent Period.

      "LESSOR LIENS" means Liens on or against any Leased Property, the Lease,
any other Operative Document or any payment of Rent (a) which result from any
act or omission of, or any Claim against, the Lessor unrelated to the
Transaction or from Lessor's failure to perform as required under the Operative
Documents or (b) which result from any Tax owed by the Lessor, except any Tax
for which the Company or a Lessee is obligated to indemnify (including, without
limitation, in the foregoing exception, any assessments with respect to any
Leased Property noted on the related Title Policy or assessed in connection with
any construction or development by the related Lessee or the Construction
Agent).

      "LESSOR RATE" means the Eurodollar Rate or the Base Rate, as the case may
be, PLUS the Applicable Margin, PLUS 0.75%.

      "LESSOR SIDE LETTER" means the letter agreement, dated as of December 3,
1998, between the Company and the Lessor.

      "LESSOR'S INVESTED AMOUNT" means the amounts funded by the Lessor pursuant
to Section 2 of the Master Agreement that are not proceeds of Loans by a Lender,
as such amount may be increased during the related Construction Term pursuant to
Section 2.3(c) of the Master Agreement.

      "LIEN" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of the Operative Documents, a Person shall be deemed to
own subject to a Lien any Property that it has acquired or holds subject to the
interest of

                                      -27-
<PAGE>
a vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement (other than an operating lease) relating to such
Property.

      "LOAN" means a B Loan or a Synthetic Lease Loan.

      "LOAN AGREEMENT" means the Loan Agreement, dated as of December 3, 1998,
among the Lessor, the Administrative Agent and the B Lenders.

      "LOAN DOCUMENTS" means the Loan Agreement, the Note, the Assignments of
Lease and Rents, the Mortgages and all documents and instruments executed and
delivered in connection with each of the foregoing.

      "LOAN EVENT OF DEFAULT" means any of the events specified in Section 5.1
of the Loan Agreement, PROVIDED that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, event or act has been
satisfied.

      "LOAN POTENTIAL EVENT OF DEFAULT" means any event, condition or failure
which, with notice or lapse of time or both, would become a Loan Event of
Default.

      "LOSS PROCEEDS" is defined in Section 10.6 of the Lease.

      "MAJORITY SYNTHETIC LEASE A AND B LENDERS" is defined in the Credit
Agreement.

      "MARGIN REGULATIONS" means Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as the same may be in effect from time
to time.

      "MASTER AGREEMENT" means the Amended and Restated Master Agreement, dated
as of July 21, 2000, among the Company, the Lessees, the Subsidiary Guarantors,
the Lessor, the Administrative Agent, the Documentation Agent, the Syndication
Agent and the B Lenders, and shall include the Original Master Agreement for as
long as it was in effect.

      "MATERIAL ADVERSE EFFECT" means with respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), a materially adverse
effect on (i) the business, operations, revenues, financial condition, property,
capitalization or business prospects of the Company and its Subsidiaries taken
as a whole, (ii) the ability of the Company or any Lessee to perform its
obligations under any Operative Document, or (iii) the value, utility or useful
life of any Leased Property, or the validity, enforceability or legality

                                      -28-
<PAGE>
of any of the Operative Documents, or the priority, perfection or status of any
Funding Party's interest in any Leased Property.

      "MONTHLY DATE" means the last Business Day of each calendar month.

      "MORTGAGE" means, with respect to any Leased Property, that certain
mortgage, deed of trust or security deed, dated as of the related Closing Date,
by the Lessor to the Administrative Agent, in the form of Exhibit D attached to
the Master Agreement, with such modifications as are satisfactory to the Lessor
and the Administrative Agent in conformity with Applicable Law to assure
customary remedies in favor of the Administrative Agent in the jurisdiction
where the Leased Property is located.

      "MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Company or
any ERISA Affiliate and that is covered by Title IV of ERISA.

      "MUNICIPAL TRANSACTION" shall mean a transaction:

            (a) in which the Company or one of its Subsidiaries transfers one or
      more correctional and/or detention facilities (a "Transferred Facility")
      to a Person that is not a Subsidiary or Affiliate of the Company and that
      is created exclusively for purposes of consummating such transaction (an
      "SPV") for a consideration consisting of cash (a "Municipal Transaction
      Transfer");

            (b) in which such SPV incurs Indebtedness; and

            (c) in which the Company and such SPV enter into a management
      agreement, lease or similar arrangement pursuant to which the Company
      agrees to manage or lease-back such Transferred Facility;

provided that:

            (i) the Company shall have furnished to each of the Funding
      Parties copies of all of the documentation for such transaction;

            (ii) the Combined Determination Parties shall have approved such
      transaction (provided that the Funding Parties shall not condition their
      approval on the payment of a fee and such approval shall not be
      unreasonably withheld); and

            (iii) the Company shall have complied with its obligations under the
      Credit Agreement with respect to such transaction.

                                      -29-
<PAGE>
      "NET AVAILABLE PROCEEDS" shall mean:

                a.   in the case of any Disposition or any Municipal
      Transaction Transfer, the amount of Net Cash Payments received in
      connection with such Disposition or Municipal Transaction Transfer;

                b. in the case of any Casualty Event, the aggregate amount of
      proceeds of insurance, condemnation awards and other compensation received
      by the Company and its Subsidiaries in respect of such Casualty Event net
      of (A) reasonable expenses incurred by the Company and its Subsidiaries in
      connection therewith and (B) contractually required repayments of
      Indebtedness and any income and transfer taxes payable by the Company or
      any of its Subsidiaries in respect of such Casualty Event;

                c.   in the case of any incurrence of Indebtedness, the
      aggregate amount of all cash received by the Company and its
      Subsidiaries in respect of such incurrence net of fees and expenses
      incurred by Company and its Subsidiaries in connection therewith; and

                d. in the case of any Equity Issuance, the aggregate amount of
      all cash received by the Company and its Subsidiaries in respect of such
      Equity Issuance net of fees and expenses incurred by the Company and its
      Subsidiaries in connection therewith.

      "NET CASH PAYMENTS" shall mean, with respect to any Disposition or
Municipal Transaction Transfer, the aggregate amount of all cash payments, and
the fair market value of any non-cash consideration, received by the Company and
its Subsidiaries directly or indirectly in connection with such Disposition or
Municipal Transaction Transfer; PROVIDED that (a) Net Cash Payments shall be net
of (i) the amount of any legal, title and recording tax expenses, commissions
and other fees and expenses paid by the Company and its Subsidiaries in
connection with such Disposition or Municipal Transaction Transfer, (ii) any
federal, state, local and foreign taxes estimated to be payable by the Company
and its Subsidiaries as a result of such Disposition or Municipal Transaction
Transfer (but only to the extent that such estimated taxes are in fact paid to
the relevant Federal, state or local governmental authority within three months
of the date of such Disposition or Municipal Transaction Transfer) and (iii) any
required deposits or hold backs (until such time as such required deposit or
hold back is released), (b) Net Cash Payments shall be net of any repayments by
the Company or any of its Subsidiaries of Indebtedness to the extent that (i)
such Indebtedness is secured by a Lien on the Property that is the subject of
such Disposition or Municipal Transaction Transfer and (ii) the transferee of
(or holder of a Lien on) such Property requires that such Indebtedness be repaid
as a condition to the purchase of such Property and (c) Net Cash Payments shall
exclude the amount of any reasonable reserves established by the Company or such
Subsidiary, in accordance with GAAP, against any liabilities retained by the
Company or its Subsidiaries, which liabilities are associated with the Property
that is the subject of such Disposition or Municipal

                                      -30-
<PAGE>
Transaction Transfer (but only during such period as such reserves are actually
maintained), including (without limitation) any indemnification obligations,
pension and other post-employment benefit liabilities, workers' compensation
liabilities, liabilities associated with retiree benefits, liabilities relating
to environmental matters and liabilities relating to any Guarantee of
Indebtedness secured by a Lien on such Property.

      "NET WORTH" shall mean, as at any date for any Person, the sum for such
Person and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:

            (i) the amount of capital stock; PLUS

            (ii) the amount of surplus and retained earnings (or, in the case of
      a surplus or retained earnings deficit, MINUS the amount of such deficit);
      PLUS

            (iii) any warrant accretion expense (as that term is used in GAAP)
      or any original issue discount accretion expense (as such term is used in
      GAAP) arising after December 3, 1998; PLUS

            (iv) the value ascribed to any warrants issued to a Lender and the
      cumulative effect of any change in the valuation of such warrants;

PROVIDED that any predecessor basis adjustment required under GAAP shall be
disregarded in calculating "Net Worth."

      "NOTE" means the B Note issued by the Lessor under the Loan Agreement, and
any and all notes issued in replacement or exchange therefor in accordance with
the provisions thereof.

      "OBLIGATIONS" means all indebtedness (whether principal, interest, fees or
otherwise), obligations and liabilities of the Company and each Lessee to the
Funding Parties (including without limitation all extensions, renewals,
modifications, rearrangements, restructures, replacements and refinancings
thereof, whether or not the same involve modifications to interest rates or
other payment terms of such indebtedness, obligations and liabilities), whether
arising under any of the

                                      -31-
<PAGE>
Operative Documents or otherwise, and whether now existing or hereafter created,
absolute or contingent, direct or indirect, joint or several, secured or
unsecured, due or not due, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, or acquired by Funding Parties
outright, conditionally or as collateral security from another, including but
not limited to the obligation of the Company and each Lessee to repay future
advances by the Funding Parties, whether or not made pursuant to commitment and
whether or not presently contemplated by the Company or any Lessee and the
Funding Parties hereunder.

      "OBLIGOR" means the Company or any Subsidiary Guarantor.

      "OFFICER'S CERTIFICATE" of a Person means a certificate signed by the
Chairman of the Board or the President or any Executive Vice President or any
Senior Vice President or any other Vice President of such Person signing with
the Treasurer or any Assistant Treasurer or the Controller or any Assistant
Controller or the Secretary or any Assistant Secretary of the such Person, or by
any Vice President who is also Controller or Treasurer signing alone.

      "OPERATIVE DOCUMENTS" means the Master Agreement, the Purchase Agreements,
the Joinder Agreements, the Lease, the Security Agreement and Assignment, the
Notes, the Loan Agreement, the Guaranty Agreement, the Assignments of Lease and
Rents, the Mortgages, the Ground Leases, the Construction Agency Agreement and
the other documents delivered in connection with the transactions contemplated
by the Master Agreement.

      "OPERATIVE PARTIES" means the Administrative Agent, the Lessor and the B
Lenders.

      "ORIGINAL MASTER AGREEMENT" is defined in the Preliminary Statement to
the Master Agreement.

      "OVERDUE RATE" means the lesser of (a) the highest non-usurious interest
rate permitted by Applicable Law and (b) an interest rate per annum (calculated
on the basis of a 365-day (or 366-day, if appropriate) year equal to 2.0% above
the Base Rate plus the Applicable Margin in effect from time to time or, in the
case of Yield, 2% above the Lessor Rate.

      "PARTIAL PURCHASE OPTION" is defined in Section 14.1(b) of the Lease.

      "PARTNERSHIP AGREEMENT" means the Agreement of Limited Partnership of AFG,
dated as of February 28, 1996, among the General Partner and the persons listed
on Schedule A thereto as limited partners.

                                      -32-
<PAGE>
      "PAYMENT DATE" means (i) with respect to each Eurodollar Advance, the last
day of each Rent Period (and if such Rent Period is longer than three months,
the day that is 90 days after the first day of such Rent Period) or, if such day
is not a Business Day, the next Business Day and (ii) with respect to each Base
Rate Advance, each Monthly Date.

      "PAYMENT DATE NOTICE" is defined in Section 2.3(e) of the Master
Agreement.

      "PBGC" means the Pension Benefit Guaranty Corporation, and any successor
thereto.

      "PERMITTED INVESTMENTS" shall mean: (a) direct obligations of the United
States of America, or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any Lender or by any
bank or trust company organized under the laws of the United States of America
or any state thereof and having capital, surplus and undivided profits of at
least $500,000,000, maturing not more than 90 days from the date of acquisition
thereof; (c) commercial paper rated A-1 or better or P-1 by Standard & Poor's
Corporation or Moody's Investors Service, Inc., respectively, maturing not more
than six months from the date of acquisition thereof; (d) commercial paper of
any Lender (or any Affiliate thereof located in the United States of America)
that is rated A-1 or better or P-1 by Standard and Poor's Corporation or Moody's
Investors Service, Inc., respectively, maturing not more than six months from
the date of acquisition thereof; (e) repurchase agreements entered into with any
Lender or with any bank or trust company satisfying the conditions of clause (b)
hereof that is secured by any obligation of the type described in CLAUSES (A)
through (D) of this definition; and (f) money market funds acceptable to the
Required Lenders.

      "PERMITTED LIENS" means the following with respect to any Leased Property:
(a) the respective rights and interest of the related Lessee, the Lessor, the
Administrative Agent and any Lender, as provided in the Operative Documents, (b)
Liens for Taxes either not yet due or being contested in good faith and by
appropriate proceedings, so long as enforcement thereof is stayed pending such
proceedings, (c) materialmen's, mechanics', workers', repairmen's, employees' or
other like Liens arising after the related Closing Date in the ordinary course
of business for amounts either not yet due or being contested in good faith and
by appropriate proceedings, so long as enforcement thereof is stayed pending
such proceedings, (d) Liens arising after such Closing Date out of judgments or
awards with respect to which at the time an appeal or proceeding for review is
being prosecuted

                                      -33-
<PAGE>
in good faith, so long as the enforcement thereof has been stayed pending such
appeal or review, (e) easements, rights of way, reservations, servitudes and
rights of others against the Land which do not materially and adversely affect
the value or the utility of such Leased Property, (f) other Liens incidental to
the conduct of the related Lessee's business which were not incurred in
connection with the borrowing of money or the obtaining of advances or credit
and which do not in the aggregate materially detract from the value of such
Leased Property or materially impair the use thereof, (g) assignments, and
subleases expressly permitted by the Operative Documents and (h) Liens as
provided in the Intercreditor Agreement.

      "PERSON" means an individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, nonincorporated
organization or government or any agency or political subdivision thereof.

      "PLAN" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.

      "PLANS AND SPECIFICATIONS" means with respect to any Building the final
plans and specifications for such Building prepared by the Architect, and, if
applicable, referred to by the Appraiser in the Appraisal, as such Plans and
Specifications may be hereafter amended, supplemented or otherwise modified from
time to time.

      "POTENTIAL EVENT OF DEFAULT" means any event, condition or failure which,
with notice or lapse of time or both, would become an Event of Default.

      "PRE-OPENING EXPENSES" shall mean operating expenses attributable to the
operations of an Eligible New Contract (including, but not limited to, salaries
and wages, fringe benefits, training costs, supplies, and professional fees)
incurred prior to the date on which the Company began providing services
pursuant to such Eligible New Contract, but only to the extent that such
expenses have been reviewed and approved by the Administrative Agent and are
determined in accordance with GAAP.

      "PRIME RATE" shall mean the arithmetic average of the rates of interest
publicly announced by The Chase Manhattan Bank, Citibank, N.A. and Morgan
Guaranty Trust Company of New York (or their respective successors) as their
respective prime commercial lending rates (or, as to any such bank that does not
announce such a rate, such bank's "base" or other rate reasonably determined by
the Administrative Agent to be the equivalent rate announced by such bank),
EXCEPT THAT, if any such bank shall, for

                                      -34-
<PAGE>
any period, cease to announce publicly its prime commercial lending (or
equivalent) rate, the Administrative Agent shall, during such period, reasonably
determine the "prime rate" based upon the commercial lending (or equivalent)
rates announced publicly by the other such banks.

      "PRO FORMA ADJUSTMENTS" shall mean reasonable adjustments for (a)
non-recurring or extraordinary expenses, (b) operating efficiencies, (c) census
levels and (d) per diem rates that have been received and consented to by the
Administrative Agent.

      "PROPERTY" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

      "PURCHASE AGREEMENT" means with respect to any Land, the purchase
agreement with the Seller for the conveyance of such Land to the Lessor.

      "PURCHASE OPTION" is defined in Section 14.1(a) of the Lease.

      "QUARTERLY DATES" shall mean the last Business Day of March, June, October
and December in each year, the first of which shall be October 31, 2000.

      "RECOURSE DEFICIENCY AMOUNT" means, as of any date of determination
thereof, the sum of (i) the aggregate principal amount of the Synthetic Lease
Loans then outstanding, PLUS (ii) all accrued and unpaid interest on the
Synthetic Lease Loans.

      "REGULATIONS A, D, U AND X" shall mean, respectively, Regulations A, D, U
and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.

      "REGULATORY CHANGE" shall mean, with respect to any Lender, any change
after the date of this Agreement in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
the date of this Agreement of any interpretation, directive or request applying
to a class of banks including such Lender of or under any Federal, state or
foreign law or regulations (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.

      "REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System.

                                      -35-
<PAGE>
      "REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System.

      "REGULATIONS" means the income tax regulations promulgated from time to
time under and pursuant to the Code.

      "RELEASE" means the release, deposit, disposal or leak of any Hazardous
Material into or upon or under any land or water or air, or otherwise into the
environment, including, without limitation, by means of burial, disposal,
discharge, emission, injection, spillage, leakage, seepage, leaching, dumping,
pumping, pouring, escaping, emptying, placement and the like.

      "RELEASE DATE" means, with respect to any Leased Property, the date that
the related Leased Property Balance has been paid in full, unless an Event of
Default has occurred and is continuing, in which case the Release Date shall be
the date on which the Lease Balance has been paid in full.

      "REMARKETING OPTION" is defined in Section 14.6 of the Lease.

      "RENT" means Basic Rent and Supplemental Rent, collectively.

      "RENT EXPENSE" shall mean, for any period:

            (a) the aggregate amount of rent payments made by the Obligors
      during such period in respect of any Synthetic Lease Financing (including,
      without limitation, Basic Rent); and

            (b) the aggregate amount of rent payments, minus the amount of
      amortized gain, made by the Obligors during such period in respect of the
      FF&E Lease.

For the avoidance of doubt, the parties agree that any other rent payments
(including rent payments in respect of any Municipal Transaction) shall not
constitute "Rent Expense" for purposes of the Master Agreement.

      "RENT PERIOD" means (i) in the case of Base Rate Advances, means the
period from, and including, a Monthly Date to, but excluding, the next
succeeding Monthly Date; and (ii) with respect to any Eurodollar Advance:

            (1)   initially, the period commencing on the borrowing or
                  conversion date, as the case may be, with respect to such
                  Eurodollar Advance and ending one, two, three or six months
                  thereafter, as selected by the Lessee in its Funding Notice or
                  Payment
                                      -36-
<PAGE>
                  Date Notice, as the case may be, given with respect thereto;
                  and

            (2)   thereafter, each period commencing on the last day of the next
                  preceding Rent Period applicable to such Eurodollar Advance
                  and ending one, two, three or six months thereafter, as
                  selected by the Lessee by irrevocable notice to the
                  Administrative Agent in its related Payment Date Notice;
                  PROVIDED, HOWEVER that:

                  (a) The initial Rent Period for any Funding shall commence on
            the Funding Date of such Funding and each Rent Period occurring
            thereafter in respect of such Funding shall commence on the day on
            which the next preceding Rent Period expires;

                  (b) If any Rent Period would otherwise expire on a day which
            is not a Business Day, such Rent Period shall expire on the next
            succeeding Business Day, PROVIDED that if any Rent Period in respect
            of Eurodollar Advances would otherwise expire on a day that is not a
            Business Day but is a day of the month after which no further
            Business Day occurs in such month, such Rent Period shall expire on
            the next preceding Business Day;

                  (c) Any Rent Period in respect of Eurodollar Advances which
            begins on a day for which there is no numerically corresponding day
            in the calendar month at the end of such Rent Period shall, subject
            to PARAGRAPH (D) below, expire on the last Business Day of such
            calendar month; and

                  (d) No Rent Period shall extend beyond the Lease Termination
            Date.

            "REPORT" is defined in Section 7.6 of the Master Agreement.

            "REPORTABLE EVENT" means any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg.
ss.2615.

            "REQUIRED FUNDING PARTIES" means, at any time, Funding Parties
holding an aggregate outstanding principal amount of Funded Amounts equal to at
least 51% of the aggregate outstanding principal amount of all Funded Amounts.

                                      -37-
<PAGE>
            "REQUIRED LENDERS" means, at any time, B Lenders holding an
aggregate outstanding principal amount of B Loans equal to at least 51% of the
aggregate outstanding principal amount of all B Loans.

            "REQUIRED OPERATIVE PARTIES" means, at any time, the Operative
Parties holding aggregate Commitments (or aggregate Funded Amounts if such
Commitments have terminated) equal to at least 51% of an amount equal to the sum
of (i) the Lessor's Commitment (or the Lessor's Invested Amount if such
Commitment has terminated), plus (ii) the B Lenders' Commitments (or the
principal amount of the B Loans if such Commitments have terminated).

            "REQUIREMENTS OF LAW" means, as to any Person, the charter and
by-laws or other organizational or governing documents of such Person, and any
law, rule or regulation, permit, approval, authorization, license or variance,
order or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject, including,
without limitation, the Securities Act, the Securities Exchange Act, Regulations
T, U and X of the Board of Governors of the Federal Reserve System, and any
building, environmental or land use requirement or permit or occupational safety
or health law, rule or regulation.

            "RESPONSIBLE OFFICER" means the Chairman of the Board of Directors,
President, the chief executive officer, the chief operating officer, the chief
financial officer, Treasurer, any Assistant to the Treasurer, or any Vice
President in charge of a principal business unit or division

            "SCHEDULED CONSTRUCTION TERMINATION DATE" means with respect to any
Building the earlier of (i) eighteen months after the Closing Date for the
related Land and (ii) the last day of the Lease Term.

            "SEC" means the United States Securities and Exchange Commission.

            "SECURITIES ACT" means the Securities Act of 1933, as amended.

            "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

            "SECURITY AGREEMENT AND ASSIGNMENT" means, with respect to any
Leased Property, the Security Agreement and Assignment (Construction Contract,
Architect's Agreement, Permits, Licenses and Governmental Approvals, and Plans,
Specifications and

                                      -38-
<PAGE>
Drawings) from the Construction Agent to the Lessor, substantially in the form
of Exhibit C to the Master Agreement.

            "SELLER" means as to any Leased Property, the seller thereof to the
Lessor on the related Closing Date.

            "SENIOR NOTES" shall mean, collectively, the following:

                  (a) promissory notes of the Company, in an aggregate principal
            amount not to exceed $50,000,000, secured by a Lien upon
            substantially all of the Property of the Company and its
            Subsidiaries (the "1998 SENIOR NOTES"); and

                  (b) additional Indebtedness of the Company, in an aggregate
            principal amount not to exceed $10,000,000 which may be secured by a
            Lien upon substantially all of the Property of the Company and its
            Subsidiaries, with terms and conditions, and pursuant to
            documentation, either (i) substantially similar to the terms and
            conditions of, and the documentation for, the 1998 Senior Notes or
            (ii) otherwise satisfactory to the Administrative Agent.

            "SENIOR NOTES DOCUMENTATION" shall mean any note purchase agreement,
promissory note or other document or instrument evidencing or governing the
Senior Notes.

            "START-UP EXPENSES" shall mean operating expenses attributable to
the operations of an Eligible New Contract incurred during the Start-up Period
therefor, net of the revenues recognized under such Eligible New Contract during
the Start-up Period, but only to the extent that such expenses have been
reviewed and approved by the Administrative Agent.

            START-UP PERIOD" shall mean, with respect to any Eligible New
Contract, the period of time, not to exceed six months, commencing on the date
the Company began providing service pursuant to such Eligible New Contract until
the last day of the month in which 90% of the maximum occupancy under such
Eligible New Contract was reached and are determined in accordance with GAAP.

            "SUBORDINATED BRIDGE" shall mean Indebtedness of the Obligors under
the Subordinated Bridge Loan Agreement dated as of October 14, 1999 between the
Obligors, the lenders referred to therein and ING as agent for said lenders.

            "SUBORDINATED NOTES" shall mean Indebtedness of the Company
(including the 2000 Subordinated Notes) in an aggregate principal amount not to
exceed $50,000,000, which are not secured

                                      -39-
<PAGE>
by any Property of the Company or any Subsidiary Guarantor but which may be
guaranteed by each of the Subsidiaries of the Company, and which is subordinated
to the prior payment in full of the principal of and interest on the Loans (as
defined in the Credit Agreement) on terms and conditions (including
subordination terms), and pursuant to documentation, that is (i) on market terms
and the time it is entered into and (ii) is otherwise satisfactory to the
Administrative Agent.

            "SUBORDINATED NOTES DOCUMENTATION" shall mean any note purchase
agreement, promissory note or other document or instrument evidencing or
governing the Subordinated Notes.

            "SUBSIDIARY" means with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.

            "SUBSIDIARY GUARANTOR" is defined in the preamble of the Master
Agreement.

            "SUNTRUST BANK" means SunTrust Bank, a Georgia banking corporation.

            "SUPPLEMENTAL RENT" means any and all amounts, liabilities and
obligations other than Basic Rent which Lessee assumes or agrees or is otherwise
obligated to pay under the Lease or any other Operative Document (whether or not
designated as Supplemental Rent) to the Lessor, the Administrative Agent, any
Lender or any other party, including, without limitation, amounts under Article
XVI of the Lease, and indemnities and damages for breach of any covenants,
representations, warranties or agreements, and all overdue or late payment
charges in respect of any Funded Amount.

            "SYNDICATION AGENT" means Bank of America, N.A., in its capacity
as syndication agent under the Master Agreement.

            "SYNTHETIC LEASE DOCUMENTATION" shall mean any master agreement,
lease agreement, loan agreement or other document or instrument evidencing or
governing any Synthetic Lease Financing.

                                      -40-
<PAGE>
            "SYNTHETIC LEASE FINANCING" shall mean one or more transactions
consisting of the following (provided that any such transaction need not include
the matters described in clause (e) below):

                  (a) the Company or one of its Subsidiaries enters into a lease
            (as lessee) of real Property and improvements (to be used for a
            correctional and/or detention facility) with another Person (the
            "Lessor");

                  (b) pursuant to a loan agreement (the "Loan Agreement"), the
            Lessor borrows money from one or more lenders denominated "A
            Lenders" (the "A Lenders") and one or more lenders denominated "B
            Lenders" (the "B Lenders");

                  (c) the Lessor (or another Person, which may be an Affiliate
            of the Lessor) makes an investment (the "C Investment") to pay a
            portion of the cost of such real Property and improvements;

                  (d) the Company and its Subsidiaries enter into a Guarantee of
            the Lessor's obligations to the A Lenders under the Loan Agreement
            (the "A Guarantee"), and, as provided in the Collateral Sharing
            Documentation Amendment:

                        (x) the A Guarantee is secured by Liens on substantially
                  all of the collateral for the Loans (as defined in the Credit
                  Agreement), Reimbursement Obligations (as defined in the
                  Credit Agreement) and the Senior Notes, and

                        (y) the Loans (as defined in the Credit Agreement),
                  Reimbursement Obligations (as defined in the Credit Agreement)
                  and the other obligations of the Company under the Credit
                  Agreement and under the other Basic Documents (as defined in
                  the Credit Agreement), together with the Senior Notes, are
                  secured by Liens in any collateral securing the Lessor's
                  obligations to the A Lenders under the Loan Agreement (the "A
                  Collateral Contribution"); and

                  (e)    the Company and its Subsidiaries enter into a Guarantee
      of the Lessor's obligations to the B Lenders under the Loan Agreement (the
      "B Guarantee"), and, as provided in the Collateral Sharing Documentation
      Amendment:

                        (x)    the B Guarantee and the C Investment

                                      -41-
<PAGE>
                  is secured by Liens on substantially all of the collateral for
                  the Loans (as defined in the Credit Agreement) and the Senior
                  Notes, and

                        (y)    the Loans (as defined in the Credit Agreement),
                  Reimbursement Obligations (as defined in the Credit Agreement)
                  and the other obligations of the Company under the Credit
                  Agreement and under the other Basic Documents (as defined in
                  the Credit Agreement), together with the Senior Notes, are
                  secured by Liens in any collateral securing the Lessor's
                  obligations to the B Lenders under the Loan Agreement or
                  securing the C Investment (the "B and C Collateral
                  Contribution").

            "SYNTHETIC LEASE LOAN" is defined in the Credit Agreement.

            "SYNTHETIC LEASE LOAN LENDER" is defined in the Credit Agreement.

            "TAX" or "TAXES" is defined in Section 7.4 of the Master Agreement.

            "TAX CODE" means the Internal Revenue Code of 1986, as amended and
in effect from time to time.

            "TAX INDEMNITEE" means the Lessor, the Administrative Agent, each
Lender and their respective Affiliates, successors, permitted assigns, permitted
transferees, employees, officers, directors and agents thereof, PROVIDED,
HOWEVER, that in no event shall the Company or any Lessee be a Tax Indemnitee.

            "TITLE INSURANCE COMPANY" means the company that has or will issue
the title policies with respect to a Leased Property, which company shall be
reasonably acceptable to the Funding Parties.

            "TITLE POLICY" is defined in Section 3.1 of the Master Agreement.

            "TRANSACTION" means all the transactions and activities referred to
in or contemplated by the Operative Documents.

            "2000 SUBORDINATED NOTES" shall mean Indebtedness evidenced by the
2000 Subordinated Notes Documents.

            "2000 SUBORDINATED NOTES DOCUMENTS" shall mean collectively, (a) the
Note and Equity Purchase Agreement dated as of July __, 2000, among the Company,
its Subsidiaries listed on Annex B thereto, American Capital Strategies, Ltd., a
Delaware

                                      -42-
<PAGE>
corporation and Teachers Insurance and Annuity Association, a New York
corporation, (b) the Note Documents (as that term is defined in said Note and
Equity Purchase Agreement) and (c) the 2000 Subordination Agreement.

            "2000 SUBORDINATION AGREEMENT" shall mean the Subordination
Agreement dated as of July 21, 2000 among the holders of the 2000 Subordinated
Notes, the Obligors, the Administrative Agent and the agent under the Master
Agreement, as the same may be modified and supplemented and in effect from time
to time.

            "UCC" means the Uniform Commercial Code of Georgia, as in effect
from time to time.

            "WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person,
any corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.

            "YIELD" is defined in Section 2.3 of the Master Agreement.

                                      -43-

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