Document:

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                                                                  EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

        This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of this 4th day of
August, 2000, is by and between Prison Realty Trust, Inc., a Maryland
corporation with its principal place of business at 10 Burton Hills Boulevard,
Nashville, Tennessee (the "Company"), and John D. Ferguson, a resident of
Nashville, Tennessee (the "Executive").

                              W I T N E S S E T H:

        WHEREAS, the Board of Directors of the Company has resolved that it is
in the best interest of the Company that the Executive be subject to the terms
of an executive employment agreement; and

        WHEREAS the Company and the Executive now desire to enter into this
Agreement and set forth the terms and conditions of the Executive's employment.

        NOW, THEREFORE, for and in consideration of the foregoing recitals, the
mutual promises and covenants set forth below and other good and valuable
consideration, receipt of which is hereby acknowledged, the Company and the
Executive do hereby agree as follows:

        1. Employment. The Executive shall serve as the Chief Executive Officer
and President of the Company and such other office or offices to which Executive
may be appointed or elected by the Board of Directors, with the Executive's
consent, including, but not limited to, Vice Chairman of the Board of Directors.
Subject to the provisions of Section 7. hereof, the Company shall use its best
efforts to have the Executive elected to the Board of Directors of the Company,
and the Executive shall serve in such capacity if elected. Subject to the
direction and supervision of the Board of Directors of the Company, the
Executive shall perform such duties as are customarily associated with the
offices of Chief Executive Officer and President, and such other offices to
which Executive may be appointed or elected by the Board of Directors. The
Executive's principal base of operations for the performance of his duties and
responsibilities under this Agreement shall be the offices of the Company
located in Nashville, Tennessee. The Executive agrees to abide by the Company's
Charter and Bylaws as in effect from time to time and the direction of its Board
of Directors except to the extent such direction would be inconsistent with
applicable law or the terms of this Agreement.

        2. Term. Subject to provisions of termination as hereinafter provided,
the initial term of the Executive's employment under this Agreement shall begin
on the date hereof and shall terminate on December 31, 2002 (the "Initial
Term"). Unless the Company notifies the Executive that his employment under this
Agreement will not be extended or the Executive notifies the Company that he is
not willing to extend his employment, the term of his employment under this
Agreement shall automatically be extended for a series of additional one (1)
year periods on the same terms and conditions as set forth herein (individually,
and collectively, the "Renewal Term").

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        3. Notice of Non-Renewal. If the Company or the Executive elects not to
extend the Executive's employment under this Agreement, the electing party shall
do so by notifying the other party in writing not less than sixty (60) days
prior to the expiration of the Initial Term, or sixty (60) days prior to the
expiration of any Renewal Term. If the Company does not elect to extend the
Executive's employment under this Agreement, the Executive shall be considered
to have been terminated without Cause upon the expiration of his employment, and
the Executive will receive the payments and benefits set forth in this
Agreement. The Executive's date of termination, for the purposes of this
Agreement, shall be the date of the Company's last payment to the Executive.

        4. Compensation.

        4.1. Base Salary. The Company shall pay the Executive an annual salary
("Base Salary") with respect to the Initial Term as follows: (i) for the period
beginning on the date of this agreement and ending on December 31, 2000, the
Company shall pay the Executive a pro-rated salary based on an annual salary of
$350,000; (ii) for the period beginning on January 1, 2001 and ending on
December 31, 2001, the Company shall pay the Executive a salary equal to
$350,000; and (iii) for the period beginning on January 1, 2002 and ending on
December 31, 2002, the Company shall pay the Executive a salary equal to
$400,000. The salary payable to the Executive hereunder shall be paid in
accordance with the Company's normal payroll practices, but in no event less
often than monthly. The annual salary to be paid Executive during the Renewal
Term shall be equal to $400,000, or such other amount as may agreed to by the
Company and Executive prior to such term. During each year of this Agreement,
the Executive's compensation will be reviewed by the Board of Directors of the
Company, or such committee or subcommittee to which compensation review has been
delegated, and after taking into consideration both the performance of the
Company and the personal performance of the Executive, the Board of Directors of
the Company, or any such committee or subcommittee, may increase the Executive's
compensation to any amount it may deem appropriate.

        4.2. Bonus. The Company shall pay to the Executive a cash bonus with
respect to the Company's 2000 fiscal year equal to $75,000, payable on or before
January 31, 2001. The Company shall pay to the Executive a cash bonus with
respect to the Company's 2001 fiscal year equal to $175,000, payable on or
before January 31, 2002. In the event the Company achieves certain financial
performance targets as established by the Board of Directors of the Company
after consultation with the Executive for the Company's 2001 fiscal year or such
other period as the parties mutually agree, the Company shall also pay the
Executive a cash bonus equal to $175,000, payable at the earlier of March 31,
2002 and ten (10) days following the confirmation by the Board of Directors of
the Company that such targets have been met. The Company shall pay to the
Executive a cash bonus hereunder with respect to the Company's 2002 fiscal year
equal to $200,000, payable on or before January 31, 2003. In the event the
Company achieves certain financial performance targets as established by the
Board of Directors of the Company after consultation with the Executive for the
Company's 2002 fiscal year or such other period as the parties mutually agree,
the Company shall pay to the Executive a cash bonus equal to $200,000, payable
at the earlier of March 31, 2003 and ten (10) days following the confirmation by
the Board of Directors of the Company that such targets have been met.

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        4.3. Benefits.

        4.3.1. General. The Executive shall be entitled to an annual paid
vacation as established by the Board of Directors of the Company. In addition,
the Executive shall be entitled to participate in all compensation or employee
benefit plans or programs and receive all benefits and perquisites for which any
salaried employees are eligible under any existing or future plan or program
established by the Company for salaried employees. The Executive will
participate to the extent permissible under the terms and provisions of such
plans or programs in accordance with program provisions. These may include group
hospitalization, health, dental care, life or other insurance, tax qualified
pension, savings, thrift and profit sharing plans, termination pay programs,
sick leave plans, travel or accident insurance, disability insurance, and
contingent compensation plans including unit purchase programs and unit option
plans. Except as may be provided for in Section 4.3.2. herein, nothing in this
Agreement shall preclude the Company from amending or terminating any of the
plans or programs applicable to salaried or senior executives as long as such
amendment or termination is applicable to all salaried employees or senior
executives.

        4.3.2. Life, Health and Disability Insurance. Notwithstanding the
benefit provisions of Section 4.3.1. herein, and in addition to the benefit
provisions contained therein, the Company agrees to the following:

               (i) To provide and maintain, during the period of the Executive's
        employment with the Company, and for a period of two (2) years
        thereafter, health insurance on the Executive and his spouse in such
        amounts as are customary for or available to executives of the Company;
        and

               (ii) To provide and maintain, through insurance or on its own
        account, coverage for the Executive, relating to illness or incapacity
        resulting in the Executive being unable to perform his services, that
        will provide payment of the Executive full salary and benefits for one
        (1) year. To the extent that payments are received from any worker's
        compensation or other Company paid plans, the Company's obligations will
        be reduced by amounts so received.

With respect to the Company's obligations under this Section 4.3.2, the Company
agrees to waive any and all provisions relating to any pre-existing conditions
of the Executive and any waiting period that may be required under the terms of
the Company's health insurance plan or policy with respect to the coverage of
the Executive thereunder.

        4.4. Expenses Incurred in Performance of Duties. The Company shall
promptly reimburse the Executive for all reasonable travel and other business
expenses incurred by the Executive in the performance of his duties under this
Agreement upon evidence of receipt.

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        4.5. Withholdings. All compensation payable hereunder shall be subject
to withholding for federal income taxes, FICA and all other applicable federal,
state and local withholding requirements.

        4.6 Options to Purchase Stock/SARs. Upon execution of this Agreement,
the Company shall grant to the Executive an option to purchase up to 1,000,000
shares of common stock, $.01 par value per share, of the Company, having an
exercise price equal to $2.38 per share. The option to purchase 500,000 of the
shares shall vest immediately upon the execution of this Agreement, with the
option to purchase 500,000 shares vesting upon the first anniversary hereof.
Executive shall also be entitled to receive upon execution of this Agreement an
option to purchase: (i) 500,000 shares of common stock of the Company, having an
exercise price equal to $5.00 per share, with such option vesting upon the
second anniversary hereof; and (ii) 500,000 shares of the Company's common stock
having an exercise price of $7.50 per share, with such option vesting on the
third anniversary hereof. The terms and conditions of the options shall be set
forth in an option agreement in form substantially similar to that attached
hereto as Exhibit A (the "Option Agreement").

        In the event the stockholders of the Company shall fail to approve the
grant of options or warrants or any amendment to the stock option plan
authorizing such grant thereunder (the "Plan") as described above on or before
December 31, 2000, the Company shall, on or before December 31, 2000, in lieu of
the grant of options, in the event such grant has not occurred, or in
consideration for the cancellation thereof if such grant has occurred, grant the
Executive 2,000,0000 stock appreciation rights (each, a "SAR" and, collectively,
the "SARs"). The SARs shall vest twenty-five percent (25%) upon the execution of
this Agreement, twenty-five percent (25%) upon the first anniversary hereof,
twenty-five percent (25%) upon the second anniversary hereof and twenty-five
percent (25%) upon the third anniversary hereof and shall be exercisable for a
period of ten (10) years after the date hereof. The exercise price shall be
$2.38 per share for the first and second tranche of SARs that vests, $5.00 per
share for the third tranche of SARs that vests and $7.50 per share for the
fourth tranche of SARs that vests. The SARs shall otherwise have the same terms
and conditions, including acceleration of vesting in certain events, as applies
to the options.

        Thereafter during the term, the Executive shall be eligible to
participate in the Plan or, to the extent more favorable to the Executive, other
equity plan or plans established by the Board of Directors of the Company for
the Company's senior executive officers, as the same may be amended from time to
time (provided that no such amendment shall materially diminish the benefits to
Executive thereunder), as and to the extent other senior executive officers
participate in the same.

        5. Termination of Agreement.

        5.1. Termination of Agreement Upon Death of Executive.

        5.1.1. General. The Company may terminate this Agreement without any
further obligation (except as provided in this Section 5.1.1.) to the Executive
on the death of the Executive. In the event of the Executive's death during the
course of his employment hereunder, the Executive's Base

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Salary shall continue to be paid to the Executive's estate or the Executive for
a period of one (1) year from the date of death or Disability. Nothing in this
Section 5.1.1. is intended to effect the entitlement of the Executive or his
estate to any payments or benefits to which he or it would otherwise be entitled
under any other Company plan or program.

        5.1.2. Salary, Bonus and Options. If the Executive's employment shall be
terminated because of the Executive's death, the Executive's estate or
designated beneficiaries shall, as soon as practicable: (A) the actual bonus, if
any, he would have received in respect of the fiscal year in which his death
occurs, prorated by a fraction, the numerator of which is the number of days of
the fiscal year until his death and the denominator of which is 365, payable at
the same time as such bonus would be paid to him under the term of this
Agreement and (B) accrued but unpaid Base Salary through the date of Executive's
death and any additional payments under applicable plans or programs to which
the Executive's estate or designated beneficiaries are entitled pursuant to the
terms of such plans or programs (collectively, the "Accrued Rights"). In
addition, the Executive's estate or designated beneficiaries shall, in
accordance with any agreement relating to such options, have the right to
exercise any vested, but unexercised, options to purchase shares of the
Company's common stock or other equity securities of the Company for the
duration of such options' terms. Any unexercised and any non-vested options to
purchase shares of common stock or other equity securities of the Company
previously granted to Executive shall be forfeited by the Executive.

        5.2. Termination of Agreement Upon Disability of Executive.

        5.2.1. General. The Company may terminate this Agreement without any
further obligation (except as provided in this Section 5.2.1.) to the Executive
on the Disability of the Executive. In the event of the Executive's Disability
during the course of his employment hereunder, the Executive's Base Salary shall
continue to be paid to the Executive for a period of one (1) year from the date
of Disability. Nothing in this Section 5.2.1. is intended to affect the
entitlement of the Executive or his estate to any payments or benefits to which
he or it would otherwise be entitled under any other Company plan or program.

        5.2.2. Salary, Bonus and Options. If the Executive's employment shall be
terminated because of the Executive's Disability, the Company shall pay to the
Executive, as soon as practicable his Accrued Rights. In addition, the Executive
shall, in accordance with any agreement relating to such options, have the right
to exercise any vested, but unexercised, options to purchase shares of the
Company's common stock or other equity securities of the Company for the
duration of such options' terms. Any unexercised and any non-vested options to
purchase shares of common stock or other equity securities of the Company
previously granted to Executive shall be forfeited by the Executive.

        5.2.3. Definition of Disability. For purposes of this Agreement,
"Disability" shall mean the Executive's absence from performance of his assigned
duties for the Company on a full-time basis for six (6) consecutive calendar
months as a result of incapacity due to medically documented physical or mental
illness and which, in the opinion of a physician mutually acceptable to the

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Company and the Executive or the Executive's legal representative, makes it
impossible for the Executive to perform his duties and responsibilities under
this Agreement.

        5.3. Termination for Cause.

        5.3.1. General. During the term of this Agreement, the Company may, at
any time and in its sole discretion, terminate this Agreement for Cause (as
hereinafter defined), effective as of the date of provision of written notice to
the Executive thereof. Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the affirmative vote of
not less than a majority of the entire membership of the Board of Directors of
the Company at a meeting of the Board called and held for that purpose (after
reasonable notice to the Executive, and an opportunity for the Executive,
together with counsel of his choice, to be heard before the Board of Directors
of the Company), finding that the Executive was, in the good faith opinion of
the Board of Directors of the Company, guilty of conduct set forth in Section
5.3.3. hereof and specifying the particulars thereof in reasonable detail.

        5.3.2. Salary, Bonus and Options. If the Executive's employment shall be
terminated for Cause: (i) the Company shall pay the Executive his Base Salary
earned through the date of termination of the Executive's employment with the
Company (the "Termination Date"); (ii) the Company shall not have any further
obligations to the Executive under this Agreement except those required to be
provided by law; and (iii) any unexercised and any non-vested options to
purchase shares of common stock or other equity securities of the Company
previously granted to Executive shall be forfeited by the Executive.

        5.3.3. Definition of "Cause". For purposes of this Agreement, "Cause"
shall mean: (i) conviction of a felony or of a crime involving misappropriation
or embezzlement; (ii) willful and material wrongdoing by the Executive,
including, but not limited to, acts of dishonesty or fraud, which have a
material adverse effect on the Company or any of its subsidiaries; (iii)
repeated material failure of the Executive to follow the direction of the
Company and its Board of Directors regarding the material duties of employment;
or (iv) material breach by the Executive of a material obligation under this
Agreement and failure to cure such breach within thirty (30) days after being
given written notice of such breach by the Company.

        5.4. Termination Without Cause or Resignation for Good Reason.

        5.4.1. General. The Company has the right to terminate the Executive's
employment, without Cause, effective as of the date of provision of written
notice to the Executive thereof. In addition, the Executive may resign for Good
Reason, as defined herein, effective as of the date of provision of written
notice to the Company thereof.

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        5.4.2. Effect of Termination Without Cause or Resignation for Good
Reason. In the event the Executive is terminated without Cause by the Company or
in the event the Executive resigns for Good Reason, the Company shall pay to the
Executive, as soon as practicable, his Accrued Rights. The Company shall also
pay the Executive an amount equal to two (2) times the Executive's Base Salary,
based upon the annual rate payable as of the date of termination, without any
cost of living adjustments, payable on a monthly basis for a period of two (2)
years from the date of termination or resignation, unless such termination
occurs within the two (2) year period following a Change of Control (as defined
in Section 5.5.3. herein), in which case the Company shall pay the Executive his
Accrued Rights as soon as is practicable and shall also pay Executive the Change
of Control Severance (as defined in Section 5.5.2. herein) within sixty (60)
days of the termination of Executive's employment. The Company's obligation to
make the payments set forth in this Section 5.4.2. shall be unconditional, and
the Executive shall not be required to mitigate the amount of any payment
provided for in this Section 5.4.2. In addition:

               (i) the Executive shall continue to be covered, for the two (2)
        year period, under medical, health, life and disability insurance plans
        of the Company.

               (ii) the Executive shall, in accordance with any agreement
        relating to such options, have the right to exercise any vested, but
        unexercised, options to purchase shares of the Company's common stock or
        other equity securities of the Company for the duration of such options'
        terms. Any unexercised and any non-vested options to purchase shares of
        common stock or other equity securities of the Company previously
        granted to Executive shall be forfeited by the Executive.

        5.4.3. Definition of "Good Reason". For the purposes of this Agreement,
"Good Reason" shall mean: (i) removal from the offices which Executive holds,
(ii) the assignment to Executive of any duties inconsistent with Executive's
position, authority, duties or responsibilities as contemplated by Section 1.
hereof, any adverse change in Executive's reporting responsibilities, or any
action by Company that results in a diminution in such position, authority,
duties or responsibilities, but excluding for these purposes an isolated and
insubstantial action not taken in bad faith and which is remedied by Company
promptly after receipt of notice thereof given by Executive, (iii) any
diminution in Executive's compensation in violation of this Agreement, (iv) the
relocation, without the consent of Executive, of Company's principal executive
offices or the offices of Executive to a location more than forty (40) miles
from Nashville, Tennessee, or (v) if Company or its affiliates materially
breaches this Agreement or materially breaches any other agreement between
Executive and Company or its Affiliates, including the Option Agreement, and
fails to cure such breach within thirty (30) days of its receipt of written
notice from Executive specifying the breach.

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        5.5. Resignation by Executive in the Event of a Change of Control.

        5.5.1. General. The Executive shall be entitled to resign his employment
with the Company in the event of a Change of Control of the Company pursuant to
this Section 5.5. at any time within six (6) months following the occurrence of
a Change of Control. The fact that the Executive may choose not to resign his
employment in the event of a Change of Control shall in no way affect the
Executive's right to do so upon the occurrence of a subsequent transaction or
event which constitutes a Change of Control of the Company.

        5.5.2. Effect of Resignation in the Event of a Change of Control. In the
event the Executive resigns in connection with a Change of Control of the
Company, the Company shall pay to the Executive his Accrued Rights. The Company
shall also pay the Executive, a one-time payment to be paid within sixty (60)
days of Executive's resignation, an amount equal to three (3) times the
Executive's Base Salary, based upon the annual rate payable as of the date of
termination, without any cost of living adjustments (the "Change of Control
Severance"). The Company's obligation to make the payments set forth in this
Section 5.5.2. shall be unconditional, and the Executive shall not be required
to mitigate the amount of any payment provided for in this Section 5.5.2. In
addition:

               (i) the Executive shall continue to be covered, for the two (2)
        year period, under medical, health, life and disability insurance plans
        of the Company.

               (ii) all options (whether vested or un-vested) to purchase shares
        of common stock or other equity securities of the Company previously
        granted by the Company to the Executive shall become immediately
        exerciseable for the duration of such options' terms.

        5.5.3. Definition of a "Change of Control". "Change of Control" shall
mean the occurrence of any of the following events:

               (i) the acquisition by any individual, entity or group (within
        the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
        Act of 1934, as amended), of beneficial ownership (within the meaning of
        Rule 13d-3 promulgated under the Securities Exchange Act) of fifty
        percent (50%) or more of the combined voting power of the
        then-outstanding voting securities of the Company entitled to vote
        generally in the election of directors, but excluding for the purpose of
        this section, any such acquisition by (A) the Company or any of its
        subsidiaries, (B) any employee benefit plan (or related trust) or (C)
        any corporation with respect to which, following such acquisition, more
        than fifty percent (50%) of the combined voting power of the
        then-outstanding voting securities of the Company entitled to vote
        generally in the election of directors is then beneficially owned,
        directly or indirectly, by individuals and entities who, immediately
        prior to such acquisition, were the beneficial owners of the then
        outstanding voting securities of the Company entitled to vote generally
        in the election of directors; or

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               (ii) the stockholders of the Company approve a merger or
        consolidation of the Company with any other corporation or entity
        regardless of which entity is the survivor, other than a merger or
        consolidation which would result in the voting securities of the Company
        outstanding immediately prior thereto continuing to represent (either by
        remaining outstanding or being converted into voting securities of the
        surviving entity) at least fifty percent (50%) of the combined voting
        power of the voting securities of the Company or such surviving entity
        outstanding immediately after such merger or consolidation; or

               (iii) the stockholders of the Company approve a plan of complete
        liquidation or winding-up of the Company or an agreement for the sale or
        disposition by the Company of all or substantially all of the Company's
        assets; or

               (iv) any event which the Board of Directors determines should
        constitute a Change in Control;

provided, however, that, notwithstanding the foregoing, the merger of the
Company and/or its subsidiaries with CCA, and the completion of the transactions
contemplated thereby, including the restructuring of the Company's board of
directors, all as described in the Company's proxy statement dated July 31,
2000, as filed with the U.S. Securities and Exchange Commission on such date, as
may be supplemented from time to time, regarding the restructuring of the
Company, shall not constitute a Change in Control for the purpose of this
Agreement.

        5.6. Resignation by Executive Other than in the Event of a Change of
Control or for Good Reason.

        5.6.1. General. The Executive shall be entitled to resign his employment
with the Company other than in the event of a Change of Control and for Good
Reason and for any reason at any time pursuant to this Section 5.6.

        5.6.2. Effect of Resignation Other than in the Event of a Change of
Control or for Good Reason. If the Executive resigns from his employment for any
reason other than in the event of a Change of Control or for Good Reason: (i)
the Company shall pay the Executive his Base Salary earned through the date of
termination of the Executive's employment with the Company (the "Termination
Date"); (ii) the Company shall not have any further obligations to the Executive
under this Agreement except those required to be provided by law; and (iii) any
unexercised options and any non-vested options to purchase shares of common
stock or other equity securities of the Company previously granted to Executive
shall be forfeited by the Executive.

        6. Non-Competition, Non-Solicitation and Confidentiality and
Non-Disclosure

        6.1. Non-Competition, Non-Solicitation. Executive hereby covenants and
agrees that during term of the Executive's employment hereunder and for a period
of one (1) year thereafter, Executive shall not, directly or indirectly: (i) own
any interest in, operate, join, control or participate

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as a partner, director, principal, officer or agent of, enter into the
employment of, act as a consultant to, or perform any services for any entity
(each a "Competing Entity") which has material operations which compete with any
business in which the Company is then engaged; (ii) solicit any customer or
client of the Company with respect to any business in which the Company is then
engaged (other than on behalf of the Company); or (iii) induce or encourage any
employee of the Company to leave the employ of the Company; provided, that
Executive may, solely as an investment, hold not more than five percent (5%) of
the combined voting securities of any publicly-traded corporation or other
business entity. The foregoing covenants and agreements of Executive are
referred to herein as the "Restrictive Covenant." Executive acknowledges that he
has carefully read and considered the provisions of the Restrictive Covenant
and, having done so, agrees that the restrictions set forth in this Section
6.1., including without limitation the time period of restriction set forth
above, are fair and reasonable and are reasonably required for the protection of
the legitimate business and economic interests of the Company. Executive further
acknowledges that the Company would not have entered into this Agreement or
agreed to grant Executive the options to purchase shares of the Company stock
under Section 4.6. herein absent Executive's agreement to the foregoing.

        In the event that, notwithstanding the foregoing, any of the provisions
of this Section 6.1. or any parts hereof shall be held to be invalid or
unenforceable, the remaining provisions or parts hereof shall nevertheless
continue to be valid and enforceable as though the invalid or unenforceable
portions or parts had not been included herein. In the event that any provision
of this Section 6.1. relating to the time period and/or the area of restriction
and/or related aspects shall be declared by a court of competent jurisdiction to
exceed the maximum restrictiveness such court deems reasonable and enforceable,
the time period and/or area of restriction and/or related aspects deemed
reasonable and enforceable by such court shall become and thereafter be the
maximum restrictions in such regard, and the provisions of the Restrictive
Covenant shall remain enforceable to the fullest extent deemed reasonable by
such court.

        6.2 Confidentiality and Non-Disclosure. In consideration of the rights
granted to the Executive hereunder, the Executive hereby agrees that during the
term of this Agreement and for a period of one (1) year thereafter to hold in
confidence all information concerning the Company or its business, including,
but not limited to contract terms, financial information, operating data, or
business plans or models, whether for existing, new or developing businesses,
and any other proprietary information (hereinafter, collectively referred to as
the "Proprietary Information"), whether communicated orally or in documentary or
other tangible form. The parties to this Agreement recognize that the Company
has invested considerable amounts of time and money in attaining and developing
all of the information described above, and any unauthorized disclosure or
release of such Proprietary Information in any form would irreparably harm the
Company.

        7. Attendance at Board Meeting; Election to Board. For so long as the
Executive shall serve as the Chief Executive Officer of the Company, Executive
shall have the right to attend and to be heard at all meetings of the Board of
Directors (or meetings of any committees of the Board of Directors) of the
Company in a nonvoting capacity, to receive notice of such meetings, and to
receive the information provided by the Company to the Board of Directors.
Pursuant to the

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obligations of the Company under Section 1 hereof, the Company shall use its
reasonable best efforts to have the Board of Directors nominate Executive for
election to the Board of Directors by the stockholders of the Company on an
annual basis, or at such other time as appropriate given the term of the
Executive's election to the Board, during the term of this Agreement.

        8. Tax Reimbursement Payment.

               (i) Anything in this Agreement to the contrary notwithstanding,
        in the event it shall be determined that any payment or distribution by
        or on behalf of the Company to or for the benefit of Executive as a
        result of a change in control, as defined in Section 280G of the
        Internal Revenue Code (the "Code"), (whether paid or payable or
        distributed or distributable pursuant to the terms of this Agreement or
        otherwise, a "Payment") would be subject to the excise tax imposed by
        Section 4999 of the Code, or any interest or penalties are incurred by
        Executive with respect to such excise tax (such excise tax together with
        any such interest and penalties are hereinafter collectively referred to
        as the "Excise Tax"), then Executive shall be entitled to receive an
        additional payment (a "Gross-Up Payment") in an amount such that after
        payment by Executive of all taxes (including any interest or penalties
        imposed with respect to such taxes), including, without limitation, any
        income taxes (and any interest and penalties imposed with respect
        thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive
        retains an amount of the Gross-Up Payment equal to the Excise Tax
        imposed upon the Payments.

               (ii) Subject to the provisions of subsection (iii) below, all
        determinations required to be made under this Section 8., including
        whether and when a Gross-Up Payment is required, the amount of such
        Gross-Up Payment and the assumptions to be utilized in arriving at such
        determination, shall be made by a nationally recognized accounting firm
        or law firm selected by the Executive, subject to the consent of the
        Company, which consent shall not be unreasonably withheld (the "Tax
        Firm"); provided, however, that the Tax Firm shall not determine that no
        Excise Tax is payable by the Executive unless it delivers to Executive a
        written opinion (the "Tax Opinion") that failure to pay the Excise Tax
        and to report the Excise Tax and the payments potentially subject
        thereto on or with Executive's applicable federal income tax return will
        not result in the imposition of an accuracy-related or other penalty on
        Executive. All fees and expenses of the Tax Firm shall be borne solely
        by the Company. Within fifteen (15) business days of the receipt of
        notice from Executive that there has been a Payment, or such earlier
        time as is requested by the Company, the Tax Firm shall make all
        determinations required under this Section 8., shall provide to the
        Company and Executive a written report setting forth such
        determinations, together with detailed supporting calculations, and, if
        the Tax Firm determines that no Excise Tax is payable, shall deliver the
        Tax Opinion to the Executive. Any Gross-Up Payment, as determined
        pursuant to this Section 8., shall be paid by the Company to Executive
        within fifteen (15) days of the receipt of the Tax Firm's determination.
        Subject to the other provisions of this Section 8., any determination by
        the Tax Firm shall be binding upon the Company and the Executive;
        provided, however, that the Executive shall only be bound to

                                       11

<PAGE>   12

        the extent that the determinations of the Tax Firm hereunder, including
        the determinations made in the Tax Opinion, are reasonable and
        reasonably supported by applicable law. The parties acknowledge,
        however, that as a result of the uncertainty in the application of
        Section 4999 of the Code at the time of the initial determination by the
        Tax Firm hereunder or as a result of a contrary determination by the
        Internal Revenue Service, it is possible that Gross-Up Payments which
        will not have been made by the Company should have been made
        ("Underpayment"), consistent with the calculations required to be made
        hereunder. In the event that it is ultimately determined in accordance
        with the procedures set forth in subsection (iii) below that the
        Executive is required to make a payment of any Excise Tax, the Tax Firm
        shall reasonably determine the amount of the Underpayment that has
        occurred and any such Underpayment shall be promptly paid by the Company
        to or for the benefit of Executive. In determining the reasonableness of
        the Tax Firm's determinations hereunder and the effect thereof, the
        Executive shall be provided a reasonable opportunity to review such
        determinations with the Tax Firm and the Executive's tax counsel. The
        Tax Firm's determinations hereunder, and the Tax Opinion, shall not be
        deemed reasonable until the Executive's reasonable objections and
        comments thereto have been satisfactorily accommodated by the Tax Firm.

               (iii) The Executive shall notify the Company in writing of any
        claims by the Internal Revenue Service that, if successful, would
        require the payment by the Company of the Gross-Up Payment. Such
        notification shall be given as soon as practicable but no later than
        thirty (30) calendar days after Executive actually receives notice in
        writing of such claim and shall apprise the Company of the nature of
        such claim and the date on which such claim is requested to be paid;
        provided however, that the failure of Executive to notify the Company of
        such claim (or to provide any required information with respect thereto)
        shall not affect any rights granted to the Executive under this Section
        8. except to the extent that the Company is materially prejudiced in the
        defense of such claim as a direct result of such failure. The Executive
        shall not, unless otherwise required by the Internal Revenue Service,
        pay such claim prior to the expiration of the 30-day period following
        the date on which he gives such notice to the Company (or such shorter
        period ending on the date that any payment of taxes with respect to such
        claim is due). If the Company notifies the Executive in writing prior to
        the expiration of such 30-day period that it desires to contest such
        claim, the Executive shall:

                       (1) give the Company and information reasonably requested
               by the Company relating to such claim;

                       (2) take such action in connection with contesting such
               claim as the Company shall reasonably request in writing from
               time to time, including, without limitation, accepting legal
               representation with respect to such claim by an attorney selected
               by the Company and reasonably acceptable to Executive;

                                       12
<PAGE>   13

                       (3) cooperate with the Company in good faith in order
               effectively to contest such claim; and

                       (4) if the Company elects not to assume and control the
               defense of such claim, permit the Company to participate in any
               proceedings relating to such claim;

        provided, however, that the Company shall bear and pay directly all
        costs and expenses (including additional interest and penalties incurred
        in connection with such contest and shall indemnify and hold the
        Executive harmless, on an after-tax basis, for any Excise Tax or income
        tax (including interest and penalties with respect thereto) imposed as a
        result of such representation and payment of costs and expenses. Without
        limiting the foregoing provisions of this subsection (iii), the Company
        shall have the right, at its sole option, to assume the defense of and
        control all proceedings in connection with such contest, in which case
        it may pursue or forego any and all administrative appeals, proceedings,
        hearings and conferences with the taxing authority in respect of such
        claim and may either direct the Executive to pay the tax claimed and sue
        for a refund or contest the claim in any permissible manner, and the
        Executive agrees to prosecute such contest to a determination before any
        administrative tribunal, in a court of initial jurisdiction and in one
        or more appellate courts, as the Company shall determine; provided,
        however, that if the Company directs the Executive to pay such claim and
        sue for a refund, the Company shall advance the amount of such payment
        to the Executive, on an interest-free basis and shall indemnify and hold
        the Executive harmless, on an after-tax basis, from any Excise Tax or
        income tax (including interest or penalties with respect thereto)
        imposed with respect to such advance or with respect to any imputed
        income with respect to such advance; and further provided that any
        extension of the statue of limitations relating to payment of taxes for
        the taxable year of the Executive with respect to which such contested
        amount is claimed to be due is limited solely to such contested amount.
        Furthermore, the Company's right to assume the defense of and control
        the contest shall be limited to issues with respect to which a Gross-Up
        Payment would be payable hereunder, and the Executive shall be entitled
        to settle or contest, as the case may be, any other issue raised by the
        Internal Revenue Service or any other taxing authority.

               (iv) If, after the receipt by the Executive of an amount advanced
        by the Company pursuant to this Section 8., the Executive becomes
        entitled to receive any refund with respect to such claim, the Executive
        shall (subject to the Company's complying with the requirements of
        subsection (iii) above) promptly pay to the Company the amount of such
        refund (together with any interest paid or credited thereon after taxes
        applicable thereto). If, after the receipt by the Executive of an amount
        advanced by the Company pursuant to subsection (iii) above, a
        determination is made that the Executive is not entitled to a refund
        with respect to such claim and the Company does not notify the Executive
        in writing of its intent to contest such denial of refund prior to the
        expiration of thirty (30) days after such determination, then such
        advance shall, to the extent of such denial, be forgiven and shall not
        be required to be repaid and the amount of forgiven advance shall
        offset, to the extent thereof, the amount of Gross-Up Payment required
        to be paid.

                                       13
<PAGE>   14

        9. Indemnification. The Company shall indemnify the Executive to the
fullest extent that would be permitted by law (including a payment of expenses
in advance of final disposition of a proceeding) as in effect at the time of the
subject act or omission, or by the Charter or Bylaws of the Company as in effect
at such time, or by the terms of any indemnification agreement between the
Company and the Executive, whichever affords greatest protection to the
Executive, and the Executive shall be entitled to the protection of any
insurance policies the Company may elect to maintain generally for the benefit
of its officers or, during the Executive's service in such capacity, directors
(and to the extent the Company maintains such an insurance policy or policies,
in accordance with its or their terms to the maximum extent of the coverage
available for any company officer or director); against all costs, charges and
expenses whatsoever incurred or sustained by the Executive (including but not
limited to any judgement entered by a court of law) at the time such costs,
charges and expenses are incurred or sustained, in connection with any action,
suit or proceeding to which the Executive may be made a party by reason of his
being or having been an officer or employee of the Company, or serving as a
director, officer or employee of an affiliate of the Company, at the request of
the Company, other than any action, suit or proceeding brought against the
Executive by or on account of his breach of the provisions of any employment
agreement with a third party that has not been disclosed by the Executive of the
Company.

        10. Expenses Incurred in Negotiation and Preparation of Agreement. The
Company shall reimburse Executive for one half (50%) of his reasonable and
documented legal fees and expenses incurred by Executive in connection with the
negotiation of the terms of his employment with the Company and the preparation
of all agreements in connection therewith.

        11. Notices. Any notice required or desired to be given under this
Agreement shall be in writing and shall be delivered personally, transmitted by
facsimile or mailed by registered mail, return receipt requested, or delivered
by overnight courier service and shall be deemed to have been given on the date
of its delivery, if delivered, and on the third (3rd) full business day
following the date of the mailing, if mailed, to each of the parties thereto at
the following respective addresses or such other address as may be specified in
any notice delivered or mailed as above provided:

                       (i)    If to the Executive, to:

                              John D. Ferguson
                              3818 West End Avenue, #104
                              Nashville, Tennessee 37205

                                       14
<PAGE>   15

                       (ii) If to the Company, to:

                            Prison Realty Trust, Inc.
                            10 Burton Hills Boulevard
                            Nashville, Tennessee 37215
                            Attention: Chairman of the Board of Directors
                            Facsimile: (615) 263-3010

        12. Waiver of Breach. The waiver by either party of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach by the other party.

        13. Assignment. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. The Executive acknowledges that the services to be
rendered by him are unique and personal, and the Executive may not assign any of
his rights or delegate any of his duties or obligations under this Agreement.

        14. Entire Agreement. This instrument contains the entire agreement of
the parties. It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.

        15. Controlling Law. This Agreement shall be governed and interpreted
under the laws of the State of Tennessee.

        16. Headings. The sections, subjects and headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

                           [signature page to follow]

                                       15

<PAGE>   16

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written.

                                       EXECUTIVE:

                                       John D. Ferguson

                                       /s/ John D. Ferguson
                                       -------------------------------------

                                       COMPANY:

                                       Prison Realty Trust, Inc.

                                       By: /s/ Thomas W. Beasley
                                          ------------------------------------

                                       Title: Chairman of the Board of Directors
                                              ----------------------------------

                                       16

<PAGE>   17

                                    EXHIBIT A

                            Form of Option Agreement

<PAGE>   18

                                OPTION AGREEMENT

        This OPTION AGREEMENT (the "Agreement"), is made this 4th of August
2000, by and between Prison Realty Trust, Inc., a Maryland corporation (the
"Company"), and John D. Ferguson, a resident of Nashville, Tennessee
("Optionee").

                                   WITNESSETH:

        WHEREAS, the Company has engaged Optionee as its Chief Executive Officer
and President on the terms and conditions set forth in that certain Employment
Agreement, dated August 4, 2000, between the Company and Optionee (the
"Employment Agreement");

        WHEREAS, pursuant to the Employment Agreement, the Company agreed to
grant to Optionee options to purchase up to an aggregate of 2,000,000 shares of
the Company's common stock, $0.01 par value per share (the "Common Stock");

        WHEREAS, the Company has adopted the 1997 CCA Prison Realty Trust Share
Incentive Plan (the "Plan"), a plan previously adopted and administered by a
predecessor to the Company;

        WHEREAS, the Board of Directors of the Company has amended the Plan to
provide for the grant of the Options, as hereinafter defined (the "Amendment");
and

        WHEREAS, the Company and Optionee desire to set forth herein the terms
and conditions of such options.

        NOW THEREFORE, for and in consideration of the foregoing recitals, the
mutual promises and covenants set forth below and other good and valuable
consideration, receipt of which is hereby acknowledged, the Company and Optionee
do hereby agree as follows:

        1. Grant of Option. Upon and subject to the terms, restrictions,
limitations and conditions set forth herein, the Company hereby grants to
Optionee the options described below (collectively, the "Options") to purchase
shares of Common Stock (collectively, the "Option Shares"):

               (i) an option to purchase up to 1,000,000 shares of Common Stock
at an exercise price of $2.38 per share, one-half (1/2) of which shall vest and
become exercisable immediately upon the execution of this Agreement and one-half
(1/2) of which shall vest and become exercisable on the first anniversary of
this Agreement;

               (ii) an option to purchase up to 500,000 shares of Common Stock
at an exercise price of $5.00 per share, all of which shall vest and become
exercisable on the second anniversary of this Agreement; and

                                        1
<PAGE>   19

               (iii) an option to purchase up to 500,000 shares of Common Stock
at an exercise price of $7.50 per share, all of which shall vest and become
exercisable on the third anniversary of this Agreement.

        2. Exercise. Subject to earlier termination pursuant to Section 4 below,
Optionee (or in the event of Optionee's death during the term of the Options,
the personal representative of the Optionee's estate) shall have the right to
exercise such the Options at any time and from time to time following the
vesting of such Options and prior to the tenth (10th) anniversary of this
Agreement (the "Option Period").

        3. Method of Exercise. The Options may be exercised, whole or in part,
by Optionee's giving written notice of exercise to the Company specifying the
number of Option Shares to be purchased. Such notice shall be accompanied by
payment in full of the purchase price in immediately available funds. In the
sole discretion of the Company, payment may also be made in the form of an
option to purchase Common Stock or unrestricted shares of Common Stock already
owned by Optionee (based in each case on the fair market value of the Common
Stock option or shares of Common Stock option or shares of Common Stock on the
date the Options are exercised, as determined in good faith by the Board of
Directors of the Company). No Option Shares shall be issued until full payment
therefor has been made.

        4. Termination of Employment. In the event Optionee's employment with
the Company is terminated pursuant to the terms of the Employment Agreement, the
vesting and exercise of the Options shall be as follows:

               (i) If Optionee's employment shall be terminated because of
Optionee's death, Optionee's estate or designated beneficiaries shall have the
right to exercise any vested, but unexercised, Options outstanding on the date
of such termination for the balance of such Options' term. In addition, Optionee
shall become immediately vested in any non-vested Options outstanding on the
date of such termination that are scheduled to vest within one (1) year from the
date of such termination, and the Optionee's estate or designated beneficiaries
shall have the right to exercise any such Options for the balance of such
Options' term. All non-vested Options shall be forfeited immediately by the
Optionee.

               (ii) If Optionee's employment shall be terminated because of the
Optionee's Disability (as determined under the Employment Agreement), Optionee
or his legal representative shall have the right to exercise any vested, but
unexercised, Options outstanding on the date of such termination for the balance
of such Options' term. In addition, Optionee shall become immediately vested in
any non-vested Options outstanding on the date of such termination that are
scheduled to vest within one (1) year from the date of such termination, and the
Optionee or his legal representative shall have the right to exercise any such
Options for the balance of such Options' term. All non-vested Options shall be
forfeited immediately by the Optionee.

                                        2
<PAGE>   20

               (iii) If Optionee's employment shall be terminated for Cause (as
determined under the Employment Agreement), all unexercised and all non-vested
Options outstanding on the date of such termination shall be immediately
forfeited by Optionee.

               (iv) If Optionee's employment shall be terminated without Cause
or if Optionee resigns for Good Reason (each as determined under the Employment
Agreement), Optionee shall have the right to exercise any vested, but
unexercised, Options outstanding on the date of such termination for the balance
of such Options' term. In addition, Optionee shall become immediately vested in
any non-vested Options that are scheduled to vest within one (1) year from the
date of such termination, and the Optionee shall have the right to exercise any
such Options for the balance of such Options' term. All non-vested Options shall
be forfeited immediately by the Optionee.

               (v) If Optionee resigns in connection with a Change of Control of
the Company (as determined under the Employment Agreement), any non-vested
Options outstanding on the date of such resignation shall vest in full and shall
become immediately exercisable, and Optionee shall have the right to exercise
any unexercised Options for the balance of such Options' term.

               (vi) If Optionee resigns (election not to renew Executive's
employment under the Employment Agreement shall not be considered a resignation)
from his employment for any reason other than in connection with a Change of
Control or for Good Reason (each as determined under the Employment Agreement),
any unexercised Options and any non-vested Options outstanding on the date of
such resignation shall be immediately forfeited by Optionee.

        5. Transferability. The Option shall not be transferable, except (a) by
will or the laws of descent and distribution, or (b) by Optionee to (i) the
spouse, children or grandchildren of Optionee ("Immediate Family Members"), or
(ii) a trust or trusts for the exclusive benefit of such Immediate Family
Members, provided that (y) there may be no consideration for any such transfer,
and (z) subsequent transfers of the Option shall be prohibited except in
accordance with this Section 5. Following transfer, any transferred Option shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of this Agreement,
except for the provisions herein regarding the employment of Optionee with the
Company and the effect of the termination of the Optionee's employment with the
Company on the terms of the Options, the term "Optionee" shall be deemed to
refer to the transferee. Notwithstanding the provisions of this Section 5,
Optionee may not transfer an Option unless the transferee executes such
agreements or other documents (if any) as the Company in its discretion deems
appropriate or advisable.

        6. Stockholder Approval. The amendment of the Plan pursuant to which
these Options are granted is conditioned upon and subject to the approval of the
stockholders of the Company (the "Stockholders"). The Company shall use its
reasonable best efforts to have the Amendment approved by the Stockholders at
the 2000 Annual Meeting of Stockholders scheduled to held in November or
December 2000, or at such other meeting of Stockholders as the parties may
agree, each called in accordance with applicable law and the Bylaws of the
Company.

                                        3

<PAGE>   21

        7. Adjustments to Option Shares. The exercise price of the Options (the
"Exercise Price"), and the number of Option Shares are subject to adjustment
from time to time upon the occurrence of the events enumerated below; provided,
however, that the transactions currently contemplated by the Company, including
(i) the merger of the Company an/or its subsidiaries with Corrections
Corporation of America, a Tennessee corporation, and the issuance of shares in
connection therewith, (ii) the issuance of shares of the Company's equity
securities in satisfaction of its distribution requirements with respect to its
election and qualification as a real estate investment trust, or REIT, for
federal income tax purposes for its 1999 taxable year, (iii) the issuance of the
Company's equity securities as part of any settlement of any outstanding
stockholder litigation against the Company and/or its directors and officers, or
(iv) the commencement of a rights offering in satisfaction of the terms of the
Company's senior secured indebtedness shall not require any adjustment to the
number of Option Shares or the Exercise Price thereof:

               (a) In case the Company shall at any time after August 4, 2000:
(i) declare a dividend on its capital stock payable in shares of its capital
stock (whether shares of Common Stock or of capital stock of any other class),
(ii) subdivide the outstanding common stock, (iii) combine the outstanding
common stock into a smaller number of shares, or (iv) engage in any other
recapitalization, the Exercise Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination,
reclassification or recapitalization, shall be proportionately adjusted so that
the holder of the Options exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock which, if such Options
had been exercised immediately prior to such date, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination, reclassification or recapitalization. Such adjustment shall be made
successively whenever any event listed above shall occur and notice of same
shall be promptly provided by the Company to the registered holder accompanied
by the appropriately converted numbers of Options and Option Shares.

               (b) In case the Company shall fix a record date for the making of
a distribution to all holders of common stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends payable in common stock) or subscription rights or options,
the Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, of which (i) the numerator shall be the current market price per
share of Common Stock (as defined in Section(c) below), on such record date,
less the fair market value of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or options
applicable to one share of Common Stock, and of which (ii) the denominator shall
be such current market price per share of Common Stock. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Exercise Price shall again be adjusted to
be the Exercise Price which would then be in effect if such record date had not
been fixed, but such subsequent adjustment shall not affect the number of Option
Shares issued upon any exercise of Options prior to the date such adjustment is
made.

                                        4
<PAGE>   22

               (c) For the purpose of any computation under Section (b) above,
the current market price per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices for the thirty (30) consecutive
trading days immediately preceding the date of determination. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on any national securities exchange, the average of the
highest reported bid and lowest reported asked prices as furnished by the
National Association of Securities Dealers ("NASD") or similar organization if
the NASD is no longer reporting such information, or, if not so available, the
fair market price.

               (d) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least five cents
($.05) in such price; provided, however, that any adjustments which by reason of
this Section (d) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this section
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be.

               (e) In the event that at any time, as a result of an adjustment
made pursuant to Section (a) above the holder of the Options thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than shares of Common Stock, thereafter the number of such other
shares so receivable upon exercise of the Options shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock purchasable pursuant to this
Options as determined by the Company.

               (f) Upon each adjustment of the Exercise Price as a result of the
calculations made in Section (a) or (b) above, the Options outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number of Option Shares
(calculated to the nearest hundredth) obtained by (i) multiplying the number of
Option Shares purchasable upon exercise of the Options immediately prior to such
adjustment of the number of Option Shares by the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (ii) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.

               (g) In case of any capital reorganization of the Company, or of
any reclassification of the Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of subdivision or combination), or in case of the consolidation of the
Company with or the merger of the Company with any other corporation or
association (other than a consolidation or merger in which (i) the Company is
the continuing corporation and (ii) the holders of the Company's Common Stock
immediately prior to such merger or consolidation continue as holders of Common
Stock after such merger or consolidation) or of the sale of the properties and
assets of the Company as, or substantially as, an entirety to any other
corporation or association, the Options shall after such reorganization,
reclassification, consolidation, merger or sale be exercisable, upon the terms
and conditions specified in this Agreement, for the

                                        5
<PAGE>   23

number of shares of stock or other securities or property to which a holder of
the number of Options Shares purchasable (at the time of such reorganization,
reclassification, consolidation, merger or sale) upon exercise of such Options
would have been entitled upon such reorganization, reclassification,
consolidation, merger or sale; and in any such case, if necessary, the
provisions set forth in this option certificate with respect to the rights and
interests thereafter of the holder of the Options shall be appropriately
adjusted by the Company so as to be applicable, as nearly as may reasonably be,
to any shares of stock or other securities or property thereafter deliverable on
the exercise of the Options. The subdivision or combination of shares of Common
Stock at any time outstanding into a greater or lesser number of shares shall
not be deemed to be a reclassification of the Common Stock for the purposes of
this Section (g). The Company shall not effect any such consolidation, merger or
sale, unless prior to or simultaneously with the consummation thereof the
successor corporation or association (if other than the Company) resulting from
such consolidation or merger or the entity purchasing such assets or other
appropriate entity shall assume, by written instrument executed and delivered to
the Company, the obligation to deliver to the holder of the Options such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase and the other obligations under this
Agreement. No fractional shares will be issued upon the exercise of rights to
purchase hereunder.

        8. Registration of Option Shares. To the extent allowed by law and under
the rules of the U.S. Securities and Exchange Commission, and to the extent
available to the Company, the Option Shares shall be subject to an effective
registration statement on Form S-8 or such other similar "short-form"
registration statement at the time of the Options' exercise and the issuance of
such shares by the Company.

        9. Governing Laws. This Agreement shall be construed, administered and
enforced according to the laws of the State of Tennessee; provided, however, the
Options may not be exercised except, in the reasonable judgment of the Board of
Directors, in compliance with exemptions under applicable state securities laws
of the state in which Optionee resides, and/or any other applicable securities
laws.

        10. Successors. This Agreement shall be binding upon and inure to the
benefits of the heirs, legal representatives, successors and permitted assigns
of the parties.

        11. Notice. Any notice required or desired to be given under this
Agreement shall be in writing and shall be delivered personally, transmitted by
facsimile or mailed by registered mail, return receipt requested, or delivered
by overnight courier service and shall be deemed to have been given on the date
of its delivery, if delivered, and on the third (3rd) full business day
following the date of the mailing, if mailed, to each of the parties thereto at
the following respective addresses or such other address as may be specified in
any notice delivered or mailed as above provided:

                                        6
<PAGE>   24

                       (i)    If to the Optionee, to:

                              John D. Ferguson
                              3818 West End Avenue, #104
                              Nashville, Tennessee 37205

                       (ii)   If to the Company, to:

                              Prison Realty Trust, Inc.
                              10 Burton Hills Boulevard
                              Nashville, Tennessee 37215
                              Attention: Chief Financial Officer
                              Facsimile: (615) 263-3010

        12. Severability. In the event that any one or more of the provisions or
portion thereof contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the same shall not invalidate
or otherwise affect any other provisions of this Agreement and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision or
portion thereof had never been contained herein.

        13. Entire Agreement. This instrument, together with the provisions
contained in the Employment Agreement with respect to the Options, contain the
entire agreement of the parties. It may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought. This Agreement may be
executed in two or more counterparts, each of which shall be deemed and original
but all of which shall constitute one and the same instrument.

        14. Violation. Any transfer, pledge, sale, assignment, or hypothecation
of any of the Options or any of the Option Shares subject thereto, other than as
specifically permitted by the terms of this Agreement, shall be a violation of
the terms of this Agreement and shall be void and without effect.

        15. Headings. The sections, subjects and headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

        16. Specific Performance. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.

                                        7

<PAGE>   25

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written.

                                   PRISON REALTY TRUST, INC.

                                   By:
                                      ------------------------------------------

                                   Title:
                                         ---------------------------------------

                                   OPTIONEE:

                                   ---------------------------------------------
                                   John D. Ferguson

                                       8<PAGE>   1

                                                                   EXHIBIT 10.1

                      FIFTH MODIFICATION OF SECOND AMENDED
                           AND RESTATED LOAN AGREEMENT

         This Fifth Modification of Second Amended and Restated Loan Agreement
("Fifth Modification") is made and entered into the 1st day of May, 2000, by and
among BANK OF AMERICA, N.A., successor to NATIONSBANK, N.A., a national banking
association ("Bank") and SCB COMPUTER TECHNOLOGY, INC., a Tennessee corporation,
DELTA SOFTWARE SYSTEMS, INC., a Tennessee corporation, TECHNOLOGY MANAGEMENT
RESOURCES, INC., F/K/A TMR ACQUISITION, INC., a Tennessee corporation, PARTNERS
CAPITAL GROUP, a California corporation, PARTNERS RESOURCES, INC., an Arizona
corporation, SCB COMPUTER TECHNOLOGY OF ALABAMA, INC. and PROVEN TECHNOLOGY,
INC., a Tennessee corporation ("collectively Borrower") and.

                                 R E C I T A L S

         A. Borrower has previously obtained from Bank a revolving term loan
facility (the "Revolving Loan") in the principal amount of $26,250,000.00 and a
term loan facility (the "Term Loan") in the principal amount of $15,000,000.00
and a short-term loan (the "Short-Term Loan") in the principal amount of
$7,000,000.00.

         B. The terms and conditions of the Revolving Loan and the Term Loan are
set forth in that certain Second Amended and Restated Loan Agreement dated July
31, 1998, as modified by that certain First Modification of Second Amended and
Restated Loan Agreement dated September 15, 1998, and that certain Second
Modification of Second Amended and Restated Loan Agreement dated May 20, 1999
and by that certain Third Modification of Second Amended and Restated Loan
Agreement dated June 21, 1999, and by that certain Fourth Modification of Second
Amended and Restated Loan Agreement dated February 17, 2000 (hereinafter as
hereafter modified or amended collectively referred to as the "Agreement").

         C. Borrower has asked Bank to modify certain provisions in the
Agreement pursuant to the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the intending to be legally bound
hereby, Bank and Borrower agree as follows:

         1. Capitalized terms not defined herein shall have the meaning
contained in the Agreement.

         2. Section 1 of the Agreement is hereby amended by adding the following
terms:

            "DD. ASSET PURCHASE AGREEMENT: The Asset Purchase Agreement dated
         April 29, 2000 by and between Maximus, Inc. and Technology Management
         Resources, Inc. pursuant to which Maximus, Inc. acquired substantially
         all of the assets of Technology Management Resources, Inc. except for
         accounts, cash and the proceeds therefrom.

                                       1
<PAGE>   2

            EE. ESCROW AGREEMENT: The Escrow Agreement dated April 29, 2000 by
         and among Maximus, Inc., Technology Management Resources, Inc. and
         Crestar Bank pursuant to which $1,000,000.00 of the proceeds payable to
         Technology Management Resources, Inc. under the Asset Purchase
         Agreement were escrowed as security for certain representations and
         warranties made by Technology Management Resources, Inc. under the
         Asset Purchase Agreement."

         3. Section 1.K of the Agreement is hereby deleted in its entirety and
in lieu thereof shall read as follows:

            "K. LOANS: The Revolving Loan and the Term Loan and any subsequent
         loan which states that it is subject to this Agreement."

         4. Section 2.A of the Agreement is deleted in its entirety and in lieu
thereof shall read as follows:

            "A. REVOLVING LOAN. Bank hereby agrees to make one or more loans to
         Borrower in the aggregate principal face amount of Twenty-Five Million
         Two Hundred Fifty Thousand and No/100 Dollars ($25,250,000.00). The
         obligation to repay the Revolving loan is evidenced by a Modified Third
         Amended and Restated Master Revolving Promissory Note dated May 1, 2000
         (the promissory note together with any and all renewals, extensions
         or rearrangements thereof being hereafter collectively referred to as
         the "Revolving Note") having a maturity date, repayment terms and
         interest rate as set forth in the Revolving Note."

         5. Section 2.A(i) of the Agreement is amended by changing "October 1,
2000" to "June 15, 2000".

         6. Section 2.A is amended by adding a new subparagraph (v) as follows:

                  "(v) ESCROW AGREEMENT. All proceeds held under the Escrow
            Agreement that are released to Technology Management Resources, Inc.
            shall be paid to Bank and applied to reduce the balance of the
            Revolving Loan and to permanently reduce the maximum amount of the
            Revolving Loan by a like amount."

         7. Section 2.C of the Agreement is deleted in its entirety.

         8. Section 5.D of the Agreement is amended by adding the following
thereto:

            "Notwithstanding the foregoing, Bank consents to the sale of
         substantially all of the assets of Technology Management Resources,
         Inc. to Maximus, Inc. pursuant to the Asset Purchase Agreement. In
         connection therewith, Bank will release its lien in the assets being
         sold under the Asset Purchase Agreement on the condition that, from the
         proceeds of sale, the Replacement Short Term Loan is paid in full, that
         a $1,674,397.94 reduction is made on the Revolving Loan, that the
         maximum available amount under the Revolving Loan is

                                       2
<PAGE>   3

         reduced to $25,250,000.00, that the maturity date of the Revolving
         Loan is amended to June 15, 2000 and that any subsequent monies paid
         to Technology Management Resources, Inc. under the Escrow Agreement
         shall be paid to reduce the balance on the Revolving Loan and to
         permanently reduce the maximum amount available under the Revolving
         Loan. In connection therewith, Bank agrees to execute UCC-3
         financing statements to release its lien on the collateral being sold
         to Maximus, Inc."

         9. Borrower warrants and represents that (a) the Loan Documents are
valid, binding and enforceable against the Borrower according to their terms;
(b) all warranties and representations made by Borrower in the Loan Documents
are hereby again warranted and represented to be true as of the date hereof,
except with regard to matters expressed only as of a specific time or which have
been supplemented or superseded by disclosures to Lender in writing and (c) no
default presently exists under the Loan Documents. Borrower further acknowledges
that Borrower's obligations evidenced by the Loan Documents are not subject to
any counterclaim, defense or right of set-off and Borrower does hereby release
Lender from any claim, known or unknown, that Borrower may have against Lender
as of the execution of this Fifth Modification.

         10. As amended hereby, the Agreement remains in full effect, and all
agreements among the parties with respect to the subject hereof are represented
fully in this Fifth Modification and the other written documents among the
parties. The provisions of the Loan Agreement regarding the arbitration of
disputes and other general matters also govern this Fifth Modification. The
validity, construction and enforcement hereof shall be determined according to
the substantive laws of the State of Tennessee.

         IN WITNESS WHEREOF, the parties have executed this Fifth Modification
to be effective the day and year first above written.

BANK OF AMERICA, N.A., SUCCESSOR TO        PARTNERS CAPITAL GROUP
NATIONSBANK, N.A.

                                           By:  /s/ Ben C. Bryant, Jr.
By:  /s/ Sherrie K. Hollis                 Its: Director
Its: Vice President

                                           By:  /s/ Gordon Bateman
                                           Its: Secretary

SCB COMPUTER TECHNOLOGY, INC.              PARTNERS RESOURCES, INC.

By:  /s/ Ben C. Bryant, Jr.                By:  /s/ Ben C. Bryant, Jr.
Its: President                             Its: Director

By:  /s/ Gordon Bateman                    By:  /s/ Gordon Bateman
Its: Secretary                             Its: Secretary

                                       3
<PAGE>   4

DELTA SOFTWARE SYSTEMS, INC.           PROVEN TECHNOLOGY, INC.

By:  /s/ Ben C. Bryant, Jr.            By:  /s/ Ben C. Bryant, Jr.
Its: President                         Its: President

By:  /s/ Gordon Bateman                By:  /s/ Gordon Bateman
Its: Secretary                         Its: Secretary

TECHNOLOGY MANAGEMENT                  SCB COMPUTER TECHNOLOGY OF ALABAMA, INC.
RESOURCES, INC.
F/K/A TMR ACQUISITION, INC.

By:  /s/ Ben C. Bryant, Jr.            By:  /s/ Ben C. Bryant, Jr.
Its: President                         Its: President

By:  /s/ Gordon Bateman                By:  /s/ Gordon Bateman
Its: Secretary                         Its: Secretary

                                       4
<PAGE>   5

                      SIXTH MODIFICATION OF SECOND AMENDED
                           AND RESTATED LOAN AGREEMENT

         This Sixth Modification of Second Amended and Restated Loan Agreement
("Sixth Modification") is made and entered into the 15th day of June, 2000, by
and among BANK OF AMERICA, N.A., successor to NATIONSBANK, N.A., a national
banking association ("Bank") and SCB COMPUTER TECHNOLOGY, INC., a Tennessee
corporation, DELTA SOFTWARE SYSTEMS, INC., a Tennessee corporation, TECHNOLOGY
MANAGEMENT RESOURCES, INC., F/K/A TMR ACQUISITION, INC., a Tennessee
corporation, PARTNERS CAPITAL GROUP, a California corporation, PARTNERS
RESOURCES, INC., an Arizona corporation, SCB COMPUTER TECHNOLOGY OF ALABAMA,
INC., an Alabama corporation, and PROVEN TECHNOLOGY, INC., a Tennessee
corporation ("collectively Borrower") and.

                                 R E C I T A L S

         A. Borrower has previously obtained from Bank a revolving term loan
facility (the "Revolving Loan") in the principal amount of $26,250,000.00 and a
term loan facility (the "Term Loan") in the principal amount of $15,000,000.00.

         B. The terms and conditions of the Revolving Loan and the Term Loan are
set forth in that certain Second Amended and Restated Loan Agreement dated July
31, 1998, as modified by that certain First Modification of Second Amended and
Restated Loan Agreement dated September 15, 1998, and that certain Second
Modification of Second Amended and Restated Loan Agreement dated May 20, 1999
and by that certain Third Modification of Second Amended and Restated Loan
Agreement dated June 21, 1999, and by that certain Fourth Modification of Second
Amended and Restated Loan Agreement dated February 17, 2000 and by that certain
Fifth Modification of Second Amended and Restated Loan Agreement dated May 1,
2000, (hereinafter as hereafter modified or amended collectively referred to as
the "Agreement").

         C. Borrower has asked Bank to modify certain provisions in the
Agreement pursuant to the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the intending to be legally bound
hereby, Bank and Borrower agree as follows:

         1. Capitalized terms not defined herein shall have the meaning
contained in the Agreement.

         2. Section 1 of the Agreement is hereby amended by adding the following
terms:

            FF. BORROWING BASE AGREEMENT: The Addendum Borrowing Agreement
            attached hereto as Exhibit A and incorporated herein by reference
            including all defined terms contained in the Borrowing Base
            Agreement.

                                       1
<PAGE>   6

            GG.  APPROVED COLLATERAL SHORTFALL:: The Approved Collateral
                 Shortfall will be as follows:

                  June 15 through July 14, 2000                   $6,000,000
                  July 15 through August 14, 2000                 $5,000,000
                  August 15 through September 14, 2000            $3,000,000
                  September 15 through October 14, 2000           $1,000,000
                  October 15, 2000 through maturity                     $-0-

         3. Section 1 of the Agreement is amended by deleting subparagraph G in
its entirety and substituting in lieu thereof the following:

            "G. EBITDA: EBITDA means, without duplication for any period, the
         following, each calculated for the trailing months of such period:
         (a) Net Income; plus (b) any provision for (or minus any benefit from)
         income or franchise taxes included in the determination of Net Income;
         plus (c) interest expense deducted in the determination of Net Income;
         plus (d) amortization and depreciation deducted in the determination
         of Net Income; plus (e) losses from (or minus gains from) non-cash
         items (excluding sales, expenses or losses related to current assets)
         included in the determination of Net Income; minus (f) after tax
         extraordinary gains (or plus after tax extraordinary losses) (in each
         case as defined under GAAP included in the determination of Net
         Income."

         4. Section 1 of the Agreement is amended by deleting subparagraph I in
its entirety and substituting in lieu thereof the following:

            "I. FUNDED DEBT: Funded Debt means, without duplication, the sum of
         (a) all indebtedness of the Borrower for borrowed money, (b) all
         purchase money indebtedness of the Borrower, (c) the principal portion
         of all obligations of the Borrower under capital leases, (d) commercial
         letters of credit and the maximum amount of all performance and standby
         letters of credit issued for the account of the Borrower, (e) all
         guaranty obligations of the Borrower with respect to Funded Debt of
         another person, (f) all Funded Debt of another entity secured by a
         lien on any property of the Borrower whether or not such Funded Debt
         has been assumed by Borrower, (g) all Funded Debt of any partnership
         or unincorporated joint venture to the extent the Borrower is legally
         obligated or has a reasonable expectation of being liable with respect
         thereto, net of any assets of such partnership or joint venture and
         (h) the principal balance outstanding under any synthetic lease, tax
         retention operating lease, off-balance sheet loan or similar
         off-balance sheet financing product pursuant to which Borrower is the
         obligor where such transaction is considered borrowed money
         indebtedness for tax purposes but is classified as an operating lease
         in accordance with GAAP."

          5. Section 2.A of the Agreement is deleted in its entirety and in lieu
thereof shall read as follows:

                                       2
<PAGE>   7

            "A. REVOLVING LOAN. Bank hereby agrees to make one or more Loans to
         Borrower in the aggregate principal face amount of Twenty-Five
         Million Two Hundred Fifty Thousand and No/100 Dollars ($25,250,000.00).
         The obligation to repay the Revolving loan is evidenced by a
         Modified Third Amended and Restated Master Revolving Promissory Note
         dated June 15, 2000 (the promissory note together with any and all
         renewals, extensions or rearrangements thereof being hereafter
         collectively referred to as the "Revolving Note") having a maturity
         date, repayment terms and interest rate as set forth in the Revolving
         Note."

         6. Section 2.A(i) of the Agreement is amended by changing "June 15,
2000" to "December 15, 2000".

         7. Section 2.A is amended by adding a new subparagraph (vi) as follows:

                "(vi) REDUCTION OF THE MAXIMUM AMOUNT OF REVOLVING LOAN. The
            Borrower shall pay to Bank all proceeds from the sale of the
            Borrower's equity interest in IGS, the sale of Borrowers' direct
            financing lease portfolio, the payment of any income tax refund
            received by Borrower and the sale of any subsidiary or the assets
            (other than in the ordinary course of business) of any subsidiary of
            Borrower. In such case, there will be corresponding dollar for
            dollar reduction in the maximum amount of the Revolving Loan. On
            September 15, 2000, the maximum amount of the Revolving Loan will be
            further adjusted to the lesser of $23,000,000 or the then maximum
            amount of the Revolving Loan."

         8. Section 2 is amended by adding new Sections E and F as follows:

            "E. MAXIMUM AMOUNTS. The Maximum outstanding balance of the
         Revolving Loan shall at no time exceed the Borrowing Base and if this
         does occur, Borrower shall immediately reduce the outstanding
         balance of the Revolving Loan to an amount less than or equal to the
         Borrowing Base. This shall be effected by a paydown on the Revolving
         Loan."

            "F. LOCKBOX. The Lockbox/Zero Balance Accounts (Bank of America
         account number 003782153078 and 003782153104) will serve as collateral
         accounts for all loans. Prior to the occurrence of a default under the
         Agreement, all deposits into the accounts will be automatically
         transferred to the Borrower's main operating account. On or before June
         23, 2000 Borrower shall notice all those account debtors who not
         currently remitting collections directly to the Bank lockbox accounts
         to begin remitting collections directly to the Bank lockbox accounts.
         All electronic transfers will be directed to one of the two zero
         balance accounts."

         9. Section 2.D of the Agreement is deleted in its entirety and replaced
by the following:

            "D. COLLATERAL. "The Notes and all obligations of Borrower to Bank
         shall be secured by the Collateral described in the Security Agreement
         together with the Honeywell

                                       3
<PAGE>   8

         Outsourcing Agreement and all assets of the former RAO Consulting,
         Inc., that was recently acquired by Borrower, and the Lock Box/Zero
         Balance Accounts."

         10. Section 4.A(i) of the Agreement is deleted in its entirety and in
lieu thereof shall read as follows:

             "(i) Maintain a ratio of Funded Debt to EBITDA for the quarter
         ending July 31, 2000 of less than 6.5:1.0 and maintain a ratio of
         Funded Debt to EBITDA for the quarter ending October 31, 2000 of less
         than 5.0:1.0. For the calculation of EBITDA for the quarter ending July
         31, 2000, the results for the three month period ending July 31, 2000
         shall be multiplied by 4. For the calculation of EBITDA for the quarter
         ending October 31, 2000, the results for the six month period ending
         October 31, 2000 shall be multiplied by 2."

         11. Section 4 is amended by adding a new subparagraph (iv) as follows:

             (iv) Maintain the following minimum EBITDA for each month as shown
         below:

<TABLE>
<CAPTION>

              Month Ending                             Minimum EBITDA
              <S>                                      <C>
                06/30/00                                 $  894,000
                07/31/00                                 $  798,000
                08/31/00                                 $1,318,000
                09/30/99                                 $1,121,000
                10/31/00                                 $1,301,000
                11/30/00                                 $1,084,000
</TABLE>

         12. Section 4.B(ii) is amended by adding the following to the end
thereof:

             "Borrower shall update the 90 day rolling cash flow projections
         that were submitted to Bank on or before the date of this Sixth
         Modification, with such update based on actual performance and such
         update shall be delivered within 20 days of each month end."

         13. Section 4.B(v) is amended by renumbering it as 4.B.(vi) and
inserting a new subsection (v) which shall read as follows:

             "(v) Furnish to Bank semi-monthly borrowing base certificates in
         form and substance acceptable to Bank. The borrowing base certificate
         for the end of each month shall be submitted by the 10th day of the
         following month. Borrower shall process its work in process through
         the end of such month during the ten day period, generate accounts
         receivable from such work in process and include those accounts
         receivable as of the end of the prior month in the month end borrowing
         base certificate."

         14. Section 4.B(vi) is amended by adding the following to the end
thereof.

             "Borrower will provide Bank and its third party consultants
         access to all books, records, plans, and personnel to evaluate the
         viability of the Borrower's management plan

                                       4
<PAGE>   9

         and perform a diagnostic evaluation of the Borrower's business.
         Borrower will reimburse Bank for all costs and expenses associated with
         the outside consultants."

         15. Section 5.A is deleted in its entirety and in lieu thereof shall
read as follows:

             "Make capital expenditures during the three month period ending
         July 31, 2000 in excess of 50% of EBITDA for such period or make
         capital expenditures during the six month period ending October 31,
         2000 in excess of 50% of EBITDA for such six month period. Any
         expenditures for computer equipment which Borrower then leases to a
         third party under an operating lease shall be excluded from capital
         expenditures but shall be subject to the restriction on computer
         equipment expenditures contained in Section 5.B below."

         16. Borrower shall pay all costs incidental to this Sixth Modification
         including but not limited to the fees and expenses of Bank's counsel.
         Borrower agrees as partial consideration for concessions and other
         financial accommodations made by Bank under the Sixth Modification that
         Bank is entitled to receive warrants to purchase during the period
         specified, 250,000 shares of duly authorized, validly issued, fully
         paid and non-assessable Common Stock of SCB Computer Technology, Inc.,
         which stock when purchased shall be registered under all applicable
         securities laws and shall be freely tradable. The total price to
         acquire the warrants shall be $1.00. The period during which the
         warrants may be exercised will be from December 15, 2000 through
         December 15, 2003. The warrant exercise price per share will be the
         average of the reported closing sale prices per share during the 30
         consecutive trading days ending on December 14, 2000 on the NASDAQ
         National Market; provided, however, that should SCB Computer
         Technology, Inc.'s shares cease to be listed or admitted to trading on
         the NASDAQ National Market (whether by reason of being delisted from
         the NASDAQ exchange or otherwise), the price per share will be the
         reported closing price per share on the last day such common stock was
         traded on the NASDAQ National Market. Borrower warrants that it will
         not materially change its capital structure so as to have a material
         adverse effect on the value of the warrants prior to the expiration
         date of the warrants without the written consent of the Bank.

         17. Borrower warrants and represents that (a) the Loan Documents are
valid, binding and enforceable against the Borrower according to their terms;
(b) all warranties and representations made by Borrower in the Loan Documents
are hereby again warranted and represented to be true as of the date hereof,
except with regard to matters expressed only as of a specific time or which have
been supplemented or superseded by disclosures to Bank in writing and (c) no
default presently exists under the Loan Documents. Borrower further acknowledges
that Borrower's obligations evidenced by the Loan Documents are not subject to
any counterclaim, defense or right of set off and Borrower does hereby release
Bank from any claim, known or unknown, that Borrower may have against Bank as of
the execution. Borrower, on its own behalf and on behalf of its predecessors,
successors, heirs and assigns (collectively, the "Releasing Parties"), hereby
acknowledge and stipulate that as of the date of this Sixth Modification, none
of the Releasing Parties has any claims or causes of action of any kind
whatsoever against Bank or any of its officers, directors, employees, agents,
attorneys, or representatives, or against any of their respective predecessors,
successors, or assigns. Each of the Releasing Parties hereby forever

                                       5
<PAGE>   10

releases, remises, and discharges Bank and all of its officers, directors,
employees, agents, attorneys and representatives, and all of its respective
predecessors, successors, and assigns, from any and all claims, causes of
action, demands, and liabilities of any kind whatsoever, whether direct or
indirect, fixed or contingent, liquidated or nonliquidated, disputed or
undisputed, known or unknown, which any of the Releasing Parties has or may
acquire in the future relating in any way to any event, circumstance, action, or
failure to act from the beginning of time through the date of this Sixth
Modification.

         18. As amended hereby, the Agreement remains in full effect, and all
agreements among the parties with respect to the subject hereof are represented
fully in this Sixth Modification and the other written documents among the
parties. The provisions of the Agreement regarding the arbitration of disputes
and other general matters also govern this Sixth Modification. The validity,
construction and enforcement hereof shall be determined according to the
substantive laws of the State of Tennessee.

         IN WITNESS WHEREOF, the parties have executed this Sixth Modification
to be effective the day and year first above written.

BANK OF AMERICA, N.A., SUCCESSOR TO        PARTNERS CAPITAL GROUP
NATIONSBANK, N.A.

                                           By:  /s/ T. Scott Cobb
By:  /s/ Sherrie K. Hollis                 Its: CEO
Its: Vice President
                                           By:  /s/ Gordon Bateman
                                           Its: Secretary

SCB COMPUTER TECHNOLOGY, INC.              PARTNERS RESOURCES, INC.

By:  /s/ T. Scott Cobb                     By:  /s/ T. Scott Cobb
Its: CEO                                   Its: CEO

By:  /s/ Gordon Bateman                    By:  /s/ Gordon Bateman
Its: Secretary                             Its: Secretary

DELTA SOFTWARE SYSTEMS, INC.               PROVEN TECHNOLOGY, INC.

By:  /s/ T. Scott Cobb                     By:  /s/ T. Scott Cobb
Its: CEO                                   Its: CEO

By:  /s/ Gordon Bateman                    By:  /s/ Gordon Bateman
Its: Secretary                             Its: Secretary

                                        6
<PAGE>   11

TECHNOLOGY MANAGEMENT                  SCB COMPUTER TECHNOLOGY OF
RESOURCES, INC.                        ALABAMA, INC.
F/K/A TMR ACQUISITION, INC.

By:  /s/ T. Scott Cobb                 By:  /s/ T. Scott Cobb
Its: CEO                               Its: CEO

By:  /s/ Gordon Bateman                By:  /s/ Gordon Bateman
Its: Secretary                         Its: Secretary

                                       7
<PAGE>   12

       THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAW. THIS
WARRANT MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF UNLESS
AND UNTIL (1) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (2) THE COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF LEGAL
COUNSEL, SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY, TO THE EFFECT THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION DOES NOT VIOLATE THE
SECURITIES ACT OR SUCH APPLICABLE STATE SECURITIES LAWS.

                          SCB COMPUTER TECHNOLOGY, INC.

                          COMMON STOCK PURCHASE WARRANT

       This certifies that, for value received, BANK OF AMERICA, N.A.
(hereinafter together with its registered successors and assigns, the "Holder")
is entitled, subject to the terms and conditions hereinafter set forth, to
purchase from SCB COMPUTER TECHNOLOGY, INC., a Tennessee corporation (the
"Company"), TWO HUNDRED FIFTY THOUSAND (250,000) shares of common stock, par
value $.01 per share, of the Company ("Common Stock") at a purchase price per
share determined as set forth in Section 1 hereof.

       This Warrant is subject to the following terms and conditions:

       1. Warrant Price and Exercise.

          (a) Price. The Holder shall be entitled to subscribe for and purchase
the number of shares of Common Stock set forth above at a purchase price per
share (the "Price") payable in cash to the Company. As used herein, the term
"Price" shall mean, with respect to the Common Stock, (i) the average of the
reported closing sale prices per share during the thirty (30) consecutive
trading days ending on December 14, 2000, on the Nasdaq National Market, or (ii)
if the Common Stock ceases to be listed or admitted to trading on the Nasdaq
National Market, the closing sale price per share on the last trading day on
which the Common Stock was traded on the Nasdaq National Market.

          (b) Exercise. The Holder may exercise this Warrant, in whole or in
part, at any time and from time to time beginning on December 15, 2000, and
ending on December 15, 2003 (the "Expiration Date"). Upon delivery of this
Warrant duly executed, together with payment in cash of the Price for the shares
of Common Stock thereby purchased, at the principal office of the Company or at
such other address as the Company may designate by notice in writing to the
Holder, the Holder shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased. All shares of Common Stock issued
upon the exercise of this Warrant shall, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable, and shall be registered under all
applicable securities laws. In case of any partial exercise of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant of like tenor and
date for the balance of the shares of Common Stock purchasable hereunder.
Certificates for the shares of Common Stock purchased in accordance with the
above provisions shall be delivered to the Holder promptly after exercise of the
purchase rights represented by this Warrant. The exercise of this Warrant shall
be deemed effective on the day on which the Holder surrenders this Warrant and
pays the Price for the

<PAGE>   13

shares of Common Stock purchased hereunder to the Company and satisfies all of
the other requirements of this Warrant. Upon such exercise, the Holder shall be
deemed a shareholder of record of those shares of Common Stock for which this
Warrant has been exercised with all rights of a shareholder, including, without
limitation, all voting rights with respect to such shares and all rights to
receive any dividends with respect to such shares.

       2. Adjustments. If this Warrant is outstanding, the Price and the number
of shares of Common Stock purchasable hereunder shall be subject to adjustment
from time to time in accordance with the following provisions:

          (a) In case the Company shall at any time subdivide the outstanding
shares of Common Stock, the Price in effect immediately prior to such
subdivision shall be proportionately decreased, and in case the Company shall at
any time combine the outstanding shares of Common Stock, the Price in effect
immediately prior to such combination shall be proportionately increased,
effective from and after the record date of such subdivision or combination, as
the case may be.

          (b) Upon any adjustment in the Price pursuant to Section 2(a) hereof,
the Holder shall thereafter be entitled to purchase, at the adjusted Price, the
number of shares of Common Stock, calculated to the nearest full share, obtained
by (i) multiplying the number of shares of Common Stock purchasable hereunder
immediately prior to such adjustment by the Price in effect immediately prior to
such adjustment, and (ii) dividing the product thereof by the Price resulting
from such adjustment.

          (c) In the event of the issuance of additional shares of Common
Stock of the Company as a dividend on the Common Stock, from and after the
record date for the determination of shareholders entitled to receive such
dividend, the Holder shall be entitled to purchase the number of shares of
Common Stock, calculated to the nearest full share, obtained by (i) multiplying
the number of shares of Common Stock purchasable hereunder immediately prior to
said record date by the percentage which the number of shares constituting any
such dividend is of the total number of shares of Common Stock outstanding
immediately prior to said record date plus the number of shares of Common Stock
issuable upon conversion of the outstanding convertible securities or upon
exercise of any outstanding convertible securities or upon exercise of any
outstanding warrants, options, or rights (including those with respect to
convertible securities) and (ii) adding the result so obtained to the number of
shares of Common Stock purchasable hereunder immediately prior to said record
date. Upon each adjustment pursuant to this Section 2(c), the Price in effect
immediately prior to such adjustment shall be reduced to an amount determined by
dividing (i) the product obtained by multiplying such Price by the number of
shares of Common Stock purchasable hereunder immediately prior to such
adjustment by (ii) the number of shares of Common Stock purchasable hereunder
immediately following such adjustment.

       3. Reorganization, Reclassification, Consolidation, or Merger. If at any
time while this Warrant is outstanding there shall be any reorganization or
reclassification of the Common Stock of the Company (other than a subdivision or
combination of shares provided for in Section 2(a) hereof), or any consolidation
or merger of the Company with another corporation, the Holder shall thereafter
be entitled to receive, during the term hereof and upon payment of the Price,
the number of shares of Common Stock or other securities or property of the
Company or of the successor corporation resulting from such consolidation or
merger, as the case may be, to which such Holder would have been entitled upon
such reorganization, reclassification, consolidation, or merger if this

                                       2
<PAGE>   14

Warrant had been exercised immediately prior to such reorganization,
reclassification, consolidation, or merger; and in any case appropriate
adjustment (as determined by agreement of the Holder and the Board of Directors
of the Company) shall be made in the application of the provisions herein set
forth with respect to the rights and interest thereafter of the Holder to the
end that the provisions set forth herein (including the adjustment of the Price
and the number of shares issuable upon the exercise of this Warrant) shall
thereafter be applicable, as near as reasonably may be, in relation to any
shares or other property thereafter deliverable upon the exercise thereof.

       4. Notice of Adjustments. Upon any adjustment of the Price and any
increase or decrease in the number of shares of Common Stock purchasable upon
the exercise of this Warrant, then, and in each such case, the Company, within
thirty (30) days after the Holder's request, shall give written notice thereof
to the Holder at the address of such Holder as shown on the books of the
Company, which notice shall state the Price as adjusted and the increased or
decreased number of shares purchasable upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation of each.

       5. Charges, Taxes and Expenses. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made without charge
to the Holder for any stock transfer tax or other expense imposed by the Company
or its transfer agent in respect to the issuance of such certificates, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of, or in such name or names as may be directed by,
the Holder; provided, however, that in the event that certificates for shares of
Common Stock are to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by an instrument of
transfer in form satisfactory to the Company, duly executed by the Holder in
person or by an attorney duly authorized in writing, and the Holder shall pay
all stock transfer taxes payable upon issuance of such stock certificate.

       6. Certain Obligations of the Company. The Company shall not increase the
par value of the shares of Common Stock issuable upon exercise of this Warrant
so that it exceeds the then prevailing Price hereunder. Before taking any action
that would cause an adjustment reducing the Price below the then par value of
the shares of Common Stock issuable upon the exercise hereof, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at the Price as so adjusted.

       7. Miscellaneous.

          (a) The Company shall at all times reserve and keep available, solely
for the purpose of issue upon the exercise hereof, a sufficient number of shares
of Common Stock to permit the exercise hereof in full.

          (b) The terms of this Warrant shall be binding upon and shall inure to
the benefit of any successors or assigns of the Company and of the Holder.

          (c) No Holder, as such, shall be entitled to vote or receive
dividends or be deemed to be a shareholder of the Company for any purpose.

                                       3
<PAGE>   15

          (d) Except as otherwise provided herein, this Warrant and all rights
hereunder are transferable by the Holder in person or by duly authorized
attorney on the books of the Company upon surrender of this Warrant, properly
endorsed, to the Company. The Company may deem and treat the Holder at any time
as the absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary.

          (e) Notwithstanding any provision hereof to the contrary, this Warrant
may not be sold, transferred, assigned or otherwise disposed of unless and until
(1) a registration statement under the Securities Act and such applicable state
securities laws shall have become effective with regard thereto, or (2) the
Company shall have received a written opinion of legal counsel, satisfactory in
form and substance to the Company, to the effect that such sale, transfer,
assignment or other disposition does not violate the Securities Act or such
applicable state securities laws.

          (f) This Warrant and the rights and obligations of the parties
hereunder shall be governed by, construed under, and enforced in accordance with
the laws of the State of Tennessee without regard to the conflict-of-law
principles thereof.

       IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer as of June 15, 2000.

                                            SCB COMPUTER TECHNOLOGY, INC.

                                            By:   /s/ T. Scott Cobb
                                               ---------------------------------
                                            Title: CEO

                                            By:    /s/ Gordon Bateman
                                               ---------------------------------
                                            Title: Secretary

                                       4

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