Document:

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                                                                   EXHIBIT 4.01

                             2000 STOCK OPTION PLAN
                         OF UNITED HERITAGE CORPORATION

         This 2000 Stock Option Plan (the "Plan") of UNITED HERITAGE
CORPORATION, a Utah corporation (the "Company"), under which stock options (the
"Options") may be granted to the directors, officers, consultants, advisors and
employees of the Company and its subsidiaries to purchase shares of the
Company's $0.001 par value common stock (the "Common Stock").

         Section 1.  PURPOSE.  The purpose of the Plan is to permit directors,
officers, consultants, advisors and employees of the Company or its subsidiaries
(now existing or hereafter acquired) to acquire a proprietary interest in the
Company, thereby providing them with an additional incentive for further
promoting the success of the Company's business operations, to encourage them to
remain as directors, officers, consultants, advisors, or employees of the
Company or its subsidiaries and to assist the Company and its subsidiaries in
attracting and retaining key personnel through the grant of Options under the
Plan. For purposes of this Plan, the terms "employment" or "employ" shall also
include serving as a director, officer, consultant or advisor to the Company or
its subsidiaries, and the term "employee" shall include any of such persons.

         Section 2.  ADMINISTRATION OF PLAN. The Plan will be administered by a
committee (the "Stock Option Committee") consisting of two members to be
appointed by the Company's Board of Directors. Each member of the Stock Option
Committee must be an active Director of the Company. Any member of the Stock
Option Committee may at any time be removed by the Company's Board of Directors
with or without cause. Upon the removal, resignation or inability to serve of
any member of the Stock Option Committee, a successor (who must be an active
Director of the Company) shall be selected by the Company's Board of Directors.
At its initial meeting, the members of the Stock Option Committee shall select
one from among them to act as chairman of the Stock Option Committee. A quorum
of the Stock Option Committee will consist of at least two members of the
Committee, and no action may be taken by the Stock Option Committee unless a
quorum is present and concurs in that action. The Stock Option Committee shall
meet at such times and places as it may determine to consider the granting of
Options under the Plan. Subject to the provisions of the Plan, the Stock Option
Committee will have authority in its discretion: (a) to construe and interpret
the Plan and all Options granted hereunder and to determine the terms and
provisions (and amendments thereof) of the Options granted under the Plan (which
need not be identical); (b) to define the terms used in the Plan and in the
Options granted hereunder; (c) to prescribe, amend and rescind rules and
regulations relating to the Plan; (d) to recommend the individuals to whom and
the time or times at which Options will be granted, the number of shares to be
subject to each Option and the Option exercise price, and to grant such options;
and (e) to make all other determinations necessary or advisable for the
administration of the Plan. All determinations and interpretations made by the
Stock Option Committee will be binding and conclusive on all persons to whom
Options are granted and on their legal representatives and beneficiaries.

         Section 3.  SHARES SUBJECT TO PLAN. Subject to adjustment as provided
in Section 8 hereof, the shares to be offered under the Plan will be in whole
or in part, as the Board of

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Directors of the Company may from time to time determine, authorized but
unissued shares of the Company's Common Stock or issued shares of the
Company's Common Stock which have been reacquired by the Company. The
aggregate number of shares of Common Stock to be delivered upon exercise of
all Options granted under the Plan may not exceed 5,000,000 shares of Common
Stock. If any Option granted under the Plan expires or terminates for any
reason without having been exercised in full, the unpurchased shares of
Common Stock subject thereto will (unless the Plan has been terminated) again
be available for other Options to be granted under the Plan.

         Section 4.  SELECTION OF OPTIONEES. Options may be granted under the
Plan to present and future directors, officers, consultants, and/or employees of
the Company and/or its subsidiaries (whether now existing or hereafter
acquired), all such persons being hereafter referred to as "Optionees." In
determining the persons to whom Options will be granted and the number of shares
of Common Stock to be covered by each Option, the Stock Option Committee shall
take into account the nature of the services rendered by such persons, their
present and potential contributions to the success of the Company and such other
factors as the Stock Option Committee in its discretion may deem relevant. An
Optionee who has been granted an Option under the Plan may be granted an
additional Option or Options under the Plan if the Stock Option Committee so
determines.

         Section 5.  OPTION PRICE. Options granted under the Plan will be
subject to such exercise price as may be determined by the Stock Option
Committee except that in no event shall the exercise price be less than the
par value of the Common Stock (the "Option Price").

         Section 6.  TERM OF OPTIONS. The date of the granting of each Option
will be deemed to be the date such Option is granted by the Stock Option
Committee. As of such date the Optionee and the Company shall execute a Stock
Option Agreement in the form attached hereto as Annex 1, on such other
agreements as may be approved by the Stock Options Committee. The Stock Options
Committee shall have the power to approve such other agreements with additional
provisions relating to employment, consulting services or other topics. Every
Option granted pursuant to the Plan must be exercised within the number of years
after the date of granting of such Option as determined by the Stock Option
Committee and allowed in the Stock Option Agreement, in the amounts and time
periods allowed in the Stock Option Agreement, which may provide that a period
of time must elapse after the date of grant before such Options are exercisable;
PROVIDED, HOWEVER, that the Option may not be exercised as to less than 100
shares at any one time (or the remaining shares then purchasable under the
Option, if less than 100 shares). The Stock Option Agreement may contain such
other provisions, including vesting requirements, as the Stock Option Committee
may, from time to time, deem advisable.

         Section 7.  METHOD OF EXERCISING OPTIONS.

 (a) Provided all of the provisions of the Plan have been fully complied with,
each Option may be exercised by forwarding to the Company's business office in
Cleburne, Texas, by certified letter or hand delivery, a written instrument
stating that the option is being exercised and giving the number of shares with
respect to which it is being exercised. Such written instrument shall be signed
by the person exercising the Option and shall be accompanied by a check for the
full

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amount of the Option Price. In lieu of paying the Option Price in cash, and
subject to (a) the prior written consent of the Stock Option Committee, and
(b) the ability of the Company to repurchase its Common Stock under Utah
corporate law, the Optionee may tender and deliver to the Company with proper
stock powers and required endorsements so many shares of the Company's issued
and outstanding Common Stock previously acquired, owned and held by the
Optionee, the sale of which is allowable under securities laws, and which
have a fair market value equal to the Option Price. The determination of fair
market value of surrendered shares of Common Stock shall be made by the Stock
Option Committee in its sole discretion, which shall be binding for all
purposes. In the event a person or persons other than an Optionee attempts to
exercise the Option, such written statement mailed to the Company shall
demonstrate compliance with Section 11 hereof and be accompanied by such
proof of right to ownership as is required by the Texas Business and Commercial
Code to be given to transfer agents in connection with the transfer of
securities. The Company shall issue a certificate representing the shares
being received upon exercise of the Option. All shares represented by any such
certificate shall be fully paid and non-assessable. Subject to the limitations
set forth in the Plan, each Option may be exercised at one time or on several
successive occasions; PROVIDED, HOWEVER, each Option may not be exercised in an
amount less than one hundred shares at any one time (unless such exercise is
being made as to the entire portion of Common Stock which may be purchased
pursuant to the Plan).

 (b) Anything herein to the contrary notwithstanding, upon the occurrence of an
event described in Section 8(b) below which accelerates the time for exercising
any Option held by an Optionee (a "Triggering Event") an Option granted under
the Plan, to the extent it remains unexercised immediately preceding a
Triggering Event, may be exercised, in whole or in part, as provided in Section
8(b) below.

         Section 8.  CHANGES IN CAPITAL STRUCTURE.

(a) Subject to any required action by the shareholders, the number of shares of
Common Stock covered by each outstanding Option, the price per share of each
such Option, and the aggregate number of shares remaining available under the
Plan shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock of the Company resulting from a
subdivision or consolidation of shares, the payment of a stock dividend (but
only on the Common Stock), or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company, provided
that no fractional shares shall be subject to any Option and each Option shall
be adjusted downward to the nearest full share.

(b) Subject to Section 8(a) above, if the Company is the surviving corporation
in any merger or consolidation, each outstanding Option shall continue in
effect. Upon consummation, dissolution or liquidation of the Company, or a
merger or consolidation in which the Company is not the surviving corporation,
each outstanding Option shall immediately terminate without further action;
PROVIDED, HOWEVER, that in such event each Optionee may (during the five (5)
business days prior to such dissolution or liquidation, or merger or
consolidation in which the Company is not the surviving corporation) exercise
such Optionee's Option, subject to the terms and provisions of Section 7 hereof.

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(c) In the event of a conversion or exchange of all of the Company's Common
Stock with par value into the same or a different number of shares with a
different par value or without par value, the shares resulting from any such
conversion or exchange shall be deemed to be Common Stock within the meaning of
the Plan, with such adjustments in the Option Price as the Stock Option
Committee shall deem appropriate.

(d) To the extent that the foregoing adjustments relate to stock or securities
of the Company, such adjustments shall be made by the Stock Option Committee
whose determination in that respect shall be final, binding and conclusive.
Notwithstanding any of the foregoing adjustments, no adjustment may be made in
the minimum number of shares which may be purchased at any one time as provided
in Section 7(a) above.

(e) Except as hereinbefore expressly provided in this Section 8, an Optionee
will have no rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any stock or other dividend or any other
increase or decrease in the number of shares of stock of any class resulting
from a dissolution, liquidation, merger, consolidation or other reorganization
with another corporation. Except as provided in Sections 8(a) and (c) above, any
issue by the Company of shares of stock of any class or securities convertible
into shares of stock of any class shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to the Option.

(f) The grant of an Option pursuant to the Plan will not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure; nor affect in
any way the right or power of the Company to merge, consolidate, dissolve,
liquidate, sell or otherwise transfer all or any part of its business or assets.

         Section 9.  TERMS AND CONDITIONS RELATING TO EMPLOYMENT.

(a) A primary reason for the Company's granting the Options under the Plan is
to encourage each Optionee to remain directors, officers, consultants, advisors
or employees of the Company or its subsidiaries. Accordingly, if such status as
director, officer, consultant, advisor or employee is terminated for any reason
other than upon the completion of a contract with a specified term or with and
upon the written consent of the Company, which consent may be granted or
withheld solely in the discretion of the Company, then such Optionee's Option
granted hereunder and then held by such Optionee (to the extent of the
unexercised portion thereof) shall expire on the same date as such termination
occurred (or 90 days prior thereto if an Optionee attempts to exercise such
Optionee's Option in anticipation of such termination). The failure of the
Company to declare promptly that an Option has expired after the occurrence of
any such event will not constitute a waiver of such right, and the Company may
at any time thereafter declare such Option to have expired regardless of its
actions during the interim period. Under no circumstances may an Optionee's
Option be in any way affected by any change of the Optionee's activities, title
or position within the group consisting of the Company and its subsidiaries. An
Optionee who terminates his employment with the Company qualifying him for
Options hereunder with the written consent of the Company may exercise his
Option within three (3) months following the date of such termination.

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(b) The Stock Option Committee may, in its discretion, include in any Option
granted under the Plan a condition that the Optionee shall agree to remain in
the employ of the Company or any of its subsidiaries for a period of time
(specified in the Stock Option Agreement) following the date the Option is
granted. No such agreement shall impose upon the Company or any of its
subsidiaries any obligation to employ the Optionee for any period of time,
unless otherwise expressly stated therein.

         Section 10. DEATH OF OPTIONEE. If an Optionee dies while in the employ
of the Company or one of its subsidiaries, then, notwithstanding anything herein
to the contrary, the unexercised portion (to the extent then unexercised) of
such Optionee's Option may be exercised in full at any time (to the extent that
the Optionee shall have been entitled to do so at the date of his death) within
one (1) year after the date of such Optionee's death, but only if exercised by
an heir, devisee or personal representative of the deceased Optionee's estate
who acquired the Option directly from the Optionee through the latter's will or
pursuant to the applicable laws of descent and distribution.

         Section 11. NONTRANSFERABILITY. No Option may be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986, as
amended, or Title I of the Employee Retirement Income Security Act, or the rules
thereunder. Each Option is exercisable, during the lifetime of an Optionee, only
by the Optionee. Any attempted assignment, transfer, pledge, hypothecation or
other encumbrance of any Option contrary to the provisions hereof, and any
execution, attachment or similar process upon any Option, will be null, void and
of no effect.

         Section 12. RIGHTS AS SHAREHOLDER. No Optionee may have any rights as a
shareholder with respect to any shares of the Company's Common Stock covered by
these Options until the date of issuance of a stock certificate to such Optionee
for such shares after exercise. Except as is otherwise provided in Section 8
above, no adjustment will be made for dividends (ordinary or extraordinary and
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued.

         Section 13. COMPANY'S OBLIGATIONS. The Company agrees to maintain at
all times sufficient authorized but unissued or reacquired stock to meet the
requirements of the Plan. The proceeds received by the Company from the sale of
the Common Stock pursuant to these Options shall be used for general corporate
purposes. The Company further agrees to pay all fees and expenses necessarily
incurred by the Company in connection with these Options. Although the Company
shall in no event be obligated to register any securities covered hereby
pursuant to the Securities Act of 1933, as amended (the "Act"), it will use its
best efforts to comply with all laws and regulations which, in the opinion of
the Company's counsel, are applicable thereto. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority deemed
necessary by counsel for the Company for the lawful issuance and sale of Common
Stock hereunder shall relieve the Company of any liability in respect of the
failure to issue or sell Common Stock as to which the requisite authority has
not been obtained.

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         Section 14.  REQUIREMENTS OF LAW.

(a) The Company shall not be required to sell or issue any shares of Common
Stock subject to the Options if the issuance of such shares shall constitute a
violation of any provision of any law or regulation of any governmental
authority. Specifically, in connection with the Act, upon exercise of an Option,
unless a registration statement under the Act is in effect with respect to the
shares of Common Stock covered by the Option, the Company shall not be required
to issue such shares of Common Stock unless the Company has received an opinion
of counsel that registration of such shares is not required. Any reasonable
determination in this connection by the Company shall be final, binding and
conclusive. If required by the Act, the rules adopted by the Securities and
Exchange Commission, or applicable state law in the opinion of counsel for the
Company, an appropriate legend shall be placed on certificates representing
shares of Common Stock issued pursuant to the exercise of an Option.

(b) As a condition to the exercise of any portion of an Option, the Company may
require the Optionee exercising such Option to represent and warrant at the time
of such exercise that any shares of Common Stock acquired at exercise are being
acquired only for investment and without any present intention to sell or
distribute such shares, if, in the opinion of counsel for the Company, such a
representation is required under the Act or any other applicable law, regulation
or rule of any governmental agency.

         Section 15. RELIANCE ON REPORTS. Each member of the Stock Option
Committee and each member of the Board of Directors shall be fully justified in
relying or acting in good faith upon any report made by the independent public
accountants of the Company and its subsidiaries and upon any other information
furnished in connection with the Plan by any person or persons other than
himself. In no event shall any person who is or shall have been a member of the
Stock Option Committee or of the Board of Directors be liable for any
determination made or other action taken or any omission to act in reliance upon
any such report or information or for any action, including the furnishing of
information, taken or failure to act, if in good faith.

         Section 16. AMENDMENT OR TERMINATION OF PLAN. The Company's Board of
Directors may at any time amend the provisions of the Plan for the purpose of
complying with applicable corporate, securities, or federal tax laws. Further,
the Board of Directors may at any time amend, alter or discontinue the Plan,
except that no amendment or alteration may be made which would impair the rights
of any Optionee under any Option previously granted without such Optionee's
consent.

         Section 17. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to
the terms and conditions and within the limitations of the Plan, the Stock
Option Committee may modify, extend or renew outstanding Options granted under
the Plan, or accept the surrender of outstanding Options (to the extent not
theretofore exercised) and authorize the granting of new Options in substitution
therefore (to the extent not theretofore exercised), including canceling
outstanding Options and reissuing new Options at a lower Option Price in the
event that the fair market value per share of Common Stock at any time prior to
the date of exercise falls below the Option Price of Options granted pursuant to
the Plan. Notwithstanding the foregoing, however, no modification of an Option
shall, without the consent of the

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participant, alter or impair any rights or obligations under any Option
theretofore granted under the Plan.

         Section 18. EFFECTIVE DATE. The Plan shall become effective as of the
date of its adoption by the Board of Directors of the Company.

         The Secretary of the Company hereby certifies that the Plan was adopted
by the Board of Directors effective the 14th day of July, 2000.

                                                 /s/ Harold L. Gilliam

                                                 Harold L. Gilliam, Secretary

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Annex 1

                             STOCK OPTION AGREEMENT

         This STOCK OPTION AGREEMENT ("Agreement") is made this ___ day of
__________, 200___ between United Heritage Corporation, a Utah corporation (the
"Company"), and ________________, hereinafter called the Optionee.

The Company desires, by affording the Optionee an opportunity to purchase
shares of its $0.001 par value common stock (the "Common Stock"), as
hereinafter provided, to carry out the purpose of the 2000 Stock Option Plan
of United Heritage Corporation (the "Plan"), approved and adopted by its
directors.

         NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto
agree as follows:

         1. GRANT OF OPTION. The Company hereby irrevocably grants to the
Optionee the right and option (the "Option") to purchase all or any part of
an aggregate of ______ shares of Common Stock (such number being subject to
adjustment as provided in Section 8 of the Plan) on the terms and conditions
herein set forth and subject further to all of the terms and provisions of
the Plan which are incorporated herein by reference for all purposes. For
purposes of the Plan and this Agreement, the terms "employment" or "employ"
shall also include serving as a director, officer, consultant, or advisor to
the Company or its subsidiaries, and the term "employee" shall include any of
such persons.

         2. PURCHASE PRICE. The purchase price of the Common Stock covered by
the Option shall be $_________ per share.

         3. TERM OF OPTION. Subject to earlier termination as provided in
paragraphs 5 and 6 hereof, the term of the Option, and any limitations on
number of shares or time periods that it may be exercised are as follows:

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

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

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

Unless otherwise stated above, the Options may be exercised, prior to
expiration or termination, at any time or from time to time, as to any part
or all of the shares covered thereby; PROVIDED, HOWEVER, that the Option may
not be exercised as to less than 100 shares at any one time (or the remaining
shares then purchasable under the Option, if less than 100 shares). The
purchase price of the shares as to which the Option shall be exercised shall
be paid in full in cash, by delivery of a check or by the delivery of other
shares of Common Stock of the Company, at the time of exercise and as
provided by the Plan. Except as provided in paragraphs 5 and 6 hereof, the
Option may not be exercised at any time unless the Optionee shall have been
in the continuous employ of the Company and/or of one or more of its
subsidiaries, from the date hereof to the date of the exercise of the Option.
The holder of the Option shall not have any of the rights of a

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shareholder with respect to the shares covered by the Option except to the
extent that one or more certificates for such shares shall be delivered to
him upon the due exercise of the Option. The Option may not be exercised
unless at the date of exercise a registration statement on Form S-8 under the
Securities Act of 1933, as amended (the "Act"), relating to the shares
covered by the Option shall be in effect, or if, in the opinion of counsel
for the Company, the exercise and issuance of Common Stock would be exempt
from registration requirements under the Act and under applicable securities
laws. The Company is under no obligation to register the shares covered by
the Option under the Act.

         4. NONTRANSFERABILITY. The Option shall not be transferable
otherwise than by will or the laws of descent and distribution, or pursuant
to a qualified domestic relations order as defined by the Internal Revenue
Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act, or the rules thereunder, and the Option may be exercised,
during the lifetime of the Optionee, only by him. More particularly (but
without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided above), pledged or hypothecated in
any way, shall not be assignable by operation of law, and shall not be
subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the
Option contrary to the provisions hereof, and they levy of any execution,
attachment or similar process upon the Option, shall be null and void and
without effect.

         5. TERMINATION OF EMPLOYMENT. In the event the employment of the
Optionee shall be terminated, other than with and upon the written consent of
the Company, which consent may be granted or withheld solely in the
discretion of the Company, or pursuant to completion of an agreement
containing a specific term duration, then such Optionee's Option granted
hereunder and then held by such Optionee (to the extent of the unexercised
portion thereof) shall expire on the same date as such termination occurred
(or 90 days prior thereto if an Optionee attempts to exercise such Optionee's
Option in anticipation of such termination). The failure of the Company to
promptly declare that an Option has expired after the occurrence of any such
event will not constitute a waiver of such right, and the Company may at any
time thereafter declare such Option to have expired regardless of its actions
during the interim period. Nothing in this Agreement shall confer upon the
Optionee any right to continue in the employ of the Company or of any of its
subsidiaries or interfere in any way with the right of the Company or any
such subsidiaries to terminate his employment at any time.

         6. DEATH OF OPTIONEE. If the Optionee shall die while he shall be
employed by the Company or one or more of its subsidiaries, then,
notwithstanding anything herein to the contrary, the Option may be exercised
(to the extent that the Optionee shall have been entitled to do so at the
date of his death) by a legatee or legatees of the Optionee under his last
will, or by his personal representatives or distributees, at any time within
one (1) year after his death.

         7. METHOD OF EXERCISING OPTION. This Option may be exercised by
written notice to the Company.

         8. SUBSIDIARY. As used herein, the term "subsidiary" shall mean any
present or future corporation which would be a "subsidiary corporation" of
the Company, as that term is defined in Section 425 of the Internal Revenue
Code of 1986.

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         9. OTHER MATTERS. The Optionee acknowledges receipt of a copy of the
Plan, a copy of which is annexed hereto, and represents that the Optionee is
familiar with the terms and provisions thereof. The Optionee hereby accepts
this Option subject to all of the terms and provisions of the Plan. The
Optionee hereby agrees to accept as binding, conclusive and final all
decisions and interpretations of the Board of Directors and, where
applicable, the Stock Option Committee, upon any questions arising under the
Plan or this Agreement. As a condition to the issuance of shares of Common
Stock of the Company under this Agreement, the Optionee authorizes the
Company to withhold in accordance with applicable law from any regular cash
compensation payable to him any taxes required to be withheld by the Company
under federal, state or local law as a result of his exercise of this Option

         EXECUTED in Cleburne, Texas on the day and year written above.

                                    COMPANY:

                                    UNITED HERITAGE CORPORATION

                                    By:
                                       -----------------------------------------
                                           Walter G. Mize, Chairman of the Board

OPTIONEE:

-------------------------
         (Signature)
Address:
        -----------------------

        -----------------------FIRST AMENDMENT TO CREDIT AGREEMENT
                    -----------------------------------

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT is made as of the 10th day of
November,   2000   by   and  among  CORRECTIONAL  SERVICES  CORPORATION,  a
corporation duly organized and validly existing under the laws of the State
of Delaware (the "COMPANY");  each  of the Subsidiaries of the Company that
is a signatory hereto or that, pursuant  to Section 9.1.20(b) of the Credit
Agreement  (as  hereinafter  defined),  shall   become   a   party   hereto
(individually,  a "SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY
GUARANTORS"; and  the  Subsidiary Guarantors collectively with the Company,
the "OBLIGORS"); each of  the  lenders  that is a signatory hereto or that,
pursuant  to  Section  12.6(b)  of the Credit  Agreement,  shall  become  a
"Lender"  hereunder  (individually,   a  "LENDER"  and,  collectively,  the
"LENDERS");  and  SUMMIT  BANK,  a  New  Jersey   banking  corporation,  as
syndication  agent  for the Lenders (in such capacity,  together  with  its
successors in such capacity, the "SYNDICATION AGENT").

                           W I T N E S S E T H:
                           -------------------

     WHEREAS, the Company,  the  Subsidiary Guarantors, the Lenders and the
Syndication Agent entered into a Credit  Agreement  dated  August  31, 1999
(the "Credit Agreement"); and

     WHEREAS,  the  Company  has  requested  the  Syndication Agent and the
Lenders to make certain amendments to the Credit Agreement  as  more  fully
described herein, and the Syndication Agent and the Lenders have agreed  to
do  so,  subject  to  and  in  accordance  with  the  terms  and conditions
hereinafter set forth.

     NOW,  THEREFORE, in consideration of the premises and other  good  and
valuable consideration,  the  receipt  and  sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1.    Defined Terms.  Except as otherwise indicated  herein, all words
and terms defined in the Credit Agreement shall have the same meanings when
used herein.

     2.    Amendments to Credit Agreement.

          (a)  The  following  definitions appearing in Section  1  of  the
Credit Agreement are hereby amended to read in their entirety as follows:

          "Applicable Margin" shall mean:

               (i) with reference  to  Revolving Credit Loans that are
     Base Rate Loans or LIBOR Loans, an  amount  in excess of the Base
     Rate or the LIBOR Rate, as the case may be, determined  from time
     to  time  in  accordance  with  the  table set forth below.   The
     Applicable  Margin  shall  change  on  the   fifth  Business  Day
     following  receipt  by  the  Syndication  Agent of  a  Compliance
     Certificate of the Company demonstrating that  the  ratio  of the
     consolidated   Total   Funded   Debt   of  the  Company  and  its
     Subsidiaries  to  Adjusted  EBITDA  as at the  last  day  of  the
     immediately preceding fiscal quarter of the Company shall be at a
     different  level  in  the table below, whereupon  the  Applicable

<PAGE>

     Margin shall be reduced or increased to the applicable percentage
     set  forth in such table.   Notwithstanding  the  foregoing,  the
     Applicable  Margin  shall not be reduced at any time during which
     an Event of Default shall have occurred and be continuing:

<TABLE>
<CAPTION>
                                  Applicable Margin for   Applicable Margin for
            Ratio of Total          Revolving Credit      Revolving Credit Loans
            Funded Debt to           Loans that are              that are
Level       Adjusted EBITDA          Base Rate Loans           LIBOR Loans
-----       ---------------          ---------------           -----------
  <S>          <C>                        <C>                      <C>
  I            >3.75:1                    2.00%                    3.50%
               -

  II           <3.75:1 and                1.75%                    3.25%
               >3.25:1
               -

  III          <3.25:1 and                1.50%                    3.00%
               >2.75:1
               -

  IV           <2.75:1 and                1.25%                    2.75%
               >2.25:1
               -

  V            <2.25:1                    1.00%                    2.50%
</TABLE>

               (ii) with reference  to  DD  Loans  that  are Base Rate
     Loans, an amount equal to 1.00%.

          Notwithstanding the foregoing, if, as a result of prevailing
     market conditions and despite a good faith effort by  Summit Bank
     to sell down a portion of its Commitments and Loans, Summit  Bank
     has  been  unable  by August 31, 2001 to reduce its Commitment to
     less than 50% of the sum of all Commitments, then the Syndication
     Agent and the Company  shall  in good faith negotiate an increase
     in the Applicable Margin to facilitate a sell down by Summit Bank
     of its Commitment and Loans.

          "Capital Event" shall mean  (i)  an  Equity Issuance, (ii) a
     Disposition, other than a Contemplated Disposition,  or  (iii) an
     issuance  by  any Obligor of any Indebtedness described in clause
     (a) or (b) of the definition "Indebtedness."

          "EBITDA" shall mean, for any period, for the Company and its
     Subsidiaries  (determined   on   a   consolidated  basis  without
     duplication in accordance with GAAP), the sum of (a) Consolidated
     Net  Income,  PLUS  (b)  depreciation  and  amortization  expense
     deducted  in the determination of such Consolidated  Net  Income,
     PLUS  (c)  Consolidated   Interest   Expense   deducted   in  the
     determination  of  such Consolidated Net Income, PLUS (d) federal
     and state income taxes  as determined in accordance with GAAP and
     deducted in the determination  of  such  Consolidated Net Income,
     MINUS  (e)  any  items of gain which are extraordinary  items  as
     defined in GAAP to  the  extent reflected in the determination of

<PAGE> 2

     Consolidated  Net  Income,  PLUS   (f)   any   losses  which  are
     extraordinary items as defined in GAAP to the extent reflected in
     the  determination of Consolidated Net Income PLUS  (g)  non-cash
     compensation  and  accruals,  PLUS  (h) non-cash contributions or
     accruals to or with respect to deferred profit sharing plans PLUS
     (i)  subject  to  the  approval of the Agent  in  its  reasonable
     discretion, non-recurring, non-cash expenses.

          "Excess Cash Flow" shall mean:

               (i) the sum of  the  following:  (A)  EBITDA  PLUS  (B)
     proceeds  of  business interruption or similar insurance PLUS (C)
     decreases in working  capital (but excluding from the calculation
     thereof (1) any change in working capital resulting solely from a
     change in the aggregate  outstanding  Revolving  Credit Loans for
     the period during which Excess Cash Flow is being  calculated and
     (2)  the portion of the DD Loans that would be deemed  a  current
     liability  for  the period during which Excess Cash Flow is being
     calculated) PLUS  (D)  cash  payments received as a result of tax
     refunds; MINUS

               (ii) the   sum  of   the   following:  (A) Consolidated
     Interest Expense plus scheduled  payments  of principal  on  term
     loans PLUS (B) Capital Expenditures that are not funded with debt
     or equity PLUS (C) increases in  working  capital (but  excluding
     from the  calculation thereof (1) any change in  working  capital
     resulting solely   from   a  change  in the aggregate outstanding
     Revolving  Credit  Loans  for the period during which Excess Cash
     Flow is being calculated  and  (2)  the  portion  of the DD Loans
     that  would  be deemed a current liability for the period  during
     which  Excess  Cash  Flow  is  being  calculated)  PLUS  (D) cash
     payments for taxes.

         Notwithstanding the foregoing, in no event shall the proceeds
     of a Capital Event  or a Contemplated  Disposition be included in
     the calculation of Excess Cash Flow.

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

<PAGE> 3

     funds acceptable to the Required Lenders; and (g) Permitted Stock
     Repurchases.

          "Required  Lenders" shall mean (i) until such time as Summit
     Bank's Commitment  constitutes  less  than  50% of the sum of all
     Commitments, Lenders holding 100% of the Commitments  (or, if the
     Commitments  have  terminated  or  expired, 100% of the aggregate
     unpaid principal amount of the Loans),  and  (ii)  from and after
     the date on which Summit Bank's Commitment constitutes  less than
     50% of the sum of all Commitments, Lenders holding 66-2/3% of the
     Commitments  (or,  if the Commitments have terminated or expired,
     66-2/3% of  the aggregate unpaid principal amount of the Loans).

          "Revolving Credit  Commitment"  shall mean, for each Lender,
     the  obligation  of such Lender to make  Loans  in  an  aggregate
     principal amount at  any  one  time  outstanding  up  to  but not
     exceeding  the  amount set forth opposite the name of such Lender
     on  Schedule  1  under  the  caption "Amount  of  Commitment  for
     Revolving Credit Loan"  (as the same may be reduced  from time to
     time pursuant to  Section 2.3 hereof).   The aggregate  principal
     amount  of  the  Revolving  Credit  Commitments   was  originally
     $30,000,000  and,  from  and  after  November 10, 2000, shall  be
     $25,000,000.

          "Senior  Debt"  shall  mean Total Funded Debt of the Company
     and its Subsidiaries MINUS Subordinated Debt.

          "UCC" shall mean the Uniform  Commercial  Code  as in effect
     from  time to time in any applicable jurisdiction, including,  as
     and when adopted, the revisions to Article 9 thereof.

          (b)  The  following  definitions are hereby added to Section 1 of
the Credit Agreement:

          "Available Excess Cash  Flow"  shall mean (i) for the fiscal
     quarter ending September 30, 2000, 25% of the Excess Cash Flow of
     the Company for such fiscal quarter,  (ii) for the fiscal quarter
     ending December 31, 2000, the difference  between  (A) 25% of the
     Excess  Cash  Flow  of the Company for the six-month period  then
     ended and (B) the aggregate amount of Permitted Stock Repurchases
     (other  than  Permitted  Stock  Repurchases  made  with  the  net
     proceeds  of a Contemplated  Disposition)  made  by  the  Company
     during such six-month period, (iii) for the fiscal quarter ending
     March 31, 2001, the difference between (A) 25% of the Excess Cash
     Flow of the  Company for the nine-month period then ended and (B)
     the aggregate  amount  of Permitted Stock Repurchases (other than
     Permitted Stock Repurchases  made  with  the  net  proceeds  of a
     Contemplated  Disposition)  made by the Company during such nine-
     month period, and (iv) for the  fiscal  quarter  ending  June 30,
     2001  and  each of the Company's fiscal quarters thereafter,  the
     difference between (A) 25% of the Excess Cash Flow of the Company
     for the 12-month  period  then ended and (B) the aggregate amount
     of  Permitted  Stock  Repurchases  (other  than  Permitted  Stock
     Repurchases  made  with  the   net  proceeds  of  a  Contemplated
     Disposition) made by the Company during such 12-month period.

<PAGE> 4

          "Contemplated Dispositions"  shall collectively mean (i) the
     sale of the Company's Tampa Bay Academy, (ii) the sale of certain
     undeveloped land owned by the Company and located in the State of
     Washington  and  (iii)  the assignment  to,  and  assumption  by,
     Dominion Management Group  of  the  contracts for the Crowley and
     McLoud facilities.

          "Permitted Stock Repurchase" shall  mean a repurchase by the
     Company on the open market of its publicly  traded capital stock,
     so long as (i) such repurchases do not exceed  $10,000,000 in the
     aggregate, (ii) the amount of such repurchases made  from time to
     time  with  the  net  proceeds  of  the Contemplated Dispositions
     received  by  the  Company  does not exceed  the  lesser  of  (A)
     $4,000,000 or (B) 50% of the net proceeds received by the Company
     from the Contemplated Dispositions,  as  certified  by  a  senior
     financial  officer  of the Company in a certificate delivered  to
     the Syndication Agent  prior to each such repurchase,  (iii) each
     repurchase other than the  repurchases described in the preceding
     clause (ii) is in an amount  that  does  not  exceed  25%  of the
     Available Excess Cash Flow of the Company, as demonstrated in the
     Compliance Certificate delivered by the Company as at the end  of
     each  of  its fiscal quarters and (iv) no Event of Default exists
     at the time of, or would result from, such repurchase.

          "Total  Funded Debt" shall mean, for any Person at any date,
     without duplication,  (a)  all  indebtedness  of  such Person for
     borrowed money (whether by loan or the issuance and  sale of debt
     securities)  or  for  the deferred purchase price of property  or
     services (other than current  trade  liabilities  incurred in the
     ordinary  course  of  business  and  payable  in accordance  with
     customary practices), (b) any other indebtedness  of  such Person
     which  is  evidenced  by  a  note,  bond,  debenture  or  similar
     instrument,  (c)  all  obligations  of  such Person under Capital
     Leases, (d) all obligations of such Person  in respect of letters
     of credit, acceptances or similar instruments  issued  or created
     for  the  account  of  such  Person,  (e)  the  principal balance
     outstanding  under  any synthetic lease, tax retention  operating
     lease,  off-balance  sheet  loan  or  similar  off-balance  sheet
     financing product to which  such  Person  is  a party, where such
     transaction  is  considered borrowed money indebtedness  for  tax
     purposes but is classified  as  an  operating lease in accordance
     with GAAP.

          (c)  Each of the definitions "Applicable  Commitment  Fee  Rate,"
"Consolidated   Debt   Service,"   "Consolidated   Interest   Expense"  and
"Subordinated  Debt"  appearing  in  Section  1 of the Credit Agreement  is
hereby amended by substituting the term "Total  Funded  Debt"  for the term
"Indebtedness,"   wherever   "Indebtedness"   appears   in   the  foregoing
definitions.

          (d)  Section 2.10.2 of the Credit Agreement is hereby  amended to
read in its entirety as follows:

<PAGE> 5

          2.10.2  Excess Cash Flow.

          Not  later  than  90 days after the end of each fiscal year,
     commencing with the fiscal  year  ending  December  31, 2000, the
     Company shall prepay the DD Loans in an aggregate amount equal to
     (i) 25% of the Excess Cash Flow for such fiscal year (computed on
     the basis of the financial statements provided to the Syndication
     Agent pursuant to Section 9.1(c) hereof); PROVIDED, HOWEVER, such
     prepayment  shall  only be required if the ratio of Total  Funded
     Debt to EBITDA as at  the  end  of  such  fiscal  year  equals or
     exceeds 2.0 to 1.0 PLUS (ii) the amount, if any, by which (A) the
     aggregate  amount  of  Permitted Stock Repurchases (but excluding
     therefrom Permitted Stock  Repurchases made with the net proceeds
     of a Contemplated Disposition)  made  by  the  Company during the
     immediately  preceding  fiscal  year  (or,  in  the case  of  the
     Company's  fiscal  year  ending  December  31,  2000, during  the
     immediately  preceding six-month period) exceeds (B)  the  Excess
     Cash Flow of the Company for such fiscal year (or, in the case of
     the Company's fiscal year ending December 31, 2000, for such six-
     month period).  The  Company shall demonstrate its computation of
     Excess Cash Flow and its prepayment of the DD Loans in its annual
     Compliance Certificate for such year.

          (e)  Section 8.1.26  of the Credit Agreement is hereby amended to
read in its entirety as follows:

          8.1.26 Default Of Total Funded Debt, Use Permits, Orders and
     Other Agreements.

               No Obligor is in  breach or default of, and no event of
     default or event, which with  the  passage  of  time or giving of
     notice or both, would constitute, mature into or become a default
     or event of default, has occurred and is continuing  with respect
     to (i) any Total Funded Debt of any kind or nature, (ii)  any Use
     Permit, (iii) any judgment, order, award or decree issued by  any
     court  or  governmental  or  administrative  agency,  or (iv) any
     agreement  to which it is a party, which breach or default  might
     have a Material Adverse Effect.

          (f)  Section  9.1.6(f)  of the Credit Agreement is hereby amended
to read in its entirety as follows:

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

          (g)  Section 9.1.7 of the  Credit  Agreement is hereby amended to
read in its entirety as follows:

          9.1.7 Total Funded Debt.

<PAGE> 6

               The Company will not, nor will  it  permit  any  of its
     Subsidiaries  to,  create,  incur  or  suffer  to exist any Total
     Funded Debt except (without duplication):

               (a)  Total Funded Debt arising pursuant  to  the  Basic
     Documents or the Operative Documents;

               (b) Total  Funded  Debt  outstanding on the date hereof
     and listed in Part A of SCHEDULE 8.1.12 hereto;

               (c) Total Funded Debt of Subsidiaries of the Company to
     the Company or to other Subsidiaries of the Company;

               (d)  Total  Funded  Debt  of  the   Company   and   its
     Subsidiaries  secured  by  Liens  permitted  under  Section 9.1.6
     (other  than  Section  9.1.6(h))  hereof  up to but not exceeding
     $500,000 at any one time outstanding;

               (e)  Total Funded Debt of one or more  Special  Purpose
     Subsidiaries in  an aggregate amount not exceeding $20,000,000 at
     any one time outstanding;

               (f)  Total   Funded   Debt  consisting  of  any  future
     Synthetic Lease Financing; and

               (g) additional Total Funded Debt of the Company and its
     Subsidiaries  (including,  without   limitation,   Capital  Lease
     obligations)  up  to but not exceeding $500,000 at any  one  time
     outstanding.

          (h)  Section 9.1.9  of  the Credit Agreement is hereby amended to
read in its entirety as follows:

          9.1.9 Dividend Payments.

          The  Company  will  not, nor  will  it  permit  any  of  its
     Subsidiaries to, declare or  make  any  Dividend  Payment  at any
     time,  except  a  Dividend  Payment  (i) from a Subsidiary to the
     Company in order to fund the mandatory  prepayment required under
     Section  2.1.10 hereof upon the occurrence  of  a  Capital  Event
     involving such Subsidiary and (ii) constituting a Permitted Stock
     Repurchase.

          (i)  Section  9.1.10 of the Credit Agreement is hereby amended to
read in its entirety as follows:

          9.1.10  Total Funded Debt to Adjusted EBITDA Ratio.

          The  Company  will   not   permit   the  ratio  of  (i)  the
     consolidated   Total   Funded  Debt  of  the  Company   and   its
     Subsidiaries as of the last  day  of  any  fiscal  quarter of the
     Company  ending  during  any  test period set forth in the  table
     below, to (ii) Adjusted EBITDA for the period of four consecutive

<PAGE> 7

     fiscal quarters ending on the same  day,  to  be greater than the
     ratio set forth opposite such test period below:

              Four Fiscal
            Quarters Ending                        Ratio
            ---------------                        -----
            September 30, 2000                     3.25:1

            December 31, 2000                      2.50:1
            and thereafter

          (j)  Section  9.1.11 of the Credit Agreement is hereby amended to
read in its entirety as follows:

               9.1.11   Senior Debt to Adjusted EBITDA Ratio.  [deleted]

          (k)  Section 9.1.12  of the Credit Agreement is hereby amended to
read in its entirety as follows:

          9.1.1 Consolidated Net Worth.

               The Company will not permit its Consolidated Net Worth to be
     less than its Consolidated Net Worth as at June 30, 2000 PLUS (i)
     90% of the Company's cumulative,  positive  (any  loss  shall  be
     treated as zero) Consolidated Net Income earned from July 1, 2000
     through  the  date  of  determination  PLUS, (ii) 100% of the net
     proceeds of Equity Issuances from July 1,  2000 through such date
     of  determination MINUS (iii) the aggregate amount  of  Permitted
     Stock  Repurchases  made  from  July 1, 2000 through such date of
     determination.

          (l)  Section 9.1.13 of the Credit  Agreement is hereby amended to
read in its entirety as follows:

               9.1.13 Consolidated Total Funded Debt to Net Worth Ratio.

               The  Company  will  not permit the  ratio  of  (i)  the
     consolidated  Total  Funded  Debt   of   the   Company   and  its
     Subsidiaries  to  (ii)  the  sum of the consolidated Total Funded
     Debt of the Company and its Subsidiaries  PLUS  Consolidated  Net
     Worth to exceed 70% at any time prior to December 31, 2001 or 65%
     from and after such date.

          (m)  Section 10.1(b) of the Credit Agreement is hereby amended to
read in its entirety as follows:

          (b)  The Company or any of its Subsidiaries shall default in
     the payment  when  due  of any principal of or interest on any of
     its other Total Funded Debt  aggregating  $250,000 or more, or in
     the  payment  when  due  of  any amount under any  Interest  Rate
     Protection  Agreement,  or  any  event  specified  in  any  note,

<PAGE> 8

     agreement, indenture or other document  evidencing or relating to
     any such Total Funded Debt or any event specified in any Interest
     Rate Protection Agreement shall occur if the effect of such event
     is to cause, or (with the giving of any notice  or  the  lapse of
     time  or  both)  to  permit  the  holder or holders of such Total
     Funded Debt (or a trustee or agent  on  behalf  of such holder or
     holders) to cause, such Total Funded Debt to become due, or to be
     prepaid  in  full  (whether  by  redemption, purchase,  offer  to
     purchase or otherwise), prior to its  stated  maturity; or in the
     case  of any Interest Rate Protection Agreement,  to  permit  the
     payments  owing  under such Interest Rate Protection Agreement to
     be liquidated or the  Company shall be in default in or obligated
     to pay any "Recourse Deficiency  Amount" (as that term is defined
     in the Master Agreement) in respect  of  the 1999 Synthetic Lease
     Financing; or

          (n)  Section 12.6(b) of the Credit Agreement is hereby amended to
read in its entirety as follows:

               (b)   Each  Lender  may,  with  the  consent   of   the
     Syndication Agent  and (in the case of a Revolving Credit Lender)
     the Letter of Credit  Issuer, assign any of its Loans, its Notes,
     its  Letter  of Credit Liabilities  and  its  Commitments  to  an
     Eligible Assignee  PROVIDED  that  (i)  no  such  consent  by the
     Syndication Agent shall be required in the case of any assignment
     to  another  Lender  or an Affiliate of an assigning Lender; (ii)
     any such partial assignment  shall be in an amount at least equal
     to $5,000,000 and, after giving effect thereto, the Commitment of
     both the assignor and the assignee is at least $1,000,000, unless
     the assignee is an Affiliate of  an  assigning  Lender; and (iii)
     each such assignment by a Lender of its Loans, Letter  of  Credit
     Liabilities  or  Commitment  shall be made in such manner so that
     the same portion of its Loans,  Letter  of Credit Liabilities and
     Commitment  is  assigned  to  the  respective   assignee.    Upon
     execution  and  delivery  by the assignor and the assignee to the
     Syndication  Agent  of  an Assignment  and  Assumption  Agreement
     substantially in the form  of  EXHIBIT  C hereto (the "ASSIGNMENT
     AND ASSUMPTION AGREEMENT") pursuant to which such assignee agrees
     to become a "Lender" hereunder (if not already  a  Lender) having
     the  Commitment(s),  Letter  of  Credit  Liabilities  and   Loans
     specified  in  such Assignment and Assumption Agreement, and upon
     the consent thereto  by  the  Syndication  Agent,  to  the extent
     required  above,  the assignee shall have, to the extent of  such
     assignment (unless otherwise provided in such assignment with the
     consent of the Syndication  Agent),  the  obligations, rights and
     benefits of a Lender hereunder holding the  Commitment(s), Letter
     of Credit Liabilities and Loans (or portion thereof)  assigned to
     it   (in   addition   to  the  Commitment(s),  Letter  of  Credit
     Liabilities and Loans, if any, theretofore held by such assignee)
     and the assigning Lender shall, to the extent of such assignment,
     be released from the Commitment(s)  (or  portion(s)  thereof)  so
     assigned.   Upon  each  such assignment, (x) the assigning Lender
     shall pay the Syndication  Agent an assignment fee of $3,500, and
     (y) the assignee shall for all  purposes be deemed a party to the
     Intercreditor Agreement.  Within five Business Days after receipt
     by the Company of (i) notice from  the  Syndication  Agent of any
     assignment  made  pursuant  to  this  Section  12.6(b)  and  (ii)

<PAGE> 9

     Substitute  Notes  reflecting  the Commitments and Loans assigned
     hereunder, the Company shall execute  and  deliver  such Notes to
     the   Syndication  Agent  for  distribution  to  the  appropriate
     parties.

          (o)  Schedule  1  to  the Credit Agreement is hereby deleted
and replaced with Schedule 1 to this Agreement.

          (p)  Part A of Schedule  8.1.12  to  the Credit Agreement is
hereby deleted and replaced with Schedule 8.1.12 to this Agreement.

          (q)  Exhibit B to the Credit Agreement is hereby deleted and
replaced with Exhibit B to this Agreement.

     3.   Guaranty   Reaffirmation.   The  Subsidiary   Guarantors   hereby
acknowledge and agree to the amendments to the Credit Agreement effected by
this Agreement.  Each  of the Subsidiary Guarantors hereby reaffirms all of
the terms and conditions  of  the  guaranty  set  forth in Section 6 of the
Credit Agreement and agrees that such guaranty is applicable  to all of the
Guaranteed  Obligations,  as  amended  by  this Agreement and the documents
being executed and delivered pursuant hereto.   The  Subsidiary  Guarantors
hereby  acknowledge  and  agree  that  they  have  no  defenses, offsets or
counterclaims with respect to the Guaranteed Obligations  and  hereby waive
and  release all claims against the Syndication Agent and the Lenders  with
respect thereto.

     4.   Substitute  Notes.   To  evidence  the  decrease in the aggregate
Revolving  Credit Commitment from $30,000,000 to $25,000,000,  the  Company
is,  concurrently  herewith,  executing  and  delivering  to  each  of  the
Revolving  Credit  Lenders  a  substitute  Revolving  Credit  Note  (each a
"Substitute Note") in substitution for, but not repayment of, the Revolving
Credit  Note (each a "Prior Note") heretofore issued to each such Revolving
Credit Lender.   The  parties  acknowledge and agree that the execution and
delivery  of  the  Substitute  Notes  shall  not  constitute  a  repayment,
refinancing, accord and satisfaction  or novation of the Prior Notes or the
indebtedness evidenced thereby.

     5.   Representations  And  Warranties.    In   order   to  induce  the
Syndication  Agent and the Lenders to enter into this Agreement  and  amend
the Credit Agreement as provided herein, each Obligor hereby represents and
warrants to the  Syndication Agent and the Lenders that:

          (a)  All  of  the  representations and warranties of the Obligors
set forth in the Credit Agreement  are  true,  complete  and correct in all
material  respects  on  and as of the date hereof with the same  force  and
effect as if made on and  as  of  the  date  hereof  and as if set forth at
length herein.

          (b)  No  Default  or  Event of Default presently  exists  and  is
continuing on and as of the date hereof.

          (c)  Since  the  date of  the  Obligors'  most  recent  financial
statements delivered to the  Syndication  Agent, no Material Adverse Effect
has occurred, and no event has occurred or failed to occur which has had or
is likely to have a Material Adverse Effect.

<PAGE> 10

          (d)  Each  Obligor  has  full power  and  authority  to  execute,
deliver and perform any action or step  which may be necessary to carry out
the  terms  of  this  Agreement  and all other  agreements,  documents  and
instruments,  if  any,  executed and  delivered  by  the  Obligors  to  the
Syndication Agent and the  Lenders  concurrently  herewith or in connection
herewith (collectively, the "Amendment Documents"); each Amendment Document
to  which  any  of  the  Obligors  is  a party has been duly  executed  and
delivered by such Obligors and is the legal,  valid  and binding obligation
of such Obligor enforceable in accordance with its terms,  subject  to  any
applicable  bankruptcy,  insolvency,  general  equity  principles  or other
similar laws affecting the enforcement of creditors' rights generally.

          (e)  The  execution,  delivery  and  performance of the Amendment
Documents will not (i) violate any provision of  any existing law, statute,
rule,  regulation  or  ordinance binding upon the Obligors,  (ii)  conflict
with,  result in a breach  of,  or  constitute  a  default  under  (A)  the
certificate  of  incorporation  or  by-laws  or  other equivalent formation
documents of any Obligor, (B) any order, judgment,  award  or decree of any
court,  governmental  authority,  bureau  or  agency, or (C) any  mortgage,
indenture,  material  lease,  contract  or  other  material   agreement  or
undertaking to which any Obligor is a party or by which any Obligor  or its
properties  or  assets  may  be  bound,  or (iii) result in the creation or
imposition of any lien or other encumbrance  upon  or  with  respect to any
property  or  asset  now owned or hereafter acquired by any Obligor,  other
than liens in favor of the Syndication Agent for the ratable benefit of the
Lenders.

          (f)  No consent,  license,  permit, approval or authorization of,
exemption by, notice to, report to, or  registration, filing or declaration
with any Person is required in connection  with  the  execution,  delivery,
performance  by the Obligors of the Amendment Documents or the transactions
contemplated thereby.

     6.   Syndication Agent's Costs.  The Company shall on demand reimburse
the Syndication Agent for all out-of-pocket costs, including legal fees and
expenses, incurred  by  the  Syndication  Agent  in  connection  with  this
Agreement and the other Amendment Documents and the transactions referenced
herein.

     7.   No  Change.   Except  as  expressly  set forth herein or modified
hereby,  all of the terms and provisions of the Credit  Agreement  and  the
other Basic  Documents  are  hereby  reaffirmed  in  their  entirety  shall
continue in full force and effect.

     8.   Counterparts;  Effectiveness.  This Agreement may be executed  in
any number of counterparts,  each  of which shall be an original and all of
which shall constitute one and the same  instrument.   This Agreement shall
not be binding upon any party until all parties hereto have  executed  this
Agreement and delivered it to the Syndication Agent.

<PAGE> 11

     9.   Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

     IN  WITNESS WHEREOF, the undersigned have caused their duly authorized
representatives  to  execute  and  deliver this Agreement as of the day and
year first above written.

                              CORRECTIONAL SERVICES CORPORATION,
                              a Delaware corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL, INC.
                              a Maryland corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              FF&E, INC., a New Jersey corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              COMMUNITY CORRECTIONS, INC., a
                              Texas corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                    (Signatures continued on next page)

<PAGE> 12

                              YOUTH SERVICES INTERNATIONAL
                              OF NORTHERN IOWA, INC., an
                              Iowa corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF BALTIMORE, INC., a Maryland
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF VIRGINIA, INC., a Virginia
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              HOLDINGS, INC., a Delaware corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                    (Signatures continued on next page)

<PAGE> 13

                              YOUTH SERVICES INTERNATIONAL
                              REAL PROPERTY PARTNERSHIP, LLP,
                              a Maryland limited liability partnership

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President of Both
                                    Partners

                              YOUTH SERVICES INTERNATIONAL
                              OF DELAWARE, INC., a Delaware
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF ILLINOIS, INC., a Maryland
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF MARYLAND, INC., a Maryland
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                    (Signatures continued on next page)

<PAGE> 14

                              YOUTH SERVICES INTERNATIONAL
                              OF MINNESOTA, INC., a Maryland
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF SOUTH DAKOTA, INC., a South Dakota
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF TEXAS, INC., a Texas
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YSI OF CENTRAL IOWA, INC.,
                              an Iowa corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                    (Signatures continued on next page)

<PAGE> 15

                              YOUTH SERVICES INTERNATIONAL
                              OF IOWA, INC., a Maryland
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF MICHIGAN, INC., a Michigan
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF MISSOURI, INC., a Missouri
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              YOUTH SERVICES INTERNATIONAL
                              OF TENNESSEE, INC., a Maryland
                              corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                    (Signatures continued on next page)

<PAGE> 16

                              YOUTH SERVICES INTERNATIONAL
                              SOUTHEASTERN PROGRAMS, INC.,
                              a Maryland corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              CSC MANAGEMENT DE PUERTO RICO, INC.,
                              a Puerto Rico corporation

                              By:   /s/ Ira M. Cotler
                                    ----------------------------
                                    Ira M. Cotler
                                    Executive Vice President

                              SUMMIT BANK,
                              as the Syndication Agent and a Lender

                              By:   /s/ Lisa Cohen
                                    ___________________________
                                    Lisa Cohen
                                    Vice President

                              SUNTRUST BANK, NASHVILLE, N.A.,
                              as a Lender

                              By:   /s/ William H. Crawford
                                    ___________________________
                                    William H. Crawford
                                    Vice President

                              BANCO POPULAR NORTH AMERICA

                              By:   /s/ Ronald B. Goldberg
                                    ___________________________
                                    Ronald B. Goldberg
                                    Vice President

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