Document:

Exhibit 4.1 to Leggett and Platt, Incorporated Form S-8 POS

Exhibit 4.1

LEGGETT
& PLATT, INCORPORATED

STOCK BONUS
PLAN

AS RESTATED

EFFECTIVE AS
OF JANUARY 1, 2002,

EXCEPT AS OTHERWISE INDICATED

TABLE OF CONTENTS

TO

LEGGETT & PLATT, INCORPORATED

EMPLOYEE STOCK PURCHASE/STOCK BONUS PLAN

AS RESTATED

EFFECTIVE AS OF JANUARY 1, 2002,

EXCEPT AS OTHERWISE INDICATED

	ARTICLE/SECTION 	SUBJECT 	PAGE 

	ARTICLE I 	1
	  	1.01.   Accounting Year 	1 
	  	1.02.   Accounts 	1 
	  	1.03.   Anniversary Date 	1 
	  	1.04.   Attained Age 	2 
	  	1.05.   Beneficiary 	2 
	  	1.06.    Board of Directors 	2 
	  	1.07.   Cash Dividend Holding Account 	2 
	  	1.08.   Cash Dividend Reinvestment Account/Diversified Investments 	2 
	  	1.09.   Cash Dividends Reinvestment Account/Other Investments 	2 
	  	1.10.   Cash Dividends Reinvestment Account/Stock 	3 
	  	1.11.   Committee 	3 
	  	1.12.   Compensation	3 
	  	1.13.   Compensation Base 	3 
	  	1.14.   Contingent Beneficiary 	4 
	  	1.15.   Early Retirement Date 	5 
	  	1.16.   Effective Date 	5 
	  	1.17.   Eligible Employee 	5 
	  	1.18.   Eligible Rollover Distribution 	5 
	  	1.19.   Eligible Retirement Plan 	5 
	  	1.20.   Employee 	5 
	  	1.21.   Employer  	6 
	  	1.22.   Employer Stock 	6 
	  	1.23.   Employee Pre-Tax Contributions Account/Diversified Investments 	6 
	  	1.24.   Employee Pre-Tax Contributions Account/Other Investments 	6 
	  	1.25.   Employee Pre-Tax Contributions Account/Stock	6 
	  	1.26.   Employer Contributions Account/Diversified Investments 	7 
	  	1.27.   Employer Contributions Account/Other Investments 	7 
	  	1.28.   Employer Contributions Account/Stock 	7 
	  	1.29.   ESOP Transfer Account/Other Investments 	7 
	  	1.30.   ESOP Transfer Account/Stock 	7 
	  	1.31.   ESOP Transfer Contributions 	7 

(i)

	  	1.32.   Forfeitures 	7 
	  	1.33.   Highly Compensated Employee 	8 
	  	1.34.   Hour of Service 	8 
	  	1.35.   Limited Participant 	9 
	  	1.36.   Net Profits 	9 
	  	1.37.   Normal Retirement Date 	9 
	  	1.38.   One Year Break in Service 	9 
	  	1.39.   Participant 	10 
	  	1.40.   Participant After-Tax Contributions Account/Other Investments 	10 
	  	1.41.   Participant After-Tax Contributions
Account/Diversified Investments 	10 
	  	1.42.   Participant After-Tax Contributions
 Account/Stock	10 
	  	1.43.   Participant Deductible Contributions
 Account/Stock	11 
	  	1.44.   Participation Date	11 
	  	1.45.   Plan	11 
	  	1.46.   Rollover Account/Other Investments	11 
	  	1.47.   Rollover Account/Stock	11 
	  	1.48.   Rollover Contributions	11 
	  	1.49.   Sponsoring Employer	11 
	  	1.50.   Total and Permanent Disability	11 
	  	1.51.   Trust Agreement	11 
	  	1.52.   Trustee	11 
	  	1.53.   Trust Fund	12 
	  	1.54.   Valuation Date	12 
	  	1.55.   Vesting Service	12 
	ARTICLE II 	12
	  	2.01.   Eligibility	13 
	  	2.02.   Employee Contributions	14 
	  	2.03.   Suspension of Employee Pre-Tax Contributions	15 
	  	2.04.   Resumption of Employee Pre-Tax Contributions	16 
	  	2.05.   Limited Participant	16 
	  	2.06.   Exclusion of Highly Compensated Employees	16 
	  	2.07.   Average Deferral Percentage/Average Contribution Percentage
            Nondiscrimination Tests Do Not 
           Apply to this Plan	16 
	  	2.08.   Limitation on Pre-Tax Contributions to this and Other Internal Revenue Code
            Section 401(k)
            Plans Apply to this Plan	16 
	  	2.09.   Plan Controlling	17 
	ARTICLE III 	17
	  	3.01.    Matching Employer Contributions	17 
	  	3.02.     Additional Employer Contributions	18 
	  	3.03.     Limit on "Annual Additions"	19 
	  	3.04.     Corrective Adjustments in Annual Additions	20 
	  	3.05.     Suspension of Participant Contributions Due to the In-service Withdrawals
            from a Related
            Employer 401(k) Plan	20

(ii)

	ARTICLE IV 	21
	  	4.01.      Determination of Fair Market Value	21 
	  	4.02.      Adjustment of Other Investments
and Diversified Investments Accounts	21 
	  	4.03.      Adjustment of Stock Accounts	22 
	  	4.04.       Quarterly Participant Account Statements	23 
	  	4.05.       Best Judgment Rule	23 
	  	4.06.      Special Valuation Date	23 
	  	4.07.      Allocation of Stock Dividends	23 
	  	4.08.      Diversified Investments for Certain
 Participants and Accounts	23 
	  	4.09.      ERISA § 404(c) Compliance Intended	26 
	  	4.10.      Cash Dividends on Employer Stock;
 Reinvestment or Cash Election	26 
	ARTICLE V 	27
	  	5.01.     Distribution on Early or Normal Retirement	27 
	  	5.02.    Employment Beyond Normal Retirement	27 
	  	5.03.    Distribution on Death	28 
	  	5.04.   Distribution on Disability	28 
	  	5.05.   Distribution on Termination of Employment	28 
	  	5.06.   In-Service Withdrawals	29 
	  	5.07.   Distributions Usually In Employer Stock	29 
	  	5.08.    Distribution Date	30 
	  	5.09.    Forms of Distribution	32 
	  	5.10.    Segregating Accounts of Former Participants	33 
	  	5.11.    Death Payments to Contingent Beneficiaries	33 
	  	5.12.    Special Rules Applicable to Deductible
 Participant Contributions	33 
	  	5.13.    Reemployment/Repayment of
Benefits/Restoration of Accounts	34 
	  	5.14.    Qualified Domestic Relations Orders	36 
	  	5.15.    Eligible Rollover Distributions; Required
Tax Withholding; Notice	36 
	  	5.16.    Reemployment After a Military Leave;
 Make-up Contributions	37 
	ARTICLE VI 	37
	  	6.01.    Composition and Duties of Committee	37 
	  	6.02.    Term; No Compensation	37 
	  	6.03.    Claims Procedure	38 
	  	6.04.    Required Vote; Records of Committee	39 
	  	6.05.    Directing Payments	39 
	  	6.06.     Nondiscrimination	39 
	  	6.07.     Written Instructions to Trustee	39 
	  	6.08.     Duty to Maintain Participant Accounts	39 
	  	6.09.     Employment of Counsel	39 
	  	6.10.     Indemnification	39 
	ARTICLE VII 	40
	  	7.01.     Trust Agreement	40 
	  	7.02.    Trust Fund	40 

(iii)

	  	7.03.    Removal of Trustee	40 
	  	7.04.    Powers of Trustee	40 
	  	7.05.    Trust Agreement Part of the Plan	40 
	  	7.06.    Settlement of Accounts of Trustee	40 
	ARTICLE VIII 	40
	  	8.01.    Amendment of Plan	40 
	  	8.02.    Termination of Plan	41 
	  	8.03.    Full Vesting of Accounts on Plan Termination	41 
	  	8.04.    Return of Mistaken/Nondeductible Employer
 Contributions	41 
	ARTICLE IX 	41
	  	9.01.     Corporate Merger or Consolidation	41 
	  	9.02.     Plan Transfer or Merger	41 
	  	9.03.     Plan Benefits Not Subject to Claims of Creditors	42 
	  	9.04.     No Contractual Obligation	42 
	  	9.05.    Suspension of Employer Contributions	42 
	  	9.06.    No Right of Employment	42 
	  	9.07.    Governing Law	42 
	  	9.08.    Distribution to a Minor or Incompetent	42 
	  	9.09.    Named Fiduciaries	42 
	  	9.10.    Committee and Trustee Responsibilities	43
	  	9.11.    Nondiversion Clause	43 
	  	9.12.    Voting Rights	43 
	  	9.13.    Table of Contents; Captions	43 
	ARTICLE X 	44
	  	10.01.    Eligible Rollover Contributions	44 
	  	10.02.    ESOP Transfer Contributions	45 
	  	10.03.    Vesting in Rollover Contributions and
 ESOP Transfer Contributions	45 
	  	10.04.    Adjustment of Rollover Accounts
 and ESOP Transfer Accounts	45 
	  	10.05.    Distribution of Rollover Accounts and ESOP
Transfer Accounts upon Disability	45 
	  	10.06.    Distribution of Rollover Accounts and
 ESOP Transfer Accounts upon Death	46 
	  	10.07.    Distribution of Rollover Accounts
 and ESOP Transfer Accounts upon Termination of 
              Employment	46 
	  	10.08.    Form of Distribution	46 
	ARTICLE XI 	46
	  	11.01.    Application	46 
	  	11.02.    Special Minimum Contribution	47 
	  	11.03.    Key Employee Defined	47 

(iv)

LEGGETT
& PLATT, INCORPORATED

STOCK BONUS
PLAN

                   
Effective  July 1, 1977,  Leggett & Platt,  Incorporated,  a Missouri  corporation  whose  principal  offices  are  located in
Carthage,  Missouri  (hereinafter  referred  to as the  "Sponsoring  Employer"  or as an  "Employer"),  adopted  the  Leggett  & Platt,
Incorporated  Employee Stock  Purchase/Stock  Bonus Plan for the benefit of its eligible employees,  renamed in this restatement as the
Leggett & Platt,  Incorporated  Stock Bonus Plan.  The Plan was last  restated,  effective as of January 1, 1989.  This  restatement of
the Plan is effective as of January 1, 2002, except as otherwise indicated.

                   
The purpose of this Plan is to provide an  opportunity  for  eligible  employees  of the  Employers to share in the growth and
prosperity of the Employers by acquiring a proprietary  interest in the Sponsoring  Employer  through the  acquisition of shares of the
Sponsoring Employer's common stock through the Plan.

                   
This Plan is intended to continue to qualify as a stock bonus plan under  Sections  401(a) and,  effective as of  November 14,
2001, to also qualify as an employee stock  ownership plan under Section  4975(e)(7) of the Internal  Revenue Code. It is also intended
that this Plan,  together with the Trust Agreement,  satisfy the requirements of the Employee  Retirement  Income Security Act of 1974,
as amended, and the Plan shall be interpreted,  wherever possible,  to comply with the terms of the Act and applicable  regulations and
rulings issued under the Act.

ARTICLE I

DEFINITIONS

          
       As used in this Plan, the following  terms shall have the following  meanings unless a different  meaning is clearly  required
by the context in which it is used.  Any words herein used in the  masculine  shall be read and  construed  in the feminine  where they
would so apply.  Words in the  singular  shall be read and  construed  as though  used in the  plural in all cases  where they would so
apply.

          
       1.01.         Accounting  Year.  The term  "Accounting  Year" shall mean the fiscal  year of the  Sponsoring  Employer  for federal
income tax purposes (which, as of the effective date of this restated Plan document, is the calendar year).

          
         1.02.         Accounts.  The term  "Accounts"  shall mean the records  maintained for the purpose of accounting for a Participant's
interest in the Plan.  "Account" may refer to one, more than one, or all of the following accounts.

                  
 "Cash Dividends Holding Account"

         
          
 "Cash Dividends Reinvestment Account/Diversified Investments"

         
          
 "Cash Dividends Reinvestment Account/Other Investments"

         
          
 "Cash Dividends Reinvestment Account/Stock"

         
          
 "Employee Pre-Tax Contributions Account/Diversified Investments"

         
          
"Employee Pre-Tax Contributions Account/Other Investments"

         
          
 "Employer Pre-Tax Contributions Account/Stock"

         
          
 "Employer Contributions Account/Diversified Investments"

         
          
 "Employer Contributions Account/Other Investments"

         
          
 "Employer Contributions Account/Stock"

         
          
 "ESOP Transfer Account, Other Investments"

        
          
 "ESOP Transfer Account/Stock"

         
          
"Participant After-Tax Contributions Account/Diversified Investments"

         
          
 "Participant After-Tax Contributions Account/Other Investments"

         
          
 "Participant After-Tax Contributions Account/Stock"

         
          
 "Participant Deductible Contributions Account/Stock"

         
          
 "Rollover Account/Other Investments"

         
          
 "Rollover Account/Stock"

          
1.03.         Anniversary  Date. The term  "Anniversary  Date" shall mean the first day of each  Accounting  Year. The  Anniversary
Date is January 1.

          
1.04.         Attained Age. The term  "Attained  Age" shall mean the age, in years,  of an Employee as of the last  anniversary  of
his date of birth.

          
1.05.         Beneficiary.  The term  "Beneficiary"  shall mean the surviving  spouse of a deceased  Participant,  or, in the event
that either:

	  	     (a)   the deceased Participant is not survived by a spouse, or 

	  	     (b)   the  deceased  Participant's  surviving  spouse had agreed,  in writing,  witnessed  by a notary  public,  to the
         designation of another beneficiary, 

the person or persons
designated by the Participant in the latest written notice to the Committee on a
form provided by the Committee. If any non-spouse Beneficiary so designated
predeceases the Participant and the Participant has no surviving spouse at his
death and had not designated another Beneficiary, the provisions of Section 5.11
hereof shall apply. The Participant shall have the right to change his
Beneficiary from time to time in the manner hereinabove described. 

                   
Any beneficiary  designation made in accordance with the foregoing,  shall be automatically revoked on the marriage or divorce
and remarriage of a Participant.

                   
1.06.     Board of  Directors.  The term "Board of  Directors"  shall mean the Board of Directors of the  Sponsoring  Employer,
unless in the context in which it is used it clearly means the Board of Directors or an Employer.

                  
1.07.     Cash Dividend  Holding  Account.  The term "Cash Dividends  Holding  Account" shall mean the Account of a Participant
to which cash dividends  attributable to his Accounts that the  Participant has elected to have paid to him,  pursuant to Section 4.10,
which are received by the Trustee after  January 1,  2002 and credited to this Account  pursuant to Section 4.10. A Participant's  Cash
Dividends Holding Account shall be debited when the cash dividends are distributed to the Participant pursuant to Section 4.10.

          
1.08.     Cash   Dividend   Reinvestment    Account/Diversified    Investments.    The   term   Cash   Dividends   Reinvestment
Account/Diversified  Investments"  shall mean the Account of a Participant  to which is credited  with amounts from his Cash  Dividends
Reinvestment  Account/Stock  which are  diversified  into certain  investments  elected  pursuant to Section  4.08 hereof,  credited or
debited  with  adjustments  made  pursuant to Section 4.02 and debited with  benefit  payments or transfers  from such  accounts to the
Participant's Other Investments,  Stock or other Diversified  Investments  Accounts.  Separate subaccounts shall be maintained for each
diversified investment option and may be maintained for the interim investment of the proceeds from the sale of Employer Stock.

          
1.09.     Cash  Dividends  Reinvestment  Account/Other  Investments.   The  term  "Cash  Dividends  Reinvestment  Account/Other
Investments"  shall mean the Account of a participant to which is credited his share of the cash  dividends  received by the Trust Fund
which are  attributable  to his  Accounts  and are  credited to this  Account  pursuant to Section  4.10,  credited or debited with the
adjustments made pursuant to Section 4.02 and debited with payments made for Employer Stock.

2

          
1.10.     Cash Dividends  Reinvestment  Account/Stock.  The term "Cash  Dividends  Reinvestment  Account/Stock"  shall mean the
Account of a Participant  which is credited with his shares of Employer  Stock  purchased by the Trust Fund from  reinvested  dividends
received by the Trust Fund which are  attributable  to his  Accounts  and are credited or debited  with  adjustments  made  pursuant to
Section 4.03 and transfers  into or out of the  diversified  investments  elected  pursuant to Section 4.08.  While each  Participant's
Account/Stock  shall  record the number of shares  credited to the account  (expressed  in  fractional  shares to the nearest  four (4)
places), no allocation of specific shares of Employer Stock held in the Trust Fund shall be made to such account.

                
1.11.     Committee.  The term "Committee" shall mean the Committee provided for in Article VI hereof.

                   
 1.12.     Compensation.  Except as provided  below,  the term  "Compensation"  shall mean a Participant's  (i) total  salary or
wages,  including  overtime pay, and (ii) regular  bonuses and regular incentive awards received under bonus and incentive plans of the
Employer.  "Compensation"  for  Participants  who are  salespersons  who  regularly  incur  travel  and  other  expenses  which are not
separately  reimbursed  shall mean seventy five percent  (75%) of the items set forth in (i) and (ii) above.  "Compensation"  shall not
include  extraordinary  forms of remuneration  such as living and automobile  allowances,  imputed or bonus income related to insurance
programs, extraordinary bonuses and extraordinary incentive awards.

                   
If a  Participant  is on a  military  leave  during a period  of time  when his  reemployment  rights  with the  Employer  are
guaranteed by federal law, he shall be deemed to have received  Compensation during his period of military service,  provided (i) he is
reemployed by an Employer  within the time  required by federal law after the  expiration  of his active  military  service and (ii) he
makes the  Participant  contributions  required by Section  2.02(a) hereof within the time  prescribed in Section 5.16 hereof after his
reemployment,  based  on his  deemed  Compensation,  as  hereinafter  defined,  during  his  military  leave.  A  Participant's  deemed
Compensation  during a military  leave shall be computed on the basis of the  assumption  that his regular  rate of pay would have been
paid for forty (40) hours a week or eight (8) hours a day  during the  regular  business  days from the  commencement  of his  military
leave to his  reemployment  date.  Regular rate of pay shall be calculated  for this purpose on the basis of his regular hourly rate of
pay at the time of the  commencement  of his military  leave,  adjusted by the average  increases at the facility or principal place of
his employment for similarly situated active employees during the period of his military leave.

          
         This Plan does not limit  compensation  in accordance with the provisions of Section  401(a)(17) of the Internal  Revenue Code
since the Plan does not benefit any Highly Compensated Employees.

          
 1.13.     Compensation  Base. The term  "Compensation  Base" for any Employee who was a Plan  Participant on December 31, 1983,
shall mean that portion of a  Participant's  Compensation  in excess of the amount of Social  Security  Covered  Compensation or hourly
rate set opposite his year of birth in the  appropriate  column of the table below (on the basis of either (i) the  appropriate  hourly
rate in the case of an  hourly  rate  Employee  or (ii) the  frequency  of the  Participant's  compensation  payments  in the case of a
non-hourly rate Employee):

3

	Year
of
Birth 	Hourly
Rate 	Weekly
Covered
Compensation 	Biweekly
Covered
Compensation 	Monthly
Covered
Compensation 
	
1911 or before 	
$3.46	
$138	
$277	
  $600 
	 1912-1913	  3.75 	  150 	  300 	    650 
	1914-1915 	  4.05 	  162 	  323 	    700 
	1916-1917 	  4.33 	  173 	  346 	    750 
	1918-1921 	  4.62 	  185 	  369 	    800 
	1922-1925 	  4.90 	  196 	  392 	    850 
	1926-1930 	  5.19 	  208 	  415 	    900 
	1931-1932 	  5.48 	  219 	  438 	    950 
	1933-1934 	  5.77 	  231 	  462 	  1,000 
	1935 and later 	  5.97 	  239 	  478 	  1,035 

          
The term “Compensation Base” for any Employee who was not a Plan
Participant on December 31, 1983, but who became a Plan Participant between
January 1, 1984 and December 31, 1986, shall mean that portion of a
Participant’s Compensation in excess of the amount of Social Security
Covered Compensation or hourly rate specified below (on the basis of either (i)
the hourly rate in the case of an hourly rate Employee or (ii) on the basis of
the frequency of the Participant’s Compensation payments in the case of a
non-highly rate Employee): 

	Hourly
Rate

	Weekly
Covered
Compensation

	Biweekly Covered
Compensation

	Monthly Covered
Compensation

	$5.97	$239	$478	$1,035

          
        The term  "Compensation  Base" for any Employee who was not a Participant on December 31, 2001,  shall mean $32,977.  The term
"Compensation Base" for any Accounting Year after 2001 shall mean the Compensation Base for the immediately  preceding  Accounting Year
increased  by the merit  budget  percentage  guideline  which was  approved by the Board of  Directors  for the  immediately  preceding
Accounting Year for salaried and clerical hourly employees defined as average performers, rounded down to the next whole percentage.

          
  1.14.         Contingent  Beneficiary.  The term  "Contingent  Beneficiary"  shall  mean the person or  persons  (or a trust)  duly
designated by the  Participant,  with the written  consent of his spouse,  if any,  witnessed by a notary public,  to receive any death
benefit due from the Plan in the event the designated  Beneficiary  does not survive the  Participant.  Notwithstanding  the foregoing,
written consent of the spouse is not required if the spouse is designated as the Beneficiary.

4

          
          1.15.         Early  Retirement  Date. The term "Early  Retirement  Date" shall mean the date a Participant  retires and leaves the
employ of the Employers provided he has attained age fifty-five (55) and has at least five (5) years of Vesting Service.

          
      1.16.         Effective  Date.  The term  "Effective  Date" shall mean July 1, 1977.  The  effective  date on this restated plan is
January 1,  2002,  except for certain changes in Section 5.08, which shall be effective as of November 14,  2001 as provided in Section
5.08.

          
   1.17.         Eligible Employee.  The term "Eligible  Employee" shall mean each Employee who as of any Participation Date satisfies
(a), (b), and (c) below:

	 	        (a)
either (i) his annual Compensation for the Accounting Year immediately
preceding the Participation Date was equal to or greater than the applicable
Compensation Base, as calculated under Section 1.13 hereof (which is based on
the Employee’s compensation during such immediately preceding Accounting
Year) or (ii) from and after January 1, 1992, the Eligible Employee is a
salaried Employee, regardless of the amount of his Compensation for the
Accounting Year immediately preceding the Participation Date; 

	 	       
 (b) he is not a Highly Compensated Employee, and

	 	        (c)
he has either (i) been credited with at least one thousand (1,000) Hours of
Service in his first twelve (12) months of employment, or (ii) been
credited with at least one thousand (1,000) Hours of Service in any Accounting
Year. 

          
1.18.     Eligible  Rollover  Distribution.
  The term  "Eligible  Rollover  Distribution"  shall have the meaning  specified in
Section 5.15.

          
 1.19.     Eligible Retirement Plan.  The term "Eligible Retirement Plan" shall have the meaning specified in Section 5.15.

          
       1.20.         Employee.  The term "Employee" shall mean each current or future employee of an Employer,  except for all purposes of
the Plan, the term "Employee" shall not include any employee who is a member of a collective  bargaining unit, the  representatives  of
which have bargained for and/or  negotiated  retirement  benefits (other than those  contained  herein) and who have been excluded from
this Plan as the result of good faith  negotiations  between the parties  (such  exclusion  shall be considered to have occurred in the
event  the  matter  of  participation  is not  raised  by the  unit's  collective  bargaining  representative).  Furthermore,  the term
"Employee"  shall not include any "leased  employee" as defined in Section  414(n)(2) of the Internal Revenue Code nor any other person
classified  by his Employer as a "leased  employee",  as a "temporary  employee",  any other hourly  employee  employed  solely for the
purposes of  "temporary  operations"  of an Employer or any person  classified  by his  Employer as an  "independent  contractor".  The
Sponsoring  Employer shall notify the  Committee,  in writing,  of the existence and location of any  "temporary  operations." A person
classified by an Employer as either a "leased  employee" or an  "independent  contractor" is not an Employee for purposes of this Plan,
even if the person is later  classified  as a common law  employee by the  Employer  or is later  classified  as a common law  employee
pursuant to the settlement of a federal  employment tax audit with the Internal  Revenue Service (in which event such person shall only
be  considered  to be an Employee,  for the purpose of this Plan,  from and after the date of his  classification  by the Employer as a
common law  employee of an Employer (or an employer  that is a member of a controlled  group of  corporations  or trades or  businesses
with an Employer within the meaning of Sections 414(b) or (c) of the Internal Revenue Code).

5

          
   1.21.         Employer.  The term  "Employer"  shall mean Leggett & Platt,  Incorporated,  a Missouri  corporation  whose principal
offices are located at Carthage,  Missouri,  its successors and assigns,  and any subsidiary or affiliated  companies authorized by the
Board of Directors of Leggett & Platt,  Incorporated  to participate in this Plan with respect to their  Employees,  and subject to the
provisions of Article IX, any corporation  into which the Employer may be merged or consolidated or to which all or  substantially  all
of its assets may be  transferred.  The Employers  participating  in this Plan as of January 1, 2002,  the branch numbers and locations
of such Employers who are covered by this Plan are listed on Schedule I, a copy of which is attached hereto.

          
  1.22.         Employer  Stock.  The term  "Employer  Stock" shall mean the shares of the common stock of the  Sponsoring  Employer,
with voting rights, which are contributed to or acquired by the Trustee as part of the Trust Fund.

          
 1.23.         Employee  Pre-Tax   Contributions   Account/Diversified   Investments.   The  term  "Employee  Pre-Tax  Contributions
Account/Diversified  Investments"  shall mean the Account of a Participant to which shall be credited amounts from his Employee Pre-Tax
Contributions  Account/Stock  which are  diversified  into certain  investments  elected  pursuant to Section 4.08 hereof,  credited or
debited  pursuant  to Section  4.02 and  debited  with  benefit  payments  or  transfers  from such  accounts  to  Participant's  Other
Investments,  Stock  or  other  Diversified  Investments  Accounts.  Separate  subaccounts  shall be  maintained  for each  diversified
investment option and may be maintained for the interim investment of the proceeds from the sale of Employer Stock.

          
  1.24.         Employee Pre-Tax Contributions  Account/Other  Investments.  The term "Employee Pre-Tax  Contributions  Account/Other
Investments"  shall mean the Account of a  Participant  to which  shall be  credited  pre-tax  contributions  to the Trust  Fund,  made
pursuant to Section  2.02(a) from and after  January 1, 2002,  credited or debited with the  adjustments  made pursuant to Section 4.02
and debited with payments made for Employer Stock.

          
 1.25.      Employee Pre-Tax  Contributions  Account/Stock.  The term "Employee Pre-Tax  Contributions  Account/Stock" shall mean
the Account of a Participant  to which is credited  with shares of Employer  Stock  purchased by the Trust Fund from the  Participant's
pre-tax  contributions  made  pursuant to Section  2.02(a),  credited or debited with the  adjustments  made  pursuant to Section 4.03,
transfers  into or out of  diversified  investments  pursuant to Section  4.08.  While such  account  shall record the number of shares
credited to the account  (expressed in  fractional  shares to the nearest four (4) places),  no  allocation  of any specific  shares of
Employer Stock held in the Trust Fund shall be made to such account.

6

          
 1.26.         Employer  Contributions   Account/Diversified  Investments.  The  term  "Employer  Contributions  Account/Diversified
Investments" shall mean the Account of a Participant to which is credited amounts from his Employer  Contribution  Account/Stock  which
are diversified into certain  investments  elected pursuant to Section 4.08 hereof,  credited or debited with adjustments made pursuant
to Section 4.02 and debited with benefit  payments or transfers from such accounts to the  Participant's  Other  Investments,  Stock or
other Diversified  Investments  Accounts.  Separate  subaccounts shall be maintained for each diversified  investment option and may be
maintained for the interim investment of the proceeds from the sale of Employer Stock.

          
  1.27.         Employer Contributions  Account/Other Investments.  The term "Employer Contributions Account/Other Investments" shall
mean the Account of a  Participant  to which is credited his share of the Employer  Contributions  made to the Trust Fund in other than
Employer  Stock,  credited or debited with the  adjustments  made  pursuant to Section 4.02 and debited with payments made for Employer
Stock

          
         1.28.         Employer Contributions  Account/Stock.  The term "Employer  Contributions  Account/Stock" shall mean the Account of a
Participant  which is  credited  with his  shares of  Employer  Stock  purchased  by the  Trust  Fund from  Employer  Contributions  or
contributed  to the Trust Fund by the Employer as an Employer  Contribution,  credited or debited  with  adjustments  made  pursuant to
Section 4.03 and transfers  into or out of the  diversified  investments  elected  pursuant to Section 4.08.  While each  Participant's
Employer  Contributions  Account/Stock shall record the number of shares credited to the account (expressed in fractional shares to the
nearest four (4) places), no allocation of specific shares of Employer Stock held in the Trust Fund shall be made to such account.

          
        1.29.         ESOP Transfer Account/Other  Investments.  The term "ESOP Transfer Account/Other  Investments" shall mean the Account
of a  Participant  which is credited  with amounts  which the  Participant  elects to transfer  from the Leggett & Platt,  Incorporated
Employee Stock Ownership Plan pursuant to Section 10.02 in a form other than shares of Employer Stock.

          
        1.30.         ESOP Transfer  Account/Stock.  The term "ESOP Transfer  Account/Stock"  shall mean the Account of a Participant which
is credited with shares of Employer  Stock which the  Participant  elects to transfer from the Leggett & Platt,  Incorporated  Employee
Stock Ownership Plan pursuant to Section 10.02 of this Plan.

          
         1.31.         ESOP Transfer  Contributions.  The "ESOP  Transfer  Contributions"  shall mean the shares of Employer Stock and other
amounts which are  transferred at the  Participant's  election from the Leggett & Platt,  Incorporated  Employee  Stock  Ownership Plan
pursuant to Section 10.02 of this Plan.

          
        1.32.         Forfeitures.  The term "Forfeitures" shall mean the nonvested portions of the Employer  Contributions  Account/Stock,
or Other Investments or Diversified  Investments of each Participant who terminated  employment during an Accounting Year without being
reemployed  before  the end of such  Accounting  Year (at which time they are  applied to reduce  Employer  Contributions  pursuant  to
Section 3.01).

7

          
         1.33.         Highly  Compensated  Employee.  The term "Highly  Compensated  Employee" shall have the same meaning as under Section
414(q) of the Internal Revenue Code and the regulations  thereunder;  generally,  "Highly Compensated Employee" shall mean any employee
of the Employers,  or any other entity which is a member of a controlled  group of corporations  with the Sponsoring  Employer or which
is under common  control with the  Sponsoring  Employer or which is part of an affiliated  service group with the  Sponsoring  Employer
within the meaning of Sections 414(b), (c) and (m) of the Internal Revenue Code, who either:

	 	    (a)   
during the Accounting Year immediately preceding the applicable Accounting Year--

 

	 	           
(i)   was at any time a 5-percent owner of an Employer, or

	 	          
(ii)   
received compensation from the Employers in excess of $80,000 or such higher
amount as adjusted for such Accounting Year by the Secretary of the Treasury
pursuant to Section 414(q) of the Internal Revenue Code. 

 	 	    (b)   
during the applicable Accounting Year is at any time
 a five-percent owner of an Employer, or

Compensation for this
purpose shall mean compensation as defined in section 414(s) of the Internal
Revenue Code and the regulations thereunder (generally, all the compensation
from the Employer which is includable in the Employee’s gross income for
federal income tax purposes). 

                   
1.34.         Hour of  Service.  The term "Hour of Service"  shall mean any hour for which an  employee  is directly or  indirectly
compensated or entitled to  compensation  by an Employer;  including,  for this purpose,  any employer that is a member of a controlled
group of  corporations,  commonly  controlled  group of trades or businesses or affiliated  service group with the Sponsoring  Employer
within the meaning of Sections 414(b), (c) and (m) of the Internal Revenue Code:

	 	        (a)   
 for the performance of duties for an Employer;

	 	        (b)   
for other reasons not requiring the performance of duties such as vacation,
holiday, illness, incapacity (including disability), jury duty, or a paid leave
of absence; and 

	 	        (c)   
as a result of a back pay award (irrespective of mitigation of damages) which
has been awarded or agreed to by an Employer. 

8

                   
The Hours of Service  credited  to an employee  under item (a) and item (c) above for which  duties  were  performed  shall be
based upon the actual  number of Hours of Service for which he is directly or  indirectly  compensated  as  hereinabove  provided.  The
number of Hours of Service to be  credited to an employee  under  items (b) and (c) above for which no duties were  performed  shall be
calculated on the basis of the number of hours  regularly  scheduled for the  performance of duties during the period of time for which
he received  compensation  or a back pay award.  If an employee has no regular work  schedule,  the number of Hours of Service shall be
calculated  on the  basis of an eight  (8) hour  day  and/or  forty  (40)  hour  week.  If an  employee  receives  direct  or  indirect
compensation  under item (b) or item (c) of this  Section for which no duties were  performed  which was not based upon "units of time"
the Hours of Service to be credited shall be calculated pursuant to the pertinent governmental regulations.

                   
Hours of Service for the  performance of duties shall be credited as of the date the duties were  performed;  Hours of Service
for other reasons not requiring the  performance of duties,  shall be credited to the period or periods for which the payment was made;
Hours of Service  resulting from a back pay award, to the extent not previously  credited,  shall be credited for the period or periods
to which the award or agreement pertains.

                  
Notwithstanding the foregoing:

           (i)      no more than five  hundred  one (501) Hours of Service  shall be  credited  under item (b) and item (c) above for any
single continuous period during which no duties were performed; 

                   
(ii)          no Hours of Service  shall be  credited  under  item (b) above if the  indirect  compensation  was paid  pursuant  to
workmen's compensation, unemployment compensation, or disability insurance laws; and

                   
 (iii)         no Hours of Service  shall be credited  for any payment to an employee  which  solely  reimburses  the  employee  for
medical or medically related expenses.

                   
 1.35.         Limited Participant.  The term "Limited  Participant" shall mean a Participant who becomes a "Limited Participant" as
defined in Sections 2.03 and 2.05 hereof.

                  
 1.36.         Net Profits.  The term "Net Profits"  shall mean the net income of the  Sponsoring  Employer for an  Accounting  Year
calculated  in  accordance  with  generally  accepted  accounting  principles  before  (i)  federal or state  income  taxes or (ii) any
additional contributions to this Plan pursuant to Section 3.02.

          
        1.37.         Normal Retirement Date.  The term "Normal Retirement Date" shall mean a Participant's sixty-fifth (65th) birthday.

          
       1.38.         One Year Break in Service.  A "One Year Break in Service" shall occur for any  Accounting  Year if an Employee is not
credited  with more than five  hundred  (500) Hours of Service for such  Accounting  Year.  A "One Year Break in Service"  shall not be
deemed to have  occurred if it is solely  caused by either  (i) service  in the armed forces of the United  States while an  Employee's
reemployment  rights are guaranteed by law, (ii) a leave of absence (without pay) duly granted an Employee by his Employer,  or (iii) a
"maternity or paternity  absence," as defined in Sections  410(a)(5)(E) and 411(a)(6)(E) of the Internal Revenue Code, i.e., an absence
because of--

9

	  	(i)     pregnancy of an Employee; 

	  	(ii)    birth of a child of an Employee;

 
	  	(iii)    placement of a child for adoption with an Employee; or

	  	(iv)   caring for a child during the period immediately following such a birth or placement. 

          
         1.39.          Participant.  The  term  "Participant"  shall  mean  an  Employee  who has met the  requirements  of  Article  II for
participation hereunder.

          
       1.40.         Participant  After-Tax  Contributions  Account/Other  Investments.  The  term  "Participant  After-Tax  Contributions
Account/Other  Investments"  shall mean the Account of a Participant  to which shall be credited his  contributions  to the Trust Fund,
made  pursuant to Section  2.02(a) or (b),  credited or debited  with the  adjustments  made  pursuant to Section 4.02 and debited with
payments made for Employer  Stock.  In the event that a Participant  makes  contributions  pursuant to both Section 2.02(a) and Section
2.02(b),  such account shall for  accounting  purposes only, be subdivided  into two  subaccounts,  with one such  subaccount to record
contributions  made  pursuant  to  Section  2.02(a)  (and  adjustments  relating  thereto)  and the  other  such  subaccount  to record
contributions made pursuant to Section 2.02(b) (and adjustments relating thereto).

          
         1.41.         Participant After-Tax Contributions  Account/Diversified  Investments.  The term "Participant After-Tax Contributions
Account/  Diversified  Investments"  shall mean the Account of a Participant  to which shall be credited  amounts from his  Participant
Contributions  Account/Stock  which are  diversified  into certain  investments  elected  pursuant to Section 4.08 hereof,  credited or
debited  pursuant  to Section  4.02 and  debited  with  benefit  payments  or  transfers  from such  accounts  to  Participant's  Other
Investments,  Stock  or  other  Diversified  Investments  Accounts.  Separate  subaccounts  shall be  maintained  for each  diversified
investment option and may be maintained for the interim investment of the proceeds from the sale of Employer Stock.

          
       1.42.         Participant After-Tax  Contributions  Account/Stock.  The term "Participant  After-Tax  Contributions  Account/Stock"
shall mean the Account of a  Participant  to which is  credited  with shares of  Employer  Stock  purchased  by the Trust Fund from the
Participant's  nondeductible  contributions made pursuant to Section 2.02(a), credited or debited with the adjustments made pursuant to
Section 4.03,  transfers into or out of diversified  investments  pursuant to Section 4.08.  While such account shall record the number
of shares  credited to the account  (expressed  in  fractional  shares to the nearest four (4) places),  no  allocation of any specific
shares of Employer Stock held in the Trust Fund shall be made to such account.

10

          
  1.43.       Participant Deductible Contributions  Account/Stock.  The term "Participant Deductible  Contributions  Account/Stock"
shall mean the Account of a  Participant  which is credited  with shares of Employer  Stock  purchased  by the Trust Fund prior to 1987
with the  Participant's  deductible  contributions  made  pursuant to Section  2.02(b).  While such account  shall record the number of
shares credited to the account  (expressed in fractional  shares to the nearest four (4) places),  no allocation of any specific shares
of Employer Stock held in the Trust Fund shall be made to such account.

          
         1.44.         Participation Date.  The term "Participation Date" shall mean January 1 and July 1 in each calendar year.

          
     1.45.         Plan.  The term "Plan" shall mean the Leggett & Platt,  Incorporated  Stock Bonus Plan (formerly the Leggett & Platt,
Incorporated Employee Stock Purchase/Stock Bonus Plan).

          
      1.46.         Rollover  Account/Other  Investments.  The term  "Rollover  Account/Other  Investments"  shall mean the  Account of a
Participant  to which shall be credited his Rollover  Contributions  to the Trust Fund,  made  pursuant to Section  10.01,  credited or
debited with the adjustments made pursuant to Section 4.02 and debited with payments made for Employer Stock.

          
 1.47.         Rollover  Account/Stock.  The term  "Rollover  Account/  Stock"  shall  mean the  Account of a  Participant  which is
credited with shares of Employer  Stock  purchased by the Trust Fund from the  Participant's  Rollover  Contributions  made pursuant to
Section 10.01.

          
 1.48.         Rollover  Contributions.  The term "Rollover  Contributions" shall mean the Participant's Rollover Contributions made
pursuant to Section 10.01.

          
         1.49.         Sponsoring Employer.  The term "Sponsoring Employer" shall mean Leggett & Platt, Incorporated.

          
  1.50.         Total and Permanent  Disability.  The term "Total and Permanent  Disability"  or "Totally and  Permanently  Disabled"
shall mean a physical  or mental  condition  arising  after the  original  date of  employment  of the  Participant  which  totally and
permanently  prevents the Participant  from engaging in any occupation or employment for remuneration or profits except for the purpose
of  rehabilitation  not incompatible  with a finding of total and permanent  disability.  The determination as to whether a Participant
is totally and  permanently  disabled shall be made (i) on medical  evidence by a licensed  physician  designated by the Committee,  or
(ii) on evidence that the  Participant  is eligible for  disability  benefits  under any  long-term  disability  plan  sponsored by the
Employer,  or (iii) on evidence that the  Participant  is eligible for disability  benefits under the Social  Security Act in effect at
the date of disability.

          
      1.51.         Trust  Agreement.  The term "Trust  Agreement"  shall mean the  agreement  entered  into between the Employer and the
Trustee contemporaneously with the execution of this Plan as it may subsequently be amended.

          
         1.52.         Trustee.  The term "Trustee" shall mean the Trustee under the Trust Agreement.

11

          
          1.53.         Trust Fund.  The term "Trust Fund" shall mean all cash,  Employer  Stock,  other  securities and property held by the
Trustee pursuant to the terms of the Trust Agreement, together with income therefrom.

          
         1.54.         Valuation  Date.  The term  "Valuation  Date"  shall  mean the last  business  day of each  month.  For  distribution
purposes the term  "Valuation  Date" shall mean the last  business day of each fiscal  quarter of the calendar  year (i.e.,  generally,
March 31, June 30, September 30 and December 31).  The term shall also include special Valuation Dates pursuant to Section 4.06.

          
        1.55.         Vesting  Service.  The term "Vesting  Service" shall mean the number of Accounting Years during which the Employee is
credited with at least one thousand  (1,000) Hours of Service,  including any Hours of Service with an Employer  while the Employer was
a member of a controlled group of  corporations,  commonly  controlled  group of trades or businesses or affiliated  service group with
the Sponsoring  Employer  within the meaning of Sections  414(b),  (c) and (m) of the Internal  Revenue Code excluding (i) any Hours of
Service with an Employer  prior to the date the  Employer  became a part of a controlled  group with the  Sponsoring  Employer and (ii)
excluding any  Accounting  Year ending before  January 1, 2002,  during which the Employee was eligible to make Employee  nondeductible
contributions  under Section  2.02(a) of the Plan but declined to make any Employee  nondeductible  contributions  hereunder,  unless a
non-Highly  Compensated  Employee is a Participant  during such Accounting Year in the Executive Stock Purchase  program  maintained by
the  Sponsoring  Employer.  In addition,  if a terminated  Employee is reemployed,  his Vesting  Service shall not include any years of
employment  prior to his  earlier  termination  of  employment  if (i) he did not have any vested and  nonforfeitable  interest  in his
Employer  Contribution  Accounts upon his earlier termination of employment and (ii) he incurred at least five (5) consecutive One Year
Breaks in Service before he was reemployed.

                    If a Member is on military  leave  during a period of time when his  reemployment  rights with an Employer are  guaranteed  by
federal  law, he shall be credited  with the Hours of Service  during his military  leave for  vesting,  computed on the basis of forty
(40)  hours a week or  eight  (8)  hours a day for  each  regular  business  day from the  commencement  of his  military  leave to his
reemployment  date,  provided (i) he is reemployed by an Employer  within the time required by federal law after the  expiration of his
military service,  and (ii) he makes the Participant  contributions  permitted under Section 2.02 within the time prescribed by Section
5.16 after his reemployment,  without any interest thereon,  based on his deemed  Compensation during his military leave, as defined in
Section 1.12 hereof.  Any such Employee  contributions  may be made in a single payment or in installments over a period no longer than
the lesser of three (3) times his period of qualified  military service,  as defined in Section 414(u)(5) of the Internal Revenue Code,
or within five (5) years of the date of his reemployment.

ARTICLE II

PARTICIPATION
IN THE EMPLOYEE STOCK PURCHASE/STOCK

BONUS PLAN AND CONTRIBUTIONS BY THE PARTICIPANTS

12

          
  2.01.         Eligibility.  Each  Eligible  Employee who was a Participant  in the Plan on December 31, 2001,  shall be entitled to
continue to  participate  in the Plan on and after  January 1, 2002,  provided he remains an Eligible  Employee  and he is not a Highly
Compensated  Employee.  No Employee  shall be entitled to continue  to  participate  in this Plan for any part of any  Accounting  Year
after 1988 during which he is a Highly Compensated Employee, except as a Limited Participant as provided in Section 2.05 hereof.

                   As of any  Participation  Date on or after January 1, 1989, and prior to January 1, 2002,  any Eligible  Employee who is not a
Highly  Compensated  Employee may become a Participant  provided his original date of employment is at least one (1) year prior to such
Participation  Date.  Such Eligible  Employee shall then become a Participant as of the  Participation  Date on which he agrees to make
(and does make) the Participant non-deductible contributions required in Section 2.02(a).

                    As of any Participation Date on or after January 1, 2002, any Eligible Employee who is not a Highly  Compensated  Employee may
become a  Participant  provided  his  original  date of  employment  is at least one (1) year prior to such  Participation  Date.  Such
Eligible  Employee  shall  then  become a  Participant  as of the  Participation  Date on which he agrees  to make (and does  make) the
Participant pre-tax contributions required in Section 2.02(a).

                    If the employees of a subsidiary or an affiliated  company of the Sponsoring  Employer  become  employees of an Employer under
the Plan, then in determining  eligibility to become a Participant in the Plan, vesting, and early retirement,  the Sponsoring Employer
shall  recognize his Hours of Service for such  subsidiary or affiliated  company or branch location while the subsidiary or affiliated
company or branch location was part of a company that was a member of a controlled  group of  corporations,  commonly  controlled group
of trades or businesses or affiliated  service group with the Sponsoring  Employer within the meaning of Sections  414(b),  (c) and (m)
of the Internal  Revenue Code. In addition,  the Sponsoring  Employer may,  credit all such employees with Hours of Service or years of
Vesting  Service with such  subsidiary or affiliated  company (the  "employing  entity") even though all or part of such employment may
have occurred prior to the date the employing  entity became a subsidiary or an affiliated  company.  An Employee who becomes  eligible
to participate in the Plan under this paragraph shall enter the Plan on the date of his or her transfer to an Employer under the Plan.

                    If the  Sponsoring  Employer,  either  directly or through a subsidiary,  acquires a business  ("acquired  business")  through
purchase of all or a substantial part of the assets of the acquired  business and if in connection with such  acquisition  employees of
the acquired business are hired by the Sponsoring  Employer and/or any of its subsidiaries,  then in determining  eligibility to become
a Participant in the Plan,  vesting and early retirement the Board of Directors of the Sponsoring  Employer may, by resolution,  credit
all such employees with Hours of Service and years of Vesting Service with such acquired business.

          
         A terminated  Participant,  who is reemployed  after December 31, 2001,  shall again become a Participant on his  reemployment
date  provided he is not a Highly  Compensated  Employee  and agrees to resume  making (and does resume  making) the  Employee  pre-tax
contributions required in Section 2.02(a).

13

                    A terminated  Employee (who had not become a Participant  prior to his  termination)  who is reemployed by the Employer  shall
become a Plan  Participant on the  Participation  Date coincident with or immediately  following the date he satisfies the requirements
set forth in this Section 2.01,  counting,  for this purpose,  his years of Vesting Service prior to his reemployment  unless he incurs
consecutive  One Year Breaks in Service that equal or exceed (i) five (5) years or (ii) his years of Vesting  Service as of his earlier
termination of employment,  in which event he shall be treated the same as a new Employee for the purpose of his  eligibility to become
a Participant in this Plan.

          
         2.02.         Employee  Contributions.  Each Eligible  Employee may make  contributions  to the Trust Fund in  accordance  with the
following:

          
         2.02(a).       Employee  Pre-Tax  Contributions.  For each  Accounting  Year  beginning on or after January 1, 2002,  each Eligible
Employee  whose annual  Compensation  for the applicable  Accounting  Year is expected to exceed the  Compensation  Base (as defined in
Section  1.13) for such  Accounting  Year shall be provided with an  enrollment  form by the  Committee on which he may authorize  that
pre-tax Employee contributions be withheld, by payroll deduction, equal to:

                                                         two percent (2%); or,

                                                        three percent (3%); or,

                                                        four percent (4%); or,

                                                        five percent (5%); or,

                                                 five and seven tenths percent (5.7%).

of his Compensation for the Accounting Year which is in excess of:

                                                         $23,738 annually, or

                                                           $913 biweekly, or

                                                            $456 weekly, or

                                                            $11.40 hourly.

                    The Committee  shall notify each  Participant in the Plan within a reasonable  period of time prior to December 31, 2001, that
the rate of  Participant  nondeductible  contributions  the  Participant is making to the Plan will continue after December 31, 2001 as
Employee salary reduction pre-tax  contributions,  unless the Participant notifies the Committee,  on a form that will be furnished the
Participant by the Committee, that he does not wish to continue his payroll deduction contributions on a pre-tax basis.

                    After 2002,  the above  threshold  amounts  shall be increased by the same  percentage  (and  pursuant to the same formula) by
which the  Compensation  Base for Employees who become  Participants  on and after January 1, 2002 is increased in accordance  with the
provisions of Section 1.13 hereof.

14

                    Notwithstanding  the above, any Eligible  Employee who became a Participant  prior to January 1, 1987, and who is not a Highly
Compensated  Employee,  and who is otherwise eligible to participate in this Plan may authorize annual contributions of a dollar amount
which is at least equal to the dollar amount the Eligible Employee contributed to this Plan for 1988.

                    Each  Eligible  Employee  whose  annual  Compensation  for the  applicable  Accounting  Year is not  expected  to  exceed  the
Compensation  Base (as  defined in Section  1.13) for such  Accounting  Year (and who is a salaried  Employee),  shall be  provided  an
enrollment  form by the Committee on which he may authorize that pre-tax  Employee  contributions  be withheld,  by payroll  deduction,
equal to not less than five dollars  ($5.00) per biweekly  payroll period nor more than fifteen dollars  ($15.00) per biweekly  payroll
period; provided that the amount shall be in whole dollars.

                    Prior to January 1, 2002, this Plan provided that  Participant  contributions  would be made on a  nondeductible  or after-tax
basis.  Effective  from and after  January 1, 2002,  Participant  nondeductible  or  after-tax  contributions  to this Plan are neither
required nor permitted.

                    A Participant may only change the rate of his  contributions  as of a Participation  Date by a written notice to the Committee
at least fifteen (15) days prior to the Participation Date.

          
       2.02(b).       Deductible  Employee  Contributions.  From and after  January  1, 1982,  and prior to January 1, 1987,  Participants
were  permitted to make  voluntary  deductible  contributions  in cash to the Trust Fund in  accordance  with the law in effect at such
time.  Subject to the  provisions  of Section 5.07, a Participant  may elect at any time to withdraw  from his  Participant  Deductible
Contributions  Account/Stock and/or that portion, if any, of his Participant  Contributions  Account/Other  Investments attributable to
contributions  made  pursuant to this Section  2.02(b),  all or a part of (i) the balance then credited to such Stock  Account,  and/or
(ii) the amount  then  constituting  such  portion  of such Other  Investments  Account.  If a  Participant  who has not  Attained  Age
fifty-nine and one-half  (59-1/2)  requests a withdrawal  from his  Participant  Deductible  Contributions  Account/Stock  (or from the
portion of his Participant After-

Tax Contributions
Account/Other Investments which is attributable to contributions, if any, made
pursuant to Section 2.02(b)), such requests shall not be granted unless the
Participant acknowledges in writing that he understands that the amount
withdrawn 

	  	(i)     will be subject to a ten percent (10%) federal excise tax penalty;

 
	  	(ii)    will also be taxed as ordinary income for federal income tax purposes;

 
	  	(iii)    will be reported to the Internal Revenue Service for such purposes.

 

             
      2.03.         Suspension  of Employee  Pre-Tax  Contributions.  A  Participant  may,  at any time,  suspend  his  Employee  pre-tax
contributions  made pursuant to Section 2.02(a),  during which period of time such Participant  shall be considered to be participating
in the Plan as a "Limited  Participant."  A suspension of such  contributions  may only be accomplished by giving written notice to the
Employer at least  fifteen  (15) days before the end of the payroll  period  during  which the  suspension  is to take effect (on forms
prescribed by the Committee).

15

          
         2.04.         Resumption of Employee Pre-Tax  Contributions.  A Participant who has suspended  Employee pre-tax  contributions  may
resume them by giving fifteen (15) days' written notice to the Employer (on forms prescribed by the Committee).

          
        2.05.         Limited  Participant.  If a Participant  (i) ceases to be an Eligible  Employee while  remaining in the employ of the
Employer,  or (ii) becomes a Highly  Compensated  Employee,  or (iii)  suspends  his Employee  pre-tax  contributions,  as  hereinabove
provided,  he shall become a "Limited  Participant"  in which event he shall continue to participate in the Plan for all purposes (such
as vesting and  investment  earnings)  except that he shall not be entitled to make any  Employee  contributions  under the Plan and he
shall not share in any Employer contributions under the Plan for any Accounting Year in which he is a Highly Compensated Employee.

          
      2.06.         Exclusion  of Highly  Compensated  Employees.  Sixty (60) days prior to each  Accounting  Year,  the  Employer  shall
determine which employees should be Highly  Compensated  Employees for the following  Accounting Year. As of each Valuation Date during
an Accounting  Year, the Committee shall review its  determination  of the Highly  Compensated  Employees of the Employers.  As soon as
reasonably  practicable  after the end of each  Accounting  Year, the Sponsoring  Employer shall  determine which Employees were Highly
Compensated  Employees for the immediately  preceding  Accounting Year. In the event any Highly Compensated  Employee made any Employee
pre-tax  contributions  under Section  2.02(a) or shared in any matching  Employer  contributions  under Article III for any Accounting
Year beginning on or after January 1, 2002, such Employee  contribution  shall be returned as hereinafter  provided,  together with the
investment  earnings  or less the  investment  losses  thereon,  thereon,  and any  related  matching  Employer  contribution  shall be
forfeited.  Such Employee pre-tax contribution shall be returned to the Highly Compensated  Employee as soon as reasonably  practicable
after the Committee  determines that he is a Highly Compensated  Employee.  Furthermore,  matching Employer  contributions shall not be
allocated to the Accounts of a Highly Compensated  Employee for any Accounting Year in which he is a Highly Compensated  Employee,  but
shall be applied to reduce future matching Employer contributions due under this Plan.

          
       2.07.         Average Deferral  Percentage/Average  Contribution Percentage  Nondiscrimination Tests
Do Not Apply to this Plan. The average  deferral  percentage  nondiscrimination  test under Section 401(k) of the Internal  Revenue Code and the average  contribution
percentage  nondiscrimination  test under  Section  401(m) of the  Internal  Revenue  Code do not apply to this Plan as  restated as of
January 1, 2002, since this Plan does not benefit Highly Compensated Employees.

          
     2.08.         Limitation  on Pre-Tax  Contributions  to this and Other  Internal  Revenue Code  Section  401(k) Plans Apply to this
Plan. The Employee pre-tax  contributions under this Plan and any other cash or deferred  arrangement  maintained by the Employer shall
not exceed the  limitations on such Employee  contributions  by Section 402(g) of the Internal  Revenue Code,  which for calendar years
2002 through 2006, are as follows:

16

	  	Calendar
Year

	Limit

	  	2002

 	$11,000

 
	  	 2003

  	$12,000

 
	  	2004 

 	$13,000

 
	  	2005

 	$14,000

 
	  	2006   	 $15,000 (as indexed thereafter) 

If a Participant exceeds
this limitation in any calendar year because of his participation in an
“other cash or deferred arrangement” maintained by the Employer, the
Employer shall distribute such excess Employee pre-tax contribution from the
“other cash or deferred arrangement” within 60 days after the end of
the applicable calendar year. (Under the design of this Plan it is
mathematically impossible for a Participant to contribute Employee pre-tax
contributions to this Plan in an amount greater than the Internal Revenue Code
Section 402(g) limit). If a Participant exceeds this limitation in any calendar
year because of his participation in an “other cash or deferred
arrangement” or another plan that permits elective deferral contributions
to be made that is subject to the Internal Revenue Code section 402(g) limit
which, in either event, is maintained by an unrelated employer, the Participant
shall advise the Employer by March 1 after the calendar year in which such limit
is exceeded of (a) the amount of the excess contribution and (b) the plan from
which he will withdraw the excess contributions, plus the investment earnings
(or less the investment losses) thereon by the immediately following April 15.
If the excess contribution is corrected by a distribution from this Plan the
matching Employer contributions thereon will be forfeited and applied to reduce
future matching Employer contributions. 

          
         2.09.         Plan  Controlling.  Upon becoming a  Participant,  a Participant  shall be bound then and  thereafter by the terms of
this Plan and the Trust Agreement, including all amendments to the Plan and the Trust Agreement made in the manner herein authorized.

ARTICLE III

CONTRIBUTIONS BY THE EMPLOYER

                  
 3.01.         Matching  Employer  Contributions.  As soon as  practicable  after each  payroll  period for which  Employee  pre-tax
contributions  made pursuant to Section  2.02(a) are withheld from  Participants,  the Employer  will remit such  contributions  to the
Trustee,  plus an amount equal to one-half  (1/2) of such Employee  pre-tax  contributions.  The Employer  contributions  may either be
made (i) in cash or (ii) in shares of Employer  Stock,  valued at the closing price of the shares on the New York Stock Exchange on the
business day immediately  prior to the date of the contribution to the Trust Fund, if the shares are contributed  directly to the Trust
Fund.  The Employer may also in one or more  transactions  purchase  shares of Employer Stock in the open market as treasury stock with
instructions  to the  broker-dealer  or other person  authorized  to execute the  transaction  to deliver on behalf of the Employer the
shares  purchased by the Employer upon settlement to the Trustee (or for credit to the Trustee's  account with a depository),  in which
event  the  shares  purchased  shall be  valued  at the cost of  treasury  stock  purchased,  plus  commission,  if any,  and any other
out-of-pocket  expenses  related to the transaction.  Alternatively,  the Employer may in one or more  transactions  purchase shares of
Employer stock directly from a Participant,  employee or other person,  other than a Participant,  employee or other person to whom the
restrictions  in Section 16(a) or Section 16(b) of the Securities and Exchange Act of 1934 are  applicable,  with  instructions  to the
transfer  agent of the Employer to deliver the  certificates  for such shares of treasury  stock directly to the Trustee (or for credit
to the Trustee's  account with a  depository);  the purchase  price for any such shares of treasury stock shall be based on the closing
price of the Employer Stock on the New York Stock Exchange on the business day immediately  preceding the  transaction,  (and shall not
include any out-of-pocket  expenses related to such a transaction)  which shall be the value of the shares delivered to the Trustee for
Plan  accounting  purposes.  As of the Valuation Date  coincident  with the close of each  Accounting  Year, the value of  Forfeitures,
calculated as of such date,  shall be applied to reduce any additional  Employer  Contribution  for such  Accounting Year under Section
3.02 hereof or to reduce future Employer Contributions under this Section 3.01.

17

          
         3.02.         Additional  Employer  Contributions.  For each  Accounting  Year in which the Employer has Net Profits or accumulated
Net Profits,  the Employer may make an additional  contribution  from such Net Profits (or accumulated Net Profits) to be allocated to:
(i) each active  Participant  who is employed by the Employer on the last day of the  Accounting  Year for which such  contribution  is
made, and (ii) each  Participant who retired,  died or became Totally and Permanently  Disabled during such Accounting Year. The amount
of any  contributions  made pursuant to this Section 3.02 shall be determined by the Board of Directors of the Sponsoring  Employer and
shall not exceed the lesser of (i) one-half (1/2) of the Employee  pre-tax  contributions  made pursuant to Section 2.02(a) during such
Accounting  Year by the  Participants  entitled  to share in the  allocation,  and (ii) the maximum  amount  deductible  under  Section
404(a)(3)(A) of the Internal  Revenue Code, or any statute or rule of similar import.  The amount of such additional  contribution  may
be made (i) in cash, or (ii) in shares of Employer  Stock,  valued as of the closing price of the shares on the New York Stock Exchange
on the  business  day prior to the date of the  contribution  to the Trust Fund,  if the shares are  contributed  directly to the Trust
Fund.  The  Employer  may in one or more  transactions  purchase  shares of Employer  Stock in the open  market as treasury  stock with
instructions  to the  broker-dealer  or other person  authorized  to execute the  transaction  to deliver on behalf of the Employer the
shares  purchased by the Employer upon settlement to the Trustee (or for credit to the Trustee's  account with a depository),  in which
event the  shares  purchased  shall be  valued  at the cost of  treasury  stock  purchased,  plus  commissions,  if any,  and any other
out-of-pocket  expenses  related to the transaction.  Alternatively,  the Employer may in one or more  transactions  purchase shares of
Employer  stock directly from a Participant,  employee or other person,  other than a Participant  employee or other person to whom the
restrictions  in Section 16(a) or Section 16(b) of the Securities and Exchange Act of 1934 are  applicable,  with  instructions  to the
transfer  agent of the  Employer to deliver  the  certificate(s)  for such  shares of treasury a stock  directly to the Trustee (or for
credit to the Trustee's  account with a  depository);  the purchase  price for any such shares of treasury  stock shall be based on the
closing price of the Employer  stock on the New York Stock Exchange on the business day  immediately  preceding the  transaction,  (and
shall not include any  out-of-pocket  expenses  related to such a transaction)  which shall be the value of the shares delivered to the
Trustee for Plan  accounting  purposes.  The additional  contribution  shall be allocated as of the Valuation Date  coincident with the
close of the Accounting Year for which it is made in the proportion that the Employee  pre-tax  contributions  made pursuant to Section
2.02(a) of each Participant  eligible to share in the allocation for such Accounting Year bears to the total  contributions of all such
Participants.

18

          
       3.03.         Limit on "Annual  Additions".  Notwithstanding  any  provisions  contained  herein to the  contrary,  effective as of
January 1, 2002, the total "annual addition" to any Participant's  Accounts and to any other "defined  contribution plan" maintained by
the Employers  combined shall not exceed the lesser of (a) Forty Thousand Dollars  ($40,000) as adjusted  pursuant to Section 415(d) of
the Internal Revenue Code of 1986, as amended,  or (b) one hundred percent (100%) of the Participant's total annual  compensation.  For
purposes of this Section,  the term "annual  additions" shall mean the total addition to the  Participant's  Accounts in the Accounting
Year attributable to:

	 	        
(i)         Employer contributions under this Article III;

  	 	        
(ii)     Any  Employer  contributions  and  forfeitures  for  such  Accounting  Year to any  other  "defined
 contribution plan" maintained by the Employers;

	 	        (iii)   
All of a Participant’s pre-tax contributions made pursuant to Section
2.02(a) and to any other defined contribution plan maintained by the Employers;

	 	        (iv)   
All of a Participant’s elective deferrals, as defined in Section 402(g)(3)
of the Internal Revenue Code to any other plan maintained by the Employer
pursuant to Section 401(k) of the Internal Revenue Code;

	 	        (v)   
All amounts allocated, after March 31, 1984, to an individual medical account,
as defined in section 415(1)(2) of the Internal Revenue Code, which is part of a
pension or annuity plan maintained by the Employers are treated as annual
additions to a defined contribution plan. Also amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits,
allocated to the separate account of a key employee, as defined in section
491A(d) (3) of the Internal Revenue Code, under a welfare benefit fund, as
defined in Section 419(e) of the Internal Revenue Code, maintained by the
Employer are treated as annual additions to a defined contribution plan; and

	 	        
  (vi)        All allocations under a simplified employee pension.

19

                    "Annual  Compensation"  for the purpose of this Section 3.03 is defined as wages within the meaning of Section  3401(a) of the
Internal  Revenue Code for the purposes of income tax  withholding at the source but determined  without regard to any rules that limit
the remuneration  included in wages based on the nature or location of the employment or the services  performed (such as the exception
for agricultural labor in Section 3401(a) (2))of the Internal Revenue Code.

                    For limitation  years  beginning after December 31, 1997, for purposes of applying the limitations of this Section 3.03 annual
compensation  paid or made available  during such limitation year shall include any elective  deferral (as defined in Section 402(g) of
the Internal  Revenue  Code) and any amount which is  contributed  or deferred by an Employer at the  election of the  Participant  and
which is not includible in the gross income of the Participant by reason of Sections 125 or 457 of the Internal Revenue Code.

                    The  compensation  limit  referred  to in Section  3.03(a)  shall not apply to any  contribution  for medical  benefits  after
separation  from service (within the meaning of Section 401(h) or Section  419A(f)(2) of the Internal  Revenue Code) which is otherwise
treated as an annual addition.

          
      3.04.         Corrective  Adjustments in Annual  Additions.  In the event that as of any Valuation Date  corrective  adjustments in
the "annual  addition" to any  Participant's  accounts are required  pursuant to Section 3.03,  such  adjustments  shall be made in the
following order of precedence:

	 	        (a)   
By a reduction of his Employee Pre-Tax Contributions Accounts in an amount equal
to all or such portion of the Participant’s pre-tax contributions made
hereunder during the Accounting Year in question, which is required to make such
corrective adjustment. 

	 	        (b)   
If a further corrective adjustment is necessary, his Employer Contributions
Accounts shall be reduced by Employer contributions made on behalf of the
Participant during the Accounting Year. 

                    The amount of any "corrective  adjustments" to Employee Pre-Tax  Contributions  Accounts  pursuant to Section 3.04(a) shall be
returned to the  Participant as soon as practical  after such  adjustments  are made. The amount of any  "corrective  adjustments" to a
Participant's   Employer  Contributions  Accounts  pursuant  to  Section  3.04(b)  shall  be  allocated  to  the  appropriate  Employer
Contributions  Accounts of all other Participants eligible to share in the Employer's  contribution pursuant to, and in the same manner
as the additional  Employer  contribution  was (or would have been)  allocated  under Section 3.02. If such  reallocation is prohibited
because the annual  addition to the accounts of all  Participants  exceeds the  limitations  specified in Section 3.03,  the Sponsoring
Employer shall be entitled to apply them to future Employer contributions for a subsequent Accounting Year.

          
      3.05.         Suspension of  Participant  Contributions  Due to the In-service  Withdrawals  from a
 Related  Employer  401(k) Plan. Notwithstanding  any provisions of this Plan to the contrary,  if a Participant  withdraws  elective  deferrals from an I.R.C.ss.401(k)
Plan maintained by the Sponsoring  Employer or an Employer that is a member of a controlled  group of corporations or controlled  group
of trades or businesses  with the Sponsoring  Employer (as defined in I.R.C.ss.414(b) and (c) of the Internal  Revenue Code),  which is
conditioned (in part) on a six (6) or twelve (12) month  suspension of employee  contributions  to all qualified  defined  contribution
plans  maintained  by his  employer  (and  related  employers),  then  such  Participant  shall  not be  entitled  to make  Participant
contributions  to this Plan for such six (6) or twelve (12) month  period.  Such a Participant  may elect to resume making  Participant
contributions as of the beginning of the calendar quarter immediately following such suspension.

20

ARTICLE IV

ACCOUNTS OF
PARTICIPANTS

          
         4.01.         Determination  of Fair Market Value.  As of each Valuation Date, the Trustee shall determine the fair market value of
the Trust Fund and  the fair market value of the Accounts of each Participant.

          
     4.01(a).  Determination of Investment  Earnings.  The investment  earnings (or losses, if such computation is negative) of the
"Other  Investments"  and  "Diversified  Investments"  portions of the Trust Fund shall be calculated by the Trustee.  Such  investment
earnings (or losses)  shall be equal to (i) the fair market value of such portions of the Trust Fund as of the current  Valuation  Date
(including income accrued,  but uncollected,  and excluding  expenses  incurred,  but unpaid),  less (ii) the fair market value of such
portions of the Trust Fund as of the  immediately  preceding  Valuation  Date;  plus (iii) benefit  payments to  Participants or former
Participants  from such  portions  of the Trust Fund and any other  disbursements  from such  portions of the Trust Fund on behalf of a
particular  Participant  since the last preceding  Valuation Date; less (iv) any Employer and Employee  Pre-Tax  contributions  made to
said  portions of the Trust Fund since the last  preceding  Valuation  Date;  less (v) any transfers to such portions of the Trust Fund
since the last  preceding  Valuation  Date for any reason;  plus (vi) any transfers from such portions of the Trust Fund since the last
preceding Valuation Date for the purchase of Employer Stock.

          
       4.01(b).       Valuation  of Other  Investments  and  Diversified  Investments  Accounts.  The Other  Investments  and  Diversified
Investment  Accounts of each  Participant  as of a Valuation Date shall be equal to the value of such Accounts as of the last Valuation
Date plus or minus the applicable adjustments set forth in Section 4.02.

          
     4.02.         Adjustment  of Other  Investments  and  Diversified  Investments  Accounts.  As of each  Valuation  Date,  the  other
Investments and Diversified Investments Accounts of each Participant shall be adjusted in the following order and manner:

          
       4.02(a).        Reduction  of  Other  Investments  and  Diversified  Investments  Accounts.
  The  Other  Investments  Accounts  and Diversified  Investment  Accounts of each  Participant  as of the last  preceding  Valuation Date shall be reduced by the amount of any
benefit payments from such Accounts since such Valuation Date.

21

          
   4.02(b).       Allocation of Investment  Earnings.  The investment  earnings (or losses)  determined under Section 4.01(a) shall be
allocated to the Other  Investments and Diversified  Investments  Accounts of each active  Participant and each Limited  Participant in
the ratio  that the  value of such  Accounts  as of the last  preceding  Valuation  Date  (plus any  adjustment  for  contributions  or
diversification  transfers received since the preceding Valuation Date and less any adjustments pursuant to Section 4.02(a)),  bears to
the total value of all such Accounts as of the last preceding Valuation Date.

                    Except as otherwise  provided in Article V hereof no allocation of investment  earnings (or losses) shall be made to the Other
Investments and Diversified  Investments Accounts of Participants whose benefits are in the process of being distributed,  based on the
immediately preceding Valuation Date balance under Article V, but which have not been distributed by such Valuation Date.

          
 4.02(c).       Contributions;  Cash  Dividends;  Transfers;  Purchase of Employer  Stock.  The Other  Investments  and  Diversified
Investments Accounts shall be increased by (i) the amount of the Employer, Participants,  Rollover,  diversification transfers and ESOP
Transfer  Contributions  received during the quarter ending with the Valuation Date, (ii) any other  investment  income  (including any
investment  income from the interim  investment  of Employer  Stock  diversification  sales).  Cash  Dividends  shall be  allocated  in
accordance  with  Section 4.10 hereof.  The Other  Investments  Accounts  shall be reduced by the amount  applied to purchase  Employer
Stock and diversification transfers during such quarter.

          
       4.02(d).       Vesting  of  Other  Investments  and  Diversified  Investments  Accounts.
  A  Participant's  Other  Investments  and
Diversified  Investments which are attributable to Cash Dividend Reinvestments,  Employee Pre-Tax Contributions,  Participant After-Tax
Contributions,  Participant  Deductible  Contributions and Rollovers shall be 100% immediately and fully vested.  The Other Investments
and Diversified  Investments  Accounts which are  attributable  to Employer  Contributions  of a Participant who terminates  employment
after  December  31,  2001,  shall  become  100%  fully  vested  and  nonforfeitable  as of the last day of the Plan  Year in which the
Participant is credited with three (3) years of Vesting Service.

          
        4.03.         Adjustment of Stock  Accounts.  As of each Valuation Date, the Stock Accounts of each  Participant  shall be adjusted
in the following order and manner:

          
     4.03(a).       Reduction of Stock Accounts.  The Stock Accounts of each  Participant as of the last preceding  Valuation Date shall
be reduced by the amount of any benefit  payments  from such Account on the  Participant's  behalf since the last  preceding  Valuation
Date and by the sale of any whole shares for transfer and  reinvestment  in  diversified  investments  pursuant to Section 4.08 hereof.
With  respect to benefit  payments  such  reduction  shall be expressed  in whole and  fractional  shares even though cash in an amount
equivalent  to part or all of such shares may have been  distributed  for such  payments.  With respect to sales of Employer  Stock for
reinvestment in diversification investments, such reduction shall be made in whole shares only.

          
          4.03(b).       Purchase of  Employer  Stock;  Increase in Stock  Account. The  "nonvested  and  forfeitable"  subdivisions  of the
Employer  Contributions  Account/Stock  of each  Participant  expressed in whole and fractional  shares to the nearest four (4) places,
shall be  increased  by the number of shares  purchased  for such  Accounts  based upon the  average  price per share of the  aggregate
purchases of Employer Stock during the quarter ending with the Valuation Date,  divided by the number of shares  purchased.  The shares
shall be credited to the subdivision of the "Employer  Contributions  Account/Stock" for the same year the "Other Investments  Account"
is debited.  For the purposes of this Section  4.03(b),  shares  contributed  by the  Sponsoring  Employer shall be deemed to have been
purchased at the fair market value of such shares based on the closing  price of Employer  Stock on the New York Stock  Exchange on the
business day immediately preceding the date the shares were contributed to the Trust Fund.

22

          
         4.03(c).       Valuation  of Stock  Accounts.  The Employer  Stock  Accounts  shall be  maintained  in whole shares and  fractional
shares  expressed to the nearest four (4) places and shall  reflect the cost of the shares  purchased  or the  appropriate  fair market
value of the shares of Employer Stock contributed to the Trust Fund by the Employer.

          
       4.03(d).  Vesting of Stock Accounts.  A participant's  Stock Accounts which are  attributable to Cash Dividend  Reinvestments,
Employee Pre-Tax Contributions,  Participant After-Tax  Contributions,  Participant Deductible  Contributions shall be 100% immediately
and fully vested.  The Stock Accounts which are  attributable to Employer  Contributions,  of a Participant  who terminates  employment
after  December  31,  2001,  shall  become  100%  fully  vested  and  nonforfeitable  as of the last day of the Plan  Year in which the
Participant is credited with three (3) years of Vesting Service.

          
         4.04.    Quarterly  Participant Account Statements.  As soon as reasonably  practicable after the close of each quarter of the
Accounting Year (i.e.,  March 31, June 30,  September 30 and December 31), the Committee shall advise each  Participant of the value of
his Accounts as of the Valuation Date coincident with the close of such quarter.

          
         4.05.    Best  Judgment  Rule.  In  determining  the value of the Trust Fund and the  Accounts,  the Trustee and the Committee
shall  exercise  their  best  judgment,  and all  determinations  of value (in the  absence of bad  faith)  shall be  binding  upon all
Participants and their Beneficiaries.  All allocations shall be deemed to have been made as of a Valuation Date.

          
       4.06.    Special  Valuation Date.  Notwithstanding  anything to the contrary  expressed or implied  herein,  the Committee may
direct a special  Valuation  Date as of any  business  day or for  distribution  purposes,  the last  business  day of any month.  Such
special Valuation Date shall be deemed equivalent to a regular Valuation Date.

          
        4.07.         Allocation of Stock  Dividends.  All stock  dividends on Employer Stock shall be allocated to Employer Stock Accounts
in the ratio that number of shares in each Employer  Stock  Account  bears to the total number of shares in the Employer  Stock Account
of all Participants.

          
      4.08.         Diversified  Investments  for Certain  Participants  and  Accounts.  If a Participant  who is an active  Employee has
completed at least five (5) years of  Participation  in the Plan and has Attained Age  thirty-five  (35) he may elect to diversify  the
investments in his Accounts and future Employee Pre-Tax Contributions as hereinafter provided.

23

          
    4.08(a).       Existing  Account/Diversification  Out of Employer Stock.  An eligible  Participant may diversify part or all of the
whole  shares of  Employer  Stock  credited  to his  Participant  After-Tax  Contributions,  Employee  Pre-Tax  Contributions  and,  if
applicable, Employer Contributions Accounts/Stock as hereinafter provided:

	 If an eligible Participant's
Attained Age is:

  	Then he may diversify the following
percentage of his Participant After-Tax

and/or Employee Pre-Tax Contributions 
Account/Stock
 	And he may also diversify the
following percentage of his
Employer Contributions

Account/Stock
 
	
35-39

 	
Up to 25%

 	
None

 
	40-44

 	Up to 50%

 	None

 
	45-49

 	Up to 75%

 	None

	50-59

 	Up to 100%

 	Up to 50%

 
	60 or older

 	Up to 100%

 	Up to 100%

 

          
The applicable percentage of Employer Stock that a Participant may direct the
Committee, in writing, to sell and reinvest in diversified investments shall be
based on the whole share balance in the Participant’s Account(s) that are
eligible for diversification as of the most recent quarterly valuation date
(i.e., March 31, June 30, September 30 and December 31), adjusted by any shares
distributed or credited to the applicable Account(s) since such Valuation Date.

          
     If the  Participant  has  previously  elected to  diversify,  the  number of whole  shares of  Employer  Stock he may elect to
diversify  at any time within any age brackets  shall be adjusted by the  Committee  and the Trustee in an equitable  manner to reflect
such  prior  diversification.  If a  Participant  who  previously  elected  to  diversify,  later  elects to redeem  part or all of his
diversified  investments  and  reinvest the proceeds in Employer  stock,  the number of whole shares of Employer  Stock he may elect to
diversify at any time shall be adjusted by the Committee and the Trustee in an equitable  manner to reflect such prior  diversification
and reinvestment in Employer Stock.

          
       A written  request to diversify or reinvest  shall be made in writing on forms  furnished the Committee and may be made at any
time.  However,  only one request to diversify  (i.e. sell Employer  Stock) or reinvest (i.e.  purchase  Employer Stock) may be made in
any calendar  quarter.  Upon receipt of such a request the  Committee  shall direct the Trustee in writing to sell such whole shares as
soon as  reasonably  practicable  either in the open  market or by reducing  the number of shares of Employer  Stock the Trustee may be
required to purchase as a result of Employee  Pre-Tax,  Employer or Rollover  Contributions  or the reinvestment of dividends on shares
of Employer  Stock in the Trust Fund.  The amount  credited to a  Participant's  Accounts as a result of such a sale of Employer  Stock
shall be based on the average of the actual sale  proceeds or, if no actual  shares are sold on the open  market,  based on the closing
price of the Employer  Stock on the New York Stock Exchange on the business day  immediately  preceding the date such shares are deemed
to be sold by the  Trustee.  The  amounts  realized  from any such sales of whole  shares of  Employer  Stock  shall be credited to the
Participant's  Employer  Contributions  and/or  Participant   Contribution/Other   Investments  and/or  Employee  Pre-Tax  Contribution
Account(s)  whichever is applicable,  until such amounts are reinvested in the diversified  investments made available by the Committee
and  elected,  in writing,  by the  Participant  on a form which will be  provided  by the  Committee.  When a  Participant's  properly
completed  and signed  election to sell whole  shares of Employer  Stock is received  by the  Trustee the Trustee  shall  reinvest  the
proceeds  of any such  actual or deemed  sales of Employer  Stock as soon as  reasonably  practicable  in the  diversified  investments
elected by the Participant.

24

          
        The  diversification  investment  options a Participant  may elect shall be determined by the Committee  from time to time. As
of January 1, 2002, the following diversification investment options are provided by the Trustee for this Plan:

             
       Discretionary Cash Fund

          
       Short & Intermediate Bond Fund
          
       Asset Management Fund
          
        Capital Value Fund
          
         Equity Index Fund
          
        Capital Appreciation Fund

          
        A diversification investment election may be made in five percent (5%) increments which equal 100%.

          
        4.08(b).       Existing  Accounts/Reinvestment  From Diversification  Investments into Employer Stock.
 A Participant whose Employer Contributions  and/or Participant  After-Tax  Contributions  and/or Employee Pre-Tax /Stock Account(s) have been diversified may at any
time elect to redeem all or part of the investments in the Participant's  Diversification  Accounts and reinvest the proceeds in shares
of Employer Stock as soon as reasonably  practicable after the proceeds from such redeemed  investments are available for reinvestment,
provided  that  only one such  election  may be made in any  calendar  quarter  and the  Participant  has not made any  diversification
election out of Employer  Stock in such  calendar  quarter.  Such  Employer  Stock  purchases  shall be made by the Trustee on the open
market,  from Employer  treasury stock or authorized but unissued shares or from the Trust Fund as a result of shares of Employer Stock
sold by this Plan in order to make cash in lieu of stock  distributions.  If any such  purchases are not made in the open market,  they
shall be deemed  to be  purchased  on the basis of the  closing  price of the  Employer  Stock on the New York  Stock  Exchange  on the
business day immediately preceding the date such shares are deemed to be purchased by the Trustee.

          
   4.08(c).       Diversification  Investments  of  Future  Participant  Contributions.
  A  Participant  who is  entitled  to elect to
diversify  under this  Section  4.08 may also elect to  diversify  the  investment  of his future  Employee  pre-tax  contributions  as
hereinafter provided.

25

	 If an eligible Participant's
Attained Age is:

 
 	Then he may direct the 
diversification of the following 
applicable percentage of his future
 
Employee pre-tax contributions
 
	
35-40

 	
Up to 25%

 
	40-44

	Up to 75%

 
	50 and older 	Up to 100% 

          
         A Participant  who is entitled to diversify  future Employee  pre-tax  contributions  may do so at any time, in writing,  on a
form which shall be furnished  the  Participant  by the  Committee.  The election  shall be effective on the payroll  period  ending at
least fifteen (15) business days after the Committee's  receipt of such written  election.  Investments in the diversified  investments
elected by the  Participant in accordance with this Section 4.08 shall be made by the Trustee as soon as reasonably  practicable  after
such diversification election is received by the Trustee.

          
      4.08(d).       Restriction  on Elections  Provided  for in the Plan - Section 16 of the  Securities
 Exchange  Act of 1934.  In the case of a Participant  to whom the  provisions of either  Section  16(a) or Section  16(b) of the  Securities  Exchange Act of 1934 are
applicable  (herein  referred to as an "Insider"),  the following  restrictions  shall apply to any election under this Section 4.08 or
any other Section of this Plan.  Any election by an Insider to direct an investment,  a transfer or change of investment,  a withdrawal
or any other election which would constitute a "Discretionary  Transaction" as that term is defined by SEC Rule  16b-3(b)(1),  may only
be made by an Insider if such election is made more than six months after any previous  opposite way  Discretionary  Transaction  under
any plan (including this Plan) of the Sponsoring Employer, as defined by SEC Rule 16(b)(3)(f).

          
     4.09.         ERISAss.404(c) Compliance  Intended.  The Sponsoring  Employer intends that this Plan be an ERISA Section 404(c) plan
with respect to the portion of  Participant  Accounts which are subject to  diversification  elections  and,  therefore,  the Committee
shall  administer  the  Plan in  compliance  with  Section  404(c)  of the  Employee  Retirement  Income  Security  Act of 1974 and the
regulations of the U.S. Department of Labor thereunder..

          
       4.10.         Cash Dividends on Employer Stock; Reinvestment or Cash Election.

          
     4.10(a).       Allocation;  Credit.  Effective from and after January 1, 2002,  cash dividends on Employer Stock shall be allocated
in  proportion  to the  number of shares  of  Employer  Stock of each  Participant's  Accounts  and  shall be  credited  to either  the
Participant's Cash Dividends Holding Account or the Participant's Cash Dividends Reinvestment  Account/Other  Investments in accordance
with the Participant's election, as hereinafter provided.

26

          
   4.10(b).       Election.  As soon as reasonably  practicable  after the beginning of the 2002 Plan Year (and at the time prescribed
by the Committee for Plan Years  beginning  after  December 31, 2002) each  Participant, including, but not limited to, terminated vested
Participants,  shall be afforded the  opportunity to elect to
have the cash dividend  allocable to the  Participant's  accounts either (i) credited to his Cash Dividends Holding Account and paid to
him by the end of the Plan  Year of the  receipt  of such  cash  dividends  by the  Trustee  or (ii)  credited  to his  Cash  Dividends
Reinvestment  Account/Other  Investment and reinvested  primarily in additional shares of Employer Stock. This election must be made in
the form and  manner  prescribed  by the  Committee  before a dividend  is paid in order to apply to the  dividend.  If a cash  payment
election is not made in a timely or prescribed  manner,  the cash dividend  allocable to a Participant's  Accounts shall be credited to
his Cash Dividends  Reinvestment  Account/Other  Investments to be invested primarily in additional shares of Employer Stock. Dividends
credited to either a Participant's  Cash Dividend's  Holding Account or to his Cash Dividends  Reinvestment  Account/Other  Investments
shall be fully (100%) and immediately  vested,  even if the  Participant is not otherwise fully vested in all of his Accounts  pursuant
to Sections 4.02(d) and 4.03(d) hereof.

          
     4.10(c).       Cash Dividend  Holding  Account  Investment  Income.  Each  Participant's  Cash Dividends  Holding  Account shall be
invested in short-term cash equivalent  investments,  the investment earnings on which shall be credited to the Participant's  Employee
Pre-Tax Contributions  Account/Other  Investments,  unless the Participant has not made Employee pre-tax contributions to this Plan, in
which event, the investment earnings shall be credited to his Participant After-Tax Contributions Account/Other Investments..

          
4.10(d).       Application.
 The  Sponsoring  Employer  intends to apply the  provisions  of this Section 4.10 to any cash dividend
declared in 2001 with a payment date in 2002.

ARTICLE V

PAYMENT OF
BENEFITS TO PARTICIPANTS

          
         5.01.         Distribution on Early or Normal  Retirement.  When a Participant  lives to either his Early Retirement Date or Normal
Retirement Date and retires,  the full value of his Accounts shall, if elected by the Participant,  immediately  become  distributable,
calculated as of the quarterly  Valuation Date  coincident  with or,  otherwise,  immediately  following his Early  Retirement  Date or
Normal  Retirement  Date,  whichever is  applicable,  unless the  distribution  is not made within sixty (60) days after such quarterly
Valuation  Date,  in which  event the  distributable  amount  and/or  shares  shall be  calculated  as of the  monthly  Valuation  Date
immediately preceding the actual distribution or in accordance with the provisions of Section 5.10 hereof, whichever is applicable.

          
      5.02.         Employment  Beyond Normal  Retirement.  A Participant  may continue his employment past his Normal  Retirement  Date.
Such  Participant  shall continue to be an active  Participant  under the Plan and the full value of his Accounts  shall, if elected by
the  Participant,  immediately  become  distributable,  calculated as of the quarterly  Valuation Date coincident  with or,  otherwise,
immediately  following  the actual date of his  retirement,  unless the  distribution  is not made  within 60 days after the  quarterly
Valuation  Date,  in which  event the  distributable  amount  and/or  shares  shall be  calculated  as of the  monthly  Valuation  Date
immediately preceding the actual distribution or in accordance with the provisions of Section 5.10 hereof, whichever is applicable.

27

          
      5.03.    Distribution  on Death.  If a  Participant  dies while an active  Participant  under the Plan,  the full value of his
Accounts shall, if elected by his Beneficiary or Beneficiaries,  immediately become  distributable to his Beneficiary or Beneficiaries,
calculated as of the quarterly  Valuation Date coincident with or, otherwise,  immediately  following the date of his death, unless the
distribution  is not made within 60 days after the  quarterly  Valuation  Date, in which event the  distributable  amount and/or shares
shall be  calculated  as of the monthly  Valuation  Date  immediately  preceding  the actual  distribution  or in  accordance  with the
provisions of Section 5.10 hereof, whichever is applicable.

          
     5.04.         Distribution  on  Disability.  When it is determined  that a Participant  is Totally and  Permanently  Disabled,  the
Committee shall certify such fact to the Trustee, and the full value of such Disabled  Participant's  Accounts shall, if elected by the
Participant,  immediately  become  distributable,  calculated  as of the  quarterly  Valuation  Date  coincident  with  or,  otherwise,
immediately  following  the  date of his  termination  of  employment  due to  Total  and  Permanent  Disability (as  determined  by the
Committee),  unless the  distribution is not made within 60 days after the quarterly  Valuation Date, in which event the  distributable
amount  and/or shares shall be  calculated  as of the monthly  Valuation  Date  immediately  preceding  the actual  distribution  or in
accordance with the provisions of Section 5.10 hereof, whichever is applicable.

          
    5.05.         Distribution  on Termination of Employment.  Whenever the employment of a Participant  shall terminate other than for
early,  normal or late  retirement,  death or Total and  Permanent  Disability,  this  Section  5.05 shall  apply.  In such event,  the
Participant  shall cease to be a Participant  and the vested and  nonforfeitable  portion of his Employer  Contributions  Account/Other
Investments or Diversified Investments,  if any, and of his Employer Contributions  Account/Stock shall, if elected by the Participant,
become  distributable,  calculated as of the quarterly  Valuation  Date  coincident  with or immediately  following his  termination of
employment.  The nonvested and forfeitable portion of his Employer Contributions  Account/Other  Investments or Diversified Investments
and Employer  Contributions  Account/Stock shall be forfeited as of the Valuation Date coincident with the close of the Accounting Year
during which his termination of employment  occurred  provided he is not reemployed on or before such date and repays to the Trust Fund
any  distribution he received  (pursuant to Section 5.13) on or before such Valuation  Date.  Subject to the provisions of Section 5.12
hereof,  the full  value of the  terminated  Participant's  Accounts  shall,  if  elected  by the  Participant,  become  distributable,
calculated  as of the quarterly  Valuation  Date  coincident  with or  immediately  following  the date his  termination  of employment
occurred,  provided he is not  reemployed on or before such Valuation  Date and repays to the Trust Fund any  distribution  he received
(pursuant  to  Section  5.13) on or before  such  Valuation  Date.  If a  distribution  is not made  within  sixty  (60) days after the
applicable  quarterly  Valuation  Date,  the  distributable  amount and/or shares shall be calculated as of the monthly  Valuation Date
immediately preceding the actual distribution or in accordance with the provisions of Section 5.10 hereof, whichever is applicable.

28

          
    5.06.         In-Service  Withdrawals.  An Employee who has been an active  Participant for at least two (2) years and has attained
age fifty-nine and one-half (59-1/2),  may withdraw in one lump sum the entire balance of his vested Accounts,  provided the withdrawal
satisfies the terms of this Section 5.06.  Partial  withdrawals  are not  permitted.  Only one (1)  in-service  withdrawal  may be made
prior to a Participant's termination of employment.

                    A Participant  may make a request for an in-service  withdrawal  at any time and the  Committee  shall in accordance  with its
practices  and  procedures,  direct the  Trustee  to make the  withdrawal  as soon as  reasonably  practicable.  The amount of any such
withdrawal  shall be based on the vested shares of Employer Stock and other amounts  credited to the  Participant's  Accounts as of the
immediately preceding Valuation Date, adjusted for Employee pre-tax  contributions,  Employer  contributions,  reinvested dividends and
any other investment  earnings the Committee  estimates should be credited to the Participant's Stock and Other Investment Accounts for
participation  after such  Valuation  Date.  A  Participant's  ability to elect a cash  distribution  shall be  determined  pursuant to
Section  5.07. If a cash  distribution  is elected by the  Participant,  the Employer  Stock in his Accounts  shall be valued as of the
date the Committee receives the Participant's written request for an in-service withdrawal.

                    If an  additional  Employer  contribution  is made to the Plan for the  Accounting  Year in which  the  Participant  elects an
in-service  withdrawal,  the  Participant  shall be  entitled  to a share  of such  additional  Employer  contribution  which  shall be
distributed to the  Participant  after it is received by the Trustee.  The  distribution  of such an additional  Employer  contribution
shall be made in the same form (i.e., Employer Stock or cash) as the in-service withdrawal was made to the Participant.

                    If a cash dividend on the Employer  Stock occurs on or before an  in-service  withdrawal  is  distributed  but before the cash
dividend is received by the Trustee,  the  Participant's  share of such cash dividend will be distributed to the Participant in cash as
soon as reasonably  practicable after it is received by the Trustee. If a stock dividend,  split or other  recapitalization of Employer
Stock  (hereinafter  referred to as a "stock  dividend") is payable to shareholders of record on or before an in-service  withdrawal is
distributed  but before the stock  dividend  is  received  by the  Trustee,  the  Participant's  share of such stock  dividend  will be
distributed to the  Participant  as soon as reasonably  practicable  after it is received by the Trustee.  The  distribution  of such a
stock dividend shall be made in the same form (i.e., Employer Stock or cash) as the in-service withdrawal was made to the Participant.

                    If a Participant  makes an  in-service  withdrawal  pursuant to the  provisions of this Section 5.06 prior to the beginning of
the  calendar  year in which  the  Participant  Attains  Age  seventy  and  one-half  (70-1/2),  he shall not be  entitled  to make any
Participant  contributions  for the six  consecutive  months after the next  practicable  pay period after the Committee has received a
notice of withdrawal.

          
    5.07.         Distributions  Usually In Employer Stock.
 Except as hereinafter  provided,  all benefits  distributed to or on behalf
of a Participant from his Other  Investments or Diversified  Investments  accounts shall be converted to Employer Stock by the purchase
of additional  shares by the Trustee to the maximum extent  practicable.  Any amount that cannot be applied to the purchase of Employer
Stock shall be  distributed  in cash.  All benefits  distributed  to or on behalf of a  Participant  from his Stock  accounts  shall be
distributed in whole shares of Employer Stock,  except that the value of any fractional  share shall be distributed in cash, based upon
the value of such fractional share as of the quarterly  Valuation Date when his Accounts became  distributable  under this Article V or
as of the monthly  Valuation Date next preceding the actual  distribution of such shares,  if the distribution is not made within sixty
(60) days after such quarterly Valuation Date.

29

                    Notwithstanding  the  foregoing,  unless a  Participant  requests in writing that his Accounts be  distributed  to the maximum
extent  practicable in shares of Employer Stock, in any case where less than fifty (50) shares of Employer Stock are  distributable  to
the Participant,  the Committee shall distribute in cash the distributable  balance in his Other Investments accounts and distribute in
cash an amount equal to the fair market value of the distributable  shares of Employer Stock credited to his Stock accounts,  valued at
the closing price of the shares on the New York Stock Exchange (i) as of the quarterly  Valuation Date  coincident  with or immediately
preceding the date the  Participant's  Accounts become  distributable  hereunder,  or (ii) if the date of distribution is sixty (60) or
more days after such quarterly  Valuation Date, as of the monthly  Valuation Date immediately  preceding the day the Committee  directs
the  Trustee to make a cash  distribution  hereunder.  In  addition,  the  Committee  shall,  in any case where the number of shares of
Employer  Stock that is  distributable  to a  Participant  hereunder is at least fifty (50) shares but not more than one hundred  (100)
shares,  afford  the  Participant  the  opportunity  to  elect to have his  Accounts  either  distributed  (i) in cash,  calculated  as
hereinabove provided, or (ii) in shares of Employer Stock to the maximum extent practicable  (calculated as hereinabove  provided).  In
any case, where the number of shares of Employer Stock that is  distributable to a Participant  hereunder is at least one hundred (100)
shares or more, the  distribution  shall,  to the maximum extent  practicable  (calculated  as hereinabove  provided),  be in shares of
Employer Stock.

                    Distributions  from  Diversified  Investments  Accounts shall be made in cash unless the Participant or Beneficiary  elects in
writing (on a form which will be provided by the Committee prior to the  distribution)  that part or all of his distribution be made in
Employer  Stock,  in which event  Employer  Stock shall be  purchased  by the Trustee  with the  proceeds  from the  redemption  of his
Diversified Investments Accounts and distributed to the Participant.

          
     5.08.         Distribution  Date.  Effective  from and after  November 14,  2001,  any benefit  payable  under this Article V shall
commence  within  sixty (60) days after the date the benefit  becomes  distributable  hereunder,  unless (i) the  distributable  amount
cannot be  ascertained  within  such  sixty (60) days,  in which  event the  benefit  shall be paid as soon as  reasonably  practicable
thereafter or (ii) the benefit amount or the fair market value of the Employer Stock that is  distributable  is more than five thousand
dollars ($5,000) and the Participant  does not elect an immediate  distribution,  in which event the distribution  shall be deferred to
not later than the earlier of (i) December 31 of the calendar year in which the Participant  reaches  Attained Age seventy and one-half
(70-1/2),  or  (ii) December  31 of the calendar year in which the fifth (5th)  anniversary of his  retirement or other  termination of
employment  occurs at which time the  Participant  shall be entitled to elect to receive a  distribution  of his Accounts in accordance
with the applicable  provisions of this Article V. The surviving  spouse of a deceased  Participant may elect to defer the commencement
of benefit  distributions  to a date no later than  December  31 of the  calendar  year in which the  deceased  Participant  would have
attained  age 70-1/2 if the benefit  amount or the fair market  value of the  Employer  Stock that is  distributable  is more than five
thousand  dollars  ($5,000).  A  nonspouse  Beneficiary  may not defer the  commencement  of  benefit  payments.  As a result,  benefit
payments to a nonspouse  Beneficiary  shall commence within sixty (60) days after the calendar  quarter as of which the benefit becomes
distributable or as soon as reasonably  practicable  thereafter.  If the benefit amount or fair market value of the Employer Stock that
is  distributable  to a  Participant,  or his surviving  spouse or Beneficiary is not more than five thousand  dollars  ($5,000),  such
benefit  shall be  distributed  in a lump sum or in the form of a direct  rollover  to an  Eligible  Retirement  Plan.  Any  additional
contributions  allocated to a former  Participant  who retired,  died or became Totally or Permanently  Disabled  during the Accounting
Year for which an additional  contribution  is made shall be distributed as soon as practicable  after receipt of the  contribution  by
the  Trustee.  The  distribution  shall be made in the  same  form as his  benefits  were  otherwise  distributed  as a  result  of his
retirement, death or disability subject to the provisions of Section 5.07 hereof.

30

                    The  benefit  payments of a  Participant  who  attains  age 70-1/2  after  December  31,  1997,  or the benefit  payments of a
Participant  who attained age 70-1/2 in 1997,  but whose  benefits had not commenced  prior to January 1, 1998,  shall  commence in the
form and at the time  elected  pursuant to Sections  5.07 and 5.09 hereof by not later than April 1 of the  calendar  year  immediately
following the calendar year in which the Participant  retires or attains age 70-1/2,  whichever occurs last,  unless the Participant is
a five percent or greater owner of the Sponsoring  Employer,  in which event,  benefit  payments shall commence in the manner described
in the  immediately  preceding  paragraph  by December  31 of the  calendar  year in which he attains  age  70-1/2,  even if he has not
retired.  The required  minimum  distribution  under this  paragraph  for the calendar  year during  which the  Participant  retires or
terminates  employment after attaining age 70-1/2,  whichever occurs last, shall be a fraction of the balance of his Accounts as of the
Valuation Date immediately  preceding the  distribution,  the numerator of which shall be one and the denominator of which shall be the
lesser of (i) fifteen (15) years and (ii) the life  expectancy of the  Participant  or, if the  Participant is married,  the joint life
expectancy  of the  Participant  and his spouse,  computed in  accordance  with Table V or VI of  regulations  under  Section 72 of the
Internal  Revenue Code,  whichever is  applicable.  The second  annual  installment  distribution  shall be made by December 31 of each
later calendar year. Each later minimum required annual  distribution  shall be equal to the balance of the  Participant's  Accounts as
of the September 30 Valuation Date for such year  multiplied by a fraction,  the numerator of which shall be one and the denominator of
which shall be the  denominator  used for the most  recent  annual  installment  distribution  reduced by one,  or, if there has been a
suspension of installment  distributions  for more than one year, the fraction shall be the lesser of (i) the denominator  used for the
most recent annual  installment  distribution  reduced by one, or (ii) the life expectancy of the Participant or, if the Participant is
married,  the joint  life  expectancy  of the  Participant  and his  spouse,  computed  in  accordance  with Table V or Table VI of the
regulations  under Section 72 of the Internal  Revenue Code,  whichever is applicable.  Required  minimum  distributions  shall be made
pro-rata  from each of the  Participant's  Accounts.  Distributions  of amounts in excess of the required  minimums  shall be made from
such Accounts as specified in writing by the  Participant.  In addition,  any death benefit that becomes  payable under this Plan shall
commence (or be paid) within one (1) year after it becomes  distributable  hereunder.  Notwithstanding  the foregoing,  any Participant
who remains  employed after December 31, 1997 and after  Attaining Age seventy and one-half  (70-1/2) shall be afforded the opportunity
each  Accounting  Year after  Attained Age 70-1/2 to withdraw part or all of his Accounts under this Plan pursuant to the provisions of
Section 5.06 hereof.  Furthermore,  any Participant who elected the commencement of minimum required  distributions prior to January 1,
1998 in installments may elect to suspend his or her annual installment  payments,  in a written notice to the Committee,  provided the
remaining minimum required  distributions are resumed by no later than April 1 of the calendar year immediately  following the calendar
year in which the Participant later retires or otherwise terminates employment.

31

                    With  respect to  distributions  under the Plan made on or after  January 1, 2002 for  calendar  years  beginning  on or after
January 1, 2002,  the Plan will apply the minimum  distribution  requirements  of Section  401(a)(9)  of the  Internal  Revenue Code in
accordance  with the  regulations  under Section  401(a)(9)  that were  proposed on January 17, 2001 (the 2001  Proposed  Regulations),
notwithstanding any provision of the Plan to the contrary.

          
       5.09.         Forms of  Distribution.  The normal form of  distribution  shall be a lump sum  distribution of Employer Stock and/or
cash as provided in Section 5.07 hereof.  A Participant or Beneficiary  may,  however,  request an alternative  form of distribution of
any benefits under the Plan as provided  hereinafter.  The request by the Participant or the Beneficiary  shall be in writing and shall
be filed with the  Committee  at least  thirty  (30) days or, in case the  Participant  is an Insider of the  Sponsoring  Employer  (as
defined in Section 4.08 hereof),  six (6) months,  before  distribution  is to be made. The alternative  forms of  distribution  are as
follows:

                  
1.      If the Participant is entitled to a distributable benefit in an amount or value of more than five thousand
dollars ($5,000), periodic installments in substantially equal annual amounts
for a period not longer than hereinafter specified;

                  
2.       A direct rollover to an Eligible Retirement Plan, pursuant to the provisions of Section 5.15 hereof; or

                  
 3.            Any combination of the above.

                    If periodic  installments  are elected by a  Participant,  the  installment  payments  shall be made over a period of time not
longer than the lesser of (i) fifteen (15) years or (ii) the  Participant's  life  expectancy or, if the  Participant  is married,  the
joint life  expectancy of the Participant  and his spouse,  computed in accordance  with Table V or Table VI of the  regulations  under
Section 72 of the Internal  Revenue Code,  whichever is  applicable.  A Participant  who has elected  installment  payments who has not
retired or otherwise  terminated  employment may elect to suspend his or her annual  installment  payments,  in a written notice to the
Committee,  provided that the remaining  installment payments are resumed by not later than by April 1 of the calendar year immediately
following the calendar year in which the Participant later retires or otherwise terminates employment.

                    If periodic installments are elected by a nonspouse  Beneficiary of a deceased Participant,  the installment payments shall be
made over a period  not  longer  than five (5)  years.  Benefit  payments  for a  nonspouse  beneficiary  may not be rolled  over to an
individual retirement account, annuity or trust.

32

          
    5.10.         Segregating  Accounts  of Former  Participants.  As soon as  practical  after the amount that is  distributable  to a
former  Participant is finally  determined,  if his  distribution  will either be made in  installments or be delayed more than six (6)
months if payable in a lump sum, his  Accounts  shall be  segregated  from the other Trust Fund assets into a separate  trust  account.
The investment of such separate  trust account shall  continue to be governed by the provisions of Section 5.04 of the Trust  Agreement
and the Employer Stock dividends and other  investment  income credited to such account shall, to the extent  practicable,  be invested
in Employer Stock. All  disbursements  and expenses  attributable to such accounts shall be charged thereto.  Trustee's fees,  however,
shall be paid by the Employer.  Periodic  installment  payments  from such  separate  trust  accounts  shall be made in Employer  Stock
and/or cash pursuant to Section 5.07 hereof;  provided,  however,  that the elections  accorded to the  Participant in Section 5.07 are
based on the  aggregate  amount of shares and cash in his  Accounts  as of the date the  Participant's  Accounts  become  distributable
hereunder.  In the event of the death of either a Participant  or a Beneficiary  to whom periodic  installments  are being paid (or are
to be paid)  prior to receipt of the full  amount of such  separate  trust  account,  the  remaining  balance  shall be paid as soon as
practical to the Beneficiary or Contingent  Beneficiary.  The Committee may, with the consent of the Trustee,  direct that any separate
trust accounts under this Section 5.10 be commingled for investment purposes.

          
        5.11.         Death  Payments to  Contingent  Beneficiaries.  If, at the time of a  Participant's  death while  benefits  are still
outstanding,  his named  Beneficiary  does not survive  him,  his  benefits  shall be paid to his named  Contingent  Beneficiary.  If a
deceased  Participant is not survived by either a named  Beneficiary or Contingent  Beneficiary  (or if no Beneficiary  was effectively
named),  the  benefits  shall be paid in a single  sum to the person or persons  in the first of the  following  classes of  successive
preference  beneficiaries  then surviving:  the  Participant's (a) spouse,  (b) children,  (c) parents,  (d) brothers and sisters,  (e)
executors and  administrators.  The  determination  of the eligible  Beneficiary,  Contingent  Beneficiary,  or  successive  preference
beneficiary shall be made by the Committee.

          
        5.12.         Special Rules  Applicable  to Deductible  Participant  Contributions.  Notwithstanding  any provision to the contrary
herein contained,  the following special rules shall govern the distribution of a Participant's  Participant  Deductible  Contributions
Account/Stock and/or that portion, if any, of his Participant  Contributions  Account/Other  Investments  attributable to contributions
made pursuant to Section 2.02(b),  in circumstances where the Participant  terminates  employment for reasons other than death or Total
and Permanent Disability:

          
       5.12(a).       Election.  The Participant  may elect that his Participant  Deductible  Contributions  Account/Stock  (and/or or the
portion,  if any, of his Participant  Contributions  Account/Other  Investments which is attributable to contributions made pursuant to
Section 2.02(b)) shall either be;

33

	 	        (i)   
retained in the Trust Fund and credited with the investment earnings (or losses)
of the Trust Fund in accordance with Section 4.02 hereof until the close of the
Accounting Year in which the Participant reaches Attained Age fifty-nine and
one-half (59-1/2), at which time the Participant’s Deductible Contributions
Account/Stock (or the portion, if any, of his Participant Account/Other
Investments which is attributable to contributions made pursuant to Section
2.02(b)), shall be distributed to the Participant in accordance with the
provisions of Section 5.09 hereof; or 

	 	        (ii)   
transferred by the Trustee to an Individual  Retirement Account at a financial institution selected
                  by the Participant; or 

	 	        (iii)
distributed to the Participant, subject to the provisions of Section 5.12(b)
hereof, in the form of distribution selected pursuant to Section 5.09 hereof. 

In the absence of an
election by the Participant, his Participant Deductible Contributions
Account/Stock and/or the portion, if any, of his Participant Contributions
Account/Other Investments attributable to contributions made pursuant to Section
2.02(b) shall be retained in the Trust Fund and credited with the investment
earnings (or losses) of the Trust Fund in accordance with Section 4.02 hereof
until the close of the Accounting Year in which the Participant reaches Attained
Age fifty-nine and one-half (59-1/2), at which time such Accounts shall be
distributed to the Participant in accordance with the provisions of Section 5.09
hereof. 

                   
 5.12(b).       Acknowledgment.  If a terminated  Participant  who has not Attained Age fifty-nine and one-half  (59-1/2)  elects to
receive a  distribution  of his  Participant  Deductible  Contributions  Account/Stock  (or the  portion,  if any,  of his  Participant
Contributions  Account/Other  Investments which is attributable to contributions  made pursuant to Section 2.02(b)),  such distribution
shall not be made unless the Participant acknowledges in writing that he understands that the amount distributed

	 	         (i)    
     will be subject to a ten percent (10%) federal excise tax penalty;

	 	        (ii)   
    will also be taxed as ordinary income for federal income tax purposes; and
 

	 	        (iii)    
   will be reported to the Internal Revenue Service for such purposes. 

          
    5.13.         Reemployment/Repayment  of  Benefits/Restoration  of Accounts.  Notwithstanding any provision contained herein to the
contrary,  a terminated  Participant who was partially vested pursuant to Section 5.05 and who is reemployed  before he incurs five (5)
consecutive  One Year Breaks in  Service,  shall be entitled  to repay to the Trust Fund the  benefits he  received,  in the manner and
within the time hereinafter specified, and to have certain forfeited portions of his Accounts restored.

34

          
    5.13(a).       Repayment of Employer  Stock and Cash  Distributions.  If the  reemployed  Participant  received a  distribution  of
Employer  Stock and cash, he must repay the Trust Fund the same number of shares of Employer  Stock and the same amount of cash that he
received as a result of his  termination  of  employment,  or if subsequent to the receipt of the  distribution  there has been a stock
split or stock  dividend,  or a  reorganization  or  recapitalization  of the  Employer,  then he must repay to the Trust Fund the same
amount of cash that he received as a result of his  termination  of employment  and the number of shares of Employer  Stock and/or cash
which he  received  because of said  stock  split,  stock  dividend,  reorganization  or  recapitalization  for the number of shares of
Employer Stock that he received as a result of his termination of employment.  However,  the reemployed  Participant is not required to
repay any cash  distributions  he received on the shares of Employer  Stock he received as a result of his  termination  of employment.
The repayment  shall be made not later than the earlier of (i) five (5) years after his  reemployment  or (ii) the date he first incurs
five (5)  consecutive  One Year Breaks in Service.  Upon receipt by the Trustee of the entire  amount of the  reemployed  Participant's
repayment  the  Committee,  as of the next  succeeding  Valuation  Date,  shall credit to his  Participant  Stock and Other  Investment
Accounts the shares of Employer  Stock and cash so repaid and shall restore the shares of Employer  Stock and cash  forfeited  from his
Accounts.  Any shares of Employer  Stock and cash which the Committee so restores  shall be made from  Forfeitures  which are otherwise
available to reduce  Employer  contributions,  provided the repayment is made in the last quarter of the  Accounting  Year and any such
Forfeitures  exceed the number of shares of Employer  Stock and the amount of cash to be restored.  Otherwise the Employer shall make a
special  contribution in an amount  sufficient to restore such forfeited shares of Employer Stock and cash. The reemployed  Participant
shall be entitled  to vest in such  restored  Accounts  as if the  Employer  contributions  for the shares of  Employer  Stock and cash
restored had been made in the applicable years.

          
  5.13(b).       Repayment of Cash  Distributions.  If the reemployed  Participant  received a distribution solely consisting of cash
(in lieu of Employer  Stock) he must repay to the Trust Fund the same  amount of cash that he  received as a result of his  termination
of  employment  by not later than the earlier of (i) five (5) years after his  reemployment,  or (ii) the date he first incurs five (5)
consecutive  One Year Breaks in Service.  Upon receipt by the Trustee of the entire amount of the  reemployed  Participant's  repayment
the Committee shall cause the Employer to restore to the Participant  the additional  amount of cash that would have been  distributed.
The Committee shall then cause the Trustee,  as of the next  succeeding  Valuation Date, to credit such repaid and restored cash to the
Participant's  Other  Investments  Accounts  (and the  appropriate  subdivision  of such  accounts).  Any cash which the  Committee  so
restores shall be made from  Forfeitures  which are otherwise  available to reduce  Employer  contributions,  provided the repayment is
made in the last  quarter of an  Accounting  Year and any such  Forfeitures  exceed the amount of cash to be restored.  Otherwise,  the
Employer shall make a special  contribution in an amount  sufficient to restore such forfeited cash. The reemployed  Participant  shall
be entitled to vest in such restored  accounts as if the number of shares of Employer Stock  purchased  with such restored  amounts had
been purchased from Employer contributions in the applicable years preceding his reemployment.

35

          
      5.14.         Qualified  Domestic  Relations  Orders.  Benefit  payments to an  alternate  payee  pursuant to a Qualified  Domestic
Relations Order may be distributed  prior to a Participant's  termination of employment or death, but shall not be distributed prior to
the date the Participant reaches Attained Age fifty (50), unless the Participant  terminates  employment prior to reaching Attained Age
fifty (50).  The amount and form of benefit payments shall be computed in accordance with the provisions of Article V hereof.

          
        5.15.         Eligible Rollover Distributions;  Required Tax Withholding;  Notice.
 The amount of any Eligible Rollover Distribution
made as hereinafter  defined to a terminated or retired  Participant  shall be subject to twenty percent (20%)  withholding for federal
income taxes unless the terminated  employee  elects in writing before the Eligible  Rollover  Distribution  is made to have the entire
Eligible  Rollover  Distribution paid directly to an Eligible  Retirement Plan. An Eligible  Rollover  Distribution made after December
31, 1992 to a surviving  spouse  shall be subject to twenty  percent  (20%)  withholding  for federal  income taxes unless the Eligible
Rollover  Distribution  is directly  rolled over to an Eligible  Retirement  Plan.  The taxable  portion of a nonperiodic  payment to a
nonspouse  beneficiary  shall be subject to ten percent  (10%)  voluntary  withholding  for federal  income  taxes.  The Trustee  shall
transmit to the U.S.  Treasury  Department  the amounts so withheld  within the time required by law. Prior to making any such Eligible
Rollover  Distribution  and income tax  withholding,  the Committee shall furnish each recipient of an Eligible  Rollover  Distribution
with the notice  required  by Section  402(f) of the  Internal  Revenue  Code and the  information  required by the  relevant  Treasury
Department regulations thereunder.

          
         The following definitions apply to this Section 5.15:

	 	        (a)   
Eligible Rollover Distribution. An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
Participant, except an eligible rollover distribution does not include: (i) any
distribution which is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the Participant or the joint lives (or joint life expectancies) of the
participant and the Participant’s designated beneficiary, or for a
specified period of ten years or more; (ii) any Internal Revenue Code
§ 401(a)(9) required minimum distribution; (iii) the portion of
any distribution which is not includible in gross income (determined without
regard to the exclusion of net unrealized appreciation with respect to employer
securities); (iv) any in-service hardship withdrawal distribution from a
Participant’s Employee Pre-Tax Contributions Account; and (v) any
distribution which otherwise would be an eligible rollover distribution, except
when the total distributions to the Participant during that calendar year are
reasonably expected to be less than $200. 

	 	        (b)   
Eligible Retirement Plan. An eligible retirement plan is an individual
retirement account described in Internal Revenue Code § 408(a), an
individual retirement annuity described in Internal Revenue Code
§ 408(b), an annuity plan described in Internal Revenue Code
§ 408(a), an annuity contract described in Internal Revenue Code
§ 403(b), an eligible plan under Internal Revenue Code
§ 457(b), or a qualified trust described in Internal Revenue Code
§ 408(a), which accepts the Participant’s or alternate
payee’s Eligible Rollover Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, and Eligible Retirement Plan must
be either an individual retirement account or individual retirement annuity. 

36

  	 	        (c)   
 Direct  Rollover.  A direct  rollover is a payment by the Plan to the Eligible  Retirement Plan specified by
 the distributee.

                    Any  distribution  under this Plan may  commence  less than thirty (30) days after the notice  required  under  Treas.  Reg.ss.
1.411(a)-11(c) is given provided that:

	 	        (a)   
the Committee clearly informs the Participant that the Participant has a right
to a period of at least thirty (30) days after receiving the notice to consider
the decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option); and 

	 	        (b)   
the Participant after receiving the notice affirmatively elects distribution.

          
   5.16.         Reemployment  After a Military  Leave;  Make-up  Contributions.  An  Employee  who is on a military  leave and who is
reemployed  within the time required by law after the expiration of his military leave may make Participant  make-up  contributions for
the period of his military leave, based on his deemed  Compensation  during his military leave as defined in Section 1.13 hereof.  Such
make-up  contributions  may be made in either a single payment or in installments and must be made during the period beginning with the
date of the  Member's  reemployment  after his military  leave equal to the lesser of (i) three times the period of his military  leave
and (ii) five years. As soon as reasonably  practicable after any such Participant  make-up  contributions are made, the Employer shall
make the  Matching  Employer  Contributions  that  would  have  been made  during  the  Participant's  military  leave on such  make-up
contributions.

ARTICLE VI

THE COMMITTEE

                   
6.01.         Composition  and Duties of Committee.  The Board of Directors of the  Sponsoring  Employer shall appoint three (3) or
more persons to be known as the  Committee to administer  the Plan,  keep records of individual  Participant  benefits,  and notify the
Participants  of the value of their  Accounts  annually.  The  Employer  will  notify the  Trustee  of the names of the  members of the
Committee and of any changes in membership that may take place from time to time.

          
       6.02.         Term; No  Compensation.  All members of the Committee  shall serve until their  resignation or dismissal by the Board
of Directors of the Sponsoring  Employer and vacancies  shall be filled in the same manner as the original  appointments.  The Board of
Directors of the Employer may dismiss any member of the  Committee at any time with or without  cause.  No  compensation  shall be paid
members of the Committee from the Trust Fund for services on such Committee.

37

          
  6.03.         Claims  Procedure.  The Committee  shall from time to time  establish  rules for the  administration  of the Plan and
transaction  of its business  consistent  with the terms of the Plan.  Without  limiting the  generality of the above  sentence,  it is
specifically  provided that the Committee shall set forth in writing,  available for inspection by any interested party, the procedures
to be followed  in  presenting  claims for  benefits  under the Plan.  The  Committee  shall rely on the  records of the  Employer,  as
certified to it, with respect to any and all factual  matters  dealing with the  employment of an Employee or  Participant.  In case of
any factual  dispute  hereunder,  the  Committee  shall  resolve  such dispute  giving due weight to all evidence  available to it. The
Committee shall interpret the Plan and shall determine all questions arising in the  administration,  interpretation and application of
the Plan. All such  decisions,  interpretations  and  determinations  shall be final,  conclusive and binding except to the extent that
they are appealed  under the following  claims  procedure.  In the event that the claim of any person to all or any part of any payment
or benefit under this Plan shall be denied,  the Committee shall provide to the claimant,  within sixty (60) days after receipt of such
claim, a written notice setting forth, in a manner calculated to be understood by the claimant:

	 	        (i)   
      The specific reason or reasons for the denial;

	 	        
 (ii)        Specific references to the pertinent Plan provisions on which the denial is based;

	 	        (iii)
A description of any additional material or information necessary for the
claimant to perfect the claim and an explanation as to why such material or
information is necessary; and 

	 	        
(iv)        An explanation of the Plan's appeal procedure.

Within sixty (60) days
after receipt of the above material, the claimant shall have a reasonable
opportunity to appeal the claim denial to the Committee for a full and fair
review. The claimant or his duly authorized representative: 

	 	        
                           (i)         May request a review upon written notice to the Committee;

	 	        
                           (ii)        May review pertinent documents; and

	 	        
                           (iii)       May submit issues and comments in writing.

                    A  decision  by the  Committee  will be made not later than sixty (60) days  after  receipt of a request  for  review,  unless
special  circumstances  require an extension of time for processing,  in which event a decision should be rendered as soon as possible,
but in no event later than one hundred and twenty (120) days after such receipt.  The  Committee's  decision on review shall be written
and include  specific  reasons for the  decision,  written in a manner  calculated  to be  understood  by the  claimant  with  specific
references to the pertinent Plan provisions on which the decision is based.  All such  decisions,  interpretations  and  determinations
by the Committee shall be final, conclusive and binding.

38

          
     6.04.         Required Vote; Records of Committee.  Except as otherwise  specifically provided herein, every decision and action of
the  Committee  shall be valid if  concurred  in by a majority of the members then in office,  which  concurrence  may be had without a
formal  meeting.  The Committee  shall select a Secretary,  who may or may not be a  Participant  in the Plan,  and any other  officers
deemed  necessary and shall adopt rules  governing its  procedures  not  inconsistent  herewith.  The Committee  shall keep a permanent
record of its meetings and actions.

          
    6.05.         Directing  Payments.  The  Committee  shall  direct the  Trustee in writing to make  payments  from the Trust Fund to
Participants  who qualify for such payments  hereunder.  Such written  order to the Trustee shall specify the name of the  Participant,
his Social Security number, his address, and the amount and the form of distribution of such payments.

          
     6.06.         Nondiscrimination.  The Committee  shall not take action or direct the Trustee to take any action with respect to any
of the  benefits  provided  hereunder  or otherwise in  pursuance  of the powers  conferred  herein upon the  Committee  which would be
discriminatory  in favor of Limited  Participants  who are Highly  Compensated  Employees,  or which  would  result in  benefiting  one
Participant,  or group of Participants,  at the expense of another or in discrimination  between Participants  similarly situated or in
the application of different rules to substantially similar sets of facts.

          
         6.07.         Written  Instructions  to Trustee.  The  Trustee may request  instructions  in writing  from the  Committee  on other
matters and may rely and act thereon.

          
         6.08.         Duty to  Maintain  Participant  Accounts.  The  Trustee  shall be  responsible  for the  maintenance  of  Participant
Accounts.  Except as provided in Section 5.10,  however,  the Trustee need not segregate  Accounts  among  Participants  for investment
purposes.

          
       6.09.         Employment of Counsel.  The Committee may employ such legal counsel,  accountants,  and other agents as it shall deem
advisable.  The Employer shall pay, or cause to be paid from the Trust Fund, the  compensation  of such legal counsel,  accountants and
other agents and any other expenses incurred by the Committee in the administration of the Plan and Trust.

          
      6.10.         Indemnification.  The Sponsoring  Employer shall indemnify and save the members of the Committee,  and any persons to
whom the Committee has allocated or delegated its  responsibilities  in accordance  with the  provisions  hereof,  as well as any other
fiduciary  who is also an  officer,  director  or  employee of an  Employer,  and each of them,  harmless  from and against any and all
claims,  loss,  damages,  expense and liability arising from their  responsibilities  in connection with the administration of the Plan
and Trust Fund and not otherwise paid or reimbursed by insurance, unless the same shall result from their own willful misconduct.

39

ARTICLE VII

THE TRUST
FUND AND TRUSTEE

          
         7.01.         Trust  Agreement.  The  Sponsoring  Employer  has entered into a Trust  Agreement  with the Trustee to hold the funds
necessary to provide the benefits set forth in this Plan.

          
         7.02.         Trust Fund.  The Trust Fund shall be received,  held in trust,  and disbursed by the Trustee in  accordance  with the
provisions of the Trust  Agreement  and this Plan.  No part of the Trust Fund shall be used for or diverted to purposes  other than for
the exclusive benefit of Participants,  retired Participants,  disabled Participants,  their Beneficiaries or Contingent  Beneficiaries
under this Plan.  No person  shall have any  interest  in, or right to,  the Trust  Fund or any part  thereof,  except as  specifically
provided for in this Plan or the Trust Agreement.

          
         7.03.         Removal of Trustee.  The Board of Directors may remove the Trustee at any time upon the notice  required by the terms
of the Trust  Agreement,  and upon such removal or upon the resignation of a Trustee,  the Board of Directors shall appoint a successor
Trustee.

          
      7.04.         Powers of Trustee.  The Trustee shall have such powers to hold, invest,  reinvest,  control and disburse the funds as
at that time shall be set forth in the Trust Agreement or this Plan.

          
    7.05.         Trust  Agreement Part of the Plan. The Trust  Agreement  shall be deemed to form a part of the Plan and all rights of
Participants or others under this Plan shall be subject to the provisions of the Trust Agreement.

          
        7.06.         Settlement of Accounts of Trustee.  The Trust Agreement may contain provisions  granting authority to the Employer to
settle the accounts of the Trustee on behalf of all persons having or claiming an interest in the Trust Fund.

ARTICLE VIII

AMENDMENT AND
TERMINATION

                   
8.01.         Amendment  of Plan.  The  Sponsoring  Employer  hereby  reserves  the right,  at any time,  by action of its Board of
Directors or the  Executive  Committee of the Board of  Directors,  or any delegee of the Board of  Directors,  to modify or amend,  in
whole or in part,  any or all of the  provisions  of the Plan,  including  specifically  the right to make  such  amendments  effective
retroactively,  if necessary,  to bring the Plan into conformity with  government  regulations  which must be complied with so the Plan
and Trust Fund may be eligible  for tax  benefits.  The Board of Directors  may  delegate  its  authority to amend this Plan to certain
designated officers of the Sponsoring Employer,  subject to whatever  restrictions or limitations the Board may deem to be necessary or
appropriate.  No  modification  or amendment shall make it possible for Trust assets to be used for or diverted to, purposes other than
the exclusive  benefit of Participants  and former  Participants  and their  Beneficiaries.  The  effectiveness of any amendment of the
Plan is expressly conditioned on the continued  qualification of the Plan, as revised by such amendment,  under the relevant provisions
of the Internal Revenue Code of 1986, as amended.

40

          
       8.02.         Termination  of Plan.  The  Sponsoring  Employer may, by action of its Board of Directors,  terminate the Plan at any
time.

          
     8.03.         Full  Vesting  of  Accounts  on  Plan  Termination.  If the  Sponsoring  Employer  terminates  the  Plan,  completely
discontinues  contributions,  or partially  terminates the Plan, the Committee  shall compute the value of the Accounts of the affected
Participants.  The Accounts of such  Participants  and any other  persons  having an interest in the Trust Fund  computed in the manner
aforementioned  shall then immediately vest and become  nonforfeitable.  The interest of each such Participant shall, at the discretion
of the  Sponsoring  Employer,  either (i) be  distributed,  or (ii)  continue  to be held in the Trust Fund and  distributed  upon each
Participant's retirement, death, disability or termination of employment.

          
        8.04.         Return of Mistaken/Nondeductible  Employer Contributions.  Notwithstanding anything contained herein to the contrary,
and pursuant to Section 403(c)(2) of the Employee  Retirement Income Security Act of 1974, upon the Employer's  request, a contribution
which was made by the Employer under a mistake of fact, or conditioned  upon  qualification  of the Plan or any amendment  thereof,  or
upon the  deductibility of the  contribution  under Section 404 of the Internal Revenue Code of 1986, shall be returned to the Employer
within one year after the payment of the  contribution,  the denial of the  qualification  or the disallowance of the deduction (to the
extent disallowed), whichever is applicable.

ARTICLE IX

MISCELLANEOUS PROVISIONS

          
         9.01.         Corporate  Merger or  Consolidation.  In the event of a merger or consolidation of the Employer or transfer of all or
substantially  all of its assets to any other  corporation,  provisions may be made by such  successor  corporation at its election for
the continuance of this agreement and the Stock Bonus Plan created  hereunder as to such successor  entity.  Such successor shall, upon
its election to continue this Plan,  be  substituted  in place of the Employer by an  instrument  duly  authorizing  such  substitution
accompanied  by a certified  copy of the  resolutions  of the Board of Directors of the Employer  and its  successor  authorizing  such substitution  and delivered to the Trustee,  and the Trustee and all  Participants  hereunder  shall be  authorized  to recognize  such
successor in the place of the Employer.

          
         9.02.         Plan Transfer or Merger.  In the case of any merger or  consolidation  with or transfer of assets or  liabilities  of
this Plan to any other Plan,  such merger,  consolidation  or transfer  shall by its terms  provide that each  Participant  of the Plan
would (if the Plan then terminated)  receive a benefit  immediately after the merger,  consolidation,  or transfer which is equal to or
greater  than the benefit he would have been  entitled to receive  immediately  before the merger,  consolidation,  or transfer (if the
Plan had then terminated).

41

          
    9.03.         Plan Benefits Not Subject to Claims of Creditors.  None of the benefits or  beneficial  interests  under the Plan are
subject to the claims of creditors of Participants or their  Beneficiaries,  and will not be subject to attachment,  garnishment or any
other legal process  except  pursuant to a Qualified  Domestic  Relations  Order as defined in Section  414(p) of the Internal  Revenue
Code.  Neither a Participant nor his Beneficiaries may assign,  sell, borrow on, or otherwise  encumber any of his beneficial  interest
in the Plan and Trust Fund,  nor shall any such benefits be in any manner liable for or subject to the deeds,  contracts,  liabilities,
engagements, or torts of any Participant or Beneficiary.

          
   9.04.         No  Contractual  Obligation.  Although it is the  intention of the Employer that this Plan shall be continued and its
contributions  made  regularly,  this Plan is entirely  voluntary on the part of the Employer,  and the continuance of the Plan and the
payments thereunder are not assumed as a contractual obligation of the Employer.

          
    9.05.         Suspension  of Employer  Contributions.  The  Sponsoring  Employer  specifically  reserves  the right in its sole and
uncontrolled  discretion and by its official and authorized acts, to modify,  suspend (in whole or in part) at any time or from time to
time and for any period or periods, or to discontinue at any time the contributions under this Plan.

          
       9.06.         No Right of  Employment.  Nothing  contained  in this Plan shall be deemed to give any  Participant  or Employee  the
right to be retained  in the service of an Employer or to  interfere  with the right of an Employer to  discharge  any  Participant  or
Employee at any time regardless of the effect which such discharge shall have upon such individual as a Participant in the Plan.

          
      9.07.         Governing Law. This Plan shall be construed in accordance  with the laws of the State of Missouri,  except where such
laws are superseded by the Employee Retirement Income Security Act of 1974, as amended, in which case such Act shall control.

          
       9.08.         Distribution  to a  Minor  or  Incompetent.  In  making  any  distribution  to or for the  benefit  of any  minor  or
incompetent  the  Committee,  in its sole,  absolute and  uncontrolled  discretion  may,  but need not,  order the Trustee to make such
distribution  to a legal or  natural  guardian,  and any such  guardian  shall  have full  authority  and  discretion  to  expend  such
distribution  for the use and benefit of such minor or incompetent,  and the receipt of such guardian shall be a complete  discharge to
the Trustee, without any responsibility on its part or on the part of the Committee to see to the application thereof.

          
     9.09.         Named  Fiduciaries.  For purposes of Part 4 of Title I of the Employee  Retirement  Income  Security Act of 1974, the
Sponsoring  Employer,  the Trustee,  and the Committee shall each be named  fiduciaries.  All actions by named  fiduciaries shall be in
accordance  with the terms of this Plan and of the Trust insofar as such  documents are  consistent  with the  provisions of Title I of
the Employee  Retirement  Income  Security Act of 1974.  Each named  fiduciary  shall act solely in the  interest of  Participants  and
Beneficiaries  and for the  exclusive  purpose of providing  benefits and  defraying  reasonable  administrative  expenses.  Each named
fiduciary shall discharge his respective  duties hereunder with the care, skill,  prudence and diligence under the  circumstances  then
prevailing  that a prudent man acting in a like  capacity and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims.  Without  limiting the generality of the above,  it is  specifically  provided that the  appointment
and retention of the members of the Committee is a duty of the Sponsoring Employer for purposes of this Section 9.09.

42

          
     9.10.         Committee and Trustee  Responsibilities.  The Committee shall be responsible for the administration and management of
the Plan except for those duties herein specifically  allocated to the Trustee or reserved by the Sponsoring  Employer.  Subject to the
objectives  and  purposes  of the Plan (as  recited  in the  preamble  to Article V of the Trust  Agreement),  the  Trustee  shall have
exclusive  responsibility  for the  management  and  control of the assets of the Plan  except to the  extent the  Sponsoring  Employer
directs the purchase of Employer Stock from the treasury stock of the Sponsoring  Employer.  Each named  fiduciary shall be responsible
only for the specific  duties  assigned above and shall not be directly or indirectly  responsible  for the duties  assigned to another
fiduciary.  The Committee shall be deemed the plan administrator for purposes of the Employee Retirement Income Security Act of 1974.

          
   9.11.         Nondiversion  Clause.  There shall be no  diversion of any portion of the assets of the Trust Fund other than for the
exclusive benefit of Participants and their Beneficiaries.

          
       9.12.         Voting  Rights.  Each  Participant  shall be  entitled  to vote in the manner set out in this  section  all shares of
Employer Stock  credited to his Accounts or to tender or exercise  similar rights with respect to all or part of the shares of Employer
Stock  credited to his  Accounts,  irrespective  of whether such  Accounts are derived from Company or  Participant  contributions  and
irrespective  of whether all or a part of the  Employer  Stock  credited to such  Accounts  may not yet have  become  fully  vested and
nonforfeitable.

                    The Committee shall determine,  as of the latest  practicable date  contemporaneous  with or prior to the record date for each
meeting of  stockholders,  the number of shares of Employer Stock credited to each  Participant's  Accounts.  The Committee  shall then
furnish  each  Participant  prior to such  meeting  the proxy  statement  for the  meeting  together  with a form to be returned to the
Committee  on which the  Participant  may set forth his  instructions  for the  voting of  shares of  Employer  Stock  credited  to his
Accounts.  Upon receipt of such  instructions  the  Committee  shall  instruct the Trustee to vote such shares in  accordance  with the
Participant's  instructions.  If, within such  reasonable  period of time prior to any such meeting of stockholders as may be specified
by the Committee no  instructions  shall have been received by the Committee from such  Participant,  the Committee  shall instruct the
Trustee  to vote,  in person or by proxy,  such  shares  of  Employer  Stock in the  manner  determined  by the  Committee  in its sole
discretion.  The Committee  shall,  in its sole  discretion,  also be entitled to direct the Trustee how to vote all shares of Employer
Stock held by the Trustee upon any matters as to which as a practical  matter no  instructions  can be given by  Participants  prior to
any meeting.

          
    9.13.         Table of  Contents;  Captions.  The Table of  Contents  and the  captions  have been  placed in this Plan solely as a
matter of  convenience  and for  reference.  They do not  describe  the scope or intent  of this  Plan and they  shall not  affect  its
interpretation.

43

ARTICLE X

ROLLOVER
CONTRIBUTIONS AND ESOP TRANSFERS

                   
10.01.        Eligible Rollover  Contributions.  A nonbargaining  Employee of an Employer who has had distributed to him his entire
interest in and Eligible  Retirement  Plan,  may,  regardless of whether he is presently  eligible to  participate  in this Plan and in
accordance with procedures approved by the Committee,  transfer part or all of the distribution  received from such Eligible Retirement
Plan to the Trust Fund for this Plan provided the following conditions are satisfied:

	 	        (a)   
 the transfer is made directly from the Eligible Retirement Plan; and

	 	        (b)   
  the amount transferred does not include any Participant after-tax contributions.

                    The Committee  shall  develop such  procedures,  and may require such  information  from the Employee  desiring to make such a
transfer,  as it deems  necessary or desirable to determine  that the  proposed  transfer  will meet the  requirements  of this Section
10.01.  Upon  approval by the  Committee,  the amount  transferred  shall be  deposited  in the Trust Fund and shall be credited to the
Employee's Rollover  Account/Other  Investments and Rollover Account/Stock  (hereinafter referred to as "Rollover Accounts").  Rollover
Accounts  may not be invested in  diversified  investments  under  Section  4.08  hereof.  Upon a transfer by an Employee  who is not a
Participant hereunder, his Rollover Accounts shall represent his sole interest in the Plan until he becomes a Participant.

                    If an Employee  transfers assets as provided in this Section 10.01, the fair market value of the assets  transferred  shall be
credited to his Rollover  Account/Other  Investments  and sold.  As soon as reasonably  practicable  the proceeds from the sale of such
transferred  assets in his  Rollover  Account/Other  Investments  shall be  invested  as a part of the  entire  Trust Fund in shares of
Employer Stock.

                    A  Participant  may elect at any time to withdraw  from his  Rollover  Accounts  all or any part of (i) the shares of Employer
Stock then credited to such Stock Account,  and (ii) the amount then constituting such Other Investments  Account.  Any such withdrawal
shall be made in  accordance  with the  provisions of Section 5.06 (even though the  Participant  has not attained age  fifty-nine  and
one-half  (59 1/2)) in shares of  Employer  Stock and in cash for the  fractional  shares  and the  amount  distributable  from such Other
Investment  Accounts.  If a  Participant  who has not Attained Age  fifty-nine  and one-half  (59-1/2)  requests a withdrawal  from his
Rollover  Accounts,  such request shall not be granted  unless the  Participant  acknowledges  in writing that he understand the amount
withdrawn

	 	        
                           (i)         will be subject to a ten percent (10%) federal excise tax penalty;

	 	        

                           (ii)        will also be taxed as ordinary income for federal income tax purposes; and

44

	 	        
                           (iii)       will be reported to the Internal Revenue Service for such purposes.

          
  10.02.        ESOP Transfer  Contributions.  Any Employee who is either (1) a Participant making contributions  pursuant to Section
2.02(a) of this Plan as of December 31, 1989, or (2) a Limited  Participant  as of December 31, 1989,  and who receives a  distribution
from the  Leggett  & Platt,  Incorporated  Employee  Stock  Ownership  Plan  (herein  referred  to as the  "ESOP")  as a result  of the
termination  of the ESOP,  may elect to have the entire amount of such  distribution  transferred to the Trust Fund under this Plan and
credited to his ESOP Transfer  Account/Other  Investments  and ESOP Transfer  Account/Stock.  Such election shall be made in writing on
forms  provided by the  Committee.  ESOP  Transfer  Contributions  shall be  transferred  directly  from the trustee of the ESOP to the
Trustee of this Plan as soon as reasonably practicable following the termination of the ESOP.

                    A  Participant  may  elect at any time to  withdraw  from his ESOP  Transfer  Accounts  all or any part of (i) the  shares  of
Employer Stock then credited to such Stock Account,  and (ii) the amount then  constituting such Other  Investments  Account.  Any such
withdrawal  shall be made in  accordance  with the  provisions  of Section  5.06 (even  though the  Participant  has not  attained  age
fifty-nine  and one-half  (59 1/2)) in shares of Employer Stock and in cash for the fractional  shares and the amount  distributable  from
such other  Investment  Accounts.  If a Participant  who has not Attained Age  fifty-nine and one-half  (59-1/2)  requests a withdrawal
from his ESOP Transfer  Accounts,  such request shall not be granted unless the Participant  acknowledges in writing that he understand
that the amount withdrawn

	 	        
                           (i)         will be subject to a ten percent (10%) federal excise tax penalty;

	 	        
                           (ii)        will also be taxed as ordinary income for federal income tax purposes;

	 	        
                           (iii)       will be reported to the Internal Revenue Service for such purposes.

          
     10.03.        Vesting  in  Rollover  Contributions  and  ESOP  Transfer  Contributions.   A  Participant's  Rollover  Account/Other
Investments,  Rollover Account/Stock,  ESOP Transfer Account/Other  Investments,  and ESOP Transfer Account/Stock shall be fully vested
at all time.

          
   10.04.        Adjustment of Rollover  Accounts and ESOP Transfer  Accounts.  After the Rollover Accounts and ESOP Transfer Accounts
become a part of the Trust Fund  pursuant  to Section  10.01 and  Section  10.02 they shall  share in the gains and losses of the Trust
Fund, in accordance with the terms of Section 4.02 and Section 4.03.

          
     10.05.        Distribution of Rollover  Accounts and ESOP Transfer Accounts upon Disability.  When the Employee retires  (including
retirement for Total and Permanent  Disability),  he shall be entitled to a distribution of the full value of his Rollover Accounts and
ESOP Transfer  Accounts,  determined as of the Valuation Date  coincident  with or  immediately  following his  retirement,  unless the
distribution is not made within 60 days after such Valuation Date, in which event, the  distributable  amount shall be calculated as of
the monthly Valuation Date immediately  preceding the actual  distribution or in accordance with the provisions of Section 5.10 hereof,
whichever is applicable.  Such distribution shall be made in the form of payment elected in accordance with Section 5.09.

45

          
        10.06.        Distribution  of Rollover  Accounts and ESOP Transfer  Accounts upon Death.  If the Employee dies before his Rollover
Accounts  and ESOP  Transfer  Accounts are  distributed  to him,  his  Beneficiary  shall be entitled to the full value of his Rollover
Accounts and ESOP Transfer  Accounts  determined as of the Valuation Date coincident  with or immediately  following his date of death,
unless the  distribution  is not made within 60 days after such  Valuation  Date,  in which event,  the  distributable  amount shall be
calculated as of the monthly  Valuation Date  immediately  preceding the actual  distribution  or in accordance  with the provisions of
Section 5.10 hereof,  whichever is applicable.  Such full value shall be applied to provide a Death Benefit in accordance  with Section
5.03 hereof.

          
       10.07.        Distribution  of Rollover  Accounts  and ESOP  Transfer  Accounts  upon  Termination
of  Employment.  If an Employee
terminated  employment for any reason other than retirement or death, his Rollover  Accounts and ESOP Transfer  Accounts shall continue
to be held in the Trust Fund, and shall share in the gains and losses thereof in accordance  with Section 4.02 and Section 4.03,  until
the first to occur of (i) the date the Employee  requests such funds be  transferred  to another  funding  medium,  (ii) the Employee's
death, or (iii) the date benefits become payable to the Employee under the terms of this Plan.

          
    10.08.        Form of Distribution.  Any former Employee or retired  Employee who is entitled to a distribution  under the terms of
this Plan may request,  and the Committee shall agree to, a lump sum distribution of his entire vested interest  hereunder,  as soon as
reasonably  practicable,  unless  the  distribution  is not made  within  60 days  after  such  Valuation  Date,  in which  event,  the
distributable  amount shall be  calculated  as of the monthly  Valuation  Date  immediately  preceding  the actual  distribution  or in
accordance with the provisions of Section 5.10 hereof,  whichever is applicable in order that such  distribution may (i) be transferred
to an Individual  Retirement  Account described in Section 408(a) of the Internal Revenue Code of 1986, as amended,  or (ii) be applied
to purchase an Individual  Retirement  Annuity described in Section 408(b) of such Code, or (iii) be transferred to an employee's trust
described  in  Section  401(a) of the Code  which is exempt  from tax under  Section  501(a)  of the  Code.  Upon the  transfer  of the
Employee's entire vested interest, the Employee shall be entitled to no further benefits under the terms of the Plan.

ARTICLE XI

TAX EQUITY
AND FISCAL

RESPONSIBILITY ACT OF 1982

TOP-HEAVY PROVISIONS

                   
11.01.        Application.  The provisions of this Article XI shall only be applicable if the Plan becomes  "top-heavy" (as defined
in Section  416(g) of the Internal  Revenue  Code),;  i.e.,  generally,  if sixty percent (60%) or more of the value of the Accounts of
Participants  of this Plan as of any  "determination  date" (as  defined in Section  416(g)(4)  of the Code,  i.e.,  December 31 of the
immediately  preceding  Plan Year)  beginning  as of December 31,  1983,  is  attributable  to "key  employees"  (as defined in Section
416(i)(1) of the Code),  including the accrued  benefits of any defined  benefit plan which must be  mandatorily  aggregated  with this
Plan under Section 416 of the Internal  Revenue Code. For this purpose prior to January 1, 2002,  benefit  payments to "key  employees"
during the Accounting Year (ending with such determination  date) or in any of the four (4) immediately  preceding calendar years shall
be taken into  account.  From and after January 1, 2002,  only benefit  payments  during the one year period ending on the  determining
date  shall be  taken  into  account,  including  any  terminated  plan,  had it not been  aggregated  with  this  plan  under  Section
416(g)(2)(A)(i)  of the Internal  Revenue Code.  In the case of a benefit  payment for any reason other than  separation  from service,
death or disability,  this provision shall be applied by taking into account not only benefit  payments to "key  employees"  during the
Accounting  Year  (ending with the  determination  date),  but also each of the four (4)  immediately  preceding  calendar  years.  The
present value of accrued  benefits in any defined benefit plan sponsored by the Employer which must be mandatorily  aggregated for this
purpose,  shall be  determined  on the basis of the  actuarial  assumptions  then being used to comply with Section  401(a)(25)  of the
Internal  Revenue  Code.  If the Plan  becomes  "top-heavy"  as of any  determination  date,  then  effective  in the  next  succeeding
Accounting Year, the provisions of this Article XI shall apply.

46

          
        11.02.        Special  Minimum  Contribution.  If this Plan becomes  "top-heavy,"  the minimum  employer  contribution  required by
Section  416(c) of the  Internal  Revenue Code shall be satisfied by the defined  benefit plan  maintained  by the Employer  which also
covers all the Employees who are covered by this Plan.

          
      11.03.        Key Employee  Defined.  The term "key employee"  shall have the same meaning as is specified in Section  416(i)(1) of
the Internal  Revenue Code,  i.e., any Employee or former  Employee  (including any deceased  employee) who at any time during the Plan
Year that  includes the  determination  date was an officer of the  Employer  having  annual  compensation  greater  than  $130,000 (as
adjusted under Section  416(i)(1) of the Internal  Revenue Code for Plan Years beginning after December 31, 2002), a 5-percent owner of
the Employer,  or a 1-percent  owner of the Employer  having  annual  compensation  of more than  $150,000.  For this  purpose,  annual
compensation  means  compensation  within the meaning of Section  415(c)(3) of the Internal Revenue Code. The determination of who is a
"key employee" will be made in accordance with section 416(i)(1) of the Internal Revenue Code and the applicable  regulations and other
guidance of general applicability issued thereunder.

47

                                                              SCHEDULE I

                                                    LIST OF PARTICIPATING EMPLOYERS

                                                         AS OF JANUARY 1, 2002

                                                    WHO ARE ENTITLED TO PARTICIPATE

                                                  IN THIS PLAN BY BRANCH AND LOCATION

48

SIGNATURES

                   
IN WITNESS  WHEREOF,  the Sponsoring  Employer has caused this Restated Plan to be executed this _____ day of December,  2001,
to be  effective  as of January 1, 2002,  except as  otherwise  indicated,  by its Vice  President,  Human  Resources,  pursuant to the
resolutions of the Board of Directors, dated May 12, 1999, a certified copy of which is attached.

	ATTEST:                     
                     
                     
(SEAL)

	  	LEGGETT & PLATT, INCORPORATED, the Sponsoring Employer

	 
	By: 	 

	Secretary 	  	John Hale
Vice President, Human Resources<PAGE>
                                                                    EXHIBIT 10.1

                                 $794,409,963.20

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of December 7, 2001

                                      among

                       CORRECTIONS CORPORATION OF AMERICA
                 (formerly known as Prison Realty Trust, Inc.),
                                  as Borrower,

                                       AND

                      CERTAIN SUBSIDIARIES OF THE BORROWER
                         FROM TIME TO TIME PARTY HERETO,
                                 as Guarantors,

                               THE SEVERAL LENDERS
                         FROM TIME TO TIME PARTY HERETO,

                          LEHMAN COMMERCIAL PAPER INC.,
                            as Administrative Agent,

                                SOCIETE GENERALE,
                             as Documentation Agent,

                            THE BANK OF NOVA SCOTIA,
                              as Syndication Agent,

                             SOUTHTRUST BANK, N.A.,
                                   as Co-Agent

                                       AND

                              LEHMAN BROTHERS INC.
                      as Lead Arranger and as Book Manager

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page

<S>                                                                                                            <C>
SECTION 1. DEFINITIONS............................................................................................2
         1.1      Definitions.....................................................................................2
         1.2      Computation of Time Periods....................................................................40
         1.3      Accounting Terms...............................................................................40
         1.4      Interrelationship with First Amended and Restated Credit Agreement.............................41
         1.5      Confirmation of Existing Obligations...........................................................41

SECTION 2. CREDIT FACILITIES.....................................................................................41
         2.1      Revolving Loans................................................................................41
         2.2      Letter of Credit Subfacility...................................................................43
         2.3      Swingline Loan Subfacility.....................................................................47
         2.4      Term Loan......................................................................................49
         2.5      Tranche C Term Loan............................................................................50
         2.6      New Term Loan..................................................................................52

SECTION 3. OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................53
         3.1      Default Rate...................................................................................53
         3.2      Extension and Conversion.......................................................................54
         3.3      Prepayments....................................................................................54
         3.4      Termination and Reduction of Revolving Committed Amount........................................57
         3.5      Fees...........................................................................................58
         3.6      Capital Adequacy...............................................................................59
         3.7      Limitation on Eurodollar Loans.................................................................60
         3.8      Illegality.....................................................................................60
         3.9      Requirements of Law............................................................................61
         3.10     Treatment of Affected Loans....................................................................62
         3.11     Taxes..........................................................................................62
         3.12     Compensation...................................................................................64
         3.13     Pro Rata Treatment.............................................................................65
         3.13A    Tranche C Pro Rata Treatment...................................................................65
         3.13B    New Term Loan Pro Rata Treatment...............................................................66
         3.14     Sharing of Payments............................................................................66
         3.15     Payments, Computations, Etc....................................................................66
         3.16     Evidence of Debt...............................................................................68

SECTION 4. GUARANTY..............................................................................................69
         4.1      The Guaranty...................................................................................69
         4.2      Obligations Unconditional......................................................................69
         4.3      Reinstatement..................................................................................70
         4.4      Certain Additional Waivers.....................................................................70
         4.5      Remedies.......................................................................................70
         4.6      Rights of Contribution.........................................................................71
         4.7      Guarantee of Payment; Continuing Guarantee.....................................................72
</TABLE>

<PAGE>
<TABLE>
<S>                                                                                                            <C>
SECTION 5. CONDITIONS..........................................................................................72
         5.1      Conditions to Effectiveness..................................................................72
         5.2      Conditions to all Extensions of Credit.......................................................77

SECTION 6. REPRESENTATIONS AND WARRANTIES......................................................................78
         6.1      Financial Condition..........................................................................78
         6.2      No Material Change...........................................................................78
         6.3      Organization and Good Standing...............................................................78
         6.4      Power; Authorization; Enforceable Obligations................................................79
         6.5      No Conflicts.................................................................................79
         6.6      No Default...................................................................................79
         6.7      Ownership....................................................................................80
         6.8      Indebtedness.................................................................................80
         6.9      Litigation...................................................................................80
         6.10     Taxes........................................................................................80
         6.11     Compliance with Law..........................................................................80
         6.12     ERISA........................................................................................80
         6.13     Subsidiaries.................................................................................81
         6.14     Governmental Regulations, Etc................................................................82
         6.15     Purpose of Loans and Letters of Credit.......................................................83
         6.16     Environmental Matters........................................................................83
         6.17     Intellectual Property........................................................................84
         6.18     Solvency.....................................................................................84
         6.19     Investments..................................................................................84
         6.20     Location of Collateral.......................................................................84
         6.21     Disclosure...................................................................................84
         6.22     [Intentionally omitted.].....................................................................85
         6.23     Labor Matters................................................................................85
         6.24     Year 2000 Compliance.........................................................................85
         6.25     First Priority Lien..........................................................................85
         6.26     Leases.......................................................................................85

SECTION 7. AFFIRMATIVE COVENANTS...............................................................................86
         7.1      Information Covenants........................................................................86
         7.2      Preservation of Existence and Franchises.....................................................90
         7.3      Books and Records............................................................................90
         7.4      Compliance with Law..........................................................................90
         7.5      Payment of Taxes and Other Indebtedness......................................................90
         7.6      Insurance....................................................................................90
         7.7      Maintenance of Property......................................................................91
         7.8      Performance of Obligations...................................................................91
         7.9      Use of Proceeds..............................................................................92
         7.10     Audits/Inspections...........................................................................92
         7.11     Financial Covenants..........................................................................92
         7.12     Additional Credit Parties....................................................................94
         7.13     Environmental Laws...........................................................................95
         7.14     Collateral...................................................................................96
         7.15     Leases.......................................................................................96
         7.16     Year 2000 Compliance.........................................................................97
         7.17     Appraisals...................................................................................97
</TABLE>

                                       ii
<PAGE>
<TABLE>
<S>                                                                                                            <C>
         7.18     Hedging Agreements.............................................................................. 97
         7.19     [Intentionally omitted.]........................................................................ 97
         7.20     [Intentionally omitted.]........................................................................ 97
         7.21     [Intentionally omitted.]........................................................................ 97
         7.22     [Intentionally omitted.]........................................................................ 97
         7.23     Cash Management................................................................................. 97
         7.24     Management Contract............................................................................. 98

SECTION 8. NEGATIVE COVENANTS..................................................................................... 98
         8.1      Indebtedness.................................................................................... 98
         8.2      Liens...........................................................................................100
         8.3      Nature of Business..............................................................................100
         8.4      Consolidation, Merger, Dissolution, etc.........................................................100
         8.5      Asset Dispositions..............................................................................101
         8.6      Investments.....................................................................................101
         8.7      Restricted Payments.............................................................................101
         8.8      Prepayments of Indebtedness, etc................................................................102
         8.9      Transactions with Affiliates....................................................................102
         8.10     Fiscal Year; Organizational Documents...........................................................102
         8.11     Limitation on Restricted Actions................................................................103
         8.12     Ownership of Subsidiaries.......................................................................103
         8.13     Sale Leasebacks.................................................................................103
         8.14     No Further Negative Pledges.....................................................................103
         8.15     [Intentionally omitted.]........................................................................104
         8.16     Speculative Transactions........................................................................104
         8.17     [Intentionally omitted.]........................................................................104
         8.18     Capital Expenditures............................................................................104

SECTION 9. EVENTS OF DEFAULT......................................................................................104
         9.1      Events of Default...............................................................................104
         9.2      Acceleration; Remedies..........................................................................107

SECTION 10. AGENCY PROVISIONS.....................................................................................108
         10.1     Appointment, Powers and Immunities..............................................................108
         10.2     Reliance by Administrative Agent................................................................109
         10.3     Defaults........................................................................................109
         10.4     Rights as a Lender..............................................................................109
         10.5     Indemnification.................................................................................110
         10.6     Non-Reliance on Agents and Other Lenders........................................................110
         10.7     Successor Administrative Agent..................................................................110

SECTION 11. MISCELLANEOUS.........................................................................................111
         11.1     Notices.........................................................................................111
         11.2     Right of Set-Off; Adjustments...................................................................112
         11.3     Benefit of Agreement............................................................................112
         11.3A    Tranche C Assignments and Pledges...............................................................114
         11.3B    New Term Loan Assignments and Pledges...........................................................114
         11.4     No Waiver; Remedies Cumulative..................................................................114
         11.5     Expenses; Indemnification.......................................................................115
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                                            <C>
         11.6     Amendments, Waivers and Consents.............................................................116
         11.6A    Tranche C Amendments, Waivers and Consents...................................................117
         11.6B    New Term Loan Amendments, Waivers and Consents...............................................118
         11.7     Counterparts.................................................................................120
         11.8     Headings.....................................................................................120
         11.9     Survival.....................................................................................120
         11.10    Governing Law; Submission to Jurisdiction; Venue.............................................120
         11.11    Severability.................................................................................121
         11.12    Entirety.....................................................................................121
         11.13    Binding Effect; Termination..................................................................121
         11.14    Confidentiality..............................................................................121
         11.15    Conflict.....................................................................................122
         11.16    Existing Agreement Superseded................................................................122
</TABLE>

                                       iv

<PAGE>

                                    SCHEDULES

Schedule 1.1(b)            Investments
Schedule 1.1(c)            Liens
Schedule 2.1(a)            Lenders
Schedule 5.1(f)(i)         Mortgaged Properties
Schedule 6.9               Certain Litigation
Schedule 6.13              Subsidiaries
Schedule 6.17              Intellectual Property
Schedule 6.20(a)           Real Property Locations
Schedule 6.20(b)           Personal Property Locations
Schedule 6.20(c)           Chief Executive Offices/Principal Places of Business
Schedule 7.6               Insurance
Schedule 7.23              Excluded Accounts
Schedule 8.1               Indebtedness

                                    EXHIBITS

Exhibit 2.1(e)             Form of Revolving Note
Exhibit 2.3(d)             Form of Swingline Note
Exhibit 2.4(d)             Form of Term Note
Exhibit 2.5(f)             Form of Tranche C Term Note
Exhibit 2.6(b)             Form of Notice of Borrowing
Exhibit 2.6(f)             Form of New Term Loan Note
Exhibit 3.2                Form of Notice of Extension/Conversion
Exhibit 3.11(d)            Form of Exemption Certificate
Exhibit 7.1(c)             Form of Officer's Compliance Certificate
Exhibit 7.12               Form of Joinder Agreement
Exhibit 11.3(b)            Form of Assignment and Acceptance

                                       v
<PAGE>

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

         THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December
7, 2001, by and among CORRECTIONS CORPORATION OF AMERICA (formerly known as
Prison Realty Trust, Inc.), a Maryland corporation (the "Borrower"), the
subsidiaries of the Borrower from time to time party hereto (collectively, the
"Subsidiary Guarantors"), the Lenders (as defined herein), LEHMAN COMMERCIAL
PAPER INC. ("LCPI"), as administrative agent for the Lenders (in such capacity,
the "Administrative Agent"), SOCIETE GENERALE, as documentation agent (in such
capacity, the "Documentation Agent"), THE BANK OF NOVA SCOTIA, as syndication
agent (the "Syndication Agent"), SOUTHTRUST BANK, N.A., as co-agent (the
"Co-Agent") and LEHMAN BROTHERS INC. ("LBI"), as book manager and lead arranger
(in such capacities, the "Lead Arranger"), AMENDS AND RESTATES IN FULL the
Amended and Restated Credit Agreement, dated as of August 4, 1999 (as heretofore
amended, modified, restated or supplemented from time to time, the "First
Amended and Restated Credit Agreement"), among the Borrower, the subsidiaries of
the Borrower party thereto (the "First Amendment and Restatement Subsidiary
Guarantors"), the several lenders party thereto from time to time (the "Original
Lenders"), the Administrative Agent, as administrative agent for the Original
Lenders, the Documentation Agent, as documentation agent, the Syndication Agent,
as syndication agent, and SouthTrust Bank, N.A., as co-agent; this amendment and
restatement of the First Amended and Restated Credit Agreement, as amended,
supplemented, restated or otherwise modified from time to time, is hereinafter
referred to as this "Credit Agreement."

                               W I T N E S S E T H

         WHEREAS, in amendment and restatement of the Original Credit Agreement
(as defined below), the Original Lenders previously extended credit to the
Borrower under the First Amended and Restated Credit Agreement;

         WHEREAS, the Borrower has requested that the First Amended and Restated
Credit Agreement be amended and restated in full as set forth herein;

         WHEREAS, the Required Lenders and the Required Tranche C Term Lenders
under and as defined in the First Amended and Restated Credit Agreement (the
"Amending Lenders") are willing so to amend and restate the First Amended and
Restated Credit Agreement and to continue to extend credit to the Borrower, upon
and subject to the terms and conditions set forth herein;

         WHEREAS, it is the intent of the Borrower, the First Amendment and
Restatement Subsidiary Guarantors, the Subsidiary Guarantors, the Amending
Lenders, the Administrative Agent, the Documentation Agent, the Syndication
Agent, the Co-Agent and the Lead Arranger that this Credit Agreement amend and
restate in its entirety the First Amended and Restated Credit Agreement and
that, from and after the Second Restatement Effective Date, the First Amended
and Restated Credit Agreement shall be of no force and effect except to evidence
the terms and conditions under which the Borrower heretofore has incurred
obligations and liabilities to the Original Lenders and the Administrative Agent
(as evidenced by the First Amended and Restated Credit Agreement and the
Administrative Agent's books and records); and

<PAGE>

        WHEREAS, this Credit Agreement is made in renewal, amendment,
restatement and modification of, but not in extinguishment or novation of, the
obligations under the First Amended and Restated Credit Agreement.

        NOW, THEREFORE, the parties hereto hereby agree to amend and restate the
First Amended and Restated Credit Agreement as follows:

                                   SECTION 1.
                                   DEFINITIONS

        1.1 DEFINITIONS. As used in this Credit Agreement, the following terms
shall have the meanings specified below unless the context otherwise requires:

        "Additional Credit Party" means each Person that becomes a Subsidiary
Guarantor after the Second Restatement Effective Date by execution of a Joinder
Agreement.

        "Adjusted Base Rate" means the Base Rate plus the Applicable Percentage.

        "Adjusted Cash Flow" means, with respect to any Real Property, as of the
end of each fiscal quarter of the Consolidated Parties for the fiscal quarter
ending on such date, the lesser of:

                (a) the sum of (i) lease payments received or accrued with
        respect to such Real Property for such period under all leases that
        comply with Section 7.15 ("Gross Lease Revenues"); provided that, with
        respect to any Real Property that is not wholly-owned by the Borrower,
        the cash lease payments with respect to such Real Property included in
        the calculation of Adjusted Cash Flow hereunder shall be limited to a
        percentage of such cash lease payments equal to the lesser of (A) the
        Borrower's percentage ownership in such Real Property and (B) the
        percentage of such cash lease payments actually received by the
        Borrower, less (ii) actual capital expenditures for maintenance items
        for such period, with respect to such Real Property, less (iii) actual
        management fees paid with respect to such Real Property during such
        period, all as determined in accordance with GAAP, and

                (b) the sum of (i) operating income for such period less (ii)
        non-cash operating income for such period after giving effect to the
        deduction resulting from the Straight-Lining of Rents less (iii) real
        estate taxes for such period less (iv) property insurance premiums for
        such period less (v) ground lease payments made with respect to such
        Real Property for such period less (vi) a capital reserve equal to
        actual capital expenditures for the maintenance, repair and upkeep of
        existing properties for such period, less (vii) a management fee equal
        to actual management fees paid with respect to such Real Property during
        such period, all as determined in accordance with GAAP

        "Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable
Percentage.

        "Administrative Agent" shall have the meaning assigned to such term in
the preamble hereto, together with any successors or assigns.

                                       2
<PAGE>

        "Administrative Agent's Fees" shall have the meaning assigned to such
term in Section 3.5(d).

        "Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
five percent (5%) or more of the Capital Stock in such Person. For purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

        "Agecroft" means Agecroft Properties, Inc., a Tennessee corporation.

        "Agecroft Charter" means the charter of Agecroft attached as Exhibit
1.1(a) to the First Amended and Restated Credit Agreement.

        "Agecroft Facility" means the prison facility located in Salford,
England, owned by Agecroft.

        "Agecroft Investment" means that certain Investment by the Borrower in
Agecroft in connection with the Agecroft Transaction in an aggregate amount not
exceeding $81,000,000 consisting of a combination of a loan (evidenced by the
Agecroft Note) and an equity investment (plus the capitalization of interest on
the Agecroft Note, not involving the transfer of funds from any Credit Party, in
an aggregate amount not exceeding $5,000,000).

        "Agecroft Note" means that certain promissory note, in a maximum
principal amount equal to $65,000,000 made by Agecroft in favor of the Borrower
and pledged to the Administrative Agent as Collateral for the Credit Party
Obligations.

        "Agecroft Securitization" means any transaction pursuant to which the
Borrower obtains cash in consideration of its direct or indirect ownership
interest in the Agecroft Facility and/or the Agecroft Note, including, without
limitation, any issuance of securities or incurrence of Indebtedness by Agecroft
or any of its Subsidiaries, any sale of the Agecroft Facility or of the capital
stock of Agecroft, or any sale-leaseback of the Agecroft Facility; provided,
that (i) any Indebtedness incurred or issued in connection with any such
transaction shall be Non-Recourse Debt and (ii) the Net Cash Proceeds received
by the Borrower in any such transaction shall be not less than 45,000,000 Pounds
Sterling (or the equivalent in United States Dollars on such date).

        "Agecroft Transaction" means the transactions in connection with the
design, development, construction, financing, leasing and subleasing of a prison
facility located in the United Kingdom pursuant to the Agecroft Transaction
Documents.

        "Agecroft Transaction Documents" means those documents listed in the
Agecroft Charter and that certain Direct Agreement, dated as of July 6, 1998,
among Agecroft, the Borrower, CCA, Agecroft Prison Management Limited ("APM")
and Her Majesty's Principal Secretary of State for the Home Department ("HMPS"),
that certain Step-In and Collateral Agreement, dated as of July 6, 1998, among
CCA, APM, HMPS and UK Detention Services Limited, and that certain Access
Agreement to be entered into by and between Agecroft, the Borrower and APM

                                       3
<PAGE>

following completion of construction of the prison facility, all as previously
provided to the Administrative Agent.

        "Aggregate Committed Amount" means the aggregate of the Revolving
Committed Amount, the Term Loan Committed Amount, the Tranche C Term Loan
Committed Amount and the New Term Loan Committed Amount.

        "Aggregate Required Lenders" means, at any time, the Required Revolving
Lenders, the Required Term Lenders and the Required Tranche C Term Lenders, each
voting as a separate class.

        "Amending Lenders" shall have the meaning assigned to such term in the
recitals hereto.

        "Amendment Effective Date" means June 9, 2000.

        "Applicable Lending Office" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify to the Administrative Agent and the Borrower by written notice as the
office by which its Eurodollar Loans are made and maintained.

        "Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, the applicable rate
of the Unused Fee for any day for purposes of Section 3.5(b), or the applicable
rate of the Standby Letter of Credit Fee for any day for purposes of Section
3.5(c)(i), the appropriate applicable percentage set forth below opposite the
applicable Senior Debt Rating then in effect as of the most recent Ratings Date.
The Applicable Percentage shall be determined based on the Senior Debt Rating;
provided that (a) if the Borrower shall not have a rating for its Senior Debt by
S&P and Moody's, then the Applicable Percentages shall be based on Pricing Level
VI and, (b) if the Borrower shall have a split Senior Debt Rating the lower of
the two ratings shall apply.

                                       4
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                     Applicable Percentage for Revolving Loans
--------------------------------------------------------------------------------------------------------------------
                                                                                      Applicable     Applicable
                                                                                      Percentage   Percentage for
  Pricing                 Moody's                                                     for Unused   Standby Letter
   Level     S&P Rating   Rating       Eurodollar Loans         Base Rate Loans           Fee      of Credit Fee
--------------------------------------------------------------------------------------------------------------------
<S>          <C>         <C>          <C>                     <C>                     <C>           <C>
     I       > BBB+      > Baa1       3.50% through and        2.75% through and      .50%          2.00%
             -           -            including June 30,       including June 30,
                                      2002 and 4.50%           2002 and 3.75%
                                      thereafter               thereafter
--------------------------------------------------------------------------------------------------------------------
    II       > BBB       > Baa2       3.75% through and        3.00% through and      .55%          2.25%
             -           -            including June 30,       including June 30,
                                      2002 and 4.75%           2002 and 4.00%
                                      thereafter               thereafter
--------------------------------------------------------------------------------------------------------------------
   III       > BBB-      > Baa3       4.00% through and        3.25% through and      .60%          2.50%
             -           -            including June 30,       including June 30,
                                      2002 and 5.00%           2002 and 4.25%
                                      thereafter               thereafter
--------------------------------------------------------------------------------------------------------------------
    IV       > BB+       > Ba1        4.50% through and        3.75% through and      .70%          3.00%
             -           -            including June 30,       including June 30,
                                      2002 and 5.50%           2002 and 4.75%
                                      thereafter               thereafter
--------------------------------------------------------------------------------------------------------------------
     V       > BB        > Ba2        4.75% through and        4.00% through and      .75%          3.25%
             -           -            including June 30,       including June 30,
                                      2002 and 5.75%           2002 and 5.00%
                                      thereafter               thereafter
--------------------------------------------------------------------------------------------------------------------
    VI       < BB        < Ba2        5.25% through and        4.50% through and      .80%          3.75%
                                      including June 30,       including June 30,
                                      2002 and 6.25%           2002 and 5.50%
                                      thereafter               thereafter
--------------------------------------------------------------------------------------------------------------------
</TABLE>

        The Applicable Percentages for the Revolving Loans, Unused Fee and
Standby Letter of Credit Fee shall be determined and adjusted on the date that
the Senior Debt Rating changes (each a "Ratings Date"). Each Applicable
Percentage shall be effective from and including one Ratings Date until but
excluding the next Ratings Date. Any adjustment in the Applicable Percentages
for the Revolving Loans and Standby Letter of Credit Fee shall be applicable to
all existing Revolving Loans and standby Letters of Credit as well as any new
Revolving Loans and standby Letters of Credit made or issued.

        "Asset Disposition" means the disposition of any or all of the assets
(including without limitation the Capital Stock of a Subsidiary) of any
Consolidated Party whether by sale, lease, transfer or otherwise (including
pursuant to any casualty or condemnation event). The term

                                       5
<PAGE>

"Asset Disposition" shall include the Agecroft Securitization and the
Headquarters Sale-Leaseback, but shall not include (a) the sale of inventory in
the ordinary course of business and (b) any single disposition of non-prison
facility assets which does not yield Net Cash Proceeds of at least $1,000,000,
provided that all such dispositions excluded under this clause (b) shall not in
the aggregate yield Net Cash Proceeds exceeding $3,000,000 during any fiscal
year of the Borrower. Asset Dispositions shall not include (i) any disposition
of cash or Cash Equivalents in the ordinary course of business, (ii) any lease
of Real Property complying with Section 7.15 or (iii) any disposition of
property by the Borrower to a Restricted Subsidiary that is a Credit Party or by
a Restricted Subsidiary to the Borrower or to another Restricted Subsidiary that
is a Credit Party.

        "Availability" means, at any time, the Revolving Committed Amount minus
the Revolving Obligations at such time.

        "Availability Reserve" means (a) $42,000,000 through but not including
June 30, 2000, (b) $27,000,000 from and including June 30, 2000, through but not
including July 21, 2000, (c) $22,000,000 from and including July 21, 2000,
through but not including September 30, 2000, (d) $17,000,000 from and including
September 30, 2000, through but not including December 31, 2000, and (e) $0.00
from and after December 31, 2000, provided that (x) if the Agecroft
Securitization is consummated on any date prior to September 15, 2000, the
amounts set forth in (a) through (c) above shall on such date be increased by an
amount equal to fifty percent (50%) of the Net Cash Proceeds therefrom and (y)
if the Pacific Life Investment is not consummated on or before September 15,
2000, the amounts set forth in each of (c) and (d) above shall on such date be
decreased by $12,000,000.

        "Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

        "Bankruptcy Event" means, with respect to any Person, the occurrence of
any of the following with respect to such Person: (i) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii) there shall be
commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.

                                       6
<PAGE>

        "Base Rate" means, for any day, the rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%)
and (b) the Prime Rate for such day. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.

        "Base Rate Loan" means any Loan bearing interest at a rate determined by
reference to the Base Rate.

        "Borrower" means the Person identified as such in the preamble hereto,
together with any permitted successors and assigns.

        "Borrowing Base" means, (A) as of any day prior to consummation of the
Management Opco Merger, the sum of the Borrowing Base Values of each Borrowing
Base Property and (B) as of any day on or after consummation of the Management
Opco Merger, the sum of the Post Merger Borrowing Base Values of each Borrowing
Base Property; provided, however, that in the case of either (A) or (B) above,
so long as any First Union Letters of Credit or NationsBank Letters of Credit
are outstanding, the Borrowing Base shall be deemed reduced by the aggregate
face amount of such First Union Letters of Credit and NationsBank Letters of
Credit that remain outstanding except to the extent any amount borrowed
hereunder (and not repaid) is used to cash collateralize the Borrower's
obligations under the First Union Letters of Credit or the NationsBank Letters
of Credit.

        "Borrowing Base Properties" means, collectively, (i) each Existing
Property identified on Schedule 5.1(f)(i) that satisfies each of the following
conditions and (ii) each New Property of a Credit Party that satisfies each of
the following conditions:

                (a) The property shall qualify as Eligible Real Estate.

                (b) The Administrative Agent shall have received a pro forma
        compliance certificate with respect to the property which includes an
        annualized calculation of the projected quarterly Consolidated Adjusted
        EBITDA of such property and the projected quarterly Adjusted Cash Flow
        with respect to any property that is proposed to be added to the
        Borrowing Base prior to consummation of the Management Opco Merger, as
        applicable, of such property in form and substance satisfactory to the
        Lenders.

                (c) The Administrative Agent shall have received and be
        satisfied with, in its sole discretion, any lease or sub-lease, as
        appropriate, entered into by the Borrower (as lessor or sublessor, as
        applicable) in leasing such property.

                (d) The Administrative Agent shall have received, in form and
        substance satisfactory to the Administrative Agent, a fully executed and
        notarized Mortgage in favor of the Administrative Agent encumbering the
        ownership interest of the Borrower in the property, together with such
        UCC-1 financing statements as the Administrative Agent shall deem
        appropriate with respect to the property.

                (e) The Administrative Agent shall have received, in form and
        substance reasonably satisfactory to the Administrative Agent, an
        opinion of counsel in the state in which the property is located with
        respect to the enforceability of the form of Mortgage and sufficiency of
        the form of UCC-1 financing statements to be recorded or filed in such

                                       7
<PAGE>

        state and such other matters as the Administrative Agent may request, in
        form and substance reasonably satisfactory to the Administrative Agent.

                (f) The Administrative Agent shall have received, in form and
        substance reasonably satisfactory to the Administrative Agent, a
        Mortgage Policy issued by the Title Insurance Company in an amount
        satisfactory to the Administrative Agent with respect to the property,
        assuring the Administrative Agent that the applicable Mortgage creates a
        valid and enforceable first priority mortgage lien on the property, free
        and clear of all defects and encumbrances except Permitted Liens, which
        Mortgage Policy shall contain such coverage and endorsements as shall be
        reasonably satisfactory to the Administrative Agent and for any other
        matters that the Administrative Agent may request and provide
        affirmative insurance and such reinsurance as the Administrative Agent
        may request, all of the foregoing in form and substance reasonably
        satisfactory to the Administrative Agent.

                (g) The Administrative Agent shall have received, in form and
        substance satisfactory to the Administrative Agent, a map or plat of a
        survey of the site of the property certified to the Administrative Agent
        and the Title Insurance Company in a manner satisfactory to them, dated
        a date satisfactory to the Administrative Agent and the Title Insurance
        Company by an independent professional licensed land surveyor reasonably
        satisfactory to the Administrative Agent and the Title Insurance
        Company, and otherwise in form and substance satisfactory to the
        Administrative Agent.

                (h) The Administrative Agent shall have received, in form and
        substance reasonably satisfactory to the Administrative Agent, a current
        certification from the Borrower's registered engineer land surveyor in a
        form acceptable to the Administrative Agent as to whether any of the
        improvements on the property are located within any area designated by
        the Director of the Federal Emergency Management Agency as a "special
        flood hazard" area and if any improvements on such parcel are located
        within a "special flood hazard" area, evidence of a flood insurance
        policy from a company and in an amount satisfactory to the
        Administrative Agent for the applicable portion of the premises, naming
        the Administrative Agent, for the benefit of the Lenders, as mortgagee.

                (i) The Administrative Agent shall have received, in form and
        substance satisfactory to the Administrative Agent, a copy of the
        management agreement between the owner, lessee or sublessee of the
        property, as applicable, and the appropriate governmental entity (if
        applicable).

                (j) The Administrative Agent shall have received, in form and
        substance satisfactory to the Administrative Agent, (i) for the twelve
        month period preceding the date of such property's admittance as a
        Borrowing Base Property (or if such property has not been in operation
        for twelve months, for the period from the date of its opening through
        the date of its admittance as a Borrowing Base Property) historical
        operating statements and occupancy reports with respect to such property
        (and, if available, historical operating statements and occupancy
        reports with respect to such property for the three year period
        preceding the date of such property's admittance as a Borrowing Base
        Property), together with (ii) operating statements and occupancy reports
        with respect to such property for the first projected year following the
        property's admittance as a Borrowing Base Property.

                                       8
<PAGE>

                (k) The Administrative Agent shall have received, in form and
        substance satisfactory to the Administrative Agent, an environmental
        site assessment report for the property dated not more than twelve (12)
        months prior to the date of the date of the admittance of such property
        as a Borrowing Base Property.

                (l) With respect to each Real Property owned by the Borrower and
        leased to Management Opco, the Administrative Agent shall have received,
        in form and substance satisfactory to the Administrative Agent, a
        subordination of lease agreement from Management Opco with respect to
        such property.

                (m) With respect to each Real Property which has been in
        operation for at least five (5) years, the Administrative Agent shall
        have received, in form and substance satisfactory to the Administrative
        Agent, a current engineering report for the property.

                (n) With respect to each New Property, the Borrower shall,
        subject to the proviso below, provide the Lenders with each of the items
        identified in subsections (b) through (m) above and the Aggregate
        Required Lenders and the Required New Term Loan Lenders shall have
        approved the admittance of such New Property as a Borrowing Base
        Property; provided, however, a Lender's failure to notify the
        Administrative Agent of its objection to the admittance of such New
        Property as a Borrowing Base Property within fifteen (15) days of such
        Lender's receipt of notice from the Administrative Agent of its receipt
        of all of the items identified in subsections (b) through (m) above
        shall be deemed to constitute such Lender's consent to such New
        Property's admittance as a Borrowing Base Property. The Administrative
        Agent agrees to forward to any Lender copies of the items identified in
        subsections (b) through (m) above upon the request of such Lender.

        Notwithstanding the foregoing, the Credit Parties hereby acknowledge and
agree that prior to consummation of the Management Opco Merger (i) any property
which fails to maintain an occupancy rate of at least 75% for two consecutive
fiscal quarters shall no longer be considered a Borrowing Base Property;
provided, however, subject to satisfaction of the conditions set forth in
subsections (a) through (n) above, with respect to any New Property that does
not achieve at least a 75% occupancy level during the six month period
commencing on the date such New Property commences operations, such New Property
shall constitute a Borrowing Base Property during such six month period and 75%
of such New Property's Borrowing Base Value will be included in the Borrowing
Base during such six month period, (ii) the sum of the Borrowing Base Values of
the justice facilities of the Borrower shall not constitute more than five
percent (5%) of the sum of the Borrowing Base Values of the Borrowing Base
Properties and (iii) irrespective of the Borrower's failure to satisfy the
occupancy requirement set forth above as to such below-listed New Properties,
the Borrowing Base shall include 100% of Borrowing Base Value of (A) the,
California City Correctional Facility, located in California City, California
and (B) the Florence Correctional Center, located in Florence, Arizona. In the
event the aggregate value of the justice facilities of the Borrower included in
the Borrowing Base exceeds five percent (5%) of the Borrowing Base, the
Borrowing Base will be reduced by an amount equal to such excess.

        "Borrowing Base Value" means, at any date of determination with respect
to each Borrowing Base Property, an amount for such Borrowing Base Property
equal to the lesser of:

                                       9
<PAGE>

                (a)     45% of the Implied Value of such Borrowing Base
                        Property.

                (b)     the amount of indebtedness payments on which could be
                        covered 2 times by the Adjusted Cash Flow of such
                        Borrowing Base Property assuming (i) an interest rate
                        equal to the greater of (A) the Seven Year Treasury Rate
                        plus two percent (2%) per annum and (B) nine percent
                        (9%) per annum and (ii) a principal mortgage
                        amortization of 20 years.

        For purposes of determining the Borrowing Base Value of any Borrowing
Base Property which has not been operational for four full fiscal quarters, the
Adjusted Cash Flow attributable to such Borrowing Base Property shall be deemed
to be the result obtained by annualizing the components of the actual Adjusted
Cash Flow attributable to such Borrowing Base Property for the period that such
Borrowing Base Property has been operational.

        "Build-to-Suit Capital Expenditures" means capital expenditures
necessary to complete "build-to-suit" contracts entered into with the United
States Bureau of Prisons or any other federal or state governmental agency (such
other federal or state governmental agency to be reasonably satisfactory to the
Required Lenders, the Required Tranche C Term Lenders and the Required New Term
Loan Lenders).

        "Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close, except that, when used in connection with a Eurodollar Loan, such day
shall also be a day on which dealings between banks are carried on in U.S.
dollar deposits in London, England.

        "C Corporation" has the meaning attributed thereto in the Code.

        "Capitalization Rate" means eleven and one-half percent (11.5%).

        "Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.

        "Capital Raising Event" means any combination of the following
transactions, which together result in Net Cash Proceeds to the Borrower of at
least $100,000,000: (i) an offering made by the Borrower to its then-current
common shareholders through the distribution of rights to purchase shares of
common stock of the Borrower (based on each shareholder's then-current pro rata
share of the Borrower's common stock); (ii) an offering by the Borrower of
common or preferred stock (other than Disqualified Stock); (iii) an issuance of
Subordinated PIK Debt (provided that, anything else in this Agreement to the
contrary notwithstanding (including, without limitation, Sections 3.3(b)(ii) and
8.18), the Net Cash Proceeds of any issuance of Subordinated PIK debt shall be
immediately applied to repay the Loans in the order and in accordance with the
procedures set forth in Section 3.3(b)(iii)); or (iv) certain sales of assets of
the Borrower including, without limitation, the Headquarters Sale-Leaseback, but
excluding the Agecroft Securitization, in each case in form and substance
satisfactory to the Administrative Agent (provided that, anything else in this
Agreement to the contrary notwithstanding (including, without limitation,
Sections 3.3(b)(ii), 7.22 and 8.18), the Net Cash Proceeds of any such asset
sales shall be immediately applied to repay the Loans in the order and in
accordance with the procedures set forth in Section 3.3(b)(iii)); provided that,
in the case of each of (i) - (iv) above, (x) each such transaction shall be
consummated in accordance with all applicable federal and

                                       10
<PAGE>

state laws, and (y) the proceeds of each such transaction shall be applied in
accordance with the terms and conditions of this Agreement (including, without
limitation, as set forth above in this definition.

        "Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.

        "Cash Collateral Account" shall have the meaning assigned to such term
in Section 3.3(b).

        "Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) U.S. dollar denominated
time deposits and certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any Revolving Lender or any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 270 days from
the date of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of acquisition, (d)
repurchase agreements entered into by any Person with a bank or trust company
(including any of the Lenders) or recognized securities dealer having capital
and surplus in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which such Person shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least 100% of
the amount of the repurchase obligations and (e) Investments, classified in
accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).

        "CCA" means the entity formerly known as Corrections Corporation of
America (but not CCA of Tennessee), a Tennessee corporation, which was merged
with and into the Borrower on December 31, 1998, pursuant to the Merger
Agreement.

        "CCA of Tennessee" means CCA of Tennessee, Inc. (formerly known as
Corrections Corporation of America (but not CCA)), a Tennessee corporation.

        "CCA of Tennessee Credit Agreement" means that certain Loan and Security
Agreement, dated as of September 15, 2000, by and among, CCA of Tennessee, as
borrower, certain subsidiaries of CCA of Tennessee party thereto from time to
time as guarantors, the financial institutions signatories thereto and LCPI, as
agent.

                                       11
<PAGE>

        "Change of Control" means the occurrence of any of the following events:
(i) any Person or two or more Persons acting in concert shall have acquired
"beneficial ownership," directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of, control
over, Voting Stock of the Borrower (or other securities convertible into such
Voting Stock) representing 9% or more of the combined voting power of all Voting
Stock of the Borrower, (ii) during any period of up to 24 consecutive months
(such period commencing at any time on or after the Original Closing Date),
individuals who at the beginning of such 24 month period were directors of the
Borrower (together with any new director whose election by the Borrower's Board
of Directors or whose nomination for election by the Borrower's shareholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors of the Borrower then in office, (iii)
there shall have occurred under any indenture or other instrument evidencing any
Indebtedness in excess of $1,000,000 any "change of control" (as defined in such
indenture or other evidence of Indebtedness) obligating a Credit Party to
repurchase, redeem or repay (or offer to repurchase, redeem or repay) all or
part of the Indebtedness or capital stock provided for therein or (iv) subject
to Section 9.1(q), any of the Chairman of the Board of Directors, Chief
Executive Officer or President of the Borrower as of the Second Restatement
Effective Date ceases to continue to hold such office or continue with
management responsibilities substantially similar to those existing on the
Second Restatement Effective Date and a replacement for such Person reasonably
satisfactory to the Aggregate Required Lenders and the Required New Term Loan
Lenders and possessing substantially similar qualifications and reputation to
the Person being replaced is not employed by the Borrower within ninety (90)
days after such first Person ceases to hold such office or continue to have such
management responsibilities. As used herein, "beneficial ownership" shall have
the meaning provided in Rule 13d-3 of the Securities and Exchange Commission
under the Securities Act of 1934.

        "Closing Date" means the Original Closing Date.

        "Co-Agent" shall, on and after the Second Restatement Effective Date,
have no meaning under this Credit Agreement or under any other Credit Document.

        "Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.

        "Collateral" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral Documents.

        "Collateral Documents" means a collective reference to the Security
Agreement, the Pledge Agreement, the Mortgages and such other documents executed
and delivered in connection with the attachment and perfection of the
Administrative Agent's security interests and liens arising thereunder,
including, without limitation, UCC financing statements and patent and trademark
filings.

                                       12
<PAGE>

        "Commitment" means the Revolving Commitment, the Swingline Commitment,
the LOC Commitment, the Term Loan Commitment, the Tranche C Term Loan Commitment
and the New Term Loan Commitment.

        "Consolidated Adjusted EBITDA" means, for any period, the amount equal
to the sum of (a) Consolidated Net Income for such period, plus (b) an amount
which, in the determination of Consolidated Net Income for such period, has been
deducted for (i) Consolidated Interest Expense, (ii) total federal, state, local
and foreign income, value added and similar taxes (including the write-off of
deferred taxes) and (iii) depreciation and amortization expense, all as
determined in accordance with GAAP less (c) actual management fees paid by the
Consolidated Parties during such period less (d) Consolidated Capital
Expenditures for such period with respect to Real Properties in operation less
(e) an amount which, in the determination of Consolidated Net Income for such
period, is attributable to rent payments earned under the Lease Agreements but
not yet paid in cash, all as determined in accordance with GAAP. For purposes of
calculating the Leverage Ratio, with respect to any Real Property which has not
been operational for an entire twelve month period, Consolidated Adjusted EBITDA
attributable to such Real Property shall be deemed to be the result obtained by
annualizing the components of the actual Consolidated Adjusted EBITDA
attributable to such Real Property.

        "Consolidated Capital Expenditures" means, for any period, all capital
expenditures of the Consolidated Parties for the maintenance, repair and upkeep
of existing properties, determined on a consolidated basis for such period in
accordance with GAAP.

        "Consolidated Current Assets" means at any date, all amounts (other than
cash and Cash Equivalents) which would, in conformity with GAAP, be set forth
under the caption "total current assets" (or any like caption) on a consolidated
balance sheet of the Consolidated Parties at such date.

        "Consolidated Current Liabilities" means at any date, all amounts that
would, in conformity with GAAP, be set forth under the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Consolidated Parties at such date, but excluding the current portion of any
Funded Debt of the Consolidated Parties.

        "Consolidated Interest Expense" means, for any period, interest expense
(including without limitation any fees payable in respect of any Hedging
Agreement), the interest component under Capital Leases, the implied interest
component under Synthetic Leases and dividends paid on preferred stock) of the
Consolidated Parties on a consolidated basis for such period, as determined in
accordance with GAAP.

        "Consolidated Net Income" means, for any period, net income (excluding
extraordinary items) after taxes for such period of the Consolidated Parties on
a consolidated basis, as determined in accordance with GAAP.

        "Consolidated Net Worth" means, as of any date, shareholders' equity or
net worth of the Consolidated Parties minus the sum of all rent payments that
have been earned under the Lease Agreements but not paid in cash as a result of
an agreement to defer the payment of such rent until a later date.

        "Consolidated Parties" means a collective reference to the Borrower and
its Restricted Subsidiaries, and "Consolidated Party" means any one of them. For
purposes of this Credit

                                       13
<PAGE>

Agreement, any Special Affiliates of the Borrower shall not be considered a
Consolidated Party, notwithstanding the treatment of such Special Affiliates
under GAAP (including without limitation any requirement that such Special
Affiliates be accounted for as a Subsidiary for purposes of consolidated
financial statements under GAAP).

        "Consolidated Working Capital" means at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.

        "Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, any related
commitment letters, the Collateral Documents and all other related agreements
and documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time), and "Credit
Document" means any one of them.

        "Credit Parties" means a collective reference to the Borrower and the
Guarantors, and "Credit Party" means any one of them.

        "Credit Party Obligations" means, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including any Issuing Lender),
the Administrative Agent, the Documentation Agent, the Syndication Agent, the
Co-Agent and the Lead Arranger whenever arising, under this Credit Agreement,
the Notes, the Collateral Documents or any of the other Credit Documents
(including, but not limited to, any interest accruing after the occurrence of a
Bankruptcy Event with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (ii) all liabilities
and obligations, whenever arising, owing from any Credit Party to any Lender, or
any Affiliate of a Lender, arising under any Hedging Agreement.

        "Debt Service Coverage Ratio" means, as of the end of each fiscal
quarter of the Consolidated Parties for the fiscal quarter ending on such date,
the ratio of (a) the sum of the Adjusted Cash Flow for each of the Borrowing
Base Properties for the applicable period, minus (in respect of any fiscal
quarter ended after June 30, 1999) any Tenant Incentive Fees incurred or paid by
the Borrower during such period, to (b) Implied Debt Service for the applicable
period. The Adjusted Cash Flow for any fiscal quarter for any Borrowing Base
Property that has been operational for less than the entire fiscal quarter shall
be determined by giving pro forma effect to the components of Adjusted Cash Flow
as if such Borrowing Base Property had been operational from the first day of
such fiscal quarter.

        "Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.

        "Defaulting Lender" means, at any time, any Lender that (a) has failed
to make a Loan or purchase a Participation Interest required pursuant to the
terms of this Credit Agreement within one Business Day of when due, (b) other
than as set forth in (a) above, has failed to pay to the Administrative Agent or
any Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement within one Business Day of when due, unless such amount is subject to
a good faith dispute or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or with respect to which (or with respect to
any of assets of which) a receiver, trustee or similar official has been
appointed.

                                       14
<PAGE>

        "Disqualified Stock" means any Capital Stock of any Credit Party that
any Credit Party is or, upon the passage of time or the occurrence of any event
(in each case prior to December 31, 2006), may become obligated to redeem,
purchase, retire, defease or otherwise make any payment in respect of, in
consideration other than Capital Stock (other than Disqualified Stock).

        "Documentation Agent" shall have the meaning assigned to such term in
the preamble hereto, together with any successors and assigns.

        "Dollars" and "$" means dollars in lawful currency of the United States
of America.

        "Domestic Subsidiary" means, with respect to any Person, any Subsidiary
of such Person which is incorporated or organized under the laws of any State of
the United States or the District of Columbia.

        "Duff & Phelps" means Duff & Phelps Credit Rating Co., or any successor
or assignee of the business of such entity in the business of rating securities.

        "EBITDA Reduction Amount" means, with respect to any Asset Disposition,
the amount of Post Merger EBITDA attributable to the assets sold in such Asset
Disposition in the fiscal quarter immediately preceding such Asset Disposition,
in accordance with GAAP.

        "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
and (iii) any other Person approved by the Administrative Agent (such approval
not to be unreasonably withheld or delayed) and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in accordance
with Section 11.3, the Borrower (such approval not to be unreasonably withheld
or delayed by the Borrower and such approval to be deemed given by the Borrower
if no objection is received by the assigning Lender and the Administrative Agent
from the Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower); provided,
however, that the approval of the Administrative Agent and the Borrower with
respect to any proposed Eligible Assignee of a Term Loan, Tranche C Term Loan or
New Term Loan is not required and provided, further, that neither the Borrower
nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.

        "Eligible Real Estate" means, as of any date of determination, any
correctional, justice or detention property that satisfies the following
criteria: (a) except as provided in clause (c) below, the property must be
located in the United States or a United States territory, (b) except as
provided in clause (c) below, the property must be wholly owned by the Borrower
in fee or consist of a leasehold property of the Borrower pursuant to a lease
acceptable to the Required Lenders, the Required Tranche C Term Lenders and the
Required New Term Loan Lenders) in their reasonable discretion, (c) with respect
to any New Property, (i) if the property is not wholly owned by the Borrower, it
must be located in the United States or a United States territory or (ii) if the
property is not located in the United States or a United States territory, it
must be wholly owned by the Borrower; provided that the value of all such
properties included in this clause (c) may not exceed five percent (5%) of Total
Value, (d) the property must be unencumbered other than any lien securing the
Credit Party Obligations, (e) the property must be free of structural and title
defects and have passed a structural inspection conducted by an architect or
engineer engaged by the Administrative Agent or the Borrower shall have provided
to the Lenders other written evidence of structural integrity with respect to
the property reasonably acceptable in form and substance to the Required
Lenders, the Required Tranche C Term Lenders and the Required New Term Loan
Lenders, (f) the Lenders must have received an environmental site assessment

                                       15
<PAGE>

report for the property in form and substance reasonably satisfactory to the
Required Lenders, the Required Tranche C Term Lenders and the Required New Term
Loan Lenders dated not more than twelve (12) months prior to the acquisition of
such property by the Borrower, (g) the property must be fully operating and
generating revenue, (h) any lessee leasing the property from the Borrower must
be in compliance with all material terms of the facility management agreement
between such lessee and the appropriate governmental entity, (i) the Borrower
must have leased the property to a lessee or sublessee (where applicable)
reasonably acceptable to the Required Lenders, the Required Tranche C Term
Lenders and the Required New Term Loan Lenders pursuant to the terms and
conditions of a lease agreement reasonably acceptable in form and substance to
the Required Lenders, the Required Tranche C Lenders and the Required New Term
Loan Lenders and (j) the Borrower and lessee or sublessee (where applicable) of
the property must be in compliance with all material terms and conditions
contained in the lease or sublease (where applicable) agreement between the
Borrower and such lessee or sublessee (where applicable). For purposes of this
definition, the parties hereby agree that a Lender's failure to notify the
Administrative Agent of its objection to any of the items identified in this
definition within fifteen (15) days of notice from the Administrative Agent of
its receipt of all items identified in clauses (e), (f) and (i) of this
definition shall be deemed to constitute such Lender's approval of such items.
The Administrative Agent agrees to forward to any Lender copies of the items
identified in clauses (e), (f) and (i) upon the request of such Lender.

        "Environmental Laws" means any and all lawful and applicable Federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.

        "Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

        "Equity Issuance" means any issuance by any Consolidated Party to any
Person which is not a Credit Party of (a) shares of its Capital Stock, (b) any
shares of its Capital Stock pursuant to the exercise of options or warrants or
(c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.

        "ERISA Affiliate" means an entity which is under common control with any
Consolidated Party within the meaning of Section 4001(a)(14) of ERISA, or is a
member of a group which includes any Consolidated Party and which is treated as
a single employer under Sections 414(b) or (c) of the Code.

                                       16

<PAGE>

        "ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by any Consolidated Party or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (iii) the distribution
of a notice of intent to terminate or the actual termination of a Plan pursuant
to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA; (v) any event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or partial withdrawal of any
Consolidated Party or any ERISA Affiliate from a Multiemployer Plan; (vii) the
conditions for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA.

        "Eurodollar Loan" means any Loan that bears interest at a rate based
upon the Eurodollar Rate.

        "Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal to the quotient
obtained by dividing (a) the Interbank Offered Rate for such Eurodollar Loan for
such Interest Period by (b) 1 minus the Eurodollar Reserve Requirement for such
Eurodollar Loan for such Interest Period.

        "Eurodollar Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurodollar liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Eurodollar Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Requirement.

        "Event of Default" shall have the meaning assigned to such term in
Section 9.1.

        "Excess Cash Flow" means for either of (x) the first and second fiscal
quarters of any fiscal year of the Consolidated Parties or (y) the third and
fourth fiscal quarters of any fiscal year of the Consolidated Parties, the
excess, if any, of Post Merger EBITDA for such two fiscal quarters plus any
decrease in Consolidated Working Capital during such two fiscal quarters, minus
(i) the aggregate amount of cash actually paid by the Consolidated Parties
during such two fiscal quarters on account of capital expenditures, (ii) the
aggregate amount of cash actually paid by the Consolidated Parties during such
two fiscal quarters on account of taxes, (iii) any increase in Consolidated
Working Capital during such two fiscal quarters, (iv) any regularly-scheduled
amortization of the Term Loans, the Tranche C Term Loans and the New Term Loans
during such two fiscal quarters, (v) Consolidated Interest Expense for such two
fiscal quarters, and (vi) any repayment of Indebtedness during such two fiscal
quarters (other than any repayment of

                                       17
<PAGE>

current Indebtedness and any mandatory repayment of Term Loans, Tranche C Term
Loans and New Term Loans during such two fiscal quarters).

        "Excluded CCA of Tennessee Accounts" shall have the meaning assigned to
such term in Section 7.23.

        "Excluded Credit Party Accounts" shall have the meaning assigned to such
term in Section 7.23.

        "Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief financial
officer or treasurer of such Person.

        "Existing Properties" shall have the meaning assigned to such term in
Section 5.1(f)(i).

        "Fees" means all fees payable pursuant to Section 3.5.

        "Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by the Administrative Agent.

        "First Amended and Restated Credit Agreement" shall have the meaning
assigned to such term in the preamble hereto.

        "First Amendment and Restatement Subsidiary Guarantors" has the meaning
assigned to such term in the preamble hereto.

        "First Union Letters of Credit" has the meaning assigned to such term in
clause (ix) of the definition of "Permitted Liens."

        "Fitch" means Fitch Investors Service, or any successor or assignee of
the business of such entity in the business of rating securities.

        "Fixed Charge Coverage Ratio" means, as of the end of each fiscal
quarter of the Consolidated Parties, for the twelve month period ending on such
date, the ratio of (i) Post Merger EBITDA for such period minus capital
expenditures made during such period to (ii) cash interest expense for such
period plus cash taxes actually paid during such period plus cash dividends
actually paid during such period on the Borrower's preferred stock plus any
regularly-scheduled amortization of the Term Loans, the Tranche C Term Loans and
New Term Loans during such period.

        "Foreign Subsidiary" means, with respect to any Person, any Subsidiary
of such Person other than a Domestic Subsidiary; provided, however, that a
Foreign Subsidiary that is treated as a pass-through entity for United States
federal income tax purposes shall be deemed a Domestic

                                       18
<PAGE>

Subsidiary for purposes of this Credit Agreement and the other Credit Documents
while so treated.

        "Funded Debt" means, as to any Person, all Indebtedness of such Person
of the types described in clauses (a) through (d) and (m) and (n) of the
definition of "Indebtedness" in this Section 1.1.

        "GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section 1.3.

        "Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.

        "Gross Lease Revenue" shall have the meaning given to such term in the
definition of Adjusted Cash Flow.

        "Guarantors" means a collective reference to each of the Subsidiary
Guarantors, together with their successors and permitted assigns, and
"Guarantor" means any one of them.

        "Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any Property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount of
the Indebtedness in respect of which such Guaranty Obligation is made.

        "Headquarters Sale-Leaseback" means the sale by the Borrower of the
Borrower's headquarters building in Nashville, Tennessee, which results in Net
Cash Proceeds to the Borrower of at least $12,000,000, and the subsequent
leasing of such headquarters by the Borrower from the purchaser thereof, all on
terms and conditions reasonably satisfactory to the Required Lenders, the
Required Tranche C Term Lenders and the Required New Term Loan Lenders.

        "Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement between the Borrower and any Lender, or any
Affiliate of a Lender.

        "Implied Debt Service" means, the scheduled debt payments that would
have been due on the average outstanding loan balance under this Credit
Agreement for the prior fiscal quarter assuming a principal mortgage
amortization of 20 years and assuming an interest rate equal to the greater of
(i) nine percent (9%) per annum and (b) the Seven Year Treasury Rate plus two
percent (2.0%) per annum.

                                       19
<PAGE>

        "Implied Value" means, with respect to any Real Property on any date, an
amount equal to the Adjusted Cash Flow of such Real Property for the four full
fiscal quarters most recently ended on or prior to such date, divided by the
Capitalization Rate. For purposes of determining the Implied Value of any Real
Property which has not been operational for four full fiscal quarters, the
Adjusted Cash Flow attributable to such Real Property shall be deemed to be the
result obtained by annualizing the components of the actual Adjusted Cash Flow
attributable to such Real Property for the period that such Real Property has
been operational.

        "Indebtedness" means, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such Person (other
than trade debt incurred in the ordinary course of business and due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, Property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
Guaranty Obligations of such Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedging Agreements and similar arrangements whether or not
permitted under this Credit Agreement and whether or not any Lender or any
Affiliate of any Lender is a party thereto, (j) all obligations of such Person
to repurchase any securities which repurchase obligation is related to the
issuance thereof, (k) the undrawn face amount of all standby letters of credit
issued, trade letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (l) all preferred Capital Stock
issued by such Person and required by the terms thereof to be redeemed, or for
which mandatory sinking fund payments are due, by a fixed date occurring less
than twelve (12) years after the Restatement Effective Date, (m) all other
obligations of such person under any arrangement or financing structure
classified as debt (for tax purposes) by any nationally recognized rating
agency, (n) the principal portion of all obligations of such Person under
Synthetic Leases and (o) the Indebtedness of any partnership in which such
Person is a general partner, and the Indebtedness of any unincorporated joint
venture in which such Person is a joint venturer, to the extent that such Person
would, either pursuant to contract or by operation of law, be liable for such
Indebtedness.

        "Intellectual Property" shall have the meaning assigned to such term in
Section 6.17.

        "Interbank Offered Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if

                                       20
<PAGE>

necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).

        "Interest Coverage Ratio" means, as of the end of each fiscal quarter of
the Consolidated Parties for the twelve month period ending on such date, the
ratio of Consolidated Adjusted EBITDA for such period to Consolidated Interest
Expense for such period. Notwithstanding the foregoing, for purposes of
calculating the Interest Coverage Ratio as of the end of any fiscal quarter
ending within twelve months of the Original Closing Date, Interest Coverage
Ratio shall mean, the ratio of Consolidated Adjusted EBITDA for the period from
the Original Closing Date through such applicable fiscal quarter end to
Consolidated Interest Expense for the period from the Original Closing Date
through such applicable fiscal quarter end.

        "Interest Payment Date" means (a) as to Base Rate Loans, the last day of
each calendar month, the date of repayment of principal of such Loan and the
Revolving Loan Maturity Date, Term Loan Maturity Date, Tranche C Term Loan
Maturity Date or New Term Loan Maturity Date, as applicable, and (b) as to
Eurodollar Loans, the last day of each applicable Interest Period, the date of
repayment of principal of such Loan and the Revolving Loan Maturity Date, Term
Loan Maturity Date, Tranche C Term Loan Maturity Date or New Term Loan Maturity
Date, as applicable, and in addition where the applicable Interest Period for a
Eurodollar Loan is greater than three months, then also the date three months
from the beginning of the Interest Period and each three months thereafter.

        "Interest Period" means, as to Eurodollar Loans, a period of one, two,
three or six months' duration, as the Borrower may elect, commencing, in each
case, on the date of the borrowing (including continuations and conversions
thereof); provided, however, (a) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (b) no Interest Period shall extend beyond the Revolving Loan Maturity
Date, Term Loan Maturity Date, Tranche C Term Loan Maturity Date or New Term
Loan Maturity Date, as applicable, (c) with regard to the Term Loans, no
Interest Period shall extend beyond any Principal Amortization Payment Date
unless the portion of the Term Loans comprised of Base Rate Loans together with
the portion of the Term Loans comprised of Eurodollar Loans with Interest
Periods expiring on or prior to such Principal Amortization Payment Date is at
least equal to the amount of such Principal Amortization Payment due on such
date, (d) with regard to the Tranche C Term Loans, no Interest Period shall
extend beyond any Principal Amortization Payment Date unless the portion of the
Tranche C Term Loans comprised of Base Rate Loans together with the portion of
Tranche C Term Loans comprised of Eurodollar Loans with Interest Periods
expiring on or prior to such Principal Amortization Payment Date is at least
equal to the amount of such Principal Amortization Payment due on such date, (d)
with regard to the New Term Loans, no Interest Period shall extend beyond any
Principal Amortization Payment Date unless the portion of the New Term Loans
comprised of Base Rate Loans together with the portion of New Term Loans
comprised of Eurodollar Loans with Interest Periods expiring on or prior to such
Principal Amortization Payment Date is at least equal to the amount of such
Principal Amortization Payment due on such date and (e) where an Interest Period
begins on a day for which there is no

                                       21
<PAGE>

numerically corresponding day in the calendar month in which the Interest Period
is to end, such Interest Period shall end on the last Business Day of such
calendar month.

        "Investment" means (a) the acquisition (whether for cash, property,
services, assumption of Indebtedness, securities or otherwise) of assets,
Capital Stock, bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of any Person or (b) any deposit with,
or advance, loan or other extension of credit to, any Person (other than
deposits made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution to or
investment in any Person, including, without limitation, any Guaranty
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person.

        "Issuing Lender" means any Revolving Lender selected by the Borrower
with the consent of such Revolving Lender and with the approval of the
Administrative Agent (such approval not to be unreasonably withheld).

        "Issuing Lender Fees" shall have the meaning assigned to such term in
Section 3.5(c)(iii).

        "Joinder Agreement" means a Joinder Agreement substantially in the form
of Exhibit 7.12 hereto, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 7.12.

        "LTM Post Merger EBITDA" shall have the meaning assigned to such term in
Section 7.11(i).

        "Lead Arranger" shall have the meaning assigned to such term in the
preamble hereto, together with any successors and assigns.

        "Lease Agreement" shall have the meaning assigned to such term in
Section 9.1(l).

        "Lender" means any of the Persons identified as a "Lender" on Schedule
2.1(a) hereto, and any Person which may become a Lender by way of assignment in
accordance with the terms hereof, together with their successors and permitted
assigns.

        "Letter of Credit" means any letter of credit issued by an Issuing
Lender for the account of the Borrower in accordance with the terms of Section
2.2.

        "Leverage Ratio" means, with respect to the Consolidated Parties on a
consolidated basis as of the last day of any fiscal quarter, the ratio of (a)
Total Indebtedness on the last day of such fiscal quarter to (b) Consolidated
Adjusted EBITDA for the twelve month period ending on the last day of such
fiscal quarter; provided, however, for purposes of calculating the Leverage
Ratio as of the end of any fiscal quarter ending within twelve months of the
Original Closing Date, Consolidated Adjusted EBITDA for the applicable period
shall be deemed to be the result obtained by annualizing the components of
Consolidated Adjusted EBITDA for the period commencing on the Original Closing
Date and ending as of the end of such fiscal quarter.

        "Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform

                                       22
<PAGE>

Commercial Code as adopted and in effect in the relevant jurisdiction or other
similar recording or notice statute, and any lease in the nature thereof).

        "Litigation Settlement Debt" means the issuance by the Borrower of eight
percent (8%) zero coupon subordinate promissory notes in an aggregate principal
amount not to exceed twenty-nine million dollars ($29,000,000) in settlement of
claims pending against the Borrower as contemplated by that certain Amended
Stipulation of Settlement, dated as of January 7, 2001, among legal counsel for
the Borrower and various attorneys party thereto as legal counsel for the
plaintiffs in such claims; provided that such Litigation Settlement Debt (i)
shall be subordinate to the prior payment in full in cash of the Credit Party
Obligations and all other Indebtedness of the Borrower in accordance with the
Litigation Settlement Debt Subordination Provisions and otherwise in a manner
reasonably satisfactory to the Administrative Agent; (ii) shall have a maturity
date not earlier than January 2, 2009; (iii) shall be fully extinguished if, at
any time prior to January 2, 2009, the trading price of the Borrower's publicly
traded common stock is greater than $16.30 for any consecutive period of fifteen
(15) trading days following the issuance of the Litigation Settlement Debt; (iv)
on January 2, 2009, if such Litigation Settlement Debt has not been extinguished
pursuant to (iii) above, shall be reduced by an amount equal to the Stock Price
Premium upon the maturity of the Litigation Settlement Debt; and (v) shall
otherwise be satisfactory to the Administrative Agent.

        "Litigation Settlement Debt Subordination Provisions" means (i) no
covenants or other affirmative or negative obligations (other than the promise
to pay when due); (ii) no defaults or events of default except failure to pay
when due; (iii) no right to payment of principal or interest so long as any
Credit Party Obligations have not been paid in full in cash; (iv) no
acceleration, collection or other rights or remedies upon a default or event of
default so long as any Credit Party Obligations have not been paid in full in
cash; (v) no right or ability to amend or modify the Litigation Settlement Debt
without the consent of the Administrative Agent, which consent may be granted or
withheld in the Administrative Agent's sole and absolute discretion; (vi) no
right or ability to object or consent to any amendments, modifications, or other
changes to, or refinancings or waivers of the Credit Party Obligations or any of
the Credit Documents, or the exercise or non-exercise of any rights or remedies
by any of the Secured Parties; (vii) no right or ability to challenge the
Secured Parties' claims or liens or the Litigation Settlement Debt Subordination
Provisions; (viii) the right of the Administrative Agent, as attorney-in-fact
for the holders of the Litigation Settlement Debt, to take any actions in the
name of such holders to effectuate the provisions and intent of the Litigation
Settlement Debt Subordination Provisions; (ix) the continued applicability and
enforceability of all of the Litigation Settlement Debt Subordination Provisions
subsequent to the occurrence of a Bankruptcy Event with respect to the Borrower;
(x) the right of the Secured Parties to vote the claims of the holders of the
Litigation Settlement Debt in any proceeding arising out of or relating to a
Bankruptcy Event of any Credit Party with respect to any matter to be voted
upon, including, without limitation, acceptance or rejection of a plan of
reorganization or election of a trustee; (xi) in connection with any Bankruptcy
Event with respect to the Borrower, assignment to the Secured Parties of the
right to file a proof of claim on behalf of the holders of the Litigation
Settlement Debt and agreement not to file a competing claim; (xii) agreement by
the holders of the Litigation Settlement Debt to hold in trust for the Secured
Parties and immediately to remit to the Administrative Agent any payment
received by them from the Borrower in violation of the Litigation Settlement
Debt Subordination Provisions; (xiii) agreement by the holders of the Litigation
Settlement Debt that, if there occurs a Bankruptcy Event with respect to the
Borrower, such holders will not (A) object to any plan of reorganization or
disclosure statement that is supported by the Secured Parties, (B)

                                       23
<PAGE>

propose or support any plan of reorganization not supported by the Secured
Parties, (C) seek any dismissal of a bankruptcy case or conversion of the case
to a case under a different chapter of the Bankruptcy Code other than in a
manner expressly consented to by the Secured Parties, (D) seek the appointment
of a trustee or examiner, (E) serve on any official committee of creditors
appointed in any proceeding relating to such Bankruptcy Event, or (F) file any
motion, pleading or other document or appear in any capacity in a bankruptcy
case without the consent of the Secured Parties; and (xiv) other subordination
provisions (both pre-bankruptcy and post-bankruptcy) required by the
Administrative Agent.

        "Loan" or "Loans" means the Revolving Loans, the Term Loans, the Tranche
C Term Loans and/or the New Term Loans (or a portion of any Revolving Loan, Term
Loan, Tranche C Term Loan or New Term Loan bearing interest at the Adjusted Base
Rate or the Adjusted Eurodollar Rate) and/or any Swingline Loans individually or
collectively, as appropriate.

        "LOC Commitment" means the commitment of the Issuing Lenders to issue
Letters of Credit, and to honor payment obligations under, Letters of Credit
hereunder in an aggregate face amount at any time outstanding (together with the
amounts of any unreimbursed drawings thereon) of up to the LOC Committed Amount
and with respect to each Revolving Lender, the commitment of each Revolving
Lender to purchase participation interests in the Letters of Credit.

        "LOC Committed Amount" shall have the meaning assigned to such term in
Section 2.2.

        "LOC Documents" means, with respect to any Letter of Credit, such Letter
of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or at risk or (ii) any collateral security for such
obligations.

        "LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by an Issuing Lender but
not theretofore reimbursed by the Borrower.

        "LTM EBITDA Reduction Amount" means, with respect to any Asset
Disposition, the amount of Post Merger EBITDA attributable to the assets sold in
such Asset Disposition in the four full fiscal quarters immediately preceding
such Asset Disposition, in accordance with GAAP.

        "Management Opco" means Corrections Corporation of America (formerly
Correctional Management Services Corporation (and not CCA)), a Tennessee
corporation that was merged with and into CCA of Tennessee pursuant to the
Management Opco Merger.

        "Management Opco Merger" means the merger of Management Opco with and
into CCA of Tennessee, with CCA of Tennessee as the surviving entity, on October
1, 2000.

        "Management Opco Merger Date" means October 1, 2000.

                                       24
<PAGE>

        "Master Lease" means that certain Master Agreement to Lease dated
December 31, 2000 between the Borrower and CCA of Tennessee, as amended or
modified from time to time as provided herein.

        "Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets or liabilities
of the Consolidated Parties taken as a whole or (ii) the rights and remedies of
the Administrative Agent or the other Secured Parties under the Credit
Documents, provided that, for purposes of Sections 5.2(e) and 6.2 only, any
failure to consummate the Pacific Life Investment shall not, in and of itself,
be deemed to constitute a Material Adverse Effect (it being understood that this
proviso shall not apply to any circumstances affecting any of the Consolidated
Parties that may have given rise to such failure).

        "Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.

        "MDP" means MDP Ventures IV, LLC, together with any other or successor
holder of the notes issued under the MDP Note Purchase Agreement.

        "MDP Note Purchase Agreement" means that certain note purchase
agreement, dated as of December 31, 1998, as amended on June 30, 2000, between
the Borrower and MDP, relating to the Borrower's 10.0% convertible subordinated
notes due December 31, 2008.

        "Merger" means, collectively, those certain mergers of each of CCA and
PZN with and into the Borrower pursuant to the terms and conditions of the
Merger Agreement, which were consummated on December 31, 1998, and January 1,
1999, respectively.

        "Merger Agreement" means that certain Amended and Restated Agreement and
Plan of Merger among the Borrower, PZN and CCA dated September 29, 1998.

        "Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.

        "Mortgage" shall have the meaning given to such term in Section 5.1(f).

        "Mortgage Policy" shall have the meaning given to such term in Section
5.1(f).

        "Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.

        "Multiple Employer Plan" means a Plan which any Consolidated Party or
any ERISA Affiliate and at least one employer other than the Consolidated
Parties or any ERISA Affiliate are contributing sponsors.

        "NationsBank" means NationsBank, N.A. (now known as Bank of America,
N.A.), and its successors.

        "NationsBank Letters of Credit" has the meaning assigned to such term in
clause (ix) of the definition of "Permitted Liens."

                                       25
<PAGE>

        "Net Cash Proceeds" means (i) the aggregate cash proceeds received by
the Consolidated Parties in respect of any incurrence of Indebtedness under
Section 8.1(e), any Equity Issuance or any Asset Disposition, net of (a) direct
costs (including, without limitation, legal, accounting and investment banking
fees, and sales commissions) and (b) taxes paid or payable as a result thereof
and (ii) any cash amounts received (or deemed received) by the Borrower in
repayment of the Agecroft Note or otherwise in connection with the Agecroft
Securitization; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received by the Consolidated Parties in any of the
transactions described above.

        "Net Worth" means, as of any date, shareholders' equity or net worth of
the Borrower minus the sum of all rent payments that have been earned under the
Lease Agreements but not paid in cash as a result of an agreement to defer the
payment of such rent until a later date.

        "New CEO" shall have the meaning assigned to such term in Section
9.1(q).

        "New Properties" means any real property asset owned by the Borrower or
any leasehold estate of the Borrower (in each case other than those real
property assets and leasehold estates listed on Schedule 5.1(f)(i)) which, in
either case, qualifies as a parcel of Eligible Real Estate and satisfies each of
the conditions identified in the definition of "Borrowing Base Properties".

        "New Term Loan" shall have the meaning assigned to such term in Section
2.6(a).

        "New Term Loan Committed Amount" means TWO HUNDRED SIXTY NINE MILLION
FOUR HUNDRED NINE THOUSAND NINE HUNDRED SIXTY THREE DOLLARS AND TWENTY CENTS
($269,409,963.20).

        "New Term Loan Commitment" means, with respect to each New Term Loan
Lender, the commitment of such New Term Loan Lender to make its portion of the
New Term Loan in a principal amount equal to such Lenders' New Term Loan
Commitment Percentage of the New Term Loan Committed Amount.

        "New Term Loan Commitment Fee" shall have the meaning assigned to such
term in Section 3.5(f).

        "New Term Loan Commitment Percentage" means, for any New Term Loan
Lender, the percentage identified as its New Term Loan Commitment Percentage in
the records of the Administrative Agent, as such percentage may be modified in
connection with any assignment made in accordance with the provisions of Section
11.3B.

        "New Term Loan Maturity Date" means December 31, 2002.

        "New Term Loan Lenders" means Lenders holding New Term Loan Commitments,
as identified on Schedule 2.1(a), and their successors and assigns.

        "New Term Loans" shall have the meaning assigned to such term in Section
2.6(a).

        "New Term Loan Note" means a promissory note of the Borrower in favor of
a New Term Loan Lender evidencing the New Term Loans provided by such Lender
pursuant to

                                       26
<PAGE>

Section 2.6, as such promissory note may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.

        "Non-Conforming Investments" means Investments by a Consolidated Party
in undeveloped land, non-income producing properties, properties not
constituting correctional, detention or justice facilities or any other
investments not related to the ownership of correctional, justice or detention
facilities.

        "Non-Recourse Debt" means Indebtedness (i) as to which neither the
Borrower nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) other than a pledge of the equity interests of any
Unrestricted Subsidiary, (b) is directly or indirectly liable (as a guarantor or
otherwise) other than by virtue of a pledge of the equity interests of any
Unrestricted Subsidiary, or (c) constitutes the lender; (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against any Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Obligations) of the Borrower or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to which the
lenders thereunder will not have any recourse to the Capital Stock or assets of
the Borrower or any of its Restricted Subsidiaries (other than the equity
interests of any Unrestricted Subsidiary).

        "Non-U.S. Lender" shall have the meaning assigned to such term in
Section 3.11(d).

        "Note" or "Notes" means the Revolving Notes, the Swingline Notes, the
Term Notes, the Tranche C Term Notes and/or the New Term Loan Notes, if any,
individually or collectively, as appropriate.

        "Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.6(b), as required by Section 2.6(b).

        "Notice of Extension/Conversion" means the written notice of extension
or conversion in substantially the form of Exhibit 3.2, as required by Section
3.2.

        "Obligations" means, collectively, the Revolving Loans, the Swingline
Loans, the LOC Obligations, the Term Loans, the Tranche C Term Loans and the New
Term Loans.

        "Operating Lease" means, as applied to any Person, any lease (including,
without limitation, leases which may be terminated by the lessee at any time) of
any Property (whether real, personal or mixed) which is not a Capital Lease
other than any such lease in which that Person is the lessor.

        "Original Administrative Agent" shall mean NationsBank, in its capacity
as administrative agent under the Original Credit Agreement.

        "Original Closing Date" shall mean January 1, 1999.

        "Original Credit Agreement" shall mean the Credit Agreement, dated as of
January 1, 1999, as heretofore amended, modified, restated or supplemented prior
to the date hereof, among the Borrower, the subsidiaries of the Borrower party
thereto, the banks and other financial

                                       27

<PAGE>

institutions party thereto as lenders, the Original Administrative Agent, LCPI,
as documentation agent and The Bank of Nova Scotia, as the syndication agent.

        "Original Lenders" shall have the meaning assigned to such term in the
preamble hereto.

        "Original Term Lenders" means the Term Lenders under the First Amended
and Restated Credit Agreement immediately prior to the Second Restatement
Effective Date.

        "Original Tranche C Term Lenders" means the Tranche C Term Lenders under
the First Amended and Restated Credit Agreement immediately prior to the Second
Restatement Effective Date.

        "Other Taxes" shall have the meaning assigned to such term in Section
3.11.

        "Pacific Life Investment" means the cash investment in the Borrower by
Pacific Life Insurance Company and/or existing holders of the Borrower's common
stock of at least $200,000,000, pursuant to the terms and conditions of that
certain Securities Purchase Agreement, dated as of April 5, 2000, and executed
as of April 16, 2000, among the Borrower, certain of the Borrower's
subsidiaries, and Pacific Life Insurance Company, as amended or otherwise
modified with the prior consent of the Required Lenders, the Required Tranche C
Term Lenders and the Required New Term Loan Lenders.

        "Participation Interest" means a purchase by a Lender of a participation
in Letters of Credit or LOC Obligations as provided in Section 2.2 or in any
Loans as provided in Section 3.14.

        "PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.

        "Permitted Investments" means Investments which are either (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made by any
Consolidated Party in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (iii) Investments
consisting of Capital Stock, obligations, securities or other property received
by any Consolidated Party in settlement of accounts receivable (created in the
ordinary course of business); (iv) Investments existing as of the Second
Restatement Effective Date and set forth in Schedule 1.1(b); (v) Investments in
any Credit Party; (vi) Investments consisting of the acquisition of Real
Properties, provided that for any Real Properties located outside of the United
States or a United States territory, the provisions of clause (c) of the
definition of "Eligible Real Estate" are complied with and, if such Investment
is made through a Subsidiary of the Borrower (other than an Unrestricted
Subsidiary), the provisions of Section 7.12 are complied with respect to such
Subsidiary, and (vii) prior to Agecroft's designation as an Unrestricted
Subsidiary hereunder, the Agecroft Investment.

        "Permitted Liens" means:

                (i) Liens in favor of the Administrative Agent for the benefit
        of the Secured Parties to secure the Credit Party Obligations;

                (ii) Liens (other than Liens created or imposed under ERISA) for
        taxes, assessments or governmental charges or levies not yet due or
        Liens for taxes being

                                       28

<PAGE>

        contested in good faith by appropriate proceedings for which adequate
        reserves determined in accordance with GAAP have been established (and
        as to which the Property subject to any such Lien is not yet subject to
        foreclosure, sale or loss on account thereof);

                (iii) statutory Liens of landlords and Liens of carriers,
        warehousemen, mechanics, materialmen and suppliers and other Liens
        imposed by law or pursuant to customary reservations or retentions of
        title arising in the ordinary course of business, provided that such
        Liens secure only amounts not yet due and payable or, if due and
        payable, are unfiled and no other action has been taken to enforce the
        same or are being contested in good faith by appropriate proceedings for
        which adequate reserves determined in accordance with GAAP have been
        established (and as to which the Property subject to any such Lien is
        not yet subject to foreclosure, sale or loss on account thereof);

                (iv) Liens (other than Liens created or imposed under ERISA)
        incurred or deposits made by any Consolidated Party in the ordinary
        course of business in connection with workers' compensation,
        unemployment insurance and other types of social security, or to secure
        the performance of tenders, statutory obligations, bids, leases,
        government contracts, performance and return-of-money bonds and other
        similar obligations (exclusive of obligations for the payment of
        borrowed money);

                (v) Liens in connection with attachments or judgments (including
        judgment or appeal bonds) provided that the judgments secured shall,
        within 30 days after the entry thereof, have been discharged or
        execution thereof stayed pending appeal, or shall have been discharged
        within 30 days after the expiration of any such stay;

                (vi) easements, rights-of-way, restrictions (including zoning
        restrictions), minor defects or irregularities in title and other
        similar charges or encumbrances not, in any material respect, impairing
        the use of the encumbered Property for its intended purposes;

                (vii) leases or subleases granted to others not interfering in
        any material respect with the business of any Consolidated Party;

                (viii) normal and customary rights of setoff upon deposits of
        cash in favor of banks or other depository institutions;

                (ix) Liens on cash held by (A) (i) NationsBank, as issuing
        lender under the Original Credit Agreement, to secure the Borrower's
        obligations in respect of letters of credit issued under the Original
        Credit Agreement and outstanding on the Restatement Effective Date (the
        "NationsBank Letters of Credit") and (ii) First Union National Bank, as
        issuing lender under a predecessor credit agreement to the Original
        Credit Agreement, to secure the Borrower's obligations in respect of
        letters of credit issued under such predecessor credit agreement and
        outstanding on the Restatement Effective Date (the "First Union Letters
        of Credit"), in each case so long as such liens are released within
        ninety (90) days of the Restatement Effective Date and (B) SouthTrust
        Bank, N.A., as issuing lender under the First Amended and Restated
        Credit Agreement, to secure the Borrower's obligations in respect of
        letters of credit issued under the First Amended and

                                       29
<PAGE>

        Restated Credit Agreement and outstanding on the Second Restatement
        Effective Date, so long as such liens relate to an amount not greater
        than $1,250,000;

                (x) Liens existing as of the Original Closing Date and set forth
        on Schedule 1.1(c); provided that (a) no such Lien shall at any time be
        extended to or cover any Property other than the Property subject
        thereto on the Original Closing Date and (b) the principal amount of the
        Indebtedness secured by such Liens shall not be increased, extended,
        renewed, refunded or refinanced;

                (xi) Liens on the assets or Capital Stock of any Unrestricted
        Subsidiary securing the obligations of such Unrestricted Subsidiary or
        any other Unrestricted Subsidiary that owns or is owned by such
        Unrestricted Subsidiary; and

                (xii) Liens on certain government contracts, related accounts
        receivable and other assets of CCA of Tennessee, in each case pledged to
        secure the CCA of Tennessee Credit Agreement.

        "Permitted Unsecured Debt" means Indebtedness incurred after the
Restatement Effective Date pursuant to Section 8.1(e) and issued in a public
offering or Rule 144A transaction.

        "Permitted Unsecured Debt Documents" means the indenture, underwriting
agreement, purchase agreement, registration rights agreement and other
documentation governing any Permitted Unsecured Debt.

        "Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority.

        "Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Consolidated
Party or any ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within the
meaning of Section 3(5) of ERISA.

        "Pledge Agreement" means the amended and restated pledge agreement dated
as of the Restatement Effective Date executed in favor of the Administrative
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.

        "PMI" means PMI Mezzanine Fund, L.P.

        "PMI Note Purchase Agreement" means that certain note purchase
agreement, dated as of December 31, 1998, as amended on June 30, 2000 and on
March 5, 2001, between the Borrower and PMI, relating to the Borrower's 8.0%
Convertible Subordinated Notes due February 28, 2005.

        "Post Merger Adjusted Cash Flow" means, with respect to any Real
Property, as of the end of each fiscal quarter of the Consolidated Parties, Post
Merger EBITDA (as herein defined) for the fiscal quarter ending on such date
with respect to such Real Property only.

                                       30
<PAGE>

        "Post Merger Borrowing Base Value" means, at any date of determination
with respect to each Borrowing Base Property, an amount for such Borrowing Base
Property equal to 75% of the Post Merger Implied Value of such Borrowing Base
Property.

        "Post Merger EBITDA" shall mean for any fiscal period, an amount equal
to (a) Consolidated Net Income for such period, minus (b) the sum of (i) income
tax credits, (ii) interest income, (iii) gains from extraordinary items for such
period, (iv) any aggregate net gain (but not any aggregate net loss) during such
period arising from the sale, exchange or other disposition of capital assets
(including any fixed assets, whether tangible or intangible) and (v) any other
non-cash gains which have been added in determining Consolidated Net Income, in
each case to the extent included in the calculation of Consolidated Net Income
for such period in accordance with GAAP, but without duplication, plus (c) the
sum of (i) any provision for income taxes, (ii) Consolidated Interest Expense,
(iii) loss from extraordinary items for such period, (iv) the amount of non-cash
charges (including depreciation and amortization) for such period, and (v)
Restructuring Charges for such period, to the extent permitted by GAAP, in each
case to the extent included in the calculation of Consolidated Net Income for
such period in accordance with GAAP, but without duplication. In addition "Post
Merger EBITDA" will include payments representing principal and interest under
management agreements or direct financing leases, where such principal and
interest represent reimbursement for construction of a facility the title to
which is required to be transferred to a governmental authority.

        "Post Merger Implied Value" means, with respect to any Real Property on
any date, an amount equal to the Post Merger Adjusted Cash Flow of such Real
Property for the immediately preceding four full fiscal quarters, based on
multiplying the most recently ended quarter on or prior to such date times 4,
divided by the Capitalization Rate. For purposes of determining the Post Merger
Implied Value of any Real Property which has not been operational for a full
fiscal quarter, the Post Merger Adjusted Cash Flow attributable to such Real
Property shall be deemed to be the result obtained by extrapolating from the
components of the actual Post Merger Adjusted Cash Flow attributable to such
Real Property for the period that such Real Property has been operational. The
opening calculation of Post Merger Implied Value will be based on the Post
Merger Adjusted Cash Flow for the quarter ended March 31, 2000.

        "Post Merger Interest Coverage Ratio" means, as of the end of each
fiscal quarter of the Consolidated Parties, for the twelve month period ending
on such date, the ratio of Post Merger EBITDA for such period to cash interest
expense for such period.

        "Prime Rate" means the per annum rate of interest established from time
to time by NationsBank as its prime rate, which rate may not be the lowest rate
of interest charged by NationsBank to its customers.

        "Principal Amortization Payment" means a principal amortization payment
on the Term Loans, the Tranche C Term Loans or the New Term Loans, as set forth
in Sections 2.4(b), 2.5(d) and 2.6(d), respectively.

        "Principal Amortization Payment Date" means the date a Principal
Amortization Payment is due.

        "Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.

                                       31
<PAGE>

        "Proxy" means the Borrower's Amendment No. 1 to Proxy Statement, to be
filed with the United States Securities and Exchange Commission (the "SEC")
that, if approved by the Borrower's common shareholders, would permit, among
other things, the Change in Tax Status and the Management Opco Merger.

        "PZN" means CCA Prison Realty Trust, a Maryland real estate investment
trust, which was merged with and into the Borrower on January 1, 1999, pursuant
to the Merger Agreement.

        "Real Properties" means each of the Existing Properties and New
Properties, and "Real Property" means any one of them.

        "Refinancing Fee" shall have the meaning given such term in Section
3.5(a).

        "Register" shall have the meaning given such term in Section 11.3(c).

        "Regulation T, U, or X" means Regulation T, U or X, respectively, of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof.

        "REIT" means a real estate investment trust as defined in Sections
856-860 of the Code.

        "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles) of any Materials of Environmental Concern.

        "Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the notice requirement has been
waived by regulation.

        "Required Lenders" means, at any time, the Required Revolving Lenders
and the Required Term Lenders, each voting as a separate class.

        "Required New Term Loan Lenders" means, at any time, the New Term Loan
Lenders which are then in compliance with their obligations hereunder (as
determined by the Administrative Agent) and holding in the aggregate at least 66
2/3% of the outstanding New Term Loans.

        "Required Revolving Lenders" means, at any time, the Revolving Lenders
which are then in compliance with their obligations hereunder (as determined by
the Administrative Agent) and holding in the aggregate at least 66 2/3% of (i)
the Revolving Commitments (and Participation Interests therein) or (ii) if the
Revolving Commitments have been terminated, the outstanding Revolving Loans and
Participation Interests (including the Participation Interests of the Issuing
Lender in any Letters of Credit).

        "Required Term Lenders" means, at any time, the Term Lenders which are
then in compliance with their obligations hereunder (as determined by the
Administrative Agent) and holding in the aggregate at least 66 2/3% of the
outstanding Term Loans.

        "Required Tranche C Term Lenders" means, at any time, the Tranche C Term
Lenders which are then in compliance with their obligations hereunder (as
determined by the

                                       32
<PAGE>

Administrative Agent) and holding in the aggregate at least 66 2/3% of the
outstanding Tranche C Term Loans.

        "Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its material
property is subject.

        "Restatement Effective Date" means August 4, 1999.

        "Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding (including
without limitation any payment in connection with any merger or consolidation
involving any Consolidated Party), or to the direct or indirect holders of any
shares of any class of Capital Stock of any Consolidated Party, now or hereafter
outstanding, in their capacity as such (other than dividends or distributions
payable in the same class of Capital Stock of the applicable Person or to any
Credit Party (directly or indirectly through Subsidiaries), (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding and (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of any Consolidated
Party, now or hereafter outstanding.

        "Restricted Subsidiary" means, with respect to any Person, any
Subsidiary of such Person that is not an Unrestricted Subsidiary.

        "Restructuring Charges" means (i) non-recurring charges or extraordinary
items applied in accordance with SAB No. 100, EITF 94-3, FAS No. 121, or APB No.
120, as applicable; (ii) severance package payments accrued through and
including March 31, 2001; and (iii) fees paid to management consultants,
financial consultants and other professionals (including legal fees), provided
that such fees shall be limited to $1,600,000, in the aggregate, for the fiscal
quarter ending December 31, 2000, and $1,500,000, in the aggregate, for each
fiscal quarter thereafter, in each case only to the extent that such fees,
extraordinary items, non recurring charges, and severance package payments are
directly related to the restructuring of the corporate and capital structure of
the Consolidated Parties.

        "Revolving Commitment" means, with respect to each Revolving Lender, the
commitment of such Revolving Lender in an aggregate principal amount at any time
outstanding of up to such Revolving Lender's Revolving Commitment Percentage of
the Revolving Committed Amount, (i) to make Revolving Loans in accordance with
the provisions of Section 2.1(a) and (ii) to purchase Participation Interests in
Letters of Credit in accordance with the provisions of Section 2.2(c).

        "Revolving Commitment Percentage" means, for any Revolving Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.

                                       33
<PAGE>

        "Revolving Committed Amount" means FOUR HUNDRED MILLION DOLLARS
($400,000,000) or such lesser amount as the Revolving Committed Amount may be
reduced from time to time pursuant to Section 3.4.

        "Revolving Lender" means Lenders holding Revolving Commitments, as
identified on Schedule 2.1(a) (as such Schedule 2.1(a) may be supplemented as
necessary to reflect the prepayment of the Revolving Loans in full on the Second
Restatement Effective Date pursuant to Section 3.3(a) and the corresponding
termination and elimination of the Revolving Committed Amount pursuant to
Section 3.4), and their successors and assigns.

        "Revolving Loan Maturity Date" means January 1, 2002.

        "Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).

        "Revolving Note" means a promissory note of the Borrower in favor of a
Revolving Lender evidencing the Revolving Loans provided by such Lender pursuant
to Section 2.1, as such promissory note may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.

        "Revolving Obligations" means, collectively, the Revolving Loans, the
Swingline Loans and the LOC Obligations.

        "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor or assignee of the business of such division in the
business of rating securities.

        "Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to any Consolidated Party of any Property, whether owned by such
Consolidated Party as of the Original Closing Date or later acquired, which has
been or is to be sold or transferred by such Consolidated Party to such Person
or to any other Person from whom funds have been, or are to be, advanced by such
Person on the security of such Property.

        "Second Restatement Effective Date" means the first date on which all of
the conditions precedent set forth in Section 5.1 have been satisfied.

        "Secured Parties" means, collectively, the Administrative Agent, the
Lenders (including, without limitation, any Issuing Lender and any Affiliate of
any Lender which has entered into a Hedging Agreement with any Credit Party),
the Documentation Agent, the Syndication Agent, the Co-Agent and the Lead
Arranger and "Secured Party" means any one of them.

        "Security Agreement" means the amended and restated security agreement
dated as of the Restatement Effective Date executed in favor of the
Administrative Agent by each of the Credit Parties, as amended, modified,
restated or supplemented from time to time.

        "Senior Debt" shall have the meaning given such term in the definition
of Senior Debt Rating.

        "Senior Debt Rating" means the publicly announced ratings by S&P and
Moody's for the senior secured (non-credit enhanced) long term debt of the
Borrower ("Senior Debt").

                                       34
<PAGE>

        "Senior Notes" means the Borrower's $100,000,000 in principal amount of
12% Senior Notes, due 2006 (the "Initial Senior Notes"), and the senior notes of
the Borrower, having the same terms as the Initial Senior Notes, issued in
exchange for the Initial Senior Notes as contemplated by the Senior Notes
Documents.

        "Senior Notes Documents" means the Senior Notes Indenture, the
Underwriting Agreement and the Senior Notes, each as in effect on the
Restatement Effective Date.

        "Senior Notes Indenture" means the Indenture, dated as of June 10, 1999,
among the Borrower and State Street Bank and Trust Company, as trustee (the
"Trustee"), as supplemented by that certain First Supplemental Indenture, dated
as of June 11, 1999, among the Borrower and the Trustee, pursuant to which the
Senior Notes are issued.

        "Service Company A" means Prison Management Services, Inc., a Tennessee
corporation.

        "Service Company A License Agreement" means that certain Service Mark
and Trade Name Use Agreement dated as of December 31, 1998 between Service
Company A and Management Opco, as amended or modified from time to time.

        "Service Company B" means Juvenile and Jail Facility Management
Services, Inc., a Tennessee corporation.

        "Service Company B License Agreement" means that certain Service Mark
and Trade Name Use Agreement dated as of December 31, 1998 between Service
Company B and Management Opco, as amended or modified from time to time.

        "Service Company Mergers" means the merger of Service Company A and
Service Company B with and into CCA of Tennessee (with CCA of Tennessee as the
surviving entity) on November 30, 2000.

        "Seven Year Treasury Rate" means, for any date, a rate of interest equal
to the yield to maturity for actively traded U.S. Treasury securities as
determined by the Administrative Agent prior to 9:00 a.m. New York City time on
such date (based on the offer price for U.S. Treasury securities on such day as
indicated on page 5 of the so-called "Telerate Screen") having a term to
maturity as closely approximating seven (7) years as possible.

        "Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.

        "Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature in their ordinary course, (iii) such Person is not engaged in a business
or a transaction, and is not about to engage in a business or a transaction, for
which such Person's Property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged or is to engage, (iv) the fair value of the Property of
such Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such

                                       35
<PAGE>

Person and (v) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

        "Special Affiliate" means any corporation, association or other business
entity formed for the purpose of earning income not qualified as "rents from
real property" under applicable provisions of the Code, in which the Borrower
owns substantially all of the economic interest but less than 10% of the voting
interests, and the remaining economic and voting interests are subject to
restrictions requiring that ownership of such interests be held by officers,
directors or employees of the Borrower or any non-affiliated third parties.

        "Standby Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(i).

        "Straight-Lining of Rents" means, with respect to any lease, the method
by which rent received with respect to such lease is considered earned equally
over the term of such lease despite the existence of (i) any free rent periods
under such lease or (ii) any rent step-up provisions under such lease.

        "Stock Price Premium" means an amount equal to (i) the difference
between the average price over the immediately preceding fifty (50) day period
of the Borrower's common stock less $4.90 times (ii) 4,690,000; provided that if
such amount is less than or equal to zero, the Stock Price Premium shall be
zero.

        "Subordinated PIK Debt" means unsecured, subordinated, non-guaranteed
Indebtedness of the Borrower containing terms and conditions reasonably
satisfactory to the Administrative Agent, provided that, in any event, (i) such
Indebtedness shall be subordinated in right of payment to the Loans hereunder in
a manner satisfactory to the Administrative Agent, (ii) such Indebtedness shall
have a maturity date at least one year later than the final maturity of the
Senior Notes, and (iii) payments of principal and interest under such
Indebtedness shall be made only in kind and not in cash or any other assets of
the Borrower or any other Credit Party, provided that the terms of such
Subordinated PIK Debt may provide for the payment of principal and interest in
cash upon the repayment in full in case of all amounts outstanding under this
Agreement and the other Credit Documents in accordance with the terms hereof and
thereof.

        "Subsidiary" means, as to any Person at any time, (a) any corporation
more than 50% of whose Capital Stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at such time, any class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association, joint
venture or other entity of which such Person directly or indirectly through
Subsidiaries owns at such time more than 50% of the Capital Stock.

        "Subsidiary Guarantor" means each of the Persons identified as a
"Subsidiary Guarantor" on the signature pages hereto and each Additional Credit
Party which may hereafter execute a

                                       36
<PAGE>

Joinder Agreement, together with their successors and permitted assigns, and
"Subsidiary Guarantor" means any one of them.

        "Swingline Commitment" means the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time outstanding of
up to the Swingline Committed Amount.

        "Swingline Committed Amount" shall have the meaning assigned to such
term in Section 2.3(a).

        "Swingline Lender" means Lehman Commercial Paper Inc.

        "Swingline Loan" shall have the meaning assigned to such term in Section
2.3(a).

        "Swingline Note" means a promissory note of the Borrower in favor of the
Swingline Lender in the original principal amount of $25,000,000, as such
promissory note may be amended, modified, restated or replaced from time to
time.

        "Syndication Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors and assigns.

        "Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an Operating Lease for purposes of GAAP.

        "Taxes" shall have the meaning assigned to such term in Section 3.11.

        "Tenant Incentive Agreement" means the Amended and Restated Tenant
Incentive Agreement, dated as of May 4, 1999, between the Borrower and
Management Opco.

        "Tenant Incentive Fees" shall mean the fees payable by the Borrower to
Management Opco pursuant to the Tenant Incentive Agreement.

        "Term Lenders" means Lenders holding Term Loan Commitments, as
identified on Schedule 2.1(a) and their successors and assigns.

        "Term Loan" shall have the meaning assigned to such term in Section
2.4(a).

        "Term Loan Amendment Fee" shall have the meaning assigned to such term
in Section 3.5(g).

        "Term Loan Committed Amount" means TWO HUNDRED FIFTY MILLION DOLLARS
($250,000,000).

        "Term Loan Commitment" means, with respect to each Term Lender, the
commitment of such Term Lender to make its portion of the Term Loan in a
principal amount equal to such Lender's Term Loan Commitment Percentage (if any)
of the Term Loan Committed Amount.

        "Term Loan Commitment Percentage" means, for any Term Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule 2.1(a),
as such percentage may

                                       37
<PAGE>

be modified in connection with any assignment made in accordance with the
provisions of Section 11.3.

        "Term Loan Maturity Date" means December 31, 2002.

        "Term Loans" shall have the meaning assigned to such term in Section
2.4(a).

        "Term Note" means a promissory note of the Borrower in favor of a Term
Lender evidencing the Term Loans provided by such Lender pursuant to Section
2.4, as such promissory note may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.

        "Title Insurance Company" shall have the meaning given to such term in
Section 5.1(f).

        "Total Aggregate Required Lenders" means the Required Revolving Lenders,
the Required Term Lenders, the Required Tranche C Term Lenders and the Required
New Term Loan Lenders, each voting as a separate class.

        "Total Assets" means the total assets of the Consolidated Parties on a
consolidated basis, as determined in accordance with GAAP.

        "Total Beds Occupied Ratio" means the ratio (expressed as a percentage)
of (i) the average number of total beds occupied (or for which the Borrower has
been otherwise compensated) during any calendar month (which beds are located in
facilities that are both owned by a Credit Party and managed by a Credit Party
("Beds")) to (ii) the average number of total Beds available during such
calendar month.

        "Total Capitalization" means, as of any date of determination, the sum
of (a) Total Indebtedness plus (b) the shareholders' equity or net worth of the
Consolidated Parties on a consolidated basis, as determined in accordance with
GAAP.

        "Total Indebtedness" means, as of any date of determination, all
Indebtedness (other than under clause (i) of the definition thereof) of the
Consolidated Parties on a consolidated basis, as determined in accordance with
GAAP.

        "Total Value" means, as of any date of determination, an amount equal to
the sum of (a) the aggregate Implied Value or Post Merger Implied Value, as
applicable of all Real Properties plus (b) one hundred percent (100%) of all
cash and Cash Equivalents of the Consolidated Parties.

        "Trade Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(ii).

        "Tranche C Commitment Percentage" means, for any Tranche C Term Lender,
the percentage identified as its Tranche C Term Loan Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.

        "Tranche C Term Lenders" means Lenders holding Tranche C Term Loan
Commitments, as identified on Schedule 2.1(a), and their successors and assigns.

                                       38
<PAGE>

        "Tranche C Term Loan" shall have the meaning assigned to such term in
Section 2.5(a).

        "Tranche C Term Loan Amendment Fee" shall have the meaning assigned to
such term in Section 3.5(h).

        "Tranche C Term Loan Committed Amount" means THREE HUNDRED FIFTY MILLION
DOLLARS ($350,000,000).

        "Tranche C Term Loan Commitment" means, with respect to each Tranche C
Term Lender, the commitment of such Tranche C Term Lender to make its portion of
the Tranche C Term Loan in a principal amount equal to such Lenders' Tranche C
Term Loan Commitment Percentage of the Tranche C Term Loan Committed Amount.

        "Tranche C Term Loan Maturity Date" means December 31, 2002.

        "Tranche C Term Loans" shall have the meaning assigned to such term in
Section 2.5(a).

        "Tranche C Term Note" means a promissory note of the Borrower in favor
of a Tranche C Term Lender evidencing the Tranche C Term Loans provided by such
Lender pursuant to Section 2.5, as such promissory note may be amended,
modified, restated, supplemented, extended, renewed or replaced from time to
time.

        "Underwriting Agreement" means the Underwriting Agreement among the
Borrower and LBI.

        "Unrestricted Subsidiary" means any Subsidiary of the Borrower that the
Borrower notifies the Administrative Agent in writing is an "Unrestricted
Subsidiary", but only to the extent that such Subsidiary (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not a party to any agreement, contract,
arrangement or understanding with the Borrower or any Restricted Subsidiary of
the Borrower not permitted by Section 8.9; (c) is a Person with respect to which
neither the Borrower nor any of its Restricted Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional equity interests in such
Person, except with respect to Investments permitted under Section 8.6(iii), (y)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results or (z) to otherwise
guarantee performance or payment; and (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Borrower or any of its Restricted Subsidiaries. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary (or is redesignated by the Borrower as a Restricted
Subsidiary), it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Credit Agreement, any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Borrower as of such date
and any Investments in such Subsidiary shall be deemed to be Investments in a
Restricted Subsidiary of the Borrower as of such date (and, if such Indebtedness
or Investments are not permitted to be incurred hereunder the Borrower shall be
in default under this Credit Agreement). At the time of any designation by the
Borrower of any Restricted Subsidiary as an Unrestricted Subsidiary, such
designation shall be deemed (A) an Investment in an Unrestricted Subsidiary in
an amount equal to the sum of (i) the net worth of such Restricted Subsidiary
immediately prior to such designation (such net worth to be calculated without
regard to any Guarantee Obligation of such Restricted Subsidiary with respect to
the Obligations) and (ii) the aggregate principal amount of any Indebtedness
owed by such designated Restricted Subsidiary to the Borrower or any other
Restricted Subsidiary immediately

                                       39
<PAGE>

prior to such designation, all calculated, except as set forth in the
parenthetical to clause (i), on a consolidated basis in accordance with GAAP and
(B) an Asset Disposition (unless the amount of such Investment would not
constitute an Asset Disposition because the amount thereof would be within the
limitations set forth in the second sentence of the definition of Asset
Disposition in this Section 1.1).

        "Unused Fee" shall have the meaning assigned to such term in Section
3.5(b).

        "Unused Fee Calculation Period" shall have the meaning assigned to such
term in Section 3.5(b).

        "Unused Revolving Committed Amount" means, for any period, the amount by
which (a) the then applicable Revolving Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal amount of
all Revolving Loans plus (ii) the outstanding aggregate principal amount of all
LOC Obligations.

        "Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.

        "Waiver and Amendment" means that certain Waiver and Amendment, dated as
of June 9, 2000, among the Borrower, certain of the Borrower's subsidiaries, the
Lenders, and the Administrative Agent.

        "Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock is at the time owned by such Person directly or indirectly
through other Wholly Owned subsidiaries.

        1.2 COMPUTATION OF TIME PERIODS. For purposes of computation of periods
of time hereunder, the word "from" means "from and including" and the words "to"
and "until" each mean "to but excluding."

        1.3 ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made in accordance with GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 (or, prior to the delivery of the first financial statements
pursuant to Section 7.1, consistent with the financial statements as at December
31, 1997); provided, however, if there occurs any revision in GAAP or the rules
promulgated thereunder, then such calculations shall be made on a basis
consistent with such revision, unless the Borrower or the Required Lenders, the
Required Tranche C Term Lenders or the Required New Term Loan Lenders shall
object in writing to the Administrative Agent not later than 60 days after
delivery of the first financial statements pursuant to Section 7.1, after the
effectiveness of such revision, in which case the Borrower shall continue to
make all calculations in accordance with GAAP and the rules and regulations
promulgated thereunder as in effect immediately prior to the effectiveness of
such revision.

                                       40
<PAGE>

        1.4 INTERRELATIONSHIP WITH FIRST AMENDED AND RESTATED CREDIT
AGREEMENT. (a) As stated in the preamble hereof, this Credit Agreement is
intended to amend and restate the provisions of the First Amended and Restated
Credit Agreement and, notwithstanding any substitution of Notes as of the Second
Restatement Effective Date, except as expressly modified herein, (x) all of the
terms and provisions of the First Amended and Restated Credit Agreement shall
continue to apply for the period prior to the Second Restatement Effective Date,
including any determinations of payment dates, interest rates, Events of Default
or any amount that may be payable to the Administrative Agent or the Original
Lenders (or their assignees or replacements hereunder), and (y) the obligations
under the First Amended and Restated Credit Agreement shall continue to be paid
or prepaid on or prior to the Second Restatement Effective Date, and shall from
and after the Second Restatement Effective Date continue to be owing and be
subject to the terms of this Credit Agreement. All references in the Notes and
the other Credit Documents to (i) the "Original Credit Agreement", the "First
Amended and Restated Credit Agreement" or the "Credit Agreement" shall be deemed
to include references to this Credit Agreement and (ii) the "Lenders" or a
"Lender" or to the "Administrative Agent" shall mean such terms as defined in
this Credit Agreement. As to all periods occurring on or after the Second
Restatement Effective Date, all of the covenants set forth in the First Amended
and Restated Credit Agreement shall be of no further force and effect, it being
understood that all obligations of the Borrower under the First Amended and
Restated Credit Agreement shall be governed by this Credit Agreement from and
after the Second Restatement Effective Date.

            (b) The Borrower, the Agents and the Lenders acknowledge and agree
that all principal, interest, fees, costs, reimbursable expenses and
indemnification obligations accruing or arising under or in connection with the
Original Credit Agreement and the First Amended and Restated Credit Agreement
which remain unpaid and outstanding as of the Second Restatement Effective Date
shall be and remain outstanding and payable as an obligation under this Credit
Agreement and the other Credit Documents; provided that no Lender hereunder
which was not an Original Lender shall be liable for any obligation or
indemnification of Lenders under the First Amended and Restated Credit Agreement
or the Original Credit Agreement.

        1.5 CONFIRMATION OF EXISTING OBLIGATIONS. The Borrower and each
Guarantor hereby reaffirm and admit the validity and enforceability of this
Credit Agreement and the other Credit Documents and all of their respective
obligations hereunder and thereunder and agree and admit that, as of the date
hereof, they have no defenses to, or offsets or counterclaim against, any of
their respective obligations to the Agents or any Lender under the Credit
Documents of any kind whatsoever.

                                   SECTION 2.

                                CREDIT FACILITIES

        2.1 REVOLVING LOANS.

            (a) Revolving Commitment. To the extent any Revolving Loans (as
defined below) are outstanding under the First Amended and Restated Credit
Agreement on the Second Restatement Effective Date, such Revolving Loans shall
be deemed to constitute Revolving Loans outstanding hereunder from and after the
Second Restatement Effective Date. In addition, subject to the terms and
conditions hereof and in reliance upon the representations and warranties set
forth herein, each Revolving Lender severally agrees to make available to the
Borrower such

                                       41
<PAGE>

Revolving Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("Revolving Loans") from time to time from
the Second Restatement Effective Date until the Revolving Loan Maturity Date, or
such earlier date on which the Revolving Commitments shall have been terminated
as provided herein; provided, however, that (i) with regard to the Lenders
collectively, the aggregate principal amount of the Obligations outstanding
shall not at any time exceed the lesser of (A) the Aggregate Committed Amount
minus the Availability Reserve and (B) the Borrowing Base; and (ii) with regard
to each Revolving Lender individually, the amount of such Revolving Lender's
Revolving Commitment Percentage of the Revolving Obligations outstanding shall
not exceed such Revolving Lender's Revolving Commitment Percentage of the
Revolving Committed Amount minus the Availability Reserve. Revolving Loans may
consist of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than six Eurodollar Loans
shall be outstanding under this Section 2.1 at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period). Revolving Loans
hereunder may be repaid and reborrowed in accordance with the provisions hereof.

            (b) Revolving Loan Borrowings. Notwithstanding anything to the
contrary set forth in this Credit Agreement or in any other Credit Document and
for the avoidance of doubt, on and after the Second Restatement Effective Date
the Borrower shall no longer be entitled to request Revolving Loan borrowings
hereunder.

            (c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Revolving Loan Maturity Date, unless accelerated
sooner pursuant to Section 9.2.

            (d) Interest. Subject to the provisions of Section 3.1,

                (i) Base Rate Loans. During such periods as Revolving Loans
        shall be comprised in whole or in part of Base Rate Loans, such Base
        Rate Loans shall bear interest at a per annum rate equal to the Adjusted
        Base Rate.

                (ii) Eurodollar Loans. During such periods as Revolving Loans
        shall be comprised in whole or in part of Eurodollar Loans, such
        Eurodollar Loans shall bear interest at a per annum rate equal to the
        Adjusted Eurodollar Rate.

        Interest on Revolving Loans shall be payable in arrears on each
        applicable Interest Payment Date (or at such other times as may be
        specified herein).

            (e) Revolving Notes. If requested by a Revolving Lender, and upon
surrender to the Administrative Agent of any note issued to such Lender under
the Original Credit Facility, the Revolving Loans made by such Revolving Lender
shall be evidenced by a duly executed promissory note of the Borrower to such
Revolving Lender in an original principal amount equal to such Revolving
Lender's Revolving Commitment Percentage of the Revolving Committed Amount and
in substantially the form of Exhibit 2.1(e).

                                       42
<PAGE>

        2.2 LETTER OF CREDIT SUBFACILITY.

            (a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the relevant
Issuing Lender may reasonably require and in reliance upon the representations
and warranties set forth herein, each Issuing Lender agrees to issue, and each
Revolving Lender severally agrees to participate in the issuance by such Issuing
Lender of Letters of Credit in Dollars from time to time from the Restatement
Effective Date until the Revolving Loan Maturity Date as the Borrower may
request, in a form acceptable to the relevant Issuing Lender; provided, however,
that (i) on and after the Second Restatement Effective Date, the LOC Obligations
outstanding shall not at any time exceed ZERO DOLLARS ($0.00) (the "LOC
Committed Amount"), (ii) on and after the Second Restatement Effective Date, LOC
Obligations with respect to trade or commercial Letters of Credit shall not at
any time exceed Zero Dollars ($0.00), (iii) with regard to the Lenders
collectively, the aggregate principal amount of the Obligations outstanding
shall not at any time exceed the Aggregate Committed Amount; provided, further,
(iv) with regard to each Revolving Lender individually, the amount of such
Revolving Lender's Revolving Commitment Percentage of the Revolving Obligations
outstanding shall not exceed such Revolving Lender's Revolving Commitment
Percentage of the Revolving Committed Amount. No Letter of Credit shall (x) have
an original expiry date more than one year from the date of issuance or (y) as
originally issued or as extended, have an expiry date extending beyond a date
five Business Days prior to the Revolving Loan Maturity Date. Each Letter of
Credit shall comply with the related LOC Documents. The issuance and expiry
dates of each Letter of Credit shall be a Business Day.

            (b) Notice and Reports. Notwithstanding anything to the contrary
set forth in this Credit Agreement or in any other Credit Document and for the
avoidance of doubt, on and after the Second Restatement Effective Date, no
Letters of Credit will be issued under this Credit Agreement or under any other
Credit Document. Each Issuing Lender will, at least quarterly and more
frequently upon request, disseminate to the Administrative Agent and each of the
Revolving Lenders a detailed report specifying the Letters of Credit issued by
such Issuing Lender which are then outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the beneficiary, the face amount and the
expiry date, as well as any payment or expirations which may have occurred. Each
Issuing Lender will notify the Administrative Agent of the issuance of any
Letter of Credit by such Issuing Lender prior to such issuance as well as each
payment under each such Letter of Credit at the time of such payment.

            (c) Participation. Each Revolving Lender, upon issuance of a Letter
of Credit by an Issuing Lender, shall be deemed to have purchased without
recourse a Participation Interest from such Issuing Lender in such Letter of
Credit and the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective Revolving
Commitment Percentages of the Revolving Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to such Issuing
Lender and discharge when due, its pro rata share of the obligations arising
under such Letter of Credit. Without limiting the scope and nature of each
Revolving Lender's Participation Interest in any Letter of Credit, to the extent
that relevant Issuing Lender has not been reimbursed as required hereunder or
under any such Letter of Credit, each such Revolving Lender shall pay to such
Issuing Lender its pro rata share of such unreimbursed drawing in same day funds
on the day of notification by such Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) below. The obligation of each
Revolving Lender to so reimburse the Issuing Lenders shall be absolute and
unconditional

                                       43
<PAGE>

and shall not be affected by the occurrence of a Default, an Event of Default or
any other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the relevant
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.

            (d) Reimbursement. In the event of any drawing under any Letter of
Credit, the relevant Issuing Lender will promptly notify the Borrower. Unless
the Borrower shall immediately notify such Issuing Lender that the Borrower
intends to otherwise reimburse such Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Revolving Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection (e) below
on the related Letter of Credit, the proceeds of which will be used to satisfy
the related reimbursement obligations. The Borrower promises to reimburse the
relevant Issuing Lender on the day of drawing under any Letter of Credit (either
with the proceeds of a Revolving Loan obtained hereunder or otherwise) in same
day funds. If the Borrower shall fail to reimburse the relevant Issuing Lender
as provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Adjusted Base Rate plus 2%. The
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against the
relevant Issuing Lender, the Administrative Agent, the Revolving Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower or any other
Credit Party to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The relevant Issuing Lender will
promptly notify the other Revolving Lenders of the amount of any unreimbursed
drawing and each Revolving Lender shall promptly pay to the Administrative Agent
for the account of the Issuing Lender in Dollars and in immediately available
funds, the amount of such Revolving Lender's pro rata share of such unreimbursed
drawing. Such payment shall be made on the day such notice is received by such
Revolving Lender from the relevant Issuing Lender if such notice is received at
or before 1:00 P.M. (New York City time) otherwise such payment shall be made at
or before 12:00 Noon (New York City time) on the Business Day next succeeding
the day such notice is received. If such Revolving Lender does not pay such
amount to such Issuing Lender in full upon such request, such Revolving Lender
shall, on demand, pay to the Administrative Agent for the account of such
Issuing Lender interest on the unpaid amount during the period from the date of
such drawing until such Revolving Lender pays such amount to such Issuing Lender
in full at a rate per annum equal to, if paid within two (2) Business Days of
the date that such Revolving Lender is required to make payments of such amount
pursuant to the preceding sentence, the Federal Funds Rate and thereafter at a
rate equal to the Base Rate. Each Revolving Lender's obligation to make such
payment to the relevant Issuing Lender, and the right of such Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a Revolving
Lender to the relevant Issuing Lender, such Revolving Lender shall,
automatically and without any further action on the part of such Issuing Lender
or such Revolving Lender, acquire a Participation Interest in an amount equal to
such payment (excluding the portion of such payment constituting interest owing
to the Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents, and
shall have a claim against the Borrower with respect thereto.

                                       44
<PAGE>

            (e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Revolving Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing under a
Letter of Credit, in which case a Revolving Loan advance comprised of Base Rate
Loans (or Eurodollar Loans to the extent the Borrower has complied with the
procedures of Section 2.1(b)(i) with respect thereto) shall be immediately made
to the Borrower by all Revolving Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) pro rata based on the respective Revolving
Commitment Percentages of the Revolving Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 9.2) and the proceeds
thereof shall be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each such Revolving Lender hereby irrevocably agrees
to make its pro rata share of each such Revolving Loan immediately upon any such
request or deemed request in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for a Revolving Loan to be made
by the time otherwise required hereunder, (v) whether the date of such borrowing
is a date on which Revolving Loans are otherwise permitted to be made hereunder
or (vi) any termination of the Commitments relating thereto immediately prior to
or contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party), then
each such Revolving Lender hereby agrees that it shall forthwith purchase (as of
the date such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Issuing Lender such Participation Interests in the
outstanding LOC Obligations as shall be necessary to cause each such Revolving
Lender to share in such LOC Obligations ratably (based upon the respective
Revolving Commitment Percentages of the Revolving Lenders (determined before
giving effect to any termination of the Commitments pursuant to Section 9.2)),
provided that at the time any purchase of Participation Interests pursuant to
this sentence is actually made, the purchasing Revolving Lender shall be
required to pay to the relevant Issuing Lender, to the extent not paid to such
Issuing Lender by the Borrower in accordance with the terms of subsection (d)
above, interest on the principal amount of Participation Interests purchased for
each day from and including the day upon which such borrowing would otherwise
have occurred to but excluding the date of payment for such Participation
Interests, at the rate equal to, if paid within two (2) Business Days of the
date of the Revolving Loan advance, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.

            (f) Designation of Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a), a Letter of Credit issued hereunder
may contain a statement to the effect that such Letter of Credit is issued for
the account of a Credit Party other than the Borrower, provided that
notwithstanding such statement, the Borrower shall be the actual account party
for all purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations hereunder
with respect to such Letter of Credit.

                                       45

<PAGE>

            (g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder; provided, however, that no Letters
of Credit will be renewed or extended on and after the Second Restatement
Effective Date.

            (h) [Intentionally omitted.]

            (i) Indemnification; Nature of Issuing Lender's Duties.

                (i) In addition to its other obligations under this Section 2.2,
        the Borrower hereby agrees to pay, and protect, indemnify and save each
        Revolving Lender harmless from and against, any and all claims, demands,
        liabilities, damages, losses, costs, charges and expenses (including
        reasonable attorneys' fees) that such Revolving Lender may incur or be
        subject to as a consequence, direct or indirect, of (A) the issuance of
        any Letter of Credit or (B) the failure of such Revolving Lender to
        honor a drawing under a Letter of Credit as a result of any act or
        omission, whether rightful or wrongful, of any present or future de jure
        or de facto government or Governmental Authority (all such acts or
        omissions, herein called "Government Acts").

                (ii) As between the Borrower and the Revolving Lenders
        (including the relevant Issuing Lender), the Borrower shall assume all
        risks of the acts, omissions or misuse of any Letter of Credit by the
        beneficiary thereof. No Revolving Lender (including the relevant Issuing
        Lender) shall be responsible: (A) for the form, validity, sufficiency,
        accuracy, genuineness or legal effect of any document submitted by any
        party in connection with the application for and issuance of any Letter
        of Credit, even if it should in fact prove to be in any or all respects
        invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
        validity or sufficiency of any instrument transferring or assigning or
        purporting to transfer or assign any Letter of Credit or the rights or
        benefits thereunder or proceeds thereof, in whole or in part, that may
        prove to be invalid or ineffective for any reason; (C) for errors,
        omissions, interruptions or delays in transmission or delivery of any
        messages, by mail, cable, telegraph, telex or otherwise, whether or not
        they be in cipher; (D) for any loss or delay in the transmission or
        otherwise of any document required in order to make a drawing under a
        Letter of Credit or of the proceeds thereof; and (E) for any
        consequences arising from causes beyond the control of such Revolving
        Lender, including, without limitation, any Government Acts. None of the
        above shall affect, impair, or prevent the vesting of any Issuing
        Lender's rights or powers hereunder.

                (iii) In furtherance and extension and not in limitation of the
        specific provisions hereinabove set forth, any action taken or omitted
        by any Revolving Lender (including the relevant Issuing Lender), under
        or in connection with any Letter of Credit or the related certificates,
        if taken or omitted in good faith, shall not put such Revolving Lender
        under any resulting liability to the Borrower or any other Credit Party.
        It is the intention of the parties that this Credit Agreement shall be
        construed and applied to protect and indemnify each Revolving Lender
        (including each Issuing Lender) against any and all risks involved in
        the issuance of the Letters of Credit, all of which risks are hereby
        assumed by the Borrower (on behalf of itself and each of the other
        Credit Parties), including, without limitation, any and all Government
        Acts. No Revolving Lender (including the relevant Issuing Lender) shall,
        in any way, be liable for any failure by such

                                       46
<PAGE>

        Revolving Lender or anyone else to pay any drawing under any Letter of
        Credit as a result of any Government Acts or any other cause beyond the
        control of such Revolving Lender.

                (iv) Nothing in this subsection (h) is intended to limit the
        reimbursement obligations of the Borrower contained in subsection (d)
        above. The obligations of the Borrower under this subsection (h) shall
        survive the termination of this Credit Agreement. No act or omission of
        any current or prior beneficiary of a Letter of Credit shall in any way
        affect or impair the rights of the Revolving Lenders (including the
        Issuing Lenders) to enforce any right, power or benefit under this
        Credit Agreement.

                (v) Notwithstanding anything to the contrary contained in this
        subsection (h), the Borrower shall have no obligation to indemnify any
        Revolving Lender (including any Issuing Lender) in respect of any
        liability incurred by such Revolving Lender (A) arising solely out of
        the gross negligence or willful misconduct of such Revolving Lender, as
        determined by a court of competent jurisdiction, or (B) caused by such
        Revolving Lender's failure to pay under any Letter of Credit after
        presentation to it of a request strictly complying with the terms and
        conditions of such Letter of Credit, as determined by a court of
        competent jurisdiction, unless such payment is prohibited by any law,
        regulation, court order or decree.

            (j) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of each Issuing Lender hereunder to the Revolving
Lenders are only those expressly set forth in this Credit Agreement and that
each Issuing Lender shall be entitled to assume that the conditions precedent
set forth in Section 5.2 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been satisfied;
provided, however, that nothing set forth in this Section 2.2 shall be deemed to
prejudice the right of any Revolving Lender to recover from the relevant Issuing
Lender any amounts made available by such Revolving Lender to such Issuing
Lender pursuant to this Section 2.2 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of the
Issuing Lender.

            (k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter of
credit application), this Credit Agreement shall control.

        2.3 SWINGLINE LOAN SUBFACILITY.

            (a) Swingline Commitment. Subject to the terms and conditions
hereof, the Swingline Lender, in its individual capacity, agrees to make certain
revolving credit loans to the Borrower (each a "Swingline Loan" and,
collectively, the "Swingline Loans") from time to time from the Restatement
Effective Date until the Revolving Loan Maturity Date for the purposes
hereinafter set forth; provided, however, (i) the aggregate amount of Swingline
Loans outstanding at any time shall not exceed TWENTY FIVE MILLION DOLLARS
($25,000,000.00) (the "Swingline Committed Amount"), and (ii) with regard to the
Lenders collectively, the aggregate principal amount of the Obligations
outstanding shall not at any time exceed the Aggregate Committed Amount.
Swingline Loans hereunder shall be made in

                                       47
<PAGE>

accordance with the provisions of this Section 2.3, and may be repaid and
reborrowed in accordance with the provisions hereof.

            (b) Swingline Loan Advances.

                (i) Disbursement. Notwithstanding anything to the contrary set
        forth in this Credit Agreement or in any other Credit Document and for
        the avoidance of doubt, on and after the Second Restatement Effective
        Date the Borrower shall no longer be entitled to request Swingline Loan
        advances hereunder.

                (ii) [Intentionally omitted.]

                (iii) Repayment of Swingline Loans. The principal amount of all
        Swingline Loans shall be due and payable on the Revolving Loan Maturity
        Date. The Swingline Lender may, at any time, in its sole discretion, by
        written notice to the Borrower and the Revolving Lenders, demand
        repayment of its Swingline Loans by way of a Revolving Loan advance, in
        which case the Borrower shall be deemed to have requested a Revolving
        Loan advance comprised solely of Base Rate Loans in the amount of such
        Swingline Loans; provided, however, that any such demand shall be deemed
        to have been given one Business Day prior to the Revolving Loan Maturity
        Date and on the date of the occurrence of any Event of Default described
        in Section 9.1 and upon acceleration of the indebtedness hereunder and
        the exercise of remedies in accordance with the provisions of Section
        9.2. Each Revolving Lender hereby irrevocably agrees to make its pro
        rata share of each such Revolving Loan in the amount, in the manner and
        on the date specified in the preceding sentence notwithstanding (I) the
        amount of such borrowing may not comply with the minimum amount for
        advances of Revolving Loans otherwise required hereunder, (II) whether
        any conditions specified in Section 5.2 are then satisfied, (III)
        whether a Default or an Event of Default then exists, (IV) failure of
        any such request or deemed request for a Revolving Loan to be made by
        the time otherwise required hereunder, (V) whether the date of such
        borrowing is a date on which Revolving Loans are otherwise permitted to
        be made hereunder or (VI) any termination of the Commitments relating
        thereto immediately prior to or contemporaneously with such borrowing.
        In the event that any Revolving Loan cannot for any reason be made on
        the date otherwise required above (including, without limitation, as a
        result of the commencement of a proceeding under the Bankruptcy Code
        with respect to the Borrower or any other Credit Party), then each
        Revolving Lender hereby agrees that it shall forthwith purchase (as of
        the date such borrowing would otherwise have occurred, but adjusted for
        any payments received from the Borrower on or after such date and prior
        to such purchase) from the Swingline Lender such participations in the
        outstanding Swingline Loans ratably based upon its Revolving Commitment
        Percentage of the Revolving Committed Amount (determined before giving
        effect to any termination of the Commitments pursuant to Section 3.4),
        provided that (A) all interest payable on the Swingline Loans shall be
        for the account of the Swingline Lender until the date as of which the
        respective participation is purchased and (B) at the time of any
        purchase of participations pursuant to this sentence is actually made,
        the purchasing Revolving Lender shall be required to pay to the
        Swingline Lender, to the extent not paid to the Swingline Lender by the
        Borrower in accordance with the terms of subsection (c) below, interest
        on the principal amount of participation purchased for each day from and
        including the day upon which such borrowing would otherwise have
        occurred to but

                                       48
<PAGE>

        excluding the date of payment for such participation, at the rate equal
        to the Federal Funds Rate.

            (c) Interest on Swingline Loans. Subject to the provisions of
Section 3.1, each Swingline Loan shall bear interest at per annum rate equal to
the Adjusted Base Rate. Interest on Swingline Loans shall be payable in arrears
on each applicable Interest Payment Date (or at such other times as may be
specified herein).

            (d) Swingline Note. If requested by the Swingline Lender, and upon
surrender to the Administrative Agent of any note issued to such Lender under
the Original Credit Facility, the Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in
substantially the form of Exhibit 2.3(d).

        2.4 TERM LOAN.

            (a) Term Commitment. Without extinguishing the rights of the
Original Term Lenders to receive payment for interest accrued on the Term Loans
prior to the Second Restatement Effective Date, each Term Loan made on the
Original Closing Date pursuant to Section 2.4 of the Original Credit Agreement
(a "Term Loan" and collectively with the Term Loans of each other Term Lender,
the "Term Loans") (less any regularly-scheduled Principal Amortization Payments
under the Original Credit Agreement and the First Amended and Restated Credit
Agreement made prior to the Second Restatement Effective Date) shall be deemed
to be outstanding as a Term Loan hereunder from and after the Second Restatement
Effective Date. The Term Loans may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Borrower may request; provided, however,
that no more than six Eurodollar Loans shall be outstanding under this Section
2.4 at any time (it being understood that, for purposes hereof, Eurodollar Loans
with different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Amounts repaid on the Term Loans may not be reborrowed.
For the avoidance of doubt, the Term Loans were initially made to the Borrower
on the Original Closing Date and have remained outstanding without interruption
(subject to any regularly-scheduled Principal Amortization Payments under the
Original Credit Agreement and the First Amended and Restated Credit Agreement)
through and including the Second Restatement Effective Date, notwithstanding the
amendment and restatement of the Original Credit Agreement pursuant to the First
Amended and Restated Credit Agreement and the amendment and restatement of the
First Amended and Restated Credit Agreement pursuant to this Credit Agreement.

            (b) Repayment of Term Loans. The principal amount of the Term Loans
outstanding as of the Restatement Effective Date shall be repaid in fourteen
(14) consecutive quarterly installments as follows unless accelerated sooner
pursuant to Section 9.2:

<TABLE>
<CAPTION>
================================================================================
                 PRINCIPAL                              TERM LOAN
                AMORTIZATION                      PRINCIPAL AMORTIZATION
               PAYMENT DATES                             PAYMENT
================================================================================
<S>                                               <C>
             September 30, 1999                         $    625,000
--------------------------------------------------------------------------------
             December 31, 1999                          $    625,000
--------------------------------------------------------------------------------
               March 31, 2000                           $    625,000
--------------------------------------------------------------------------------
</TABLE>

                                       49

<PAGE>
<TABLE>
<CAPTION>
================================================================================
                 PRINCIPAL                              TERM LOAN
                AMORTIZATION                      PRINCIPAL AMORTIZATION
               PAYMENT DATES                             PAYMENT
================================================================================
<S>                                               <C>
               June 30, 2000                            $    625,000
--------------------------------------------------------------------------------
             September 30, 2000                         $    625,000
--------------------------------------------------------------------------------
             December 31, 2000                          $    625,000
--------------------------------------------------------------------------------
               March 31, 2001                           $    625,000
--------------------------------------------------------------------------------
               June 30, 2001                            $    625,000
--------------------------------------------------------------------------------
             September 30, 2001                         $    625,000
--------------------------------------------------------------------------------
             December 31, 2001                          $    625,000
--------------------------------------------------------------------------------
               March 31, 2002                           $    625,000
--------------------------------------------------------------------------------
               June 30, 2002                            $    625,000
--------------------------------------------------------------------------------
             September 30, 2002                         $    625,000
--------------------------------------------------------------------------------
             December 31, 2002                          $240,625,000
--------------------------------------------------------------------------------
                   Total                                $248,750,000
================================================================================
</TABLE>

            (c) Interest. Subject to the provisions of Section 3.1, (i)
Eurodollar Loans comprising all or a part of the Term Loans shall bear interest
at a per annum rate equal to the Eurodollar Rate plus (A) 5.50% through and
including June 30, 2002 and (B) 6.50% thereafter and (ii) Base Rate Loans
comprising all or part of the Term Loans shall bear interest at a per annum rate
equal to the Base Rate plus (A) 4.50% through and including June 30, 2002 and
(B) 5.50% thereafter. Interest on Term Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be specified
herein).

            (d) Term Notes. If requested by a Term Lender, and upon surrender to
the Administrative Agent of any note issued to such Lender under the Original
Credit Facility, the Term Loan made by such Term Lender shall be evidenced by a
duly executed promissory note of the Borrower to such Term Lender in an original
principal amount equal to the principal amount of such Term Loan outstanding on
the Original Closing Date, substantially in the form of Exhibit 2.4(d).

        2.5 TRANCHE C TERM LOAN.

            (a) Tranche C Term Commitment. Without extinguishing the rights of
the Original Tranche C Term Lenders to receive payment for interest accrued on
the Tranche C Term Loans prior to the Second Restatement Effective Date, each
Tranche C Term Loan made on the Restatement Effective Date pursuant to Section
2.5 of the First Amended and Restated Credit Agreement (a "Tranche C Term Loan"
and collectively with the Tranche C Term Loans of each other Tranche C Term
Lender, the "Tranche C Term Loans") (less any regularly-scheduled Principal
Amortization Payments under the First Amended and Restated Credit Agreement made
prior to the Second Restatement Effective Date) shall be deemed to be
outstanding as a Tranche C Term Loan hereunder from and after the Second
Restatement Effective Date. The Tranche C Term Loans may consist of Base Rate
Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request; provided, however, that no more than six Eurodollar Loans shall be
outstanding under this Section 2.5 at any time (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although

                                       50
<PAGE>

borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period). Amounts repaid on the Tranche C
Term Loans may not be reborrowed. For the avoidance of doubt, the Tranche C Term
Loans were initially made to the Borrower on the Restatement Effective Date and
have remained outstanding without interruption (subject to any
regularly-scheduled Principal Amortization Payments under the First Amended and
Restated Credit Agreement) through and including the Second Restatement
Effective Date, notwithstanding the amendment and restatement of the First
Amended and Restated Credit Agreement pursuant to this Credit Agreement.

            (b) Borrowing Procedures. The entire amount of the Tranche C Term
Loans was made in a single borrowing on the Restatement Effective Date. The
Borrower submitted an appropriate Notice of Borrowing to the Administrative
Agent not later than 11:00 A.M. (New York City time) on the Business Day prior
to the Restatement Effective Date, which Notice of Borrowing was irrevocable and
specified that the funding of the Tanche C Term Loans was requested. Each
Tranche C Term Lender made its Tranche C Term Loan Commitment Percentage of the
Tranche C Term Loan available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in Schedule 2.1(a),
or at such other office as the Administrative Agent may designate in writing, by
1:00 P.M. (New York City time) on Second Restatement Effective Date in Dollars
and in funds immediately available to the Administrative Agent.

            (c) Minimum Amounts. Eurodollar Loans having the same Interest
Period and Base Rate Loans that comprise parts of the Tranche C Term Loan shall
be in an aggregate principal amount that is not less than $10,000,000 and
integral multiples of $1,000,000 (or the then remaining principal balance of the
Tranche C Term Loans, if less).

            (d) Repayment of Tranche C Term Loans. The principal amount of the
Tranche C Term Loans shall be repaid in fourteen (14) consecutive quarterly
installments as follows unless accelerated sooner pursuant to Section 9.2:

<TABLE>
<CAPTION>
    ============================================================================
                   PRINCIPAL                        TRANCHE C TERM LOAN
                 AMORTIZATION                      PRINCIPAL AMORTIZATION
                 PAYMENT DATES                            PAYMENT
    ============================================================================
<S>                                                <C>
              September 30, 1999                         $    875,000
    ----------------------------------------------------------------------------
               December 31, 1999                         $    875,000
    ----------------------------------------------------------------------------
                March 31, 2000                           $    875,000
    ----------------------------------------------------------------------------
                 June 30, 2000                           $    875,000
    ----------------------------------------------------------------------------
              September 30, 2000                         $    875,000
    ----------------------------------------------------------------------------
               December 31, 2000                         $    875,000
    ----------------------------------------------------------------------------
                March 31, 2001                           $    875,000
    ----------------------------------------------------------------------------
                 June 30, 2001                           $    875,000
    ----------------------------------------------------------------------------
              September 30, 2001                         $    875,000
    ----------------------------------------------------------------------------
               December 31, 2001                         $    875,000
    ----------------------------------------------------------------------------
                March 31, 2002                           $    875,000
    ----------------------------------------------------------------------------
                 June 30, 2002                           $    875,000
    ----------------------------------------------------------------------------
              September 30, 2002                         $    875,000
    ----------------------------------------------------------------------------
               December 31, 2002                         $338,625,000
    ----------------------------------------------------------------------------
                     Total                               $350,000,000
    ============================================================================
</TABLE>

                                       51

<PAGE>

            (e) Interest. Subject to the provisions of Section 3.1, (i)
Eurodollar Loans comprising all or a part of the Tranche C Term Loans shall bear
interest at a per annum rate equal to the Eurodollar Rate plus (A) 5.50% through
and including June 30, 2002 and (B) 6.50% thereafter and (ii) Base Rate Loans
comprising all or part of the Tranche C Term Loans shall bear interest at a per
annum rate equal to the Base Rate plus (A) 4.50% through and including June 30,
2002 and (B) 5.50% thereafter. Interest on Tranche C Term Loans shall be payable
in arrears on each applicable Interest Payment Date (or at such other times as
may be specified herein).

            (f) Tranche C Term Notes. If requested by a Tranche C Term Lender,
the portion of the Tranche C Term Loan made by such Tranche C Term Lender shall
be evidenced by a duly executed promissory note of the Borrower to such Tranche
C Term Lender in an original principal amount equal to the original principal
amount of such Tranche C Term Lender's Tranche C Commitment Percentage of the
Tranche C Term Loan, and substantially in the form of Exhibit 2.5(f).

        2.6 NEW TERM LOAN.

            (a) New Term Loan Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth herein
each New Term Loan Lender severally agrees to make available to the Borrower on
the Second Restatement Effective Date a term loan in Dollars (a "New Term Loan"
and collectively with the New Term Loans of each other New Term Loan Lender, the
"New Term Loans") in an amount equal to the New Term Loan Commitment of such New
Term Loan Lender and in an aggregate principal amount for all New Term Loan
Lenders equal to the New Term Loan Committed Amount; provided, however, that
with regard to the Lenders collectively, the sum of the aggregate principal
amount of the Obligations outstanding shall not exceed the Aggregate Committed
Amount. The New Term Loans may initially consist only of Base Rate Loans.
Subsequent to the Second Restatement Effective Date, New Term Loans may be
converted to Eurodollar Loans pursuant to Section 3.2 as the Borrower may
request; provided, however, that no more than six New Term Loans that are
Eurodollar Loans shall be outstanding at any time (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period). Amounts repaid
on the New Term Loans may not be reborrowed.

            (b) Borrowing Procedures. The entire amount of the New Term Loans
shall be made in a single borrowing on the Second Restatement Effective Date.
The Borrower shall submit an appropriate Notice of Borrowing to the
Administrative Agent not later than 11:00 A.M. (New York City time) on the
Business Day prior to the Second Restatement Effective Date, which Notice of
Borrowing shall be irrevocable and shall specify that the funding of the New
Term Loans is requested. Each New Term Loan Lender shall make its New Term Loan

                                       52
<PAGE>

Commitment Percentage of the New Term Loan available to the Administrative Agent
for the account of the Borrower at the office of the Administrative Agent
specified in Schedule 2.1(a), or at such other office as the Administrative
Agent may designate in writing, by 1:00 P.M. (New York City time) on the Second
Restatement Effective Date in Dollars and in funds immediately available to the
Administrative Agent.

            (c) Minimum Amounts. Eurodollar Loans having the same Interest
Period and Base Rate Loans that comprise parts of the New Term Loan shall be in
an aggregate principal amount that is not less than $10,000,000 and integral
multiples of $1,000,000 (or the then remaining principal balance of the New Term
Loans, if less).

            (d) Repayment of New Term Loans. The principal amount of the New
Term Loans shall be repaid in five (5) consecutive quarterly installments as
follows unless accelerated sooner pursuant to Section 9.2:

<TABLE>
<CAPTION>
    ============================================================================
                  PRINCIPAL                         NEW TERM LOAN
                AMORTIZATION                    PRINCIPAL AMORTIZATION
                PAYMENT DATES                          PAYMENT
    ============================================================================
<S>                                             <C>
              December 31, 2001                       $    673,524.90
    ----------------------------------------------------------------------------
               March 31, 2002                         $    673,524.90
    ----------------------------------------------------------------------------
                June 30, 2002                         $    673,524.90
    ----------------------------------------------------------------------------
             September 30, 2002                       $    673,524.90
    ----------------------------------------------------------------------------
              December 31, 2002                       $266,715,863.60
    ----------------------------------------------------------------------------
                    Total                             $269,409,963.20
    ============================================================================
</TABLE>

            (e) Interest. Subject to the provisions of Section 3.1, (i)
Eurodollar Loans comprising all or a part of the New Term Loans shall bear
interest at a per annum rate equal to the Eurodollar Rate plus (A) 5.50% through
and including June 30, 2002 and (B) 6.50% thereafter and (ii) Base Rate Loans
comprising all or part of the New Term Loans shall bear interest at a per annum
rate equal to the Base Rate plus (A) 4.50% through and including June 30, 2002
and (B) 5.50% thereafter. Interest on New Term Loans shall be payable in arrears
on each applicable Interest Payment Date (or at such other times as may be
specified herein).

            (f) New Term Loan Notes. If requested by a New Term Loan Lender, the
portion of the New Term Loan made by such New Term Loan Lender shall be
evidenced by a duly executed promissory note of the Borrower to such New Term
Loan Lender in an original principal amount equal to the original principal
amount of such New Term Loan Lender's New Term Loan Commitment Percentage of the
New Term Loan, and substantially in the form of Exhibit 2.6(f).

                                   SECTION 3.
                 OTHER PROVISIONS RELATING TO CREDIT FACILITIES

        3.1 DEFAULT RATE. (i) Upon the occurrence, and during the continuance,
of an Event of Default, (ii) for any period during which the Borrower pays to
MDP a rate in excess of 10.0% per annum under the MDP Note Purchase Agreement
(other than Contingent Interest (as defined therein)), and (iii) for any period
during which the Borrower pays to PMI a rate in excess of 8.0% per annum under
the PMI Note Purchase Agreement, then, in any such case, the principal

                                       53
<PAGE>

of and, to the extent permitted by law, interest on the Loans and any other
amounts owing hereunder or under the other Credit Documents shall bear interest,
payable on demand, at a per annum rate 2% greater than the rate which would
otherwise be applicable (or if no rate is applicable, whether in respect of
interest, fees or other amounts, then the Adjusted Base Rate plus 2%).

        3.2 EXTENSION AND CONVERSION. The Borrower shall have the option, on any
Business Day, to extend existing Loans into a subsequent permissible Interest
Period or to convert Revolving Loans, Term Loans, Tranche C Term Loans or New
Term Loans, as the case may be, to Revolving Loans, Term Loans, Tranche C Term
Loans or New Term Loans, respectively, of another interest rate type; provided,
however, that (i) except as provided in Section 3.8, Eurodollar Loans may be
converted into Base Rate Loans or extended as Eurodollar Loans for new Interest
Periods only on the last day of the Interest Period applicable thereto, (ii) no
Loans may be converted into, or continued as, Eurodollar Loans if a Default or
Event of Default is in existence and the Total Aggregate Required Lenders or the
Administrative Agent shall have determined that such conversion or continuation
is inappropriate, (iii) Loans extended as, or converted into, Eurodollar Loans
shall be subject to the terms of the definition of "Interest Period" set forth
in Section 1.1 and shall be in such minimum amounts as provided in, with respect
to the Revolving Loans, Section 2.1(b)(ii), with respect to the Term Loans,
Section 2.4(c), with respect to the Tranche C Term Loans, Section 2.5(c) or with
respect to the New Term Loans, Section 2.6(c), (iv) no more than 10 Eurodollar
Loans shall be outstanding under this Credit Agreement at any time (it being
understood that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they begin on
the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period) and (v) any request for extension or conversion of a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the
Administrative Agent specified in specified in Schedule 2.1(a), or at such other
office as the Administrative Agent may designate in writing, prior to 11:00 A.M.
(New York City time) on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the extension of a Eurodollar Loan as, or conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall be irrevocable.
In the event the Borrower fails to request extension or conversion of any
Eurodollar Loan in accordance with this Section 3.2, or any such conversion or
extension is not permitted or required by this Section 3.2, then such Eurodollar
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Administrative Agent shall give each
affected Lender notice as promptly as practicable of any such proposed extension
or conversion affecting any Loan.

        3.3 PREPAYMENTS.

            (a) Voluntary Prepayments. The Borrower shall have the right to
prepay any Loans in whole or in part from time to time as it may select;
provided, however, that (i) each

                                       54
<PAGE>

partial prepayment of Loans shall be in a minimum principal amount of
$10,000,000 and integral multiples of $5,000,000 (provided that Revolving Loans
that are Base Rate Loans may be prepaid in minimum principal amounts of
$1,000,000 and integral multiples of $100,000) and (ii) any voluntary prepayment
of the Term Loans and/or Tranche C Term Loans shall be subject to the prepayment
penalty provisions of Section 3.3(c). Subject to the foregoing terms, amounts
prepaid under this Section 3.3(a) shall be applied as the Borrower may elect;
provided that if the Borrower elects to make a voluntary prepayment with respect
to the Term Loans or the Tranche C Term Loans, the Borrower shall, to the extent
any Revolving Loans are then outstanding, be required to make a pro rata
voluntary prepayment (and corresponding permanent reduction in the Revolving
Committed Amount) with respect to the Revolving Loans. Any amounts so prepaid
shall be applied, in the case of the Term Loans, the Tranche C Term Loans and
the New Term Loans, in the inverse order of maturity thereof, and in the case of
all Loans, first to Base Rate Loans and then to Eurodollar Loans in direct order
of Interest Period maturities. All prepayments under this Section 3.3(a) shall
be subject to Section 3.12 and all prepayments of Term Loans, Tranche C Term
Loans and New Term Loans shall be subject to Section 3.3(c), but otherwise
prepayments shall be made without premium or penalty.

            (b) Mandatory Prepayments.

                (i) Committed Amounts. If at any time, (A) the sum of the
        aggregate principal amount of the Obligations outstanding shall exceed
        the Aggregate Committed Amount, (B) the amount of LOC Obligations
        outstanding shall exceed the LOC Committed Amount or (C) the amount of
        Swingline Loans outstanding shall exceed the Swingline Committed Amount,
        the Borrower shall immediately make payment on the Revolving Loans, the
        Swingline Loans and/or to a cash collateral account (any such account
        into which cash collateral is deposited by the Borrower, a "Cash
        Collateral Account") in respect of the LOC Obligations, in an amount
        sufficient to eliminate the deficiency; provided, however, to the extent
        payment on the Revolving Loans and/or to a cash collateral account in
        respect of the LOC Obligations is not sufficient to eliminate such
        deficiency, the Borrower shall make payment on the Term Loans in an
        amount sufficient to eliminate the deficiency and a corresponding
        permanent reduction in the Revolving Committed Amount. The Borrower
        hereby grants to the Administrative Agent, for the ratable benefit of
        the Secured Parties, a continuing security interest in all amounts at
        any time on deposit in any and all cash collateral accounts to secure
        all LOC Obligations from time to time outstanding and all other Credit
        Party Obligations hereunder.

                (ii) Asset Disposition; Etc. Immediately upon receipt by any
        Consolidated Party of proceeds from any Asset Disposition, any
        incurrence of Indebtedness under Section 8.1(e), a Capital Raising Event
        or repayment of the Agecroft Note (other than in connection with the
        Agecroft Securitization), the Borrower shall prepay the Loans in an
        aggregate amount equal to the Net Cash Proceeds of the related Asset
        Disposition, incurrence of Indebtedness, Capital Raising Event or
        repayment (such prepayment to be applied as set forth in clause (iii)
        below).

                Notwithstanding the foregoing, the Borrower shall not be
        required to make a prepayment pursuant to Section 3.3(b)(ii) with
        respect to (x) up to $42,000,000 of Net Cash Proceeds from the sale of
        the Polk County, Florida, correctional facility, and (y) up to
        $5,000,000 per annum of Net Cash Proceeds from any Asset Dispositions
        (other than

                                       55

<PAGE>

        the Agecroft Securitization and the Headquarters Sale-Leaseback);
        provided, that, in the case of (x) and (y) above, the Borrower advises
        the Administrative Agent at the time the Net Cash Proceeds from such
        Asset Dispositions or repayment are received that it intends to reinvest
        such Net Cash Proceeds into replacement assets (including pursuant to
        any acquisition) within 180 days after such Asset Disposition or
        repayment and such Net Cash Proceeds are applied to repay the Revolving
        Loans (or, if no Revolving Loans are outstanding, to provide cash
        collateral for the Credit Party Obligations by deposit in a cash
        collateral account) until such time as such reinvestment occurs (or such
        180 day period expires); provided, however, if such Net Cash Proceeds
        are not so reinvested within such 180 day period, the Borrower shall be
        obligated to apply such Net Cash Proceeds to the prepayment of the Loans
        at the end of such 180 day period in accordance with the terms of
        Section 3.3(b)(iii).

                (iii) Application of Mandatory Prepayments. All amounts required
        to be paid pursuant to Sections 3.3(b)(ii) and 3.3(b)(v) shall be
        applied ratably to the Revolving Obligations, the Term Loans, the
        Tranche C Term Loans and the New Term Loans in accordance with the
        respective outstanding amounts thereof as follows: (A) to the Revolving
        Obligations (first to Revolving Loans and second to Swingline Loans and
        (after all Revolving Loans and Swingline Loans have been repaid) then to
        a cash collateral account to secure LOC Obligations) (with a
        corresponding reduction in the Revolving Committed Amount in an amount
        equal to all amounts applied to the Revolving Obligations pursuant to
        this Section (b)(iii)) and (B) to the Term Loans, the Tranche C Term
        Loans and the New Term Loans, in the inverse order of maturity thereof,
        allocated ratably between the Term Loans, the Tranche C Term Loans and
        the New Term Loans in accordance with the respective outstanding amounts
        thereof. One or more holders of the Term Loans, the Tranche C Term Loans
        or the New Term Loans may decline to accept a mandatory prepayment under
        Section 3.3(b)(ii) to the extent there are sufficient Revolving Loans,
        Term Loans or Tranche C Term Loans, as applicable, outstanding to be
        paid with such prepayment. In the event one or more holders of the Term
        Loans declines such a prepayment, such declined prepayments shall be
        split evenly, with fifty percent (50%) of such declined prepayment
        allocated toward a prepayment of the Revolving Loans (with a
        corresponding reduction in the Revolving Committed Amount in an amount
        equal to the amount prepaid pursuant to such prepayment) and fifty
        percent (50%) of such declined prepayment being returned to the
        Borrower. In the event one or more holders of the Tranche C Term Loans
        declines such a prepayment, such declined prepayments shall be split as
        follows: twenty-five percent (25%) of such declined prepayment shall be
        allocated toward a prepayment of the Revolving Loans (with a
        corresponding reduction in the Revolving Committed Amount in an amount
        equal to the amount prepaid pursuant to such prepayment), twenty-five
        percent (25%) of such declined prepayment shall be allocated toward a
        prepayment of the Term Loans (subject to the right of the holders of the
        Term Loans to decline such prepayment as provided above), and fifty
        percent (50%) of such declined prepayment shall be returned to the
        Borrower. In the event one or more holders of the New Term Loans
        declines such a prepayment, such declined prepayments shall be split as
        follows: twenty-five percent (25%) of such declined prepayment shall be
        allocated toward a prepayment of the Term Loans (subject to the right of
        the holders of the Term Loans to decline such prepayment as provided
        above), twenty-five percent (25%) of such declined prepayment shall be
        allocated toward a prepayment of the Tranche C Term Loans (subject to
        the right of the holders of the Tranche C Term Loans to decline such
        prepayment as provided above),

                                       56
<PAGE>

        and fifty percent (50%) of such declined prepayment shall be returned to
        the Borrower. Notwithstanding the foregoing or anything to the contrary
        set forth in this Credit Agreement, in no event shall the Borrower
        receive greater than fifty percent (50%) of the aggregate declined
        portions of any prepayment (with any excess being allocated ratably
        toward a prepayment of the Term Loans, the Tranche C Term Loans and the
        New Term Loans). Within the parameters of the applications set forth
        above, prepayments shall be applied first to Base Rate Loans and then to
        Eurodollar Loans in direct order of Interest Period maturities. All
        prepayments under this Section 3.3(b) shall be subject to Section 3.12.

                (iv) [Intentionally omitted.]

                (v) Excess Cash Flow. Unless the Required Lenders, the Required
        Tranche C Term Lenders and the Required New Term Loan Lenders otherwise
        agree, if for any period comprised of either (a) the first and second
        fiscal quarters of any fiscal year of the Consolidated Parties,
        commencing with the fiscal year beginning January 1, 2001 or (b) the
        third and fourth fiscal quarters of any such fiscal year of the
        Consolidated Parties, there shall be Excess Cash Flow, the Borrower
        shall apply seventy-five percent of such Excess Cash Flow to the
        prepayment of the Loans and the reduction of the Revolving Committed
        Amount as set forth in Section 3.1(b)(iii). Each such prepayment and
        commitment reduction shall be made on a date no later than the date that
        is three (3) Business Days after delivery of the officer's certificate
        that would otherwise be due, pursuant to Section 7.1(c), at the end of
        the second and fourth fiscal quarters of the Consolidated Parties.

            (c) Prepayment Penalty. In the event the Borrower voluntarily elects
to prepay the Term Loan and/or the Tranche C Term Loan within one year of the
Original Closing Date as permitted by Section 3.3(a), the Borrower shall be
obligated to pay a prepayment fee equal to two percent (2.0%) of the principal
amount prepaid. In the event the Borrower voluntarily elects to prepay the Term
Loan and/or the Tranche C Term Loan between December 31, 1999 and December 31,
2000 as permitted by Section 3.3(a), the Borrower shall be obligated to pay a
prepayment fee equal to one percent (1.0%) of the principal amount prepaid.
After two years from the Original Closing Date, the Borrower may prepay the Term
Loan and/or the Tranche C Term Loan without a prepayment penalty or fee.

        3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT. The
Borrower may from time to time permanently reduce or terminate the Revolving
Committed Amount in whole or in part (in minimum aggregate amounts of
$10,000,000 or in integral multiples of $5,000,000 in excess thereof (or, if
less, the full remaining amount of the then applicable Revolving Committed
Amount)) upon three Business Days' prior written notice to the Administrative
Agent; provided, that, (i) no such termination or reduction shall be made which
would cause the sum of the aggregate outstanding principal amount of the
Obligations to exceed the Aggregate Committed Amount, unless, concurrently with
such termination or reduction, the Loans are repaid to the extent necessary to
eliminate such excess and (ii) no such termination or reduction shall be made
which would cause the sum of the aggregate outstanding principal amount of the
Revolving Obligations to exceed the Revolving Committed Amount. The
Administrative Agent shall promptly notify each affected Lender of receipt by
the Administrative Agent of any notice from the Borrower pursuant to this
Section 3.4.

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        3.5 FEES.

            (a) Refinancing Fee. In consideration of the amendments effected by
this Credit Agreement and the New Term Loan Commitments provided hereby, the
Borrower agrees to pay to the Administrative Agent for the ratable account of
each Lender a fee (the "Refinancing Fee") in an amount equal to 1.00% of the
aggregate dollar amount of all Term Loans, Tranche C Term Loans and New Term
Loans outstanding on and as of June 30, 2002. Such Refinancing Fee shall be
payable on the first Business Day after June 30, 2002. For the avoidance of
doubt, if the Borrower has prepaid all Loans hereunder and all other Obligations
hereunder have been paid in full, in each case on or before June 30, 2002, the
Borrower shall not be obligated to pay the Refinancing Fee.

             (b) Unused Fee. In consideration of the Revolving Commitments of
the Revolving Lenders hereunder, the Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a fee (the "Unused
Fee") on the Unused Revolving Committed Amount computed at a per annum rate for
each day during the applicable Unused Fee Calculation Period (hereinafter
defined) equal to the Applicable Percentage in effect from time to time. The
Unused Fee shall begin accruing on the Restatement Effective Date and shall be
due and payable in arrears on the last business day of each March, June,
September and December (and any date that the Revolving Committed Amount is
reduced as provided in Section 3.4 and the Revolving Loan Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or portion
thereof for which the Unused Fee is payable hereunder being herein referred to
as an "Unused Fee Calculation Period"), beginning with the first of such dates
to occur after the Restatement Effective Date. For purposes of computation of
the Unused Fee, the Swingline Loans shall not be counted toward or considered
usage under the Revolving Loan Facility.

            (c) Letter of Credit Fees.

            (i) Letter of Credit Issuance Fee. In consideration of the issuance
of standby or any other performance related Letters of Credit hereunder, the
Borrower promises to pay to the Administrative Agent for the account of each
Revolving Lender a fee (the "Standby Letter of Credit Fee") on such Revolving
Lender's Revolving Commitment Percentage of the average daily maximum amount
available to be drawn under each such standby Letter of Credit computed at a per
annum rate for each day from the date of issuance to the date of expiration
equal to the Applicable Percentage for Eurodollar Loans. The Standby Letter of
Credit Fee will be payable quarterly in arrears on the last Business Day of each
March, June, September and December for the immediately preceding quarter (or a
portion thereof).

            (ii) Trade Letter of Credit Fee. In consideration of the issuance of
trade Letters of Credit hereunder, the Borrower promises to pay to the
Administrative Agent for the account of each Revolving Lender a fee (the "Trade
Letter of Credit Fee") on such Revolving Lender's Revolving Commitment
Percentage of the amount of each drawing under any such trade Letter of Credit
equal to .125%. The Trade Letter of Credit Fee will be payable on each date of
drawing under a trade Letter of Credit.

            (iii) Issuing Lender Fees. In addition to the Standby Letter of
Credit Fee payable pursuant to clause (i) above and the Trade Letter of Credit
Fee payable pursuant to clause (ii) above, the Borrower promises to pay to the
Issuing Lender for its own account without

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sharing by the other Revolving Lenders (A) a letter of credit fronting fee of
one-eighth percent (1/8%) per annum on the average daily maximum amount
available to be drawn under outstanding Letters of Credit payable quarterly in
arrears with the Standby Letter of Credit Fee and the Trade Letter of Credit
Fee, and (B) customary charges from time to time of the Issuing Lender with
respect to the issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit (collectively, the
"Issuing Lender Fees").

            (d) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, an administrative fee in an amount
previously agreed between the Borrower and the Administrative Agent (the
"Administrative Agent's Fees"), on the Restatement Effective Date and annually
in advance prior to the date on which all Commitments under this Credit
Agreement have terminated and no Credit Party Obligations are outstanding.

            (e) Other Fees. The Borrower agrees to pay to LCPI, in immediately
available funds on the Restatement Effective Date, the other fees referred to in
the Commitment Letter (and related Fee Letter), each dated as of April 26, 1999,
and as amended, among the Borrower, LCPI and LBI and as further agreed among the
Borrower, LCPI and LBI.

            (f) New Term Loan Commitment Fee. In consideration of the New Term
Loan Commitments provided hereby, the Borrower agrees to pay to the
Administrative Agent on the Second Restatement Effective Date, for the ratable
account of each New Term Loan Lender, a fee (the "New Term Loan Commitment Fee")
in an amount equal to 1.00% of the New Term Loan Committed Amount.

            (g) Term Loan Amendment Fee. In consideration of the amendments
affected by this Credit Agreement, the Borrower agrees to pay to the
Administrative Agent on the Second Restatement Effective Date, for the ratable
account of each Term Lender, a fee (the "Term Loan Amendment Fee") in an amount
equal to 0.25% of the aggregate dollar amount of all Term Loans outstanding on
and as of the Second Restatement Effective Date.

            (h) Tranche C Term Loan Commitment Fee. In consideration of the
amendments affected by this Credit Agreement, the Borrower agrees to pay to the
Administrative Agent on the Second Restatement Effective Date, for the ratable
account of each Tranche C Term Lender, a fee (the "Tranche C Term Loan Amendment
Fee") in an amount equal to 0.25% of the aggregate dollar amount of all Tranche
C Term Loans outstanding on and as of the Second Restatement Effective Date.

        3.6 CAPITAL ADEQUACY. If any Lender has determined, after the date
hereof, that the adoption or the becoming effective of, or any change in, or any
change by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy), then, upon notice from such Lender to the Borrower, the Borrower
shall be obligated to pay to

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<PAGE>

such Lender such additional amount or amounts as will compensate such Lender for
such reduction. Each determination by any such Lender of amounts owing under
this Section shall, absent manifest error, be conclusive and binding on the
parties hereto.

        3.7 LIMITATION ON EURODOLLAR LOANS. If on or prior to the first day of
any Interest Period for any Eurodollar Loan:

                (a) the Administrative Agent determines (which determination
        shall be conclusive) that by reason of circumstances affecting the
        relevant market, adequate and reasonable means do not exist for
        ascertaining the Eurodollar Rate for such Interest Period; or

                (b) the Required Lenders determine (which determination shall be
        conclusive) and notify the Administrative Agent that the Eurodollar Rate
        will not adequately and fairly reflect the cost to the Lenders of
        funding Eurodollar Loans for such Interest Period;

then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, continue Eurodollar Loans, or to
convert Base Rate Loans into Eurodollar Loans and the Borrower shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Eurodollar Loans or convert such Eurodollar
Loans into Base Rate Loans in accordance with the terms of this Credit
Agreement.

        3.7A LIMITATION ON TRANCHE C EURODOLLAR LOANS. If on or prior to the
first day of any Interest Period for any Eurodollar Loan the Required Tranche C
Lenders determine (which determination shall be conclusive) and notify the
Administrative Agent that the Eurodollar Rate will not adequately and fairly
reflect the cost to the Tranche C Lenders of funding Eurodollar Loans to be held
by such Tranche C Lenders during such Interest Period, then the Administrative
Agent shall give the Borrower prompt notice thereof, and so long as such
condition remains in effect, the Tranche C Lenders shall be under no obligation
to make additional Eurodollar Loans, continue Eurodollar Loans, or to convert
Base Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s)
of the then current Interest Period(s) for the outstanding Eurodollar Loans,
either prepay such Eurodollar Loans or convert such Eurodollar Loans into Base
Rate Loans in accordance with the terms of this Credit Agreement.

        3.7B LIMITATION ON NEW TERM LOAN EURODOLLAR LOANS. If on or prior to the
first day of any Interest Period for any Eurodollar Loan the Required New Term
Loan Lenders determine (which determination shall be conclusive) and notify the
Administrative Agent that the Eurodollar Rate will not adequately and fairly
reflect the cost to the New Term Loan Lenders of funding Eurodollar Loans to be
held by such New Term Loan Lenders during such Interest Period, then the
Administrative Agent shall give the Borrower prompt notice thereof, and so long
as such condition remains in effect, the New Term Loan Lenders shall be under no
obligation to make additional Eurodollar Loans, continue Eurodollar Loans, or to
convert Base Rate Loans into Eurodollar Loans and the Borrower shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Eurodollar Loans or convert such Eurodollar
Loans into Base Rate Loans in accordance with the terms of this Credit
Agreement.

        3.8 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof occurring after

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<PAGE>

the Closing Date shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Credit Agreement, (a) such Lender shall
promptly give written notice of such circumstances to the Borrower and the
Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans, shall forthwith be canceled and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.13.

        3.9 REQUIREMENTS OF LAW. If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable law, rule,
or regulation, or any change in the interpretation or administration thereof by
any Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank, or
comparable agency:

                (i) shall subject such Lender (or its Applicable Lending Office)
        to any tax, duty, or other charge with respect to any Eurodollar Loans,
        its Notes, or its obligation to make Eurodollar Loans, or change the
        basis of taxation of any amounts payable to such Lender (or its
        Applicable Lending Office) under this Credit Agreement or its Notes in
        respect of any Eurodollar Loans (other than taxes imposed on the overall
        net income of such Lender by the jurisdiction in which such Lender has
        its principal office or such Applicable Lending Office);

                (ii) shall impose, modify, or deem applicable any reserve,
        special deposit, assessment, or similar requirement (other than the
        Eurodollar Reserve Requirement utilized in the determination of the
        Adjusted Eurodollar Rate) relating to any extensions of credit or other
        assets of, or any deposits with or other liabilities or commitments of,
        such Lender (or its Applicable Lending Office), including the Commitment
        of such Lender hereunder; or

                (iii) shall impose on such Lender (or its Applicable Lending
        Office) or the London interbank market any other condition affecting
        this Credit Agreement or its Notes or any of such extensions of credit
        or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the

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<PAGE>

Administrative Agent), suspend the obligation of such Lender to make or continue
Eurodollar Loans, or to convert Base Rate Loans into Eurodollar Loans, until the
event or condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.10 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested. Each Lender shall promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section 3.9 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
it. Any Lender claiming compensation under this Section 3.9 shall furnish to the
Borrower and the Administrative Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.

        3.10 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to
make any Eurodollar Loan or to continue, or to convert Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to Section 3.8 or 3.9 hereof, such
Lender's Eurodollar Loans shall be automatically converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for such Eurodollar
Loans (or, in the case of a conversion required by Section 3.8 hereof, on such
earlier date as such Lender may specify to the Borrower with a copy to the
Administrative Agent) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to such conversion no longer exist:

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

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

If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to the conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.

        3.11 TAXES. (a) Any and all payments by any Credit Party to or for the
account of any Lender or the Administrative Agent hereunder or under any other
Credit Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,

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<PAGE>

excluding, in the case of each Lender and the Administrative Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender (or its Applicable Lending Office) or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If any Credit Party shall be required by law to deduct any Taxes
from or in respect of any sum payable under this Credit Agreement or any other
Credit Document to any Lender or the Administrative Agent, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
3.11) such Lender or the Administrative Agent receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such Credit
Party shall make such deductions, (iii) such Credit Party shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) such Credit Party shall furnish to the
Administrative Agent, at its address referred to in Section 11.1, the original
or a certified copy of a receipt evidencing payment thereof.

        (b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Credit
Agreement or any other Credit Document or from the execution or delivery of, or
otherwise with respect to, this Credit Agreement or any other Credit Document
(hereinafter referred to as "Other Taxes").

        (c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.

        (d) Each Lender that is not a United States person under Section
7701(a)(30) of the Code (a "Non-U.S. Lender"), on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Administrative Agent
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with (i) Internal Revenue Service Form
W-8 BEN or W-8 ECI, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which reduces
the rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively connected
with the conduct of a trade or business in the United States or (ii) with
respect to any Non-U.S. Lender that is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code claiming exemption from U.S. withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest," a statement substantially in the form of Exhibit 3.11(d)
or a Form W-8 BEN certifying, in the case of (i) or (ii) above, that such Lender
is entitled to an exemption from or a reduced rate of tax on payments pursuant
to this Credit Agreement or any of the other Credit Documents.

        (e) For any period with respect to which a Lender has failed to provide
the Borrower and the Administrative Agent with the appropriate form pursuant to
Section 3.11(d)

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<PAGE>

(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 3.11(a) or
3.11(b) with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.

        (f) If any Credit Party is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.

        (g) Within thirty (30) days after the date of any payment of Taxes, the
applicable Credit Party shall furnish to the Administrative Agent the original
or a certified copy of a receipt evidencing such payment.

        (h) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.

        3.12 COMPENSATION. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:

                (a) any payment, prepayment, or conversion of a Eurodollar Loan
        for any reason (including, without limitation, the acceleration of the
        Loans pursuant to Section 9.2) on a date other than the last day of the
        Interest Period for such Loan; or

                (b) any failure by the Borrower for any reason (including,
        without limitation, the failure of any condition precedent specified in
        Section 5 to be satisfied) to borrow, convert, continue, or prepay a
        Eurodollar Loan on the date for such borrowing, conversion,
        continuation, or prepayment specified in the relevant notice of
        borrowing, prepayment, continuation, or conversion under this Credit
        Agreement.

        With respect to Eurodollar Loans, such indemnification may include an
amount equal to the excess, if any, of (a) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) over
(b) the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Lender on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank Eurodollar market. The
covenants of the Borrower set forth in this Section 3.12 shall survive the
repayment of the Loans,

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<PAGE>

LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.

        3.13 PRO RATA TREATMENT. Except to the extent otherwise provided herein:

             (a) Loans. Each Revolving Loan, each payment or (subject to the
terms of Section 3.3) prepayment of principal of any Revolving Loan (other than
Swingline Loans) or reimbursement obligations arising from drawings under
Letters of Credit, each payment of interest on the Revolving Loans or
reimbursement obligations arising from drawings under Letters of Credit, each
payment of Unused Fees, each payment of the Standby Letter of Credit Fee, each
payment of the Trade Letter of Credit Fee, each reduction in Revolving
Commitments and LOC Commitments and each conversion or extension of any
Revolving Loan, shall be allocated pro rata among the Revolving Lenders in
accordance with the respective principal amounts of their outstanding Revolving
Loans or Swingline Loans and Participation Interests. With respect to the Term
Loan, each payment or prepayment of principal on the Term Loan, each payment of
interest thereon, and each conversion or extension of any Loan comprising the
Term Loan, shall be allocated pro rata among the Term Lenders in accordance with
the respective principal amounts of their outstanding Term Loan and
Participation Interests therein.

             (b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Administrative Agent shall have been notified
in writing by any Lender prior to the date of any requested borrowing that such
Lender does not intend to make available to the Administrative Agent its ratable
share of such borrowing to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on the date of such borrowing, and the Administrative Agent in reliance
upon such assumption, may (in its sole discretion but without any obligation to
do so) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent,
the Administrative Agent shall be able to recover such corresponding amount from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover from the Lender or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrower at the
applicable rate for the applicable borrowing pursuant to the Notice of Borrowing
and (ii) from a Lender at the Federal Funds Rate.

        3.13A TRANCHE C PRO RATA TREATMENT. With respect to the Tranche C Term
Loans, each payment or prepayment of principal on the Tranche C Term Loans, each
payment of interest thereon and each conversion or extension of any Loan
comprising the Tranche C Term Loans, shall be allocated pro rata among the
Tranche C Term Lenders in accordance with the respective principal amounts of
their outstanding Tranche C Term Loans and Participation Interests therein.

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        3.13B NEW TERM LOAN PRO RATA TREATMENT. With respect to the New Term
Loans, each payment or prepayment of principal on the New Term Loans, each
payment of interest thereon and each conversion or extension of any Loan
comprising the New Term Loans, shall be allocated pro rata among the New Term
Loan Lenders in accordance with the respective principal amounts of their
outstanding New Term Loans and Participation Interests therein.

        3.14 SHARING OF PAYMENTS. The Lenders agree among themselves that, in
the event that any Lender shall obtain payment in respect of any Loan, LOC
Obligations or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Lender shall promptly purchase from the other Lenders a Participation
Interest in such Loans, LOC Obligations and other obligations in such amounts,
and make such other adjustments from time to time, as shall be equitable to the
end that all Lenders share such payment in accordance with their respective
ratable shares as provided for in this Credit Agreement. The Lenders further
agree among themselves that if payment to a Lender obtained by such Lender
through the exercise of a right of setoff, banker's lien, counterclaim or other
event as aforesaid shall be rescinded or must otherwise be restored, each Lender
which shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Administrative Agent shall fail to remit to the Administrative
Agent or any other Lender an amount payable by such Lender or the Administrative
Agent to the Administrative Agent or such other Lender pursuant to this Credit
Agreement on the date when such amount is due, such payments shall be made
together with interest thereon for each date from the date such amount is due
until the date such amount is paid to the Administrative Agent or such other
Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.

        3.15 PAYMENTS, COMPUTATIONS, ETC. (a) Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Administrative
Agent in Dollars in immediately available funds, without setoff, deduction,
counterclaim or withholding of any kind, at the Administrative Agent's office
specified in Schedule 2.1(a) not later than 2:00 P.M. (Charlotte, North Carolina
time) on the date when due. Payments received after such time shall be deemed to
have been received on the next succeeding Business Day. The Administrative Agent
may (but shall not be obligated to) debit the amount of any such payment which
is not made by such time to any ordinary deposit account of the Borrower or any
other Credit Party maintained with the Administrative Agent (with notice to the
Borrower or such other Credit Party). The Borrower shall, at the time it makes
any payment under this Credit Agreement,

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specify to the Administrative Agent the Loans, LOC Obligations, Fees, interest
or other amounts payable by the Borrower hereunder to which such payment is to
be applied (and in the event that it fails so to specify, or if such application
would be inconsistent with the terms hereof, the Administrative Agent shall
distribute such payment to the Lenders in such manner as the Administrative
Agent may determine to be appropriate in respect of obligations owing by the
Borrower hereunder, subject to the terms of Section 3.13(a)). The Administrative
Agent will distribute such payments to such Lenders, if any such payment is
received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business Day
in like funds as received prior to the end of such Business Day and otherwise
the Administrative Agent will distribute such payment to such Lenders on the
next succeeding Business Day. Whenever any payment hereunder shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of interest and
Fees for the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next preceding
Business Day. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days elapsed
over a year of 360 days, except with respect to computation of interest on Base
Rate Loans which (unless the Base Rate is determined by reference to the Federal
Funds Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of borrowing, but
exclude the date of payment.

             (b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent or any Lender on account of
the Credit Party Obligations or any other amounts outstanding under any of the
Credit Documents or in respect of the Collateral shall be paid over or delivered
as follows:

                FIRST, to the payment of all reasonable out-of-pocket costs and
        expenses (including without limitation reasonable attorneys' fees) of
        the Administrative Agent in connection with enforcing the rights of the
        Lenders under the Credit Documents and any protective advances made by
        the Administrative Agent with respect to the Collateral under or
        pursuant to the terms of the Collateral Documents;

                SECOND, to payment of any fees owed to the Administrative Agent;

                THIRD, to the payment of all reasonable out-of-pocket costs and
        expenses (including without limitation, reasonable attorneys' fees) of
        each of the Lenders in connection with enforcing its rights under the
        Credit Documents or otherwise with respect to the Credit Party
        Obligations owing to such Lender;

                FOURTH, to the payment of all of the Credit Party Obligations
        consisting of accrued fees and interest;

                FIFTH, to the payment of the outstanding principal amount of the
        Credit Party Obligations (including the payment or cash
        collateralization of the outstanding LOC Obligations);

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                SIXTH, to all other Credit Party Obligations and other
        obligations which shall have become due and payable under the Credit
        Documents or otherwise and not repaid pursuant to clauses "FIRST"
        through "FIFTH" above; and

                SEVENTH, to the payment of the surplus, if any, to whoever may
        be lawfully entitled to receive such surplus.

        In carrying out the foregoing, (i) amounts received shall be applied in
        the numerical order provided until exhausted prior to application to the
        next succeeding category; (ii) each of the Lenders shall receive an
        amount equal to its pro rata share (based on the proportion that the
        then outstanding Loans and LOC Obligations held by such Lender bears to
        the aggregate then outstanding Loans and LOC Obligations) of amounts
        available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
        and "SIXTH" above; and (iii) to the extent that any amounts available
        for distribution pursuant to clause "FIFTH" above are attributable to
        the issued but undrawn amount of outstanding Letters of Credit, such
        amounts shall be held by the Administrative Agent in a cash collateral
        account and applied (A) first, to reimburse the Issuing Lender from time
        to time for any drawings under such Letters of Credit and (B) then,
        following the expiration of all Letters of Credit, to all other
        obligations of the types described in clauses "FIFTH" and "SIXTH" above
        in the manner provided in this Section 3.15(b).

        3.16 EVIDENCE OF DEBT. (a) Each Lender shall maintain an account or
accounts evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Credit Agreement. Each Lender will make
reasonable efforts to maintain the accuracy of its account or accounts and to
promptly update its account or accounts from time to time, as necessary.

             (b) The Administrative Agent shall maintain the Register pursuant
to Section 11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Loan hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder from or for
the account of any Credit Party and each Lender's share thereof. The
Administrative Agent will make reasonable efforts to maintain the accuracy of
the subaccounts referred to in the preceding sentence and to promptly update
such subaccounts from time to time, as necessary.

             (c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if consistent
with the entries of the Administrative Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the Credit
Parties therein recorded; provided, however, that the failure of any Lender or
the Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Credit Parties to repay the Credit Party obligations owing
to such Lender.

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                                   SECTION 4.

                                    GUARANTY

        4.1 THE GUARANTY. The Guarantors hereby jointly and severally guarantee
to each Secured Party, as primary obligor and not as surety, the prompt payment
of the Credit Party Obligations in full when due (whether at stated maturity, as
a mandatory prepayment, by acceleration, as a mandatory cash collateralization
or otherwise) strictly in accordance with the terms thereof. The Guarantors
hereby further agree that if any of the Credit Party Obligations are not paid in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Credit Party Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
in accordance with the terms of such extension or renewal.

        Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.

        4.2 OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantors under
Section 4.1 are joint and several, absolute and unconditional, irrespective of
the value, genuineness, validity, regularity or enforceability of any of the
Credit Documents or Hedging Agreements, or any other agreement or instrument
referred to therein, or any substitution, release, impairment or exchange of any
Guarantor or other guarantee of or security for any of the Credit Party
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.2 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Each Guarantor agrees that such Guarantor shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrower or any other
Guarantor for amounts paid under this Section 4 until such time as the Secured
Parties have been paid in full, all Commitments under this Credit Agreement have
been terminated and no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the Secured Parties in
connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:

                (a) at any time or from time to time, without notice to any
        Guarantor, the time for any performance of or compliance with any of the
        Credit Party Obligations shall be extended, or such performance or
        compliance shall be waived;

                (b) any of the acts mentioned in any of the provisions of any of
        the Credit Documents, any Hedging Agreement or any other agreement or
        instrument referred to in the Credit Documents or Hedging Agreements
        shall be done or omitted;

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                (c) the maturity of any of the Credit Party Obligations shall be
        accelerated, or any of the Credit Party Obligations shall be modified,
        supplemented or amended in any respect, or any right under any of the
        Credit Documents, any Hedging Agreement or any other agreement or
        instrument referred to in the Credit Documents or Hedging Agreements
        shall be waived or any other guarantee of any of the Credit Party
        Obligations or any security therefor shall be released, impaired or
        exchanged in whole or in part or otherwise dealt with;

                (d) any Lien granted to, or in favor of, the Administrative
        Agent or any Secured Party as security for any of the Credit Party
        Obligations shall fail to attach or be perfected;

                (e) any of the Credit Party Obligations shall be determined to
        be void or voidable (including, without limitation, for the benefit of
        any creditor of any Guarantor) or shall be subordinated to the claims of
        any Person (including, without limitation, any creditor of any
        Guarantor); or

                (f) the occurrence of any Bankruptcy Event with respect to any
        Consolidated Party.

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any other
Secured Party exhaust any right, power or remedy or proceed against any Person
under any of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging Agreements, or
against any other Person under any other guarantee of, or security for, any of
the Credit Party Obligations.

        4.3 REINSTATEMENT. The obligations of the Guarantors under this Section
4 shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Credit Party Obligations
is rescinded or must be otherwise restored by any holder of any of the Credit
Party Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each other Secured Party on demand for all
reasonable costs and expenses (including, without limitation, fees and expenses
of counsel) incurred by the Administrative Agent or such other Secured Party in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.

        4.4 CERTAIN ADDITIONAL WAIVERS. Each Guarantor agrees that such
Guarantor shall have no right of recourse to security for the Credit Party
Obligations, except through the exercise of rights of subrogation pursuant to
Section 4.2 and through the exercise of rights of contribution pursuant to
Section 4.6.

        4.5 REMEDIES. The Guarantors agree that, to the fullest extent permitted
by law, as between the Guarantors, on the one hand, and the Administrative Agent
and the other Secured Parties, on the other hand, the Credit Party Obligations
may be declared to be forthwith due and payable as provided in Section 9.2 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 9.2) for purposes of Section 4.1

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notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Credit Party Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Credit Party Obligations being deemed to have
become automatically due and payable), the Credit Party Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by the Guarantors for purposes of Section 4.1. The Guarantors acknowledge and
agree that their obligations hereunder are secured in accordance with the terms
of the Security Agreement and the other Collateral Documents and that the
Secured Parties may exercise their remedies thereunder in accordance with the
terms thereof.

        4.6 RIGHTS OF CONTRIBUTION. The Guarantors hereby agree as among
themselves that, if any Guarantor shall make an Excess Payment (as defined
below), such Guarantor shall have a right of contribution from each other
Guarantor in an amount equal to such other Guarantor's Contribution Share (as
defined below) of such Excess Payment. The payment obligations of any Guarantor
under this Section 4.6 shall be subordinate and subject in right of payment to
the prior payment in full to the Administrative Agent and the other Secured
Parties of the Guaranteed Obligations, and none of the Guarantors shall exercise
any right or remedy under this Section 4.6 against any other Guarantor until
payment and satisfaction in full of all of such Guaranteed Obligations. For
purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
obligations arising under the other provisions of this Section 4; (b) "Excess
Payment" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of all of the Credit Parties exceeds the
amount of all of the debts and liabilities (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of the
Credit Parties hereunder) of the Credit Parties; provided, however, that, for
purposes of calculating the Pro Rata Shares of the Guarantors in respect of any
payment of Guaranteed Obligations, any Guarantor that became a Guarantor
subsequent to the date of any such payment shall be deemed to have been a
Guarantor on the date of such payment and the financial information for such
Guarantor as of the date such Guarantor became a Guarantor shall be utilized for
such Guarantor in connection with such payment; and (d) "Contribution Share"
shall mean, for any Guarantor in respect of any Excess Payment made by any other
Guarantor, the ratio (expressed as a percentage) as of the date of such Excess
Payment of (i) the amount by which the aggregate present fair salable value of
all of its assets and properties exceeds the amount of all debts and liabilities
of such Guarantor (including contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Credit Parties other than the maker of
such Excess Payment exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Credit Parties) of the Credit Parties other
than the maker of such Excess Payment; provided, however, that, for purposes of
calculating the Contribution Shares of the Guarantors in respect of any Excess
Payment, any Guarantor that became a Guarantor subsequent to the date of any
such Excess Payment shall be deemed to have been a Guarantor on the date of such
Excess Payment and the financial information for such Guarantor as of the date
such Guarantor became a

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Guarantor shall be utilized for such Guarantor in connection with such Excess
Payment. This Section 4.6 shall not be deemed to affect any right of
subrogation, indemnity, reimbursement or contribution that any Guarantor may
have under applicable law against the Borrower in respect of any payment of
Guaranteed Obligations.

        4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE. The guarantee in this
Section 4 is a guaranty of payment and not of collection, is a continuing
guarantee, and shall apply to all Credit Party Obligations whenever arising.

                                   SECTION 5.
                                   CONDITIONS

        5.1 CONDITIONS TO EFFECTIVENESS. The effectiveness of this amendment and
restatement of the First Amended and Restated Credit Agreement is subject to
satisfaction of each of the following conditions:

            (a) Executed Credit Documents. Receipt by the Administrative Agent
of: (i) this Credit Agreement, duly executed by the Borrower, the Subsidiary
Guarantors, the Amending Lenders, the New Term Loan Lenders, the Administrative
Agent, the Documentation Agent, the Syndication Agent, the Co-Agent and the Lead
Arranger, (ii) any Notes requested by the applicable Lender (against return of
any notes issued to such Lender under the First Amended and Restated Credit
Agreement), duly executed by the Borrower, and (iii) all other Credit Documents,
duly executed by the parties thereto, each in form and substance acceptable to
the Administrative Agent.

            (b) Corporate Documents. Receipt by the Administrative Agent of the
following:

                (i) Charter Documents. Copies of the articles or certificates of
        incorporation or other charter documents of each Credit Party certified
        to be true and complete as of a recent date by the appropriate
        Governmental Authority of the state or other jurisdiction of its
        incorporation and certified by a secretary or assistant secretary of
        such Credit Party to be true and correct as of the Second Restatement
        Effective Date.

                (ii) Bylaws. A copy of the bylaws of each Credit Party certified
        by a secretary or assistant secretary of such Credit Party to be true
        and correct as of the Second Restatement Effective Date.

                (iii) Resolutions. Copies of resolutions of the Board of
        Directors of each Credit Party approving and adopting the Credit
        Documents to which it is a party, the transactions contemplated therein
        and authorizing execution and delivery thereof, certified by a secretary
        or assistant secretary of such Credit Party to be true and correct and
        in force and effect as of the Second Restatement Effective Date.

                (iv) Good Standing. Copies of certificates of good standing,
        existence or its equivalent with respect to each Credit Party certified
        as of a recent date by the appropriate Governmental Authorities of the
        state or other jurisdiction of incorporation and each other jurisdiction
        in which the failure to so qualify and be in good standing could have a
        Material Adverse Effect.

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                (v) Incumbency. An incumbency certificate of each Credit Party
        certified by a secretary or assistant secretary to be true and correct
        as of the Second Restatement Effective Date.

            (c) Financial Forecasts. The Administrative Agent shall have
received detailed financial forecasts for the Borrower and CCA of Tennessee for
the fiscal periods 2001-2002, including income statements, balance sheets and
cash flow statements, in each case based on (and including) reasonable operating
and accounting assumptions and otherwise in form and substance reasonably
satisfactory to the Administrative Agent.

            (d) Opinions of Counsel. The Administrative Agent shall have
received legal opinions from (i) New York counsel to the Credit Parties
reasonably satisfactory to the Administrative Agent, (ii) Miles & Stockbridge
and (iii) Stokes, Bartholomew, Evans & Petree, each in form and substance
reasonably satisfactory to the Administrative Agent, dated the Second
Restatement Effective Date and addressed to each of the Administrative Agent,
the Documentation Agent, the Syndication Agent, the Co-Agent, the Lead Arranger
and each of the Lenders.

            (e) Personal Property Collateral. The Administrative Agent shall
have received:

                (i) As may be requested by the Administrative Agent, UCC
        financing statement amendments or initial financing statements in lieu
        of continuation statements, as applicable, with respect to all UCC-1
        financing statements and fixture filings originally executed and
        delivered prior to the Second Restatement Effective Date by the Credit
        Parties under the First Amended and Restated Credit Agreement who are
        parties to this Credit Agreement, in each case reflecting, if necessary,
        the amendment and restatement of the First Amended and Restated Credit
        Agreement by this Credit Agreement, as well as any other instruments and
        documents in form and substance reasonably satisfactory to the
        Administrative Agent necessary or, in the opinion of the Administrative
        Agent, desirable to continue the perfection and priority of the
        Administrative Agent's security interest in any Collateral after giving
        effect to this Credit Agreement, including, without limitation, the
        delivery of a letter from the Credit Parties to the Administrative Agent
        authorizing the filing of such amendments, financing statements and
        fixture filings.

                (ii) all stock certificates evidencing the Capital Stock pledged
        to the Administrative Agent pursuant to the Pledge Agreement, together
        with duly executed in blank, undated stock powers attached thereto
        (unless, with respect to the pledged Capital Stock of any Foreign
        Subsidiary, such stock powers are deemed unnecessary by the
        Administrative Agent in its reasonable discretion under the law of the
        jurisdiction of incorporation of such Person);

                (iii) such patent/trademark/copyright filings (or amendments
        thereto) as requested by the Administrative Agent in order to perfect or
        continue the perfection of the Administrative Agent's security interest
        in such Collateral after giving effect to this Credit Agreement;

                (iv) all instruments and chattel paper in the possession of any
        of the Credit Parties, together with allonges or assignments as may be
        necessary or appropriate

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        to perfect or continue the perfection of the Administrative Agent's
        security interest in such Collateral after giving effect to this Credit
        Agreement;

                (v) duly executed consents as are necessary, in the
        Administrative Agent's reasonable judgment, to perfect or continue the
        perfection of the Administrative Agent's security interest in the
        Collateral after giving effect to this Credit Agreement;

                (vi) in the case of any personal property Collateral located at
        a premises leased to a Credit Party, such estoppel letters, consents and
        waivers (or amendments to any of the foregoing) from the landlords on
        such real property as may be required by the Administrative Agent; and

                (vii) duly-executed termination statements or other releases for
        any Liens (other than Permitted Liens) existing on the Second
        Restatement Effective Date.

            (f) Real Property Collateral. The Administrative Agent shall have
received, in form and substance satisfactory to the Administrative Agent:

                (i) to the extent requested by the Administrative Agent, fully
        executed and notarized amendments or amendments and restatements of all
        mortgages, deeds of trust or deeds to secure debt granted in connection
        with the Original Credit Agreement or the First Amended and Restated
        Credit Agreement or, in the Administrative Agent's sole discretion,
        mortgages, deeds of trust or deeds to secure debt in favor of the
        Administrative Agent (each such amendment, restatement, mortgage, deed
        of trust and deed to secure debt, together with all of the foregoing
        delivered and recorded in connection with the Original Credit Agreement
        or the First Amended and Restated Credit Agreement, a "Mortgage" and
        collectively, "Mortgages") encumbering (a) the real property assets
        owned by the Borrower set forth on Schedule 5.1(f)(i) and (b) each
        leasehold estate of the Borrower set forth on Schedule 5.1(f)(i) (each
        of those owned real property assets and leasehold estates on Schedule
        5.1(f)(i), an "Existing Property" and collectively, the "Existing
        Properties"), together with such UCC-1 financing statements (or UCC-3
        amendments and/or assignments of financing statements filed in
        connection with the Original Credit Agreement or the First Amended and
        Restated Credit Agreement), as the Administrative Agent shall deem
        appropriate with respect to each such Existing Property;

                (ii) (A) Endorsements (the "Title Endorsements") to all existing
        Mortgage Policies that were issued pursuant to the terms of the Original
        Credit Agreement and the First Amended and Restated Credit Agreement,
        which Title Endorsements shall be issued by the title insurer that
        issued such Mortgage Policies and which shall specifically insure that
        the insured priority of the lien of the Mortgages (as defined in the
        First Amended and Restated Credit Agreement) is unaffected by this
        Credit Agreement, or shall insure the first priority lien status of any
        Mortgage amendment or new Mortgage contemplated hereby, and (B) with
        respect to any Existing Property that was acquired after the Restatement
        Effective Date or that for any other reason does not have in place a
        "Mortgage Policy" (as defined in the First Amended and Restated Credit
        Agreement) in accordance with the terms of the First Amended and
        Restated Credit Agreement, ALTA or other appropriate form mortgagee
        title insurance policies (the "Mortgage Policies") issued by a title
        insurer satisfactory to the Administrative Agent

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        (the "Title Insurance Company"), in favor of the Administrative Agent,
        in an amount satisfactory to the Administrative Agent with respect to
        each such Existing Property, insuring that each applicable Mortgage
        creates a valid and enforceable first priority mortgage lien on the
        respective Existing Properties, free and clear of all defects and
        encumbrances except Permitted Liens, which Title Endorsements or
        Mortgage Policies shall be in form and substance satisfactory to the
        Administrative Agent and contain such endorsements as shall be
        satisfactory to the Administrative Agent, and providing affirmative
        insurance and such reinsurance as the Administrative Agent may request,
        all of the foregoing in form and substance reasonably satisfactory to
        the Administrative Agent, provided that, in the discretion of the
        Administrative Agent, delivery of such Title Endorsements and/or
        Mortgage Policies may be made promptly after the Second Restatement
        Effective Date;

                (iii) with respect to any Existing Property that was acquired
        after the Restatement Effective Date or for which the Administrative
        Agent has not already received such a survey, maps or plats of a survey
        of the site of each such Existing Property certified to the
        Administrative Agent and the Title Insurance Company in a manner
        reasonably satisfactory to them, dated a date satisfactory to the
        Administrative Agent and the Title Insurance Company by an independent
        professional licensed land surveyor reasonably satisfactory to the
        Administrative Agent and the Title Insurance Company, and otherwise in
        form and substance satisfactory to the Administrative Agent;

                (iv) to the extent requested by the Administrative Agent, an
        opinion of counsel (which counsel shall be satisfactory to the
        Administrative Agent) in the states in which each Existing Property is
        located with respect to the enforceability of any new or amended
        Mortgage contemplated hereby, standard remedies with respect thereto,
        the sufficiency of the form of UCC-1 financing statements or UCC-3
        amendments and/or assignments to be recorded or filed in such state, the
        continued perfection and priority of the Liens evidenced thereby and
        such other matters as the Administrative Agent may request, in form and
        substance satisfactory to the Administrative Agent, it being understood,
        however, that the Administrative Agent may, in its sole discretion,
        instead require letters in favor of the Administrative Agent from any
        such counsel with respect to the legal opinions delivered by such
        counsel in connection with the Original Credit Agreement or the First
        Amended and Restated Credit Agreement;

                (v) with respect to any Existing Property for which such a
        certification was not delivered pursuant to the Original Credit
        Agreement or the First Amended and Restated Credit Agreement,
        certification from Bankers Hazard Determination Services or Borrower's
        land surveyor in a form reasonably satisfactory to the Administrative
        Agent or other evidence acceptable to the Administrative Agent that none
        of the improvements on the Existing Properties are located within any
        area designated by the Director of the Federal Emergency Management
        Agency as a "special flood hazard" area; and, regardless of any
        deliveries made pursuant to the Original Credit Agreement or the First
        Amended and Restated Credit Agreement, if any improvements on the
        Existing Properties are located within a "special flood hazard" area,
        evidence of a flood insurance policy from a company and in an amount
        satisfactory to the Administrative Agent for the applicable portion of
        the premises, naming the Administrative Agent, for the benefit of the
        Secured Parties, as mortgagee;

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<PAGE>

            (g) Subordination. With respect to each Existing Property owned by
the Borrower and leased to Management Opco or CCA of Tennessee, the
Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent, an amended and restated subordination of lease
agreement from Management Opco or CCA of Tennessee with respect to each such
lease agreement.

            (h) Environmental Reports. Except for those Existing Properties
identified on Schedule 5.1(f)(i), for which environmental site assessment
reports were previously delivered to the Original Administrative Agent, the
Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent, environmental site assessment reports and related
documents with respect to all Existing Properties.

            (i) Priority of Liens. The Administrative Agent shall have received
such other satisfactory evidence as it may reasonably require that, after giving
effect to this Credit Agreement, (i) the Administrative Agent, on behalf of the
Secured Parties, holds a perfected, first priority Lien on all Collateral and
(ii) none of the Collateral is subject to any Liens other than Permitted Liens.

            (j) Letters of Credit. The Borrower shall have terminated or cash
collateralized all Letters of Credit, in each case in a manner reasonably
satisfactory to the Administrative Agent.

            (k) Evidence of Insurance. Receipt by the Administrative Agent of
copies of insurance policies or certificates of insurance of the Consolidated
Parties evidencing liability and casualty insurance meeting the requirements set
forth in the Credit Documents, including, but not limited to, naming the
Administrative Agent as sole loss payee on behalf of the Secured Parties and the
Administrative Agent and the other Secured Parties as additional insureds, each
as appropriate.

            (l) Approval of Amendment. This Credit Agreement shall have been
consented to in writing by the requisite lenders under the First Amended and
Restated Credit Agreement.

            (m) [Intentionally omitted.]

            (n) No Default. On the Second Restatement Effective Date, no Default
or Event of Default shall have occurred and be continuing.

            (o) Representations and Warranties True. On the Second Restatement
Effective Date, the representations and warranties set forth in Section 6 and in
the other Credit Documents shall be true and correct in all material respects as
of such date (except for those which expressly relate to an earlier date).

            (p) Officer's Certificates. The Administrative Agent shall have
received a certificate or certificates executed by an Executive Officer of the
Borrower as of the Second Restatement Effective Date stating that (A) each
Credit Party is in compliance with all existing material financial obligations,
(B) all material governmental, shareholder and third party consents and
approvals, if any, with respect to the Credit Documents and the transactions
contemplated thereby have been obtained, (C) no action, suit, investigation or
proceeding is pending or, to the knowledge of the Borrower, threatened in any
court or before any arbitrator or

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<PAGE>

governmental instrumentality that purports to affect any Credit Party or any
transaction contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a Material
Adverse Effect, and (D) immediately after giving effect to this Credit
Agreement, the other Credit Documents and all the transactions contemplated
therein to occur on such date, (1) each of the Credit Parties is Solvent, (2) no
Default or Event of Default exists, (3) all representations and warranties
contained herein and in the other Credit Documents are true and correct in all
material respects, and (4) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 7.11.

            (q) Compliance Certificate. The Administrative Agent shall have
received a certificate executed by the chief financial officer of the Borrower,
demonstrating compliance with the financial covenants contained in Section 7.11
(based on the projections (and annualized, where appropriate) of the Borrower
for the first fiscal quarter following the Second Restatement Effective Date).

            (r) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses (including, without limitation, the New Term Loan Commitment Fee, the
Term Loan Amendment Fee, the Tranche C Term Loan Amendment Fee, all fees,
disbursements and other charges of counsel and all charges of IntraLinks) owed
by them to the Lenders and the Administrative Agent for which invoices have been
presented on or before the Second Restatement Effective Date.

            (s) Termination Notice. Receipt by the Administrative Agent from the
Borrower, at least three Business Days prior to the Second Restatement Effective
Date, of a notice indicating that all outstanding Revolving Loans will be
prepaid on the Second Restatement Effective Date and that the Revolving
Committed Amount will be terminated and, in connection therewith, the Revolving
Committed Amount shall have actually been terminated.

            (t) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any Lender.

        5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligations of each
Lender to make any Loan and of the Issuing Lender to issue or extend any Letter
of Credit are subject to satisfaction of the following conditions in addition to
satisfaction on the Second Restatement Effective Date of the conditions set
forth in Section 5.1:

                (a) The Borrower shall have delivered to the Administrative
        Agent, in the case of any New Term Loans, a Notice of Borrowing;

                (b) The representations and warranties set forth in Section 6
        shall, subject to the limitations set forth therein, be true and correct
        in all material respects as of such date (except for those which
        expressly relate to an earlier date);

                (c) There shall not have been commenced against any Consolidated
        Party an involuntary case under any applicable bankruptcy, insolvency or
        other similar law now or hereafter in effect, or any case, proceeding or
        other action for the appointment of a receiver, liquidator, assignee,
        custodian, trustee, sequestrator (or similar official) of such Person or
        for any substantial part of its Property or for the winding up or
        liquidation of its affairs, and such involuntary case or other case,
        proceeding or other action shall remain undismissed, undischarged or
        unbonded;

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<PAGE>

                (d) No Default or Event of Default shall exist and be continuing
        either prior to or after giving effect thereto;

                (e) No circumstances, events or conditions shall have occurred
        since December 31, 1999, which would have a Material Adverse Effect; and

                (f) Immediately after giving effect to the making of such Loan
        (and the application of the proceeds thereof), the sum of the aggregate
        principal amount of outstanding Obligations shall not exceed the
        Aggregate Committed Amount.

The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Credit Parties of the correctness as of the date of such
delivery of the matters specified in subsections (b), (c), (d), (e) and (f)
above.

                                   SECTION 6.
                         REPRESENTATIONS AND WARRANTIES

        The Credit Parties hereby represent to the Administrative Agent and each
Lender that:

        6.1 FINANCIAL CONDITION. The financial statements delivered to the
Lenders pursuant to Section 5.1(c) and Section 7.1(a) and (b)(i), (A) have been
prepared in accordance with GAAP and (B) present fairly (on the basis disclosed
in the footnotes to such financial statements) the consolidated financial
condition, results of operations and cash flows of the Consolidated Parties and
Unrestricted Subsidiaries as of such date and for such periods. The financial
statements delivered to the Lenders pursuant to Section 7.1(b)(ii), (A) have
been prepared in accordance with GAAP (other than the combined nature thereof)
and (B) present fairly the consolidated results of operations of the
Consolidated Parties and Unrestricted Subsidiaries as of such date and for such
periods.

        6.2 NO MATERIAL CHANGE. Since December 31, 2000 (a) there has been no
development or event relating to or affecting a Consolidated Party or
Unrestricted Subsidiary which has had or could reasonably be expected to have a
Material Adverse Effect and (b) except as otherwise permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the Capital Stock in a Consolidated Party nor has any of the Capital Stock
in a Consolidated Party been redeemed, retired, purchased or otherwise acquired
for value.

        6.3 ORGANIZATION AND GOOD STANDING. Each of the Consolidated Parties and
Unrestricted Subsidiaries (a) is duly organized, validly existing and is in good
standing under the laws of the jurisdiction of its incorporation or
organization, except, with respect to any Unrestricted Subsidiary, to the extent
the failure to be so organized, existing or in good standing could not
reasonably be expected to have a Material Adverse Effect, (b) has the corporate
or other necessary power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except, with respect to any
Unrestricted Subsidiary, to the extent the failure to have such power, authority
or right could not reasonably be expected to have a Material Adverse Effect and
(c) is duly qualified as a foreign entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good

                                       78
<PAGE>

standing could have a Material Adverse Effect. Furthermore, the Borrower has
conducted its business so as to qualify as a REIT for its 1999 taxable year, and
subsequent to qualifying as a REIT for its 1999 taxable year the Borrower will
conduct its business so as to qualify as a C Corporation commencing with its
2000 taxable year.

        6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each of the Credit
Parties has the corporate or other necessary power and authority, and the legal
right, to make, deliver and perform the Credit Documents to which it is a party,
and in the case of the Borrower, to obtain extensions of credit hereunder, and
has taken all necessary corporate action to authorize the borrowings and other
extensions of credit on the terms and conditions of this Credit Agreement and to
authorize the execution, delivery and performance of the Credit Documents to
which it is a party. No consent or authorization of, filing with, notice to or
other similar act by or in respect of, any Governmental Authority or any other
Person is required to be obtained or made by or on behalf of any Credit Party in
connection with the borrowings or other extensions of credit hereunder or with
the execution, delivery, performance, validity or enforceability of the Credit
Documents to which such Credit Party is a party, except for filings to perfect
the Liens created by the Collateral Documents, and except for consents,
authorizations, filings or notices which have been obtained or made. This Credit
Agreement has been, and each other Credit Document to which any Credit Party is
a party will be, duly executed and delivered on behalf of the Credit Parties.
This Credit Agreement constitutes, and each other Credit Document to which any
Credit Party is a party when executed and delivered will constitute, a legal,
valid and binding obligation of such Credit Party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law). The amendments of the First Amended and Restated Credit Agreement
reflected herein have been validly approved as required under Sections 11.6 and
11.6A of the First Amended and Restated Credit Agreement and such amendments are
binding on the Lenders.

        6.5 NO CONFLICTS. Neither the execution and delivery of the Credit
Documents, nor the consummation of the transactions contemplated therein, nor
performance of and compliance with the terms and provisions thereof by such
Credit Party will (a) violate or conflict with any provision of its articles or
certificate of incorporation or bylaws or other organizational or governing
documents of such Person, (b) violate, contravene or materially conflict with
any Requirement of Law or any other law, regulation (including, without
limitation, Regulation U or Regulation X), order, writ, judgment, injunction,
decree or permit applicable to it, except for any violation, contravention or
conflict which could not reasonably be expected to have a Material Adverse
Effect, (c) violate, contravene or conflict with contractual provisions of, or
cause an event of default under, any indenture, loan agreement, mortgage, deed
of trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, except for any violation, contravention or conflict which
could not reasonably be expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.

        6.6 NO DEFAULT. No Consolidated Party or Unrestricted Subsidiary is in
default in any respect under any contract, lease, loan agreement, indenture,
mortgage, security agreement or other agreement or obligation to which it is a
party or by which any of its properties is bound which default could reasonably
be expected to have a Material Adverse Effect.

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<PAGE>

        6.7 OWNERSHIP. Each Consolidated Party is the owner of, and has good and
marketable title to, all of its respective material assets, and none of such
assets is subject to any Lien other than Permitted Liens.

        6.8 INDEBTEDNESS. Except as otherwise permitted under Section 8.1, none
of the Consolidated Parties or Unrestricted Subsidiaries have any Indebtedness.

        6.9 LITIGATION. Subject to Schedule 6.9, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party or
Unrestricted Subsidiary which could reasonably be expected to have a Material
Adverse Effect.

        6.10 TAXES. Each Consolidated Party and Unrestricted Subsidiary has
filed, or caused to be filed, all tax returns (federal, state, local and
foreign) required to be filed and paid (a) all amounts of taxes shown thereon to
be due (including interest and penalties), and (b) all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) which are not yet delinquent, (ii) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP or (iii) that if unpaid could not reasonably
be expected to have a Material Adverse Effect. No Credit Party is aware as of
the Second Restatement Effective Date of any proposed tax assessments against
it, any other Consolidated Party or any Unrestricted Subsidiary, except to the
extent such tax assessment could not reasonably be expected to have a Material
Adverse Effect.

        6.11 COMPLIANCE WITH LAW. Each Consolidated Party and Unrestricted
Subsidiary is in compliance with all Requirements of Law and all other laws,
rules, regulations, orders and decrees (including without limitation
Environmental Laws) applicable to it, or to its properties, unless such failure
to comply could not reasonably be expected to have a Material Adverse Effect.

        6.12 ERISA. (a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, has occurred with respect to any Plan; (iii)
each Plan has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the Code, and any
other applicable federal or state laws; and (iv) no lien in favor of the PBGC or
a Plan has arisen or is reasonably likely to arise on account of any Plan.

            (b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the date on
which this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.

            (c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be reasonably
expected to incur, any

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<PAGE>

withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer
Plan. Neither any Consolidated Party nor any ERISA Affiliate would become
subject to any withdrawal liability under ERISA if any Consolidated Party or any
ERISA Affiliate were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. Neither any Consolidated
Party nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241 of
ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan
is, to the best knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.

            (d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has
occurred with respect to a Plan which has subjected or may subject any
Consolidated Party or any ERISA Affiliate to any liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which any Consolidated Party or any
ERISA Affiliate has agreed or is required to indemnify any Person against any
such liability.

            (e) Neither any Consolidated Party nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code apply
has been administered in compliance in all material respects of such sections.

            (f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder will
involve any transaction which is subject to the prohibitions of Sections 404,
406 or 407 of ERISA or in connection with which a tax could be imposed pursuant
to Section 4975 of the Code. The representation by the Credit Parties in the
preceding sentence is made in reliance upon and subject to the accuracy of the
Lenders' representation in Section 11.15 with respect to their source of funds
and is subject, in the event that the source of the funds used by the Lenders in
connection with this transaction is an insurance company's general asset
account, to the application of Prohibited Transaction Class Exemption 95-60, 60
Fed. Reg. 35,925 (1995), compliance with the regulations issued under Section
401(c)(1)(A) of ERISA, or the issuance of any other prohibited transaction
exemption or similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA of a "plan" within the meaning of
Section 4975(e)(1) of the Code.

        6.13 SUBSIDIARIES. Set forth on Schedule 6.13 is a complete and accurate
list as of the Second Restatement Effective Date of all Restricted Subsidiaries
of each Consolidated Party and all Unrestricted Subsidiaries of each
Consolidated Party (listed separately). The information on Schedule 6.13
includes jurisdiction of incorporation, the number of shares of each class of
Capital Stock outstanding, the number and percentage of outstanding shares of
each class owned (directly or indirectly) by such Consolidated Party or
Unrestricted Subsidiary, and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all other
similar rights with respect thereto. The outstanding Capital Stock of all such
Subsidiaries is validly issued, fully paid and non-assessable and is owned by
each such Consolidated Party or Unrestricted Subsidiary, directly or indirectly,
free and clear of all Liens

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<PAGE>

(other than those arising under or contemplated in connection with the Credit
Documents and Liens on the Capital Stock of Unrestricted Subsidiaries permitted
under clause (xi) of the definition of Permitted Liens). Other than as set forth
in Schedule 6.13, no Consolidated Party or Unrestricted Subsidiary has
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have outstanding any rights to subscribe for or
to purchase or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to its Capital Stock.

        6.14 GOVERNMENTAL REGULATIONS, ETC. (a) No part of the Letters of Credit
or proceeds of the Loans will be used, directly or indirectly, for the purpose
of purchasing or carrying any "margin stock" within the meaning of Regulation U,
or for the purpose of purchasing or carrying or trading in any securities. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form U-1 referred to in Regulation U.
No indebtedness being reduced or retired out of the proceeds of the Loans was or
will be incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or any "margin security" within the meaning
of Regulation T. "Margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the
Consolidated Parties. None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use of the
proceeds of the Loans) will violate or result in a violation of the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or
regulations issued pursuant thereto, or Regulation T, U or X.

            (b) No Consolidated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the Investment
Company Act of 1940, each as amended. In addition, no Consolidated Party is (i)
an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such a
company, or (ii) a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary" of a
"holding company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.

            (c) Each Consolidated Party has obtained and holds in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the ownership of its respective
Property and to the conduct of its respective businesses as presently conducted,
and which failure to obtain or hold could not reasonably be expected to have a
Material Adverse Effect.

            (d) No Consolidated Party or Unrestricted Subsidiary is in violation
of any applicable statute, regulation or ordinance of the United States of
America, or of any state, city, town, municipality, county or any other
jurisdiction, or of any agency thereof (including without limitation,
environmental laws and regulations), which violation could reasonably be
expected to have a Material Adverse Effect.

            (e) Each Consolidated Party and Unrestricted Subsidiary is current
with all material reports and documents, if any, required to be filed with any
state or federal securities commission or similar agency and is in full
compliance in all material respects with all

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<PAGE>

applicable rules and regulations of such commissions, except to the extent such
noncompliance could not reasonably be expected to have a Material Adverse
Effect.

        6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT. The proceeds of the Loans
hereunder shall be used solely by the Borrower (i) for working capital, (ii) to
provide funds for the development and construction of correctional, justice and
detention centers, (iii) for refinancing existing Indebtedness of the Borrower,
(iv) to acquire Real Properties, (v) for general corporate purposes and (vi) to
make dividend payments to its shareholders necessary to preserve its ability to
elect to be taxed as a REIT for its 1999 taxable year only; provided, however,
that (A) proceeds of the Tranche C Term Loan shall be used only for the purposes
set forth in clauses (iii) and (v) above, and for payment of the one-time
special dividend in fiscal year 1999, as described in, and subject to, Section
8.7 and (B) proceeds of the New Term Loans shall be used solely to repay (on the
Second Restatement Effective Date) all outstanding Revolving Loans in accordance
with Section 3.3(a). The Letters of Credit shall be used only for or in
connection with appeal bonds, reimbursement obligations arising in connection
with surety and reclamation bonds, reinsurance, domestic or international trade
transactions, bid or proposal bonds and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party in the
ordinary course of business, including credit enhancement for financing incurred
by the Borrower in connection with the acquisition, construction and development
of real property.

        6.16 ENVIRONMENTAL MATTERS. (a)(i) Each of the facilities and properties
owned, leased or operated by the Consolidated Parties and any Unrestricted
Subsidiaries (the "Properties") and all operations at the Properties are in
compliance with all applicable Environmental Laws, (ii) there is no violation of
any Environmental Law with respect to the Properties or the businesses operated
by the Consolidated Parties (the "Businesses"), and (iii) there are no
conditions relating to the Businesses or Properties that, in the case of the
foregoing clauses (i), (ii) and (iii) could reasonably be expected to have a
Material Adverse Effect.

            (b) None of the Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Properties in amounts
or concentrations that could reasonably be expected to have a Material Adverse
Effect.

            (c) No Consolidated Party or Unrestricted Subsidiary has received
any written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Businesses, nor
does any Consolidated Party or Unrestricted Subsidiary have knowledge or reason
to believe that any such notice will be received or is being threatened, if such
violation, alleged violation, non-compliance, liability or potential liability
could reasonably be expected to have a Material Adverse Effect.

            (d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, or generated, treated, stored or disposed of
at, on or under any of the Properties or any other location, in each case by or
on behalf of any Consolidated Party or Unrestricted Subsidiary in a manner that
could reasonably be expected to have a Material Adverse Effect.

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<PAGE>

            (e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of any Credit Party, threatened, under any
Environmental Law to which any Consolidated Party or Unrestricted Subsidiary is
or will be named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Consolidated Parties, the Properties or the Businesses, except to the extent
that each of the foregoing could not, individually or collectively, reasonably
be expected to have a Material Adverse Effect.

            (f) There has been no release, or threat of release, of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations (including, without limitation, disposal) of any Consolidated
Party or Unrestricted Subsidiary in connection with the Properties or otherwise
in connection with the Businesses, in a manner that could reasonably be expected
to have a Material Adverse Effect.

        6.17 INTELLECTUAL PROPERTY. Each Consolidated Party owns, or has the
legal right to use, all trademarks, tradenames, copyrights, technology, know-how
and processes (the "Intellectual Property") necessary for each of them to
conduct its business as currently conducted except for those the failure to own
or have such legal right to use could not reasonably be expected to have a
Material Adverse Effect. Set forth on Schedule 6.17 is a list of all material
Intellectual Property owned by each Consolidated Party or that any Consolidated
Party has the right to use. Except as provided on Schedule 6.17, no claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and to
the Credit Parties' knowledge the use of such Intellectual Property by any
Consolidated Party does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

        6.18 SOLVENCY. Each Credit Party is and, after consummation of the
transactions contemplated by this Credit Agreement, will be Solvent.

        6.19 INVESTMENTS. All Investments of each Consolidated Party and
Unrestricted Subsidiary are Permitted Investments or otherwise permitted under
Section 8.6.

        6.20 LOCATION OF COLLATERAL. Set forth on Schedule 6.20(a) is a list of
all real properties, whether owned or leased by any Consolidated Party, with
street address, county and state where located and, in the case of leased
properties, the date of the lease and the landlord and tenant party thereto. Set
forth on Schedule 6.20(b) is a list of all locations where any material personal
property of a Consolidated Party is located, including county and state where
located. Set forth on Schedule 6.20(c) is the chief executive office and
principal place of business of each Consolidated Party. Schedules 6.20(a),
6.20(b) and 6.20(c) may be updated from time to time by the Borrower by giving
written notice to the Administrative Agent.

        6.21 DISCLOSURE. Neither this Credit Agreement nor any financial
statements delivered to the Lenders nor any other document, certificate or
statement furnished to the Lenders by or on behalf of any Consolidated Party or
Unrestricted Subsidiary in connection with the transactions contemplated hereby
(other than projections and pro forma financial information) contained as of the
date such statement, information, document or certificate was so furnished, any
untrue

                                       84
<PAGE>

statement of a material fact or omitted to state a material fact necessary in
order to make the statements contained herein or therein not misleading. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount.

        6.22 [INTENTIONALLY OMITTED.]

        6.23 LABOR MATTERS. There are no collective bargaining agreements or
Multiemployer Plans covering the employees of a Consolidated Party as of the
Second Restatement Effective Date and none of the Consolidated Parties has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years.

        6.24 YEAR 2000 COMPLIANCE. Each Credit Party has (i) initiated a review
and assessment of all areas within its and each of its Subsidiaries' business
and operations that could be adversely affected by the "Year 2000 Problem" (that
is, the risk that computer applications used by such Credit Party or any of its
Subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis, and (iii) to date, implemented that plan in accordance with
the timetable. Based on the foregoing, each Credit Party believes that all
computer applications that are material to its and any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so could not reasonably be expected to have Material Adverse Effect.

        6.25 FIRST PRIORITY LIEN. Both before and after giving effect to the
amendment of the First Amended and Restated Credit Agreement pursuant to this
Credit Agreement, the Administrative Agent, on behalf of the Secured Parties,
holds a first priority lien, subject to no other liens other than Permitted
Liens, in the Collateral.

        6.26 LEASES. Each of the leases entered into between a Credit Party and
any lessee of real property owned by a Credit Party (a) has a minimum initial
lease term of five years (except for leases entered into with a governmental
entity) and (b) requires that the lessee remain solely responsible for all
operations and other liabilities with respect to the applicable property.
Furthermore, (i) eighty percent (80%) of all lease revenues of the Credit
Parties are derived from leases with Management Opco and with lessees (other
than Management Opco and with respect to current leases with Community Education
Partners, Inc.) having a senior unsecured non-credit enhanced long term debt
rating of at least BBB+ (or higher) from S&P or Baa1 (or higher) from Moody's or
if such ratings from S&P and Moody's are unavailable, an equivalent rating from
Fitch or Duff & Phelps and (ii) at least ninety percent (90%) of all lease
revenues of the Credit Parties are derived from leases with Management Opco and
with lessees (other than Management Opco ) and with respect to current leases
with Community Education Partners, Inc.) having a senior unsecured non-credit
enhanced long term debt rating of at least BBB- (or higher) from S&P or Baa3 (or
higher) from Moody's or if such ratings from S&P and Moody's are unavailable, an
equivalent rating from Fitch or Duff & Phelps.

                                       85
<PAGE>

                                   SECTION 7.
                              AFFIRMATIVE COVENANTS

        Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:

        7.1 INFORMATION COVENANTS. The Credit Parties will furnish, or cause to
be furnished, to the Administrative Agent and each of the Lenders:

                (a) Annual Financial Statements. As soon as available, and in
        any event within 90 days after the close of each fiscal year of the
        Consolidated Parties and each Unrestricted Subsidiary of the Borrower, a
        consolidated balance sheet and income statement of the Consolidated
        Parties and each such Unrestricted Subsidiary, as of the end of such
        fiscal year, together with related consolidated statements of operations
        and retained earnings and of cash flows for such fiscal year, setting
        forth in comparative form consolidated figures for the preceding fiscal
        year, all such financial information described above to be in reasonable
        form and detail and audited by independent certified public accountants
        of recognized national standing reasonably acceptable to the
        Administrative Agent and whose opinion shall be to the effect that such
        financial statements have been prepared in accordance with GAAP (except
        for changes with which such accountants concur) and shall not be limited
        as to the scope of the audit or qualified as to the status of the
        Consolidated Parties as a going concern; provided, however, that such
        opinion may be qualified, as to fiscal year 2000 and 2001 audited
        financial statements only, to the extent that such qualification is
        premised solely upon the status of the Revolving Loan Maturity Date, the
        Term Loan Maturity Date, the Tranche C Term Loan Maturity Date or the
        New Term Loan Maturity Date. Notwithstanding the foregoing, for any
        entity that becomes a Consolidated Party in any fiscal year, audited
        financial statements shall not be required for such entity for the
        portion of such fiscal year prior to the date on which such entity
        becomes a Consolidated Party.

                (b) Quarterly, Monthly and Weekly Financial Statements.

                        (i) Quarterly Financial Statements. As soon as
                available, and in any event within 45 days after the close of
                each fiscal quarter of the Consolidated Parties and each
                Unrestricted Subsidiary (other than the fourth fiscal quarter,
                in which case 90 days after the end thereof) a consolidated
                balance sheet and income statement of the Consolidated Parties
                and each such Unrestricted Subsidiary, as of the end of such
                fiscal quarter, together with related consolidated statements of
                operations and retained earnings and of cash flows for such
                fiscal quarter, in each case setting forth in comparative form
                consolidated figures for the corresponding period of the
                preceding fiscal year, all such financial information described
                above to be in reasonable form and detail and reasonably
                acceptable to the Administrative Agent, and accompanied by a
                certificate of the chief financial officer of the Borrower to
                the effect that such quarterly financial statements fairly
                present in all material respects the financial condition of the
                Consolidated Parties and the Unrestricted Subsidiaries, as
                applicable, and have been prepared in accordance with GAAP,
                subject to changes resulting from audit and normal year-end
                audit adjustments.

                                       86
<PAGE>

                        (ii) Monthly Financial Statements. As soon as available,
                and in any event within 45 days after the close of each calendar
                month, a combined consolidated income statement and EBITDA
                summary of the Consolidated Parties and each Unrestricted
                Subsidiary, as of the end of such calendar month, in each case
                setting forth in comparative form combined consolidated figures
                for the preceding calendar month, all such financial information
                described above to be in reasonable form and detail and
                reasonably acceptable to the Administrative Agent, and
                accompanied by a certificate of the chief financial officer of
                the Borrower (which certificate may be based in part on an
                accompanying certificate of the chief financial officer of each
                Unrestricted Subsidiary, as applicable) to the effect that such
                monthly financial statements fairly present in all material
                respects the financial results of the Consolidated Parties and
                the Unrestricted Subsidiaries, as applicable, and have been
                prepared in accordance with GAAP (other than the combined nature
                thereof), subject to changes resulting from audit and normal
                year-end audit adjustments.

                        (iii) Weekly Forecasts and Reports. As soon as available
                and in any event within five (5) Business Days after the end of
                each calendar week, a statement of actual cash receipts and
                disbursements of the Consolidated Parties and each Unrestricted
                Subsidiary, as of the end of such calendar week, all such
                financial information described above to be in reasonable form
                and detail and reasonably acceptable to the Administrative
                Agent, and accompanied by a certificate of the chief financial
                officer of the Borrower to the effect that such weekly forecasts
                and reports are complete and accurate in all material respects
                (which certificate may be based in part on an accompanying
                certificate of the chief financial officer of each Unrestricted
                Subsidiary, as applicable).

                (c) Officer's Certificate. At the time of delivery of the
        financial statements provided for in Sections 7.1(a) and 7.1(b)(i)
        above, a certificate of the chief financial officer of the Borrower
        substantially in the form of Exhibit 7.1(c), (i) demonstrating
        compliance with the financial covenants contained in Section 7.11 by
        calculation thereof as of the end of each such fiscal period, (ii)
        stating that no Default or Event of Default exists, or if any Default or
        Event of Default does exist, specifying the nature and extent thereof
        and what action the Credit Parties propose to take with respect thereto
        and (iii) stating that such person has reviewed Sections 8.1, 8.5 and
        8.6 and detailing the Borrower's compliance therewith. In addition,
        within five (5) Business Days of the end of each calendar month, a
        certificate of the chief financial officer of the Borrower,
        demonstrating compliance with the financial covenants contained in
        Section 7.11(vi) (which certificate may be based in part on an
        accompanying certificate of the chief financial officer of each
        Unrestricted Subsidiary, as applicable) accompanied by a report setting
        forth, on a facility by facility basis, the Total Beds Occupied Ratio
        for such month.

                (d) Annual Business Plan and Budgets. At least 30 days prior to
        the end of each fiscal year of the Borrower, beginning with the fiscal
        year ending December 31, 1999, an annual business plan and budget of the
        Consolidated Parties containing, among other things, pro forma financial
        statements for the next fiscal year.

                (e) [Intentionally omitted.]

                                       87
<PAGE>

                (f) Auditor's Reports. Promptly upon receipt thereof, a copy of
        any other report or "management letter" submitted by independent
        accountants to any Consolidated Party or Unrestricted Subsidiary, in
        each case in connection with any annual, interim or special audit of the
        books of such Consolidated Party or Unrestricted Subsidiary, as
        applicable.

                (g) Reports. Promptly upon transmission or receipt thereof, (i)
        copies of any filings and registrations with, and reports to or from,
        the Securities and Exchange Commission, or any successor agency, and
        copies of all financial statements, proxy statements, notices and
        reports as any Consolidated Party or Unrestricted Subsidiary shall send
        to its shareholders or to a holder of any Indebtedness owed by any
        Consolidated Party or Unrestricted Subsidiary, as applicable, in each
        case in its capacity as such a holder and (ii) upon the request of the
        Administrative Agent, all reports and written information to and from
        the United States Environmental Protection Agency, or any state or local
        agency responsible for environmental matters, the United States
        Occupational Health and Safety Administration, or any state or local
        agency responsible for health and safety matters, or any successor
        agencies or authorities concerning environmental, health or safety
        matters.

                (h) Notices. Upon obtaining knowledge thereof, the Credit
        Parties will give written notice to the Administrative Agent immediately
        of (i) the occurrence of an event or condition consisting of a Default
        or Event of Default, specifying the nature and existence thereof and
        what action the Credit Parties propose to take with respect thereto and
        (ii) the occurrence of any of the following with respect to any
        Consolidated Party or Unrestricted Subsidiary (A) the pendency or
        commencement of any litigation, arbitral or governmental proceeding
        against such Person which could reasonably be expected to have a
        Material Adverse Effect, (B) the institution of any proceedings against
        such Person with respect to, or the receipt of notice by such Person of
        potential liability or responsibility for violation, or alleged
        violation of any federal, state or local law, rule or regulation,
        including but not limited to, Environmental Laws, the violation of which
        could reasonably be expected to have a Material Adverse Effect, or (C)
        any notice or determination concerning the imposition of any withdrawal
        liability by a Multiemployer Plan against such Person or any ERISA
        Affiliate, the determination that a Multiemployer Plan is, or is
        expected to be, in reorganization within the meaning of Title IV of
        ERISA or the termination of any Plan.

                (i) ERISA. Upon obtaining knowledge thereof, the Credit Parties
        will give written notice to the Administrative Agent promptly (and in
        any event within five business days) of: (i) of any event or condition,
        including, but not limited to, any Reportable Event, that constitutes,
        or might reasonably lead to, an ERISA Event; (ii) with respect to any
        Multiemployer Plan, the receipt of notice as prescribed in ERISA or
        otherwise of any withdrawal liability assessed against the Credit
        Parties or any ERISA Affiliates, or of a determination that any
        Multiemployer Plan is in reorganization or insolvent (both within the
        meaning of Title IV of ERISA); (iii) the failure to make full payment on
        or before the due date (including extensions) thereof of all amounts
        which any Consolidated Party or any ERISA Affiliate is required to
        contribute to each Plan pursuant to its terms and as required to meet
        the minimum funding standard set forth in ERISA and the Code with
        respect thereto; or (iv) any change in the funding status of any Plan
        that could have a Material Adverse Effect, together with a description
        of any such

                                       88
<PAGE>

        event or condition or a copy of any such notice and a statement by the
        chief financial officer of the Borrower briefly setting forth the
        details regarding such event, condition, or notice, and the action, if
        any, which has been or is being taken or is proposed to be taken by the
        Credit Parties with respect thereto. Promptly upon request, the Credit
        Parties shall furnish the Administrative Agent and the Lenders with such
        additional information concerning any Plan as may be reasonably
        requested, including, but not limited to, copies of each annual
        report/return (Form 5500 series), as well as all schedules and
        attachments thereto required to be filed with the Department of Labor
        and/or the Internal Revenue Service pursuant to ERISA and the Code,
        respectively, for each "plan year" (within the meaning of Section 3(39)
        of ERISA).

                (j) Environmental. Upon the reasonable written request of the
        Administrative Agent, the Credit Parties will furnish or cause to be
        furnished to the Administrative Agent, at the Credit Parties' expense, a
        report of an environmental assessment of reasonable scope, form and
        depth, (including, where appropriate, invasive soil or groundwater
        sampling) by a consultant reasonably acceptable to the Administrative
        Agent as to the nature and extent of the presence of any Materials of
        Environmental Concern on any Properties (as defined in Section 6.16) and
        as to the compliance by any Consolidated Party or Unrestricted
        Subsidiary with Environmental Laws at such Properties. If the Credit
        Parties fail to deliver such an environmental report within seventy-five
        (75) days after receipt of such written request then the Administrative
        Agent may arrange for same, and the Consolidated Parties hereby grant to
        the Administrative Agent and their representatives access to the
        Properties to reasonably undertake such an assessment (including, where
        appropriate, invasive soil or groundwater sampling). The reasonable cost
        of any assessment arranged for by the Administrative Agent pursuant to
        this provision will be payable by the Credit Parties on demand and added
        to the obligations secured by the Collateral Documents.

                (k) Additional Patents and Trademarks. At the time of delivery
        of the financial statements and reports provided for in Section 7.1(a),
        the Credit Parties will deliver to the Administrative Agent, a report
        signed by the chief financial officer or treasurer of the Borrower
        setting forth (i) a list of registration numbers for all patents,
        trademarks, service marks, tradenames and copyrights awarded to any
        Consolidated Party since the last day of the immediately preceding
        fiscal year and (ii) a list of all patent applications, trademark
        applications, service mark applications, trade name applications and
        copyright applications submitted by any Consolidated Party since the
        last day of the immediately preceding fiscal year and the status of each
        such application, all in such form as shall be reasonably satisfactory
        to the Administrative Agent.

                (l) Leases. At the time of delivery of the financial statements
        provided for in Sections 7.1(a) and (b)(i) above, the Credit Parties
        will deliver to the Administrative Agent, copies of all new leases
        and/or modifications to existing leases for all of those Real Properties
        for which any Credit Party receives annual rent payments equal to or in
        excess of $1,500,000, and at the time of delivery of the financial
        statements provided for in Section 7.1(a) above, copies of the annual
        financial statements of each lessee which (i) is not a governmental
        entity or public company and (ii) accounts for at least five percent
        (5%) of the annual rent payments made to any Credit Party.

                                       89
<PAGE>

                (m) Construction Budget. Within fifteen (15) days after the
        close of each fiscal quarter of the Borrower, the Borrower shall deliver
        to the Administrative Agent, a construction budget detailing the
        construction planned by the Borrower or its Subsidiaries with respect to
        each of the Real Properties for the succeeding fiscal year, together
        with information detailing the amount of expenditures of the Borrower
        and its Subsidiaries for construction year to date.

                (n) Other Information. With reasonable promptness upon any such
        request, such other information regarding the business, properties or
        financial condition of any Consolidated Party as the Administrative
        Agent, the Required Lenders, the Required Tranche C Term Lenders, the
        Required New Term Loan Lenders or any Lender may reasonably request.

        7.2 PRESERVATION OF EXISTENCE AND FRANCHISES. Except as a result of or
in connection with a merger of a Subsidiary permitted under Section 8.4, each
Credit Party will, and will cause each of its Restricted Subsidiaries to, do all
things necessary to preserve and keep in full force and effect its existence,
rights, franchises and authority. Subject to the provisions of Section 8.7, the
Borrower will conduct its business so as to qualify as a REIT for its 1999
taxable year, and subsequent to qualifying as a REIT for its 1999 taxable year,
will operate so as to be taxed as a C Corporation.

        7.3 BOOKS AND RECORDS. Each Credit Party will, and will cause each of
its Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).

        7.4 COMPLIANCE WITH LAW. Each Credit Party will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders, and
all applicable restrictions imposed by all Governmental Authorities, applicable
to it and its Property if noncompliance with any such law, rule, regulation,
order or restriction could reasonably be expected to have a Material Adverse
Effect.

        7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS. Each Credit Party will, and
will cause each of its Subsidiaries to, pay and discharge (a) all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent, (b) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, could reasonably be expected to give rise to a Lien
upon any of its properties, and (c) except as prohibited hereunder, all of its
other Indebtedness as it shall become due; provided, however, that no
Consolidated Party or Unrestricted Subsidiary shall be required to pay any such
tax, assessment, charge, levy, claim or Indebtedness which is being contested in
good faith by appropriate proceedings and as to which adequate reserves therefor
have been established in accordance with GAAP, unless the failure to make any
such payment (i) could reasonably be expected to give rise to an immediate right
to foreclose on a Lien securing such amounts or (ii) could reasonably be
expected to have a Material Adverse Effect.

        7.6 INSURANCE. (a) Each Credit Party will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance

                                       90
<PAGE>

retentions as are in accordance with normal industry practice (or as otherwise
required by the Collateral Documents). The Administrative Agent shall be named
as loss payee or mortgagee, as its interest may appear, and/or additional
insured (along with the other Secured Parties) with respect to any such
insurance providing general liability coverage or coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by endorsement
upon the policy or policies issued by it or by independent instruments furnished
to the Administrative Agent, that it will give the Administrative Agent thirty
(30) days prior written notice before any such policy or policies shall be
altered or canceled, and that no act or default of any Consolidated Party or any
other Person shall affect the rights of the Administrative Agent or the other
Secured Parties under such policy or policies. The present insurance coverage of
the Consolidated Parties is outlined as to carrier, policy number, expiration
date, type and amount on Schedule 7.6.

            (b) In case of any material loss, damage to or destruction of any
material item of the Collateral of any Credit Party, such Credit Party shall
promptly give written notice thereof to the Administrative Agent generally
describing the nature and extent of such damage or destruction. In case of any
loss, damage to or destruction any material portion of the Collateral of any
Credit Party, such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for that
purpose, at such Credit Party's cost and expense, will promptly repair or
replace the Collateral of such Credit Party so lost, damaged or destroyed. In
the event a Credit Party shall receive any insurance proceeds as a result of any
loss, damage or destruction with respect to the Collateral, such Credit Party
will immediately pay over such proceeds to the Administrative Agent, as cash
collateral for the Credit Party Obligations. The Administrative Agent agrees to
release such insurance proceeds to such Credit Party for replacement or
restoration of the portion of the Collateral of such Credit Party lost, damaged
or destroyed if, but only if, (A) within 30 days from the date the
Administrative Agent receives such insurance proceeds, the Administrative Agent
has received written application for such release from such Credit Party,
together with evidence reasonably satisfactory to it that the Collateral lost,
damaged or destroyed has been or will be replaced or restored to its condition
immediately prior to the loss, destruction or other event giving rise to the
payment of such insurance proceeds and (B) on the date of such release no
Default or Event of Default exists. If the conditions in the preceding sentence
are not met, the Administrative Agent shall, on the first Business Day
subsequent to the date 30 days after it received such insurance proceeds, apply
such insurance proceeds as a mandatory prepayment of the Credit Party
Obligations for application in accordance with the terms of Section 3.3(b). All
insurance proceeds shall be subject to the security interest of the
Administrative Agent, for the benefit of the Secured Parties, under the
Collateral Documents.

        7.7 MAINTENANCE OF PROPERTY. Each Credit Party will, and will cause each
of its Restricted Subsidiaries to, maintain and preserve its properties and
equipment material to the conduct of its business in good repair, working order
and condition, normal wear and tear and casualty and condemnation excepted, and
will make, or cause to be made, to such properties and equipment from time to
time all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.

        7.8 PERFORMANCE OF OBLIGATIONS. Each Credit Party will, and will cause
each of its Subsidiaries to, perform in all material respects all of its
obligations under the terms of all material agreements, leases, indentures,
mortgages, security agreements or other debt instruments to which it is a party
or by which it is bound (including, without limitation, the

                                       91
<PAGE>

Agecroft Transaction Documents); provided, however, that no Credit Party nor any
of their respective Subsidiaries shall be required to perform any such
obligation which is being contested in good faith by appropriate proceedings (or
which, in the case of agreements other than for borrowed money, such Credit
Party has determined in its reasonable business judgment not to perform) and, in
each case, as to which adequate reserves therefor have been established in
accordance with GAAP, unless the failure to perform such obligation (i) could
reasonably be expected to give rise to an immediate right to foreclose on a Lien
securing such obligation or (ii) could reasonably be expected to have a Material
Adverse Effect.

        7.9 USE OF PROCEEDS. The Borrower will use the proceeds of the Loans and
will use the Letters of Credit solely for the purposes set forth in Section
6.15.

        7.10 AUDITS/INSPECTIONS. Upon reasonable notice and during normal
business hours, each Credit Party will, and will cause each of its Subsidiaries
to, permit representatives appointed by the Administrative Agent, including,
without limitation, independent accountants, agents, attorneys, and appraisers
to visit and inspect its property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Administrative
Agent or its representatives to investigate and verify the accuracy of
information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person. The Credit Parties agree
that the Administrative Agent, and its representatives, may conduct an annual
audit of the Collateral, at the expense of the Credit Parties.

        7.11 FINANCIAL COVENANTS.

             (i) Maximum Total Leverage. At all times the ratio of Total
Indebtedness to Post Merger EBITDA of the Consolidated Parties for the
immediately preceding four full fiscal quarters ("LTM Post Merger EBITDA") shall
be equal to or less than the ratio set forth below for such fiscal quarter. For
purposes of calculating LTM Post Merger EBITDA, if any Asset Dispositions have
occurred during the immediately preceding four full fiscal quarters, LTM Post
Merger EBITDA shall be adjusted by taking into effect the decrease in Post
Merger EBITDA attributable to such Asset Dispositions, in each case, to the
extent that such Asset Dispositions have been used for purposes of determining
compliance with Section 7.11(v) hereof and reasonably proportional to the LTM
EBITDA Reduction Amounts set forth in the certificates delivered pursuant to
Section 8.5 hereof for such Asset Dispositions, in accordance with GAAP.

<TABLE>
<CAPTION>
                  --------------------------------------------------------
                             Fiscal Quarter                       Ratio
                  --------------------------------------------------------
<S>                                                             <C>
                  Q4 - 2001:                                    5.35:1.00
                  --------------------------------------------------------
                  Q1 - 2002:                                    5.35:1.00
                  --------------------------------------------------------
                  Q2 - 2002:                                    5.35:1.00
                  --------------------------------------------------------
                  Q3 - 2002 and each fiscal quarter             5.30:1.00
                  thereafter:
                  --------------------------------------------------------
</TABLE>

                                       92
<PAGE>

             (ii) Post Merger Interest Coverage Ratio. The Post Merger
Interest Coverage Ratio, as of the last day of each fiscal quarter of the
Consolidated Parties, shall be equal to or greater than the ratio set forth
below for such fiscal quarter.

<TABLE>
<CAPTION>
                  -----------------------------------------------------------
                              Fiscal Quarter                         Ratio
                  -----------------------------------------------------------
<S>                                                                <C>
                  Q4 - 2001:                                       1.75:1.00
                  -----------------------------------------------------------
                  Q1 - 2002:                                       1.75:1.00
                  -----------------------------------------------------------
                  Q2 - 2002:                                       1.75:1.00
                  -----------------------------------------------------------
                  Q3 - 2002 and each fiscal quarter                1.75:1.00
                  thereafter:
                  -----------------------------------------------------------
</TABLE>

             (iii) Fixed Charge Coverage. The Fixed Charge Coverage Ratio, as of
the last day of each fiscal quarter of the Consolidated Parties, shall be equal
to or greater than the ratio set forth below for such fiscal quarter.

<TABLE>
<CAPTION>
                   ----------------------------------------------------------
                               Fiscal Quarter                        Ratio
                   ----------------------------------------------------------
<S>                                                                <C>
                   Q4 - 2001:                                      1.20:1.00
                   ----------------------------------------------------------
                   Q1 - 2002:                                      1.20:1.00
                   ----------------------------------------------------------
                   Q2 - 2002:                                      1.20:1.00
                   ----------------------------------------------------------
                   Q3 - 2002 and each fiscal quarter               1.20:1.00
                   thereafter:
                   ----------------------------------------------------------
</TABLE>

             (iv) Total Indebtedness to Total Capitalization. At all times the
ratio of Total Indebtedness to Total Capitalization shall be equal to or less
than 0.55:1.00. For purposes of determining compliance with this Section
7.11(iv), (A) during the third quarter of 2000, in connection with the Change in
Tax Status, the Borrower shall be entitled to make a permanent positive
adjustment to retained earnings in an amount equal to the lesser of (x) the
aggregate of any reductions in retained earnings that are caused directly by
recognizing deferred tax liabilities and/or valuation allowances recorded
against deferred tax assets in accordance with FSAS No. 109 and (y)
$200,000,000, (B) during the fourth quarter of 2000, the Borrower shall be
entitled to make a permanent positive adjustment to retained earnings in an
amount equal to the lesser of (x) the aggregate of any reductions in the
carrying value of any assets to fair market value and/or net realizable value
and any non-cash charges related solely to the Management Opco Merger, each as
determined in accordance with GAAP and (y) $600,000,000, and (C) during the
first quarter of 2002, the Borrower shall be entitled to make a permanent
positive adjustment to retained earnings in an amount equal to the lesser of (x)
the aggregate of any reductions in retained earnings that result from the
adoption by the Borrower of Statement of Financial Accounting Standard No. 142
and (y) $110,000,000.

                                       93
<PAGE>

             (v) Minimum Post Merger EBITDA. As of the last day of each fiscal
quarter of the Consolidated Parties, Post Merger EBITDA shall be equal to or
greater than the amount indicated below for such fiscal quarter; provided that
the amounts set forth below shall be reduced by an amount equal to the EBITDA
Reduction Amount of all Asset Dispositions, to the extent that such EBITDA
Reduction Amounts are set forth in a certificate delivered pursuant to Section
8.5 hereof.

<TABLE>
<CAPTION>
                  -----------------------------------------------------------
                              Fiscal Quarter                        Amount
                  -----------------------------------------------------------
<S>                                                              <C>
                  Q4 - 2001:                                     $40,500,000
                  -----------------------------------------------------------
                  Q1 - 2002:                                     $40,500,000
                  -----------------------------------------------------------
                  Q2 - 2002:                                     $42,000,000
                  -----------------------------------------------------------
                  Q3 - 2002 and each fiscal quarter              $50,000,000
                  thereafter:
                  -----------------------------------------------------------
</TABLE>

             (vi) Total Beds Occupied Ratio. At the end of each calendar month
the average of the Total Beds Occupied Ratios for each of the immediately
preceding three calendar months shall be equal to or greater than the amount
indicated during the period below.

<TABLE>
<CAPTION>
                  -------------------------------------------------------------
                                    Period                               Ratio
                  -------------------------------------------------------------
<S>                                                                      <C>
                  From the Second Restatement Effective Date
                  through and including June 30, 2002:                   86.0%
                  -------------------------------------------------------------
                  On and after July 1, 2002:                             87.0%
                  -------------------------------------------------------------
</TABLE>

        For purposes of determining compliance with this Section 7.11 only, the
definition of "Indebtedness" shall exclude the Litigation Settlement Debt.

        7.12 ADDITIONAL CREDIT PARTIES. As soon as practicable and in any event
within 30 days after any Person becomes a Subsidiary (or ceases to be an
Unrestricted Subsidiary (but remains a Subsidiary)) of any Credit Party , the
Borrower shall provide the Administrative Agent with written notice thereof
setting forth information in reasonable detail describing all of the assets of
such Person and shall (a) if such Person is a Domestic Subsidiary (other than an
Unrestricted Subsidiary) of a Credit Party, cause such Person to execute a
Joinder Agreement in substantially the same form as Exhibit 7.12, (b) except to
the extent set forth in Section 8.6(iii) with respect to Unrestricted
Subsidiaries, cause the following to be delivered to the Administrative Agent
pursuant to an appropriate pledge agreement in form acceptable to the
Administrative Agent: (i) 100% (or, if less, the full amount owned by such
Credit Party) of the issued and outstanding shares of Capital Stock owned by
such Credit Party of each Domestic Subsidiary of such Credit Party and (ii) 65%
(or, if less, the full amount owned by such Credit Party) of the issued and
outstanding shares of each class of Capital Stock or other ownership interests
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and
100% (or,

                                       94
<PAGE>

if less, the full amount owned by such Credit Party) of the issued and
outstanding shares of each class of Capital Stock or other ownership interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
owned by such Credit Party of each Foreign Subsidiary together with, in each
case included in (i) or (ii) above, the certificates (or other agreements or
instruments), if any, representing such shares, and all options and other
rights, contractual or otherwise, with respect thereto, and undated stock powers
signed in blank (unless, with respect to a Foreign Subsidiary, such stock powers
are deemed unnecessary by the Administrative Agent in its reasonable discretion
under the law of the jurisdiction of incorporation of such Person) and (c) cause
such Person to deliver such other documentation as the Administrative Agent may
reasonably request in connection with the foregoing, including, without
limitation, appropriate UCC-1 financing statements, real estate title insurance
policies, environmental reports, landlord's waivers, certified resolutions and
other organizational and authorizing documents of such Person, and favorable
opinions of counsel to such Person all in form, content and scope reasonably
satisfactory to the Administrative Agent. Notwithstanding the foregoing, (i) for
so long as such actions are prohibited under the Agecroft Transaction Documents,
the provisions of this Section 7.12 shall not apply to Agecroft and Agecroft
shall not be considered a "Credit Party" hereunder or under the other Credit
Documents, (ii) until designated as an "Unrestricted Subsidiary" hereunder,
Agecroft shall otherwise be deemed to be a "Restricted Subsidiary" and (iii) at
all times, all of the requirements set forth in the definitions of "Unrestricted
Subsidiary" and "Non-Recourse Debt" shall apply to Agecroft, regardless of
whether it has been designated as an Unrestricted Subsidiary hereunder; provided
that the Agecroft Transaction and the Agecroft Securitization shall be
permitted.

        7.13 ENVIRONMENTAL LAWS. (a) The Consolidated Parties shall, and shall
cause the Unrestricted Subsidiaries to, comply in all material respects with,
and take reasonable actions to ensure compliance in all material respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all material respects with and maintain, and take
reasonable actions to ensure that all tenants and subtenants obtain and comply
in all material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws except to the extent that failure to do so would not reasonably be expected
to have a Material Adverse Effect;

             (b) The Consolidated Parties shall, and shall cause the
Unrestricted Subsidiaries to, conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the failure to do or the pendency of such
proceedings would not reasonably be expected to have a Material Adverse Effect;
and

             (c) The Consolidated Parties shall defend, indemnify and hold
harmless the Administrative Agent, the Documentation Agent, the Syndication
Agent, the Co-Agent, the Lead Arranger and the Lenders (including, without
limitation, any Issuing Lender), and their respective employees, agents,
officers and directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower or any of its
Subsidiaries or the Properties, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without

                                       95
<PAGE>

limitation, reasonable attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor; provided that
the provisions of this subsection (c) shall apply to Agecroft only to the extent
not prohibited by the Agecroft Charter. The agreements in this paragraph shall
survive repayment of the Loans and all other amounts payable hereunder, and
termination of the Commitments.

        7.14 COLLATERAL. If, subsequent to the Second Restatement Effective
Date, any Credit Party shall acquire (a) any real property having a book value
in excess of $500,000 or (b) any intellectual property, securities instruments,
chattel paper or other personal property required to be delivered to the
Administrative Agent as Collateral hereunder or under any of the Collateral
Documents, the Borrower shall notify the Administrative Agent of same in each
case as soon as practicable after the acquisition thereof. Each Credit Party
shall take such action as requested by the Administrative Agent and at its own
expense, to ensure that the Administrative Agent shall have a first priority
perfected Lien in (i) all owned and developed real property of the Credit
Parties (whether now owned or hereafter acquired) having a book value in excess
of $1,000,000, (ii) to the extent deemed to be material by (A) the
Administrative Agent and (B) (x) the Required Lenders and Required New Term Loan
Lenders or (y) the Total Aggregate Required Lenders, in their sole discretion,
all owned and undeveloped real property of the Credit Parties (whether now owned
or hereafter acquired) and (iii) all personal property of the Credit Parties
(whether now owned or hereafter acquired), subject in each case only to
Permitted Liens. In addition, upon the request of the Administrative Agent, the
Borrower will assist the Administrative Agent with such post-closing lien
searches (conducted at the Borrower's expense) as the Administrative Agent shall
deem necessary or desirable to confirm the perfection and priority of the
Administrative Agent's Lien on the Collateral.

        7.15 LEASES. The Credit Parties hereby agree that all leases entered
into between the Credit Party and any lessee of real property owned by the
Credit Party will (a) have a minimum initial lease term of five years (provided
any leases entered into with a governmental entity may have a lease term of less
than five years and be subject to other appropriate limitations satisfactory to
the Required Lenders, the Required Tranche C Term Lenders and the Required New
Term Loan Lenders) and (b) require that the lessee remain solely responsible for
all operations and other liabilities with respect to the applicable property;
provided, however, with respect to all leases having annual rent payments
(whether at the inception of such lease or otherwise) in excess of $1,500,000,
such leases shall be provided to the Administrative Agent in accordance with
Section 7.1(l) and be satisfactory in form and substance to the Administrative
Agent. The Credit Parties also agree that, at all times, (i) at least eighty
percent (80%) of all lease revenues of the Credit Parties shall be derived from
leases with Management Opco and with lessees other than Management Opco having a
senior unsecured non-credit enhanced long term debt rating of at least BBB+ (or
higher) from S&P or Baa1 (or higher) from Moody's (or if such ratings are
unavailable from S&P and Moody's, an equivalent rating from either Fitch or Duff
& Phelps), (ii) at least ninety percent (90%) of all lease revenues of the
Credit Parties shall be derived from leases with Management Opco and with
lessees other than Management Opco having a senior unsecured non-credit enhanced
long term debt rating of at least BBB- (or higher) from S&P and Baa3 (or higher)
from Moody's (or if such ratings are unavailable from S&P and Moody's, an
equivalent rating from either Fitch or Duff & Phelps), and (iii) at least ninety
percent (90%) of all lease revenues of the Credit Parties are derived from
triple-net leases that are noncancelable by the lessee.

                                       96
<PAGE>

        7.16 YEAR 2000 COMPLIANCE. Each Credit Party will promptly notify the
Administrative Agent in the event such Credit Party discovers or determines that
any computer application that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 compliant, except to the extent
that such failure could not reasonably be expected to have a Material Adverse
Effect.

        7.17 APPRAISALS. If (i) the Administrative Agent, (ii) the Required
Lenders and Required New Term Loan Lenders or (iii) the Total Aggregate Required
Lenders determine that applicable law or regulation requires that appraisals of
each Real Property be prepared for the benefit of the Administrative Agent, the
Credit Parties agree that the Administrative Agent may (after notice to and
consultation with the Borrower) order appraisals of each Real Property (at the
expense of the Credit Parties). Such appraisals shall (i) be performed by a
qualified appraiser engaged by the Administrative Agent, (ii) indicate a fair
market value for each such Real Property and otherwise be in form and substance
satisfactory to the Administrative Agent and (iii) be delivered to the
Administrative Agent within 120 days of such determination that such appraisals
are necessary under applicable law or regulation. The Credit Parties further
agree that if (i) the Administrative Agent, (ii) the Required Lenders and
Required New Term Loan Lenders or (iii) the Total Aggregate Required Lenders
make the determination that appraisals of each Real Property are required by
applicable law or regulation, the Credit Parties shall, upon the purchase of a
Real Property subsequent to the Second Restatement Effective Date, provide the
Administrative Agent with a current appraisal of such Real Property (at the
expense of the Credit Parties), which appraisals shall be prepared by a
qualified appraiser engaged by the Administrative Agent, indicate a fair market
value for each such Real Property and otherwise be in form and substance
satisfactory to the Administrative Agent.

        7.18 HEDGING AGREEMENTS. The Borrower shall, not later than August 16,
1999, enter into and maintain Hedging Agreements in a notional amount of at
least $325,000,000 and otherwise in form and substance acceptable to the
Administrative Agent, all pursuant to a hedging strategy reasonably acceptable
to any two of the Administrative Agent, the Syndication Agent and the
Documentation Agent.

        7.19 [INTENTIONALLY OMITTED.]

        7.20 [INTENTIONALLY OMITTED.]

        7.21 [INTENTIONALLY OMITTED.]

        7.22 [Intentionally omitted.]

        7.23 CASH MANAGEMENT. The Credit Parties will (i) within forty-five (45)
days after the Amendment Effective Date (the "Account Transfer Deadline"),
transfer, and thereafter maintain, all depository and other non-disbursement
accounts of the Credit Parties (other than those accounts set forth on Schedule
7.23 (the "Excluded Credit Party Accounts")) to accounts held at any bank that
is a Lender and cause such accounts to become subject to a perfected lien in
favor of the Administrative Agent for the benefit of the Secured Parties in a
manner reasonably satisfactory to the Administrative Agent, provided that from
and after the Account Transfer Deadline, the average daily balance in all
Excluded Credit Party Accounts (other than any such accounts which on the date
hereof constitute cash collateral for obligations) shall at no time exceed
$500,000 (plus the amount of any outstanding checks) in the aggregate for a
period of 5 consecutive days, and (ii) as soon as is reasonably practicable
after consummation of the

                                       97
<PAGE>

Management Opco Merger, (a) transfer, and thereafter maintain, all depository
accounts of CCA of Tennessee (other than (A) commissary accounts and inmate
trust accounts and (B) accounts listed on Schedule 7.23 (such accounts in this
clause (B), the "Excluded CCA of Tennessee Accounts")) to accounts held at any
bank that is a Lender and cause such accounts to become subject to a perfected
lien in favor of the Administrative Agent for the benefit of the Secured Parties
in a manner reasonably satisfactory to the Administrative Agent, and (b)
transfer, and thereafter maintain, all centralized disbursement accounts and
concentration accounts of CCA of Tennessee to accounts held at any bank that is
a Lender and cause such concentration accounts (but not the centralized
disbursement accounts) to become subject to a perfected lien in favor of the
Administrative Agent for the benefit of the Secured Parties in a manner
reasonably satisfactory to the Administrative Agent, provided that the average
daily balance in the Excluded CCA of Tennessee Accounts and the centralized
disbursement accounts shall at no time after the date that is ten (10) Business
Days after the date of consummation of the Management Opco Merger exceed
$3,000,000 (plus the amount of any outstanding checks) in the aggregate for a
period of 5 consecutive days.

        In addition to the foregoing, (i) within fifteen (15) Business Days
after the Amendment Effective Date, the Borrower shall cause its investment
account at First Union (Account #22762322) to become subject to a lien in favor
of the Administrative Agent for the benefit of the Secured Parties in a manner
reasonably satisfactory to the Administrative Agent, and (ii) on and after the
date that is fifteen (15) Business Days after the Amendment Effective Date, the
average daily balance in the Borrower's operating account at First Union
(Account #2020000174639) shall at no time exceed $500,000 (plus the amount of
any outstanding checks) in the aggregate for a period of 5 consecutive days.

        7.24 MANAGEMENT CONTRACT. The Borrower will at all times (i) maintain an
agreement with CCA of Tennessee, in form and substance satisfactory to the
Aggregate Required Lenders and the Required New Term Loan Lenders, pursuant to
which the Borrower will (A) permit CCA of Tennessee to manage and operate such
prison facilities as are then or thereafter owned by the Borrower and then or
thereafter managed by CCA of Tennessee or (B) lease to CCA of Tennessee such
prison facilities as are then or thereafter owned by the Borrower and then or
thereafter managed by CCA of Tennessee, in either case, in exchange for a fee to
be paid from CCA of Tennessee to the Borrower, and (ii) maintain a valid and
perfected pledge of such agreement and the proceeds to be received thereunder to
the Administrative Agent as additional Collateral for the Obligations, in a
manner satisfactory to the Administrative Agent.

                                   SECTION 8.

                               NEGATIVE COVENANTS

        Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:

        8.1 INDEBTEDNESS. The Credit Parties will not permit any Consolidated
Party or Unrestricted Subsidiary to contract, create, incur, assume or permit to
exist any Indebtedness, except:

                                       98

<PAGE>

                (a) Indebtedness arising under this Credit Agreement and the
        other Credit Documents;

                (b) Indebtedness of the Borrower set forth in Schedule 8.1 (and
        renewals, refinancings and extensions thereof on terms and conditions no
        less favorable to the obligor than such existing Indebtedness);

                (c) obligations of the Borrower in respect of Hedging Agreements
        entered into in order to manage existing or anticipated interest rate or
        exchange rate risks and not for speculative purposes;

                (d) Indebtedness owing by a Credit Party to another Credit
        Party;

                (e) subject to the provisions of Section 3.3(b)(ii), unsecured
        Indebtedness of the Borrower provided that (i) no part of the principal
        part of such Indebtedness shall have a maturity date earlier than the
        final maturity of the Loans hereunder, (ii) after giving effect to the
        incurrence of any such Indebtedness on a pro forma basis, as if such
        incurrence of Indebtedness had occurred on the first day of the twelve
        month period ending on the last day of the Borrower's most recently
        completed fiscal quarter, the Borrower and its Subsidiaries would have
        been in compliance with all the financial covenants set forth in Section
        7.11 and the Borrower shall have delivered to the Administrative Agent a
        certificate of its chief financial officer to such effect setting forth
        in reasonable detail the computations necessary to determine such
        compliance and (iii) at the time of the issuance of such Indebtedness
        and after giving effect thereto, no Default or Event of Default shall
        exist or be continuing;

                (f) purchase money Indebtedness of the Borrower not exceeding
        $1,000,000 in aggregate principal amount at any time outstanding;

                (g) Indebtedness of any Unrestricted Subsidiary consisting
        entirely of Non-Recourse Debt; provided, however, that (i) the aggregate
        amount of all such Indebtedness that may be incurred or be owing by all
        Unrestricted Subsidiaries may not at any time exceed twenty percent
        (20%) of Total Value and (ii) if any such Indebtedness ceases to be
        Non-Recourse Debt of such Unrestricted Subsidiary, such event shall be
        deemed to constitute an incurrence of Indebtedness by a Restricted
        Subsidiary of the Borrower that was not permitted by this Section
        8.1(g);

                (h) Indebtedness of the Borrower in respect of the Senior Notes
        and the unsecured guarantee by any Subsidiary of the Borrower that is a
        Subsidiary Guarantor hereunder of the Borrower's obligations under (i)
        the Senior Notes (pursuant to the Senior Notes Indenture as in effect on
        the Restatement Effective Date) and (ii) the Permitted Unsecured Debt;
        provided that such guarantee is not senior to the Guarantee Obligations
        of such Subsidiary Guarantor hereunder;

                (i) Indebtedness of a Restricted Subsidiary of the Borrower that
        is a Credit Party incurred and outstanding on the date on which such
        Restricted Subsidiary was acquired by the Company (provided that such
        Indebtedness shall not be incurred (i) to provide all or any portion of
        the funds utilized to consummate the transaction or series of related
        transactions pursuant to which such Restricted Subsidiary became a
        Restricted Subsidiary or was otherwise acquired by the Borrower or (ii)
        otherwise in connection

                                       99
<PAGE>

        with, or in contemplation of, such acquisition) and as to which the
        Borrower and its other Restricted Subsidiaries are not obligated to
        become liable for such Indebtedness;

                (j) Indebtedness incurred by the Borrower or any of its
        Restricted Subsidiaries in respect of workers' compensation claims,
        self-insurance obligations, performance, proposal, completion, surety
        and similar bonds and completion guarantees provided by the Borrower or
        a Restricted Subsidiary of the Borrower in the ordinary course of
        business; provided that the underlying obligation to perform is that of
        the Borrower and its Restricted Subsidiaries and not that of the
        Company's Unrestricted Subsidiaries or any other Person;

                (k) prior to Agecroft's designation as an Unrestricted
        Subsidiary hereunder, Indebtedness owing by Agecroft to the Borrower
        pursuant to the Agecroft Note; and

                (l) Indebtedness of CCA of Tennessee under the CCA of Tennessee
        Credit Agreement as in effect on the date hereof, provided that any such
        Indebtedness shall remain subject to the limitations set forth in
        Section 9.1(o).

                (m) the Litigation Settlement Debt as contemplated by and in
        accordance with the definition thereof, provided that any settlement of
        any shareholder litigation or similar dispute shall remain subject to
        the limitations set forth in Section 9.1(r).

        8.2 LIENS. The Credit Parties will not permit any Consolidated Party or
Unrestricted Subsidiary to contract, create, incur, assume or permit to exist
any Lien with respect to any of its Property, whether now owned or after
acquired, except for Permitted Liens.

        8.3 NATURE OF BUSINESS. The Credit Parties will not permit any
Consolidated Party or any other Subsidiary to substantively alter the character
or conduct of the business conducted by such Person as of the Second Restatement
Effective Date. Specifically, neither the Borrower nor any Subsidiary of the
Borrower shall engage in any business other than the ownership of correctional,
justice and/or detention facilities (which may include secured charter schools)
that are managed by the lessees of the Borrower or such Subsidiary, as the case
may be (or agent of any such lessee in the event any lessee is a governmental
entity) and the operation and management of correctional, justice and detention
facilities.

        8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC. The Credit Parties will not
permit any Consolidated Party to enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that, notwithstanding the foregoing
provisions of this Section 8.4, (a) the Borrower may merge or consolidate with
any of its Restricted Subsidiaries provided that (i) the Borrower shall be the
continuing or surviving corporation, (ii) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as the
Administrative Agent may request in order to maintain the perfection and
priority of the Administrative Agent's liens on the assets of the Credit Parties
as required by Section 7.14 after giving effect to such transaction and (iii)
after giving effect to such transaction, no Default or Event of Default exists,
(b) any Credit Party other than the Borrower may merge or consolidate with any
other Credit Party other than the Borrower provided that (i) the Credit Parties
shall cause to be executed and delivered such documents, instruments and
certificates as the Administrative Agent may request in order to maintain the
perfection and priority of the Administrative Agent's liens on the assets of the
Credit Parties as required by Section 7.14 after giving effect to such
transaction and (ii) after giving effect to such transaction,

                                      100
<PAGE>

no Default or Event of Default exists, (c) any Consolidated Party which is not a
Credit Party may be merged or consolidated with or into any Credit Party
provided that (i) such Credit Party shall be the continuing or surviving
corporation, (ii) the Credit Parties shall cause to be executed and delivered
such documents, instruments and certificates as the Administrative Agent may
request in order to maintain the perfection and priority of the Administrative
Agent's liens on the assets of the Credit Parties as required by Section 7.14
after giving effect to such transaction and (iii) after giving effect to such
transaction, no Default or Event of Default exists, and (d) any Consolidated
Party which is not a Credit Party may be merged or consolidated with or into any
other Consolidated Party which is not a Credit Party provided that, after giving
effect to such transaction, no Default or Event of Default exists.

        8.5 ASSET DISPOSITIONS. The Credit Parties will not permit any
Consolidated Party to make any Asset Disposition (including, without limitation,
any Sale and Leaseback Transaction) unless no later than the date of
consummation of such Asset Disposition, the Administrative Agent shall have
received a certificate of an officer of the Borrower briefly describing the
assets sold or otherwise disposed of, and setting forth the net book value of
such assets, the aggregate consideration and Net Cash Proceeds received for such
assets in connection with such Asset Disposition and the corresponding EBITDA
Reduction Amount and LTM EBITDA Reduction Amount with respect to such Asset
Disposition, and the Credit Parties shall on the date of the consummation of
such Asset Disposition, apply (or cause to be applied) an amount equal to the
Net Cash Proceeds of such Asset Disposition to prepay the Loans (and to cash
collateralize the LOC Obligations) in accordance with the terms of Sections
3.3(b)(ii) and (iii) (except as expressly provided therein).

        Notwithstanding the foregoing, the Borrower agrees that it shall not
sell a Borrowing Base Property unless each of the following conditions is
satisfied: (i) no Default or Event of Default exists, (ii) such Borrowing Base
Property is sold pursuant to the terms and conditions of an arms length contract
and on terms reasonably satisfactory to the Administrative Agent, (iii) either
(a) the Borrower replaces such Borrowing Base Property with a substitute
Borrowing Base Property acceptable to the Lenders or (b) the Obligations
outstanding shall not exceed the lesser of the Aggregate Committed Amount and
the Borrowing Base after giving effect to such disposition and (iv) after giving
effect to such disposition, on a pro forma basis as if such disposition had
occurred on the first day of the twelve month period ending on the last day of
the Borrower's most recently completed fiscal quarter, the Consolidated Parties
would have been in compliance with all the financial covenants set forth in
Section 7.11.

        8.6 INVESTMENTS. The Credit Parties will not permit any Consolidated
Party to make Investments in or to any Person, except for (i) Permitted
Investments, (ii) so long as no Event of Default has occurred and is continuing,
Investments not otherwise prohibited under this Credit Agreement (other than in
Unrestricted Subsidiaries) in an amount not to exceed $3,000,000 in any fiscal
year of the Borrower and $15,000,000 in the aggregate, and (iii) the deemed
investment in Agecroft by virtue of its designation as an Unrestricted
Subsidiary hereunder (provided that any such designation shall not involve the
transfer of cash or any other assets from any Credit Party to Agecroft).

        8.7 RESTRICTED PAYMENTS. (a) The Credit Parties will not permit any
Consolidated Party to, directly or indirectly, declare, order, make or set apart
any sum for or pay any Restricted Payment, except (i) to make dividends payable
solely in the same class of Capital

                                      101
<PAGE>

Stock of such Person, (ii) to make dividends or other distributions payable to
the Borrower (directly or indirectly through Subsidiaries), (iii) the Borrower
may declare and pay non-cash dividends (other than in the form of Disqualified
Stock) in an aggregate amount not to exceed an amount necessary to maintain the
Borrower's status as a REIT for its 1999 taxable year, (iv) the Borrower may
repurchase Equity Interests of the Borrower to the extent such repurchases are
deemed to occur upon the exercise of stock options if such Equity Interests
represent a portion of the exercise price thereof and (v) the Borrower may pay
cash dividends (in an aggregate amount not to exceed $200,000 in any calendar
year) to the extent necessary in lieu of fractional shares on its series B
preferred stock.

            (b) Notwithstanding the foregoing, the Borrower will be permitted to
declare and pay dividends as currently required by its series A preferred stock
(including, without limitation, all such dividends as are in arrears on and as
of the Second Restatement Effective Date), provided that, at the time of
declaration and payment thereof, no Default or Event of Default shall have
occurred and be continuing.

        8.8 PREPAYMENTS OF INDEBTEDNESS, ETC. The Credit Parties will not permit
any Consolidated Party to (a) after the issuance thereof, amend, modify or
refinance (or permit the amendment, modification or refinancing of) any other
Indebtedness if such amendment, modification or refinancing would add or change
any terms in a manner adverse to the issuer of such Indebtedness, or shorten the
final maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof; provided that the
restrictions of this clause (a) shall not apply to any Indebtedness to the
extent (i) such Indebtedness, as so amended or modified, or (ii) the
Indebtedness refinancing such Indebtedness, as applicable, in each case could be
incurred under Section 8.1(e) hereof at the time of such amendment, modification
or refinancing, (b) except in connection with a refinancing of Indebtedness
permitted under clause (a) hereof, make (or give any notice with respect
thereto) any voluntary or optional payment or prepayment or redemption or
acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due) any other Indebtedness (other than Indebtedness owed
to the Borrower), or (c) except in connection with a refinancing of Indebtedness
permitted under clause (a) hereof, refund or exchange (except as provided in
clause (a) above) any other Indebtedness (or offer to do so).

        8.9 TRANSACTIONS WITH AFFILIATES. The Credit Parties will not permit any
Consolidated Party to enter into or permit to exist any transaction or series of
transactions with or for the benefit of any officer, director, shareholder,
Unrestricted Subsidiary (other than, if applicable, Agecroft in connection with
the Agecroft Securitization) or Affiliate of such Person (other than another
Credit Party) other than (i) normal compensation and reimbursement of expenses
of officers and directors and (ii) except as otherwise specifically limited in
this Credit Agreement, other transactions which are entered into in the ordinary
course of such Person's business on terms and conditions substantially as
favorable to such Person as would be obtainable by it in a comparable
arms-length transaction with a Person other than an officer, director,
shareholder, Unrestricted Subsidiary or Affiliate.

        8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS. The Credit Parties will not
permit any Consolidated Party to (a) change its fiscal year without the prior
written consent of the Required Lenders, the Required Tranche C Term Lenders and
the Required New Term Loan Lenders or (b) amend, modify or change its articles
of incorporation (or corporate charter or other similar

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organizational document) or bylaws (or other similar document) in any manner
that would reasonably be likely to adversely affect the Lenders.

        8.11 LIMITATION ON RESTRICTED ACTIONS. The Credit Parties will not
permit any Consolidated Party to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any such Person to (a) pay dividends or make any other
distributions to any Credit Party on its Capital Stock or with respect to any
other interest or participation in, or measured by, its profits, (b) pay any
Indebtedness or other obligation owed to any Credit Party, (c) make loans or
advances to any Credit Party, (d) sell, lease or transfer any of its properties
or assets to any Credit Party, or (e) act as a Guarantor and pledge its assets
pursuant to the Credit Documents or any renewals, refinancings, exchanges,
refundings or extension thereof, except (in respect of any of the matters
referred to in clauses (a)-(d) above) for such encumbrances or restrictions
existing under or by reason of (i) this Credit Agreement and the other Credit
Documents, (ii) applicable law, (iii) the Senior Notes Documents, (iv) the
Permitted Unsecured Debt Documents and (v) the Agecroft Transaction Documents.

        8.12 OWNERSHIP OF SUBSIDIARIES. Notwithstanding any other provisions of
this Credit Agreement to the contrary, the Credit Parties will not permit (A)
any Consolidated Party to (i) permit any Person (other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower) to own any Capital Stock of any
Restricted Subsidiary of the Borrower (provided that no Capital Stock of any
Restricted Subsidiary of the Borrower may be owned by an Unrestricted
Subsidiary) or (ii) permit any Restricted Subsidiary of the Borrower to issue
Capital Stock (except to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower; provided that no Capital Stock of any Restricted Subsidiary of the
Borrower may be owned by an Unrestricted Subsidiary), in each case except to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries and (iii) notwithstanding anything to the contrary
contained in clause (ii) above, permit any Subsidiary of the Borrower to issue
any shares of preferred Capital Stock or (B) any Person other than the Borrower
or its Restricted Subsidiaries to own any Capital Stock of any Unrestricted
Subsidiary; provided that the provisions of this clause (B) shall not apply to
any Capital Stock of an Unrestricted Subsidiary owned by a governmental or
quasi-governmental entity in a partnership, joint-venture or other cooperative
arrangement with the Borrower or any of its Restricted Subsidiaries.

        8.13 SALE LEASEBACKS. The Credit Parties will not permit any
Consolidated Party to, directly or indirectly, become or remain liable as lessee
or as guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any Property (whether real, personal or mixed),
whether now owned or hereafter acquired, (a) which such Consolidated Party has
sold or transferred or is to sell or transfer to a Person which is not a
Consolidated Party or (b) which such Consolidated Party intends to use for
substantially the same purpose as any other Property which has been sold or is
to be sold or transferred by such Consolidated Party to another Person which is
not a Consolidated Party in connection with such lease. Notwithstanding the
foregoing, the Borrower may consummate the Headquarters Sale-Leaseback, provided
that the Net Cash Proceeds thereof received by the Borrower shall be at least
$12,000,000 and shall be applied in accordance with Sections 3.3(b)(ii) and
(iii).

        8.14 NO FURTHER NEGATIVE PLEDGES. The Credit Parties will not permit any
Consolidated Party to enter into, assume or become subject to any agreement
prohibiting or

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otherwise restricting the creation or assumption of any Lien upon its properties
or assets, whether now owned or hereafter acquired, or requiring the grant of
any security for such obligation if security is given for some other obligation,
except pursuant to (1) provided the provisions thereof do not prohibit the Liens
created under the Loan Documents, (a) the Senior Notes Documents and the
Permitted Unsecured Debt Documents and any refinancing of any thereof otherwise
permitted under this Credit Agreement that, with respect to the matters referred
to in this Section 8.14, contain provisions no more restrictive on the Borrower
and its Subsidiaries than the Indebtedness being refinanced, (b) the Agecroft
Transaction Documents and (c) the CCA of Tennessee Credit Agreement, as in
effect as of the date hereof, and (2) this Credit Agreement and the other Credit
Documents.

        8.15 [INTENTIONALLY OMITTED.]

        8.16 SPECULATIVE TRANSACTIONS. The Credit Parties will not permit any
Consolidated Party to enter into any speculative hedging or similar transaction
(such as a forward equity purchase agreement).

        8.17 [Intentionally omitted.]

        8.18 CAPITAL EXPENDITURES. The Credit Parties will not permit any
capital expenditures for the construction of new facilities or the expansion of
existing facilities, except for, at any time after consummation of the Capital
Raising Event that consolidated EBITDA for the immediately preceding fiscal
quarter is at least $60,000,000, Build-to-Suit Capital Expenditures, provided
that (i) any such Build-to-Suit Capital Expenditures made under this clause
shall not exceed $50,000,000 in the aggregate for any calendar year and (ii) the
overall capital expenditures budget for any particular project under which any
such capital expenditures are made shall be reasonably satisfactory to the
Required Lenders, the Required Tranche C Term Lenders and the Required New Term
Loan Lenders.

                                   SECTION 9.

                                EVENTS OF DEFAULT

        9.1 EVENTS OF DEFAULT. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):

                (a) Payment. Any Credit Party shall

                        (i) default in the payment when due of any principal of
                any of the Loans or of any reimbursement obligations arising
                from drawings under Letters of Credit, or

                        (ii) default, and such default shall continue for three
                (3) or more Business Days, in the payment when due of any
                interest on the Loans or on any reimbursement obligations
                arising from drawings under Letters of Credit, or of any Fees or
                other amounts owing hereunder, under any of the other Credit
                Documents or in connection herewith or therewith; or

                (b) Representations. Any representation, warranty or statement
        made or deemed to be made by any Credit Party herein, in any of the
        other Credit Documents, or

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        in any statement or certificate delivered or required to be delivered
        pursuant hereto or thereto shall prove untrue in any material respect on
        the date as of which it was deemed to have been made; or

                (c) Covenants. Any Credit Party shall

                        (i) default in the due performance or observance of any
                term, covenant or agreement contained in Sections 7.2, 7.4, 7.9,
                7.11, 7.12, 7.14, 7.15, 7.16 7.17, 7.18, 8.1 through 8.14,
                inclusive, 8.16 or 8.18; or

                        (ii) default in the due performance or observance of any
                term, covenant or agreement contained in Sections 7.1(a), (b),
                (c), (e) or, (l) or (o) and such default shall continue
                unremedied for a period of at least 5 days after the earlier of
                a responsible officer of a Credit Party becoming aware of such
                default or notice thereof by the Administrative Agent; or

                        (iii) default in the due performance or observance by it
                of any term, covenant or agreement (other than those referred to
                in subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1)
                contained in this Credit Agreement and such default shall
                continue unremedied for a period of at least 30 days after the
                earlier of a responsible officer of a Credit Party becoming
                aware of such default or notice thereof by the Administrative
                Agent; or

                (d) Other Credit Documents; Etc. (i) Any Credit Party shall
        default in the due performance or observance of any term, covenant or
        agreement in any of the other Credit Documents or the Waiver and
        Amendment (subject to applicable grace or cure periods, if any), or (ii)
        except as a result of or in connection with a merger of a Subsidiary
        permitted under Section 8.4, any Credit Document shall fail to be in
        full force and effect or to give the Administrative Agent and/or the
        Lenders the Liens, rights, powers and privileges purported to be created
        thereby, or any Credit Party shall so state in writing; or

                (e) Guaranties. Except as the result of or in connection with a
        merger of a Subsidiary permitted under Section 8.4, the guaranty given
        by any Guarantor hereunder (including any Additional Credit Party) or
        any provision thereof shall cease to be in full force and effect, or any
        Guarantor (including any Additional Credit Party) hereunder or any
        Person acting by or on behalf of such Guarantor shall deny or disaffirm
        such Guarantor's obligations under such guaranty, or any Guarantor shall
        default in the due performance or observance of any term, covenant or
        agreement on its part to be performed or observed pursuant to any
        guaranty; or

                (f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
        respect to any Consolidated Party; or

                (g) Defaults under Other Agreements. With respect to any
        Indebtedness (other than Indebtedness outstanding under this Credit
        Agreement) in excess of $1,000,000 in the aggregate for the Consolidated
        Parties taken as a whole, (A)(1) any Consolidated Party shall default in
        any payment (beyond the applicable grace period with respect thereto, if
        any) with respect to any such Indebtedness, or (2) a default in the
        observance or performance relating to such Indebtedness or contained in
        any instrument or agreement evidencing, securing or relating thereto, or
        any other event or condition

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        shall occur and continue or condition exist, the effect of which default
        or other event or condition is to cause, or permit the holder or holders
        of such Indebtedness (or trustee or agent on behalf of such holders) to
        cause (determined without regard to whether any notice or lapse of time
        is required), any such Indebtedness to become due prior to its stated
        maturity; or (B) any such Indebtedness shall be declared due and
        payable, or required to be prepaid other than by a regularly scheduled
        required prepayment, prior to the stated maturity thereof; or

                (h) Judgments. Except to the extent confirming a settlement of a
        litigation not resulting in an Event of Default under Section 9.1(r),
        one or more judgments or decrees shall be entered against one or more of
        the Consolidated Parties involving a liability of $1,000,000 or more in
        the aggregate (to the extent not paid or fully covered by insurance
        provided by a carrier who has acknowledged coverage and has the ability
        to perform) and any such judgments or decrees shall not have been
        vacated, discharged or stayed or bonded pending appeal within 30 days
        from the entry thereof; or

                (i) ERISA. Any of the following events or conditions shall
        occur, if such event or condition could reasonably be expected to have a
        Material Adverse Effect: (i) any "accumulated funding deficiency," as
        such term is defined in Section 302 of ERISA and Section 412 of the
        Code, whether or not waived, shall exist with respect to any Plan, or
        any lien shall arise on the assets of any Consolidated Party or any
        ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event
        shall occur with respect to a Single Employer Plan, which is, in the
        reasonable opinion of the Administrative Agent, likely to result in the
        termination of such Plan for purposes of Title IV of ERISA; (iii) an
        ERISA Event shall occur with respect to a Multiemployer Plan or Multiple
        Employer Plan, which is, in the reasonable opinion of the Administrative
        Agent, likely to result in (A) the termination of such Plan for purposes
        of Title IV of ERISA, or (B) any Consolidated Party or any ERISA
        Affiliate incurring any liability in connection with a withdrawal from,
        reorganization of (within the meaning of Section 4241 of ERISA), or
        insolvency or (within the meaning of Section 4245 of ERISA) such Plan;
        or (iv) any prohibited transaction (within the meaning of Section 406 of
        ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
        shall occur which may subject any Consolidated Party or any ERISA
        Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
        ERISA or Section 4975 of the Code, or under any agreement or other
        instrument pursuant to which any Consolidated Party or any ERISA
        Affiliate has agreed or is required to indemnify any person against any
        such liability; or

                (j) [Intentionally omitted]; or

                (k) CCA of Tennessee Credit Agreement. There shall occur an
        Event of Default (as defined in the CCA of Tennessee Credit Agreement)
        under the CCA of Tennessee Credit Agreement; or

                (l) Lease Agreements. There shall occur (i) an event of default
        under the Master Lease (subject to applicable grace or cure periods, if
        any), (ii) any payment default (beyond any applicable grace period)
        under any lease agreement (not including the Master Lease) between the
        Borrower and CCA of Tennessee (each such lease agreement (including the
        Master Lease), a "Lease Agreement") or (iii) any shortening or

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        limitation on the term of any Lease Agreement if, after giving effect
        thereto, such Lease Agreement would not comply with Section 7.15; or

                (m) [Intentionally omitted.]

                (n) Ownership. There shall occur a Change of Control; or

                (o) Amendments. CCA of Tennessee shall (a) enter into any
        amendment of the CCA of Tennessee Credit Agreement which would (i)
        reduce the committed amount of financing available under the CCA of
        Tennessee Credit Agreement, (ii) decrease or shorten the maturity date
        of the loans under the CCA of Tennessee Credit Agreement, (iii) increase
        the rate at which interest is payable on the loans under the CCA of
        Tennessee Credit Agreement, (iv) cause the financial covenants in the
        CCA of Tennessee Credit Agreement to be more restrictive with respect to
        CCA of Tennessee than those financial covenants in effect as of the
        Second Restatement Effective Date, or (b) refinance the indebtedness
        under the CCA of Tennessee Credit Agreement on terms and conditions less
        favorable to CCA of Tennessee or the Borrower than such existing
        indebtedness under the CCA of Tennessee Credit Agreement; or

                (p) [Intentionally omitted.]

                (q) Management. At any time after December 31, 2000, a person or
        persons reasonably satisfactory to the Required Lenders, Required
        Tranche C Term Lenders and Required New Term Loan Lenders fails to serve
        in the capacities of Chief Executive Officer (the "New CEO") and Chief
        Financial Officer of the Borrower; or

                (r) Shareholder Litigation. In addition to the provisions set
        forth in (h) above, the Borrower settles any shareholder litigation or
        similar dispute for any cash amount not otherwise fully covered by the
        Borrower's directors and officers or other insurance, other than the
        Litigation Settlement Debt; or

                (s) MDP Note Purchase Agreement. There occurs at any time after
        the Amendment Effective Date, a "Repurchase Right Event" or a
        "Termination Event" (each as defined in the MDP Note Purchase
        Agreement).

        9.2 ACCELERATION; REMEDIES. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived by the requisite Lenders (pursuant to the voting requirements of Sections
11.6, 11.6A and 11.6B) or cured to the satisfaction of the requisite Lenders
(pursuant to the voting procedures in Sections 11.6, 11.6A and 11.6B, as
applicable), the Administrative Agent shall, upon the request and direction of
(x) the Required Lenders and Required New Term Loan Lenders or (y) the Total
Aggregate Required Lenders, by written notice to the Credit Parties, take one or
more of the following actions:

                (a) Termination of Commitments. Declare the Commitments
        terminated whereupon the Commitments shall be immediately terminated.

                (b) Acceleration. Declare the unpaid principal of and any
        accrued interest in respect of all Loans, any reimbursement obligations
        arising from drawings under Letters of Credit and any and all other
        indebtedness or obligations of any and every kind owing

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        by the Credit Parties to the Administrative Agent and/or any of the
        other Secured Parties hereunder to be due whereupon the same shall be
        immediately due and payable without presentment, demand, protest or
        other notice of any kind, all of which are hereby waived by the Credit
        Parties.

                (c) Cash Collateral. Direct the Credit Parties to pay (and the
        Credit Parties agree that upon receipt of such notice, or upon the
        occurrence of an Event of Default under Section 9.1(f), they will
        immediately pay) to the Administrative Agent additional cash, to be held
        by the Administrative Agent, for the benefit of the Revolving Lenders,
        in a cash collateral account as additional security for the LOC
        Obligations in respect of subsequent drawings under all then outstanding
        Letters of Credit in an amount equal to the maximum aggregate amount
        which may be drawn under all Letters of Credits then outstanding.

                (d) Enforcement of Rights. Enforce any and all rights and
        interests created and existing under the Credit Documents including,
        without limitation, all rights and remedies existing under the
        Collateral Documents, all rights and remedies against a Guarantor and
        all rights of set-off.

        Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then the Commitments
shall automatically terminate and all Loans, all reimbursement obligations
arising from drawings under Letters of Credit, all accrued interest in respect
thereof, all accrued and unpaid Fees and other indebtedness or obligations owing
to the Administrative Agent and/or any of the other Secured Parties hereunder
automatically shall immediately become due and payable without the giving of any
notice or other action by the Administrative Agent or the other Secured Parties.

                                  SECTION 10.

                                AGENCY PROVISIONS

        10.1 APPOINTMENT, POWERS AND IMMUNITIES. (a) Each Secured Party (other
than the Administrative Agent) hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent under this Credit Agreement and the
other Credit Documents with such powers and discretion as are specifically
delegated to the Administrative Agent by the terms of this Credit Agreement and
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent (which term as used in this
sentence and in Section 10.5 and the first sentence of Section 10.6 hereof shall
include its Affiliates and its own and its Affiliates' officers, directors,
employees, and agents): (a) shall not have any duties or responsibilities except
those expressly set forth in this Credit Agreement and shall not be a trustee or
fiduciary for any other Secured Party; (b) shall not be responsible to the other
Secured Parties for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the

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property (including the books and records) of any Credit Party or any of its
Subsidiaries or Affiliates; (d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Credit Document; and (e) shall
not be responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.

        10.2 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be
entitled to rely upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone or
telecopy) believed by it to be genuine and correct and to have been signed, sent
or made by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel for any Credit Party),
independent accountants, and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until the Administrative Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 11.3(b) hereof. As to any matters not expressly provided for by this
Credit Agreement, the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of (x) the Required Lenders and Required New Term Loan
Lenders and/or (y) the Total Aggregate Required Lenders, as the case may be, and
such instructions shall be binding on all of the Lenders; provided, however,
that the Administrative Agent shall not be required to take any action that
exposes the Administrative Agent to personal liability or that is contrary to
any Credit Document or applicable law or unless it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking any such action.

        10.3 DEFAULTS. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
the Administrative Agent has received written notice from a Lender or a Credit
Party specifying such Default or Event of Default and stating that such notice
is a "Notice of Default". In the event that the Administrative Agent receives
such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 10.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by (x) the Required Lenders and Required New Term Loan Lenders and/or (y) the
Total Aggregate Required Lenders, as the case may be, provided that, unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.

        10.4 RIGHTS AS A LENDER. With respect to its Commitment and the Loans
made by it, LCPI (and any successor acting as Administrative Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. LCPI (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other

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business with any Credit Party or any of its Subsidiaries or Affiliates as if it
were not acting as Administrative Agent, and LCPI (and any successor acting as
Administrative Agent) and its Affiliates may accept fees and other consideration
from any Credit Party or any of its Subsidiaries or Affiliates for services in
connection with this Credit Agreement or otherwise without having to account for
the same to the Lenders.

        10.5 INDEMNIFICATION. The Lenders agree to indemnify the Administrative
Agent (to the extent not reimbursed under Section 11.5 hereof, but without
limiting the obligations of the Credit Parties under such Section) ratably in
accordance with their respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent (including by any Lender) in any way relating to or arising
out of any Credit Document or the transactions contemplated thereby or any
action taken or omitted by the Administrative Agent under any Credit Document
(including any of the foregoing arising from the negligence of the
Administrative Agent); provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any costs or expenses payable by the Credit Parties
under Section 11.5, to the extent that the Administrative Agent is not promptly
reimbursed for such costs and expenses by the Credit Parties. The agreements in
this Section 10.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder and shall be subject to the proviso in Section 1.4(b).

        10.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender agrees that
it has, independently and without reliance on the Administrative Agent, the
Documentation Agent, the Syndication Agent, the Co-Agent, the Lead Arranger or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Administrative Agent, the
Documentation Agent, the Syndication Agent, the Co-Agent, the Lead Arranger or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under the Credit Documents. Except for notices,
reports, and other documents and information expressly required to be furnished
to the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition, or business of
any Credit Party or any of its Subsidiaries or Affiliates that may come into the
possession of the Administrative Agent or any of its Affiliates.

        10.7 SUCCESSOR ADMINISTRATIVE AGENT. (a) The Administrative Agent may
resign at any time by giving notice thereof to the Lenders and the Credit
Parties. Upon any such resignation, the Total Aggregate Required Lenders shall
have the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Total Aggregate
Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a commercial bank or financial
organization organized under the laws of the United States of America or any
state thereof having combined capital and surplus of at least

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$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 10 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.

        (b) Societe Generale, in its capacity as Documentation Agent, The Bank
of Nova Scotia, in its capacity as Syndication Agent, SouthTrust Bank, N.A., in
its capacity as Co-Agent, and Lehman Brothers Inc., in its capacity as Lead
Arranger shall have no duties or responsibilities and shall incur no liability
under this Credit Agreement or any of the other Credit Documents.

        (c) The Total Aggregate Required Lenders may elect to remove LCPI, as
Administrative Agent, in the event LCPI fails to maintain a Revolving Commitment
in an amount equal to Ten Million Dollars ($10,000,000); provided that such
Total Aggregate Required Lenders shall have appointed a successor Administrative
Agent.

                                  SECTION 11.

                                  MISCELLANEOUS

        11.1 NOTICES. Except as otherwise expressly provided herein, all notices
and other communications shall be in writing and shall have been duly given and
shall be effective (a) when delivered, (b) when transmitted via telecopy (or
other facsimile device) to the number set out below or on Schedule 2.1(a), as
applicable, (c) the Business Day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Credit Parties and the Administrative Agent, set
forth below, and, in the case of the Lenders, set forth on Schedule 2.1(a), or
at such other address as such party may specify by written notice to the other
parties hereto:

         if to any Credit Party:

                  Corrections Corporation of America
                  10 Burton Hills Boulevard
                  Nashville, Tennessee  37215
                  Attn: John Ferguson
                  Telephone: (615) 263-3000
                  Telecopy: (615) 263-3010

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         if to the Administrative Agent:

                  Lehman Commercial Paper Inc.
                  3 World Financial Center
                  New York, New York  10281
                  Attn:  Michelle Swanson
                  Telephone: (212) 526-0437
                  Telecopy: (646) 758-4652

         with a copy to:

                  Latham & Watkins
                  885 Third Avenue
                  New York, New York  10022
                  Attn:  Christopher R. Plaut
                  Telephone: (212) 906-1262
                  Telecopy: (212) 751-4864

        11.2 RIGHT OF SET-OFF; ADJUSTMENTS. Upon the occurrence and during the
continuance of any Event of Default, each Lender (and each of its Affiliates) is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender (or any of its Affiliates) to or for the credit or
the account of any Credit Party against any and all of the obligations of such
Person now or hereafter existing under this Credit Agreement, under the Notes,
under any other Credit Document or otherwise, irrespective of whether such
Lender shall have made any demand hereunder or thereunder and although such
obligations may be unmatured. Each Lender agrees promptly to notify any affected
Credit Party after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section 11.2 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.

        11.3 BENEFIT OF AGREEMENT. (a) This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that none of the Credit Parties may
assign or transfer any of its interests and obligations without prior written
consent of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.

           (b) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Credit Agreement (including,
without limitation, all or a portion of its Loans, its Notes, and its
Commitment); provided, however, that

                (i) each such assignment shall be to an Eligible Assignee;

                (ii) except in the case of an assignment to another Lender or an
        assignment of all of a Lender's rights and obligations under this Credit
        Agreement, any such partial assignment shall be in an amount at least
        equal to $5,000,000 (or, if less, the

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        remaining amount of the Commitment being assigned by such Lender) or an
        integral multiple of $1,000,000 in excess thereof;

                (iii) each such assignment by a Lender shall be of a constant,
        and not varying, percentage of all of its rights and obligations under
        this Credit Agreement and the Notes; and

                (iv) the parties to such assignment shall execute and deliver to
        the Administrative Agent for its acceptance an Assignment and Acceptance
        in the form of Exhibit 11.3(b) hereto, together with any Note subject to
        such assignment and a processing fee of $3,500 (except that no
        processing fee shall be payable (y) in connection with an assignment of
        the Term Loan by or to Lehman Commercial Paper Inc. or any Affiliate
        thereof or (z) with respect to any assignment of the Term Loan, in the
        case of an Assignee that is already a Term Lender or is an Affiliate of
        a Term Lender or a Person under common management with a Term Lender).

Upon execution, delivery, acceptance and recording (as provided in paragraph (c)
below) of such Assignment and Acceptance, the assignee thereunder shall be a
party hereto and, to the extent of such assignment, have the obligations,
rights, and benefits of a Lender hereunder and the assigning Lender shall, to
the extent of such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 11.3(b), the assignor, the Administrative Agent and the
Credit Parties shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not a
United States person under Section 7701(a)(30) of the Code, it shall deliver to
the Credit Parties and the Administrative Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 3.11.

             (c) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 11.1 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Credit Parties, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Credit Agreement. Any
assignment of any Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). The Register shall be available for
inspection by the Credit Parties or any Lender at any reasonable time and from
time to time upon reasonable prior notice.

             (d) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit 11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.

             (e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations under this
Credit Agreement (including

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all or a portion of its Commitment or its Loans); provided, however, that (i)
such Lender's obligations under this Credit Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Sections 3.7 through
3.12, inclusive, and the right of set-off contained in Section 11.2, and (iv)
the Credit Parties shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Credit
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Credit Parties relating to the Credit Party Obligations owing
to such Lender and to approve any amendment, modification, or waiver of any
provision of this Credit Agreement (other than amendments, modifications, or
waivers decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, extending any scheduled principal payment date
or date fixed for the payment of interest on such Loans or Notes, or extending
its Commitment).

             (f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion of
its Loans and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank, and any Term Lender may otherwise create security interests in any
Term Loan or Term Note in accordance with applicable law. No such assignment
shall release the assigning Lender from its obligations hereunder.

             (g) Any Lender may furnish any information concerning the
Consolidated Parties in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.14 hereof.

        11.3A TRANCHE C ASSIGNMENTS AND PLEDGES. (a) No processing fee shall be
payable to the Administrative Agent (y) in connection with an assignment of the
Tranche C Term Loan by or to Lehman Commercial Paper Inc. or any Affiliate
thereof or (z) with respect to any assignment of the Tranche C Term Loan, in the
case of an Assignee that is already a Tranche C Term Lender or is an Affiliate
of a Tranche C Term Lender or a Person under common management with a Tranche C
Term Lender or a fund advised by the same investment advisor as a Tranche C Term
Lender (or an Affiliate thereof).

         (b) Any Tranche C Term Lender may create security interests in any
Tranche C Term Loan or Tranche C Term Note in accordance with applicable law.

         11.3B NEW TERM LOAN ASSIGNMENTS AND PLEDGES. (a) No processing fee
shall be payable to the Administrative Agent (y) in connection with an
assignment of the New Term Loan by or to Lehman Commercial Paper Inc. or any
Affiliate thereof or (z) with respect to any assignment of the New Term Loan, in
the case of an Assignee that is already a New Term Loan Lender or is an
Affiliate of a New Term Loan Lender or a Person under common management with a
New Term Loan Lender or a fund advised by the same investment advisor as a New
Term Loan Lender (or an Affiliate thereof).

         (b) Any New Term Loan Lender may create security interests in any New
Term Loan or New Term Loan Note in accordance with applicable law.

        11.4 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Administrative Agent or any other Secured Party in exercising any right,
power or privilege

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hereunder or under any other Credit Document and no course of dealing between
the Administrative Agent or any other Secured Party and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Administrative Agent or any other Secured Party would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle the Credit
Parties to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the other Secured Parties to any other or further action in any circumstances
without notice or demand.

        11.5 EXPENSES; INDEMNIFICATION. (a) The Credit Parties jointly and
severally agree to pay on demand all costs and expenses of the Administrative
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities under the Credit
Documents. The Credit Parties further jointly and severally agree to pay on
demand all costs and expenses of the Administrative Agent and the Lenders, if
any (including, without limitation, reasonable attorneys' fees and expenses), in
connection with the enforcement (whether through negotiations, legal
proceedings, or otherwise) of the Credit Documents and the other documents to be
delivered hereunder.

             (b) The Credit Parties jointly and severally agree to indemnify and
hold harmless the Administrative Agent and each Lender and each of their
Affiliates and their respective officers, directors, employees, agents, and
advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans (including any
of the foregoing arising from the negligence of the Indemnified Party), except
to the extent such claim, damage, loss, liability, cost, or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 11.5 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by any of
the Credit Parties, their respective directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. The Credit Parties agree not to assert any claim against the
Administrative Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys, agents, and advisers, on
any theory of liability, for special, indirect, consequential, or punitive
damages arising out of or otherwise relating to the Credit Documents, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Loans.

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             (c) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 11.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.

        11.6 AMENDMENTS, WAIVERS AND CONSENTS. Neither this Credit Agreement nor
any other Credit Document nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing entered into by, or approved in writing
by, the Required Lenders and the Borrower, provided, however, that:

                (a) without the consent of the Required Lenders and each other
        Lender affected thereby, neither this Credit Agreement nor any other
        Credit Document may be amended to

                        (i) extend the final maturity of any Loan or of any
                reimbursement obligation, or any portion thereof, arising from
                drawings under Letters of Credit,

                        (ii) reduce the rate or extend the time of payment of
                interest (other than as a result of waiving the applicability of
                any post-default increase in interest rates) thereon or Fees
                hereunder,

                        (iii) reduce or waive the principal amount of any Loan
                or of any reimbursement obligation, or any portion thereof,
                arising from drawings under Letters of Credit,

                        (iv) increase the Commitment of a Lender over the amount
                thereof in effect (it being understood and agreed that a waiver
                of any Default or Event of Default or mandatory reduction in the
                Commitments shall not constitute a change in the terms of any
                Commitment of any Lender),

                        (v) release all or substantially all of the Collateral
                securing the Credit Party Obligations hereunder (provided that
                the Administrative Agent may, without consent from any other
                Lender, release any Collateral that is sold or transferred by a
                Credit Party in conformance with Section 8.5),

                        (vi) release the Borrower or substantially all of the
                other Credit Parties from its or their obligations under the
                Credit Documents,

                        (vii) amend, modify or waive any provision of this
                Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
                3.13, 3.14, 3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,

                        (viii) reduce any percentage specified in, or otherwise
                modify, the definition of Required Lenders, or

                        (ix) consent to the assignment or transfer by the
                Borrower of all or substantially all of the other Credit Parties
                of any of its or their rights and obligations under (or in
                respect of) the Credit Documents except as permitted thereby;

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                (b) without the consent of the Administrative Agent, no
        provision of Section 10 may be amended;

                (c) without the consent of the Issuing Lender, no provision of
        Section 2.2 may be amended; and without the consent of the Swingline
        Lender, no provision of Section 2.3 may be amended; and

                (d) with the consent of the Borrower and either the Required
        Term Lenders or the Required Revolving Lenders, increase the rate of
        interest applicable to the Loans (such increase to be in an equal amount
        for the Term Loans and the Revolving Loans).

        Notwithstanding the fact that the consent of all the Lenders is required
        in certain circumstances as set forth above, (x) each Lender is entitled
        to vote as such Lender sees fit on any bankruptcy reorganization plan
        that affects the Loans, and each Lender acknowledges that the provisions
        of Section 1126(c) of the Bankruptcy Code supersedes the unanimous
        consent provisions set forth herein and (y) the Required Lenders may
        consent to allow a Credit Party to use cash collateral in the context of
        a bankruptcy or insolvency proceeding.

        11.6A TRANCHE C AMENDMENTS, WAIVERS AND CONSENTS. Neither this Credit
Agreement nor any other Credit Document nor any of the terms hereof or thereof
may be amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing entered into by, or
approved in writing by, the Required Tranche C Term Lenders, provided, however,
that:

                (a) without the consent of the Required Tranche C Term Lenders
        and each other Tranche C Term Lender affected thereby, neither this
        Credit Agreement nor any other Credit Document may be amended to

                        (i) extend the final maturity of any Tranche C Term
                Loan,

                        (ii) reduce the rate or extend the time of payment of
                interest in respect of Tranche C Term Loans (other than as a
                result of waiving the applicability of any post-default increase
                in interest rates) thereon or Fees with respect to Tranche C
                Term Loan Commitments hereunder,

                        (iii) reduce or waive the principal amount of any
                Tranche C Term Loan,

                        (iv) increase the Tranche C Term Loan Commitment of a
                Lender over the amount thereof in effect (it being understood
                and agreed that a waiver of any Default or Event of Default or
                mandatory reduction in the Commitments shall not constitute such
                an increase in the Commitment of any Lender),

                        (v) release all or substantially all of the Collateral
                securing the Credit Party Obligations hereunder (provided that
                the Administrative Agent may, without consent from any other
                Lender, release any Collateral that is sold or transferred by a
                Credit Party in conformance with Section 8.5),

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                        (vi) release the Borrower or substantially all of the
                other Credit Parties from its or their obligations under the
                Credit Documents,

                        (vii) amend, modify or waive any provision of this
                Section 11.6A or Section 3.6, 3.7, 3.7A, 3.8, 3.9, 3.10, 3.11,
                3.12, 3.13, 3.13A, 3.14, 3.15, 9.1(a), 11.2, 11.3, 11.3A, 11.5
                or 11.9,

                        (viii) reduce any percentage specified in, or otherwise
                modify, the definition of Required Tranche C Term Lenders, or

                        (ix) consent to the assignment or transfer by the
                Borrower or all or substantially all of the other Credit Parties
                of any of its or their rights and obligations under (or in
                respect of) the Credit Documents except as permitted thereby;

                (b) with the consent of the Borrower, the Required Tranche C
        Term Lenders and either the Required Term Lenders or the Required
        Revolving Lenders, this Credit Agreement may be amended to increase the
        rate of interest applicable to the Loans (such increase to be in an
        equal amount for the Term Loans, the Tranche C Term Loans and the
        Revolving Loans).

        Notwithstanding the fact that the consent of all the Tranche C Term
        Lenders is required in certain circumstances as set forth above, (x)
        each Tranche C Term Lender is entitled to vote as such Tranche C Term
        Lender sees fit on any bankruptcy reorganization plan that affects the
        Tranche C Term Loans, and each Tranche C Term Lender acknowledges that
        the provisions of Section 1126(c) of the Bankruptcy Code supersedes the
        unanimous consent provisions set forth herein and (y) the Required
        Tranche C Term Lenders may consent to allow a Credit Party to use cash
        collateral in the context of a bankruptcy or insolvency proceeding,
        provided that the Required Lenders consent as well; provided that, the
        Required Lenders, on the one hand, and the Required Tranche C Term
        Lenders, on the other hand, each agree not to consent to such use of
        cash collateral without the affirmative consent of the other.

        The definition of Aggregate Required Lenders may not be amended without
        the consent of all Lenders.

        11.6B NEW TERM LOAN AMENDMENTS, WAIVERS AND CONSENTS. Neither this
Credit Agreement nor any other Credit Document nor any of the terms hereof or
thereof may be amended, changed, waived, discharged or terminated unless such
amendment, change, waiver, discharge or termination is in writing entered into
by, or approved in writing by, the Required New Term Loan Lenders, provided,
however, that:

                (a) without the consent of the Required New Term Loan Lenders
        and each other New Term Loan Lender affected thereby, neither this
        Credit Agreement nor any other Credit Document may be amended to

                        (i) extend the final maturity of any Loan,

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                        (ii) reduce the rate or extend the time of payment of
                interest (other than as a result of waiving the applicability of
                any post-default increase in interest rates) thereon or Fees
                hereunder,

                        (iii) reduce or waive the principal amount of any Loan,

                        (iv) increase the Commitment of a Lender over the amount
                thereof in effect (it being understood and agreed that a waiver
                of any Default or Event of Default or mandatory reduction in the
                Commitments shall not constitute such an increase in the
                Commitment of any Lender),

                        (v) release all or substantially all of the Collateral
                securing the Credit Party Obligations hereunder (provided that
                the Administrative Agent may, without consent from any other
                Lender, release any Collateral that is sold or transferred by a
                Credit Party in conformance with Section 8.5),

                        (vi) release the Borrower or substantially all of the
                other Credit Parties from its or their obligations under the
                Credit Documents,

                        (vii) amend, modify or waive any provision of this
                Section 11.6B or Section 3.6, 3.7, 3.7A, 3.7B, 3.8, 3.9, 3.10,
                3.11, 3.12, 3.13, 3.13A, 3.13B, 3.14, 3.15, 9.1(a), 11.2, 11.3,
                11.3A, 11.3B, 11.5 or 11.9,

                        (viii) reduce any percentage specified in, or otherwise
                modify, the definition of Required New Term Loan Lenders, or

                        (ix) consent to the assignment or transfer by the
                Borrower or all or substantially all of the other Credit Parties
                of any of its or their rights and obligations under (or in
                respect of) the Credit Documents except as permitted thereby;

                (b) with the consent of the Borrower, the Required New Term Loan
        Lenders, the Required Tranche C Term Lenders and either the Required
        Term Lenders or the Required Revolving Lenders, this Credit Agreement
        may be amended to increase the rate of interest applicable to the Loans
        (such increase to be in an equal amount for the Term Loans, the Tranche
        C Term Loans and the New Term Loans).

        Notwithstanding the fact that the consent of all the New Term Loan
        Lenders is required in certain circumstances as set forth above, (x)
        each New Term Loan Lender is entitled to vote as such New Term Loan
        Lender sees fit on any bankruptcy reorganization plan that affects the
        New Term Loans, and each New Term Loan Lender acknowledges that the
        provisions of Section 1126(c) of the Bankruptcy Code supersedes the
        unanimous consent provisions set forth herein and (y) the Required New
        Term Loan Lenders may consent to allow a Credit Party to use cash
        collateral in the context of a bankruptcy or insolvency proceeding,
        provided that the Required Lenders and the Required Tranche C Term
        Lenders consent as well; provided that, the Required Lenders and the
        Required Tranche C Term Lenders, on the one hand, and the Required New
        Term Loan Lenders, on the other hand, each agree not to consent to such
        use of cash collateral without the affirmative consent of the other.

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        11.7 COUNTERPARTS. This Credit Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart for each of the parties hereto.
Delivery by facsimile by any of the parties hereto of an executed counterpart of
this Credit Agreement shall be as effective as an original executed counterpart
hereof and shall be deemed a representation that an original executed
counterpart hereof will be delivered.

        11.8 HEADINGS. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Credit Agreement.

        11.9 SURVIVAL. All indemnities set forth herein, including, without
limitation, in Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the
execution and delivery of this Credit Agreement, the making of the Loans, the
issuance of the Letters of Credit, the repayment of the Loans, LOC Obligations
and other obligations under the Credit Documents and the termination of the
Commitments hereunder, and all representations and warranties made by the Credit
Parties herein shall survive delivery of the Notes and the making of the Loans
hereunder.

        11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS CREDIT
AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED THEREIN, THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the courts of
the State of New York in New York County, or of the United States for the
Southern District of New York, and, by execution and delivery of this Credit
Agreement, each of the Credit Parties hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Credit Parties further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 11.1, such service to become effective three (3) days after
such mailing. Nothing herein shall affect the right of the Administrative Agent
or any other Secured Party to serve process in any other manner permitted by law
or to commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.

              (b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

              (c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE
AGENT, THE DOCUMENTATION AGENT, THE SYNDICATION AGENT, THE CO-AGENT, THE LEAD
ARRANGER, THE LENDERS AND EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR

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RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

        11.11 SEVERABILITY. If any provision of any of the Credit Documents is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.

        11.12 ENTIRETY. This Credit Agreement (including the provisions of
Sections 1.4 and 11.16 hereof) together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.

        11.13 BINDING EFFECT; TERMINATION. (a) This Credit Agreement shall
become effective at such time when all of the conditions set forth in Section
5.1 have been satisfied or waived by the Aggregate Required Lenders and the
Required New Term Loan Lenders and it shall have been executed by each Credit
Party and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Amending Lender and each New Term Loan Lender, and
thereafter this Credit Agreement shall be binding upon and inure to the benefit
of each Credit Party, the Administrative Agent and each Lender and their
respective successors and assigns.

              (b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding, no Letters of Credit shall be
outstanding, all of the Credit Party Obligations have been irrevocably satisfied
in full and all of the Commitments hereunder shall have expired or been
terminated.

        11.14 CONFIDENTIALITY. The Administrative Agent and each Lender (each, a
"Lending Party") agrees to keep confidential any information furnished or made
available to it by the Credit Parties pursuant to this Credit Agreement that is
marked confidential; provided that nothing herein shall prevent any Lending
Party from disclosing such information (a) to any other Lending Party or any
Affiliate of any Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party or Affiliate of any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the credit facility
provided herein, (c) as required by any law, rule, or regulation, (d) upon the
order of any court or administrative agency, (e) upon the request or demand of
any regulatory agency or authority, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Credit Agreement,
(g) in connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
(i) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee and (j) to any
financial institution which is a direct or indirect contractual counterparty in
swap agreements or such contractual counterparty's professional advisors (so
long as any such contractual counterparty or professional advisor agrees to be
bound by the provisions of this Section 11.14).

                                      121
<PAGE>

        11.15 CONFLICT. To the extent that there is a conflict or inconsistency
between any provision hereof, on the one hand, and any provision of any other
Credit Document, on the other hand, this Credit Agreement shall control.

        11.16 EXISTING AGREEMENT SUPERSEDED. As set forth in Section 1.4, the
First Amended and Restated Credit Agreement is superseded by this Credit
Agreement, which has been executed in amendment, restatement and modification,
but not in extinguishment of, the obligations under the First Amended and
Restated Credit Agreement.

                            [Signature Pages Follow]

                                      122
<PAGE>

        IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.

BORROWER:                       CORRECTIONS CORPORATION OF AMERICA
                                (formerly known as Prison Realty Trust, Inc.),
                                a Maryland corporation

                                By: /s/ John D. Ferguson
                                   ---------------------------------------------
                                Name: John D. Ferguson
                                Title: Vice-Chairman, CEO & President

SUBSIDIARY
GUARANTORS:                     PRISON REALTY MANAGEMENT, INC.,
                                a Tennessee corporation

                                By: /s/ John D. Ferguson
                                   ---------------------------------------------
                                Name: John D. Ferguson
                                Title: Chairman, CEO & President

                                CCA OF TENNESSEE, INC. (f/k/a CCA
                                Acquisition Sub, Inc.), a Tennessee corporation

                                By: /s/ John D. Ferguson
                                   ---------------------------------------------
                                Name: John D. Ferguson
                                Title: Chairman, CEO & President

                                TRANSCOR AMERICA, LLC,
                                a Tennessee limited liability company

                                By: /s/ Todd Mullenger
                                   ---------------------------------------------
                                Name: Todd Mullenger
                                Title: VP, Treasurer

                                CCA INTERNATIONAL, INC.,
                                a Delaware corporation

                                By: /s/ John D. Ferguson
                                   ---------------------------------------------
                                Name: John D. Ferguson
                                Title: Chairman, CEO & President

<PAGE>

                           TECHNICAL AND BUSINESS INSTITUTE, INC., a Tennessee
                           corporation

                           By: /s/ John D. Ferguson
                              -------------------------------------------------
                           Name: John D. Ferguson
                           Title: Chairman, CEO & President

                              (SIGNATURES CONTINUE)

<PAGE>

LENDERS:                     LEHMAN COMMERCIAL PAPER INC.,
                             individually in its capacity as a
                             Lender and in its capacity as Administrative Agent

                             By: /s/ Michele Swanson
                                 ----------------------------------------------
                             Name: Michele Swanson
                             Title: Authorized Signatory

                              (SIGNATURES CONTINUE)

<PAGE>

                            SOCIETE GENERALE,
                            individually in its capacity as a Lender and in its
                            capacity as Documentation Agent

                            By: /s/ Elizabeth R. Peck
                               ------------------------------------------------
                            Name: Elizabeth R. Peck
                            Title: Director

                              (SIGNATURES CONTINUE)

<PAGE>

                                         THE BANK OF NOVA SCOTIA,
                                         individually in its capacity as a
                                         Lender and in its capacity
                                         as Syndication Agent

                                         By: /s/ W. J. Brown
                                            -------------------------------
                                         Name: W. J. Brown
                                         Title: Managing Director

                              (SIGNATURES CONTINUE)

<PAGE>

                             SOUTHTRUST BANK, N.A.,
                             individually in its capacity as a Lender and in its
                             capacity as Co-Agent

                             By: /s/ Marcy A. Harris
                                 -----------------------------------------------
                             Name: Marcy A. Harris
                             Title: Vice President

                              (SIGNATURES CONTINUE)

<PAGE>

                                      LEHMAN BROTHERS INC.,
                                      in its capacity as Advisor,
                                      Lead Arranger and Book Manager

                                      By: /s/ (Authorized Signatory)
                                          -----------------------------------
                                      Name: (Authorized Signatory)
                                      Title: (Authorized Signatory)

                              (SIGNATURES CONTINUE)

<PAGE>

            [SIGNATURE PAGES OF OTHER LENDERS INTENTIONALLY OMITTED]

<PAGE>

                 [EXHIBITS AND SCHEDULES INTENTIONALLY OMITTED]

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