EXHIBIT 10.6

MASTER AGREEMENT TO LEASE

BETWEEN

CCA PRISON REALTY TRUST, LANDLORD

AND

CORRECTIONS CORPORATION OF AMERICA, TENANT

DATED: JULY 18, 1997

ARTICLE I                         SEPARATE LEASE AGREEMENTS; PREMISES AND TERM....................................1
                     1.01         Separate Lease Agreements.......................................................1
                     1.02         Leased Property.................................................................2
                     1.03         Term............................................................................2
                     1.04         Holding Over....................................................................3
                     1.05         Surrender.......................................................................3

ARTICLE II                        RENT............................................................................3
                     2.01         Base Rent.......................................................................3
                     2.02         Additional Rent.................................................................3
                     2.02.01      Other Additional Rent...........................................................4
                     2.03         Place(s) of Payment of Rent; Direct Payment of Other Additional Rent............4
                     2.04         Net Lease.......................................................................4
                     2.05         No Termination, Abatement, Etc..................................................4

ARTICLE III                       IMPOSITIONS AND UTILITIES.......................................................5
                     3.01         Payment of Impositions..........................................................5
                     3.02         Definition of Impositions.......................................................6
                     3.03         Utilities.......................................................................6
                     3.04         Escrow of Impositions...........................................................7
                     3.05         Discontinuance of Utilities.....................................................7

ARTICLE IV                        INSURANCE.......................................................................8
                     4.01         Property Insurance..............................................................8
                     4.02         Liability Insurance.............................................................8
                     4.03         Insurance Requirements..........................................................9
                     4.04         Replacement Cost...............................................................10
                     4.05         Blanket Policy.................................................................10
                     4.06         No Separate Insurance..........................................................10
                     4.07         Waiver of Subrogation..........................................................10
                     4.08         Mortgages......................................................................11

ARTICLE V                         INDEMNITY; HAZARDOUS SUBSTANCES................................................11
                     5.01         Tenant's Indemnification.......................................................11
                     5.02         Hazardous Substances or Materials..............................................11
                     5.03         Limitation of Landlord's Liability.............................................12

ARTICLE VI                        USE AND ACCEPTANCE OF PREMISES.................................................13
                     6.01         Use of Leased Property.........................................................13
                     6.02         Acceptance of Leased Property..................................................13
                     6.03         Conditions of Use and Occupancy................................................13
                     6.04         Financial Statements and Other Information.....................................14

ARTICLE VII                       REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS............................14
                     7.01         Maintenance....................................................................14
                     7.02         Compliance with Laws...........................................................14
                     7.03         Required Alterations...........................................................15
                     7.04         Mechanics' Liens...............................................................15
                     7.05         Replacements of Fixtures.......................................................15

ARTICLE VIII                      ALTERATIONS AND SIGNS; TENANT'S PROPERTY; CAPITAL
                                  ADDITIONS TO THE LEASED PROPERTY...............................................16
                     8.01         Tenant's Right to Construct....................................................16
                     8.02         Scope of Right.................................................................16
                     8.03         Cooperation of Landlord........................................................17
                     8.04         Commencement of Construction...................................................17
                     8.05         Rights in Tenant Improvements..................................................18
                     8.06         Personal Property..............................................................18
                     8.07         Requirements for Personal Property.............................................18
                     8.08         Signs..........................................................................20
                     8.09         Financings of Capital Additions to a Leased Property...........................20

ARTICLE IX                        DEFAULTS AND REMEDIES..........................................................22
                     9.01         Events of Default..............................................................22
                     9.02         Remedies.......................................................................24
                     9.03         Right of Set-Off...............................................................26
                     9.04         Performance of Tenant's Covenants..............................................26
                     9.05         Late Charge....................................................................27
                     9.06         Litigation; Attorneys' Fees....................................................27
                     9.07         Remedies Cumulative............................................................27
                     9.08         Escrows and Application of Payments............................................27
                     9.09         Power of Attorney..............................................................27

ARTICLE X                         DAMAGE AND DESTRUCTION.........................................................28
                     10.01        General........................................................................28
                     10.02        Landlord's Inspection..........................................................29
                     10.03        Landlord's Costs...............................................................29
                     10.04        Rent Abatement.................................................................29
                     10.05        Substantial Damage During Lease Term...........................................30
                     10.06        Damage Near End of Term........................................................30

ARTICLE XI                        CONDEMNATION...................................................................30
                     11.01        Total Taking...................................................................30
                     11.02        Partial Taking.................................................................31
                     11.03        Restoration....................................................................31
                     11.04        Landlord's Inspection..........................................................31
                     11.05        Award Distribution.............................................................32
                     11.06        Temporary Taking...............................................................32
ARTICLE XII                       TENANT'S RIGHT OF FIRST REFUSAL................................................32

                     12.01        Rights of First Refusal........................................................32
                     12.02        Restriction on Exercise of Purchase Refusal Right..............................33

ARTICLE XIII                      ASSIGNMENT AND SUBLETTING; ATTORNMENT..........................................34
                     13.01        Prohibition Against Subletting and Assignment..................................34
                     13.02        Changes of Control.............................................................34
                     13.03        Operating/Service Agreements...................................................35
                     13.03.01     Permitted Agreements...........................................................35
                     13.03.02     Terms of Agreements............................................................35
                     13.03.03     Copies.........................................................................35
                     13.03.04     Assignment of Rights in Agreements.............................................35
                     13.03.05     Licenses, Etc..................................................................35
                     13.04        Assignment.....................................................................35
                     13.05        REIT Limitations...............................................................36
                     13.06        Attornment.....................................................................36

ARTICLE XIV                       ARBITRATION....................................................................36
                     14.01        Controversies..................................................................36
                     14.02        Appointment of Arbitrators.....................................................37
                     14.03        Arbitration Procedure..........................................................37
                     14.04        Expenses.......................................................................37
                     14.05        Enforcement of the Arbitration Award...........................................37

ARTICLE XV                        QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATES..............38
                     15.01        Quiet Enjoyment................................................................38
                     15.02        Landlord Mortgages; Subordination..............................................38
                     15.03        Attornment; Non-Disturbance....................................................38
                     15.04        Estoppel Certificates..........................................................39

ARTICLE XVI                       MISCELLANEOUS..................................................................39
                     16.01        Notices........................................................................39
                     16.02        Advertisement of Leased Property...............................................40
                     16.03        Landlord's Access..............................................................40
                     16.04        Entire Agreement...............................................................40
                     16.05        Severability...................................................................41
                     16.06        Captions and Headings..........................................................41
                     16.07        Governing Law..................................................................41
                     16.08        Memorandum of Lease............................................................41
                     16.09        Waiver.........................................................................41
                     16.10        Binding Effect.................................................................41
                     16.11        Authority......................................................................41
                     16.12        Transfer of Permits, Etc.......................................................41

                     16.13        Modification...................................................................42
                     16.14        Incorporation by Reference.....................................................42
                     16.15        No Merger......................................................................42
                     16.16        Laches.........................................................................42
                     16.17        Waiver of Jury Trial...........................................................42
                     16.18        Permitted Contests.............................................................43
                     16.19        Construction of Lease..........................................................43
                     16.20        Counterparts...................................................................43
                     16.21        Relationship of Landlord and Tenant............................................43
                     16.22        Landlord's Status as a REIT....................................................44
                     16.23        Sale of Real Estate Assets.....................................................44

ARTICLE XVII                      NONDISCLOSURE AND RELATED MATTERS..............................................44
                     17.01        Covenant Not to Disclose.......................................................44
                     17.02        Non-Interference Covenant......................................................44
                     17.03        Business Materials and Property Disclosure.....................................45
                     17.04        Breach by Landlord.............................................................45

MASTER AGREEMENT TO LEASE

This Master Agreement to Lease ("Agreement") dated as of the 18th day of July, 1997 by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one or more of Tenant's affiliates) has concurrently conveyed to Landlord various properties upon which Tenant engages in the business of the development and management of correctional and detention facilities, which properties are listed on Schedule A attached hereto (the "Real Estate Conveyance"), and Landlord and Tenant desire to provide for the lease by Landlord back to the Tenant of such properties; and

WHEREAS, Landlord may from time to time lease additional properties that Landlord may acquire to Tenant; and

WHEREAS, Landlord and Tenant desire that each of the properties listed on Schedule A and each additional property that Landlord may lease to Tenant shall be the subject of a separate and individual lease agreement describing said property, the rent and various other terms of said lease (each such lease agreement referred to individually as a "Lease," and the property that is the subject of an individual Lease being referred to as "Leased Property"); and

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

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein and in each Lease, Landlord and Tenant agree as follows:

ARTICLE I

SEPARATE LEASE AGREEMENTS; PREMISES AND TERM

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

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

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

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

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

(d) All furniture, equipment, inventory and other personal property identified on Schedule B attached hereto and incorporated herein by reference (the "Personal Property"). For purposes hereof, (i) Personal Property shall include all items of property which Tenant is obligated to install, place, use, maintain, repair and/or replace pursuant to the provisions of Sections 8.06 and 8.07 hereof however, such Personal Property is and shall remain the property of Tenant until the expiration or termination of this Lease, and (ii) Personal Property shall not include certain proprietary property of Tenant as set forth on Schedule C.

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

SUBJECT, HOWEVER, to the easements, liens, encumbrances, restrictions, agreements, and other title matters listed or specifically referred to in any individual Lease ("Permitted Exceptions").

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

1.04 Holding Over. Should Tenant, without the express consent of Landlord, continue to hold and occupy the Leased Property after the expiration of the Term, such holding over beyond the Term and the acceptance or collection of Rent by the Landlord shall operate and be construed as creating a tenancy from month-to-month and not for any other term whatsoever. During any such holdover period Tenant shall pay to Landlord for each month (or portion thereof) Tenant remains in the Leased Property one hundred fifty percent (150%) of the Base Rent in effect on the expiration date. Said month-to-month tenancy may be terminated by Landlord by giving Tenant ten (10) days written notice, and at any time thereafter Landlord may re-enter and take possession of the Leased Property.

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

ARTICLE II

RENT

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

2.02 Additional Rent. Beginning on the first day of the month following the first anniversary date of each Lease, the Tenant shall pay Landlord an amount (the "Additional Rent") each year equal to a percentage of the prior year Total Rent (for the purposes hereof, Total Rent is Base Rent plus Additional Rent) under such Lease, such percentage being the greater of (i) four percent (4%) or (ii) the percentage which is twenty-five percent (25%) of the percentage increase in gross management revenues realized by Tenant from its operations at the applicable Leased Property for such prior year exclusive of any such increase as is attributable to an expansion in the size or number of beds in such Leased Property. The Additional Rent shall be payable monthly, in advance, along with Base Rent, and otherwise in the manner as set forth in
Section 2.01 above. Tenant shall provide to Landlord, not later than thirty (30) days following each anniversary date of each Lease, Tenant's statement, certified by Tenant's chief financial officer, setting forth such percentage increase

in gross management revenues realized by Tenant for the applicable Leased Facility for the prior year.

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

2.03 Place(s) of Payment of Rent; Direct Payment of Other Additional Rent. The Base Rent, Additional Rent and Other Additional Rent are hereinafter referred to as "Rent." Landlord shall have all legal, equitable and contractual rights, powers and remedies provided either in this Agreement, in any Lease or by statute or otherwise in the case of nonpayment of the Rent. Tenant shall make all payments of Base Rent and Additional Rent at Landlord's principal place of business or as Landlord may otherwise from time to time direct in writing, and all payments of Other Additional Rent directly to the person or persons to whom such amount is owing at the time and times when such payments are due, and shall give to Landlord such evidence of such direct payments as Landlord shall reasonably request.

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

2.05 No Termination, Abatement, Etc. Except as otherwise specifically provided in this Agreement or a particular Lease, Tenant shall remain bound by this Agreement or such Lease in accordance with its terms. Except as otherwise specifically provided in the Agreement or a particular Lease, Tenant shall not, without the prior written consent of Landlord, modify, surrender or terminate the Agreement or such Lease, nor seek nor be entitled to any abatement, deduction, deferment or reduction of Rent, or set-off against the Rent. Except as specifically provided in this Agreement or a particular Lease, the obligations of Landlord and Tenant shall not be affected by reason of (i) the lawful or unlawful prohibition of, or restriction upon, Tenant's use of the Leased Property, or any part thereof, the interference with such use by any person, corporation, partnership or other entity, or by reason of eviction by paramount title; (ii) any claim which Tenant has or might have against Landlord or by reason of any default or breach of any warranty by Landlord under this Agreement or a particular Lease or any other agreement between Landlord and Tenant, or to which Landlord and Tenant are parties; (iii) any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding up or other proceeding affecting Landlord or any assignee or transferee of Landlord; or (iv) any other cause, whether similar or dissimilar to any of the foregoing, other than a discharge of Tenant from any such obligations as a matter of law. Except as otherwise specifically provided in this Agreement or a particular Lease, and to the maximum extent permitted by law, Tenant hereby specifically waives all rights, including but not limited to any rights under any statute relating to rights of tenants in any state in which any Leased Property is located, arising from any occurrence whatsoever, which may now or hereafter be conferred upon it

by law (a) to modify, surrender or terminate any Lease or quit or surrender the Leased Property or any portion thereof; or (b) entitling Tenant to any abatement, reduction, suspension or deferment of the Rent or other sums payable by Tenant hereunder. The obligations of Landlord and Tenant hereunder shall be separate and agreements and the Rent and all other sums shall continue to be payable in all events unless the obligations to pay the same shall be terminated pursuant to the express provisions of this Agreement or a particular Lease or by termination of this Agreement or a particular Lease other than by reason of an Event of Default.

ARTICLE III

IMPOSITIONS AND UTILITIES

3.01 Payment of Impositions. Subject to the adjustments set forth herein, Tenant shall pay, as Other Additional Rent, all Impositions (as hereinafter defined) that may be levied or become a lien on the Leased Property or any part thereof at any time (whether prior to or during the Term), without regard to prior ownership of said Leased Property, before the same becomes delinquent. Tenant shall furnish to Landlord on an annual basis copies of official receipts or other satisfactory proof evidencing such payments. Tenant's obligation to pay such Impositions shall be deemed absolutely fixed upon the date such Impositions become a lien upon the Leased Property or any part thereof. Tenant, at its expense, shall prepare and file all tax returns and reports in respect of any Imposition as may be required by governmental authorities, provided, Landlord shall be responsible for the preparation and filing of any such tax returns or reports in respect of any real or personal property owned by Landlord. Tenant shall be entitled to any refund due from any taxing authority if no Event of Default (as hereinafter defined) shall have occurred hereunder and be continuing. Landlord shall be entitled to any refund from any taxing authority if an Event of Default has occurred and is continuing. Any refunds retained by Landlord due to an Event of Default shall be applied as provided in Section 9.08. Landlord and Tenant shall, upon request of the other, provide such data as is maintained by the party to whom the request is made with respect to the Leased Property as may be necessary to prepare any required returns and reports. In the event governmental authorities classify any property covered by this Lease as personal property, Landlord and Tenant shall file all personal property tax returns in such jurisdictions where it may legally so file with respect to their respective owned personal property. Landlord, to the extent it possesses the same, and Tenant, to the extent it possess the same, will provide the other party, upon request, with cost and depreciation records necessary for filing returns for any property so classified as personal property. Where Landlord is legally required to file personal property tax returns, Tenant will be provided with copies of assessment notices indicating a value in excess of the reported value in sufficient time for Tenant to file a protest. Tenant may, upon notice to Landlord, at Tenant's option and at Tenant's sole cost and expense, protest, appeal, or institute such other proceedings as Tenant may deem appropriate to effect a reduction of real estate or personal property assessments and Landlord, at Tenant's expense as aforesaid, shall fully cooperate with Tenant in such protest, appeal, or other action. Tenant shall provide Landlord copies of all materials filed or presented in connection with any such proceeding. Tenant shall promptly reimburse Landlord for all personal property taxes paid by Landlord upon receipt of billings accompanied by copies of a bill therefor and payments thereof which identify the

personal property with respect to which such payments are made. Impositions imposed in respect to the tax-fiscal period during which the Term commences and terminates shall be adjusted and prorated between Landlord and Tenant on a per diem basis, with Tenant being obligated to pay its pro rata share from and including the Commencement Date to and including the expiration or termination date of the Term, whether or not such Imposition is imposed before or after such commencement or termination, and Tenant's obligation to pay its prorated share thereof shall survive such termination. Tenant shall also pay to Landlord a sum equal to the amount which Landlord may be caused to pay of any privilege tax, sales tax, gross receipts tax, rent tax, occupancy tax or like tax (excluding any tax based on net income), hereinafter levied, assessed, or imposed by any federal, state, county or municipal governmental authority, or any subdivision thereof, upon or measured by rent or other consideration required to be paid by Tenant under this Agreement.

3.02 Definition of Impositions. "Impositions" means, collectively,
(i) taxes (including without limitation, all real estate and personal property ad valorem (whether assessed as part of the real estate or separately assessed as unsecured personal property, sales and use, business or occupation, single business, gross receipts, transaction, privilege, rent or similar taxes, but not including income or franchise or excise taxes payable with respect to Landlord's receipt of Rent); (ii) assessments (including without limitation, all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed with in the Term); (iii) ground rents, water, sewer or other rents and charges, excises, tax levies, and fees (including without limitation, license, permit, inspection, authorization and similar fees); (iv) to the extent they may become a lien on the Leased Property all taxes imposed on Tenant's operations of the Leased Property including without limitation, employee withholding taxes, income taxes and intangible taxes; and (v) all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforseen, of every character in respect of the Leased Property or any part thereof and/or the Rent (including all interest and penalties thereon due to any failure in payment by Tenant), which at any time prior to, during or in respect of the Term hereof may be assessed or imposed on or in respect of or be a lien upon (a) Landlord or Landlord's interest in the Leased Property or any part thereof; (b) the Leased Property or any part thereof or any rent therefrom or any estate, right, title or interest therein; or (c) any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in connection with the Leased Property or the leasing or use of the Leased Property or any part thereof. Tenant shall not, however, be required to pay (i) any tax based on net income (whether denominated as a franchise or capital stock or other tax) imposed on Landlord; or (ii) except as provided in Section 13.01, any tax imposed with respect to the sale, exchange or other disposition by Landlord of any Leased Property or the proceeds thereof; provided, however, that if any tax, assessment, tax levy or charge which Tenant is obligated to pay pursuant to the first sentence of this definition and which is in effect at any time during the Term hereof is totally or partially repealed, and a tax, assessment, tax levy or charge set forth in clause (i) or (ii) immediately above is levied, assessed or imposed expressly in lieu thereof Tenant shall then pay such tax, levy, or charge set forth in said clause (i) or (ii).

3.03 Utilities. Tenant shall contract for, in its own name, and will pay, as Other Additional Rent all taxes, assessments, charges/deposits, and bills for utilities, including without limitation

charges for water, gas, oil, sanitary and storm sewer, electricity, telephone service, trash collection, and all other utilities which may be charged against the occupant of the Improvements during the Term. Tenant shall at all times maintain that amount of heat necessary to ensure against the freezing of water lines. Tenant hereby agrees to indemnify and hold Landlord harmless from and against any liability or damages to the utility systems and the Leased Property that may result from Tenant's failure to maintain sufficient heat in the Improvements.

3.04 Escrow of Impositions. In the event Tenant persistently fails to timely pay Impositions with respect to any Leased Facility, then, upon thirty
(30) days written notice from Landlord to Tenant, Tenant shall thereafter deposit with Landlord on the first day of each month during the remaining Term hereof and any extended Term, a sum equal to one-twelfth (1/12th) of the Impositions assessed against such Leased Property which sums shall be used by Landlord toward payment of such Impositions. If, at the end of any applicable tax year, any such funds held by Landlord are insufficient to make full payment of taxes or other Impositions for which such funds are held, Tenant, on demand, shall pay to Landlord any additional funds necessary to pay and discharge the obligations of Tenant pursuant to the provisions of this section. If, however, at the end of any applicable tax year, such funds held by Landlord are in excess of the total payment required to satisfy taxes or other Impositions for which such funds are held, Landlord shall apply such excess amounts to Tenant's tax and Imposition escrow fund for the next tax year. If any such excess exists following the expiration or earlier termination of any Lease, and subject to
Section 9.08 below, Landlord shall promptly refund such excess amounts to Tenant. The receipt by Landlord of the payment of such Impositions by and from Tenant shall only be as an accommodation to Tenant and the taxing authorities, and shall not be construed as rent or income to Landlord, Landlord serving, if at all, only as a conduit for delivery purposes. All such deposits by Tenant shall be held in an interest-bearing account with one or more national banks having total assets of not less than $1,000,000,000, with all interest thereon accruing in favor of Tenant. In lieu of making escrow deposits as aforesaid, Tenant may elect to provide Landlord with a letter of credit, or a payment bond, in the face amount of one year's Impositions on the subject Leased Property, issued by a national bank or reputable bonding or surety company, in all respects reasonably acceptable to Landlord. Said letter of credit or payment bond shall be drawable or callable, as the case may be, upon Tenant's failure to timely pay any such Impositions, for the sole purpose of providing the funds necessary to pay such Impositions, and shall otherwise be in form and substance reasonably satisfactory to Landlord.

For purposes hereof, "persistently fails to timely pay Impositions" shall mean failure to timely pay any Imposition with respect to any Leased Premises for any two (2) Lease Years in any five (5) Lease Year Period, notwithstanding Tenant's subsequent payment of such Impositions.

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

ARTICLE IV

INSURANCE

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

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

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

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

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

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

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

4.02 Liability Insurance. Tenant shall, at Tenant's expense, maintain liability insurance against the following:

(a) Claims for personal injury or property damage commonly covered by comprehensive general liability insurance with endorsements for blanket, contractual, personal injury, owner's protective liability, real property, fire damage, legal liability, broad form property damage, and extended bodily injury, with commercially reasonable amounts for bodily injury and property damage acceptable to Landlord, but with a combined single limit of not less than Five Million Dollars ($5,000,000.00) per occurrence and Ten Million Dollars ($10,000,000.00) in the aggregate. At Landlord's request, such $5,000,000.00 and $10,000,000.00 minimum requirements shall be increased by up to four percent (4%) per year.

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

4.03 Insurance Requirements. The following provisions shall apply to all insurance coverages required hereunder:

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

(b) Tenant shall be the "named insured" and Landlord and any mortgagee of Landlord shall be an "additional named insured" on each policy.

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

(d) The policies shall contain a severability of interest and/or cross-liability endorsement, provide that the acts or omissions of Tenant will not invalidate the Landlord's coverage, and provide that Landlord shall not be responsible for payment of premiums.

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

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

Landlord shall have the right to review the insurance coverages required hereunder with Tenant from time to time, to obtain the input of third party professional insurance advisors (at Landlord's expense) with respect to such insurance coverages, and to consult with Tenant in Tenant's

annual review and renewal of such insurance coverages. All insurance coverages hereunder shall be in such form, substance and amounts as are customary or standard in Tenant's industry.

4.04 Replacement Cost. The term "full replacement cost" means the actual replacement cost thereof from time to time including increased cost of construction, with no reductions or deductions. Tenant shall, not later than thirty (30) days after the anniversary of each policy of insurance, of the Term, increase the amount of the replacement cost endorsement for the Improvements. If Tenant makes any Permitted Alterations (as hereinafter defined) to the Leased Property, Landlord may have such full replacement cost redetermined at any time after such Permitted Alterations are made, regardless of when the full replacement cost was last determined.

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

4.06 No Separate Insurance. Tenant shall not take out separate insurance concurrent in form or contributing in the event of loss with that required in this Article, or increase the amounts of any then existing insurance by securing an additional policy or additional policies, unless all parties having an insurable interest in the subject matter of the insurance, including Landlord and any mortgagees, are included therein as additional named insureds or loss payees, the loss is payable under said insurance in the same manner as losses are payable under this Agreement, and such additional insurance is not prohibited by the existing policies of insurance. Tenant shall immediately notify Landlord of the taking out of such separate insurance or the increasing of any of the amounts of the existing insurance by securing an additional policy or additional policies. The term "mortgages" as used in this Agreement includes Deeds of Trust and the term "mortgagees" includes trustees and beneficiaries under a Deed of Trust.

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

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

ARTICLE V

INDEMNITY; HAZARDOUS SUBSTANCES

5.01 Tenant's Indemnification. Subject to Section 4.07, Tenant hereby agrees to indemnify and hold harmless Landlord, its agents, and employees from and against any and all demands, claims, causes of action, fines, penalties, damages (including consequential damages), losses, liabilities (including strict liability), judgments, and expenses (including, without limitation, attorneys' fees, court costs, and the costs set forth in Section 9.06) incurred in connection with or arising from: (i) the use, condition, operation or occupancy of each Leased Property; (ii) any activity, work, or thing done, or permitted or suffered by Tenant in or about the Leased Property;
(iii) any acts, omissions, or negligence of Tenant or any person claiming under Tenant, or the contractors, agents, employees, invitees, or visitors of Tenant or any such person; (iv) any claim of any person incarcerated in the Leased Premises, including claims alleging breach or violation of such person's civil or legal rights; (v) any breach, violation, or nonperformance by Tenant or any person claiming under Tenant or the employees, agents, contractors, invitees, or visitors of Tenant or of any such person, of any term, covenant, or provision of this Agreement or any Lease or any law, ordinance, or governmental requirement of any kind; (vi) any injury or damage to the person, property or business of Tenant, its employees, agents, contractors, invitees, visitors, or any other person entering upon the Leased Property under the express or implied invitation of Tenant; and (vii) and any accident, injury to or death of persons or loss of damage to any item of property occurring at the Leased Property. If any action or proceeding is brought against Landlord, its employees, or agents by reason of any such claim, Tenant, upon notice from Landlord, will defend the claim at Tenant's expense with counsel reasonably satisfactory to Landlord. In the event Landlord reasonably determines that its interests and the interests of Tenant in any such action or proceeding are not substantially the same and that Tenant's counsel cannot adequately represent the interests of Landlord therein, Landlord shall have the right to hire separate counsel in any such action or proceeding and the reasonable costs thereof shall be paid for by Tenant.

5.02 Hazardous Substances or Materials. Tenant shall not, either with or without negligence, injure, overload, deface, damage or otherwise harm any Leased Property or any part or component thereof; commit any nuisance; permit the emission of any hazardous agents or substances; allow the release or other escape of any biologically or chemically active or other hazardous substances or materials so as to impregnate, impair or in any manner affect, even temporarily, any element or part of any Leased Property, or allow the storage or use of such substances or materials in any manner not sanctioned by law or by the highest standards prevailing

in the industry for the storage and use of such substances or materials; nor shall Tenant bring onto any Leased Property any such materials or substances; permit the occurrence of objectionable noise or odors; or make, allow or suffer any waste whatsoever to any Leased Property. Landlord may inspect the Leased Property from time to time, and Tenant will cooperate with such inspections. Without limitation, "hazardous substances" for the purpose of this Section 5.02 shall include any substances regulated by any local, state or federal law relating to environmental conditions and industrial hygiene, including, without limitation, the Resource Conservation and Recovery Act of 1976 ("RCRA"), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Hazardous Materials Transportation Act, the Federal Water Pollution Control Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Safe Drinking Water Act, and all similar federal, state and local environmental statutes, ordinances and the regulations, orders, or decrees now or hereafter promulgated thereunder. Notwithstanding the foregoing, Tenant anticipates using, storing and disposing of certain hazardous substances in connection with operation of correctional or detention facilities which are not in violation of the foregoing laws. Such substances include, but are not limited to the following: medical wastes, diesel fuel, maintenance and janitorial supplies, and waste from reprographic activities. Upon request by Landlord, Tenant shall submit to Landlord annual reports regarding Tenant's use, storage, and disposal of any of the foregoing materials, said reports to include information regarding continued hazardous materials inspections, personal interviews, and federal, state and local agency listings. In addition, Tenant shall execute affidavits, representations and the like from time to time at Landlord's request concerning Tenant's best knowledge and belief regarding the presence or absence of hazardous materials on the Leased Property. Other than for circumstances involving Landlord's gross negligence or intentional misconduct, Tenant shall indemnify and hold harmless Landlord from and against all liabilities (including punitive damages), costs and expenses (including reasonable attorneys' fees) imposed upon or asserted against the Landlord or the Leased Property on account of, among other things, any applicable federal, state or local law, ordinance, regulation, order, permit, decree or similar items relating to hazardous substances, human health or the environment (collectively, "Environmental Laws") (irrespective of whether there has occurred any violation of any Environmental Law ), in respect of the Leased Property, including (a) liability for response costs and for costs of removal and remedial action incurred by the United States Government, any state or local governmental unit to any other person or entity, or damages from injury to or destruction or loss of natural resources, including the reasonable costs of assessing such injury, destruction or loss, incurred pursuant to any Environmental Law, (b) liability for costs and expenses of abatement, investigation, removal, remediation, correction or clean-up, fines, damages, response costs or penalties which arise from the provisions of any Environmental Law, (c) liability for personal injury or property damage arising under any statutory or common-law tort theory, including damages assessed for the maintenance of a public or private nuisance or for carrying on of a dangerous activity or (d) by reason of a breach of an environmental representation or warranty by Tenant.

5.03 Limitation of Landlord's Liability. Landlord, its agents and employees, will not be liable for any loss, injury, death, or damage (including consequential damages) to persons, property, or Tenant's business occasioned by theft, act of God, public enemy, injunction, riot, strike,

insurrection, war, court order, requisition, order of governmental body or authority, fire, explosion, falling objects, steam, water, rain or snow, leak or flow of water (including water from the elevator system), rain or snow from any Leased Property or into any Leased Property or from the roof, street, subsurface or from any other place, or by dampness or from the breakage, leakage, obstruction, or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting fixtures of the Leased Property, or from construction, repair, or alteration of the Leased Property or from any acts or omissions of any other occupant or visitor of the Leased Property, or from the presence or release of any hazardous substance or material on or from the Leased Property or from any other cause beyond Landlord's control.

ARTICLE VI

USE AND ACCEPTANCE OF PREMISES

6.01 Use of Leased Property. Tenant shall use and occupy each Leased Property exclusively as a correctional or detention facility or other purpose for which the Leased Property is being used at the Commencement Date of the Term, and for no other purpose without the prior written consent of the Landlord. Tenant shall obtain and maintain all approvals, licenses, and consents needed to use and operate each Leased Property for such purposes. Tenant shall promptly deliver to Landlord complete copies of surveys, examinations, certification and licensure inspections, compliance certificates, and other similar reports issued to Tenant by any governmental agency.

6.02 Acceptance of Leased Property. Except as otherwise specifically provided in this Agreement or in any individual Lease, Tenant acknowledges that (i) Tenant and its agents have had an opportunity to inspect the Leased Property; (ii) Tenant has found the Leased Property fit for Tenant's use; (iii) delivery of the Leased Property to Tenant is in an "as-is" condition;
(iv) Landlord is not obligated to make any improvements or repairs to the Leased Property; and (v) the roof, walls, foundation, heating, ventilating, air conditioning, telephone, sewer, electrical, mechanical, utility, plumbing, and other portions of the Leased Property are in good working order. Tenant waives any claim or action against Landlord with respect to the condition of the Leased Property. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO QUALITY OR THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.

6.03 Conditions of Use and Occupancy. Tenant agrees that during the Term it shall use and keep the Leased Property in a careful, safe and proper manner; not commit or suffer waste thereon; not use or occupy the Leased Property for any unlawful purposes; not use or occupy the Leased Property or permit the same to be used or occupied, for any purpose or business deemed extra hazardous on account of fire or otherwise; keep the Leased Property in such repair and condition as may be required by the local board of health, or other city, state or federal authorities, free of all cost

to Landlord; not permit any acts to be done which will cause the cancellation, invalidation, or suspension of any insurance policy; and permit Landlord and its agents to enter upon the Leased Property at all reasonable times after notice to Tenant to examine the condition thereof.

6.04 Financial Statements and Other Information. Within ten (10) days following Tenant's filing of quarterly and annual reports with the Securities and Exchange Commission, Tenant shall deliver to Landlord copies of such reports. Tenant shall provide Landlord at the same time Tenant provides copies of its quarterly and annual reports as aforesaid (or more often as may be reasonably requested by Landlord in writing), the following additional financial information for each calendar quarter hereafter, with respect to each Leased Property: gross revenues, average occupancy rates and total cash flow (i.e., operating income plus depreciation and amortization plus Base Rent plus Additional Rent hereunder). Tenant shall also deliver to Landlord such additional financial information as Landlord may reasonably request, provided the same is of a type normally maintained by Tenant or can be obtained without undue cost or burden on Tenant's personnel and does not constitute information which Tenant reasonably determines to be proprietary or confidential. Additionally, upon Landlord's request, Tenant shall provide Landlord with copies of Tenant's annual capital expenditure budgets for each Leased Property and any reports generated by Tenant regarding maintenance and repairs of the Leased Property.

ARTICLE VII

REPAIRS, COMPLIANCE WITH LAWS, AND MECHANICS' LIENS

7.01 Maintenance. Tenant shall maintain each Leased Property in good order, repair and appearance, and repair each Leased Property, including without limitation, all interior and exterior, structural and nonstructural repairs and replacements to the roof, foundations, exterior walls, building systems, HVAC systems, parking areas, sidewalks, water, sewer and gas connections, pipes, and mains. Tenant shall pay as Other Additional Rent the full cost of maintenance, repairs, and replacements. Tenant shall maintain all drives, sidewalks, parking areas, and lawns on or about the Leased Property in a clean and orderly condition, free of accumulations of dirt, rubbish, snow and ice. Tenant shall permit Landlord to inspect the Leased Property at all reasonable times, and shall implement all reasonable suggestions of the Landlord as to the maintenance and replacement of the Leased Property.

7.02 Compliance with Laws. Tenant shall comply with all laws, ordinances, orders, rules, regulations, and other governmental requirements relating to the use, condition, or occupancy of each Leased Property, whether now or hereafter enacted and in force including without limitation, (i) licensure requirements for operation as a correctional or detention facility,
(ii) requirements of any board of casualty insurance underwriters or insurance service office for any other similar body having jurisdiction over the Leased Property, and (iii) all zoning and building codes and Environmental Laws. At Landlord's request, from time to time, Tenant shall deliver to Landlord copies of certificates or permits evidencing compliance with such laws, including without limitation, copies of the correctional or detention facility licenses, certificates of occupancy and building

permits. Tenant shall provide Landlord with copies of any notice from any governmental authority alleging any non-compliance by Tenant or any Leased Facility with any of the foregoing requirements and such evidence as Landlord may reasonably require of Tenant's remediation thereof. Tenant hereby agrees to defend, indemnify and hold Landlord harmless from and against any loss, liability (including strict liability), claim, damage (including consequential damages), cost and expense (including attorneys' fees) resulting from any failure by Tenant to comply with any laws, ordinances, rules, regulations, and other governmental requirements.

7.03 Required Alterations. Tenant shall, at Tenant's sole cost and expense, make any additions, changes, improvements or alterations to each Leased Property, including structural alterations, which may be required by any governmental authorities, including those required to continue licensure requirements as a correctional or detention facility, whether such changes are required by Tenant's use, changes in the law, ordinances, or governmental regulations, defects existing as of the date of this Lease, or any other cause whatsoever. Tenant shall provide prior written notice to Landlord of any changes to each Leased Property pursuant to this Section 7.03 which involve changes to the structural integrity of such Leased Property or materially affect the operational capabilities or rated capacity of the Leased Facility. All such additions, changes, improvements or alterations shall be deemed to be a Tenant Improvement and shall comply with all laws requiring such alterations and with the provisions of Section 8.01.

7.04 Mechanics' Liens. Tenant shall have no authority to permit or create a lien against Landlord's interest in the Leased Property, and Tenant shall post notices or file such documents as may be required to protect Landlord's interest in the Leased property against liens. Tenant hereby agrees to defend, indemnify, and hold Landlord harmless from and against any mechanics' liens against the Leased Property by reason of work, labor services or materials supplied or claimed to have been supplied on or to the Leased Property. Tenant shall immediately remove, bond-off, or otherwise obtain the release of any mechanics' lien filed against the Leased Property. Tenant shall pay all expenses in connection therewith, including without limitation, damages, interest, court costs and reasonable attorneys' fees.

7.05 Replacements of Fixtures. Tenant shall not remove Fixtures from any Leased Property except to replace the Fixtures by other similar items of equal quality and value. Items being replaced by Tenant may be removed and shall become the property of Tenant and items replacing the same shall be and remain the property of the Landlord. Tenant shall execute, upon written request from Landlord, any and all documents necessary to evidence Landlord's ownership of the Fixtures and replacements therefor. Tenant may finance replacements for the Fixtures by equipment lease or by a security agreement and financing statement; provided, however, that for any item of Fixtures or Personal Property having a cost greater than or equal to Twenty Thousand Dollars ($20,000.00), Tenant may not finance replacements by security agreement or equipment lease unless (i) Landlord has consented to the terms and conditions of the equipment lease or security agreement; (ii) the equipment lessor or lender has entered into a nondisturbance agreement with the Landlord upon terms and conditions acceptable to Landlord, including without limitation, the following: (a) Landlord shall have the right (but not the obligation) to assume such security agreement or

equipment lease upon the occurrence of an Event of Default by Tenant under any Lease; (b) the equipment lessor or lender shall notify Landlord of any default by Tenant under the equipment lease or security agreement and give Landlord a reasonable opportunity to cure such default; and (c) Landlord shall have the right to assign its rights under the equipment lease, security agreement, or nondisturbance agreement; and (iii) Tenant shall, within thirty (30) days after receipt of an invoice from Landlord, reimburse Landlord for all costs and expenses incurred in reviewing and approving the equipment lease, security agreement, and nondisturbance agreement, including without limitation, reasonable attorneys' fees and costs.

ARTICLE VIII

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

8.01 Tenant's Right to Construct. During the Term of this Agreement, so long as no Event of Default shall have occurred and be continuing as to the Leased Property that is the subject of such improvements, Tenant may make Capital Additions (as defined herein), or other alterations, additions, changes and/or improvements to any Leased Property as deemed necessary or useful to operate the Leased Property as a correction or detention facility (the "Primary Intended Use") (individually, a "Tenant Improvement," or collectively, "Tenant Improvements") with the prior written consent of the Landlord, which will not be unreasonably withheld or delayed. "Capital Additions" shall mean the construction of one or more new buildings or one or more additional structures annexed to any portion of any of the Improvements on a particular Leased Property, which are constructed on any parcel of land or portion of the Land of a particular Leased Property during the Term of any individual Lease, including the construction of a new floor, or the repair, replacement, restoration, remodeling or rebuilding of the Improvements or any portion thereof on any Leased Property which are not normal, ordinary or recurring to maintain the Leased Property. Except as otherwise agreed to by Landlord in writing, any such Tenant Improvement shall be made at Tenant's sole expense and shall become the property of Landlord upon termination of this Lease. Unless made on an emergency basis to prevent injury to person or property, Tenant will submit plans to Landlord for Landlord's prior approval, such approval not to be unreasonably withheld or delayed, for any Tenant Improvement which is not a Capital Addition and which has a cost of more than $500,000 or a cost which, when aggregated with the costs of all such Tenant Improvements for any individual Leased Facility in the same Lease Year, would cause the total costs of all such Tenant Improvements to exceed $1,000,000. Such $500,000 and $1,000,000 amounts shall be increased by four percent (4%) per annum, cumulatively for each subsequent Lease Year. Additionally, in connection with any Tenant Improvement, including any Capital Addition, Tenant shall provide Landlord with copies of any plans and specification therefor, Tenant's budget relating thereto, any required government permits or approvals, any construction contracts or agreements relating thereto, and any other information relating to such Tenant Improvement as Landlord shall reasonably request.

8.02 Scope of Right. Subject to Section 8.01 herein and Section 7.03 concerning required alterations, at Tenant's cost and expense, Tenant shall have the right to:

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

(b) erect upon the Leased Property such Tenant Improvements as Tenant deems desirable;

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

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

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

8.03 Cooperation of Landlord. Landlord shall cooperate with Tenant and take such actions, including the execution and delivery to Tenant of any applications or other documents, reasonably requested by Tenant in order to obtain any governmental approvals sought by Tenant to construct any Tenant Improvement within ten (10) business days following the later of (a) the date Landlord receives Tenant's request, or (b) the date of delivery of any such application or document to Landlord, so long as the taking of such action, including the execution of said applications or documents, shall be without cost to Landlord (or if there is a cost to Landlord, such cost shall be reimbursed by Tenant), and will not cause Landlord to be in violation of any law, ordinance or regulation.

8.04 Commencement of Construction. Tenant agrees that:

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

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

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

(d) Tenant shall not suffer or permit any mechanics' liens or any other claims or demands arising from the work of construction of any Tenant Improvement to be enforced against the Leased Property or any part thereof, and Tenant agrees to hold Landlord and said Leased Property free and harmless from all liability from any such liens, claims or demands, together with all costs and expenses in connection therewith;

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

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

8.05 Rights in Tenant Improvements. Notwithstanding anything to the contrary in this Lease, all Tenant Improvements constructed pursuant to Section 8.01, any and all subsequent additions thereto and alterations and replacements thereof, shall be the sole and absolute property of Tenant during the Term of the particular Lease. Upon the expiration or early termination of any Lease, all such Tenant Improvements shall become the property of Landlord. Without limiting the generality of the foregoing, Tenant shall be entitled to all federal and state income tax benefits associated with any Tenant Improvement during the Term of this Agreement.

8.06 Personal Property. Tenant shall install, place, and use on the Leased Property such fixtures, furniture, equipment, inventory and other personal property in addition to the Fixtures as may be required or as Tenant may, from time to time, deem necessary or useful to operate the Leased Property as a correctional or detention facility.

8.07 Requirements for Personal Property. Tenant shall comply with all of the following requirements in connection with Personal Property:

(a) With respect to each Leased Property, Tenant shall notify Landlord within one hundred twenty (120) days after each Lease Year of any additions, substitutions, or replacements of an item of Personal Property at such Leased Property which individually has a cost of more than $25,000.00 and shall furnish Landlord with such other information as Landlord may reasonably request from time to time.

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

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

(d) Tenant shall, at Tenant's sole cost and expense, keep Personal Property insured against loss or damage by fire, vandalism and malicious mischief, sprinkler leakage, and other physical loss perils commonly covered by fire and extended coverage, boiler and machinery, and difference in conditions insurance in an amount not less than ninety percent (90%) of the then full replacement cost thereof. Tenant shall use the proceeds from any such policy for the repair and replacement of Personal Property. The insurance shall meet the requirements of Section 4.03.

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

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

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

(h) Tenant shall remove any of Tenant's personal property which does not constitute Personal Property hereunder, upon the termination or expiration of the Lease and shall repair any damage to the Leased Property resulting from the removal of Tenant's personal property. If Tenant fails to remove Tenant's personal property within ninety (90) days after the termination or expiration of the Lease, then Tenant shall be deemed to have abandoned Tenant's personal property, Tenant's personal property shall become the property of Landlord, and Landlord may remove, store and dispose of Tenant's personal property. In such event, Tenant shall have no claim or right against Landlord for such property or the value thereof regardless of the disposition thereof by Landlord. Tenant shall pay Landlord, upon demand, all expenses incurred by Landlord in removing, storing, and disposing of Tenant's personal property and repairing any damage caused by such removal. Tenant's obligations hereunder shall survive the termination or expiration of the Lease. Notwithstanding the foregoing, it is understood and agreed that all property constituting Personal Property hereunder shall be and/or become the sole and exclusive property of Landlord upon the expiration or termination of the Lease.

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

8.08 Signs. Tenant may, at its own expense, erect and maintain identification signs at the Leased Property, provided such signs comply with all laws, ordinances, and regulations. Upon the occurrence of an Event of Default or the termination or expiration of a Lease, Tenant shall, within thirty (30) days after notice from Landlord, remove the signs and restore the applicable Leased Property to its original condition.

8.09 Financings of Capital Additions to a Leased Property.

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

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

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

(ii) any information, certificates, licenses, permits or documents requested by either Landlord or any lender with whom Landlord has agreed or may agree to provide financing which are necessary to confirm that Tenant will be able to use the Capital Addition upon completion thereof in accordance with the Primary Intended Use (as defined in
Section 8.01), including all required, federal, state or local government licenses and approvals;

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

(iv) an amendment to this Lease, or a new lease agreement, duly executed and acknowledged, in form and substance satisfactory to Landlord and Tenant, and containing such provisions as may be necessary or appropriate, including without limitation, any appropriate changes in the legal description of the Land, the Rent, and other changes with respect to the Capital Addition;

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

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

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

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

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

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

(d) (i) If Landlord and Tenant are unable to agree on the terms of the financing of a Capital Addition by Landlord, Tenant may undertake the cost of any such Capital Addition and seek construction, permanent or other financing from other sources.

(ii) In the event Tenant shall construct any Capital Addition and shall have obtained construction, permanent or other financing in connection therewith from sources other than Landlord, as set forth in the foregoing Section 8.09(d)(i), Landlord shall have the option to acquire such Capital Addition for a period of three (3) years following the date Tenant first receives inmates in such Capital Addition ("Service Commencement Date"). The price at which Landlord may acquire such Capital Addition shall be the fair market value of the Capital Addition, as reasonably and mutually determined by Landlord and Tenant, provided, Landlord and Tenant agree that for the first two (2) years following the Service Commencement Date the fair market value of such Capital Addition shall be deemed to be equal to Tenant's actual costs and expenses to acquire, develop, design, construct and equip such Capital Addition ("Tenant's Cost"), as reflected on the books of Tenant, plus five percent (5%) of Tenant's Cost. Landlord's exercise of such option shall require Landlord to acquire such Capital Addition on such terms and conditions as Landlord and Tenant shall reasonably agree, which shall be generally consistent with the terms and conditions of Landlord's initial acquisition of the related Leased Property from Tenant. Upon such acquisition, Landlord shall lease such Capital Addition to Tenant on the terms and conditions set forth herein, and Landlord and Tenant shall execute a new Lease, or an amendment to the existing Lease, with respect thereto. In such case, for acquisitions of Capital Additions within five (5) years of the date hereof, the annual Base Rent shall be the greater of (i) the fair market rental value of the Capital Addition, as reasonably and mutually determined by Landlord and Tenant and (ii) eleven percent (11%) of the purchase price of such Capital Addition. For Capital Additions thereafter, the Base Rent shall be the fair market rental value of the Capital Addition, as reasonably and mutually determined by Landlord and Tenant. Regardless of whether the foregoing option is exercised, all Capital Additions shall become the property of Landlord upon the expiration or termination of this Lease.

ARTICLE IX

DEFAULTS AND REMEDIES

9.01 Events of Default. The occurrence of any one or more of the following shall be an event of default ("Event of Default") hereunder:

(a) Tenant fails to pay in full any installment of Rent, or any other monetary obligation payable by Tenant to Landlord under a Lease, within fifteen (15) days after notice of nonpayment from Landlord;

(b) Tenant fails to observe and perform any other covenant, condition or agreement under this Agreement or a Lease to be performed by Tenant (except those described in Section 9.01(a) of this Agreement) and such failure continues for a period of thirty (30) days after written notice thereof is given to Tenant by Landlord; or if, by reason of the nature of such default, the same cannot with due diligence be remedied within said thirty (30) days, such failure will not be deemed to continue if Tenant proceeds promptly and

with due diligence to remedy the failure and diligently completes the remedy thereof; provided, however, said cure period will not extend beyond thirty (30) days if the facts or circumstances giving rise to the default are creating a further harm to Landlord or the Leased Property and Landlord makes a good faith determination that Tenant is not undertaking remedial steps that Landlord would cause to be taken if such Lease were then to terminate;

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

(d) If Tenant, on a petition in bankruptcy filed against it, is adjudicated as bankrupt or a court of competent jurisdiction enters an order or decree appointing, without the consent of Tenant, a receiver of Tenant of the whole or substantially all of its property, or approving a petition filed against it seeking reorganization or arrangement of Tenant under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof, and such judgment, order or decree is not vacated or set aside or stayed within ninety (90) days from the date of the entry thereof;

(e) If the estate or interest of Tenant in any Leased Property or any part thereof is levied upon or attached in any proceeding and the same is not vacated or discharged within the later of ninety (90) days after commencement thereof or thirty (30) days after receipt by Tenant of notice thereof from Landlord (unless Tenant is contesting such lien or attachment in accordance with this Agreement);

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

(g) A default by Tenant in any payment of principal or interest on any obligations for borrowed money having a principal balance of Twenty-Five Million Dollars ($25,000,000) or more in the aggregate (excluding obligations which are limited in recourse to specific property of Tenant provided that such property is not a substantial portion of the assets of Tenant and excluding any debt which is denominated as "subordinated debt"), or in the performance of any other provision contained in any instrument under which any such obligation is created or secured (including the breach of any covenant thereunder), if an

effect of such default is that the holder(s) of such obligation cause such obligation to become due prior to its stated maturity; or

(h) A final, non-appealable judgment or judgments for the payment of money in excess of Ten Million Dollars ($10,000,000) in the aggregate not fully covered (excluding deductibles) by insurance is rendered against Tenant and the same remains undischarged, unvacated, unbonded or unstayed for a period of one hundred twenty (120) consecutive days.

Notwithstanding the foregoing, an Event of Default under the foregoing subsections (a), (c), (d), (g) and (h) shall constitute an Event of Default under all of the Leases and an Event of Default under the foregoing subsections
(b), (e) and (f) shall constitute an Event of Default only with respect to the specific Lease and Leased Property to which such Event of Default applies. Provided, with respect to the Events of Default under the foregoing subsections
(b), (e) and (f), if such Events of Default shall at any time be applicable to Leased Properties for which the monthly Base Rent constitutes, in the aggregate, greater than twenty-five percent (25%) of the monthly Base Rent for all of the Leased Properties, then such Events of Default shall constitute Events of Default under all of the Leases.

9.02 Remedies. To the extent any Event of Default is applicable only to a specific Lease or Leases, or a specific Leased Property or Leased Properties (in accordance with Section 9.01 above), the remedies set forth herein shall be exercisable solely with respect to such Lease or Leases, or Leased Property or Leased Properties, and shall not be exercisable with respect to any other Leases or Leased Property. To the extent any Event of Default constitutes an Event of Default under all of the Leases (in accordance with
Section 9.01 above), the remedies set forth herein shall be exercisable with respect to all of the Leases and all of the Leased Properties. Subject to the foregoing provisions, Landlord may exercise any one or more of the following remedies upon the occurrence of an Event of Default:

(a) Landlord may terminate the applicable Lease, exclude Tenant from possession of the subject Leased Property and use reasonable efforts to lease such Leased Property to others. If any Lease is terminated pursuant to the provisions of this subparagraph
(a), Tenant will remain liable to Landlord for damages in an amount equal to the Rent and other sums which would have been owing by Tenant under such Lease for the balance of the Term if the Lease had not been terminated, less the net proceeds, if any, of any re-letting of the subject Leased Property by Landlord subsequent to such termination, after deducting all Landlord's expenses in connection with such re-letting, including without limitation, the expenses set forth in
Section 9.02(b)(2) below. Landlord will be entitled to collect such damages from Tenant monthly on the days on which the Rent and other amounts would have been payable under the subject Lease if such Lease had not been terminated and Landlord will be entitled to receive such damages from Tenant on each such day. Alternatively, at the option of Landlord, if such Lease is terminated, Landlord will be entitled to recover from Tenant (a) all unpaid Rent then due and payable, and (b) the worth at the time of the award (as hereafter defined) of the Rent which would have been due and payable from the date of termination

through the Expiration Date as if the Lease had not been terminated. The "worth at the time of award" of the amount referred to in clause
(b) is computed at "present value" using New York Prime Rate. For purposes of this Agreement, "New York Prime Rate" shall mean that rate of interest identified as prime or national prime by the Wall Street Journal, or if not published or found, then the rate of interest charged by the American bank with the greatest number of assets on ninety (90) day unsecured notes to its preferred customers. For the purpose of determining unpaid Rent under clause (b), the Rent reserved in the Lease will be deemed to be the sum of the following: (i) the Base Rent computed pursuant to Section 2.01; (ii) the Additional Rent computed pursuant to Section 2.02; and (iii) the Other Additional Rent computed pursuant to Section 2.02.01. Such computation of Other Additional Rent shall be based on the Other Additional Rent paid for the Lease Year preceding the date of termination, increased by 4% per year thereafter. Following payments by Tenant of the foregoing amounts, Landlord shall deliver and pay over to Tenant all rent, income, and other proceeds of any nature realized from the sale, lease or other disposition or utilization of the Leased Premises, if any, actually received by Landlord, up to the amounts so paid by Tenant less Landlord's reasonably incurred costs and expenses of maintaining and re-leasing or selling the Leased Premises.

(b) (1) Without demand or notice, Landlord may re-enter and take possession of the applicable Leased Property or any part of such Leased Property; and repossess such Leased Property as of the Landlord's former estate; and expel the Tenant and those claiming through or under Tenant from such Leased Property; and, remove the effects of both or either, without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of Rent or preceding breach of covenants or conditions. If Landlord elects to re-enter, as provided in this paragraph (b) or if Landlord takes possession of such Leased Property pursuant to legal proceedings or pursuant to any notice provided by law, Landlord may, from time to time, without terminating the subject Lease, re-let such Leased Property or any part of such Leased Property, either alone or in conjunction with other portions of the Improvements of which such Leased Property are a part, in Landlord's name but for the account of Tenant, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the Term of this Lease) and on such terms and conditions (which may include concessions of free rent, and the alteration and repair of such Leased Property) as Landlord, in its uncontrolled discretion, may determine. Landlord may collect and receive the Rents for such Leased Property. Landlord will not be responsible or liable for any failure to re-let such Leased Property, or any part of such Leased Property, or for any failure to collect any Rent due upon such re-letting. No such re-entry or taking possession of such Leased Property by Landlord will be construed as an election on Landlord's part to terminate this Lease unless a written notice of such intention is given to Tenant. No notice from Landlord under this Lease or under a forcible entry and detainer statute or similar law will constitute an election by Landlord to terminate this Lease unless such notice specifically says so. Landlord reserves the right following any such re-entry or re-letting, or both, to exercise its right to terminate this Lease by giving Tenant such written notice, and, in that event such Lease will terminate as specified in such notice.

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

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

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

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

9.04 Performance of Tenant's Covenants. Landlord may perform any obligation of Tenant which Tenant has failed to perform within two (2) days after Landlord has sent a written notice to Tenant informing it of its specific failure (provided no such notice shall be required if Landlord has previously notified Tenant of such failure under the provisions of Section 9.01). Tenant shall reimburse Landlord on demand, as Other Additional Rent, for any expenditures thus incurred by Landlord and shall pay interest thereon at the New York Prime Rate (as herein defined).

9.05 Late Charge. Any payment not made by Tenant for more than ten
(10) days after the due date shall be subject to a late charge payable by Tenant as Rent of three percent (3%) of the amount of such overdue payment.

9.06 Litigation; Attorneys' Fees. Within ten (10) days after Tenant has knowledge of any litigation or other proceeding that may be instituted against Tenant, against any Leased Property to secure or recover possession thereof, or that may affect the title to or the interest of Landlord in such Leased Property, Tenant shall give written notice thereof to Landlord. Within thirty (30) days of Landlord's presentation of an invoice, Tenant shall pay all reasonable costs and expenses incurred by Landlord in enforcing or preserving Landlord's rights under this Agreement and each Lease, whether or not an Event of Default has actually occurred or has been declared and thereafter cured, including without limitation, (i) the fees, expenses, and costs of any litigation, receivership, administrative, bankruptcy, insolvency or other similar proceeding; (ii) reasonable attorney, paralegal, consulting and witness fees and disbursements; and (iii) the expenses, including without limitation, lodging, meals, and transportation, of Landlord and its employees, agents, attorneys, and witnesses in preparing for litigation, administrative, bankruptcy, insolvency or other similar proceedings and attendance at hearings, depositions, and trials in connection therewith. All such costs, charges and fees as incurred shall be deemed to be Other Additional Rent under this Agreement.

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

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

9.09 Power of Attorney. Tenant hereby irrevocably and unconditionally appoints Landlord, or Landlord's authorized officer, agent, employee or designee, as Tenant's true and lawful attorney-in-fact, to act, after an Event of Default, for Tenant in Tenant's name, place, and stead, and for Tenant's and Landlord's use and benefit, to execute, deliver and file all applications and any and all other necessary documents or things, to effect a transfer, reinstatement, renewal and/or extension of any and all licenses and other governmental authorizations issued to Tenant in connection with Tenant's operation of any Leased Property, and to do any and all other acts incidental to any of the foregoing. Tenant irrevocably and unconditionally grants to Landlord as its attorney-in-fact full power and authority to do and perform, after an Event of Default, every act necessary and proper to be done in the exercise of any of the foregoing powers as fully as Tenant might or could do if

personally present or acting, with full power of substitution, hereby ratifying and confirming all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and is irrevocable prior to the full performance of the Tenant's obligations under this Agreement and each Lease.

ARTICLE X

DAMAGE AND DESTRUCTION

10.01 General. Tenant shall notify Landlord if any of the Leased Property is damaged or destroyed by reason of fire or any other cause. Tenant shall promptly repair, rebuild, or restore the Leased Property, at Tenant's expense, so as to make the Leased Property at least equal in value to the Leased Property existing immediately prior to such occurrence and as nearly similar to it in character as is practicable and reasonable. Before beginning such repairs or rebuilding, or letting any contracts in connection with such repairs or rebuilding, Tenant will submit for Landlord's approval, which approval Landlord will not unreasonably withhold or delay, complete and detailed plans and specifications for such repairs or rebuilding. Promptly after receiving Landlord's approval of the plans and specifications, Tenant will begin such repairs or rebuilding and will prosecute the repairs and rebuilding to completion with diligence, subject, however, to strikes, lockouts, acts of God, embargoes, governmental restrictions, and other causes beyond Tenant's reasonable control. Landlord will make available to Tenant the net proceeds of any fire or other casualty insurance paid to Landlord for such repair or rebuilding as the same progresses, after deduction of any costs of collection, including attorneys' fees. Payment will be made against properly certified vouchers of a competent architect in charge of the work and approved by Landlord. Prior to commencing the repairing or rebuilding, Tenant shall deliver to Landlord for Landlord's approval a schedule setting forth the estimated monthly draws for such work. Landlord will contribute to such payments out of the insurance proceeds an amount equal to the proportion that the total net amount received by Landlord from insurers bears to the total estimated cost of the rebuilding or repairing, multiplied by the payment by Tenant on account of such work. Landlord may, however, withhold ten percent (10%) from each payment until (i) the work of repairing or rebuilding is completed and proof has been furnished to Landlord that no lien or liability has attached or will attach to the Leased Property or to Landlord in connection with such repairing or rebuilding, (ii) Tenant has obtained a certificate of use and occupancy (or its functional equivalent) for the portion of the Leased Premises repaired or rebuilt and (iii) if Tenant has an agreement with any governmental authority for the detention of inmates at such Leased Property which requires such governmental authority to approve such repairs or rebuilding, such approval shall have been obtained. Upon the completion of rebuilding or repairing and the furnishing of such proof, the balance of the net proceeds of such insurance payable to Tenant on account of such repairing or rebuilding will be paid to Tenant. Tenant will obtain and deliver to Landlord a temporary or final certificate of occupancy before the Leased Property is reoccupied for any purpose. Tenant shall complete such repairs or rebuilding free and clear of mechanic's or other liens, and in accordance with the building codes and all applicable laws, ordinances, regulations, or orders of any state, municipal, or other public authority affecting the repairs or rebuilding, and also in accordance with all requirements of the insurance rating

organization, or similar body. Any remaining proceeds of insurance after such restoration will be Tenant's property.

10.02 Landlord's Inspection. During the progress of such repairs or rebuilding, Landlord and its architects and engineers may, from time to time, inspect the Leased Property and will be furnished, if required by them, with copies of all plans, shop drawings, and specifications relating to such repairs or rebuilding. Tenant will keep all plans, shop drawings, and specifications available, and Landlord and its architects and engineers may examine them at all reasonable times. If, during such repairs or rebuilding, Landlord and its architects and engineers determine that the repairs or rebuilding are not being done in accordance with the approved plans and specifications, Landlord will give prompt notice in writing to Tenant, specifying in detail the particular deficiency, omission, or other respect in which Landlord claims such repairs or rebuilding do not accord with the approved plans and specifications. Upon the receipt of any such notice, Tenant will cause corrections to be made to any deficiencies, omissions, or such other respect. Tenant's obligations to supply insurance, according to Article IV, will be applicable to any repairs or rebuilding under this Section.

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

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

10.05 Substantial Damage During Lease Term. Provided Tenant has fully complied with Section 4.01 hereof (including actually maintaining in effect rental value insurance or business interruption insurance provided for in clause (c) thereof) and has satisfied the conditions of the last sentence of this Section 10.05, if, at any time during the Term of the particular Lease, the Leased Property is so damaged by fire or otherwise that more than fifty percent (50%) of the correctional or detention facility at the Leased Property is rendered unusable, Tenant may, within thirty (30) days after such damage, give notice of its election to terminate the Lease subject to the particular Leased Property and, subject to the further provisions of this Section, such Lease will cease on the tenth (10th ) day after the delivery of such notice. If the Lease is so terminated, Tenant will have no obligation to repair, rebuild or replace the Leased Property, and the entire insurance proceeds will belong to Landlord. If the Lease is not so terminated, Tenant shall rebuild the Leased Property in accordance with Section 10.01. If Tenant elects to terminate any Lease pursuant to this Section 10.05, Tenant will pay (or cause to be paid) to Landlord, an amount equal to the difference between the amount of all insurance proceeds received by Landlord, and the net book value of such Leased Property as shown in Landlord's financial statements as of the date of such termination.

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

ARTICLE XI

CONDEMNATION

11.01 Total Taking. If at any time during the Term any Leased Property is totally and permanently taken by right of eminent domain or by conveyance made in response to the threat of the exercise of such right ("Condemnation"), the applicable Lease shall terminate on the Date of Taking (which shall mean the date the condemning authority has the right to possession of the property being condemned), and Tenant shall promptly pay all outstanding rent and other charges through the date of termination, provided, however the applicable Lease shall not so terminate if the Condemnation occurred due to the failure of Tenant to maintain the Leased Property as required by Article VII of this Agreement or other applicable provision of this Agreement, whether or not such failure on the part of Tenant constituted an Event of Default under an individual Lease at the time of the Condemnation.

11.02 Partial Taking. If a portion of any Leased Property is taken by Condemnation, the subject Lease shall remain in effect if such Leased Property is not thereby rendered Unsuitable for its Primary Intended Use (which shall mean that the Leased Property is in such a state or condition such that in the good faith judgment of Tenant, reasonably exercised, the Leased Property cannot be operated on a commercially practicable basis as a correctional or detention facility), but if such Leased Property is thereby rendered Unsuitable for its Primary Intended Use, such Lease shall terminate on the Date of Taking, provided such Condemnation was not as a result of Tenant's failure to maintain the Leased Property as provided for in Section 11.01.

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

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

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

11.05 Award Distribution. The entire compensation, sums or anything of value awarded, paid or received on a total or partial Condemnation (the "Award") shall belong to and be paid to Landlord, except that, subject to the rights of any mortgagee of Tenant, Tenant shall be entitled to receive from the Award, if and to the extent such Award specifically includes such items, a sum attributable to the value, if any, of: (i) any Tenant Improvements, and (ii) the leasehold interest of Tenant under the subject Lease; provided, however, that if the amount received by Landlord and said mortgagee is less than the Condemnation Threshold (which shall mean, as of any given date, an amount equal to the net book value of such Leased Property as shown on the financial statements of Landlord as of the date of the Condemnation), then the amount of the Award otherwise payable to Tenant for the value of its leasehold interest under this Lease (and not any other funds of Tenant) shall instead be paid over to Landlord up to the amount of the shortfall.

11.06 Temporary Taking. The taking of any Leased Property, or any part thereof, by military or other public authority shall constitute a taking by Condemnation only when the use and occupancy by the taking authority has continued for longer than six (6) months. During any such six (6) month period, which shall be a temporary taking, all the provisions of the subject Lease shall remain in full force and effect with no abatement of rent payable by Tenant hereunder. In the event of any such temporary taking, the entire amount of any such Award made for such temporary taking allocable to the Term of such Lease, whether paid by way of damages, rent or otherwise, shall be paid to Tenant.

ARTICLE XII

TENANT'S RIGHT OF FIRST REFUSAL

12.01 Rights of First Refusal. Subject to the terms and conditions set forth in this Section 12.01 and provided that no Event of Default with respect to the subject Leased Property has occurred and is continuing at such time or at the expiration of this Agreement or the individual Lease, Tenant shall have a right of first refusal (the "Purchase Refusal Right") to purchase any Leased Property (including any Leased Property owned by an Affiliate [as defined in Section 13.01 hereof] of Landlord). If during the Term or for a period of ninety (90) days following termination of any Lease, Landlord or any Affiliate of Landlord receives a bona fide third party offer to Transfer any Leased Property, then, prior to accepting such third party offer, Landlord shall send written notice and a copy thereof to Tenant ("Landlord's Notice"). Tenant shall have ninety (90) days after receipt of Landlord's Notice to exercise Tenant's Purchase Refusal Right, by giving Landlord written notice thereof. Failure of Tenant to exercise the Purchase Refusal Right within such time period set forth

above shall be deemed to extinguish the Purchase Refusal Right for a period of one hundred eighty (180) days. Thereafter, prior to the expiration of such one hundred eighty (180) days, Landlord or its Affiliates may Transfer such Leased Property provided however, that the Transfer of the Leased Property is at a price equal to or greater than the price contained in the Landlord's Notice, and otherwise consistent in all material respects with the terms and conditions set forth in Landlord's Notice. Tenant's Purchase Refusal Right shall revive in the event that Landlord fails to Transfer the Leased Property within said one hundred eighty (180) days. In the event that Tenant elects to exercise the Purchase Refusal Right and to acquire the Leased Property thereby, (a) Tenant shall acquire such Leased Property on the same terms and conditions and subject to all time periods and other limitations as provided in Landlord's Notice
(provided, however, Tenant shall in all events have not less than ninety (90)
days to close its acquisition of the Leased Property following its written notice exercising its Purchase Refusal Right), and (b) concurrently with such acquisition, the Lease of such Leased Property shall terminate (but Tenant shall remain liable to pay any unpaid Rent with respect to such Leased Property and all indemnifications and other provisions that survive the expiration of the individual Lease or of this Agreement shall continue in effect), and this Agreement shall be appropriately amended to reflect the termination of such Lease.

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

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

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

ARTICLE XIII

ASSIGNMENT AND SUBLETTING; ATTORNMENT

13.01 Prohibition Against Subletting and Assignment. Subject to
Section 13.03, Tenant shall not, without the prior written consent of Landlord (which consent Landlord may grant or withhold in its sole and absolute discretion), assign, mortgage, pledge, hypothecate, encumber or otherwise transfer (except to an Affiliate of Tenant) (as defined) this Agreement or any Lease or any interest herein or therein, or all or any part of the Leased Property, or suffer or permit any Lease or the leasehold estate created thereby or any other rights arising under any Lease to be assigned, transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in part, whether voluntarily, involuntarily or by operation of law (except to an Affiliate of Tenant). For purposes of this Section 13.01, an assignment of any Lease shall be deemed to include any Change of Control of Tenant, as if such Change of Control were an assignment of the Lease. No assignment shall in any way impair the continuing primary liability of Tenant hereunder.

An "Affiliate" shall mean any Person directly or indirectly controlling, controlled by, or under common control with that Person.

A "Person" shall mean and include natural persons, corporations, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts, Indian tribes or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof.

13.02 Changes of Control. A Change of Control requiring the consent of Landlord shall mean:

(a) the issuance and/or sale by Tenant or the sale by any stockholder of Tenant of a Controlling (which shall mean, as applied to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise) interest in Tenant to a Person other than an Affiliate of Tenant, other than in either case a distribution to the public pursuant to an effective registration statement under the Securities Act of 1933, as amended (a "Registered Offering");

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

(c) any transaction pursuant to which Tenant is merged with or consolidated into another entity (other than an entity owned and Controlled by an Affiliate of Tenant), and Tenant is not the surviving entity.

13.03 Operating/Service Agreements.

13.03.01 Permitted Agreements. Tenant shall, without Landlord's prior approval, be permitted to enter into certain operating/service agreements for portions of any Leased Property to various licensees in connection with Tenant's operation of correctional or detention facilities as is customarily associated with or incidental to the operation of such Leased Property, which agreements may be in the nature of a sublease agreement.

13.03.02 Terms of Agreements. Each operating/service agreement concerning any of the Leased Property shall be subject and subordinate to the provisions of the applicable Lease. No agreement made as permitted by Section 13.03.01 shall affect or reduce any of the obligations of Tenant hereunder, and all such obligations shall continue in full force and effect as if no agreement had been made. No agreement shall impose any additional obligations on Landlord under the applicable Lease.

13.03.03 Copies. Tenant shall, within ten (10) days after the execution and delivery of any operating/service agreement permitted by Section 13.03.01, deliver a duplicate original thereof to Landlord.

13.03.04 Assignment of Rights in Agreements. As security for performance of its obligations under each Lease, Tenant hereby grants, conveys and assigns to Landlord all right, title and interest of Tenant in and to all operating/service agreements now in existence or hereinafter entered into for any or all of the applicable Leased Property, and all extensions, modifications and renewals thereof and all rents, issues and profits therefrom, to the extent the same are assignable by Tenant. Landlord hereby grants to Tenant a license to collect and enjoy all rents and other sums of money payable under any such agreement concerning any of such Leased Property; provided, however, that Landlord shall have the absolute right at any time after the occurrence and continuance of an Event of Default upon notice to Tenant and any vendors or licensees to revoke said license and to collect such rents and sums of money and to retain the same. Tenant shall not (i) after the occurrence and continuance of an Event of Default, consent to, cause or allow any material modification or alteration of any of the terms, conditions or covenants of any of the agreements or the termination thereof, without the prior written approval of Landlord nor
(ii) accept any rents (other than customary security deposits) more than ninety
(90) days in advance of the accrual thereof nor permit anything to be done, the doing of which, nor omit or refrain from doing anything, the omission of which, will or could be a breach of or default in the terms of any of the agreements.

13.03.05 Licenses, Etc. For purposes of Section 13.03, the operating/service agreements shall mean any licenses, concession arrangements, or other arrangements relating to the possession or use of all or any part of any Leased Property but specifically excluding any management agreement, facility operating agreement or other agreement for the housing or detention of inmates.

13.04 Assignment. No assignment shall in any way impair the continuing primary liability of Tenant hereunder, and no consent to any assignment in a particular instance shall be deemed to

be a waiver of the prohibition set forth in Article XIII. Any assignment shall be solely of Tenant's entire interest in the subject Lease. Any assignment or other transfer of all or any portion of Tenant's interest in any Lease in contravention of Article XIII shall be voidable at Landlord's option.

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

13.06 Attornment. Tenant shall insert in each sublease permitted under Section 13.03.01 provisions to the effect that (a) such sublease is subject and subordinate to all of the terms and provisions of the applicable Lease (including this Agreement) and to the rights of Landlord hereunder, (b) in the event such Lease shall terminate before the expiration of such sublease, the sublessee thereunder will, at Landlords' option, attorn to Landlord and waive any right the sublessee may have to terminate the sublease or to surrender possession thereunder, as a result of the termination of such Lease, and (c) in the event the sublessee receives a written notice from Landlord or Landlord's assignees, if any, stating that Tenant is in default under such Lease, the sublessee shall thereafter be obligated to pay all rentals accruing under said sublease directly to the party giving such notice, or as such party may direct. All rentals received from the sublessee by Landlord or Landlord's assignees, if any, as the case may be, shall be credit against the amounts owing by Tenant under such Lease.

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

ARTICLE XIV

ARBITRATION

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

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

14.04 Expenses. The expenses of the arbitration shall be assessed by the arbitrators and specified in the written decision. In the absence of a determination or assessment of expenses of the arbitration procedure in the award, all of the expenses of such arbitration shall be divided equally between Landlord and Tenant. Each party in interest shall be responsible for and pay the fees, costs and expenses of its own counsel, unless the arbitration award provides for an assessment of reasonable attorneys' fees and costs.

14.05 Enforcement of the Arbitration Award. There shall be no appeal from the decision of the arbitrators, and upon the rendering of an award, any party thereto may file the arbitrators' decision in the United States District Court for the Middle District of Tennessee for enforcement as provided by applicable law.

ARTICLE XV

QUIET ENJOYMENT, SUBORDINATION,
ATTORNMENT, ESTOPPEL CERTIFICATES

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

15.02 Landlord Mortgages; Subordination. Subject to Section 15.03, without the consent of Tenant, Landlord may, from time to time, directly or indirectly, create or otherwise cause to exist any lien, encumbrances or title retention agreement on the Leased Properties, or any portion thereof or any interest therein, whether to secure any borrowing or other means of financing or refinancing. This Agreement and each Lease and Tenant's rights under this Agreement and each Lease are subordinate to any ground lease or underlying lease, first mortgage, first deed of trust, or other first lien against any Leased Property, together with any renewal, consolidation, extension, modification or replacement thereof, which now or at any subsequent time affects any Leased Property or any interest of Landlord in any Leased Property, except to the extent that any such instrument expressly provides that this Agreement and each Lease is superior. This provision will be self-operative, and no further instrument or subordination will be required in order to effect it. However, Tenant shall execute, acknowledge and deliver to Landlord, at any time and from time to time upon demand by Landlord, such documents as may be requested by Landlord or any mortgagee or any holder of any mortgage or other instrument described in this Section, to confirm or effect any such subordination. If Tenant fails or refuses to execute, acknowledge, and deliver any such document within twenty (20) days after written demand, Landlord may execute, acknowledge and deliver any such document on behalf of Tenant as Tenant's attorney-in-fact. Tenant hereby constitutes and irrevocably appoints Landlord, its successors and assigns, as Tenant's attorney-in-fact to execute, acknowledge, and deliver on behalf of Tenant any documents described in this Section. This power of attorney is coupled with an interest and is irrevocable.

15.03 Attornment; Non-Disturbance. If any holder of any mortgage, indenture, deed of trust, or other similar instrument described in Section 15.02 succeeds to Landlord's interest in any Leased Property, Tenant will pay to such holder all Rent subsequently payable under the subject Lease. Tenant shall, upon request of anyone succeeding to the interest of Landlord, automatically become the tenant of, and attorn to, such successor in interest without changing such Lease. The successor in interest will not be bound by (i) any payment of Rent for more than one (1) month in advance; (ii) any amendment or modification of such Lease made without its written consent; (iii) any claim against Landlord arising prior to the date on which the successor succeeded to Landlord's interest; or (iv) any claim or offset of Rent against the Landlord. Upon request by Landlord or such successor in interest and without cost to Landlord or such successor in interest, Tenant will execute, acknowledge and deliver an instrument or instruments confirming the attornment. If Tenant fails or refuses to execute, acknowledge and deliver any such instrument within twenty (20) days after written demand, then Landlord or such successor in interest will be entitled to execute, acknowledge,

and deliver any document on behalf of Tenant as Tenant's attorney-in-fact. Tenant hereby constitutes and irrevocably appoints Landlord, its successors and assigns, as Tenant's attorney-in-fact to execute, acknowledge, and deliver on behalf of Tenant any such document. This power of attorney is coupled with an interest and is irrevocable.

Landlord shall use reasonable efforts to obtain a non-disturbance agreement from any such party referred to above which provides that in the event such party succeeds to Landlord's interest under the Lease and provided that no Event of Default by Tenant exists, such party will not disturb Tenant's possession, use or occupancy of the Leased Property.

15.04 Estoppel Certificates. At the request of Landlord or any mortgagee or purchaser of any Leased Property, Tenant shall execute, acknowledge, and deliver an estoppel certificate, in recordable form, in favor of Landlord or any mortgagee or purchaser of such Leased Property certifying the following: (i) that the subject Lease is unmodified and in full force and effect, or if there have been modifications that the same is in full force and effect as modified and stating the modifications; (ii) the date to which Rent and other charges have been paid; (iii) that neither Tenant nor Landlord is in default nor is there any fact or condition which, with notice or lapse of time, or both, would constitute a default, if that be the case, or specifying any existing default; (iv) that Tenant has accepted and occupies such Leased Property; (v) that Tenant has no defenses, set-offs, deductions, credits, or counterclaims against Landlord, if that be the case, or specifying such that exist; (vi) that the Landlord has no outstanding construction or repair obligations; and (vii) such other information as may reasonably be requested by Landlord or any mortgagee or purchaser. Any purchaser or mortgagee may rely on this estoppel certificate. If Tenant fails to deliver the estoppel certificates to Landlord within ten (10) days after the request of the Landlord, then Tenant shall be deemed to have certified that (a) such Lease is in full force and effect and has not been modified, or that such Lease has been modified as set forth in the certificate delivered to Tenant; (b) Tenant has not prepaid any Rent or other charges except for the current month; (c) Tenant has accepted and occupies such Leased Property; (d) neither Tenant nor Landlord is in default nor is there any fact or condition which, with notice or lapse of time, or both, would constitute a default; (e) Landlord has no outstanding construction or repair obligation; and (f) Tenant has no defenses, set-offs, deductions, credits, or counterclaims against Landlord. Tenant hereby irrevocably appoints Landlord as Tenant's attorney-in-fact to execute, acknowledge and deliver on Tenant's behalf any estoppel certificate which Tenant does not object to within twenty (20) days after Landlord sends the certificate to Tenant. This power of attorney is coupled with an interest and is irrevocable.

ARTICLE XVI

MISCELLANEOUS

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

If to Tenant:              Corrections Corporation of America
                           102 Woodmont Boulevard, Suite 800
                           Nashville, Tennessee 37205
                           Attention: Darrell K. Massengale

With a copy to:            Stokes & Bartholomew, P.A.
                           424 Church Street, Suite 2800
                           Nashville, Tennessee 37219
                           Attention: Elizabeth E. Moore

If to Landlord:            CCA Prison Realty Trust
                           2200 Abbott Martin Road
                           Nashville, Tennessee 37215
                           Attention: Michael W. Devlin

With a copy to:            Sherrard & Roe, PLC
                           424 Church Street, Suite 2000
                           Nashville, Tennessee 37219
                           Attention: Kim A. Brown

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

16.02 Advertisement of Leased Property. In the event the parties hereto have not executed a renewal lease of any Leased Property within one (1) year prior to the expiration of the Term, then Landlord or its agent shall have the right to enter such Leased Property at all reasonable times for the purpose of exhibiting such Leased Property to others and to place upon such Leased Property for and during the period commencing two hundred ten (210) days prior to the expiration of the Term "for sale" or "for rent" notices or signs.

16.03 Landlord's Access. Landlord shall have the right to enter upon the Leased Property, upon reasonable prior notice to Tenant, for purposes of inspecting the same and assuring Tenant's compliance with this Agreement provided, any such entry by Landlord shall be subject to all rules, guidelines and procedures prescribed by Tenant in connection therewith. Landlord shall not be allowed entry to the Leased Premises unless accompanied by such of Tenant's personnel as Tenant shall require.

16.04 Entire Agreement. This Agreement and the individual Leases contain the entire agreement between Landlord and Tenant with respect to the subject matter hereof and thereof. No

representations, warranties, and agreements have been made by Landlord except as set forth in this Agreement and the Leases.

16.05 Severability. If any term or provision of this Agreement or any Lease is held or deemed by Landlord to be invalid or unenforceable, such holding shall not affect the remainder of this Agreement or any Lease and the same shall remain in full force and effect, unless such holding substantially deprives Tenant of the use of the Leased Property or Landlord of the Rents therefor, in which event the Lease for such Leased Property shall forthwith terminate as if by expiration of the Term.

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

16.07 Governing Law. This Agreement and each of the Leases shall be construed under the laws of the State of Tennessee.

16.08 Memorandum of Lease. Landlord and Tenant agree that a record of this Agreement or any Lease may be recorded by either party in a memorandum of lease approved by Landlord and Tenant with respect to each Leased Property.

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

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

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

16.12 Transfer of Permits, Etc. Upon the expiration or earlier termination of the Term of any Lease (whether pursuant to the provisions of this Agreement or of such Lease), Tenant shall, at the option of Landlord, transfer to and relinquish to Landlord or Landlord's nominee and to cooperate with Landlord or Landlords' nominee in connection with the processing by Landlord or such nominee

of all licenses, operating permits, and other governmental authorization and all contracts, including without limitation, the correctional or detention facility license, and any other contracts with governmental or quasi-governmental entities which may be necessary or appropriate for the operation by Landlord or such nominee of the subject Leased Property for the purposes of operating a correctional or detention facility; provided that the costs and expenses of any such transfer or the processing of any such application shall be paid by Landlord or Landlord's nominee; and provided further that any management agreement, facility operating agreement or other agreement for the housing or detention of inmates shall be expressly excluded. Any such permits, licenses, certificates and contracts which are held in Landlord's name now or at the termination of such Lease shall remain the property of Landlord. To the extent permitted by law, Tenant hereby irrevocably appoints Landlord, its successors and assigns and any nominee or nominees specifically designated by Landlord or any successor or assign as Tenant's attorney-in-fact to execute, acknowledge, deliver and file all documents appropriate to such transfer or processing of any such application on behalf of Tenant; this power of attorney is coupled with an interest and is irrevocable.

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

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

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

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

16.17 Waiver of Jury Trial. To the extent that there is any claim by one party against the other that is not to be settled by arbitration as provided in Article XIV hereof, Landlord and Tenant waive trial by jury in any action, proceeding or counterclaim brought by either of them against the other on all matters arising out of this Agreement or the use and occupancy of the Leased Property (except claims for personal injury or property damage). If Landlord commences any summary proceeding for nonpayment of Rent, Tenant will not interpose, and waives the right to interpose, any counterclaim in any such proceeding.

16.18 Permitted Contests. Tenant, on its own or on Landlord's behalf (or in Landlord's name), but at Tenant's expense, may contest, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any Imposition or any legal requirement or insurance requirement or any lien, attachment, levy, encumbrance, charge or claim provided that (i) in the case of an unpaid Imposition, lien, attachment, levy, encumbrance, charge or claim, the commencement and continuation of such proceedings shall suspend the collection thereof from Landlord and from the Leased Property; (ii) neither the Leased Property nor any Rent therefrom nor any part thereof or interest therein would be in any immediate danger of being sold, forfeited, attached or lost; (iii) in the case of a legal requirement, Landlord would not be in any immediate danger of civil or criminal liability for failure to comply therewith pending the outcome of such proceedings; (iv) in the event that any such contest shall involve a sum of money or potential loss in excess of Fifty Thousand Dollars ($50,000.00), Tenant shall deliver to Landlord and its counsel an opinion of Tenant's counsel to the effect set forth in clauses (i), (ii) and (iii), to the extent applicable; (v) in the case of a legal requirement and/or an Imposition, lien, encumbrance, or charge, Tenant shall give such reasonable security as may be demanded by Landlord to insure ultimate payment of the same and to prevent any sale or forfeiture of the affected Leased Property or the Rent by reason of such nonpayment or noncompliance; provided, however, the provisions of this Section shall not be construed to permit Tenant to contest the payment of Rent (except as to contests concerning the method of computation or the basis of levy of any Imposition or the basis for the assertion of any other claim) or any other sums payable by Tenant to Landlord hereunder; (vi) in the case of an insurance requirement, the coverage required by Article IV shall be maintained; and (vii) if such contest be finally resolved against Landlord or Tenant, Tenant shall, as Other Additional Rent due hereunder, promptly pay the amount required to be paid, together with all interest and penalties accrued thereon, or comply with the applicable legal requirement or insurance requirement. Landlord, at Tenant's expense, shall execute and deliver to Tenant such authorizations and other documents as may be reasonably required in any such contest, and, if reasonably requested by Tenant or if Landlord so desires, Landlord shall join as a party therein. Tenant hereby agrees to indemnify and save Landlord harmless from and against any liability, cost or expense of any kind that may be imposed upon Landlord in connection with any such contest and any loss resulting therefrom.

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

16.20 Counterparts. This Agreement and each Lease may be executed in duplicate counterparts, each of which shall be deemed an original hereof or thereof.

16.21 Relationship of Landlord and Tenant. The relationship of Landlord and Tenant is the relationship of lessor and lessee. Landlord and Tenant are not partners, joint venturers, or associates.

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

16.23 Sale of Real Estate Assets. Notwithstanding any other provision of this Agreement or of any Lease, Landlord shall not be required to sell or transfer Leased Property, or any portion thereof, which is a real estate asset as defined in Section 856(c)(6) of the Code, to Tenant if Landlord's counsel advises Landlord that such sale or transfer may not be a sale of property described in Section 857(b)(6)(C) of the Code. If Landlord determines not to sell such property pursuant to the above sentence, Tenant's right, if any, to purchase the Leased Property shall continue and be exercisable at such time as the transaction, upon the advice of Landlord's counsel, would be a sale of property described in Section 857(b)(6)(C) of the Code.

ARTICLE XVII
NONDISCLOSURE AND RELATED MATTERS

17.01 Covenant Not to Disclose. Landlord agrees that, by virtue of the relationship of trust and confidence between Landlord and Tenant, it possesses and will possess certain data and knowledge of operations of the Tenant which are proprietary in nature and confidential. Landlord covenants and agrees that it will not knowingly, at any time, directly or indirectly, for whatever reason, without Tenant's prior written consent, which may be given or withheld in Tenant's sole discretion, reveal, divulge or make known to any person or entity, any confidential or proprietary record, data, trade secret, pricing policy, bid amount, pricing strategy, personnel policy, method or practice of obtaining or doing business, or any other confidential or proprietary information whatever (the "Confidential Information"), whether or not obtained with the knowledge and permission of the Tenant and whether or not developed, devised or otherwise created in whole or in part by the efforts of Landlord, nor shall Landlord use such Confidential Information for its own account. Confidential Information shall not include any information generally available to the public other than as a result of a disclosure of such information by Landlord. Notwithstanding anything to the contrary provided herein, a disclosure of Confidential Information by Landlord will not be considered a violation of this Article XVII in the event such disclosure is involuntarily compelled by a final, non-appealable, order from a court of competent jurisdiction.

17.02 Non-Interference Covenant. Landlord covenants and agrees that it will not, at any time, directly or indirectly, for whatever reason, whether for its own account or for the account of any other person, firm, corporation or other organization, without Tenant's prior written consent, which may be given or withheld in Tenant's sole discretion: (i) solicit, employ, deal with or otherwise interfere with any of the Tenant's contracts or relationships with any employee, officer, director or any independent contractor, whether the person is employed by or associated with the Tenant on the date of this Agreement or at any time hereafter; or (ii) solicit, accept, deal with or otherwise interfere with any of the Tenant's contracts or relationships with any independent

contractor, customer, client or supplier. Notwithstanding the foregoing, (i) Landlord may offer employment to the current employees of the Tenant who are terminated by the Tenant subsequent to the date hereof, (ii) Landlord shall in no way be liable for any actions by any entity leasing or managing any facility owned by Landlord, and (iii) nothing provided herein shall prevent Landlord from soliciting relationships with an entity or entities to lease, license, manage or otherwise use any facility leased to the Tenant subsequent to the termination of such lease with the Tenant.

17.03 Business Materials and Property Disclosure. All written materials, records and documents made by Landlord or coming into its possession concerning the business or affairs of the Tenant shall be the sole property of the Tenant and, upon request by the Tenant, Landlord shall deliver the same to the Tenant and shall retain no copies. The foregoing restrictions shall not be applicable to any written materials, records and documents generally available to the public other than as a result of a disclosure of such written materials, records and documents by Landlord.

17.04 Breach by Landlord. It is expressly understood, acknowledged and agreed by Landlord that: (i) the restrictions contained in this Article XVII represent a reasonable and necessary protection of the legitimate interests of the Tenant and that its failure to observe and comply with its covenants and agreements in this Article XVII will cause irreparable harm to the Tenant; (ii) it is and will continue to be difficult to ascertain the nature, scope and extent of the harm; and (iii) a remedy at law for such failure by Landlord will be inadequate. Accordingly, it is the intention of the parties that, in addition to any other rights and remedies which the Tenant may have in the event of any breach by Landlord of this Article XVII, the Tenant shall be entitled, and is expressly and irrevocably authorized by Landlord, to demand and obtain specific performance, including, without limitation, temporary and permanent injunctive relief, and all other appropriate equitable relief against Landlord in order to enforce against Landlord any of the covenants and agreements contained in this Article XVII, and/or to prevent any breach or any threatened breach by Landlord of the covenants and agreements of Landlord contained in this Article XVII. Should the Tenant prevail in any action to enforce this Article XVII, the Tenant shall be entitled to recover all of its costs and expenses relating thereto, including reasonable attorney's fees and expenses.

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

CCA PRISON REALTY TRUST

CORRECTIONS CORPORATION OF AMERICA

                                   SCHEDULE A

                                 THE FACILITIES

                                                           LOCATION
FACILITY NAME                                              (CITY, STATE)

Bridgeport Pre-Parole Transfer Facility                    Bridgeport, Texas

Central Arizona Detention Center                           Florence, Arizona

Houston Processing Center                                  Houston, Texas

Laredo Processing Center                                   Laredo, Texas

Leavenworth Detention Center                               Leavenworth, Texas

Mineral Wells Pre-Parole Transfer Facility                 Mineral Wells, Texas

West Tennessee Detention Facility                          Mason, Tennessee

Eloy Detention Facility                                    Eloy, Arizona

T. Don Hutto Correctional Facility                         Taylor, Texas

SCHEDULE B

PERSONAL PROPERTY

All of those certain items of property described on the CCA - Master Depreciation Schedule dated June 30, 1997, on file at the offices of Seller and Purchaser.

Asset Number                        Vendor                             Description
------------                        ------                             -----------

9404                                Dury's                             Camera for Timeclock Avant
9964                                Control Systems                    Timeclock Systems

Asset Number                        Vendor                             Description
------------                        ------                             -----------

12173                               Control Systems                    Timeclock Systems
8463                                Control Systems                    Timeclock Kronos 460F
8466                                Control Systems                    Camera SSI 124E Die Cutter

Asset Number                        Vendor                             Description
------------                        ------                             -----------

9255                                Control Systems                    Timeclock Kronos 460F Barcode
9403                                Control Systems                    Timeclock Kronos 460F Barcode
12218                               Dycam Inc.                         Camera Digital Model 4STD PC
13103                               Control Systems                    Timeclock Kronos 480F 256K

Asset Number                        Vendor                             Description
------------                        ------                             -----------

2619                                Control Systems                    Timeclocks
12733                               Digital Connections                Wide Area Network - Wan
1026                                Southern Time                      Timeclocks

Asset Number                        Vendor                             Description
------------                        ------                             -----------

2620                                Control Systems                    Timeclocks
4110                                Control Systems                    Internal Commun. Board
7230                                Control Systems                    Software Close Up Customer
12166                               Digital Connections                Wide Area Network - Wan
12607                               Computer Discount
                                         Warehouse                     Novell Groupwise 5 Mailbox 10
12608                               Computer Discount
                                        Warehouse                      Novell Groupwise 5 Mailbox 10
12609                               Megabyte Business                  Printer ID Card Persona 2MB
1620                                Simplex                            Timeclock and Card Racks

Asset Number                        Vendor                             Description
------------                        ------                             -----------

6729                                Control Systems                    Timeclock System SS Barcode
12738                               Digital Connections                Wide Area Network - Wan

Asset Number                        Vendor                             Description
------------                        ------                             -----------

9256                                Control Systems                    Timeclock Kronos 460F Barcode

Asset Number                        Vendor                             Description
------------                        ------                             -----------

4184                                Control Systems                    Timeclock - Kronos
10659                               Control Systems                    Barcode Reader Kronos 460F

Asset Number                        Vendor                             Description
------------                        ------                             -----------

13024                               Control Systems                    Timeclock Kronos 480F 256K
13266                               Control Systems                    Software TKC250 V8B 1-User

EXHIBIT 10.7

LEASE AGREEMENT
(HOUSTON)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Houston, Harris County, State of Texas, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the Houston Processing Center;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of twelve (12) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2009 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Second Extended Term") on the same terms and provisions (other than with respect to renewal) as

the Fixed Term, as set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen
(18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of the initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

CORRECTIONS CORPORATION OF AMERICA

EXHIBIT A

Legal Description of Leased Property

Metes and Bounds Description

5.843 Acres (254,531 Square Feet) Portion of Reserve "C" Block One World/Houston Section One International Business Center William Lloyd Survey, A-1407 Harris County, Texas

Being a tract or parcel containing 5.843 acres (254,531 square feet) of land situated in the William Lloyd Survey, Abstract No. 1407, Harris County, Texas, being out of and a part of Reserve "C" Block One of World/Houston Section One International Business Center, recorded in Volume 278, Page 25 of the Harris County Map Records (H.C.M.R.) and being the same called 5.840 acre tract described in deed recorded under Clerk's File Number J194317 of the Harris County Official Public Records of Real Property (H.C.O.P.R.R.P.); said 5.843 acre tract being more particularly described by metes and bounds as follows with all bearings referenced to said subdivision plat:

Beginning at a 5/8-inch iron rod found for the northeast corner of said Reserve "C" and the herein described tract, being the southeast corner of that certain called 6.6031 acre tract, described in deed recorded under Clerk's File Number G291174 of said H.C.O.P.R.R.P. and being in the west line of Lot 10 of Block One, Greenlee Addition, a subdivision in Harris County of record in Volume 40, Page 32 of said H.C.M.R.:

THENCE, South 02 degrees 51 minutes 21 seconds East, 485.42 feet along the line common to said Reserve "C" and said Greenlee Addition to a 3/4-inch galvanized iron pipe found for the northeast corner of that certain called 5.50 acre tract described in deed recorded under Clerk's File Number H038206 of said H.C.O.P.R.R.P., and being the southeast corner of the herein described tract;

THENCE, South 89 degrees 07 minutes 09 seconds West, departing the west line of said Block 1 of Greenlee Addition and along the north line of said 5.50 acre tract, 500.50 feet to a 3/4-inch galvanized iron pipe found for the common west corner of said 5.50 acre tract and the herein described tract, and being in the existing east right-of-way line of Export Plaza Drive (80 feet wide);

THENCE, North 02 degrees 51 minutes 27 seconds West, 104.37 feet along the existing east right-of-way line of said Export Plaza Drive to a 3/4-inch galvanized iron pipe found for the beginning of a tangent curve to the left;

THENCE, Northwesterly, 172.82 feet along the existing east right-of-way line of said Export Plaza Drive, the existing north right-of-way line of Consulate Plaza Drive (80 feet wide) and along the arc of said curve to the left (Central Angle = 70 degrees 43 minutes 34 seconds, Radius = 140.00 feet, Chord Bearing and Distance = North 38 degrees 13 minutes 14 seconds West, 162.05 feet) to a 5/8-

inch iron rod found for a common south corner of Reserves "B" and "C" of said World/Houston Section One International Business Center;

THENCE, North 16 degrees 24 minutes 59 seconds East, 246.82 feet departing the existing north right-of-way line of said Consulate Plaza Drive and along the common line between said Reserve "B" and "C" to a 5/8-inch iron rod found for the common corner of Reserves "A", "B" and "C" of said World/Houston Section One International Business Center, being the southwest corner of said 6.6031 acre tract and being the northwest corner of the herein described tract from which a found 8-inch square cross-tie fence corner post bears South 52 degrees 12 minutes 39 seconds East, 0.74 feet;

THENCE, North 87 degrees 17 minutes 38 seconds East, 512.53 feet along the common line between the herein described tract, Reserve "C" and said 6.6031 acre tract to the POINT OF BEGINNING containing 5.843 acres (254,531 square feet) of land, more or less.

Compiled by:
SURVCON INC.
Job No. 5980-01
April 14, 1997

Houston Processing Center
Houston, Harris County Texas

EXHIBIT B

Mortgage Debt

Property: Houston Processing Center

This property is subject to the following Mortgage Debt:

That certain deed of trust of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: Houston Processing Center

1. Standby fees, taxes and assessments by any taxing authority for the year 1997, and subsequent years.

2. The following restrictive covenants of record itemized below: Volume 278, page 25 of the Map Records of Harris County, Texas and those Restrictions filed for record under Clerk's File No. F934983, as corrected and refiled under Clerk's File No. F944735, and as amended by instrument filed under Clerk's File No. G698447, all of the Official Records of Real Property of Harris County, Texas.

3. A water line easement 10 feet wide along the westerly line of subject property, which abuts Consulate Plaza Drive, and/or Export Plaza Drive, as reflected on the map or plat thereof, recorded in Volume 278, page 25 of the Map Records of Harris County, Texas.

4. An unobstructed easement 16 feet wide, together with an unobstructed aerial easement 5 feet, 6 inches wide, beginning at a height of 16 feet 3 inches above the ground, and extending upwards and outwards on an inclined plane, to a height of 18 feet 6 inches above the ground, located south and west of and adjoining the heretofore cited 16 feet wide easement, all located along the north and east lines of subject property, as granted to Houston Lighting and Power Company by instrument filed under Clerk's File No. F941406, and as corrected by instrument filed under Clerk's File No. G120555, and as further ratified by instrument filed under Clerk's File No. G769967, all of the Official Records of Real Property of Harris County, Texas.

5. Blanket easements for ingress and egress, for installation, maintenance, repair and removal of public utilities, as set out in the Declaration filed under Clerk's File No. F934983, and as refiled under Clerk's File No. F944735, and as amended by instrument filed under Clerk's File No. G698447, all of the Official Public Records of Real Property of Harris County, Texas.

6. An easement for drainage purposes extending a distance of 15 feet on each side of the center line of all natural water courses, as reflected by the map or plat thereof, recorded in Volume 278, page 25 of the Map Records of Harris County, Texas.

7. A water line and meter easement, as granted to the City of Houston by instrument filed under Clerk's File No. J546727 of the Official Public Records of Real Property of Harris County, Texas, and being more particularly described by metes and bounds therein.

8. Agreement by and between Warner Cable Communications, Inc. and Corrections Corporation of America for the installation, operation and maintenance of a Cable Television

System as reflected by instrument filed under Clerk's File No. N216013 of the Official Public Records of Harris County, Texas.

9. An unobstructed easement 10 feet wide, together with an unobstructed aerial easement 10 feet wide, beginning at a plane of 16 feet above the ground and extending upwards, located on both sides of and adjoining the said 10 feet wide easement, as granted to Houston Lightening and Power Company by instrument filed under Clerk's File No. J445703 of the Official Public Records of Real Property of Harris County, Texas; said easement(s) being further reflected and defined on Sketch No. N84-041 attached to said instrument.

10. A 1/16th non-participating royalty interest in and to all the oil, gas and other minerals in, on, under or that may be produced from subject property is excepted herefrom as the same is set forth in instrument recorded in Volume 5812, page 576 of the Deed Records of Harris County, Texas.

11. All oil, gas and other minerals, the royalties, bonuses, rentals and all other rights in connection with same are excepted herefrom as set forth in instrument filed under Clerk's File No. G296822 of the Official Public Records of Harris County, Texas. Waiver of surface rights contained therein.

12. All oil, gas and other minerals, the royalties, bonuses, rentals and all other rights in connection with same are excepted herefrom as set forth in instrument filed under Clerk's File No. F934983, and as refiled under Clerk's File No. F944735, and as amended by instrument filed under Clerk's File No. G698447, all of the Official Public Records of Harris County, Texas. Waiver of surface rights contained therein.

13. Building set back line of 20 feet along that portion of the west property line abutting Consulate Plaza Drive and/or Export Plaza Drive, as set out on plat recorded in Volume 278, page 25 of the Map Records of Harris County, Texas.

14. The subject property lies within the area designated and zoned by the City of Houston as the "Jetero Airport Hazard Area" (Houston Intercontinental Airport) and is subject to the restrictions and regulations imposed by Ordinance of the City of Houston, a certified copy of which is recorded in Volume 5448, page 421, Deed Records, Harris County, Texas, as amended by Ordinance No. 83-861, filed for record under Clerk's File No. J040968 of the Official Public Records, Harris County, Texas.

15. Annual Maintenance Charge payable to World/Houston International Business Center Improvement Association, as set forth in instrument filed under Clerk's File No. F934983, and as refiled under Clerk's File No. F944735, and as amended by instrument filed under Clerk's File No. G698447, all of the Official Public Records of Real Property of Harris County, Texas and additionally secured by a separate, valid and subsisting lien, as set forth therein.

16. The subject property is located within the City of Houston or within its extra territorial jurisdiction (within 5 miles of the city limits but outside another municipality). It is subject to the terms, conditions, and provisions of City of Houston Ordinance No. 85-1878, pertaining to, among other things, the platting and re-platting of real property and to the establishment of building lines (25 feet along major thoroughfares and 10 feet along other streets). A certified copy of said ordinance was filed for record on August 1, 1991, under Harris County Clerk's File No. N 253886.

17. All matters shown on the Plat of Asbuilt Survey, dated April 15, 1997, as revised June 17, 1997, prepared by William H. Smith, Jr., R.P.L.S. No. 3982, Survcon Inc., 5757 Woodway, Houston, Texas 77057, Job Number 5980-01.

EXHIBIT D

Base Rent Schedule

Property: Houston Processing Center

Tenant will pay to Landlord annual Base Rent of $1,500,000.00, payable in equal monthly installments of $125,000.00.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased

EXHIBIT 10.8

LEASE AGREEMENT
(LAREDO)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Laredo, Webb County, State of Texas, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the Laredo Processing Center;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of twelve (12) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2009 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Second Extended Term") on the same terms and provisions (other than with respect to renewal) as

the Fixed Term, as set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen
(18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of the initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

EXHIBIT A

Legal Description of Leased Property

THE SURFACE ONLY TO:

A 4.0 ACRE TRACT OF LAND, MORE OR LESS, BEING PARTLY OUT OF THE ROBERT HAYNES
22.43 ACRE TRACT, BEING OF RECORD IN VOLUME 295, PAGES 238-241, WEBB COUNTY DEED RECORDS AND PARTLY OUT OF THE HAYNES TRACT BEING OF RECORD IN VOLUME 207, PAGE 161, WEBB COUNTY DEED RECORDS; THIS 4.0 ACRE TRACT ALSO KNOWN AS LOT 2A, BLOCK 1, OUT OF THE CASA BLANCA SUBDIVISION, AS RE-PLATTED AND RECORDED IN VOLUME 8, PAGE 50, OF THE WEBB COUNTY PLAT RECORDS, ALL SAID PROPERTY BEING OUT OF PORCION 28, WEBB COUNTY, TEXAS;

COMMENCING from the southeast corner of said Haynes tract, same being a point on the northeasterly right-of-way line of U.S. Highway No. 59, and same being at approximately highway station 194 + 86;

THENCE, North 87 degrees 21 minutes 00 seconds West, 862 feet, along said right-of-way line, to the southwest corner of Lot No. 1, out of the Casa Blanca Subdivision Plat as Recorded in Volume 3, Page 100, of the Webb County Plat Records, to the southeast corner of this tract and the POINT OF BEGINNING.

THENCE, North 02 degrees 39 minutes 00 seconds East, 200 feet, with the common boundary line of this tract and said Lot No. 1, to the northwest corner of said Lot No. 1 and an exterior corner of this tract;

THENCE, North 87 degrees 21 minutes 00 seconds West, 25.76 feet, with the common boundary line of the Juan Moreno 1.9261 acre tract, recorded in Volume 1414, Pages 805-811, of the Webb County Deed Records, to the most westerly, southwest corner of the said Juan Moreno tract, and an interior corner of this tract;

THENCE, North 02 degrees 39 minutes 00 seconds East, 250 feet, with the common boundary line of this tract and said Juan Moreno tract, to the northwest corner of said Juan Moreno tract and the northeast corner of this tract;

THENCE, North 87 degrees 21 minutes 00 seconds West, 375.75 feet, to the northeast corner of Lot No. 3, out of the aforesaid Casa Blanca Subdivision Plat and the northwest corner of this tract;

THENCE, South 02 degrees 39 minutes 00 seconds West, 450 feet, with the common boundary line of this tract, and said Lot No. 3, to the southeast corner of said Lot No. 3, a point on the aforesaid northeasterly right-of-way line of U. S. Highway 59, to the southwest corner of this tract;

THENCE, South 87 degrees 21 minutes 00 seconds East, 401.51 feet, along the southwesterly boundary line of this tract, being in common with the northeasterly right-of-way line of said U.S. Highway 59, to the POINT OF BEGINNING.

Laredo Processing Center Laredo, Webb County, Texas

EXHIBIT B

Mortgage Debt

Property: Laredo Processing Center

This property is subject to the following Mortgage Debt:

That certain deed of trust of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: Laredo Processing Center

1. Standby fees, taxes and assessments by any taxing authority for the year 1997, and subsequent years.

2. Easement and right of way for electric transmission lines dated November 6, 1984, executed by Richard E. Haynes to Central Power and Light Company, recorded in Volume 1083, pages 817-820, Webb County Real Property Records.

3. All oil, gas and other minerals reserved in Deed dated November 30, 1984, executed by Richard E. Haynes, Trustee to Corrections Corporation of America, recorded in Volume 1087, Pages 781-783, Webb County Real Property Records, and containing the waiver of any right of ingress and egress and surface rights.

4. Easement and right of way for electric transmission lines dated May 11, 1983, executed by Victor M. Solis and Gloria Solis to Central Power and Light Company, recorded in Volume 1025, pages 792-793, Webb County Real Property Records.

5. All oil, gas and other minerals reserved in Deed dated May 28, 1987, executed by Richard E. Haynes to Corrections Corporation of America, recorded in Volume 1236, pages 490-493, Webb County Real Property Records, in which the Surface Rights only were conveyed.

6. All utility easements reflected on Subdivision Replat recorded in Volume 8, page 50, Webb County Plat Records.

7. Subject to Order of Joint Airport Zoning Board of the City of Laredo and Webb County recorded in Volume 655, page 277, Webb County Real Property Records.

8. Rights of Webb County, Texas, to flood spillway along the Eastern boundaries of Chacon Creek, as reflected on Plat prepared by J. Limon on July 15, 1961, as set out in Deed dated January 18, 1962, from Adelaide G. Bunn, individually and as Independent Executrix of the Estate of T. B. Bunn, Deceased to Veterans Land Board of the State of Texas, recorded in Volume 295, pages 238-241, Webb County, Records.

9. All matters shown on the Survey, dated November 15, 1990, last revised _______________, 1997, prepared by Cesareo R. Porras, P.L.S. No. 3481, Porras Engineering Company, 304 E. Calton Road, Laredo, Texas 78044, Drawing Number F.B. #94.

EXHIBIT D

Base Rent Schedule

Property: Laredo Processing Center

Tenant will pay to Landlord annual Base Rent of $1,200,000.00, payable in equal monthly installments of $100,000.00.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased Property as of the respective commencement dates thereof.

EXHIBIT 10.9

LEASE AGREEMENT
(BRIDGEPORT)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Bridgeport, Wise County, State of Texas, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the Bridgeport Pre-Parole Transfer Facility;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of twelve (12) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2009 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Second Extended Term") on the same terms and provisions (other than with respect to renewal) as

the Fixed Term, as set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen
(18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of the initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

CORRECTIONS CORPORATION OF AMERICA

EXHIBIT A

Legal Description of Leased Property

THE SURFACE ESTATE ONLY, IN AND TO:

Being a 4.26 acre tract in the Edward Stephens Survey, Abstract Number 755, Wise County, Texas and also being the same tract of land deeded to Concept, Inc., described in instruments recorded in Volume 255, page 523, Real Records, Wise County, Texas and Volume 382, page 17, Real Records, Wise County, Texas and being described as one tract by metes and bounds as follows:

Beginning at a 5/8" iron rod found in the North Right-of-Way of F.M. #1658 for the Southeast corner of said tract described in Volume 255, page 523;

THENCE North 73 degrees 31 minutes 34 seconds West with the North Right-of-Way line of said F.M. #1658 a distance of 335.92 feet to a 3" steel fence post found for the Southwest corner of the tract herein described;

THENCE North 01 degrees 32 minutes 30 seconds East a distance of 697.88 feet to a 3" steel fence post found for the Northwest corner of the tract herein described;

THENCE North 89 degrees 03 minutes 36 seconds East a distance of 164.69 feet to a 1/2" iron pipe found for a corner;

THENCE South 89 degrees 38 minutes 04 seconds East a distance of 57.10 feet to a 5/8" iron rod found for the most North Northeast corner of the tract herein described;

THENCE South 01 degrees 30 minutes 36 seconds West a distance of 551.24 feet to a 3" steel fence post found for a ell corner of the tract herein described;

THENCE South 88 degrees 01 minutes 24 seconds East a distance of 102.37 feet to a 5/8" iron rod found for the most East Northeast corner of the tract herein described;

THENCE South 01 degrees 28 minutes 34 seconds West a distance of 240.72 feet to the point of beginning and containing 4.26 acres of land, more or less.

Bridgeport Pre-Parole Transfer Facility Bridgeport, Wise County, Texas

EXHIBIT B

Mortgage Debt

Property: Bridgeport Pre-Parole Transfer Facility

This property is subject to the following Mortgage Debt:

That certain deed of trust of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: Bridgeport Pre-Parole Transfer Facility

1. Standby fees, taxes and assessments by any taxing authority for the year 1997, and subsequent years.

2. Reservation of all oil, gas and other minerals contained in deed dated January 3, 1975, from A. J. Whelan, et al. to Robert Goode, recorded in Volume 340, page 181, Deed Records of Wise County, Texas.

3. Reservation of all oil, gas and other minerals contained in deed dated March 10, 1977, from A. J. Whelan, et al to Gordon E. Taylor, recorded in Volume 362, page 442, Deed Records of Wise County, Texas.

4. Right-of-Way to West Wise Rural Water Supply Corp., dated July 15, 1993, recorded in Volume 541, page 586, Real Records of Wise County, Texas.

5. Water and sewer lines across subject property as shown on survey dated April 15, 1997, as revised June 18, 1997, prepared by Roger C. Steadham, R.P.L.S. No. 4281.

6. Overhead electric and telephone lines as shown on survey dated April 15, 1997, as revised June 18, 1997, prepared by Roger C. Steadham, R.P.L.S. No. 4281.

7. Fence inset along the North and East property lines as shown on survey dated April 15, 1997, as revised June 18, 1997, prepared by Roger C. Steadham, R.P.L.S. No. 4281.

8. Rights of the Wise County Water Control and Improvement District #1 to issue bonds.

9. All matters shown on the Survey, dated April 15, 1997, as revised June 18, 1997, prepared by Roger C. Steadham, R.P.L.S. No. 4281, Steadham Surveying, 608 13th Street, Bridgeport, Texas 76426.

EXHIBIT D

Base Rent Schedule

Property: Bridgeport Pre-Parole Transfer Facility

Tenant will pay to Landlord annual Base Rent of $400,000.00, payable in equal monthly installments of $33,333.33.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased

EXHIBIT 10.10

LEASE AGREEMENT
(MINERAL WELLS)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Mineral Wells, Parker County, State of Texas, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the Mineral Wells Pre-Parole Transfer Facility;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of twelve (12) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2009 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the

"Second Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen (18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of the initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

EXHIBIT A

Legal Description of Leased Property

Being a 25.08 acre tract in the T. & P. Railroad Co. Survey East of the Brazos River, Abstract Number 1549, Parker County, Texas and also being a certain tract conveyed to Mineral Wells R.E. Holding Corp. recorded in instrument recorded in Volume 1581, page 85, Deed Records, Parker County, Texas, being described by metes and bounds as follows:

Beginning at a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set in the East R.O.W. of Reynolds Road and the North R.O.W. of Shurtz Road for the Southwest corner of said Mineral Wells R.E. Holding Corp. Tract, said point being by previous description 7241.98 feet South 65 degrees 05 minutes 59 seconds East from the Northwest corner of the T. & P. Railroad Co. Survey East of the Brazos River, Abstract Number 869, Palo Pinto County, Deed Records;

THENCE North 12 degrees 49 minutes 41 seconds East a distance of 117.14 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set in the East R.O.W of said Reynolds Road for the Southwest corner of a certain 0.31 acre tract described in instrument recorded in Volume 1646, Page 651, Deed Records, Parker County, Texas;

THENCE South 77 degrees 10 minutes 26 seconds East a distance of 150.00 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set for the Southeast corner of said 0.31 acre tract;

THENCE North 12 degrees 49 minutes 41 seconds East a distance of 90.00 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set for the Northeast corner of said 0.31 acre tract;

THENCE North 77 degrees 10 minutes 26 seconds West a distance of 150.00 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set in the East R.O.W. of said Reynolds Road for the Northwest corner of said 0.31 acre tract;

THENCE North 12 degrees 49 minutes 41 seconds East a distance of 348.86 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set in the East R.O.W. of said Reynolds Road for the Southwest corner of a certain 0.44 acre tract described in instrument recorded in Volume 1554, page 1635, Deed Records, Parker County, Texas;

THENCE South 77 degrees 10 minutes 31 seconds East a distance of 110.00 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set for the Southeast corner of said 0.44 acre tract;

THENCE North 12 degrees 49 minutes 41 seconds East a distance of 175.00 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set for the Northeast corner of said 0.44 acre tract;

THENCE North 77 degrees 10 minutes 31 seconds West a distance of 110.00 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set in the East R.O.W. of said Reynolds Road for the Northwest corner of said 0.44 acre tract;

THENCE North 12 degrees 49 minutes 41 seconds East a distance of 710.91 feet to a 3/4 inch iron rod found in the East R.O.W. of said Reynolds Road for the Northwest corner of said Mineral Wells R.E. Holding Corp. tract;

THENCE South 77 degrees 01 minutes 31 seconds East a distance of 780.78 feet to a 3/4 inch iron rod found in the West R.O.W. of Heintzelman Road for the northeast corner of said Mineral Wells R.E. Holding Corp. tract;

THENCE South 12 degrees 51 minutes 11 seconds West a distance of 1441.93 feet to a 1/2 inch iron rod with a yellow plastic cap stamped STEADHAM R.P.L.S. 4281 set in the West R.O.W. of said Heintzelman Road and in the North R.O.W. of said Shurtz Road for the southeast corner of said Mineral Wells R.E. Holding Corp. tract;

THENCE North 77 degrees 01 minutes 25 seconds West a distance of 780.15 feet to the POINT OF BEGINNING and containing 25.08 acres of land, more or less.

Mineral Wells Pre-Parole Transfer Facility Mineral Wells, Parker County, Texas

EXHIBIT B

Mortgage Debt

Property: Mineral Wells Pre-Parole Transfer Facility

This property is subject to the following Mortgage Debt:

That certain deed of trust of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: Mineral Wells Pre-Parole Transfer Facility

1. Standby fees, taxes and assessments by any taxing authority for the year 1997, and subsequent years.

2. Easements created in instrument executed by United States of America to City of Mineral Wells, Texas for joint usage of existing sewer lines and appurtenances, dated September 30, 1975, filed October 7, 1975, recorded in Volume 620, page 89, Deed Records, Parker County, Texas.

3. Easements created in instrument executed by United States of America to City of Mineral Wells, Texas for joint usage of existing water lines and appurtenances, dated September 30, 1975, filed October 7, 1975, recorded in Volume 622, page 502, Deed Records, Parker County, Texas.

4. Easements created in instrument executed by United States of America to Texas Power & Light Company for all existing electrical transmission lines and systems, dated November 5, 1975, filed December 24, 1975, recorded in Volume 626, page 1, Deed Records, Parker County, Texas.

5. Easements created in instrument by United States of America to Brazos River Gas Company for all existing gas distribution lines and systems, dated March 12, 1976, filed March 25, 1976, recorded in Volume 634, page 1, Deed Records, Parker County, Texas.

6. Oil, Gas and Mineral Lease executed by and between Carl Kessler and Richard F. Williamson, Trustee, dated June 23, 1981, filed August 4, 1981, recorded in Volume 1115, page 1121, Real Records, Parker County, Texas.

7. Terms, provisions, and conditions of Lease Agreement by and between Mineral Wells R.E. Holding Corp., a Delaware corporation, as Lessor, and Concept Incorporated, a Delaware corporation, as Lessee, as evidenced by Memorandum of Lease, dated November 17, 1993, filed November 18, 1993, recorded in Volume 1581, page 91, Real Records, Parker County, Texas.

8. Reservation of subsurface mineral estate, including oil, gas and other minerals in and under subject property, including royalty interests, royalties, bonuses, rentals and all other rights in connection therewith, including all easements or rights-of-way owned or held by any lessee or mineral owner, on, over, or across the said lands for the purpose of producing or transporting any of said minerals together with the rights of ingress and egress, as set forth in deed from Concept Incorporated, a Delaware corporation to Mineral Wells R.E. Holding

Corp., a Delaware corporation, dated November 17, 1993, filed November 18,1 993, recorded in Volume 1581, page 85, Real Records, Parker County, Texas.

9. That portion of the premises located within the boundaries of any road or roadway.

10. All matters shown on the Survey, dated April 17, 1997, as revised June 18, 1997, prepared by Roger C. Steadham, R.P.L.S. No. 4281, Steadham Surveying, 608 13th Street, Bridgeport, Texas 76426, including, but not limited to, the following: (a) asphalt roadway (50' r.o.w.) crossing West to East at Northern side of subject property; (b) fences not on property lines; and (c) overhead electric lines which enter property from various points and cross from East to West at North side of subject property.

EXHIBIT D

Base Rent Schedule

Property: Mineral Wells Pre-Parole Transfer Facility

Tenant will pay to Landlord annual Base Rent of $3,000,000.00, payable in equal monthly installments of $250,000.00.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased Property as of the respective commencement dates thereof.

EXHIBIT 10.11

LEASE AGREEMENT
(MASON)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Mason, Tipton County, State of Tennessee, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the West Tennessee Detention Facility;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of ten (10) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2007 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Second Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as

set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen (18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of this initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

EXHIBIT A

Legal Description of Leased Property

Beginning at a 1/2 inch rebar found the right-of-way line of Finde Naifeh Jr. Drive (Mason Gainsville Road - 60 ft. R.O.W.) a distance of 1612.95 feet (C=1615.56 ft.) Southwestwardly, as measured along said southerly right-of-way line from its intersection with the westerly right-of-way line of U. S. Highway #70, said point being the northwesterly corner of the William Liles Tract (DB.568, PG. 42); thence South 03 degrees 45 minutes 00 seconds East along the westerly line of said Liles Tract and the Cecil Bright Tract (DB. 701, PG. 664) a distance of 1601.22 feet to point; thence South 80 degrees 00 minutes 00 seconds West a distance of 53.65 feet to a point; thence South 81 degrees 00 minutes 00 seconds West a distance of 105.60 feet to a point; thence South 86 degrees 00 minutes 00 seconds West a distance of 110.20 feet to a point; thence South 00 degrees 15 minutes 00 seconds East a distance of 39.60 feet to a point; thence South 68 degrees 00 minutes 00 seconds West a distance of 112.20 feet to a point; thence South 01 degrees 15 minutes 00 seconds East a distance of 138.00 feet to a point; thence South 25 degrees 00 minutes 00 seconds East a distance of 141.90 feet to a point; thence South 50 degrees 15 minutes 00 seconds West a distance of 135.30 feet to a point; thence North 62 degrees 45 minutes 00 seconds West a distance of 110.20 feet to a point; thence South 73 degrees 45 minutes 00 seconds West a distance of 117.50 feet to a point; thence South 86 degrees 45 minutes 00 seconds West, a distance of 67.30 feet to a point; thence South 73 degrees 00 minutes 00 seconds West a distance of 130.70 feet to a point; thence South 10 degrees 45 minutes 00 seconds West a distance of 240.90 feet to a point; thence South 43 degrees 45 minutes 00 seconds West a distance of 104.90 feet to a point; thence North 03 degrees 45 minutes 00 seconds West along the easterly line of the Robert Marshall Tract (DB. 235, PG. 85) a distance of 2369.40 feet to a 1/2 inch rebar set in the southerly right-of-way line of said Finde Naifeh Jr. Drive; thence North 87 degrees 45 minutes 00 seconds East along said southerly right-of-way line a distance of 983.40 feet to the point of beginning, containing 43.186 acres or 1881168.086 square feet, more or less, described according to the ALTA Boundary Survey, dated April 16, 1997, as revised June 19, 1997, prepared by John Wesley Ashworth, III, Tennessee No. 1344, Ashworth-Vaughan, Inc., 195 Center Street, Collierville, Tennessee 38017, Job Number 3989.00

Being the same property conveyed to Corrections Partners, Inc., a Delaware corporation, by deed from Corrections Corporation of America, a Tennessee corporation, of record in Record Book _____, page _____, Register's Office for Tipton County, Tennessee.

West Tennessee Detention Facility Mason, Tipton County, Tennessee

EXHIBIT B

Mortgage Debt

Property: West Tennessee Detention Facility

This property is subject to the following Mortgage Debt:

That certain deed of trust of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: West Tennessee Detention Facility

1. 1997 Taxes, a lien, which are not yet due and payable.

2. Easement(s) in favor of Memphis CATV, Inc. (Cablevision), as set forth in instrument recorded in Record Book 666, page 666, Register's Office for Tipton County, Tennessee.

3. Easement(s) for the flow of Beaver Creek Canal.

4. All matters shown on ALTA Boundary Survey, dated April 16, 1997, as revised June 19, 1997, prepared by John Wesley Ashworth, III, Tennessee No. 1344, Ashworth-Vaughan, Inc., 195 Center Street, Collierville, Tennessee 38017, Job Number 3989.00.

EXHIBIT D

Base Rent Schedule

Property: West Tennessee Detention Facility

Tenant will pay to Landlord annual Base Rent of $3,700,000.00, payable in equal monthly installments of $308,333.33.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased Property as of the respective commencement dates thereof.

EXHIBIT 10.12

LEASE AGREEMENT
(LEAVENWORTH)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Leavenworth, Leavenworth County, State of Kansas, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the Leavenworth Detention Center;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of ten (10) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2007 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Second Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as

set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen (18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of the initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

EXHIBIT A

Legal Description of Leased Property

SURFACE ONLY AS TO ALL TRACTS:

Tract 1:

Lots 2, 3, 4, 5, 6, 7, and 8, Block 5, LEAVENWORTH INDUSTRIAL PARK,

City of Leavenworth, Leavenworth County, Kansas.

Tract 2:

Lots 2, 4, and 6, Block 4, BREWER PLACE, REPLAT OF BLOCKS 3 AND 4,

LEAVENWORTH INDUSTRIAL PARK, City of Leavenworth, Leavenworth County, Kansas.

Tract 3:

Vacated Highway Terrace bounded by the above tracts.

All being more particularly described as follows:

Beginning at the Southeast corner of Lot 8, Block 5, of said "LEAVENWORTH
INDUSTRIAL PARK";

THENCE North 89 degrees 40 minutes 56 seconds West, 410.31 feet along the South line of said Lot 8, also being the North line of Astro Way, to a point on the West line of vacated Highway Terrace, also being on the East line of Lot 6, Block 4, of said "BREWER PLACE REPLAT";

THENCE, South 00 degrees 19 minutes 04 seconds West, 60.00 feet to the Southeast corner of said Lot 6;

THENCE North 89 degrees 40 minutes 56 seconds West, 321.00 feet to the Southwest corner of said Lot 6;

THENCE, North 00 degrees 19 minutes 04 seconds East, 1,278.78 feet to the Northwest corner of Lot 2, Block 5, of said "LEAVENWORTH INDUSTRIAL PARK";

THENCE, along the North line of said Lot 2, also being the South line of Kansas Highway No. 5, South 89 degrees 50 minutes 26 seconds East, 236.60 feet to a point of curvature;

THENCE along a curve to the right, having a delta of 90 degrees 51 minutes 00 seconds a radius of 501.95 feet, an arc length of 795.91 feet;

THENCE continuing along the West line of said Kansas Highway No.5, also being the East line of said "LEAVENWORTH INDUSTRIAL PARK", South 01 degrees 00 minutes 34 seconds West, 711.48 feet to the "Point of Beginning", NET AREA: 863,056.076 square feet or 19.813 acres, more or less.

Leavenworth Detention Center Leavenworth, Leavenworth County, Kansas

EXHIBIT B

Mortgage Debt

Property: Leavenworth Detention Center

This property is subject to the following Mortgage Debt:

That certain mortgage of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: Leavenworth Detention Center

1. General taxes and special assessments for 1997 and subsequent years, not yet due or payable.

2. Restrictive covenants appearing in Book 484, page 37, and as amended in Book 484, page 670 and Book 503, page 1867 and Book 505, page 724, and Book 650, page 1847, and Book 651, page 317.

3. Restrictions, reservations and covenants, if any, as shown on the Plat of Leavenworth Industrial Park, recorded in Plat Book 7, page 99.

4. Restrictive covenants appearing in Book 475, page 61.

5. Restrictions, reservations and covenants, if any, as shown on the Plat of Brewer Place, Replat of Blocks 3 and 4, Leavenworth Industrial Park, recorded in Plat Book 10, page 41.

6. Building set-back line(s) 40 feet from the unvacated portion of Highway Terrace, Astrow Way and Kansas Highway #5 on Lots 2 through 8, Block 5, Leavenworth Industrial Park.

7. Building set-back line(s) across the 40 feet from Astrow Way and the unvacated portion of Highway Terrace on Lots 2, 4 and 6, Block 4, Brewer Place Replat.

8. License Agreement, dated November 10, 1947, to Cities Service Gas Company recorded January 6, 1948 in Book 357, page 141.

9. All of the coal underlying the subject property was conveyed to Carr Coal Mining and Manufacturing Company in Deed recorded March 23, 1925 in Book 278, page 47.

10. All matters shown on ALTA/ACSM Land Title Survey, dated April 16, 1997, as revised June 20, 1997, prepared by David L. King, Ks. L.S. No. 782, Schmitz, King & Associates, Inc., 3202-B Parallel Parkway, Kansas City, Kansas 66104, Job No. 97046.

EXHIBIT D

Base Rent Schedule

Property: Leavenworth Detention Center

Tenant will pay to Landlord annual Base Rent of $3,300,000.00, payable in equal monthly installments of $275,000.00.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased Property as of the respective commencement dates thereof.

EXHIBIT 10.13

LEASE AGREEMENT
(ELOY)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Eloy, Pinal County, State of Arizona, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the Eloy Detention Center;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of twelve (12) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2009 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Second Extended Term") on the same terms and provisions (other than with respect to renewal) as

the Fixed Term, as set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen
(18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of the initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

CORRECTIONS CORPORATION OF AMERICA

EXHIBIT A

Legal Description of Leased Property

PARCEL "A" - PRISON COMPOUND

A portion of the Northeast Quarter of Section 16, Township 7 South, Range 8 East, of the Gila and Salt River Base and Meridian, Pinal County, Arizona; using a basis of bearing the East line of the Northeast corner of said Section 16, using a bearing of North 00 degrees 00 minutes 07 seconds East and being more particularly described as follows:

Commencing at the East quarter corner of said Section 16, being a brass cap in handhole; thence South 89 degrees 47 minutes 31 seconds West, along the East/West mid-section line of said Section 16, a distance of 735.00 feet to the point of beginning; thence continuing South 89 degrees 47 minutes 31 seconds West along said mid-section line 1907.59 feet to the center of said Section 16, being a 3 inch aluminum monument; thence North 00 degrees 02 minutes 32 seconds West along the North/South mid-section line of said Section 16, a distance of 2648.25 feet to the North quarter corner of said Section 16, being a G.L.O brass cap; thence North 89 degrees 56 minutes 55 seconds East, along the north line of said northeast quarter 1909.62 feet; thence South 00 degrees 00 minutes 07 seconds West, parallel to the East line of said Northeast quarter 2643.03 feet to the point of beginning.

Except all coal, oil, gas and mineral deposits as reserved in instrument recorded September 20, 1944 in Book 71 of Deeds, page 511.

Said parcel contains approximately 120 acres, more or less. This legal description is recorded in Docket 1958, page 755, Records of Pinal County, Arizona.

PARCEL "B" - WELL SITE AND INGRESS/EGRESS EASEMENT

A parcel of land situated in the Northeast Quarter of Section 16, Township 7 South, Range 8 East of the Gila and Salt River Base and Meridian, Pinal County, Arizona; more particularly described as follows:

Beginning at the East quarter corner of said Section 16, measure westerly along the mid-section line bearing South 89 degrees 47 minutes 31 seconds West, a distance of 452.00 feet to the true point of beginning; thence continuing westerly along the mid-section line bearing South 89 degrees 47 minutes 31 seconds West, a distance of 208.00 feet; thence northerly bearing North 00 degrees 00 minutes 07 seconds East, a distance of 208.00 feet; thence easterly bearing North 89 degrees 47 minutes 31 seconds East, a distance of 208.00 feet; thence southerly bearing South 00 degrees 00 minutes 07 seconds West, a distance of 208.00 feet to the true point of beginning.

Except all coal, oil, gas and mineral deposits as reserved in instrument recorded September 20, 1944 in Book 71 of Deeds, page 511.

Said parcel contains approximately 1.0 acres more or less.

Together with and subject to an easement for ingress and egress more particularly described as follows:

A 30 foot strip of land lying to the North of the following described line; beginning at the East quarter corner of said Section 16, measuring westerly along the mid-section line bearing South 89 degrees 47 minutes 31 seconds West, a distance of 40.00 feet to the true point of beginning; thence continuing westerly along the mid-section line bearing South 89 degrees 47 minutes 31 seconds West, a distance of 412.00 feet.

Except all gas, oil, metals and mineral rights as reserved in patent from State of Arizona recorded in Book 32 of Deeds, page 325, Records of Pinal County, Arizona.

This legal description is recorded in Docket 1999, page 997, Records of Pinal County, Arizona.

PARCEL "C" - SEWAGE DISPOSAL BEDS

A parcel of land situated in the northwest corner of Section 16, Township 7 South, Range 8 East, of the Gila and Salt River Base and Meridian, Pinal County, Arizona, more particularly described as follows:

Beginning at the North quarter corner of said Section 16, measure southerly along the mid-section line bearing South 00 degrees 02 minutes 32 seconds East, a distance of 600.00 feet to the true point of beginning; thence continuing southerly along the mid-section line bearing South 00 degrees 02 minutes 32 seconds East, a distance of 600.00 feet; thence westerly bearing South 89 degrees 57 minutes 28 seconds West, a distance of 1815.00 feet; thence northerly bearing North 00 degrees 02 minutes 32 seconds West, a distance of 600.00 feet; thence Easterly bearing North 89 degrees 57 minutes 28 seconds East, a distance of 1815.00 feet to the true point of beginning.

Except all gas, oil, metals and mineral rights as reserved in patent from State of Arizona Recorded in Book 32 of Deeds, page 325, Records of Pinal County, Arizona.

Said parcel contains approximately 25 acres, more or less. This legal description is recorded in Docket 1999, page 997, Records of Pinal County, Arizona.

Eloy Detention Center Eloy, Pinal County, Arizona

EXHIBIT B

Mortgage Debt

Property: Eloy Detention Center

This property is subject to the following Mortgage Debt:

That certain deed of trust of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: Eloy Detention Center

1. Taxes and assessments collectible by the County Treasurer not yet due and payable for the year 1997.

2. Assessments, obligations and liabilities by reason of the property described herein being included in any existing or proposed sewer system, street, lighting or other assessment and/or improvement district of the City of Eloy, if any.

3. Liabilities and obligations existing or which may arise against the property by reason of its inclusion within Central Arizona Water Conservation District, Pinal County Flood Control District and Central Arizona Water Irrigation District.

4. Reservations contained in State of Arizona patent recorded in Book 32 of Deeds, page 325, reading as follows: The State of Arizona reserves all rights to any and all minerals, ores, and metals of every kind and character and all coal, asphaltum, oil, gases, fertilizers, fossils and other like substances in or under said land and all the right of ingress and egress for the purpose of mining, together with enough of the surface of the land as may be necessary for the proper and convenient working and extraction of such minerals and substances.

5. Water rights, claims or title to water, whether or not shown by the public records.

6. The right of entry to prospect for, mine and remove the oil, gas and other mineral deposits in said land as reserved in Deed recorded in Book 71 of Deeds, Page 511.

7. Liabilities and obligations imposed upon said land by reason of its inclusion within the Central Arizona Water Irrigation and Drainage District as disclosed by instrument recorded on January 20, 1990, in Docket 1580, page 919.

8. Easement for public highway purposes and rights incident thereto, as set forth in instrument recorded in Book 85 of Deeds, page 243. (Parcel A)

9. Resolution by the Board of Supervisors of Pinal County Arizona purporting to establish a county roadway, 33 feet on each side of all section lines, recorded February 21, 1964, in Docket 375, page 572.
(Parcel A)

10. Easement for electric transmission lines and rights incident thereto, as set forth in instrument recorded in Docket 1301, page 452. (Parcel A)

11. Easement for water distribution system canals, laterals and ditches and rights incident thereto, as set forth in instrument recorded in Docket 1515, page 195. (Parcels A and B)

12. Easement for ingress, egress and irrigation purposes and rights incident thereto, as set forth in instrument recorded in Docket 1568, page 482. (Parcels A and C)

13. Easement for electric lines and appurtenant facilities and rights incident thereto, as set forth in instrument recorded in Docket 2026, page 456. (Parcel A)

14. Easement for electric lines and appurtenant facilities and rights incident thereto, as set forth in instrument recorded in Docket 2026, page 458. (Parcel B)

15. Agreement for the operation, maintenance, repair and financing of an irrigation distribution system according to the terms and conditions contained therein, dated June 13,1984, between Central Arizona Irrigation and Drainage District, an irrigation district, and B.K.W. Farms, Inc., an Arizona corporation, recorded June 26,1985, in Docket 1295, page 47.

16. Agreement for irrigation and water use according to the terms and conditions contained therein, dated December 1, 1989, between Central Arizona Irrigation and Drainage District, an irrigation district, and Lin & Sons, Enterprises, Inc., a California corporation, recorded March 26, 1990, in Docket 1665, page 684.

17. All matters shown on ALTA/ACSM Land Title Survey, dated June 20, 1997, prepared by Robert B. Atherton, R.L.S. No. 16490, Atherton Engineering Inc., 4620 N. 16th Street, Suite 108, Phoenix, AZ 85016-5148, Job No. 97-26.

EXHIBIT D

Base Rent Schedule

Property: Eloy Detention Center

Tenant will pay to Landlord annual Base Rent of $6,000,000.00, payable in equal monthly installments of $500,000.00.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased

EXHIBIT 10.14

LEASE AGREEMENT
(FLORENCE)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Florence, Pinal County, State of Arizona, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the Central Arizona Detention Center;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of ten (10) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2007 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Second Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as

set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen (18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of the initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

CORRECTIONS CORPORATION OF AMERICA

EXHIBIT A

Legal Description of Leased Property

A parcel of land located in the Northeast Quarter of Section 36, Township 4 South, Range 9 East of the Gila and Salt River Base and Meridian, Pinal County, Arizona, more particularly described as follows:

The North 1100.00 feet of the Northeast Quarter of Section 36, Township 4 South, Range 9 East of the Gila and Salt River Base and Meridian, Pinal County, Arizona.

Central Arizona Detention Center Florence, Pinal County, Arizona

EXHIBIT B

Mortgage Debt

Property: Central Arizona Detention Center

This property is subject to the following Mortgage Debt:

That certain deed of trust of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: Central Arizona Detention Center

1. Taxes and assessments collectible by the County Treasurer not yet due and payable for the year 1997.

2. Taxes, assessments, obligations and liabilities on the subject property by reason of the City of Florence Sewer System, Revenue and General Obligation Bonds.

3. Liabilities and obligations existing or which may arise against the property by reason of its inclusion within COUNTY FIRE CONTRIBUTIONS DISTRICT; ELECTRICAL DISTRICT NUMBER TWO; CENTRAL ARIZONA WATER CONSERVATION DISTRICT; PINAL COUNTY LIBRARY DISTRICT; PINAL COUNTY FLOOD CONTROL DISTRICT; FLORENCE FLOOD CONTROL DISTRICT; and SAN CARLOS IRRIGATION DISTRICT.

4. Reservations contained in the Patent from the United States of America, reading as follows:

"Subject to any vested and accrued water rights for mining, agricultural, manufacturing, or other purposes, and rights to ditches and reservoirs used in connection with such water rights, as may be recognized and acknowledged by the local customs, laws, and decisions of courts; and there is reserved from the lands hereby granted, a right-of-way thereon for ditches or canals constructed by the authority of the United States".

5. Water rights, claims or title to water, whether or not shown by the public records.

6. Roadway right-of-way, 33 feet in width, along the section lines of said section, as set forth in Minute Book 7, page 386, of the office of the Board of Supervisors of Pinal County, Arizona, a certificate copy of which was recorded February 21, 1964 in Docket 375, page 572.

7. An easement for highway and rights incident thereto as set forth in instrument recorded January 12, 1931 in Book 49 of Deeds, page 187.

8. An easement for telephone and telegraph lines and rights incident thereto as set forth in instrument recorded March 21, 1952 in Docket 58, page 227.

9. An easement for electrical transmission line and rights incident thereto as set forth in instrument recorded November 12, 1980 in Docket 1035, page 607.

10. The effect of a Map, Plat or Survey filed in Book 2 of Surveys, page 90, evidenced by a Notice of Recording Map or Plat recorded December 18, 1989, in Docket 1646, page 605.

11. The effect of a Map, Plat or Survey filed in Book 2 of Surveys, page 102, evidenced by a Notice of Recording Map or Plat recorded April 2, 1990, in Docket 1667, page 223.

12. The effect of a Map, Plat or Survey filed in Book 2 of Surveys, page 131, evidenced by a Notice of Recording Map or Plat recorded November 25, 1991, in Docket 1786, page 144.

13. The effect of a Map, Plat or Survey filed in Book 2 of Surveys, page 103.

14. An easement and rights incident thereto for installation of pipeline and appurtenances over the property, as set forth in instrument recorded September 28, 1994, in Docket 2045, page 192.

15. An easement and rights incident thereto for utility purposes over the property, as set forth in instrument recorded February 22, 1995, in Docket 2082, page 215.

16. An easement and rights incident thereto for utility purposes over the property, as set forth in instrument recorded February 22, 1995, in Document No. 1996-029763.

17. That portion of the premises located within the boundaries of any road or roadway.

18. All matters shown on the ALTA/ACSM Land Title Survey, dated June 20, 1997, prepared by Robert B. Atherton, R.L.S. No. 16490, Atherton Engineering Inc., 4620 N. 16th Street, Suite 108, Phoenix, Arizona 85016-5148, Job No. 97-25.

19. Canal and Irrigation Ditch within San Carlos Irrigation District Right of Way.

EXHIBIT D

Base Rent Schedule

Property: Central Arizona Detention Center

Tenant will pay to Landlord annual Base Rent of $12,300,000.00, payable in equal monthly installments of $1,025,000.00.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased

EXHIBIT 10.15

LEASE AGREEMENT
(TAYLOR)

THIS LEASE AGREEMENT ("Lease") dated as of the 18th day of July, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("Landlord") and CORRECTIONS CORPORATION OF AMERICA, a Tennessee corporation ("Tenant").

RECITALS

WHEREAS, Tenant (or one of Tenant's affiliates) has concurrently conveyed to Landlord the property described in Exhibit A hereto, and Landlord and Tenant desire that Landlord lease such property back to Tenant; and

WHEREAS, Landlord and Tenant have entered into a Master Agreement to Lease of even date herewith (the "Master Agreement") which sets forth certain agreements of the parties with respect to the lease of various properties including the property that is the subject of this Lease;

NOW, THEREFORE, in consideration of the premises and of their respective agreements and undertakings herein, Landlord and Tenant agree as follows:

ARTICLE I
PREMISES AND TERM

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant leases from Landlord the Land located in the City of Taylor, Williamson County, State of Texas, described in Exhibit A hereto, and all Improvements, Fixtures, and Personal Property thereon or thereto (each as defined in the Master Agreement, and, together with said Land, the "Leased Property"); such Leased Property collectively known and described at the date hereof as the T. Don Hutto Correctional Center;

SUBJECT, HOWEVER, to the lien of the mortgage debt described in Exhibit B hereto, if any, and to all easements, liens, encumbrances, restrictions, agreements, and other title matters existing as of the date hereof and listed in Exhibit C hereto (collectively the "Permitted Exceptions").

1.2 Term. The initial term (the "Fixed Term") of the Lease shall be for a fixed term of twelve (12) years commencing on July 18, 1997 (the "Commencement Date") and expiring on July 17, 2009 (the "Expiration Date"). The Term of this Lease may be renewed on the mutual agreement of Landlord and Tenant as follows:
(i) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the Expiration Date, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease; (ii) provided that Tenant gives Landlord notice on or before the date which is six
(6) months prior to the expiration of the Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Second Extended Term") on the same terms and provisions (other than with respect to renewal) as

the Fixed Term, as set forth in the Lease; and (iii) provided that Tenant gives Landlord notice on or before the date which is six (6) months prior to the expiration of the Second Extended Term, upon the mutual agreement of Landlord and Tenant, the Lease shall be renewed for one (1) additional five (5) year term (the "Third Extended Term") on the same terms and provisions (other than with respect to renewal) as the Fixed Term, as set forth in the Lease. Tenant's right to so extend the Term of the Lease is conditioned on Landlord's prior approval of the Extended Term, Second Extended Term, or Third Extended Term, as the case may be. The term "Term" used in this Agreement means the Fixed Term, Extended Term, Second Extended Term and Third Extended Term, as appropriate. The term "Lease Year" means each twelve (12) month period during the Term commencing on January 1 and ending on December 31, except the first Lease Year of each Lease shall be the period from the Commencement Date through the following December 31, and the last Lease Year shall end on the date of termination of the Lease if a day other than December 31. Landlord may terminate this Lease prior to the expiration of the Term hereof, at any time following the date which is five (5) years from the date hereof, upon written notice to Tenant not less than eighteen
(18) months prior to the effective date of such termination.

ARTICLE II
RENT

2.1 Base Rent. Tenant shall pay Landlord Base Rent for the Term in advance in consecutive monthly installments payable on the first day of each month during the Term, the Extended Term, Second Extended Term and the Third Extended Term, commencing on the Commencement Date, in accordance with the Base Rent Schedule attached hereto as Exhibit D. If the Commencement Date or the Expiration Date shall be other than on the first day of a calendar month, the initial (or final, as appropriate) monthly installment of Base Rent payable pursuant to the Lease shall be prorated for the number of days until, in the case of the initial monthly installment, the first day of the calendar month following the Commencement Date and, in the case of the final monthly installment, the Expiration Date.

2.2 Additional Rent. The Base Rent shall be subject to such increases over the Term as determined pursuant to Section 2.02 of the Master Agreement.

2.3 Other Additional Rent. Tenant shall also pay all Other Additional Rent with respect to the Leased Property, as set forth in the Master Agreement.

ARTICLE III
OTHER TERMS AND CONDITIONS

3.1 Master Agreement Incorporated Herein. All provisions of the Master Agreement (except any provisions expressly therein not to be a part of an individual lease of leased property) are hereby incorporated in and are a part of this Lease of the Leased Property.

3.2 Recordation. At the request of Landlord or Tenant, a short form memorandum of this Lease may be recorded in the real estate records of any county which Landlord or Tenant deems appropriate in order to provide legal notice of the existence hereof.

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

CCA PRISON REALTY TRUST

EXHIBIT A

Legal Description of Leased Property

Metes and Bounds Description

64.513 Acres Wm. R. Williams Survey, A-665 James C. Eaves Survey, A-214 Williamson County, Texas

Being a tract containing 64.513 acres of land situated in the Wm. R. Williams Survey, Abstract No. 665 and the James C. Eaves Survey, Abstract No. 214 in the City of Taylor, Williamson County, Texas and being all of a called 64.537 acre parcel described in deed to Corrections Corporation of America recorded in Document Number 9639935 of the Official Records Williamson County, Texas (O.R.W.C.T.). Said 64.513 acre tract being more particularly described by metes and bounds with all bearings referenced to the aforementioned deed of record:

BEGINNING at a 1/2-inch iron rod found in a south right-of-way line of Welch Street being the northwest corner of said Tract 1 and the northeast corner of a called 16.16 acre tract described in deed to Our Lady of Gaudalupe Church recorded in Volume 1482, page 866 of said O.R.W.C.T.;

THENCE, North 87 degrees 11 minutes 00 seconds East, along said Welch Street right-of-way line, a distance of 1,623.43 feet to a 1/2-iron rod found in the west right-of-way line of Park Street (60.00 feet wide) per the plat of Doak's Addition to the Town of Taylor, a subdivision of record in Volume 56, page 483 of the Williamson County Deed Records (W.C.D.R.) and being the northeast corner of said Tract 1;

THENCE, South 05 degrees 17 minutes 10 seconds East, departing said Welch Street and along said Park Street right-of-way line, a distance of 1,708.31 feet to a 1/2-inch iron rod found for the northeast corner of a called 9.0 acre tract described in deed to Mary Rundell and J. Sorenson recorded in Volume 270, page 54 of the Williamson County Probate Records and being the southeast corner of said Tract 1;

THENCE, South 85 degrees 12 minutes 10 seconds West (called South 85 degrees 11 minutes 13 seconds West), departing said Park Street and along the north line of said 9.00 acre tract and along the north line of a called 31.60 acre tract described as Sixth Tract in deed to Wilhemie Sorenson recorded in Volume 1967, page 117 of said O.R.W.C.T, a distance of 1,618.76 feet (called 1,618.44 feet) to a 1/2-inch iron rod found for an interior corner of said 31.60 acre tract and being the southwest corner of said Tract 1;

THENCE, North 04 degrees 48 minutes 00 seconds West (called North 04 degrees 55 minutes 32 seconds West), along the most northerly easterly line of said 31.60 acre tract, at a distance of 305.77 feet pass a found 3/4-inch iron rod, 0.12 feet left and continuing for a total distance of 355.87 feet

(called 306.32 feet) to a 1/2-inch iron rod found for the most northerly corner of said 31.60 acre tract and being the southeast corner of the aforementioned 16.16 acre tract;

THENCE, North 05 degrees 32 minutes 24 seconds West (called North 05 degrees 30 minutes 03 seconds West), along the easterly line of said 16.16 acre tract, a distance of 1,408.61 feet (called 1,458.59 feet) to the POINT OF BEGINNING and containing a computed area of 64.513 acres of land, more or less.

Prepared by:
SURVCON INC.
400 West 15th, Suite 500
Austin, Texas 78701
Job No. 4775-01
April 1997
Revised: June 1997

T. Don Hutto Correctional Center Taylor, Williamson County, Texas

EXHIBIT B

Mortgage Debt

Property: T. Don Hutto Correctional Center

This property is subject to the following Mortgage Debt:

That certain deed of trust of First Union National Bank of Tennessee, as Administrative Agent, dated July 18, 1997.

EXHIBIT C

Permitted Exceptions

Property: T. Don Hutto Correctional Center

1. Standby fees, taxes and assessments by any taxing authority for the year 1997, and subsequent years.

2. An easement dated February 28, 1928, granted to Texas Power & Light Company of Dallas, Texas by Nellie G. Bowers, individually and as executrix of the Estate of A. L. Bowers, Deceased, et al., recorded in Volume 235, page 534, Deed Records, Williamson County, Texas.

3. An undivided 1/8th interest in all oil, gas and other minerals on, in, under or that may be produced from the subject property as set forth in instrument recorded in Volume 238, Page 363, Deed Records, Williamson County, Texas.

4. An undivided 1/8th interest of all oil, gas and other minerals on, in, under or that may be produced from the subject property as set forth in instrument recorded in Volume 299, Page 572, Deed Records, Williamson County, Texas.

5. An undivided 1/2 interest in all oil, gas and other minerals on, in, under or that may be produced from the subject property as set forth in instrument recorded in Volume 544, Page 97, Deed Records, Williamson County, Texas.

6. An undivided 1/6 interest in all oil, gas and other minerals on, in, under or that may be produced from the subject property as set forth in instrument recorded in Volume 544, Page 99, Deed Records, Williamson County, Texas.

7. An undivided 1/2 interest in all oil, gas and other minerals on, in, under or that may be produced from the subject property as set forth in instrument recorded in Volume 1088, Page 309, Official Records, Williamson County, Texas.

8. An undivided 1/2 interest in all oil, gas and other minerals on, in, under or that may be produced from the subject property as set forth in instrument recorded in Volume 1133, Page 880, Official Records, Williamson County, Texas.

9. All matters shown on the ALTA/ACSM Land Title Survey, dated April 17, 1997, as revised June 24, 1997, prepared by Arthur W. Girts, Jr., R.P.L.S. No. 4741, Survcon Inc., 400 W. 15th, Suite 500, Austin, Texas 78701, Job #4775-01.

EXHIBIT D

Base Rent Schedule

Property: T. Don Hutto Correctional Center

Tenant will pay to Landlord annual Base Rent of $2,500,000.00, payable in equal monthly installments of $208,333.33.

Base Rent for the Extended Term, Second Extended Term and Third Extended Term shall be equal to the fair market rental value of the Leased Property as of the respective commencement dates thereof.

Exhibit 10.17

TRADE NAME USE AGREEMENT

THIS AGREEMENT (the "Agreement") dated this day of July, 1997, by and among Corrections Corporation of America ("Grantor"), a Delaware corporation, and CCA Prison Realty Trust ("Grantee"), a Maryland real estate investment trust.

W I T N E S S E T H:

WHEREAS, Grantor is the sole and exclusive owner of the corporate name Corrections Corporation of America and its abbreviation "CCA" (the Trade Name).

NOW, THEREFORE, in consideration of the premises and the mutual promises and undertakings herein contained, and for other good and valuable consideration, the parties agree as follows:

1. Grant of Trade Name by Grantor. Grantor grants to Grantee the non-exclusive, non-transferrable right to use the Trade Name in its corporate name as follows: CCA Prison Realty Trust, subject to the provisions of this Agreement.

2. Term. This Agreement shall commence on the date above written and terminate on the date which Grantee ceases to own any correctional or detention facility managed by Grantor (the "Term").

3. Termination. This Agreement may be terminated upon ten (10) days' written notice from Grantor to Grantee upon occurrence of any of the following events:

(a) A change in control of Grantee;

(b) Grantee goes into liquidation or bankruptcy or has a receiver or trustee appointed to administer either its property or affairs, or makes a general assignment of its property for the benefit of creditors or in any other manner takes advantage of the laws of bankruptcy or insolvency or the like.

4. Reservation of Rights. Except for the limited rights herein expressly granted to Grantee, all rights in the Trade Name are reserved to Grantor throughout the world for the sale and exclusive use or other disposition by Grantor at anytime, and from time to time, without any obligation to Grantee.

5. Maintenance of Quality Standards. Grantee agrees that the nature and quality of: all services rendered by Grantee hereunder; all goods sold by Grantee hereunder; and all related advertising, promotional, and other related uses of the Trade Name by Grantee shall conform to standards reasonably set by Grantor. Grantee agrees to cooperate with Grantor in facilitating Grantor's control of such nature and quality, and to supply Grantor with specimens of all uses of the Trade Name upon request.

6. Transfer Prohibited. The Trade Name granted hereunder shall not be assigned, sublicensed, or otherwise transferred without the prior written consent of Grantor. In the event of a prohibited transfer, Grantor shall have the right to terminate this Agreement forthwith by written notice to Grantee.

7. Rights Upon Termination. Upon the termination (by expiration or otherwise) of this Agreement, for any reason, all rights granted to Grantee hereunder shall automatically revert to Grantor for its use or disposition. Upon termination, Grantee shall promptly cease use of the Trade Name, and shall promptly deliver to Grantor all materials previously supplied by Grantor to Grantee and all copies thereof, in whole or in part. At Grantor's option, Grantor may, in lieu of return, require that Grantee destroy said materials and copies and provide to Grantor satisfactory evidence of destruction. Grantor shall not be liable to Grantee for damages of any kind on account of the termination or expiration of this Agreement. Without limiting the foregoing, upon termination or expiration of this Agreement for any reason, Grantor shall have no liability for reimbursement or for damages for loss of goodwill, or on account of any expenditures, investments, leases, or commitments made by Grantee. Grantee acknowledges and agrees that Grantee has no expectation and has received no assurances that its business relationship with Grantor will continue beyond the stated term of this Agreement or its earlier termination, that any investment by Grantee in the will be recovered or recouped, or that Grantee shall obtain any anticipated amount of profits by virtue of this Agreement.

8. No Franchise or Joint Venture. The parties expressly acknowledge that this Agreement shall not be deemed to create an agency, partnership, franchise, employment, or joint venture relationship between Grantor and Grantee. Nothing in this Agreement shall be construed as a grant of authority to Grantee to waive any right, incur any obligation or liability, enter into any agreement, grant any release or otherwise purport to act in the name of Grantor.

9. Indemnification.

9.1 The Grantee shall indemnify and hold harmless Grantor, its affiliates, directors, officers, employees, representatives, agents, successors and assigns from and against any and all losses, damages, costs and expenses, including attorney's fees, resulting from, arising out of Grantee's breach of the promises, covenants, representations and warranties made by it herein.

9.2 The Grantor shall indemnify and hold harmless Grantee, its affiliates, directors, officers, employees, representatives, agents, successors and assigns from and against any and all losses, damages, costs and expenses, including attorney's fees, resulting from, arising out of Grantor's breach of the promises, covenants, representations and warranties made by it herein.

10. Representations and Warranties.

10.1 Grantee hereby represents and warrants that (a) it is a real estate investment trust duly organized and validly existing under the laws of Maryland; (b) the execution and delivery by the Grantee of this Agreement, the performance by Grantee of all the terms and conditions thereof to be performed by it and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action, and no other act or approval of any person or entity is required to authorize such execution, delivery, and performance; (c) the Agreement constitutes a valid and binding obligation of Grantee, enforceable in accordance with its terms; (d) this Agreement and the execution and delivery thereof by Grantee, does not, and the fulfillment and compliance with the terms and conditions hereof and the consummation of the transactions contemplated hereby will not, (i) conflict with any of, or require the consent of any person or entity under, the terms, conditions or provisions of the organizational documents of Grantee, (ii) violate any provision of, or require any consent, authorization or approval under, any law or administrative regulation or any judicial, administrative or arbitration order, award, judgment, writ, injunction or decree applicable to Grantee, or (iii) conflict with, result in a breach of, or constitute a default under, any material agreement or obligation to which Grantee is a party.

10.2 Grantor hereby represents and warrants that (a) it is a corporation duly organized and validly existing under the laws of Delaware; (b) the execution and delivery by the Grantor of this Agreement, the performance by Grantor of all the terms and conditions thereof to be performed by it and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action, and no other act or approval of any person or entity is required to authorize such execution, delivery, and performance; (c) the Agreement constitutes a valid and binding obligation of Grantor, enforceable in accordance with its terms; (d) this Agreement and the execution and delivery thereof by Grantor, does not, and the fulfillment and compliance with the terms and conditions hereof and the consummation of the transactions contemplated hereby will not, (i) conflict with any of, or require the consent of any person or entity under, the terms, conditions or provisions of the organizational documents of Grantor, (ii) violate any provision of, or require any consent, authorization or approval under, any law or administrative regulation or any judicial, administrative or arbitration order, award, judgment, writ, injunction or decree applicable to Grantor, or (iii) conflict with, result in a breach of, or constitute a default under, any material agreement or obligation to which Grantor is a party; (e) to the best of Grantor's knowledge, it is the owner of the Trade Name and has the right to grant the rights to use the Trade Name to the Grantee under the terms of this Agreement; and (f) has not been subject to any third party claims for infringement due to the use of the Trade Name.

11. Ownership; Form of Use. Grantee acknowledges that Grantor owns all right, title, and interest in and to the Trade Name, agrees that it will do nothing inconsistent with such ownership. Grantee agrees that nothing in this Agreement shall give Grantee any right, title, or interest in the Trade Name other than the right to use it in accordance with this Agreement, and Grantee agrees that it will not attack the title of Grantor to the Trade Name or attack the validity of this Agreement. Grantee agrees to use the Trade Name only in the form and manner as prescribed from time to time by Grantor.

12. Waiver; Modification. No wavier or modification of any of the terms of this Agreement shall be valid unless in writing. No waiver by either party of a breach hereof or a default hereunder shall be deemed a waiver by such party of a subsequent breach or default of like or similar nature.

13. Separability. If any provision in this Agreement contravenes or is otherwise invalid under the law of any country or subdivision thereof, then such provision insofar as such country or subdivision is concerned shall be deemed eliminated from this Agreement and the Agreement shall, as so modified, remain valid and binding on the parties hereto and in full force and effect.

14. Disclaimer of Warranties. EXCEPT AS MAY BE EXPRESSLY PROVIDED IN THIS
AGREEMENT, GRANTOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IN RESPECT OF THE TRADE NAME, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF NON-INFRINGEMENT OR OF RESULTS TO BE OBTAINED FROM USE THEREOF.

15. Negation of Consequential Damages. IN NO EVENT SHALL GRANTOR BE LIABLE
FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES WHATSOEVER HEREUNDER, REGARDLESS OF WHETHER GRANTOR HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES.

16. Governmental Licenses, Permits and Approvals. Grantee, at its expense, shall be responsible for obtaining and maintaining all licenses, permits, approvals, authorizations, and clearances which are required by governmental authorities with respect to this Agreement, and for compliance with any requirements of governmental authorities for the registration or recordation of this Agreement and for making any payments required in connection therewith. Grantee shall furnish to Grantor, promptly upon Grantor's request, written evidence from such governmental authorities of the due issuance and continuing validity of any such licenses, permits, clearances, authorizations, approvals, registration or recordation.

17. Notices.

17.1 Notices and other communications required or permitted to the given under this Agreement shall be in writing and delivered by hand or overnight delivery, or placed in certified or registered mail, return receipt requested, at the addresses specified below or such other address as either party may, by notice to the other, designate:

If to Grantor:            Corrections Corporation of America
                          102 Woodmont Blvd., Suite 800
                          Nashville, Tennessee 37205
                          Attn: Doctor R. Crants

with a copy to:           Elizabeth E. Moore, Esq.
                          Stokes & Bartholomew, P.A.
                          424 Church Street, Suite 2800
                          Nashville, Tennessee 37219

If to Grantee:            CCA Prison Realty Trust
                          2200 Abbott Martin Road, Suite 201
                          Nashville, Tennessee 37215
                          Attn: D. Robert Crants, III

17.2 Notices and other communications shall be deemed given when delivered by hand or overnight delivery to the proper address or the date of the return receipt, as provided above.

18. Governing Laws. This Agreement shall be construed in accordance with the laws of Tennessee, excluding the choice of law provisions thereof. The parties hereby submit to the jurisdiction of the courts of Tennessee in respect to all disputes arising out of or in connection with this Agreement.

19. Enforcement. It is expressly understood, acknowledged, and agreed by Grantee that (a) the restrictions contained in this Agreement represent a reasonable and necessary protection of the legitimate interests of Grantor and its affiliates, and that Grantee's failure to observe and comply with the covenants and agreements in this Agreement will cause irreparable harm to Grantor and its affiliates; (b) it is and will continue to be difficult to ascertain the nature, scope, and extent of the harm; and (c) a remedy at law for such failure by Grantee will be inadequate. Accordingly, it is the intention of the parties that, in addition to any other rights and remedies which Grantor and its affiliates may have in the event of any breach or threatened breach of the Agreement, Grantor and its affiliates shall be entitled, and are expressly and irrevocably authorized by Grantee, to demand and obtain specific performance, including, without limitation, temporary and permanent injunctive relief and all other appropriate equitable relief against Grantee in order to enforce against Grantee the covenants and agreements contained in this Agreement. Such right to obtain injunctive relief may be exercised concurrently with, prior to, after, or in lieu of, any other rights resulting from any such breach or threatened breach. Grantee shall account for and pay over to Grantor all compensation, profits, and other benefits, after taxes, enuring to Grantee's benefit, which are derived or received by Grantee or any person or business entity controlled by Grantee resulting from any action or transaction constituting breach of the Agreement.

20. Entire Agreement. This Agreement contains the entire understanding of the parties. There are no representations, warranties, promises, covenants, or undertakings other than those hereinabove contained.

IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed by their duly authorized officers and their respective corporate seals to be hereunto affixed on the date set forth above.

GRANTOR:

CORRECTIONS CORPORATION OF
AMERICA

By: ___________________________________

Its:___________________________________

GRANTEE:

CCA PRISON REALTY TRUST

By: ___________________________________

Its:___________________________________

EXHIBIT 10.19

CREDIT AGREEMENT

DATED AS OF JULY 18, 1997,

BY AND AMONG

CCA PRISON REALTY TRUST,

AND CERTAIN SUBSIDIARIES THEREOF,

AS BORROWERS,

THE LENDERS REFERRED TO HEREIN,

FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT,

AND

SOUTHTRUST BANK, NATIONAL ASSOCIATION,
AS CO-AGENT

ARTICLE I        DEFINITIONS...........................................................................  1
         SECTION 1.1.      Definitions.................................................................  1
         SECTION 1.2.      General..................................................................... 16
         SECTION 1.3.      Other Definitions and Provisions............................................ 17

ARTICLE II       REVOLVING CREDIT FACILITY............................................................. 17
         SECTION 2.1.      Revolving Credit Loans...................................................... 17
         SECTION 2.2.      Swingline Loans............................................................. 17
         SECTION 2.3.      Procedure for Advances of Revolving Credit and
                           Swingline Loans............................................................. 19
         SECTION 2.4.      Repayment of Loans.......................................................... 20
         SECTION 2.5.      Notes....................................................................... 21
         SECTION 2.6.      Permanent Reduction of the Aggregate Commitment............................. 21
         SECTION 2.7.      Revolving Termination Date.................................................. 22
         SECTION 2.8.      Use of Proceeds............................................................. 23
         SECTION 2.9.      Release of Security......................................................... 23
         SECTION 2.10.     Increase In Aggregate Commitment; Additional Lenders........................ 23

ARTICLE III      LETTER OF CREDIT FACILITY............................................................. 24
         SECTION 3.1.      L/C Commitment.............................................................. 24
         SECTION 3.2.      Procedure for Issuance of Letters of Credit................................. 24
         SECTION 3.3.      Commissions and Other Charges............................................... 25
         SECTION 3.4.      L/C Participations.......................................................... 25
         SECTION 3.5.      Reimbursement Obligation of the Borrowers................................... 26
         SECTION 3.6.      Obligations Absolute........................................................ 27
         SECTION 3.7.      Effect of Application....................................................... 27

ARTICLE IV       GENERAL LOAN PROVISIONS............................................................... 27
         SECTION 4.1.      Interest.................................................................... 27
         SECTION 4.2.      Notice and Manner of Conversion or Continuation
                           of Loans.................................................................... 30
         SECTION 4.3.      Fees........................................................................ 30
         SECTION 4.4.      Manner of Payment........................................................... 31
         SECTION 4.5.      Crediting of Payments and Proceeds.......................................... 31
         SECTION 4.6.      Adjustments................................................................. 32
         SECTION 4.7.      Nature of Obligations of Lenders Regarding
                           Extensions of Credit; Assumption by the
                           Administrative Agent........................................................ 32
         SECTION 4.8.      Changed Circumstances....................................................... 33
         SECTION 4.9.      Indemnity................................................................... 35
         SECTION 4.10.     Capital Requirements........................................................ 36
         SECTION 4.11.     Taxes....................................................................... 36

ARTICLE V        CLOSING; CONDITIONS OF CLOSING AND BORROWING.......................................... 38
         SECTION 5.1.      Closing..................................................................... 38
         SECTION 5.2.      Conditions to Closing and Initial Extensions of Credit...................... 38
         SECTION 5.3.      Conditions to All Loans and Letters of Credit............................... 43

ARTICLE VI        REPRESENTATIONS AND WARRANTIES OF THE
         BORROWERS..................................................................................... 43
         SECTION 6.1.      Representations and Warranties.............................................. 43
         SECTION 6.2.      Survival of Representations and Warranties, Etc............................. 49

ARTICLE VII      FINANCIAL INFORMATION AND NOTICES..................................................... 50
         SECTION 7.1.      Financial Statements and Projections........................................ 50
         SECTION 7.2.      Officer's Compliance Certificate............................................ 51
         SECTION 7.3.      Other Reports............................................................... 51
         SECTION 7.4.      Notice of Litigation and Other Matters...................................... 51
         SECTION 7.5.      Accuracy of Information..................................................... 52

ARTICLE VIII     AFFIRMATIVE COVENANTS................................................................. 53
         SECTION 8.1.      Preservation of Corporate Existence and Related Matters..................... 53
         SECTION 8.2.      Maintenance of Property..................................................... 53
         SECTION 8.3.      Insurance................................................................... 53
         SECTION 8.4.      Accounting Methods and Financial Records.................................... 53
         SECTION 8.5.      Payment and Performance of Obligations...................................... 54
         SECTION 8.6.      Compliance With Laws and Approvals.......................................... 54
         SECTION 8.7.      Environmental Laws.......................................................... 54
         SECTION 8.8.      Compliance with ERISA....................................................... 54
         SECTION 8.9.      Compliance With Agreements.................................................. 55
         SECTION 8.10.     Conduct of Business......................................................... 55
         SECTION 8.11.     Visits and Inspections...................................................... 55
         SECTION 8.12.     Incarceration Agreements.................................................... 55
         SECTION 8.13.     Lease Terms and Conditions.................................................. 55
         SECTION 8.14.     Lease Revenues.............................................................. 56
         SECTION 8.15.     Hedging Agreement........................................................... 56
         SECTION 8.16.     Additional Borrowers........................................................ 56
         SECTION 8.17.     Further Assurances.......................................................... 56

ARTICLE IX       FINANCIAL COVENANTS................................................................... 57
         SECTION 9.1       Ratio of Total Liabilities to Total Capitalization.......................... 57
         SECTION 9.2       Ratio of Total Funded Debt to Cash Flow..................................... 57
         SECTION 9.3       Ratio of Dividends to Funds From Operations................................. 57
         SECTION 9.4       Interest Coverage Ratio..................................................... 57
         SECTION 9.5       Minimum Net Worth........................................................... 58
         SECTION 9.6       Additional Secured Debt..................................................... 58
         SECTION 9.7       Investment Grade Rating..................................................... 58

ARTICLE X        NEGATIVE COVENANTS.................................................................... 58
         SECTION 10.1.     Limitations on Debt......................................................... 58
         SECTION 10.2.     Limitations on Contingent Obligations....................................... 59
         SECTION 10.3.     Limitations on Liens........................................................ 59
         SECTION 10.4.     Limitations on Loans, Advances, Investments and
                           Acquisitions................................................................ 60
         SECTION 10.5.     Limitations on Mergers and Liquidation...................................... 61
         SECTION 10.6.     Limitations on Sale of Assets............................................... 61
         SECTION 10.7.     Limitations on Dividends and Distributions.................................. 62
         SECTION 10.8.     Transactions with Affiliates................................................ 62
         SECTION 10.9.     Certain Accounting Changes.................................................. 62
         SECTION 10.10.    Amendment to Sale Leaseback Documents....................................... 62

         SECTION 10.11.    Restrictions on Working Capital............................................. 63
         SECTION 10.12.    Restrictions on Use of Proceeds and Other Expenditures...................... 63
         SECTION 10.13.    Restrictive Agreements...................................................... 64
         SECTION 10.14.    Operating Leases............................................................ 64

ARTICLE XI        DEFAULT AND REMEDIES................................................................. 64
         SECTION 11.1.     Events of Default........................................................... 64
         SECTION 11.2.     Remedies.................................................................... 67
         SECTION 11.3.     Rights and Remedies Cumulative; Non-Waiver; Etc............................. 67

ARTICLE XII       THE ADMINISTRATIVE AGENT............................................................. 68
         SECTION 12.1.     Appointment................................................................. 68
         SECTION 12.2.     Delegation of Duties........................................................ 68
         SECTION 12.3.     Exculpatory Provisions...................................................... 68
         SECTION 12.4.     Reliance by the Administrative Agent........................................ 69
         SECTION 12.5.     Notice of Default........................................................... 69
         SECTION 12.6.     Non-Reliance on the Administrative Agent and
                           Other Lenders............................................................... 70
         SECTION 12.7.     Indemnification............................................................. 70
         SECTION 12.8.     The Administrative Agent in Its Individual Capacity......................... 71
         SECTION 12.9.     Resignation of the Administrative Agent; Successor
                           Administrative Agent........................................................ 71
         SECTION 12.10     The Co-Agent................................................................ 71

ARTICLE XIII      MISCELLANEOUS........................................................................ 72
         SECTION 13.1.     Notices..................................................................... 72
         SECTION 13.2.     Expenses; Indemnity......................................................... 73
         SECTION 13.3.     Set-off..................................................................... 74
         SECTION 13.4.     Governing Law............................................................... 74
         SECTION 13.5.     Consent to Jurisdiction..................................................... 74
         SECTION 13.6.     Binding Arbitration; Waiver of Jury Trial................................... 75
         SECTION 13.7.     Reversal of Payments........................................................ 76
         SECTION 13.8.     Accounting Matters.......................................................... 76
         SECTION 13.9.     Successors and Assigns; Participations...................................... 76
         SECTION 13.10.    Amendments, Waivers and Consents............................................ 79
         SECTION 13.11.    Performance of Duties....................................................... 80
         SECTION 13.12.    Joint and Several Liability; CCA Reit as Agent for
                           Borrowers................................................................... 80
         SECTION 13.13.    All Powers Coupled with Interest............................................ 80
         SECTION 13.14.    Survival of Indemnities..................................................... 80
         SECTION 13.15.    Titles and Captions......................................................... 80
         SECTION 13.16.    Severability of Provisions.................................................. 80
         SECTION 13.17.    Counterparts................................................................ 80
         SECTION 13.18.    Entire Agreement; Term of Agreement......................................... 81

Exhibit A-1       -        Form of Revolving Credit Note
Exhibit A-2       -        Form of Swingline Note
Exhibit B                  -       Form of Notice of Borrowing
Exhibit C                  -       Form of Notice of Prepayment
Exhibit D                  -       Form of Notice of Account Designation
Exhibit E                  -       Form of Notice of Conversion/
                                   Continuation
Exhibit F                  -       Form of Officer's Compliance Certificate
Exhibit G                  -       Form of Assignment and Acceptance
Exhibit H                  -       Form of Security Agreement
Exhibit I                  -       Form of Deed of Trust
Exhibit J                  -       Form Of Assignment of Lease

Schedule 1.1      -        Lenders and Commitments
Schedule 6.1(a)   -        Jurisdictions of Organization and Qualification
Schedule 6.1(b)   -        Capitalization
Schedule 6.1(h)   -        Environmental Matters
Schedule 6.1(i)   -        ERISA Plans
Schedule 6.1(l)   -        Material Contracts

CREDIT AGREEMENT (as amended, restated or otherwise modified, this "Agreement"), dated as of the 18th day of July, 1997, by and among CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("CCA REIT"), and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms hereof (collectively with CCA REIT, the "Borrowers"), the financial institutions who are or may become a party to this Agreement (the "Lenders"), and FIRST UNION NATIONAL BANK OF TENNESSEE, as administrative agent for the Lenders (the "Administrative Agent"), and SOUTHTRUST BANK, National Association, as Co-Agent.

STATEMENT OF PURPOSE

The Borrowers have requested, and the Lenders have agreed, to extend certain credit facilities to the Borrowers on the terms and conditions of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Definitions. The following terms when used in this Agreement shall have the meanings assigned to them below:

"Affiliate" means, with respect to any Person, any other Person (other than a Subsidiary) which directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person or any of its Subsidiaries. The term "control" means (a) the power to vote five percent (5%) or more of the securities or other equity interests of a Person having ordinary voting power, or (b) the possession, directly or indirectly, of any other power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

"Administrative Agent" means First Union in its capacity as Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 12.9.

"Administrative Agent's Office" means the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 13.1.

"Aggregate Commitment" means the aggregate amount of the Lenders' Commitments hereunder, as such amount may be reduced or modified at any time or from time to time

pursuant to the terms hereof. On the Closing Date, the Aggregate Commitment shall be One Hundred and Fifty Million Dollars ($150,000,000).

"Agreement" means this Credit Agreement, as amended, restated or otherwise modified.

"Annualized" means, with respect to any ratio set forth in Article VIII, that each financial term included in the calculation of such ratio shall be calculated by multiplying such financial term (a) for the quarter end immediately following the Closing Date, by four, (b) for the period of two consecutive fiscal quarters immediately following the Closing Date, by two and
(c) for the period of three consecutive fiscal quarters immediately following the Closing Date, by four-thirds.

"Applicable Law" means all applicable provisions of constitutions, statutes, laws, rules, treaties, regulations and orders of all Governmental Authorities and all orders and decrees of all courts and arbitrators.

"Applicable Margin" shall have the meaning assigned thereto in Section 4.1(c).

"Application" means an application, in the form specified by the Issuing Lender from time to time, requesting the Issuing Lender to issue a Letter of Credit.

"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 13.9.

"Assignments of Lease" means the collective reference to the assignments of lease executed by any Borrower in favor of the Administrative Agent, for the ratable benefit of itself and the Lenders, substantially in the form of Exhibit J hereto, each as amended, restated or otherwise modified.

"Available Commitment" means, as to any Lender at any time, an amount equal to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's Extensions of Credit.

"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate or the Federal Funds Rate.

"Base Rate Loan" means any Loan bearing interest at a rate based upon the Base Rate as provided in Section 4.1(a).

"Borrowers" means the collective reference to CCA REIT and any additional Subsidiary thereof joined as a Borrower hereunder pursuant to Section 8.16.

"Business Day" means (a) for all purposes other than as set forth in clause (b) below, any day other than a Saturday, Sunday or legal holiday on which banks in Charlotte, North Carolina and New York, New York are open for the conduct of their commercial banking business, and

(b) with respect to all notices and determinations in connection with, and payments of principal and interest on, any LIBOR Rate Loan, any day that is a Business Day described in clause (a) and that is also a day for trading by and between banks in Dollar deposits in the London interbank market.

"Capital Asset" means, with respect to the Borrowers and their Subsidiaries, any asset that should, in accordance with GAAP, be classified and accounted for as a capital asset on a Consolidated balance sheet of the Borrowers and their Subsidiaries.

"Capital Expenditure" means, with respect to the Borrowers and their Subsidiaries for any period, the aggregate cost of all Capital Assets acquired by the Borrowers and their Subsidiaries during such period, as determined in accordance with GAAP.

"Capital Lease" means, with respect to the Borrowers and their Subsidiaries, any lease of any property that should, in accordance with GAAP, be classified and accounted for as a capital lease on a Consolidated balance sheet of the Borrowers and their Subsidiaries.

"Cash Flow" means, for any period, the sum of (a) Funds From Operations less (b) Required Dividends less (c) Maintenance Capital Expenditures, in each case for such period. For purpose of determining compliance with Section 10.4(b) and Article IX for any quarter in which an acquisition of a Correctional Facility is to occur, Cash Flow shall be adjusted in a manner satisfactory to the Administrative Agent to include on a pro forma basis the projected first year Cash Flow of such Correctional Facility.

"CCA" means Corrections Corporation of America, a Tennessee corporation, and its successors and assigns.

"Change in Control" shall have the meaning assigned thereto in Section 11.1(i).

"Closing Date" means the date of this Agreement.

"Co-Agent" means SouthTrust Bank, National Association, in its capacity as Co-Agent.

"Code" means the Internal Revenue Code of 1986, and the rules and regulations thereunder, each as amended or supplemented from time to time.

"Commitment" means, as to any Lender, the obligation of such Lender to make Loans to and issue or participate in Letters of Credit issued for the account of any Borrower hereunder in an aggregate principal or face amount at any time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 1.1 hereto, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof.

"Commitment Percentage" means, as to any Lender at any time, the ratio of (a) the amount of the Commitment of such Lender to (b) the Aggregate Commitment of all of the Lenders.

"Consolidated" means, when used with reference to financial statements or financial statement items of the Borrowers and their Subsidiaries, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

"Contingent Obligation" means, with respect to the Borrowers and their Subsidiaries, without duplication, any obligation, contingent or otherwise, of any such Person pursuant to which such Person has directly or indirectly guaranteed any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement condition or otherwise) or (b) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, that the term Contingent Obligation shall not include endorsements for collection or deposit in the ordinary course of business.

"Correctional Facility" means any correctional or detention facility owned (or if the context requires to be acquired) by any Borrower, including, without limitation, any real property associated therewith.

"Credit Facility" means the collective reference to the Revolving Credit Facility and the L/C Facility.

"Debt" means, with respect to the Borrowers and their Subsidiaries at any date and without duplication, the sum of the following calculated in accordance with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money including but not limited to obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person, (b) all obligations to pay the deferred purchase price of property or services of any such Person, except trade payables arising in the ordinary course of business not more than ninety (90) days past due, (c) all obligations of any such Person as lessee under Capital Leases, (d) all Debt of any other Person secured by a Lien on any asset of any such Person, (e) all Contingent Obligations of any such Person, (f) all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, including without limitation any Reimbursement Obligation, and banker's acceptances issued for the account of any such Person, (g) all obligations to redeem, repurchase, exchange, defease or otherwise make payments in respect of capital stock or other securities of such Person and (h) all termination payments which would be due and payable by any such Person pursuant to a Hedging Agreement.

"Deeds of Trust" means the collective reference to the deeds of trust, mortgages or similar real property security instruments executed by any Borrower in favor of the Administrative Agent, for the ratable benefit of itself and the Lenders, substantially in the form of Exhibit I hereto, each as amended, restated or otherwise modified.

"Default" means any of the events specified in Section 11.1 which with the passage of time, the giving of notice or any other condition, would constitute an Event of Default.

"Dividends" means for any period all Required Dividends plus any other dividend or distribution paid by any Borrower with respect to its capital stock.

"Dollars" or "$" means, unless otherwise qualified, dollars in lawful currency of the United States.

"Duff & Phelps" means Duff & Phelps Credit Rating Co.

"Eligible Assignee" means, with respect to any assignment of the rights, interest and obligations of a Lender hereunder, a Person that is at the time of such assignment (a) a commercial bank organized under the laws of the United States or any state thereof, having combined capital and surplus in excess of $1,000,000,000, (b) a finance company, insurance company, investment bank or other financial institution which in the ordinary course of business extends credit of the type extended hereunder and that has total assets in excess of $3,000,000,000, (c) already a Lender hereunder (whether as an original party to this Agreement or as the assignee of another Lender), (d) the successor (whether by transfer of assets, merger or otherwise) to all or substantially all of the commercial lending business of the assigning Lender, or (e) any other Person that has been approved in writing as an Eligible Assignee by CCA REIT and the Administrative Agent.

"Employee Benefit Plan" means any employee benefit plan within the meaning of Section 3(3) of ERISA which (a) is maintained for employees of any Borrower or any ERISA Affiliate or (b) has at any time within the preceding six years been maintained for the employees of any Borrower or any current or former ERISA Affiliate.

"Environmental Laws" means any and all federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

"ERISA" means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder, each as amended or modified from time to time.

"ERISA Affiliate" means any Person who together with any Borrower is treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.

"Eurodollar Reserve Percentage" means, for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

"Event of Default" means any of the events specified in Section 11.1, provided that any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

"Extensions of Credit" means, as to any Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Loans made by such Lender then outstanding and (b) such Lender's Commitment Percentage of the L/C Obligations then outstanding.

"Excess Cash" means as of any date, the aggregate amount of unrestricted cash and cash equivalents set forth on a Consolidated balance sheet of the Borrowers and their Subsidiaries as of such date, in excess of $5,000,000.

"FDIC" means the Federal Deposit Insurance Corporation, or any successor thereto.

"Federal Funds Rate" means, the rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) representing the daily effective federal funds rate as quoted by the Administrative Agent and confirmed in Federal Reserve Board Statistical Release H.15 (519) or any successor or substitute publication selected by the Administrative Agent. If, for any reason, such rate is not available, then "Federal Funds Rate" shall mean a daily rate which is determined, in the opinion of the Administrative Agent, to be the rate at which federal funds are being offered for sale in the national federal funds market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be the same as the rate for the most immediate preceding Business Day.

"First Union" means First Union National Bank of Tennessee, a national banking association, and its successors.

"Fiscal Year" means the fiscal year of the Borrowers and their Subsidiaries ending on December 31.

"Fitch" means Fitch Investors Service, L.P.

"Fixed Asset Book Value" means, with respect to the Borrowers and their Subsidiaries at any date of determination, the book value of the fixed assets thereof as set forth on a

Consolidated balance sheet of the Borrowers and their Subsidiaries prepared in accordance with GAAP.

"Funds From Operations" means, with respect to the Borrowers and their Subsidiaries for any period, the following calculated on a Consolidated basis without duplication for such period in accordance with GAAP: (a) Net Income, plus (b) (to the extent deducted in the determination of Net Income), depreciation and amortization minus (c) interest income.

"GAAP" means generally accepted accounting principles, as recognized by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board, consistently applied and maintained on a consistent basis for the Borrowers and their Subsidiaries throughout the period indicated and consistent with the prior financial practice of the Borrowers and their Subsidiaries.

"Governmental Approvals" means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

"Governmental Authority" means any nation, province, state or political subdivision thereof, and any government or any Person exercising executive, legislative, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

"Hazardous Materials" means any substances or materials (a) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or emission or release of which requires a permit or license under any Environmental Law or other Governmental Approval, (e) which are deemed to constitute a nuisance, a trespass or pose a health or safety hazard to persons or neighboring properties, (f) which are materials consisting of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (g) which contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

"Hedging Agreement" means any agreement with respect to an interest rate swap, collar, cap, floor or a forward rate agreement or other agreement regarding the hedging of interest rate risk exposure executed in connection with hedging the interest rate exposure of any Borrower, and any confirming letter executed pursuant to such hedging agreement, all as amended or supplemented from time to time.

"Incarceration Agreement" means any agreement, as amended, restated or otherwise modified, pursuant to which a Governmental Authority has contracted to incarcerate, detain or otherwise house inmates, prisoners or other detainees of such Governmental Authority at a Correctional Facility.

"Initial Facilities" means the collective reference to the Houston Processing Center, the Laredo Processing Center, the Bridgeport Pre-Parole Transfer Facility, the Mineral Wells Pre-Parole Transfer Facility, the West Tennessee Detention Facility, the Leavenworth Detention Center, the Eloy Detention Center, the Central Arizona Detention Center and the T. Don Hutto Correctional Center, all of which Correctional Facilities shall be acquired by CCA REIT from CCA pursuant to the Sale Leaseback Documents.

"Interest Expense" means, with respect to the Borrowers and their Subsidiaries for any period, the gross interest expense (including without limitation, interest expense attributable to Capital Leases and all net obligations pursuant to Hedging Agreements) of the Borrowers and their Subsidiaries, determined for such period on a Consolidated basis in accordance with GAAP.

"Interest Period" shall have the meaning assigned thereto in Section 4.1(b).

"Investment Grade Rating" means a Senior Debt Rating of at least (a) BBB- by Standard & Poor's or (b) Baa3 by Moody's.

"Issuing Lender" means First Union in its capacity as issuer of any Letter of Credit, or any successor thereto.

"L/C Commitment" means Five Million Dollars ($5,000,000).

"L/C Facility" means the letter of credit facility established pursuant to Article III hereof.

"L/C Obligations" means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of all outstanding Reimbursement Obligations.

"L/C Participants" means the collective reference to all the Lenders other than the Issuing Lender.

"Lease" means the collective reference to the leases, each as amended, restated or otherwise modified, between any Borrower and any Private Counterparty or any Public Counterparty for the lease of any Correctional Facility; "Lease" means any of such leases.

"Lender" means each Person executing this Agreement as a Lender set forth on the signature pages hereto and each Person that hereafter becomes a party to this Agreement as a Lender pursuant to Section 13.9.

"Lending Office" means, with respect to any Lender, the office of such Lender maintaining such Lender's Commitment Percentage of the Loans.

"Letters of Credit" shall have the meaning assigned thereto in Section 3.1.

"LIBOR" means the rate for deposits in Dollars for a period equal to the Interest Period selected which appears on the Telerate Page 3750 at approximately 11:00 a.m. London time, two (2) Business Days prior to the commencement of the applicable Interest Period. If, for any reason, such rate is not available, then "LIBOR" shall mean the rate per annum at which, as determined by the Administrative Agent, Dollars in the amount of $5,000,000 are being offered to leading banks at approximately 11:00 a.m. London time, two (2) Business Days prior to the commencement of the applicable Interest Period for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the Interest Period selected.

"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the LIBOR Rate as provided in Section 4.1(a).

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset.

"Loans" means the collective reference to the Revolving Credit Loans and the Swingline Loans and "Loan" means any of such Loans.

"Loan Documents" means, collectively, this Agreement, the Notes, Security Documents, the Applications, the Letters of Credit, any Hedging Agreement executed by any Lender or any Affiliate of any Lender in connection with hedging the interest rate exposure of any Borrower under this Agreement and each other document, instrument and agreement executed and delivered by any Borrower, any Subsidiary thereof or their counsel in connection with this Agreement or otherwise referred to herein or contemplated hereby, all as may be amended, restated or otherwise modified.

"Maintenance Capital Expenditures" means, with respect to the Borrowers and their Subsidiaries for any period, the aggregate cost of maintaining any Capital Assets of the Borrowers and their Subsidiaries during such period, as determined in accordance with GAAP.

"Master Lease Agreement" means the master lease agreement, as amended, restated or otherwise modified, between CCA REIT and CCA pertaining to all Correctional Facilities leased from CCA REIT by CCA.

"Material Adverse Effect" means, with respect to any Borrower or any Subsidiary thereof, a material adverse effect on the properties, business, prospects, operations or condition (financial or otherwise) of any such Person, the ability of any such Person to perform its obligations under the Loan Documents, the Sale Leaseback Documents or any other material agreement of any Borrower, in each case to which it is a party, or the ability of the Administrative Agent or any Lender to enforce its respective rights and remedies under the Loan Documents.

"Material Contract" means (a) any contract or other agreement, written or oral, of any Borrower or any Subsidiary thereof involving monetary liability of or to any such Person in an amount in excess of $250,000 per annum, or (b) any other contract or agreement, written or oral, of any Borrower or any Subsidiary thereof, the failure of any party to comply with which could reasonably be expected to have a Material Adverse Effect.

"Moody's" means Moody's Investors Service, Inc., and its successors and assigns.

"Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or is accruing an obligation to make, contributions within the preceding six years.

"Net Cash Proceeds" means, as applicable, (a) with respect to any sale or other disposition of assets, the gross cash proceeds received by any Borrower or any Subsidiary thereof from such sale less the sum of (i) all income taxes and other taxes assessed by a Governmental Authority as a result of such sale and any other customary fees and expenses incurred in connection therewith and
(ii) the principal amount of, premium, if any, and interest on any Debt secured by a Lien on the asset (or a portion thereof) sold, which Debt is required to be and is repaid in connection with such sale, (b) with respect to any offering of equity securities or issuance of Debt, the gross cash proceeds received by any Borrower or any Subsidiary thereof less all legal, underwriting and other reasonable fees and expenses incurred in connection therewith and (c) with respect to any payment under an insurance policy or in connection with a condemnation proceeding, the amount of cash proceeds received by any Borrower or any Subsidiary thereof from an insurance company or Governmental Authority net of all reasonable expenses of collection.

"Net Income" means, with respect to the Borrowers and their Subsidiaries, the Consolidated net income (or loss) of the Borrowers and their Subsidiaries for such period

determined in accordance with GAAP; provided, that there shall be excluded from net income (or loss): (a) the income (or loss) of any Person (other than a Subsidiary of such Person) in which such Person has an ownership interest unless received by such Person in a cash distribution, (b) the income (or loss) of any Person accrued prior to the date it became a Subsidiary of such first Person or is merged into or consolidated with such first Person, and (c) to the extent not excluded from Net Income by clauses (a) and (b) above, any after-tax extraordinary gains.

"Net Operating Income" means, for any period, the sum of the following for such period (a) Funds From Operations plus (b) Interest Expense.

"Net Worth" means, with respect to any Person, at any date, the stockholders' equity (including capital stock, additional paid-in capital and retained earnings, after deducting treasury stock) of such Person on such date determined in accordance with GAAP.

"Notes" means the collective reference to the Revolving Credit Notes and the Swingline Notes and "Note" means any of such Notes.

"Notice of Account Designation" shall have the meaning assigned thereto in Section 2.3(b).

"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.3(a).

"Notice of Conversion/Continuation" shall have the meaning assigned thereto in Section 4.2.

"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.4(d).

"Obligations" means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans, (b) the L/C Obligations, (c) all payment and other obligations owing by any Borrower to any Lender (or its Affiliate) or the Administrative Agent under any Hedging Agreement required pursuant to Section 8.15 to which a Lender (or its Affiliate) is a party and (d) all other fees and commissions (including attorney's fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by any Borrower to the Lenders or the Administrative Agent, of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note, and whether or not for the payment of money, under or in respect of this Agreement, any Note, any Letter of Credit or any of the other Loan Documents.

"Officer's Compliance Certificate" shall have the meaning assigned thereto in Section 7.2.

"Offering" means the issuance of common stock of CCA REIT in a fully underwritten initial public offering.

"Option Agreements" means the collective reference to the option agreements, each as amended, restated or otherwise modified, between CCA REIT and CCA granting CCA REIT the exclusive option to obtain any or all of the Option Facilities.

"Option Facilities" means the collective reference to the Northeast Ohio Correctional Center, the Torrance County Detention Facility, the Southern Colorado Correctional Facility, the North Fork Correctional Facility and the Whiteville Correctional Facility which CCA REIT shall have the option of acquiring from CCA pursuant to the Option Agreements.

"Other Taxes" shall have the meaning assigned thereto in Section 4.11(b).

"PBGC" means the Pension Benefit Guaranty Corporation or any successor agency.

"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of any Borrower or any ERISA Affiliates or (b) has at any time within the preceding six years been maintained for the employees of any Borrower or any of their current or former ERISA Affiliates.

"Person" means an individual, corporation, partnership, limited liability company, association, trust, business trust, joint venture, joint stock company, pool, syndicate, sole proprietorship, unincorporated organization, Governmental Authority or any other form of entity or group thereof.

"Preferred Stock" means any class of capital stock the terms of which contain a preference over common stock in the payment of dividends or the liquidation of assets, or is otherwise designated as preferred.

"Prime Rate" means, at any time, the rate of interest per annum publicly announced from time to time by First Union as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in the Prime Rate occurs. The parties hereto acknowledge that the rate announced publicly by First Union as its Prime Rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

"Private Counterparty" means any counterparty to a Lease that is not a Public Counterparty.

"Public Counterparty" means any Governmental Authority that is a counterparty to a Lease.

"Purchase Agreements" means the collective reference to the Agreement of Sale and Purchase, each as amended, restated or otherwise modified, between CCA REIT and CCA for the purchase of the Initial Facilities.

"Register" shall have the meaning assigned thereto in Section 13.9(d).

"Reimbursement Obligation" means the obligation of the Borrowers to reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit.

"Required Dividends" means for any period all dividends required to be distributed by CCA REIT under the Code (and any other Applicable Law) with respect to its capital stock to maintain its status as a qualified real estate investment trust.

"Required Lenders" means, at any date, any combination of holders of at least sixty-six and two-thirds percent (66-2/3%) of the aggregate Extensions of Credit, or if no Extensions of Credit are outstanding, any combination of Lenders whose Commitment Percentages aggregate at least sixty-six and two-thirds percent (66-2/3%).

"Revolver Secured Cash Flow" means, for any period, the sum of the following for such period (a) Net Operating Income less (b) Maintenance Capital Expenditures, in each case with respect to properties on which there is a perfected first priority Lien in favor of the Administrative Agent for the ratable benefit of itself and the Lenders.

"Revolving Credit Facility" means the revolving credit facility established pursuant to Article II hereof.

"Revolving Credit Loan" means any revolving loan made to any Borrower pursuant to Section 2.1, and all such Loans collectively as the context requires.

"Revolving Credit Notes" means the separate Revolving Credit Notes made by the Borrowers payable to the order of each Lender, substantially in the form of Exhibit A-1 hereto, evidencing the Revolving Credit Facility, and any amendments and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part; "Revolving Credit Note" means any of such Notes.

"Revolving Termination Date" means the earliest of the dates referred to in Section 2.7.

"Right to Purchase Agreement" means the right to purchase agreement, as amended, restated or otherwise modified, between CCA REIT and CCA granting CCA REIT an option to acquire, at fair market value, any correctional or detention facility acquired or developed and owned by CCA at any time hereafter, for a period of three (3) years after the date on which CCA first receives inmates at such facility.

"Sale Leaseback Documents" means the collective reference to the Leases for the Initial Facilities and the Option Facilities, the Master Lease, the Purchase Agreements, the Option

Agreements, the Right to Purchase Agreement, the Trade Name Use Agreement and each other document executed by any Borrower pertaining to or evidencing any transaction relating to the sale of correctional or detention facilities by CCA to any Borrower and subsequent leasing of such facilities by any Borrower to CCA.

"Sale Leaseback Transactions" means the collective reference to the transactions contemplated, referred to or evidenced by the Sale Leaseback Documents and as described in the S-11 Registration Statement (the "Registration Statement"), as amended, restated or otherwise modified, filed with the Securities and Exchange Commission on April 24, 1997.

"Security Agreement" means the reference to the security agreement executed by the Borrowers and their Subsidiaries in favor of the Administrative Agent, for the ratable benefit of itself and the Lenders, substantially in the form of Exhibit H hereto, as amended, restated or otherwise modified.

"Security Documents" means the collective reference to the Assignments of Lease, the Deeds of Trust, the Security Agreement and each other agreement or writing pursuant to which any Borrower or any Subsidiary thereof pledges or grants a security interest in any property or assets securing the Obligations or any such Person guaranties the payment and/or performance of the Obligations.

"Senior Debt Rating" means the rating, as determined by either Moody's or Standard & Poor's, of CCA REIT's senior unsecured non-credit enhanced long term Debt; provided that, as long as the Borrowers lease all Correctional Facilities to CCA, the applicable rating of CCA's senior unsecured non-credit enhanced long term debt may be substituted in lieu thereof.

"Standard & Poor's" means Standard & Poor's Ratings Group, a Division of McGraw-Hill Corporation, and its successors and assigns.

"Solvent" means, as to the Borrowers and their Subsidiaries on a particular date, that any such Person (a) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage and is able to pay its debts as they mature, (b) owns property having a value, both at fair valuation and at present fair saleable value, greater than the amount required to pay its probable liabilities (including contingencies), and (c) does not believe that it will incur debts or liabilities beyond its ability to pay such debts or liabilities as they mature.

"Subsidiary" means as to any Person, any corporation, partnership or other entity, domiciled within the United States, of which more than fifty percent (50%) of the outstanding capital stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other managers of such corporation, partnership or other entity is at the time, directly or indirectly, owned by or the management is otherwise controlled by such Person (irrespective of whether, at the time, capital stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any

contingency). Unless otherwise qualified references to "Subsidiary" or "Subsidiaries" herein shall refer to those of the Borrowers.

"Swingline Commitment" means Five Million Dollars ($5,000,000).

"Swingline Lender" means First Union in its capacity as swingline lender hereunder.

"Swingline Loan" means any swingline loan made by the Swingline Lender to any Borrower pursuant to Section 2.2, and all such Loans collectively as the context requires.

"Swingline Note" means the Swingline Note made by the Borrowers payable to the order of the Swingline Lender, substantially in the form of Exhibit A-2 hereto, evidencing the Swingline Loans, and any amendments and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

"Swingline Termination Date" means the earlier to occur of (a) the resignation of First Union as Administrative Agent in accordance with Section 12.9 and (b) the Revolving Termination Date.

"Taxes" shall have the meaning assigned thereto in Section 4.11(a).

"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA, or (b) the withdrawal of any Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA, or (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, or (f) the partial or complete withdrawal of any Borrower or any ERISA Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.

"Total Liabilities" means, at any date, all liabilities, including without limitation all Contingent Obligations and all obligations relative to the face amount of Letters of Credit, whether or not drawn, any banker's acceptances and Reimbursement Obligations, of the Borrowers and their Subsidiaries, calculated on a Consolidated basis without duplication in accordance with GAAP.

"Total Capitalization" means, at any date, the sum of (a) Total Liabilities plus (b) Net Worth of the Borrowers.

"Total Funded Debt" means, with respect to the Borrowers and their Subsidiaries at any date and without duplication, the sum of the following calculated in accordance with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money including but not limited to obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person, (b) all obligations to pay the deferred purchase price of property or services of any such Person, except trade payables arising in the ordinary course of business not more than ninety (90) days past due, (c) all obligations of any such Person as lessee under Capital Leases, (d) all Debt of any other Person secured by a Lien on any asset of any such Person, (e) all Contingent Obligations of any such Person, (f) all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn and banker's acceptances issued for the account of any such Person.

"Total Secured Debt" means the aggregate principal amount of Total Funded Debt secured by a Lien on any assets of any Borrower or any Subsidiary thereof.

"Total Unsecured Debt" means the aggregate principal amount of Total Funded Debt not secured by a Lien on any asset of any Borrower or any Subsidiary thereof.

"Trade Name Use Agreement" means the trade name use agreement, as amended, restated or otherwise modified, between CCA REIT and CCA, granting the Borrowers the right to use the trade name "CCA" as part of their respective names.

"Uniform Customs" the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500.

"UCC" means the Uniform Commercial Code as in effect in the State of North Carolina.

"United States" means the United States of America.

"Unleveraged Cash Flow" means, for any period, the sum of the following for such period (a) Net Operating Income less (b) Maintenance Capital Expenditures, in each case with respect to Correctional Facilities which are not subject to any Lien.

"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary all of the shares of capital stock or other ownership interests of which are, directly or indirectly, owned or controlled by any Borrower and/or one or more of the Wholly-Owned Subsidiaries thereof.

SECTION 1.2. General. Unless otherwise specified, a reference in this Agreement to a particular section, subsection, Schedule or Exhibit is a reference to that section, subsection, Schedule or Exhibit of this Agreement. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns

stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and the neuter. Any reference herein to "Charlotte time" shall refer to the applicable time of day in Charlotte, North Carolina.

SECTION 1.3. Other Definitions and Provisions.

(a) Use of Capitalized Terms. Unless otherwise defined therein, all capitalized terms defined in this Agreement shall have the defined meanings when used in this Agreement, the Notes and the other Loan Documents or any certificate, report or other document made or delivered pursuant to this Agreement.

(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

ARTICLE II

REVOLVING CREDIT FACILITY

SECTION 2.1. Revolving Credit Loans. Subject to the terms and conditions of this Agreement, each Lender severally agrees to make Revolving Credit Loans to the Borrowers on a joint and several basis from time to time from the Closing Date through, but not including, the Revolving Termination Date as requested by CCA REIT on behalf of the Borrowers in accordance with the terms of Section 2.3; provided, that (a) the aggregate principal amount of all outstanding Revolving Credit Loans (after giving effect to any amount requested) shall not exceed the Aggregate Commitment less the sum of all outstanding Swingline Loans and the L/C Obligations and (b) the principal amount of outstanding Revolving Credit Loans from any Lender to the Borrowers shall not at any time exceed such Lender's Commitment less such Lender's Commitment Percentage of the L/C Obligations and Swingline Loans then outstanding. Each Revolving Credit Loan by a Lender shall be in a principal amount equal to such Lender's Commitment Percentage of the aggregate principal amount of Revolving Credit Loans requested on such occasion. Subject to the terms and conditions hereof, the Borrowers may borrow, repay and reborrow Revolving Credit Loans hereunder until the Revolving Termination Date.

SECTION 2.2. Swingline Loans.

(a) Availability. Subject to the terms and conditions of this Agreement, the Swingline Lender agrees to make Swingline Loans to the Borrowers from time to time from the Closing Date through, but not including, the Swingline Termination Date; provided, that the aggregate principal amount of all outstanding Swingline Loans (after giving effect to any amount requested), shall not exceed the lesser of (i) the Aggregate Commitment less the sum of all outstanding Revolving Credit Loans and the L/C Obligations and (ii) the Swingline Commitment.

(b) Refunding.

(i) Swingline Loans (except with respect to any Swingline Loan extended after the occurrence and during the continuance of an Event of Default of which the Administrative Agent has received actual notice and which such Event of Default has not been waived by the Required Lenders or the Lenders, as applicable) shall be refunded by the Lenders on demand by the Swingline Lender. Such refundings shall be made by the Lenders in accordance with their respective Commitment Percentages and shall thereafter be reflected as Revolving Credit Loans of the Lenders on the books and records of the Administrative Agent. Each Lender shall fund its respective Commitment Percentage of Revolving Credit Loans as required to repay Swingline Loans outstanding to the Swingline Lender upon demand by the Swingline Lender but in no event later than 2:00 p.m. (Charlotte time) on the next succeeding Business Day after such demand is made. No Lender's obligation to fund its respective Commitment Percentage of a Swingline Loan shall be affected by any other Lender's failure to fund its Commitment Percentage of a Swingline Loan, nor shall any Lender's Commitment Percentage be increased as a result of any such failure of any other Lender to fund its Commitment Percentage.

(ii) The Borrowers shall pay to the Swingline Lender on demand the amount of such Swingline Loans to the extent amounts received from the Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. In addition, each Borrower hereby authorizes the Administrative Agent to charge any account maintained with the Swingline Lender (up to the amount available therein) in order to immediately pay the Swingline Lender the amount of such Swingline Loans to the extent amounts received from the Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. If any portion of any such amount paid to the Swingline Lender shall be recovered by or on behalf of the Borrowers from the Swingline Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Lenders in accordance with their respective Commitment Percentages (unless the amounts so recovered by or on behalf of the Borrowers pertain to a Swingline Loan extended after the occurrence and during the continuance of an Event of Default of which the Administrative Agent has received actual notice and which such Event of Default has not been waived by the Required Lenders or the Lenders, as applicable).

(iii) Each Lender acknowledges and agrees that its obligation to refund Swingline Loans (except any Swingline Loan extended after the occurrence and during the continuance of an Event of Default which has not been waived by the Required Lenders or the Lenders, as applicable) in accordance with the terms of this Section 2.2 is absolute and unconditional and shall not be affected by any circumstance whatsoever; provided, that if prior to the refunding of any outstanding Swingline Loans pursuant to this Section 2.2, one of the events described in Section 11.1(j) or (k) shall have occurred, each Lender will, on the date the applicable Revolving Credit Loan would have been made, purchase an undivided participating interest in the Swingline Loan to be refunded in an amount equal to its Commitment Percentage of the aggregate amount of such Swingline Loan. Each Lender will immediately transfer to the Swingline Lender, in immediately available funds, the amount of its participation and upon

receipt thereof the Swingline Lender will deliver to such Lender a certificate evidencing such participation dated the date of receipt of such funds and for such amount. Whenever, at any time after the Swingline Lender has received from any Lender such Lender's participating interest in a Swingline Loan, the Swingline Lender receives any payment on account thereof, the Swingline Lender will distribute to such Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's participating interest was outstanding and funded).

SECTION 2.3. Procedure for Advances of Revolving Credit and Swingline Loans.

(a) Requests for Borrowing. CCA REIT shall give the Administrative Agent irrevocable prior written notice in the form attached hereto as Exhibit B (a "Notice of Borrowing") not later than 12:00 noon (Charlotte time) (i) at least one Business Day before each Base Rate Loan (other than a Swingline Loan),
(ii) on the same Business Day as each Swingline Loan and (iii) at least three Business Days before each LIBOR Rate Loan, of its intention to borrow, specifying (A) the date of such borrowing, which shall be a Business Day, (B) the amount of such borrowing, which shall be in the full amount of the aggregate Available Commitment of the Lenders, or, if less, shall be in a minimum principal amount of $1,000,000 or an integral multiple of $100,000 in excess thereof for Base Rate Loans, a minimum principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof for LIBOR Rate Loans and a minimum principal amount of $100,000 or an integral multiple of $100,000 in excess thereof for Swingline Loans, (C) whether such Loan is to be a Revolving Credit Loan or a Swingline Loan, (D) in the case of a Revolving Credit Loan, whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto. Notices received after 12:00 noon (Charlotte time) shall be deemed received on the next Business Day. The Administrative Agent shall promptly notify the Lenders of each Notice of Borrowing with respect to a Revolving Credit Loan.

(b) Disbursement of Revolving Credit and Swingline Loans. Not later than 2:00 p.m. (Charlotte time) on the proposed borrowing date, (i) each Lender will make available to the Administrative Agent, for the account of the Borrowers, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, such Lender's Commitment Percentage of the Revolving Credit Loans to be made on such borrowing date and (ii) the Swingline Lender will make available to the Administrative Agent, for the account of the Borrowers, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, the Swingline Loans to be made to the Borrower on such borrowing date. The Borrowers hereby irrevocably authorize the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section 2.3 in immediately available funds by crediting or wiring such proceeds to the deposit account of the Borrowers identified on the most recent Notice of Account Designation substantially in the form of Exhibit D (a "Notice of Account Designation") or as otherwise agreed upon by CCA REIT and the Administrative Agent from time to time. Subject to
Section 4.7 hereof, the Administrative Agent shall not be obligated to disburse the proceeds of any Revolving Credit Loan requested pursuant to this Section 2.3 to the extent that any Lender has not made available to the Administrative Agent its

Commitment Percentage of such Loan. Revolving Credit Loans to be made for the purpose of refunding Swingline Loans shall be made by the Lenders as provided in
Section 2.2(b) hereof.

SECTION 2.4. Repayment of Loans.

(a) Repayment on the Termination Date. The Borrowers shall repay the outstanding principal amount of (i) all Revolving Credit Loans on the Revolving Termination Date, if not sooner repaid, and (ii) all Swingline Loans in accordance with Section 2.2(b), together, in each such case, with all accrued but unpaid interest thereon.

(b) Mandatory Repayment of Excess Loans. If at any time the outstanding principal amount of all Loans plus the L/C Obligations exceeds the Aggregate Commitment, the Borrowers shall repay immediately upon notice from the Administrative Agent, by payment to the Administrative Agent for the account of the Lenders, Extensions of Credit in an amount equal to such excess with each such repayment applied first to the principal amount of outstanding Swingline Loans, second to the principal amount of outstanding Revolving Credit Loans, and third, with respect to any Letters of Credit then outstanding, a payment of cash collateral into a cash collateral account opened by the Borrowers with the Administrative Agent for the benefit of the Lenders (such cash collateral to be applied in accordance with Section 11.2(b)). Each such repayment shall be accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

(c) Other Mandatory Repayments. The Borrowers shall also be required to make mandatory repayments of the Loans:

(i) with the Net Cash Proceeds received from the sale of any Correctional Facility to CCA and from the refinancing of Debt of the Borrowers relating to any Correctional Facility, in each case which results in a corresponding release of any Lien of the Administrative Agent for the ratable benefit of itself or the Lenders pursuant to Section 2.9; and

(ii) with respect to the Net Cash Proceeds arising from a payment under an insurance policy or in connection with a condemnation proceeding, to the extent required by the applicable Deed of Trust.

Each such repayment shall be made within three (3) Business Days of receipt of the applicable Net Cash Proceeds and shall be applied first to the principal amount of outstanding Swingline Loans and second to the principal amount of outstanding Revolving Credit Loans. Each such repayment shall be accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

(d) Optional Repayments. The Borrowers may at any time and from time to time repay the Revolving Credit Loans, in whole or in part, by providing irrevocable prior written notice, in the form attached hereto as Exhibit C (a "Notice of Prepayment"), to the

Administrative Agent not later than 12:00 noon (Charlotte time) at least one (1) Business Day prior to such repayment with respect to LIBOR Rate Loans repaid at the maturity of such LIBOR Rate Loans, three (3) Business Days prior to such repayment with respect to any other LIBOR Rate Loans and one (1) Business Day prior to such repayment with respect to Base Rate Loans, specifying the date and amount of repayment and whether the repayment is of LIBOR Rate Loans (and if so, which LIBOR Rate Loans), Base Rate Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender. If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice. Partial repayments shall be in a minimum principal amount of $1,000,000 or an integral multiple of $100,000 in excess thereof for Base Rate Loans, a minimum principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof for LIBOR Rate Loans and a minimum principal amount of $100,000 or an integral multiple of $100,000 in excess thereof for Swingline Loans. Each such repayment shall be accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

(e) Limitation on Repayment of LIBOR Rate Loans. Notwithstanding the provisions of Section 2.4(d), the Borrowers may not repay any LIBOR Rate Loan on any day other than on the last day of the Interest Period applicable thereto unless such repayment is accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

SECTION 2.5. Notes.

(a) Revolving Credit Notes. Each Lender's Revolving Credit Loans and the obligation of the Borrowers to repay such Revolving Credit Loans shall be evidenced by a Revolving Credit Note executed by the Borrowers payable to the order of such Lender representing the Borrowers' obligation to pay such Lender's Commitment or, if less, the aggregate unpaid principal amount of all Revolving Credit Loans made and to be made by such Lender to the Borrowers hereunder, plus interest and all other fees, charges and other amounts due thereon. Each Revolving Credit Note shall be dated the date hereof and shall bear interest on the unpaid principal amount thereof at the applicable interest rate per annum specified in Section 4.1.

(b) Swingline Notes. The Swingline Loans and the obligation of the Borrowers to repay such Swingline Loans shall be evidenced by a Swingline Note executed by the Borrowers payable to the order of the Swingline Lender representing the Borrowers' obligation to pay the Swingline Lender's Swingline Commitment or, if less, the aggregate unpaid principal amount of all Swingline Loans made by the Swingline Lender to the Borrowers hereunder, plus interest on such principal amounts and all other fees, charges and other amounts due thereon. The Swingline Note shall be dated the date hereof and shall bear interest on the unpaid principal amount thereof at the applicable interest rate per annum specified in Section 4.1.

SECTION 2.6. Permanent Reduction of the Aggregate Commitment.

(a) The Borrowers shall have the right at any time and from time to time, upon at least five (5) Business Days prior written notice to the Administrative Agent, to permanently reduce, in whole at any time or in part from time to time, without premium or penalty, the Aggregate Commitment in a minimum principal amount not less than $5,000,000 or any whole multiple of $1,000,000 in excess thereof.

(b) Each permanent reduction permitted pursuant to this Section 2.6 shall be accompanied by a payment of principal (and with respect to L/C Obligations, furnishing of cash collateral) sufficient to reduce the aggregate outstanding Extensions of Credit of the Lenders after such reduction to the Aggregate Commitment as so reduced. Any reduction of the Aggregate Commitment to zero shall be accompanied by payment of all outstanding Obligations (and furnishing of cash collateral satisfactory to the Administrative Agent for all L/C Obligations) and, if such reduction is permanent, termination of the Commitments and Credit Facility. Such cash collateral shall be applied in accordance with Section 11.2(b). If the reduction of the Aggregate Commitment requires the repayment of any LIBOR Rate Loan, such reduction may be made only on the last day of the then current Interest Period applicable thereto unless such repayment is accompanied by any amount required to be paid pursuant to
Section 4.9 hereof.

SECTION 2.7. Revolving Termination Date. The Credit Facility (subject to Section 2.2(a) with respect to Swingline Loans) shall terminate on the earliest of (a) July 18, 2000 (b) the date of termination by the Borrowers pursuant to Section 2.6(a), and (c) the date of termination by the Administrative Agent on behalf of the Lenders pursuant to Section 11.2(a); provided, that not earlier than the ninetieth (90th) day and not later than the sixtieth (60th) day prior to each of the first and second anniversaries of the Closing Date (each, an "Extension Date"), CCA REIT may, by written notice (an "Extension Request") given to the Administrative Agent, request that the date set forth in clause (a) above be extended in each such instance to a date that is one (1) year after such date then in effect. The Administrative Agent shall promptly advise each Lender of its receipt of any Extension Request and furnish each Lender with a copy thereof. Each Lender may, in its sole discretion, consent to a requested extension by giving written notice thereof to the Administrative Agent not later than the Business Day (the "Extension Confirmation Date") immediately preceding the date which is thirty (30) days after receipt of the Extension Request. No Lender shall be under any obligation or commitment to extend such date and no such obligation or commitment on the part of any Lender shall be inferred from the provisions of this Section 2.7. Failure on the part of any Lender to respond to an Extension Request by the applicable Extension Confirmation Date shall be deemed to be a denial of such request by such Lender. The requested extension shall not be granted unless Lenders holding Commitments aggregating at least 80% of the Aggregate Commitment as of the date the Extension Request is given shall have consented in writing to such extension. If Lenders holding Commitments aggregating less than 100% but equal to or greater than 80% of such Aggregate Commitment so consent to such an extension, CCA REIT may elect by written notice to the Administrative Agent and Lenders to (i) continue the Credit Facility for such additional period with an Aggregate Commitment equal to the then effective Aggregate Commitment less the total Commitments of Lenders who have not consented to such an

extension ("Non-Consenting Lenders") or (ii) require any such Non-Consenting Lender to transfer and assign without recourse (in accordance with the provisions of Section 13.9) its Commitment and other interests, rights and obligations under this Agreement to an Eligible Assignee, which shall assume such obligations; provided that (A) no such assignment shall conflict with any Applicable Law, (B) such assignment shall be at the expense of the Borrowers and
(C) the purchase price to be paid to such Non-Consenting Lender shall be an amount equal to the outstanding principal amount of Loans of such Non-Consenting Lender plus all interest accrued and unpaid thereon and all other amounts owing to such Non-Consenting Lender hereunder. Promptly following the applicable Extension Confirmation Date and in any event within five (5) Business Days, the Administrative Agent shall provide notice to CCA REIT in writing as to whether the requested extension has been granted and, if applicable, the list of Non-Consenting Lenders (an "Extension Confirmation Notice"). If granted, such extension shall become effective with respect to each Lender consenting thereto pursuant to the terms hereof upon the date of issuance of such Extension Confirmation Notice. The Administrative Agent shall promptly thereafter provide a copy of such Extension Confirmation Notice to each Lender.

SECTION 2.8. Use of Proceeds. Subject to Sections 10.11 and 10.12, the Borrowers shall use the proceeds of the Loans (a) to fund the acquisition of Correctional Facilities, (b) to fund construction and further development of Correctional Facilities and (c) for working capital and general corporate requirements of the Borrowers and their Subsidiaries, including the payment of certain fees and expenses incurred in connection with the transactions.

SECTION 2.9. Release of Security. Upon (i) the sale of any Correctional Facility to CCA permitted hereunder, or (ii) the refinancing of any Debt relating to any Correctional Facility permitted hereunder, the Liens of the Administrative Agent for the ratable benefit of itself and the Lenders arising under the Security Document relating to the specific assets subject to such sale or refinancing, shall be deemed released and at the expense of the Borrowers the Administrative Agent and Lenders shall execute all release documentation reasonably requested and delivered by the Borrowers in order to release such Liens; provided that, (i) the aggregate proceeds received in connection with such refinancing or sale are the greater of (A) the fair market value, as determined by the Independent Committee of the Board of Trustees of CCA REIT, of such Correctional Facility and (B) the amount equal to seventy five percent (75%) of the initial purchase price of such Correctional Facility plus the aggregate amount of all Capital Expenditures made by the Borrowers with respect to such Correctional Facility and (ii) the Net Cash Proceeds of such refinancing or sale are applied to reduce outstanding Extensions of Credit in the manner set forth in Section 2.4(c).

SECTION 2.10. Increase In Aggregate Commitment; Additional Lenders. The Aggregate Commitment may be increased and financial institutions added as Lenders hereunder within forty-five (45) days after receipt by the Administrative Agent of a written request therefor from CCA REIT on behalf of the Borrowers; provided that (a) no Default or Event of Default exists at the time of such request or the effective date of the amendment giving effect to such request, (b) each Lender approves (in its sole discretion) and executes such amendment and (c)

any increase in the Aggregate Commitment shall first be offered to Lenders party hereto at the time of such written request before any such offer is made to any financial institution.

ARTICLE III

LETTER OF CREDIT FACILITY

SECTION 3.1. L/C Commitment. Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Lenders set forth in Section 3.4(a), agrees to issue standby letters of credit ("Letters of Credit") for the account of the Borrowers on any Business Day from the Closing Date through but not including the Revolving Termination Date in such form as may be approved from time to time by the Issuing Lender; provided, that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (a) the L/C Obligations would exceed the L/C Commitment or (b) the Available Commitment of any Lender would be less than zero. Each Letter of Credit shall (i) be denominated in Dollars in a minimum amount of $250,000, (ii) be a standby letter of credit issued to support obligations of any Borrower or any of Subsidiary thereof, contingent or otherwise, incurred in the ordinary course of business, (iii) expire on a date satisfactory to the Issuing Lender, which date shall be no later than the Revolving Termination Date and (iv) be subject to the Uniform Customs and, to the extent not inconsistent therewith, the laws of the State of North Carolina. The Issuing Lender shall not at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any Applicable Law. References herein to "issue" and derivations thereof with respect to Letters of Credit shall also include extensions or modifications of any existing Letters of Credit, unless the context otherwise requires.

SECTION 3.2. Procedure for Issuance of Letters of Credit. The Borrowers may from time to time request that the Issuing Lender issue a Letter of Credit by delivering to the Issuing Lender at the Administrative Agent's Office an Application therefor, completed to the satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may request. Upon receipt of any Application, the Issuing Lender shall process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall, subject to Section 3.1 and Article V hereof, promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the Borrowers. The Issuing Lender shall furnish to CCA REIT a copy of such Letter of Credit and furnish to each Lender a copy of such Letter of Credit and the amount of each Lender's participation therein pursuant to Section 3.4(a), all promptly following the issuance of such Letter of Credit.

SECTION 3.3. Commissions and Other Charges.

(a) The Borrowers shall pay to the Administrative Agent, for the account of the Issuing Lender and the L/C Participants, a letter of credit fee with respect to each Letter of Credit in an amount equal to the product of (i) a per annum fee equal to the Applicable Margin in effect with respect to LIBOR Rate Loans as set forth in Section 4.1(c) and (ii) the face amount of such Letter of Credit on the corresponding payment date (or if sooner, the termination date of the Letter of Credit). Such fee shall be payable quarterly in arrears on the Business Day next succeeding the last Business Day of each calendar quarter and on the Revolving Termination Date. The Administrative Agent shall, promptly following its receipt thereof, distribute to the Issuing Lender and L/C Participants all commissions received by the Administrative Agent in accordance with their respective Commitment Percentages.

(b) The Borrowers shall pay to the Issuing Lender a fronting fee with respect to each Letter of Credit in an amount equal to the product of (i) 0.125% (on a per annum basis) and (ii) the face amount of such Letter of Credit. Such fee shall be payable quarterly in arrears on the Business Day next succeeding the last Business Day of each calendar quarter as long as such Letter of Credit is outstanding.

(c) In addition to the foregoing fees, the Borrowers shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit.

SECTION 3.4. L/C Participations.

(a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Commitment Percentage in the Issuing Lender's obligations and rights under each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrowers in accordance with the terms of this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at the Issuing Lender's address for notices specified herein an amount equal to such L/C Participant's Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed and such payments shall thereafter be reflected as Extensions of Credit of the Lenders on the books and records of the Administrative Agent.

(b) Upon becoming aware of any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit, the Issuing Lender shall notify

each L/C Participant of the amount and due date of such required payment and such L/C Participant shall pay to the Issuing Lender the amount specified on the applicable due date. If any such amount is paid to the Issuing Lender after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand, in addition to such amount, the product of (i) such amount, times
(ii) the daily average Federal Funds Rate as determined by the Administrative Agent during the period from and including the date such payment is due to the date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. A certificate of the Issuing Lender with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. With respect to payment to the Issuing Lender of the unreimbursed amounts described in this Section 3.4(b), if the L/C Participants receive notice that any such payment is due (A) prior to 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due on the following Business Day.

(c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its Commitment Percentage of such payment in accordance with this Section 3.4, the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrowers or otherwise), or any payment of interest on account thereof, the Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided, that in the event that any such payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

SECTION 3.5. Reimbursement Obligation of the Borrowers. The Borrowers agree to reimburse the Issuing Lender on each date on which the Issuing Lender notifies CCA REIT of the date and amount of a draft paid under any Letter of Credit for the amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs or expenses incurred by the Issuing Lender in connection with such payment. Each such payment shall be made to the Issuing Lender at its address for notices specified herein in lawful money of the United States and in immediately available funds. Interest shall be payable on any and all amounts remaining unpaid by the Borrowers under this Article III from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full at the rate which would be payable on any outstanding Base Rate Loans which were then overdue. If the Borrowers fail to timely reimburse the Issuing Lender on the date CCA REIT receives the notice referred to in this Section 3.5, the Borrowers shall be deemed to have timely given a Notice of Borrowing hereunder to the Administrative Agent requesting the Lenders to make a Base Rate Loan on such date in an amount equal to the amount of such drawing and, subject to the satisfaction or waiver of the conditions precedent specified in Article V, the Lenders shall make Base Rate Loans in such amount, the proceeds of which shall be applied to reimburse the Issuing Lender for the amount of the related drawing and costs and expenses.

SECTION 3.6. Obligations Absolute. The Borrowers' obligations under this Article III (including without limitation the Reimbursement Obligation) shall be joint and several and absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which the Borrowers may have or have had against the Issuing Lender, any L/C Participant, the Administrative Agent or any beneficiary of a Letter of Credit. Each Borrower also agrees with the Issuing Lender and each L/C Participant that neither the Issuing Lender nor any L/C Participant shall be responsible for, and the Borrowers' Reimbursement Obligation under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among any Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of any Borrower against any beneficiary of such Letter of Credit or any such transferee. The Issuing Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the Issuing Lender's gross negligence or willful misconduct. Each Borrower agrees that any action taken or omitted by the Issuing Lender or any L/C Participant under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the Uniform Customs and, to the extent not inconsistent therewith, the UCC, shall be binding on the Borrowers and shall not result in any liability of the Issuing Lender or any L/C Participant to the Borrowers. The responsibility of the Issuing Lender to the Borrowers in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit.

SECTION 3.7. Effect of Application. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Article III, the provisions of this Article III shall apply.

ARTICLE IV

GENERAL LOAN PROVISIONS

SECTION 4.1. Interest.

(a) Interest Rate Options. Subject to the provisions of this Section 4.1, at the election of CCA REIT on behalf of the Borrowers, the aggregate principal balance of the Revolving Credit Notes or any portion thereof shall bear interest at the Base Rate or the LIBOR Rate plus, in each case, the Applicable Margin as set forth below; provided that the LIBOR Rate shall not be available until three Business Days after the Closing Date. CCA REIT on behalf of the Borrowers shall select the rate of interest and Interest Period, if any, applicable to any Loan at

the time a Notice of Borrowing is given pursuant to Section 2.2 or at the time a Notice of Conversion/Continuation is given pursuant to Section 4.2. Each Loan or portion thereof bearing interest based on the Base Rate shall be a "Base Rate Loan" and each Loan or portion thereof bearing interest based on the LIBOR Rate shall be a "LIBOR Rate Loan." Any Swingline Loan shall bear interest at the Base Rate. Any Loan or any portion thereof as to which CCA REIT on behalf of the Borrowers has not duly specified an interest rate as provided herein shall be deemed a Base Rate Loan.

(b) Interest Periods. In connection with each LIBOR Rate Loan, CCA REIT on behalf of the Borrowers, by giving notice at the times described in Section 4.1(a), shall elect an interest period (each, an "Interest Period") to be applicable to such Loan, which Interest Period shall be a period of one (1), two
(2), three (3) or six (6) months; provided that:

(i) the Interest Period shall commence on the date of advance of or conversion to any LIBOR Rate Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the next preceding Interest Period expires;

(ii) if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, that if any Interest Period with respect to a LIBOR Rate Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;

(iii) any Interest Period with respect to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month at the end of such Interest Period;

(iv) no Interest Period shall extend beyond the Revolving Termination Date; and

(v) there shall be no more than six (6) Interest Periods outstanding at any time.

(c) Applicable Margin. The Applicable Margin provided for in Section 4.1(a) with respect to the Loans (the "Applicable Margin") shall be (i) during the period from the Closing Date through and including the date which is five
(5) Business Days following the date on which the Administrative Agent receives notice that CCA REIT has received an Investment Grade Rating, 0.25% for Base Rate Loans and 1.50% for LIBOR Rate Loans and (ii) thereafter shall be determined by reference to the higher Senior Debt Rating announced by Standard & Poor's or Moody's, as applicable, as follows:

=============================================================================================================================
         Tier                        Senior Debt Rating                                 Applicable Margin
                                                                    =========================================================
                                                                             LIBOR                     Base Rate
-----------------------------------------------------------------------------------------------------------------------------
           I     GREATER THAN OR EQUAL TO = BBB+/Baa1                        1.125%                      0.000%
-----------------------------------------------------------------------------------------------------------------------------
          II     GREATER THAN OR EQUAL TO = BBB/Baa2                         1.250%                      0.000%
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         III     GREATER THAN OR EQUAL TO = BBB-/Baa3                        1.375%                      0.125%
-----------------------------------------------------------------------------------------------------------------------------
          IV     LESS THAN BBB-/Baa3                                         1.750%                      0.500%
=============================================================================================================================

Adjustments, if any, in the Applicable Margin shall be made by the Administrative Agent on the fifth (5th) Business Day after the Administrative Agent has received notice of a change in the Senior Debt Rating. In the event that the above referenced rating designations are replaced by Standard & Poor's or Moody's, as applicable, the equivalent replacement rating designation shall be deemed automatically substituted therefor. Subject to Section 4.1(d), in the event that the Senior Debt Rating becomes unavailable, the Applicable Margin shall be the highest Applicable Margin set forth above until the fifth (5th) Business Day after the Senior Debt Rating once again becomes available.

(d) Default Rate. Upon the occurrence and during the continuance of an Event of Default, (i) the Borrowers shall no longer have the option to request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall bear interest at a rate per annum two percent (2%) in excess of the rate then applicable to LIBOR Rate Loans until the end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate then applicable to Base Rate Loans, and (iii) all outstanding Base Rate Loans shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate then applicable to Base Rate Loans. Interest shall continue to accrue on the Notes after the filing by or against any Borrower of any petition seeking any relief in bankruptcy or under any act or law pertaining to insolvency or debtor relief, whether state, federal or foreign.

(e) Interest Payment and Computation. Interest on each Base Rate Loan shall be payable in arrears on the Business Day next succeeding the last Business Day of each calendar quarter commencing September 30, 1997; and interest on each LIBOR Rate Loan shall be payable on the last day of each Interest Period applicable thereto, and if such Interest Period extends over three (3) months, at the end of each three (3) month interval during such Interest Period. All interest on LIBOR Rate Loans shall be computed on the basis of a 360-day year and assessed for the actual number of days elapsed and all other interest rates, fees and commissions provided hereunder shall be computed on the basis of an 365/366-day year and assessed for the actual number of days elapsed.

(f) Maximum Rate. In no contingency or event whatsoever shall the aggregate of all amounts deemed interest hereunder or under any of the Notes charged or collected pursuant to

the terms of this Agreement or pursuant to any of the Notes exceed the highest rate permissible under any Applicable Law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that the Lenders have charged or received interest hereunder in excess of the highest applicable rate, the rate in effect hereunder shall automatically be reduced to the maximum rate permitted by Applicable Law and the Lenders shall at the Administrative Agent's option promptly refund to the Borrowers any interest received by Lenders in excess of the maximum lawful rate or shall apply such excess to the principal balance of the Obligations. It is the intent hereof that the Borrowers not pay or contract to pay, and that neither the Administrative Agent nor any Lender receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by the Borrowers under Applicable Law.

SECTION 4.2. Notice and Manner of Conversion or Continuation of Loans. Provided that no Event of Default has occurred and is then continuing, the Borrowers shall have the option to (a) convert at any time all or any portion of its outstanding Base Rate Loans (other than Swingline Loans) in a minimum principal amount equal to $5,000,000 or any whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans; or (b) upon the expiration of any Interest Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a minimum principal amount equal to $1,000,000 or a whole multiple of $100,000 in excess thereof into Base Rate Loans, or (ii) continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrowers desire to convert or continue Loans as provided above, CCA REIT on behalf of the Borrowers shall give the Administrative Agent irrevocable prior written notice in the form attached as Exhibit E (a "Notice of Conversion/ Continuation") not later than 12:00 noon (Charlotte time) three (3) Business Days before the day on which a proposed conversion or continuation of such Loan is to be effective specifying (A) the Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to be converted or continued, the last day of the Interest Period therefor, (B) the effective date of such conversion or continuation (which shall be a Business Day), (C) the principal amount of such Loans to be converted or continued, and (D) the Interest Period to be applicable to such converted or continued LIBOR Rate Loan. The Administrative Agent shall promptly notify the Lenders of such Notice of Conversion/Continuation.

SECTION 4.3. Fees.

(a) Commitment Fee. Commencing on the Closing Date, the Borrowers shall pay to the Administrative Agent, for the account of the Lenders, a non-refundable commitment fee on the average daily unused portion of the Aggregate Commitment at a rate per annum which shall be 0.25%. The commitment fee shall be payable in arrears on the Business Day next succeeding the last Business Day of each calendar quarter during the term of this Agreement commencing September 30, 1997, and on the Revolving Termination Date. Such commitment fee shall be distributed by the Administrative Agent to the Lenders pro rata in accordance with the Lenders' respective Commitment Percentages.

(b) Administrative Agent's Fee. The Borrowers agree to pay to the Administrative Agent, for its own account, an annual Administrative Agent's fee as set forth in the separate fee letter agreement executed by CCA REIT and the Administrative Agent dated May 2, 1997, payable in advance on the Closing Date and on each anniversary of the Closing Date during the term of this Agreement thereafter.

(c) Arrangement, Upfront and Other Fees. The Borrowers agree to pay to the Administrative Agent, for the account of itself and the Lenders, the fees set forth in such fee letter.

SECTION 4.4. Manner of Payment. Each payment by the Borrowers on account of the principal of or interest on the Loans or of any fee, commission or other amounts (including the Reimbursement Obligation) payable to the Lenders under this Agreement or any Note shall be made not later than 2:00 p.m. (Charlotte time) on the date specified for payment under this Agreement to the Administrative Agent at the Administrative Agent's Office, for the account of the Lenders pro rata in accordance with their respective Commitment Percentages (other than as specifically set forth below), in Dollars, in immediately available funds and shall be made without any set-off, counterclaim or deduction whatsoever. Any payment received after such time but before 3:00 p.m. (Charlotte time) on such day shall be deemed a payment on such date for the purposes of
Section 11.1, but for all other purposes shall be deemed to have been made on the next succeeding Business Day. Any payment received after 3:00 p.m. (Charlotte time) shall be deemed to have been made on the next succeeding Business Day for all purposes. Upon receipt by the Administrative Agent of each such payment, the Administrative Agent shall distribute to each Lender at its address for notices set forth herein its pro rata share of such payment in accordance with this Section 4.4 and shall wire advice of the amount of such credit to each Lender. All payments received on or before 12:00 Noon (Charlotte, North Carolina time) shall be remitted by the Administrative Agent to each of the Lenders in accordance with this Section 4.4 on the same Business Day that such payments are received. Any payments received after 12:00 Noon (Charlotte, North Carolina time) shall be remitted by the Administrative Agent to the Lenders in accordance with this Section 4.4 on the next succeeding Business Day. Each payment to the Administrative Agent of the Issuing Lender's fees or L/C Participants' commissions shall be made in like manner, but for the account of the Issuing Lender or L/C Participants, as the case may be. Each payment to the Administrative Agent of Administrative Agent's fees or expenses shall be made for the account of the Administrative Agent and any amount payable to any Lender under Sections 4.8, 4.9, 4.10, 4.11 or 13.2 shall be paid to the Administrative Agent for the account of the applicable Lender.

SECTION 4.5. Crediting of Payments and Proceeds. In the event that any Borrower shall fail to pay any of the Obligations when due and the Obligations have been accelerated pursuant to Section 11.2, all payments received by the Lenders upon the Notes and the other Obligations and all net proceeds from the enforcement of the Obligations shall be applied first to all expenses then due and payable by any Borrower hereunder, then to all indemnity obligations then due and payable by any Borrower hereunder, then to all Administrative Agent's and Issuing Lender's fees then due and payable, then to all commitment

and other fees and commissions then due and payable, then to accrued and unpaid interest on the Swingline Note to the Swingline Lender, then to the principal amount outstanding under the Swingline Note to the Swingline Lender, then to accrued and unpaid interest on the Revolving Credit Notes and the Reimbursement Obligation (pro rata in accordance with all such amounts due), then to the principal amount of the Revolving Credit Notes and Reimbursement Obligation (pro rata in accordance with all such amounts due) and then to the cash collateral account described in Section 11.2(b) hereof to the extent of any L/C Obligations then outstanding, then to any termination payments due in respect of a Hedging Agreement with any Lender or any Affiliate thereof required pursuant to Section 8.15, in that order.

SECTION 4.6. Adjustments. If any Lender (a "Benefitted Lender") shall at any time receive any payment of all or part of its Extensions of Credit, or interest thereon, or if any Lender shall at any time receive any collateral in respect of its Extensions of Credit (whether voluntarily or involuntarily, by set-off or otherwise) in a greater proportion than any such payment to and collateral received by any other Lender, if any, in respect of such other Lender's Extensions of Credit, or interest thereon, such Benefitted Lender shall purchase for cash from the other Lenders such portion of each such other Lender's Extensions of Credit, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned to the extent of such recovery, with interest (only if the Benefitted Lender must pay interest) ratably, based on the amount which each such Lender must return to the aggregate amount which must be returned by the Benefitted Lender. Each Borrower agrees that each Lender so purchasing a portion of another Lender's Extensions of Credit may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion.

SECTION 4.7. Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by the Administrative Agent. The obligations of the Lenders under this Agreement to make the Loans and issue or participate in Letters of Credit are several and are not joint or joint and several. Unless the Administrative Agent shall have received notice from a Lender prior to a proposed borrowing date that such Lender will not make available to the Administrative Agent such Lender's ratable portion of the amount to be borrowed on such date (which notice shall not release such Lender of its obligations hereunder), the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the proposed borrowing date in accordance with Section 2.3(b) and the Administrative Agent may, in reliance upon such assumption, make available to the Borrowers on such date a corresponding amount. If such amount is made available to the Administrative Agent on a date after such borrowing date, such Lender shall pay to the Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount of such Lender's Commitment Percentage of such borrowing, times
(b) the daily average Federal Funds Rate during such period as determined by the Administrative Agent, times (c) a fraction the numerator of which

is the number of days that elapse from and including such borrowing date to the date on which such Lender's Commitment Percentage of such borrowing shall have become immediately available to the Administrative Agent and the denominator of which is 360. A certificate of the Administrative Agent with respect to any amounts owing under this Section shall be conclusive, absent manifest error. If such Lender's Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Lender within three (3) Business Days of such borrowing date, the Administrative Agent shall be entitled to recover such amount made available by the Administrative Agent with interest thereon at the rate per annum applicable to Base Rate Loans hereunder, on demand, from the Borrowers. The failure of any Lender to make its Commitment Percentage of any Loan available shall not relieve it or any other Lender of its obligation, if any, hereunder to make its Commitment Percentage of such Loan available on such borrowing date, but no Lender shall be responsible for the failure of any other Lender to make its Commitment Percentage of such Loan available on the borrowing date.

SECTION 4.8. Changed Circumstances.

(a) Circumstances Affecting LIBOR Rate Availability. If with respect to any Interest Period the Administrative Agent or any Lender (after consultation with Administrative Agent) shall determine that, by reason of circumstances affecting the foreign exchange and interbank markets generally, deposits in eurodollars, in the applicable amounts are not being quoted via Telerate Page 3750 or offered to the Administrative Agent or such Lender for such Interest Period, then the Administrative Agent shall forthwith give notice thereof to CCA REIT. Thereafter, until the Administrative Agent notifies CCA REIT that such circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of the Borrowers to convert any Revolving Credit Loan to or continue any Revolving Credit Loan as a LIBOR Rate Loan shall be suspended, and the Borrowers shall repay in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR Rate Loan together with accrued interest thereon, on the last day of the then current Interest Period applicable to such LIBOR Rate Loan or convert the then outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest Period.

(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the introduction of, or any change in, any Applicable Law 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 any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for any of the Lenders (or any of their respective Lending Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to the Administrative Agent and the Administrative Agent shall promptly give notice to CCA REIT and the other Lenders. Thereafter, until the Administrative Agent notifies CCA REIT that such circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR Rate Loans and the right of the Borrowers to convert any Revolving Credit Loan to or continue any Revolving Credit Loan as a LIBOR Rate Loan

shall be suspended and thereafter the Borrowers may select only Base Rate Loans hereunder, and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of the then current Interest Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately be converted to a Base Rate Loan for the remainder of such Interest Period.

(c) Increased Costs. If, after the date hereof, the introduction of, or any change in, any Applicable Law, or 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 of the Lenders (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of such Governmental Authority, central bank or comparable agency:

(i) shall subject any of the Lenders or the Issuing Lender, as Issuing Lender (or any of their respective Lending Offices) to any tax, duty or other charge with respect to any Note, Letter of Credit or Application or shall change the basis of taxation of payments to any of the Lenders (or any of their respective Lending Offices) of the principal of or interest on any Note, Letter of Credit or Application or any other amounts due under this Agreement in respect thereof (except for changes in the rate of tax on the overall net income of any of the Lenders or any of their respective Lending Offices imposed by the jurisdiction in which such Lender is organized or is or should be qualified to do business or such Lending Office is located); or

(ii) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit, insurance or capital or similar requirement against assets of, deposits with or for the account of, or credit extended by any of the Lenders (or any of their respective Lending Offices) or shall impose on any of the Lenders (or any of their respective Lending Offices) or the foreign exchange and interbank markets any other condition affecting any Note;

and the result of any of the foregoing is to increase the costs to any of the Lenders of maintaining any LIBOR Rate Loan or issuing or participating in Letters of Credit or to reduce the yield or amount of any sum received or receivable by any of the Lenders under this Agreement or under the Notes in respect of a LIBOR Rate Loan or Letter of Credit or Application, then such Lender shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify CCA REIT of such fact and demand compensation therefor and, within fifteen (15) days after such notice by the Administrative Agent, the Borrowers shall pay to such Lender such additional amount or amounts as will compensate such Lender or Lenders for such increased cost or reduction. The Administrative Agent will promptly notify CCA REIT of any event of which it has knowledge which will entitle such Lender to compensation pursuant to this
Section 4.8(c); provided, that the Administrative Agent shall incur no liability whatsoever to the Lenders or the Borrowers in the event it fails to do so. The amount of such compensation shall be determined, in the applicable Lender's sole discretion, based upon the assumption that such Lender funded its Commitment Percentage of the LIBOR Rate Loans in the London interbank market, and using any reasonable attribution or

averaging methods which such Lender deems appropriate and practical. A certificate of such Lender setting forth the basis for determining such amount or amounts necessary to compensate such Lender shall be forwarded to CCA REIT through the Administrative Agent and shall be conclusively presumed to be correct save for manifest error.

SECTION 4.9. Indemnity. Each Borrower hereby indemnifies each of the Lenders against any loss or expense (including, without limitation, any administrative fees and expenses) which may arise or be attributable to each Lender's obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a consequence of any failure by any Borrower to make any payment when due of any amount due hereunder in connection with a LIBOR Rate Loan, (b) due to any failure of any Borrower to borrow on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation or (c) due to any payment, prepayment or conversion (other than a conversion pursuant to Section 4.8(b)(ii)) of any LIBOR Rate Loan on a date other than the last day of the Interest Period therefor. The amount of such loss or expense shall be determined, in the applicable Lender's sole discretion, based upon the assumption that such Lender funded its Commitment Percentage of the LIBOR Rate Loans in the London interbank market, using any reasonable attribution or averaging methods which such Lender deems appropriate and practical, and pursuant to the following formula:

where:

"COFO" means the cost of deposits or funds in connection with any Loan referred to in this Section 4.9 at the origination of such Loan, as determined by the applicable Lender.

"COFBD" means the cost of deposits or funds in connection with any Loan referred to in this Section 4.9 on the breakage date giving rise to the compensation provided for in this Section 4.9 for the days remaining in the Interest Period applicable to such Loan, as determined by the applicable Lender.

"P" means the aggregate principal amount of such Loan subject to compensation under this Section 4.9.

"D" means the number of days remaining in the original Interest Period applicable to such Loan referred to in this Section 4.9.

A certificate of such Lender setting forth the basis for determining such amount or amounts necessary to compensate such Lender shall be forwarded to CCA REIT by the Administrative Agent and shall be conclusively presumed to be correct save for manifest error.

SECTION 4.10. Capital Requirements. If either (a) the introduction of, or any change in, or in the interpretation of, any Applicable Law or (b) compliance with any guideline or request from any central bank or comparable agency or other Governmental Authority (whether or not having the force of law), has or would have the effect of reducing the rate of return on the capital of, or has affected or would affect the amount of capital required to be maintained by, any Lender or any corporation controlling such Lender as a consequence of, or with reference to the Commitments and other commitments of this type, below the rate which the Lender or such other corporation could have achieved but for such introduction, change or compliance, then within five (5) Business Days after written demand by any such Lender, the Borrowers shall pay to such Lender from time to time as specified by such Lender additional amounts sufficient to compensate such Lender or other corporation for such reduction. A certificate as to such amounts submitted to CCA REIT and the Administrative Agent by such Lender, shall, in the absence of manifest error, be presumed to be correct and binding for all purposes.

SECTION 4.11. Taxes.

(a) Payments Free and Clear. Any and all payments by the Borrowers hereunder or under the Notes or the Letters of Credit shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholding, and all liabilities with respect thereto excluding, (i) in the case of each Lender and the Administrative Agent, income and franchise taxes imposed by the jurisdiction under the laws of which such Lender or the Administrative Agent (as the case may be) is organized or is or should be qualified to do business or any political subdivision thereof and
(ii) in the case of each Lender, income and franchise taxes imposed by the jurisdiction of such Lender's Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note or Letter of Credit to any Lender or the Administrative Agent, (A) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.11) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the amount such party would have received had no such deductions been made, (B) such Borrower shall make such deductions, (C) such Borrower shall pay the full amount deducted to the relevant taxing authority or other authority in accordance with Applicable Law, and (D) such Borrower shall deliver to the Administrative Agent evidence of such payment to the relevant taxing authority or other authority in the manner provided in Section 4.11(d).

(b) Stamp and Other Taxes. In addition, the Borrowers shall pay any present or future stamp, registration, recordation or documentary taxes or any other similar fees or charges or excise or property taxes, levies of the United States or any state or political subdivision thereof or any applicable foreign jurisdiction which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, the

Loans, the Letters of Credit, the other Loan Documents, or the perfection of any rights or security interest in respect thereto (hereinafter referred to as "Other Taxes").

(c) Indemnity. Each Borrower shall indemnify each Lender and the Administrative Agent for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.11) 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, whether or not such Taxes or Other Taxes were correctly or legally asserted. Such indemnification shall be made within thirty (30) days from the date such Lender or the Administrative Agent (as the case may be) makes written demand therefor.

(d) Evidence of Payment. Upon the request of the Administrative Agent, the Borrowers shall furnish to the Administrative Agent evidence of the Borrowers' payment of any Taxes or Other Taxes in the form of the original or a certified copy of a receipt of payment thereof or other evidence of payment satisfactory to the Administrative Agent.

(e) Delivery of Tax Forms. Each Lender organized under the laws of a jurisdiction other than the United States or any state thereof shall deliver to CCA REIT, with a copy to the Administrative Agent, on the Closing Date or concurrently with the delivery of the relevant Assignment and Acceptance, as applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms 1001, as applicable (or successor forms) properly completed and certifying in each case that such Lender is entitled to a complete exemption from withholding or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form, as the case may be, to establish an exemption from United States backup withholding taxes. Each such Lender further agrees to deliver to CCA REIT, with a copy to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms or manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to CCA REIT, certifying in the case of a Form 1001 or 4224 that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes (unless in any such case an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders such forms inapplicable or the exemption to which such forms relate unavailable and such Lender notifies CCA REIT and the Administrative Agent that it is not entitled to receive payments without deduction or withholding of United States federal income taxes) and, in the case of a Form W-8 or W-9, establishing an exemption from United States backup withholding tax.

(f) Survival. Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in this Section 4.11 shall survive the payment in full of the Obligations and the termination of the Commitments.

ARTICLE V

CLOSING; CONDITIONS OF CLOSING AND BORROWING

SECTION 5.1. Closing. The closing shall take place at the offices of Kennedy Covington Lobdell & Hickman, L.L.P., 100 North Tryon Street, Charlotte, North Carolina at 10:00 a.m. on July 18, 1997, or on such other date as the parties hereto shall mutually agree.

SECTION 5.2. Conditions to Closing and Initial Extensions of Credit. The obligation of the Lenders to close this Agreement and to make the initial Loan or issue the initial Letter of Credit is subject to the satisfaction of each of the following conditions:

(a) Executed Loan Documents. The following Loan Documents, in form and substance satisfactory to the Administrative Agent and each Lender:

(i) this Agreement;

(ii) the Revolving Credit Notes;

(iii) the Swingline Note;

(iv) the Security Agreement;

(v) an Assignment of Lease for each Lease existing on the Closing Date; and

(vi) a Deed of Trust for each parcel of real property owned by any Borrower on the Closing Date;

shall have been duly authorized, executed and delivered by the Borrower party thereto, shall be in full force and effect and no default shall exist thereunder, and the Borrowers shall have delivered original counterparts thereof to the Administrative Agent.

(b) Closing Certificates; etc.

(i) Officers's Certificate. The Administrative Agent shall have received a certificate from the chief executive officer or chief financial officer of CCA REIT, in form and substance satisfactory to the Administrative Agent, to the effect that all representations and warranties of the Borrowers contained in this Agreement and the other Loan Documents are true, correct and complete in all material respects; that the Borrowers are not in violation of any of the covenants contained in this Agreement and the other Loan Documents; that, after giving effect to the transactions contemplated by this Agreement, no Default or Event of Default has occurred and is continuing; and that each Borrower has satisfied each of the closing conditions to be satisfied by it.

(ii) Certificate of Secretary of the Borrowers. The Administrative Agent shall have received a certificate of the secretary or assistant secretary of each Borrower certifying that attached thereto is a true and complete copy of the certificate of incorporation of such Borrower and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation; that attached thereto is a true and complete copy of the bylaws of such Borrower as in effect on the date of such certification; that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Borrower authorizing the borrowings contemplated hereunder and the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party; and as to the incumbency and genuineness of the signature of each officer of such Borrower executing the Loan Documents.

(iii) Certificates of Good Standing. The Administrative Agent shall have received long-form certificates as of a recent date of the good standing of each Borrower under the laws of its jurisdiction of organization and each other jurisdiction where the Borrower is qualified to do business and a certificate of the relevant taxing authorities of such jurisdictions certifying that such Person has filed required tax returns and owes no delinquent taxes.

(iv) Opinions of Counsel. The Administrative Agent shall have received favorable opinions of counsel to the Borrowers, including favorable opinions of local counsel in jurisdictions where any Deed of Trust is to be filed, addressed to the Administrative Agent and the Lenders with respect to the Borrowers, the Loan Documents and such other matters as the Lenders shall request.

(v) Tax Forms. The Administrative Agent shall have received copies of the United States Internal Revenue Service forms required by Section 4.11(e) hereof.

(c) Collateral.

(i) Filings and Recordings. All filings and recordations that are necessary to perfect the security interests of the Lenders in the collateral described in the Security Documents shall have been forwarded for filing in all appropriate locations and the Administrative Agent shall have received evidence satisfactory to the Administrative Agent that such security interests upon such filings constitute valid and perfected first priority Liens therein.

(ii) Lien Search. The Borrowers shall have delivered the results of a Lien search made against the Borrowers under the Uniform Commercial Code as in effect in any state in which any of its assets are located, indicating among other things that its assets are free and clear of any Lien except for Liens permitted hereunder.

(iii) Hazard and Liability Insurance. The Administrative Agent shall have received certificates of insurance, evidence of payment of all insurance premiums for the current policy year of each, and, if requested by the Administrative Agent, copies (certified by an officer of CCA REIT) of insurance policies in the form required under Section 7.3 and the

Security Documents and otherwise in form and substance reasonably satisfactory to the Administrative Agent.

(iv) Title Insurance. The Administrative Agent shall have received a marked-up commitment for a policy of title insurance, insuring Lenders' first priority Liens and showing no Liens prior to Lenders' Liens other than for ad valorem taxes not yet due and payable, with title insurance companies acceptable to the Administrative Agent on the property subject to the Deeds of Trust with the final title insurance policy, being delivered within thirty (30) days after the Closing Date. Further, the Borrowers agree to provide or obtain any customary affidavits and indemnities as may be required or necessary to obtain title insurance satisfactory to the Administrative Agent.

(v) Title Exceptions. Copies of all recorded documents creating exceptions to the title policy referred to in Section 5.2(c)(iv).

(vi) Matters Relating to Flood Hazard Properties. Evidence, in the form of a certification by an insurance broker or a municipal engineer, or other third party satisfactory to the Administrative Agent, stating that each parcel of property subject to a Deed of Trust is not located in an area having "special flood hazards."

(vii) Surveys. Copies of as-built surveys of a recent date of each parcel of real property subject to a Deed of Trust certified as of a recent date by a registered engineer or land surveyor. Each such survey with an effective date of more than sixty (60) days prior to the Closing Date shall be accompanied by an affidavit (a "Survey Affidavit") of an authorized signatory of the owner of such property stating that there have been no improvements or encroachments to the property since the date of the respective survey such that the existing survey is no longer accurate. Such survey shall show the area of such property, all boundaries of the land with courses and distances indicated, including chord bearings and arc and chord distances for all curves, and shall show dimensions and locations of all easements, private drives, roadways, and other facts materially affecting such property, and shall show such other details as the Administrative Agent may reasonably request, including without limitation, any encroachment (and the extent thereof in feet and inches) onto the property or by any of the improvements on the property upon adjoining land or upon any easement burdening the property; any improvements, to the extent constructed, and the relation of the improvements by distances to the boundaries of the property, to any easements burdening the property, and to the established building lines and the street lines; and if improvements are existing, (A) a statement of the number of each type of parking space required by applicable laws, ordinances, orders, rules, regulations, restrictive covenants and easements affecting the improvement, and the number of each such type of parking space provided, and (B) the locations of all utilities serving the improvement.

(viii) Environmental Assessments. A Phase I environmental assessment of each parcel of real property subject to a Deed of Trust by an environmental engineering firm acceptable to the Administrative Agent showing no environmental conditions or liabilities in

violation of Environmental Laws that could reasonably be expected to have a Material Adverse Effect.

(ix) Other Real Property Information. The Administrative Agent shall have received such other certificates, documents and information as are reasonably requested by the Lenders, including, without limitation, engineering and structural reports, permanent certificates of occupancy and evidence of zoning compliance, each in form and substance satisfactory to the Administrative Agent.

(d) Consents; Defaults.

(i) Governmental and Third Party Approvals. All necessary approvals, authorizations and consents, if any be required, of any Person and of all Governmental Authorities and courts having jurisdiction with respect to the transactions contemplated by this Agreement and the other Loan Documents shall have been obtained.

(ii) No Injunction, Etc. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby, or which, in the Administrative Agent's discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement and such other Loan Documents.

(iii) No Event of Default. No Default or Event of Default shall have occurred and be continuing.

(e) Financial Matters.

(i) Financial Statements. The Administrative Agent shall have received recent annual and interim financial statements of the Borrowers and their Subsidiaries and such other financial information with respect to the Borrowers and their Subsidiaries as may be reasonably requested by the Administrative Agent, all in form and substance satisfactory to the Administrative Agent.

(ii) Financial Condition Certificate. CCA REIT shall have delivered to the Administrative Agent a certificate, in form and substance satisfactory to the Administrative Agent, and certified as accurate by the chief executive officer or chief financial officer of CCA REIT, that (A) each Borrower and each of its Subsidiaries are each Solvent, (B) each Borrower's payables are current and not past due, (C) attached thereto is a pro forma balance sheet of the Borrowers and their Subsidiaries setting forth on a pro forma basis the financial condition of the Borrowers and their Subsidiaries on a Consolidated basis as of that date, reflecting on a pro forma basis the effect of the transactions contemplated herein, including all fees and expenses in connection therewith, and evidencing compliance on a pro forma basis with the covenants

contained in Articles IX and X hereof and (D) attached thereto are the financial projections previously delivered to the Administrative Agent representing the good faith opinions of the Borrowers and senior management thereof as to the projected results contained therein.

(iii) Payment at Closing; Fee Letters. There shall have been paid by the Borrowers to the Administrative Agent and the Lenders the fees set forth or referenced in Section 4.3 and any other accrued and unpaid fees or commissions due hereunder (including, without limitation, legal fees and expenses), and to any other Person such amount as may be due thereto in connection with the transactions contemplated hereby, including all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of any of the Loan Documents. The Administrative Agent shall have received duly authorized and executed copies of the fee letter agreement referred to in
Section 4.3(b).

(f) Offering and Sale Leaseback Transactions.

(i) Offering. CCA REIT shall have completed the Offering on terms and conditions satisfactory to the Administrative Agent and shall have received at least $300,000,000 of Net Cash Proceeds therefrom and Doctor R. Crants shall have purchased no less than $7,500,000 and no more than $10,000,000 of common stock of CCA REIT pursuant to the Offering.

(ii) Acquisition of Correctional Facilities. CCA REIT shall have acquired at least eight (8) of the Initial Facilities on the terms and conditions contained in the Purchase Agreements delivered to the Administrative Agent and obtained the option to acquire at least five (5) of the Option Facilities on the terms and conditions contained in the Option Agreements delivered to the Administrative Agent.

(iii) Sale Leaseback Transaction. The Administrative Agent shall have received duly executed copies of the Sale Leaseback Documents and shall be reasonably satisfied with the form and substance thereof. There shall not have been any material change to the terms of the Sale Leaseback Transactions as described in the Registration Statement and the Sale Leaseback Transactions shall have been consummated pursuant to the terms of the Sale Leaseback Documents as delivered to the Administrative Agent.

(g) Miscellaneous.

(i) Notice of Borrowing; Notice of Account Designation and Application for Letter of Credit. The Administrative Agent shall have received written instructions from CCA REIT to the Administrative Agent directing the payment of any proceeds of Loans made under this Agreement that are to be paid on the Closing Date. If a Letter of Credit is to be issued on the Closing Date, CCA REIT shall have delivered an Application.

(ii) Proceedings and Documents. All opinions, certificates and other instruments and all proceedings in connection with the transactions contemplated by this

Agreement shall be satisfactory in form and substance to the Lenders. The Lenders shall have received copies of all other instruments and other evidence as the Lender may reasonably request, in form and substance satisfactory to the Lenders, with respect to the transactions contemplated by this Agreement and the taking of all actions in connection therewith.

(iii) Due Diligence and Other Documents. Each Borrower shall have delivered to the Administrative Agent such other documents, certificates and opinions as the Administrative Agent reasonably requests, certified by a secretary or assistant secretary of such Borrower as a true and correct copy thereof.

SECTION 5.3. Conditions to All Loans and Letters of Credit. The obligations of the Lenders to make any Loan or issues any Letter of Credit is subject to the satisfaction of the following conditions precedent on the relevant borrowing or issue date, as applicable:

(a) Continuation of Representations and Warranties. The representations and warranties contained in Article VI shall be true and correct on and as of such borrowing or issuance date with the same effect as if made on and as of such date.

(b) No Existing Default. No Default or Event of Default shall have occurred and be continuing hereunder (i) on the borrowing date with respect to such Loan or after giving effect to the Loans to be made on such date or (ii) the issue date with respect to such Letter of Credit or after giving affect to such Letters of Credit on such date.

(c) Compliance with Use of Proceeds Restriction. CCA REIT shall have delivered a certificate in form and substance reasonably satisfactory to the Administrative Agent demonstrating pro forma compliance with Sections 10.11 and 10.12 of this Agreement.

(d) Officer's Compliance Certificate; Additional Documents. The Administrative Agent shall have received the financial statements and Officer's Compliance Certificate required pursuant to Sections 7.1 and 7.2 respectively and each additional document, instrument, legal opinion or other item of information reasonably requested by it.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE BORROWERS

SECTION 6.1. Representations and Warranties. To induce the Administrative Agent to enter into this Agreement and the Lenders to make the Loans or issue or participate in the Letters of Credit, the Borrowers hereby represent and warrant to the Administrative Agent and Lenders that:

(a) Organization; Power; Qualification. Each Borrower and each Subsidiary thereof is duly organized, validly existing and in good standing under the laws of the jurisdiction of its

incorporation or formation, has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization, except in those jurisdictions in which the failure to so qualify could not reasonably be expected to have a Material Adverse Effect. CCA REIT was organized to be and is being operated in accordance with the rules for qualification as a "real estate investment trust" under Sections 856 through 860 of the Code. The jurisdictions in which the Borrowers are organized and qualified to do business are described on Schedule 6.1(a).

(b) Ownership. Each Subsidiary of each Borrower is listed on Schedule
6.1(b). The capitalization of the Borrowers and their Subsidiaries consists of the number of shares, authorized, issued and outstanding, of such classes and series, with or without par value, described on Schedule 6.1(b). All outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable. The shareholders of the Subsidiaries of the Borrowers and the number of shares owned by each are described on Schedule 6.1(b). There are no outstanding stock purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature whatsoever, which are convertible into, exchangeable for or otherwise provide for or permit the issuance of capital stock of any Borrower or any Subsidiary thereof, except as described on Schedule 6.1(b).

(c) Authorization of Agreement, Loan Documents and Borrowing. Each of the Borrowers and their Subsidiaries has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other Loan Documents to which it is a party in accordance with their respective terms. This Agreement and each of the other Loan Documents have been duly executed and delivered by the duly authorized officers of each Borrower and each of its Subsidiaries party thereto, and each such document constitutes the legal, valid and binding obligation of such Borrower or its Subsidiary party thereto, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors' rights in general and the availability of equitable remedies.

(d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc. The execution, delivery and performance by the Borrowers and their Subsidiaries of the Loan Documents to which each such Person is a party, in accordance with their respective terms, the borrowings hereunder and the transactions contemplated hereby do not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Approval or violate any Applicable Law relating to any Borrower or any Subsidiary thereof,
(ii) conflict with, result in a breach of or constitute a default under the certificate of incorporation, bylaws or other organizational documents of any Borrower or any Subsidiary thereof or any indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, or (iii) result in or require the

creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Liens arising under the Loan Documents.

(e) Compliance with Law; Governmental Approvals. Each of the Borrowers and their Subsidiaries (i) has all Governmental Approvals required by any Applicable Law for it to conduct its business, each of which is in full force and effect, is final and not subject to review on appeal and is not the subject of any pending or, to the best of its knowledge, threatened attack by direct or collateral proceeding, and (ii) is in compliance with each Governmental Approval applicable to it and in compliance with all other Applicable Laws relating to it or any of its respective properties.

(f) Tax Returns and Payments. Each of the Borrowers and their Subsidiaries has duly filed or caused to be filed all federal, state, local and other tax returns required by Applicable Law to be filed, and has paid, or made adequate provision for the payment of, all federal, state, local and other taxes, assessments and governmental charges or levies upon it and its property, income, profits and assets which are due and payable. No Governmental Authority has asserted any Lien or other claim against any Borrower or any Subsidiary thereof with respect to unpaid taxes which has not been discharged or resolved. The charges, accruals and reserves on the books of each Borrower and any of its Subsidiaries in respect of federal, state, local and other taxes for all Fiscal Years and portions thereof since the organization of such Borrower and any of its Subsidiaries are in the judgment of such Borrower adequate, and such Borrower does not anticipate any additional taxes or assessments for any of such years.

(g) Intellectual Property Matters. Each of the Borrowers and their Subsidiaries owns or possesses rights to use all franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, trade names, trade name rights, copyrights and rights with respect to the foregoing which are required to conduct its business, except where the failure to so own or possess could not reasonably be expected to have a Material Adverse Effect. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and neither any Borrower nor any Subsidiary thereof is liable to any Person for infringement under Applicable Law with respect to any such rights as a result of its business operations.

(h) Environmental Matters. Except those matters in existence on the Closing Date and set forth on Schedule 6.1(h), to the best of any Borrower's knowledge after due inquiry:

(i) The properties of the Borrowers and their Subsidiaries do not contain, and have not previously contained, any Hazardous Materials in amounts or concentrations which (A) constitute or constituted a violation of, or (B) could give rise to liability under, applicable Environmental Laws;

(ii) Such properties and all operations conducted in connection therewith are in compliance, and have been in compliance, with all applicable Environmental Laws, and there

is no contamination at, under or about such properties or such operations which could interfere with the continued operation of such properties or impair the fair saleable value thereof;

(iii) Neither the Borrowers nor any Subsidiary thereof has received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of their properties or the operations conducted in connection therewith, nor does any Borrower or any Subsidiary thereof have knowledge or reason to believe that any such notice will be received or is being threatened;

(iv) Hazardous Materials have not been transported or disposed of from the properties of any Borrower or any Subsidiary thereof in violation of, or in a manner or to a location which could give rise to liability under, Environmental Laws, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of such properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Laws;

(v) No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of any Borrower, threatened, under any Environmental Law to which any Borrower or any Subsidiary thereof is or will be named as a party with respect to such properties or operations conducted in connection therewith, 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 such properties or such operations; and

(vi) There has been no release, or threat of release, of Hazardous Materials at or from such properties, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws.

(i) ERISA.

(i) Neither the Borrowers nor any ERISA Affiliate maintains or contributes to, or has any obligation under, any Employee Benefit Plans other than those identified on Schedule 6.1(i);

(ii) each Borrower and each ERISA Affiliate is in compliance with all applicable provisions of ERISA and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans except for any required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the Internal Revenue Service to be so qualified, and each trust related to such plan has been determined to be exempt under Section 501(a) of the Code. No liability has been incurred by any Borrower or any ERISA Affiliate which remains unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan or any Multiemployer Plan;

(iii) No Pension Plan has been terminated, nor has any accumulated funding deficiency (as defined in Section 412 of the Code) been incurred (without regard to any waiver granted under Section 412 of the Code), nor has any funding waiver from the Internal Revenue Service been received or requested with respect to any Pension Plan, nor has any Borrower or any ERISA Affiliate failed to make any contributions or to pay any amounts due and owing as required by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension Plan prior to the due dates of such contributions under Section 412 of the Code or Section 302 of ERISA, nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;

(iv) Neither the Borrowers nor any ERISA Affiliate has: (A) engaged in a nonexempt prohibited transaction described in Section 406 of the ERISA or
Section 4975 of the Code, (B) incurred any liability to the PBGC which remains outstanding other than the payment of premiums and there are no premium payments which are due and unpaid, (C) failed to make a required contribution or payment to a Multiemployer Plan, or (D) failed to make a required installment or other required payment under Section 412 of the Code;

(v) No Termination Event has occurred or is reasonably expected to occur; and

(vi) No proceeding, claim, lawsuit and/or investigation is existing or, to the best knowledge of any Borrower after due inquiry, threatened concerning or involving any (A) employee welfare benefit plan (as defined in
Section 3(1) of ERISA) currently maintained or contributed to by any Borrower or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.

(j) Margin Stock. Neither the Borrowers nor any Subsidiary thereof is engaged principally or as one of its activities in the business of extending credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each such term is defined or used in Regulations G and U of the Board of Governors of the Federal Reserve System). No part of the proceeds of any of the Loans or Letters of Credit will be used for purchasing or carrying margin stock or for any purpose which violates, or which would be inconsistent with, the provisions of Regulation G, T, U or X of such Board of Governors.

(k) Government Regulation. Neither the Borrowers nor any Subsidiary thereof is an "investment company" or a company "controlled" by an "investment company" (as each such term is defined or used in the Investment Company Act of 1940, as amended) and neither the Borrowers nor any Subsidiary thereof is, or after giving effect to any Extension of Credit will be, subject to regulation under the Public Utility Holding Company Act of 1935 or the Interstate Commerce Act, each as amended, or any other Applicable Law which limits its ability to incur or consummate the transactions contemplated hereby.

(l) Material Contracts. Schedule 6.1(l) sets forth a complete and accurate list of all Material Contracts of the Borrowers and their Subsidiaries in effect as of the Closing Date not

listed on any other Schedule hereto; other than as set forth in Schedule 6.1(l), each such Material Contract is, and after giving effect to the consummation of the transactions contemplated by the Loan Documents will be, in full force and effect in accordance with the terms thereof.

(m) Burdensome Provisions. Neither the Borrowers nor any Subsidiary thereof is a party to any indenture, agreement, lease or other instrument, or subject to any corporate or partnership restriction, Governmental Approval or Applicable Law which is so unusual or burdensome as in the foreseeable future could be reasonably expected to have a Material Adverse Effect. The Borrowers and their Subsidiaries do not presently anticipate that future expenditures needed to meet the provisions of any statutes, orders, rules or regulations of a Governmental Authority will be so burdensome as to have a Material Adverse Effect.

(n) Financial Information. The financial information with respect to the Borrowers which has been furnished to the Administrative Agent and each Lender, is based on reasonable estimates and assumptions, all of which are fair in light of the conditions which existed at the time the projections were made, have been prepared on the basis of the assumptions stated therein, and reflect, as of the time so furnished and the Closing Date, the reasonable estimate of senior management of the Borrowers of the results of the operations and other information projected therein. The Borrowers and their Subsidiaries have no Debt, obligation or other unusual forward or long-term commitment which is not fairly reflected in the foregoing financial information.

(o) No Material Adverse Change. Since the date hereof, there has been no material adverse change in the properties, business, operations, prospects, or condition (financial or otherwise) of the Borrowers and their Subsidiaries and no event has occurred or condition arisen that could reasonably be expected to have a Material Adverse Effect.

(p) Solvency. As of the Closing Date and after giving effect to each Extension of Credit made hereunder, each Borrower and each Subsidiary thereof will be Solvent.

(q) Titles to Properties. Each of the Borrowers and their Subsidiaries has such title to the real property owned by it as is necessary or desirable to the conduct of its business and valid and legal title to all of its personal property and assets, including, but not limited to, those reflected on the balance sheets of the Borrowers and their Subsidiaries delivered pursuant to
Section 6.1(n), except those which have been disposed of by the Borrowers or their Subsidiaries subsequent to such date which dispositions have been in the ordinary course of business or as otherwise expressly permitted hereunder.

(r) Liens. None of the properties and assets of any Borrower or any Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 10.3. No financing statement under the Uniform Commercial Code of any state which names any Borrower or any Subsidiary thereof or any of their respective trade names or divisions as debtor and which has not been terminated, has been filed in any state or other jurisdiction and neither the Borrowers

nor any Subsidiary thereof has signed any such financing statement or any security agreement authorizing any secured party thereunder to file any such financing statement, except to perfect those Liens permitted by Section 10.3 hereof.

(s) Debt and Contingent Obligations. The Borrowers and their Subsidiaries have performed and are in compliance with all of the terms of such Debt and Contingent Obligations and all instruments and agreements relating thereto, and no default or event of default, or event or condition which with notice or lapse of time or both would constitute such a default or event of default on the part of any Borrower or any Subsidiary thereof exists with respect to any such Debt or Contingent Obligation.

(t) Litigation. There are no actions, suits or proceedings pending nor, to the knowledge of any Borrower, threatened against or in any other way relating adversely to or affecting any Borrower or any Subsidiary thereof or any of their respective properties in any court or before any arbitrator of any kind or before or by any Governmental Authority the result of which could reasonably be expected to have a Material Adverse Effect.

(u) Absence of Defaults. No event has occurred or is continuing which constitutes a Default or an Event of Default, or which constitutes, or which with the passage of time or giving of notice or both would constitute, a default or event of default by any Borrower or any Subsidiary thereof under any Material Contract or judgment, decree or order to which any Borrower or any Subsidiary thereof is a party or by which any Borrower or any Subsidiary thereof or any of their respective properties may be bound or which would require any Borrower or any Subsidiary thereof to make any payment thereunder prior to the scheduled maturity date therefor.

(v) Accuracy and Completeness of Information. All written information, reports and other papers and data produced by or on behalf of any Borrower or any Subsidiary thereof and furnished to the Lenders were, at the time the same were so furnished, complete and correct in all respects to the extent necessary to give the recipient a true and accurate knowledge of the subject matter. No document furnished or written statement made to the Administrative Agent or the Lenders by any Borrower or any Subsidiary thereof in connection with the negotiation, preparation or execution of this Agreement or any of the Loan Documents contains or will contain any untrue statement of a fact material to the creditworthiness of any Borrower or any Subsidiary thereof or omits or will omit to state a fact necessary in order to make the statements contained therein not misleading. No Borrower is aware of any facts which it has not disclosed in writing to the Administrative Agent having a Material Adverse Effect, or insofar as any Borrower can now foresee, could reasonably be expected to have a Material Adverse Effect.

SECTION 6.2. Survival of Representations and Warranties, Etc. All representations and warranties set forth in this Article VI and all representations and warranties contained in any certificate, or any of the Loan Documents (including but not limited to any such representation or warranty made in or in connection with any amendment thereto) shall constitute representations and warranties made under this Agreement. All representations and warranties

made under this Agreement shall be made or deemed to be made at and as of the Closing Date, shall survive the Closing Date and shall not be waived by the execution and delivery of this Agreement, any investigation made by or on behalf of the Lenders or any borrowing hereunder and shall continue until the Obligations hereunder have been finally and indefeasibly paid and satisfied in full and the Commitments terminated.

ARTICLE VII

FINANCIAL INFORMATION AND NOTICES

Until all the Obligations have been finally and indefeasibly paid and satisfied in full and the Commitments terminated, unless consent has been obtained in the manner set forth in Section 13.10 hereof, the Borrowers will furnish or cause to be furnished to the Administrative Agent at the Administrative Agent's Office at the address set forth in Section 13.1 hereof and to each Lender at its respective address as set forth on Schedule 1.1, or such other office as may be designated by the Administrative Agent or such Lender from time to time:

SECTION 7.1. Financial Statements and Projections.

(a) Quarterly Financial Statements. As soon as practicable and in any event within forty-five (45) days after the end of each fiscal quarter, an unaudited Consolidated balance sheet of the Borrowers and their Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated statements of income and cash flows for the fiscal quarter then ended and that portion of the Fiscal Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures for the preceding Fiscal Year and prepared by the Borrowers in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the period, and certified by the chief financial officer of CCA REIT to present fairly in all material respects the financial condition of the Borrowers and their Subsidiaries as of their respective dates and the results of operations of the Borrowers and their Subsidiaries for the respective periods then ended, subject to normal year end adjustments.

(b) Annual Financial Statements. As soon as practicable and in any event within ninety (90) days after the end of each Fiscal Year, an audited Consolidated balance sheet of the Borrowers and their Subsidiaries as of the close of such Fiscal Year and audited Consolidated statements of income, retained earnings and cash flows for the Fiscal Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures for the preceding Fiscal Year and prepared by an independent certified public accounting firm acceptable to the Administrative Agent in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operation of any change in the application of accounting principles and practices during the year, and accompanied by a report thereon by such certified public accountants that is not qualified with respect to scope

or limitations imposed by any Borrower or any Subsidiary thereof or with respect to accounting principles followed by any Borrower or any of Subsidiary thereof not in accordance with GAAP.

(c) Business Plan and Financial Projections. As soon as practicable and in any event within thirty (30) days prior to the beginning of each Fiscal Year and such other times as the Administrative Agent shall reasonably request, a business plan of the Borrowers and their Subsidiaries prepared in accordance with GAAP for the ensuing Fiscal Year, such plan to be prepared on a quarterly basis for such period, and to include the following for each applicable period:
an operating and capital budget, a projected income statement, statement of cash flows and balance sheet and a report containing management's discussion and analysis of such projections, accompanied by a certificate from the chief financial officer of CCA REIT to the effect that, to the best of such officer's knowledge, such projections are good faith estimates of the financial condition and operations of the Borrowers and their Subsidiaries for such fiscal period.

SECTION 7.2. Officer's Compliance Certificate. At each time financial statements are delivered pursuant to Sections 7.1(a) or (b) a certificate of the chief financial officer or the treasurer of CCA REIT in the form of Exhibit F attached hereto (an "Officer's Compliance Certificate").

SECTION 7.3. Other Reports.

(a) Promptly upon receipt thereof, copies of all reports, if any, submitted to any Borrower or its Board of Directors by its independent public accountants in connection with their auditing function, including, without limitation, any management report and any management responses thereto;

(b) As soon as practicable, copies of all financial statements and reports that any Borrower shall send to its shareholders and copies of all registration statements and all regular or periodic reports (including without limitation the annual report on Form 10-K and quarterly report on Form 10-Q) which any Borrower shall file with the Securities and Exchange Commission or any successor commission;

(c) Promptly upon receipt by any Borrower, deliver to the Administrative Agent and Lenders financial statements for each lessee party to any such Lease in form and substance satisfactory to the Administrative Agent; and

(d) Such other information regarding the operations, business affairs and financial condition of the Borrowers or any of their Subsidiaries as the Administrative Agent or any Lender may reasonably request.

SECTION 7.4. Notice of Litigation and Other Matters. Prompt (but in no event later than ten (10) days after an officer of any Borrower obtains knowledge thereof) telephonic and written notice of:

(a) the commencement of all proceedings and investigations by or before any Governmental Authority and all actions and proceedings in any court or before any arbitrator against or involving any Borrower or any Subsidiary thereof or any of their respective properties, assets or businesses, the result of which could reasonably be expected to have a Material Adverse Effect;

(b) any notice of any violation received by any Borrower or any Subsidiary thereof from any Governmental Authority including, without limitation, any notice of violation of Environmental Laws which in any such case could reasonably be expected to have a Material Adverse Effect;

(c) any labor controversy that has resulted in, or threatens to result in, a strike or other work action against any Borrower or any Subsidiary thereof;

(d) any attachment, judgment, lien, levy or order exceeding $750,000 that may be assessed against or threatened against any Borrower or any Subsidiary thereof;

(e) (i) any Default or Event of Default, (ii) any event which constitutes or which with the passage of time or giving of notice or both would constitute a default or event of default under any Incarceration Agreement or Material Contract to which any Borrower or any Subsidiary thereof is a party or by which any Borrower or any Subsidiary thereof or any of their respective properties is bound or (iii) any termination prior to the stated termination date under any Incarceration Agreement or Material Contract to which any Borrower or any Subsidiary thereof is a party or by which any Borrower or any Subsidiary thereof or any of their respective properties may be bound;

(f) (i) any unfavorable determination letter from the Internal Revenue Service regarding the qualification of an Employee Benefit Plan under Section 401(a) of the Code (along with a copy thereof), (ii) all notices received by any Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan, (iii) all notices received by any Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA and (iv) any Borrower obtaining knowledge or reason to know that any Borrower or any ERISA Affiliate has filed or intends to file a notice of intent to terminate any Pension Plan under a distress termination within the meaning of Section 4041(c) of ERISA;

(g) any change in the Senior Debt Rating; and

(h) any event which makes any of the representations set forth in
Section 6.1 inaccurate in any material respect.

SECTION 7.5. Accuracy of Information. All written information, reports, statements and other papers and data furnished by or on behalf of any Borrower to the

Administrative Agent or any Lender (other than financial forecasts) whether pursuant to this Article VII or any other provision of this Agreement, or any of the Security Documents, shall be, at the time the same is so furnished, complete and correct in all material respects to the extent necessary to give the Administrative Agent or any Lender complete, true and accurate knowledge of the subject matter based on the Borrowers' knowledge thereof.

ARTICLE VIII

AFFIRMATIVE COVENANTS

Until all of the Obligations have been finally and indefeasibly paid and satisfied in full and the Commitments terminated, unless consent has been obtained in the manner provided for in Section 13.10, each Borrower will, and will cause each of its Subsidiaries to:

SECTION 8.1. Preservation of Corporate Existence and Related Matters. Preserve and maintain its separate corporate existence and all rights, franchises, licenses and privileges necessary to the conduct of its business, and qualify and remain qualified as a foreign corporation and authorized to do business in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect, and maintain CCA REIT's qualification as "real estate investment trust" under Sections 856 through 860 of the Code.

SECTION 8.2. Maintenance of Property. Protect and preserve (or cause the applicable lessee to protect and preserve, in accordance with the terms of the applicable Lease) all properties useful in and material to its business, including copyrights, patents, trade names and trademarks; maintain (or cause the applicable lessee to maintain, in accordance with the terms of the applicable Lease) in good working order and condition all buildings, equipment and other tangible real and personal property; and from time to time make (or cause the applicable lessee to make, in accordance with the terms of the applicable Lease) all renewals, replacements and additions to such property necessary for the conduct of its business, so that the business carried on in connection therewith may be properly and advantageously conducted at all times.

SECTION 8.3. Insurance. Maintain (or cause the applicable lessee to maintain, in accordance with the terms of the applicable Lease) insurance with financially sound and reputable insurance companies against such risks and in such amounts as are customarily maintained by similar businesses and as may be required by the Security Documents and Applicable Law, and from time to time deliver to the Administrative Agent upon its request a detailed list of the insurance then in effect, stating the names of the insurance companies, the amounts and rates of the insurance, the dates of the expiration thereof and the properties and risks covered thereby.

SECTION 8.4. Accounting Methods and Financial Records. Maintain a system of accounting, and keep such books, records and accounts (which shall be true and complete in all material respects) as may be required or as may be necessary to permit the preparation of

financial statements in accordance with GAAP and in compliance with the regulations of any Governmental Authority having jurisdiction over it or any of its properties.

SECTION 8.5. Payment and Performance of Obligations. Pay and perform all Obligations under this Agreement and the other Loan Documents, and pay or perform (a) all taxes, assessments and other governmental charges that may be levied or assessed upon it or any of its property, and (b) all other indebtedness, obligations and liabilities in accordance with customary trade practices; provided, that such Borrower or such Subsidiary may contest any item described in this Section 8.5 in good faith so long as adequate reserves are maintained with respect thereto in accordance with GAAP.

SECTION 8.6. Compliance With Laws and Approvals. Observe and remain in compliance with all Applicable Laws and maintain in full force and effect all Governmental Approvals, in each case applicable to the conduct of its business.

SECTION 8.7. Environmental Laws. In addition to and without limiting the generality of Section 8.6, (a) comply with, and use its best efforts to ensure such compliance by all agents, contractors, tenants and subtenants, if any, with, all applicable Environmental Laws and obtain and comply with and maintain, and use its best efforts to ensure that all agents, contractors, tenants and subtenants obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, (b) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws, and promptly comply with all lawful orders and directives of any Governmental Authority regarding Environmental Laws, and
(c) defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates, employees, agents, officers and directors, from and against any 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 Laws applicable to any Correctional Facility or any property subject to any Deed of Trust, any operations thereon by any Person, or the operations of such Borrower or such Subsidiary, or any orders, requirements or demands of Governmental Authorities related thereto, including, without 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 directly result from the gross negligence or willful misconduct of the party seeking indemnification therefor.

SECTION 8.8. Compliance with ERISA. In addition to and without limiting the generality of Section 8.6, (a) comply with all applicable provisions of ERISA and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans, (b) not take any action or fail to take action the result of which could be a liability to the PBGC or to a Multiemployer Plan,
(c) not participate in any prohibited transaction that could result in any civil penalty under ERISA or tax under the Code, (d) operate each Employee Benefit Plan in such a manner that will not incur any tax liability under Section 4980B of the Code or any liability

to any qualified beneficiary as defined in Section 4980B of the Code and (e) furnish to the Administrative Agent upon the Administrative Agent's request such additional information about any Employee Benefit Plan as may be reasonably requested by the Administrative Agent.

SECTION 8.9. Compliance With Agreements. Comply in all respects with each term, condition and provision of all leases, agreements and other instruments entered into in the conduct of its business including, without limitation, any Material Contract; provided, that such Borrower or such Subsidiary may contest any such lease, agreement or other instrument in good faith through applicable proceedings so long as adequate reserves are maintained in accordance with GAAP.

SECTION 8.10. Conduct of Business. Engage only in the business of the ownership of Correctional Facilities or any business reasonably related thereto which such facilities shall be managed by their respective lessee or lessees (or duly authorized agent of any such lessee in the event such lessee is a Public Counterparty).

SECTION 8.11. Visits and Inspections. Permit representatives of the Administrative Agent or any Lender, from time to time, to visit and inspect its properties; inspect, audit and make extracts from its books, records and files, including, but not limited to, management letters prepared by independent accountants; and discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial condition, results of operations and business prospects.

SECTION 8.12. Incarceration Agreements. Prior to the acquisition of any Correctional Facility to be leased to a Private Counterparty, cause such Private Counterparty to (a) obtain an Incarceration Agreement for such Correctional Facility and (b) deliver to the Administrative Agent and Lenders a summary of such Incarceration Agreement in form and substance reasonable satisfactory thereto, or if so requested, provide a copy of such Incarceration Agreement to the Administrative Agent and the Lenders.

SECTION 8.13. Lease Terms and Conditions. Cause each Lease entered into by any Borrower or any Subsidiary thereof to be delivered to the Administrative Agent and cause each such Lease to contain the following terms and conditions:
(a) each such Lease will be a triple net lease, (b) each such Lease will be non-cancelable and not contingent on the maintenance of any Incarceration Agreement relating to such Lease, (c) each such Lease will have a minimum initial lease terms of (ten) 10 years (provided that, subject to prior Required Lender approval, Leases with a Public Counterparty may have lease term of less than ten (10) years and be subject to appropriations limitations imposed by Applicable Law), (d) the lessee or lessees under each such Lease will remain responsible for all prison operations and liabilities relating to the operation, administration and maintenance of the Correctional Facility subject to such Lease and (e) each such Lease (other than those governing the Initial Facilities) contains such other terms and conditions as the Administrative Agent shall reasonably request.

SECTION 8.14. Lease Revenues. Cause at least seventy-five percent (75%) of all Lease revenues to be derived from Leases where the lessee is either (a) CCA or (b) a counterparty whose debt is rated at least A- by Standard & Poor's or A3 by Moody's (or, if ratings for such counterparty are unavailable from both Standard & Poor's and Moody's, rated at least A- by either Fitch or Duff & Phelps); provided the remaining percentage (not to exceed 25%) of all lease revenues shall be derived from leases with a counterparty (x) whose debt is rated at least BBB- by Standard & Poor's or Baa3 by Moody's (or, if ratings for such counterparty are unavailable from both Standard & Poor's and Moody's, rated at least BBB- by either Fitch or Duff & Phelps) or (y) with any other counterparty approved in writing in advance by the Administrative Agent and Required Lenders.

SECTION 8.15. Hedging Agreement. Within eighteen (18) months of the Closing Date, enter into and maintain a Hedging Agreement with a counterparty acceptable to the Administrative Agent (unless the counterparty to such Hedging Agreement is (a) a Lender, (b) an Affiliate of a Lender or (c) an Eligible Assignee), and with interest rates and other terms and conditions satisfactory to the Administrative Agent for a minimum notional amount equal to fifty percent (50%) of Total Funded Debt.

SECTION 8.16. Additional Borrowers. Concurrently with the creation of any additional Subsidiary of any Borrower in accordance with the terms hereof, cause to be executed and delivered to the Administrative Agent (a) a joinder agreement in form and substance satisfactory to the Lenders such that such Subsidiary shall become a borrower hereunder and be bound by all of the terms and conditions hereof, (b) supplements to the Security Documents (or additional Security Documents) in each case in form and substance satisfactory to the Lenders such that the assets of such Subsidiary shall become collateral security for the Obligations, (c) a pledge agreement executed by CCA REIT (or other applicable Subsidiary) in each case in form and substance satisfactory to the Lenders such that the capital stock of such new Subsidiary shall become collateral for the Obligations and (d) such other documents reasonably requested by the Administrative Agent or Required Lenders consistent with the terms of this Agreement which provide that such Subsidiary shall become bound by all of the terms, covenants and agreements contained in the Loan Documents. Upon satisfaction of the conditions set forth in this Section 8.16, each Subsidiary shall become a Borrower hereunder and the other Loan Documents or a joint and several basis to the same extent as if such Subsidiary had been a party hereto and thereto on the Closing Date.

SECTION 8.17. Further Assurances. Make, execute and deliver all such additional and further acts, things, deeds and instruments as the Administrative Agent or any Lender may reasonably require to document and consummate the transactions contemplated hereby and to vest completely in and insure the Administrative Agent and the Lenders their respective rights under this Agreement, the Notes, the Letters of Credit and the other Loan Documents.

ARTICLE IX

FINANCIAL COVENANTS

Until all of the Obligations have been finally and indefeasibly paid and satisfied in full and the Commitments terminated, unless consent has been obtained in the manner set forth in Section 13.10 hereof, the Borrowers and their Subsidiaries on a Consolidated basis will not:

SECTION 9.1 Ratio of Total Liabilities to Total Capitalization. As of any fiscal quarter end, permit the ratio of (a) Total Liabilities as of such date to (b) Total Capitalization as of such date to equal or exceed .45 to 1.0.

SECTION 9.2 Ratio of Total Funded Debt to Cash Flow. As of any fiscal quarter end, permit the ratio of (a) the sum of Total Funded Debt as of such date less Excess Cash as of such date to (b) the product of Cash Flow for such fiscal quarter times four, to exceed 12.0 to 1.0.

        Date                                   Ratio

Closing Date through
9/30/97                                    1.00 to 1.00

12/31/97 through
12/31/98                                    .95 to 1.00

3/31/99 and
thereafter                                  .90 to 1.00

; provided that, for each fiscal quarter ending after the Closing Date through and including the fiscal quarter ending on March 31, 1998, this ratio shall be calculated on an Annualized basis.

SECTION 9.4 Interest Coverage Ratio: As of any fiscal quarter end, for the four consecutive fiscal quarter period ending on such date, permit the ratio of (a) the sum of (i) Funds From Operations for such period plus (ii) Interest Expense for such period less (iii) Maintenance Capital Expenditures made during such period to (b) the sum of (i) Interest Expense for such period plus (ii) Dividends paid during such period with respect to any class of Preferred Stock, to be less than 3.0 to 1.0; provided that, for each fiscal quarter ending after the Closing

Date through and including the fiscal quarter ending on March 31, 1998, this ratio shall be calculated on an Annualized basis.

SECTION 9.5 Minimum Net Worth. As of any fiscal quarter end, permit Net Worth to be less than the sum of (a) ninety five percent (95%) of the Net Cash Proceeds of the Offering plus (b) $3,000,000 (representing the accounting treatment of the initial equity interests of CCA REIT purchased by D. Robert Crants, III and Michael W. Devlin) plus (c) seventy five percent (75%) of Net Income (to the extent Net Income is positive) after the Closing Date determined on a cumulative basis less (d) Dividends paid after the Closing Date plus (e) 100% of any Net Cash Proceeds received from the issuance of, or any Debt satisfied on the conversion into, any capital stock of any Borrower during such fiscal quarter.

SECTION 9.6 Additional Secured Debt. Upon the incurrence of any secured Debt permitted hereunder during such time as any Security Document continues to secure the Obligations, as of any fiscal quarter end, permit the ratio of (a) the aggregate principal amount of Loans outstanding on such fiscal quarter end to (b) the product of Revolver Secured Cash Flow for such fiscal quarter times four, to exceed 3.25 to 1.0.

SECTION 9.7 Investment Grade Rating. As of any fiscal quarter end after such date as CCA REIT has obtained an Investment Grade Rating, permit:

(a) the ratio of (i) Total Unsecured Debt as of such fiscal quarter end to (ii) the product of Unleveraged Cash Flow for such fiscal quarter times four, to exceed 3.25 to 1.0; and

(b) the ratio of (i) Total Secured Debt as of such fiscal quarter end to (ii) Fixed Asset Book Value as of such fiscal quarter end, to exceed .25 to 1.0.

ARTICLE X

NEGATIVE COVENANTS

Until all of the Obligations have been finally and indefeasibly paid and satisfied in full and the Commitments terminated, unless consent has been obtained in the manner set forth in Section 13.10 hereof, the Borrowers have not and will not permit any of its Subsidiaries to:

SECTION 10.1. Limitations on Debt. Create, incur, assume or suffer to exist any Debt except:

(a) the Obligations;

(b) Debt incurred in connection with the Hedging Agreement required by
Section 8.15 and any other Hedging Agreement with a counterparty satisfactory to the Administrative Agent (unless the counterparty to such Hedging Agreement is
(a) a Lender, (b) an Affiliate of a Lender

or (c) an Eligible Assignee) and upon terms and conditions reasonably satisfactory to the Administrative Agent;

(c) Debt incurred in connection with the refinancing of Debt relating to any Correctional Facility; provided that, the Borrowers comply with Section 2.9;

(d) Debt consisting of Contingent Obligations permitted by Section 10.2; and

(e) Debt of the Borrowers and their Subsidiaries (a) other than provided for in clauses (a) through (d) of this Section, incurred in the ordinary course of business of the Borrowers and their Subsidiaries not to exceed $1,000,000 on any date of determination

; provided, that none of the Debt permitted to be incurred by this Section shall restrict, limit or otherwise encumber (by covenant or otherwise) the ability of any Subsidiary of any Borrower to make any payment to such Borrower or any of its Subsidiaries (in the form of dividends, intercompany advances or otherwise) for the purpose of enabling such Borrower to pay the Obligations.

SECTION 10.2. Limitations on Contingent Obligations. Create, incur, assume or suffer to exist any Contingent Obligations except:

(a) Contingent Obligations in favor of the Administrative Agent for the benefit of the Administrative Agent and the Lenders; and

(b) guaranties incurred in the ordinary course of business in an aggregate amount not to exceed $250,000 at any time.

SECTION 10.3. Limitations on Liens. Create, incur, assume or suffer to exist, any Lien on or with respect to any of its assets or properties (including without limitation shares of capital stock or other ownership interests), real or personal, whether now owned or hereafter acquired, except:

(a) Liens for taxes, assessments and other governmental charges or levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws) not yet due or as to which the period of grace (not to exceed thirty (30) days), if any, related thereto has not expired or which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;

(b) the claims of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, (i) which are not overdue for a period of more than thirty (30) days or (ii) which are being contested in good faith and by appropriate proceedings;

(c) Liens consisting of deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers' compensation, unemployment insurance or similar legislation.

(d) Liens constituting encumbrances in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property, which in the aggregate are not substantial in amount and which do not, in any case, detract from the value of such property or impair the use thereof in the ordinary conduct of business;

(e) Liens in favor of the Administrative Agent for the benefit of the Administrative Agent and the Lenders;

(f) Liens securing Debt permitted under Section 10.1(c) and Capitalized Leases and purchase money Debt permitted pursuant to Section 10.1(e); provided, that (i) such Liens shall be created substantially simultaneously with the refinancing, acquisition or lease of the related asset, (ii) such Liens do not at any time encumber any property other than the property financed or refinanced by such Debt, (iii) the amount of Debt secured thereby is not increased and (iv) the principal amount of Debt secured by any such Lien shall at no time exceed one hundred percent (100%) of the original purchase or lease price of such property at the time it was refinanced, acquired or leased; and

(g) Liens on any Correctional Facility acquired in an acquisition permitted by Section 10.12(b)(iii).

SECTION 10.4. Limitations on Loans, Advances, Investments and Acquisitions. Purchase, own, invest in or otherwise acquire, directly or indirectly, any capital stock, interests in any partnership or joint venture (including without limitation the creation or capitalization of any Subsidiary), evidence of Debt or other obligation or security, substantially all of the business or assets of any other Person or any other investment or interest whatsoever in any other Person, or make or permit to exist, directly or indirectly, any loans, advances or extensions of credit to, or any investment in cash or by delivery of property in, any Person, or enter into, directly or indirectly, any commitment or option in respect of the foregoing except:

(a) investments in (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency thereof maturing within 180 days from the date of acquisition thereof, (ii) commercial paper maturing no more than 180 days from the date of creation thereof and currently having the highest rating obtainable from either Standard & Poor's or Moody's, (iii) certificates of deposit maturing no more than 180 days from the date of creation thereof issued by commercial banks incorporated under the laws of the United States of America, each having combined capital, surplus and undivided profits of not less than $500,000,000 and having a rating of "A" or better by a nationally recognized rating agency; provided, that the aggregate amount invested in such certificates of deposit shall not at any time exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for any one such bank, or (iv) time deposits maturing no more than 30 days from the date of creation thereof

with commercial banks or savings banks or savings and loan associations each having membership either in the FDIC or the deposits of which are insured by the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder;

(b) investments by any Borrower or any Subsidiary thereof in the form of acquisitions of any Correctional Facility and related assets if each such acquisition meets all of the following requirements: (i) the total aggregate consideration for any single acquisition shall not exceed thirty five percent (35%) of the aggregate net Fixed Asset Book Value immediately prior to the consummation of any such acquisition, (ii) the Borrowers shall have demonstrated pro forma compliance with each covenant contained in Article IX hereof prior to consummating the acquisition and no Default or Event of Default shall have occurred and be continuing both before and after giving effect to the acquisition, (iii) the Borrowers shall have delivered to the Administrative Agent in form and substance satisfactory thereto (A) such additional Assignments of Lease, such additional Deeds of Trust, such additional UCC-1 financing statements and other documents as are necessary to ensure that the Administrative Agent, on behalf of itself and the Lenders, is granted a first priority security interest in all of the assets to be acquired pursuant to such acquisition (or if such acquisition is permitted by Section 10.12, a second priority security interest in all such property) and (B) such other documents, certificate and opinions consistent with Article V as are reasonably requested by the Administrative Agent or Required Lenders;

(c) loans from CCA REIT to CCA; provided that, (i) such loans are made with Net Cash Proceeds of the Offering, (ii) the aggregate principal amount of such loans do not exceed $40,000,000, (iii) the proceeds of such loans are used solely for the construction and development of Option Facilities and (iv) each such loan is repaid in full on the earlier of the closing of the sale of such Option Facility to CCA REIT or January 31, 1998; and

(d) the creation of a wholly-owned Subsidiary of CCA REIT for the purpose of providing management services to CCA REIT, including without limitation, payroll administration; provided that, CCA REIT complies with the applicable provision of Section 8.16.

SECTION 10.5. Limitations on Mergers and Liquidation. Merge, consolidate or enter into any similar combination with any other Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution).

SECTION 10.6. Limitations on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or assets (including, without limitation, the sale of any receivables and leasehold interests and any sale-leaseback or similar transaction), whether now owned or hereafter acquired except:

(a) the sale or other disposition of assets, including any Correctional Facility; provided that (i) the aggregate amount of the sale price of all assets sold or disposed of during the term of this Agreement shall not exceed twenty percent (20%) of the net Fixed Asset Book Value of

the Borrowers (as of the Closing Date), (ii) the Borrowers comply with Section 2.9 with respect to each such sale and (iii) the Borrowers shall have demonstrated pro forma compliance with each covenant contained in Article IX hereof;

(b) the sale of obsolete assets no longer used or usable in the business of any Borrower or any Subsidiary thereof; and

(c) the sale or discount without recourse of accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof.

SECTION 10.7. Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its capital stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its capital stock, or make any distribution of cash, property or assets among the holders of shares of its capital stock, or make any change in its capital structure that could reasonably be expected to have a Material Adverse Effect; provided that:

(a) any Borrower or any Subsidiary thereof may pay dividends in shares of its own capital stock;

(b) any Subsidiary may pay cash dividends to any Borrower; and

(c) any Borrower may pay Dividends as long as immediately prior to making such Dividend and after giving pro forma effect to the payment of such Dividends, no Default or Event of Default has occurred and is continuing.

SECTION 10.8. Transactions with Affiliates. Directly or indirectly: (a) make any loan or advance to, or purchase or assume any note or other obligation to or from, any of its officers, directors, shareholders or Affiliates, or to or from any member of the immediate family of any of its officers, directors, shareholders or Affiliates, or subcontract any operations to any of its Affiliates, or (b) enter into, or be a party to, any transaction with any of its Affiliates, except pursuant to the reasonable requirements of its business and upon fair and reasonable terms that are no less favorable to it than it would obtain in a comparable arm's length transaction with a Person not its Affiliate.

SECTION 10.9. Certain Accounting Changes. Change its Fiscal Year end, or make any change in its accounting treatment and reporting practices except as required by GAAP.

SECTION 10.10. Amendment to Sale Leaseback Documents. Without the prior written consent of the Administrative Agent, amend any Lease or any Sale Leaseback Document in a way that could be reasonably expected to have an adverse effect (as reasonably determined by the Administrative Agent) on any Borrower.

SECTION 10.11. Restrictions on Working Capital. At any time during the term of this Agreement, allow more than $5,000,000 in the aggregate to be outstanding under the Credit Facility for working capital and general corporate purposes.

SECTION 10.12. Restrictions on Use of Proceeds and Other Expenditures. With respect to the Dollar amounts set forth in clauses (i), (ii) and (iii) below, (a) allow an aggregate amount in excess of such amounts to be outstanding under the Credit Facility for the corresponding purpose at any time during the term of the Agreement and (b) as of any fiscal quarter end, expend an aggregate amount in excess of such amounts for the corresponding purpose during the consecutive four fiscal quarter period ending on such date: (i) $90,000,000 less all amounts expended during such period pursuant to Section 10.12(b)(ii) for further development of existing Correctional Facilities which are subject to a Lease and if such Lease is with a Private Counterparty, there is a corresponding Incarceration Agreement for such facility; provided that with respect to further development of existing Correctional Facilities leased to a Private Counterparty for which no such Incarceration Agreement exists, such amount shall not exceed $25,000,000, (ii) $90,000,000 less all amounts expended during such period pursuant to Section 10.12(b)(i) for the construction of up to two new Correctional Facilities at any one time; provided that, (A) at least seventy-five percent (75%) of the amount outstanding under the Credit Facility at any time pursuant to Section 10.12(b)(ii) is expended on the construction of new Correctional Facilities that are subject to a Lease with a public counterparty whose debt is rated at least A- by Standard & Poor's or A3 by Moody's (or, if ratings for such public counterparty are unavailable from both Standard & Poor's and Moody's, rated at least A- by either Fitch or Duff & Phelps); provided further, that the remaining percentage (not to exceed 25%) of the amount outstanding under the Credit Facility at any time pursuant to Section 10.12(b)(ii) is expended on the construction of new Correctional Facilities that are subject to a Lease with a public counterparty (x) whose debt is rated at least BBB- by Standard & Poor's or Baa3 by Moody's (or, if ratings for such public counterparty are unavailable from both Standard & Poor's and Moody's, rated at least BBB- by either Fitch or Duff & Phelps) or (y) with any other public counterparty approved in writing in advance by the Administrative Agent and Required Lenders, (B) all permits and licenses required by Applicable Law pertaining to such construction shall have been obtained prior to and maintained after the funding of any Loan to be used to finance such construction, (C) payment and performance bonds shall have been obtained for all such construction prior to and maintained after the funding of any Loan to be used to finance such construction, (D) the Administrative Agent shall have approved the construction manager for all such construction prior to the funding of any Loan to be used to finance such construction, (E) the Administrative Agent has received a signed development contract in form and substance satisfactory thereto including a description of the nature and extent of such construction prior to the funding of any Loan to be used to finance such construction and (F) the Borrowers and their Subsidiaries shall have complied with Section 10.4(b)(iii) and (iii) $30,000,000 to finance the acquisition of Correctional Facilities subject to an existing first priority Lien in favor of a third party creditor; provided, that the Borrowers and their Subsidiaries shall have complied with the provisions of
Section 10.4(b).

SECTION 10.13. Restrictive Agreements. Enter into any Debt which contains any negative pledge on assets or any covenants more restrictive than the provisions of Articles VIII, IX and X hereof, or which restricts, limits or otherwise encumbers its ability to incur Liens on or with respect to any of its assets or properties other than the assets or properties securing such Debt.

SECTION 10.14. Operating Leases. The aggregate amount of annual base payments under all lease agreements for personal property, other than Capital Leases, shall not exceed $100,000 for any fiscal year.

ARTICLE XI

DEFAULT AND REMEDIES

SECTION 11.1. Events of Default. Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment or order of any court or any order, rule or regulation of any Governmental Authority or otherwise:

(a) Default in Payment of Principal of Loans and Reimbursement Obligations. Any Borrower shall default in any payment of principal of any Loan or Note or Reimbursement Obligation when and as due (whether at maturity, by reason of acceleration or otherwise).

(b) Other Payment Default. Any Borrower shall default in the payment when and as due (whether at maturity, by reason of acceleration or otherwise) of interest on any Loan or Note or Reimbursement Obligation or the payment of any other Obligation, and such default shall continue unremedied for five (5) Business Days.

(c) Misrepresentation. Any representation or warranty made (or deemed to be made pursuant to Section 5.3(a)) by any Borrower or any of Subsidiary thereof under this Agreement, any Loan Document or any amendment hereto or thereto, shall at any time prove to have been incorrect or misleading in any material respect when made (or deemed made pursuant to Section 5.3(a)).

(d) Default in Performance of Certain Covenants. Any Borrower shall default in the performance or observance of any covenant or agreement contained in Sections 7.4(e) or Articles IX or X of this Agreement.

(e) Default in Performance of Other Covenants and Conditions. Any Borrower or any Subsidiary thereof shall default in the performance or observance of any term, covenant, condition or agreement contained in this Agreement (other than as specifically provided for otherwise in this Section 11.1) or any other Loan Document and such default shall continue for

a period of thirty (30) days after written notice thereof has been given to CCA REIT by the Administrative Agent.

(f) Hedging Agreement. Any termination payment shall be due by any Borrower under any Hedging Agreement and such amount is not paid within five (5) Business Days of the due date thereof.

(g) Debt Cross-Default. Any Borrower or any Subsidiary thereof shall
(i) default in the payment of any Debt (other than the Notes or any Reimbursement Obligation) the aggregate outstanding amount of which is in excess of $250,000 beyond the period of grace if any, provided in the instrument or agreement under which such Debt was created, or (ii) default in the observance or performance of any other agreement or condition relating to any Debt (other than the Notes or any Reimbursement Obligation) the aggregate outstanding amount of which is in excess of $250,000 or contained in any instrument or agreement evidencing, securing or relating thereto or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Debt (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice if required, any such Debt to become due prior to its stated maturity (any applicable grace period having expired).

(h) Other Cross-Defaults. (i) Any Borrower or any Subsidiary thereof shall default in the payment when due, or in the performance or observance, of any material obligation or condition (as determined by the Administrative Agent) of (A) any Material Contract unless, but only as long as, the existence of any such default is being contested by such Borrower or such Subsidiary in good faith by appropriate proceedings and adequate reserves in respect thereof have been established on the books of such Borrower or such Subsidiary to the extent required by GAAP or (B) any Lease or (ii) any other default under any Lease by CCA or any other party thereto.

(i) Change in Control or Senior Management. (i) Any person or group of persons (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended) shall obtain ownership or control in one or more series of transactions of more than nine percent (9%) of the voting power of CCA REIT entitled to vote in the election of members of the board of directors of CCA REIT or there shall have occurred under any indenture or other instrument evidencing any Debt in excess of $250,000 any "change in control" (as defined in such indenture or other evidence of Debt) obligating any Borrower to repurchase, redeem or repay all or any part of the Debt or capital stock provided for therein (any such event, a "Change in Control") or (ii) any of the Chairman of the Board of Directors, Chief Executive Officer, President or Chief Development Officer of CCA REIT as of the Closing Date ceases to continue to hold such office or continue with management responsibilities substantially similar to those existing on the Closing Date and a replacement for such Person reasonably satisfactory to the Administrative Agent and possessing substantially similar qualifications and reputation to the Person being replaced is not employed by CCA REIT within ninety (90) days after such first Person ceases to hold such office or continue to have such management responsibilities.

(j) Voluntary Bankruptcy Proceeding. Any Borrower or any Subsidiary thereof shall (i) commence a voluntary case under the federal bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to take advantage of any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or composition for adjustment of debts, (iii) consent to or fail to contest in a timely and appropriate manner any petition filed against it in an involuntary case under such bankruptcy laws or other laws, (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign, (v) admit in writing its inability to pay its debts as they become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the foregoing.

(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be commenced against any Borrower or any Subsidiary thereof in any court of competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like for any Borrower or any Subsidiary thereof or for all or any substantial part of their respective assets, domestic or foreign, and such case or proceeding shall continue undismissed or unstayed for a period of sixty (60) consecutive days, or an order granting the relief requested in such case or proceeding (including, but not limited to, an order for relief under such federal bankruptcy laws) shall be entered.

(l) Failure of Agreements. Any provision of any Loan Document (other than this Agreement) shall for any reason cease to be valid and binding on any Borrower or any Subsidiary thereof party thereto or any such Person shall so state in writing, or any Loan Document (other than this Agreement) shall for any reason cease to create a valid and perfected first priority Lien on, or security interest in, any of the collateral purported to be covered thereby, in each case other than in accordance with the express terms hereof or thereof.

(m) Termination Event. The occurrence of any of the following events:
(i) any Borrower or any ERISA Affiliate fails to make full payment when due of all amounts which, under the provisions of any Pension Plan or Section 412 of the Code, any Borrower or any ERISA Affiliate is required to pay as contributions thereto, (ii) an accumulated funding deficiency in excess of $250,000 occurs or exists, whether or not waived, with respect to any Pension Plan or (iii) any Borrower or any ERISA Affiliate as employers under one or more Multiemployer Plan makes a complete or partial withdrawal from any such Multiemployer Plan and the plan sponsor of such Multiemployer Plans notifies such withdrawing employer that such employer has incurred a withdrawal liability requiring payments in an amount exceeding $250,000.

(n) Judgment. A judgment or order for the payment of money which causes the aggregate amount of such judgments to exceed $250,000 in any Fiscal Year shall be entered

against any Borrower or any Subsidiary thereof by any court and such judgment or order shall continue undischarged or unstayed for a period of thirty (30) days.

(o) Failure to Maintain Stock Exchange Listing. CCA REIT shall fail to maintain each class of its capital stock as eligible for listing for trading on the New York Stock Exchange once any such class of capital stock is initially listed thereon.

SECTION 11.2. Remedies. Upon the occurrence of an Event of Default, with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to CCA REIT:

(a) Acceleration; Termination of Facilities. Declare the principal of and interest on the Loans, the Notes and the Reimbursement Obligations at the time outstanding, and all other amounts owed to the Lenders and to the Administrative Agent under this Agreement or any of the other Loan Documents (including, without limitation, all L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) and all other Obligations, to be forthwith due and payable, whereupon the same shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived, anything in this Agreement or the other Loan Documents to the contrary notwithstanding, and terminate the Credit Facility and any right of any Borrower to request borrowings or Letters of Credit thereunder; provided, that upon the occurrence of an Event of Default specified in Section 11.1(j) or (k), the Credit Facility shall be automatically terminated and all Obligations shall automatically become due and payable.

(b) Letters of Credit. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, require the Borrowers at such time to deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay the other Obligations. After all such Letters of Credit shall have expired or been fully drawn upon, the Reimbursement Obligation shall have been satisfied and all other Obligations shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrowers or such other Person which may be entitled thereto.

(c) Rights of Collection. Exercise on behalf of the Lenders all of its other rights and remedies under this Agreement, the other Loan Documents and Applicable Law, in order to satisfy all of the Borrowers' Obligations.

SECTION 11.3. Rights and Remedies Cumulative; Non-Waiver; Etc. The enumeration of the rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent

and the Lenders of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the Loan Documents or that may now or hereafter exist in law or in equity or by suit or otherwise. No delay or failure to take action on the part of the Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed to be a waiver of any Event of Default. No course of dealing between any Borrower, the Administrative Agent and the Lenders or their respective agents or employees shall be effective to change, modify or discharge any provision of this Agreement or any of the other Loan Documents or to constitute a waiver of any Event of Default.

ARTICLE XII

THE ADMINISTRATIVE AGENT

SECTION 12.1. Appointment. Each of the Lenders hereby irrevocably designates and appoints First Union as Administrative Agent of such Lender under this Agreement and the other Loan Documents and each such Lender irrevocably authorizes First Union as Administrative Agent for such Lender, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents (with the consent of the Required Lenders or all of the Lenders as required pursuant to Section 13.10) and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and such other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement or such other Loan Documents, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or the other Loan Documents or otherwise exist against the Administrative Agent. The Administrative Agent agrees that it shall administer the Loans and the Loan Documents in a manner consistent with that ordinarily employed by the Administrative Agent in the administration of similar loans for its own account.

SECTION 12.2. Delegation of Duties. The Administrative Agent may execute any of its respective duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by the Administrative Agent with reasonable care.

SECTION 12.3. Exculpatory Provisions. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates shall be

(a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or the other Loan Documents (except for actions occasioned solely by its or such Person's own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Borrower or any of Subsidiary thereof or any officer thereof contained in this Agreement or the other Loan Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or the other Loan Documents or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or the other Loan Documents or for any failure of any Borrower or any Subsidiary thereof to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement, or to inspect the properties, books or records of any Borrower or any Subsidiary thereof.

SECTION 12.4. Reliance by the Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrowers), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless such Note shall have been transferred in accordance with Section 13.9 hereof. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement and the other Loan Documents unless it shall first receive such advice or concurrence of the Required Lenders (or, when expressly required hereby or by the relevant other Loan Document, all the Lenders) as it deems appropriate or 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 or continuing to take any such action except as a result of its own gross negligence or willful misconduct. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the Notes in accordance with a request of the Required Lenders (or, when expressly required hereby, all the Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Notes.

SECTION 12.5. Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless it has received notice from a Lender or CCA REIT referring to this Agreement, describing 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, it shall promptly give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided that unless and until the Administrative Agent shall have received such directions, the

Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

SECTION 12.6. Non-Reliance on the Administrative Agent and Other Lenders. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of any Borrower or any Subsidiary thereof, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own evaluation of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrowers and their Subsidiaries and made its own decision to make its Loans and issue or participate in Letters of Credit hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, evaluation and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrowers and their Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder or by the other Loan Documents, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of any Borrower or any Subsidiary thereof which may come into the possession of the Administrative Agent or any of its respective officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates.

SECTION 12.7. Indemnification. The Lenders agree to indemnify the Administrative Agent in its capacity as such and (to the extent not reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), ratably according to the respective amounts of their Commitment Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes or any Reimbursement Obligations) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or the other Loan Documents, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the Administrative Agent's bad faith, gross negligence or willful misconduct. The

agreements in this Section 12.7 shall survive the payment of the Notes any Reimbursement Obligation and all other amounts payable hereunder and the termination of this Agreement.

SECTION 12.8. The Administrative Agent in Its Individual Capacity. The Administrative Agent and its respective Subsidiaries and Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrowers as though the Administrative Agent were not an Administrative Agent hereunder. With respect to any Loans made or renewed by it and any Note issued to it and with respect to any Letter of Credit issued by it or participated in by it, the Administrative Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Administrative Agent, and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity.

SECTION 12.9. Resignation of the Administrative Agent; Successor Administrative Agent. Subject to the appointment and acceptance of a successor as provided below, the Administrative Agent may resign at any time by giving notice thereof to the Lenders and CCA REIT. Upon any such resignation, the Required Lenders (and, so long as no Default or Event of Default has occurred and is continuing, with the consent of CCA REIT, which consent shall not be unreasonably withheld or delayed) shall have the right to appoint a successor Administrative Agent, which successor shall have minimum capital and surplus of at least $500,000,000. If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the Administrative Agent's giving of notice of resignation, then the Administrative Agent may, on behalf of the Lenders (and, so long as no Default or Event of Default has occurred and is continuing, with the consent of CCA REIT, which consent shall not be unreasonably withheld or delayed), appoint a successor Administrative Agent, which successor shall have minimum capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all rights, powers, 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 12.9 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.

SECTION 12.10 The Co-Agent. The Co-Agent, in its capacity as Co-Agent, shall have no duties or responsibilities and no liabilities under this Agreement or any other Loan Document.

ARTICLE XIII

MISCELLANEOUS

SECTION 13.1. Notices.

(a) Method of Communication. Except as otherwise provided in this Agreement, all notices and communications hereunder shall be in writing, or by telephone subsequently confirmed in writing. Any notice shall be effective if delivered by hand delivery or sent via telecopy, recognized overnight courier service (next day delivery requested) or certified mail, return receipt requested, and shall be presumed to be received by a party hereto (i) on the date of delivery if delivered by hand or sent by telecopy, (ii) on the next Business Day if sent by recognized overnight courier service and (iii) on the third Business Day following the date sent by certified mail, return receipt requested. A telephonic notice to the Administrative Agent as understood by the Administrative Agent will be deemed to be the controlling and proper notice in the event of a discrepancy with or failure to receive a confirming written notice.

(b) Addresses for Notices. Notices to any party shall be sent to it at the following addresses, or any other address as to which all the other parties are notified in writing.

If to any Borrower:                CCA Prison Realty Trust
                                   2200 Abbott Martin Road, Suite 201
                                   Nashville, Tennessee 37215
                                   Attention: D. Robert Crants, III
                                   Telephone No.: (615) 460-1220
                                   Telecopy No.:  (615) 460-1206

With copies to:                    Stokes and Barthelomew, P.A.
                                   SunTrust Center, Suite 2800
                                   424 Church Street
                                   Nashville, Tennessee 37219
                                   Attention:  Elizabeth E. Moore
                                   Telephone No.: (615) 259-1450
                                   Telecopy No.:  (615) 259-1470

If to First Union as
 Administrative Agent:
                                   First Union National Bank of
                                            Tennessee
                                   One First Union Center, TW-10
                                   301 South College Street
                                   Charlotte, North Carolina
                                            28288-0608
                                   Attention:  Syndication Agency
                                                   Services
                                   Telephone No.: (704) 383-0281
                                   Telecopy No.:  (704) 383-0288

                                                     and

                                   First Union National Bank
                                            of Tennessee
                                   150 Fourth Avenue North
                                   Nashville, Tennessee 37219
                                   Attention: Tim Fouts
                                   Telephone No.: (615) 251-9243
                                   Telecopy No.:  (615) 251-9461
If to any Lender:                  To the Address set forth on
                                   Schedule 1.1 hereto

(c) Administrative Agent's Office. The Administrative Agent hereby designates its office located at the address set forth above for First Union National Bank of North Carolina, or any subsequent office which shall have been specified for such purpose by written notice to the Borrowers and Lenders, as the Administrative Agent's Office referred to herein, to which payments due are to be made and at which Loans will be disbursed and Letters of Credit issued.

SECTION 13.2. Expenses; Indemnity. The Borrowers will (a) pay all out-of-pocket expenses of the Administrative Agent in connection with: (i) the preparation, execution and delivery of this Agreement and each other Loan Document, whenever the same shall be executed and delivered, including without limitation all out-of-pocket syndication and due diligence expenses and reasonable fees and disbursements of counsel for the Administrative Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or consent by the Administrative Agent or the Lenders relating to this Agreement or any other Loan Document, including without limitation reasonable fees and disbursements of counsel for the Administrative Agent, (b) pay all out-of-pocket expenses of the Administrative Agent and each Lender in connection with the administration and enforcement of any rights and remedies of the Administrative Agent and Lenders under the Credit Facility, including consulting with

appraisers, accountants, engineers, attorneys and other Persons concerning the nature, scope or value of any right or remedy of the Administrative Agent or any Lender hereunder or under any other Loan Document or any factual matters in connection therewith, which expenses shall include without limitation the reasonable fees and disbursements of such Persons, and (c) defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates, employees, agents, officers and directors, from and against any losses, penalties, fines, liabilities, settlements, damages, costs and expenses, suffered by any such Person in connection with any claim, investigation, litigation or other proceeding (whether or not the Administrative Agent or any Lender is a party thereto) and the prosecution and defense thereof, arising out of or in any way connected with the Agreement, any other Loan Document or the Loans, including without limitation reasonable attorney's and consultant's fees, except to the extent that any of the foregoing directly result from the gross negligence or willful misconduct of the party seeking indemnification therefor.

SECTION 13.3. Set-off. In addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, upon and after the occurrence of any Event of Default and during the continuance thereof, the Lenders and any assignee or participant of a Lender in accordance with Section 13.9 are hereby authorized by the Borrowers at any time or from time to time, without notice to any Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, time or demand, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Lenders, or any such assignee or participant to or for the credit or the account of the Borrowers against and on account of the Obligations irrespective of whether or not (a) the Lenders shall have made any demand under this Agreement or any of the other Loan Documents or (b) the Administrative Agent shall have declared any or all of the Obligations to be due and payable as permitted by
Section 11.2 and although such Obligations shall be contingent or unmatured.

SECTION 13.4. Governing Law. This Agreement, the Notes and the other Loan Documents, unless otherwise expressly set forth therein, shall be governed by, construed and enforced in accordance with the laws of the State of North Carolina, without reference to the conflicts or choice of law principles thereof.

SECTION 13.5. Consent to Jurisdiction. Each Borrower hereby irrevocably consents to the personal jurisdiction of the state and federal courts located in Mecklenburg County, North Carolina, in any action, claim or other proceeding arising out of any dispute in connection with this Agreement, the Notes and the other Loan Documents, any rights or obligations hereunder or thereunder, or the performance of such rights and obligations. Each Borrower hereby irrevocably consents to the service of a summons and complaint and other process in any action, claim or proceeding brought by the Administrative Agent or any Lender in connection with this Agreement, the Notes or the other Loan Documents, any rights or obligations hereunder or thereunder, or the performance of such rights and obligations, on behalf of itself or its property, in the manner specified in
Section 13.1. Nothing in this Section 13.5 shall affect the right of the Administrative Agent or any Lender to serve legal process in any

other manner permitted by Applicable Law or affect the right of the Administrative Agent or any Lender to bring any action or proceeding against any Borrower or its properties in the courts of any other jurisdictions.

SECTION 13.6. Binding Arbitration; Waiver of Jury Trial.

(a) Binding Arbitration. Upon demand of any party, whether made before or after institution of any judicial proceeding, any dispute, claim or controversy arising out of, connected with or relating to the Notes or any other Loan Documents ("Disputes"), between or among parties to the Notes or any other Loan Document shall be resolved by binding arbitration as provided herein. Institution of a judicial proceeding by a party does not waive the right of that party to demand arbitration hereunder. Disputes may include, without limitation, tort claims, counterclaims, claims brought as class actions, claims arising from Loan Documents executed in the future, or claims concerning any aspect of the past, present or future relationships arising out or connected with the Loan Documents. Arbitration shall be conducted under and governed by the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings shall be conducted in Charlotte, North Carolina. The expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000. All applicable statutes of limitation shall apply to any Dispute. A judgment upon the award may be entered in any court having jurisdiction. The panel from which all arbitrators are selected shall be comprised of licensed attorneys. The single arbitrator selected for expedited procedure shall be a retired judge from the highest court of general jurisdiction, state or federal, of the state where the hearing will be conducted. Notwithstanding the foregoing, this paragraph shall not apply to any Hedging Agreement that is a Loan Document.

(B) JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

(c) Preservation of Certain Remedies. Notwithstanding the preceding binding arbitration provisions, the parties hereto and the other Loan Documents preserve, without diminution, certain remedies that such Persons may employ or exercise freely, either alone, in conjunction with or during a Dispute. Each such Person shall have and hereby reserves the right to proceed in any court of proper jurisdiction or by self help to exercise or prosecute the following remedies: (i) all rights to foreclose against any real or personal property or other security by exercising a power of sale granted in the Loan Documents or under applicable law or by judicial foreclosure and sale, (ii) all rights of self help including peaceful occupation of property, collection of rents and set off, (iii) obtaining provisional or ancillary remedies including injunctive relief, sequestration, garnishment, attachment, appointment of receiver and in filing

an involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by confession of judgment. Preservation of these remedies does not limit the power of an arbitrator to grant similar remedies that may be requested by a party in a Dispute.

SECTION 13.7. Reversal of Payments. To the extent any Borrower makes a payment or payments to the Administrative Agent for the ratable benefit of the Lenders or the Administrative Agent receives any payment or proceeds of the collateral which payments or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds repaid, the Obligations or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or proceeds had not been received by the Administrative Agent.

SECTION 13.8. Accounting Matters. All financial and accounting calculations, measurements and computations made for any purpose relating to this Agreement, including, without limitation, all computations utilized by any Borrower or any Subsidiary thereof to determine compliance with any covenant contained herein, shall, except as otherwise expressly contemplated hereby or unless there is an express written direction by the Administrative Agent to the contrary agreed to by CCA REIT, be performed in accordance with GAAP as in effect on the Closing Date. In the event that changes in GAAP shall be mandated by the Financial Accounting Standards Board, or any similar accounting body of comparable standing, or shall be recommended by the Borrowers' certified public accountants, to the extent that such changes would modify such accounting terms or the interpretation or computation thereof, such changes shall be followed in defining such accounting terms only from and after the date the Borrowers and the Lenders shall have amended this Agreement to the extent necessary to reflect any such changes in the financial covenants and other terms and conditions of this Agreement.

SECTION 13.9. Successors and Assigns; Participations.

(a) Benefit of Agreement. This Agreement shall be binding upon and inure to the benefit of the Borrowers, the Administrative Agent and the Lenders, all future holders of the Notes, and their respective successors and assigns, except that the Borrowers shall not assign or transfer any of their rights or obligations under this Agreement without the prior written consent of each Lender.

(b) Assignment by Lenders. Each Lender may, with the consent of the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing (provided that no consents shall be required for assignments to any Affiliate of such Lender or any other Lender), CCA REIT, which consents shall not be unreasonably withheld, assign to one or more Eligible Assignees all or a portion of its interests, rights and obligations under this Agreement (including, without limitation, all or a portion of the Extensions of Credit at the time owing to it and the Notes held by it); provided that:

(i) each such assignment shall be of a constant, and not a varying, percentage of all the assigning Lender's rights and obligations under this Agreement;

(ii) if less than all of the assigning Lender's Commitment is to be assigned, the Commitment so assigned shall not be less than $5,000,000;

(iii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance in the form of Exhibit G attached hereto (an "Assignment and Acceptance"), together with any Note or Notes subject to such assignment;

(iv) such assignment shall not, without the consent of CCA REIT, require the Borrowers to file a registration statement with the Securities and Exchange Commission or apply to or qualify the Loans or the Notes under the blue sky laws of any state; and

(v) the assigning Lender shall pay to the Administrative Agent an assignment fee of $2,500 upon the execution by such Lender of the Assignment and Acceptance; provided that no such fee shall be payable upon any assignment by a Lender to an Affiliate thereof.

Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least five (5) Business Days after the execution thereof, (A) the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereby and (B) the Lender thereunder shall, to the extent provided in such assignment, be released from its obligations under this Agreement.

(c) Rights and Duties Upon Assignment. By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as set forth in such Assignment and Acceptance.

(d) Register. The Administrative Agent shall maintain a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders and the amount of the Extensions of Credit with respect to each Lender from time to time (the "Register"). The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrowers, 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 Agreement. The Register shall be available for inspection by the Borrowers or Lender at any reasonable time and from time to time upon reasonable prior notice.

(e) Issuance of New Notes. Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an Eligible Assignee together with any Note or Notes subject to such assignment and the written consent to such assignment, the Administrative Agent

shall, if such Assignment and Acceptance has been completed and is substantially in the form of Exhibit G:

(i) accept such Assignment and Acceptance;

(ii) record the information contained therein in the Register;

(iii) give prompt notice thereof to the Lenders and CCA REIT; and

(iv) promptly deliver a copy of such Assignment and Acceptance to CCA REIT.

Within five (5) Business Days after receipt by CCA REIT of notice, the Borrowers shall execute and deliver to the Administrative Agent, in exchange for the surrendered Note or Notes, a new Note or Notes to the order of such Eligible Assignee in amounts equal to the Commitment assumed by it pursuant to such Assignment and Acceptance and a new Note or Notes to the order of the assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the assigned Notes delivered to the assigning Lender. Each surrendered Note or Notes shall be canceled and returned to CCA REIT.

(f) Participations. Each Lender may sell participations to one or more banks or other entities in all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Extensions of Credit and the Notes held by it); provided that:

(i) each such participation shall be in an amount not less than $5,000,000;

(ii) such Lender's obligations under this Agreement (including, without limitation, its Commitment) shall remain unchanged;

(iii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations;

(iv) such Lender shall remain the holder of the Notes held by it for all purposes of this Agreement;

(v) the Borrowers, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement;

(vi) such Lender shall not permit such participant the right to approve any waivers, amendments or other modifications to this Agreement or any other Loan

Document other than waivers, amendments or modifications which would reduce the principal of or the interest rate on any Loan or Reimbursement Obligation, extend the term or increase the amount of the Commitment, reduce the amount of any fees to which such participant is entitled, extend any scheduled payment date for principal of any Loan or, except as expressly contemplated hereby or thereby, release substantially all of the collateral described in the Security Documents; and

(vii) any such disposition shall not, without the consent of CCA REIT, require the Borrowers to file a registration statement with the Securities and Exchange Commission to apply to qualify the Loans or the Notes under the blue sky law of any state.

(g) Disclosure of Information; Confidentiality. The Administrative Agent and the Lenders shall hold all non-public information with respect to the Borrowers obtained pursuant to the Loan Documents in accordance with their customary procedures for handling confidential information. Any Lender may, in connection with any assignment, proposed assignment, participation or proposed participation pursuant to this Section 13.9, disclose to the assignee, participant, proposed assignee or proposed participant, any information relating to the Borrowers furnished to such Lender by or on behalf of the Borrowers; provided, that prior to any such disclosure, each such assignee, proposed assignee, participant or proposed participant shall agree with the Borrowers or such Lender to preserve the confidentiality of any confidential information relating to the Borrowers received from such Lender.

(h) Certain Pledges or Assignments. Nothing herein shall prohibit any Lender from pledging or assigning any Note to any Federal Reserve Bank in accordance with Applicable Law.

SECTION 13.10. Amendments, Waivers and Consents. Except as set forth below, any term, covenant, agreement or condition of this Agreement or any of the other Loan Documents may be amended or waived by the Lenders, and any consent given by the Lenders, if, but only if, such amendment, waiver or consent is in writing signed by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and delivered to the Administrative Agent and, in the case of an amendment, signed by the Borrowers; provided, that no amendment, waiver or consent shall (a) increase the amount or extend the time of the obligation of the Lenders to make Loans or issue or participate in Letters of Credit (including without limitation pursuant to Section 2.7), (b) extend the originally scheduled time or times of payment of the principal of any Loan or Reimbursement Obligation or the time or times of payment of interest or any fee on any Loan, Letter of Credit or Reimbursement Obligations, (c) reduce the rate of interest or fees payable on any Loan or Reimbursement Obligations,
(d) permit any subordination of the principal or interest on any Loan or Reimbursement Obligation, (e) extend the expiration date of any Letter of Credit beyond the Revolving Termination Date, (f) release any material portion of the collateral or release any Security Document (other than as specifically permitted in this Agreement or the applicable Security Document), (g) amend clause (i) of the proviso to Section 2.9 or (h) amend the provisions of this
Section 13.10 or the definition of Required Lenders, without the prior written consent of each Lender. In addition, no amendment, waiver or consent to the provisions of (a) Article XII shall be made without the

written consent of the Administrative Agent and (b) Article III without the written consent of the Issuing Lender.

SECTION 13.11. Performance of Duties. The Borrowers' obligations under this Agreement and each of the Loan Documents shall be performed by the Borrowers at their sole cost and expense.

SECTION 13.12. Joint and Several Liability; CCA Reit as Agent for Borrowers.

(a) The Obligations of the Borrowers under this Agreement, the Applications and the Notes shall be joint and several.

(b) Each Borrower hereby irrevocably appoints and authorizes CCA Reit
(i) to provide the Administrative Agent with all notices with respect to Extensions of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and (ii) to take such action on behalf of the Borrowers as CCA Reit deems appropriate on its behalf to obtain Extensions of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement.

SECTION 13.13. All Powers Coupled with Interest. All powers of attorney and other authorizations granted to the Lenders, the Administrative Agent and any Persons designated by the Administrative Agent or any Lender pursuant to any provisions of this Agreement or any of the other Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Obligations remain unpaid or unsatisfied or the Credit Facility has not been terminated.

SECTION 13.14. Survival of Indemnities. Notwithstanding any termination of this Agreement, the indemnities to which the Administrative Agent and the Lenders are entitled under the provisions of this Article XIII and any other provision of this Agreement and the Loan Documents shall continue in full force and effect and shall protect the Administrative Agent and the Lenders against events arising after such termination as well as before.

SECTION 13.15. Titles and Captions. Titles and captions of Articles, Sections and subsections in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.

SECTION 13.16. Severability of Provisions. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 13.17. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so

executed shall be deemed to be an original and shall be binding upon all parties, their successors and assigns, and all of which taken together shall constitute one and the same agreement.

SECTION 13.18. Entire Agreement; Term of Agreement. This Agreement, together with the other Loan Documents, constitutes the entire agreement with respect to the subject matter hereof and supersedes all prior agreements with respect to the subject matter hereof. This Agreement shall remain in effect from the Closing Date through and including the date upon which all Obligations shall have been indefeasibly and irrevocably paid and satisfied in full and the Commitments terminated. No termination of this Agreement shall affect the rights and obligations of the parties hereto arising prior to such termination.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers, all as of the day and year first written above.

[SEAL]                                      CCA PRISON REALTY TRUST

                                                     By:________________________
                                                        Name:___________________
                                                        Title:__________________

[ADMINISTRATIVE AGENT AND LENDER SIGNATURES TO FOLLOW]

[Credit Agreement]

EXHIBIT A-1
TO
CREDIT AGREEMENT DATED AS OF JULY 18, 1997
BY AND AMONG
CCA PRISON REALTY TRUST,
AND
CERTAIN SUBSIDIARIES THEREOF,
AS BORROWERS,
THE LENDERS PARTY THERETO,
FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT,
AND
SOUTHTRUST BANK, N.A.,
AS CO-AGENT

FORM OF
REVOLVING CREDIT NOTE

REVOLVING CREDIT NOTE

$ ________________ July ____, 1997

FOR VALUE RECEIVED, the undersigned, CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("CCA REIT"), and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to the "Borrowers"), hereby promise to pay to the order of ______________________________________ (the "Bank"), at the times, at the place and in the manner provided in the Credit Agreement hereinafter referred to, the principal sum of up to ______________ Dollars ($_____________) or, if less, the aggregate unpaid principal amount of all Revolving Credit Loans disbursed by the Bank under the Credit Agreement referred to below, together with interest at the rates as in effect from time to time with respect to each portion of the principal amount hereof, determined and payable as provided in Article IV of the Credit Agreement.

This Note is one of the Revolving Credit Notes referred to in, and is entitled to the benefits of, the Credit Agreement dated as of July 18, 1997 (as amended, restated or otherwise modified, the "Credit Agreement") by and among the Borrowers, the lenders (including the Bank) who are or may become party thereto (the "Lenders"), First Union National Bank of Tennessee, as administrative agent for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A., as Co-Agent. The Credit Agreement contains, among other things, provisions for the time, place and manner of payment of this Note, the determination of the interest rate borne by and fees payable in respect of this Note, acceleration of the payment of this Note upon the happening of certain stated events and the mandatory repayment of this Note under certain circumstances.

The Borrowers agree to pay on demand all costs of collection, including reasonable attorneys' fees, if any part of this Note, principal or interest, is collected after maturity with the aid of an attorney.

Presentment for payment, notice of dishonor, protest and notice of protest are hereby waived.

THIS NOTE IS MADE AND DELIVERED IN THE STATE OF NORTH CAROLINA AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NORTH CAROLINA.

[Signature page follows]

IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed under seal by a duly authorized officer as of the day and year first above written.

CCA PRISON REALTY TRUST

[SEAL]

By:______________________ Name:_________________ Title:________________

EXHIBIT A-2
TO
CREDIT AGREEMENT DATED AS OF JULY 18, 1997
BY AND AMONG
CCA PRISON REALTY TRUST,
AND
CERTAIN SUBSIDIARIES THEREOF,
AS BORROWERS,
THE LENDERS PARTY THERETO,
FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT,
AND
SOUTHTRUST BANK, N.A.,
AS CO-AGENT

FORM OF
SWINGLINE NOTE

SWINGLINE NOTE

$5,000,000 July ___, 1997

FOR VALUE RECEIVED, the undersigned, CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("CCA REIT"), and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to the "Borrowers"), hereby promise to pay to the order of FIRST UNION NATIONAL BANK OF TENNESSEE (the "Bank"), at the times, at the place and in the manner provided in the Credit Agreement hereinafter referred to, the principal sum of up to Five Million Dollars ($5,000,000), or, if less, the aggregate unpaid principal amount of all Swingline Loans disbursed by the Bank under the Credit Agreement referred to below, together with interest at the rates as in effect from time to time with respect to each portion of the principal amount hereof, determined and payable as provided in Article IV of the Credit Agreement.

This Note is the Swingline Note referred to in, and is entitled to the benefits of, the Credit Agreement dated as of July 18, 1997 (as amended, restated or otherwise modified, the "Credit Agreement") by and among the Borrowers, the lenders (including the Bank) who are or may become party thereto (the "Lenders"), First Union National Bank of Tennessee, as administrative agent for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A., as Co-Agent. The Credit Agreement contains, among other things, provisions for the time, place and manner of payment of this Note, the determination of the interest rate borne by and fees payable in respect of this Note, acceleration of the payment of this Note upon the happening of certain stated events and the mandatory repayment of this Note under certain circumstances.

The Borrowers agree to pay on demand all costs of collection, including reasonable attorneys' fees, if any part of this Note, principal or interest, is collected after maturity with the aid of an attorney.

Presentment for payment, notice of dishonor, protest and notice of protest are hereby waived.

THIS NOTE IS MADE AND DELIVERED IN THE STATE OF NORTH CAROLINA AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NORTH CAROLINA.

[Signature page follows]

IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed under seal by a duly authorized officer as of the day and year first above written.

CCA PRISON REALTY TRUST

[SEAL]

By: _______________________ Name:__________________ Title:_________________

EXHIBIT B
to

Credit Agreement dated as of July 18, 1997, by and among CCA Prison Realty Trust, and certain Subsidiaries thereof, as Borrowers, the Lenders party thereto, First Union National Bank of Tennessee, as Administrative Agent, and SouthTrust Bank, N.A., as Co-Agent

FORM OF
NOTICE OF BORROWING

NOTICE OF BORROWING

First Union National Bank
of Tennessee, As Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608

Attention: Syndication Agency
Services

Ladies and Gentlemen:

This irrevocable Notice of Borrowing is delivered to you under Section 2.3(a) of the Credit Agreement dated as of July 18, 1997 (as amended, restated or otherwise modified, the "Credit Agreement"), by and among CCA Prison Realty Trust ("CCA REIT") and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to (collectively, "the Borrowers"), the lenders who are or may become party thereto (the "Lenders"), First Union National Bank of Tennessee, as administrative agent for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A., as Co-Agent.

        1.      CCA REIT, on behalf of the Borrowers hereby requests that the
Lenders make a Loan in the aggregate principal amount of $          (the
"Loan").(1)

        2.      CCA REIT, on behalf of the Borrowers hereby requests that the
Loan be made on the following Business Day:                            .(2)

3. CCA REIT, on behalf of the Borrowers hereby requests that the Loan bear interest at the following interest rate, plus the Applicable Margin, as set forth below:

                                                                Termination
                                                                Date for
                                                                Interest
Principal                                                       Period
Component of            Interest        Interest Period         (if
Loan                    Rate            (if applicable)         applicable)
------------            --------        ---------------         -----------

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

(1) Complete with an amount in accordance with Section 2.3 of the Credit Agreement.

(2) Complete with a Business Day in accordance with Section 2.3 of the Credit Agreement.

4. The principal amount of all Loans and L/C Obligations outstanding as of the date hereof (including the requested Loan) does not exceed the maximum amount permitted to be outstanding pursuant to the terms of the Credit Agreement.

5. All of the conditions applicable to the Loan requested herein as set forth in the Credit Agreement have been satisfied as of the date hereof and will remain satisfied to the date of such Loan.

6. All capitalized undefined terms used herein have the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Notice of Borrowing this day of , .

CCA PRISON REALTY TRUST

EXHIBIT C
to
Credit Agreement dated as of July 18, 1997,
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent

FORM OF
NOTICE OF PREPAYMENT

NOTICE OF PREPAYMENT

First Union National Bank
of Tennessee, As Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608

Attention: Syndication Agency
Services

Ladies and Gentlemen:

This irrevocable Notice of Prepayment is delivered to you by CCA Prison Realty Trust ("CCA REIT") and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to (collectively, the "Borrowers") under Section 2.4(d) of the Credit Agreement dated as of July 18, 1997 (together with all amendments and other modifications, if any, from time to time made thereto, the "Credit Agreement"), by and among the Borrowers, the lenders who are or may become party thereto (the "Lenders"), First Union National Bank of Tennessee, as administrative agent for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A., as Co-Agent.

2. CCA REIT, on behalf of the Borrower, hereby provides notice that the Borrower shall repay the above referenced Loans on the following Business Day: __________. (Complete in accordance with Section 2.4(d) of the Credit Agreement.)

3. All capitalized undefined terms used herein have the meanings assigned thereto in the Credit Agreement.

CCA Prison Realty Trust

EXHIBIT D
to
Credit Agreement dated as of July 18, 1997,
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent

FORM OF
NOTICE OF ACCOUNT DESIGNATION

FORM OF
NOTICE OF ACCOUNT DESIGNATION

Dated ________

First Union National Bank
of Tennessee, as Administrative Agent
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608

Attention: Syndication Agency Services

Ladies and Gentlemen:

This Notice of Account Designation is delivered to you by CCA Prison Realty Trust ("CCA REIT") and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to (collectively, the "Borrowers"), under Section 2.3 (b) of the Credit Agreement dated as of July 18, 1997 (as amended, restated or otherwise modified, the "Credit Agreement") by and among the Borrowers, the lenders who are or may become party thereto (collectively, the "Lenders"), First Union National Bank of Tennessee, as administrative agent for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A., as Co-Agent.

The Administrative Agent is hereby authorized to disburse all Loan proceeds into the following account(s):

[Insert name of bank/ ABA routing Number/ and Account Number]

IN WITNESS WHEREOF, the undersigned has executed this Notice of Account Designation this ____ day of _____________, _____.

CCA PRISON REALTY TRUST

By: ________________________

Name: __________________

Title: _________________

EXHIBIT E
to
Credit Agreement dated as of July 18, 1997,
by and among
CCA Prison Realty Trust,
and
CCA Prison Realty Trust Management Company,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent

FORM OF
NOTICE OF CONVERSION/CONTINUATION

FORM OF
NOTICE OF CONVERSION/CONTINUATION

First Union National Bank
of Tennessee, Administrative Agent
One First Union Center, TW-10
301 S. College Street
Charlotte, NC 28288-0608

Attention: Syndication Agency Services

Ladies and Gentlemen:

This irrevocable Notice of Conversion/Continuation (the "Notice") is delivered to you under Section 4.2 of the Credit Agreement dated as of July 18, 1997 (as amended, restated or otherwise modified, the "Credit Agreement"), by and among CCA Prison Realty Trust ("CCA REIT") and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to (collectively, the "Borrowers"), the lenders who are or may become party thereto (the "Lenders"), First Union National Bank of Tennessee, as administrative agent for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A., as Co-Agent.

1. This Notice of Conversion/Continuation is submitted for the purpose of: (Complete applicable information.)

(a) [Converting] [continuing] a ________________ Loan [into]
[as] a __________________ Loan.(1)

(b) The aggregate outstanding principal balance of such Loan is $__________.(2)

(c) The last day of the current Interest Period for such Loan is ______________.

(d) The principal amount of such Loan to be [converted] [continued] is $_____________.(3)

(e) The requested effective date of the [conversion] [continuation] of such Loan is _______________.(4)

(f) The requested Interest Period applicable to the [converted]
[continued] Loan is _________________.(5)

2. No Default or Event of Default exists, and none will exist upon the conversion or continuation of the Loan requested herein.

3. All capitalized undefined terms used herein have the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Notice of Conversion/Continuation this ____ day of _________, 19__.

CCA Prison Realty Trust

By: _______________________________
Name: _________________________
Title: ________________________

1. Delete the bracketed language and insert "Base Rate", or "LIBOR Rate", as applicable, in each blank.

2. Insert applicable date for any LIBOR Rate Loan being converted or continued.

3. Complete with an amount in compliance with Section 4.2 of the Credit Agreement.

4. Complete with a Business Day at least three (3) Business Days after the date of this Notice.

5. Complete for any LIBOR Rate Loan with an Interest Period in compliance with Section 4.1(b) of the Credit Agreement.

EXHIBIT F
to
Credit Agreement dated as of July 18, 1997
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent

FORM OF
OFFICER'S COMPLIANCE CERTIFICATE

OFFICER'S COMPLIANCE CERTIFICATE

The undersigned, on behalf of CCA Prison Realty Trust, a Maryland real estate investment trust ("CCA REIT"), and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to (collectively, the "Borrowers"), hereby certifies to First Union National Bank of Tennessee, as administrative agent (the "Administrative Agent") under the Credit Agreement referred to below, as follows:

1. This Certificate is delivered to you pursuant to Section 7.2 of the Credit Agreement dated as of July 18, 1997 (as amended, restated or otherwise modified, the "Credit Agreement"), by and among the Borrower, the lenders who are or may become party thereto (the "Lenders"), the Administrative Agent and SouthTrust Bank, N.A., as Co-Agent. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Credit Agreement.

2. I have reviewed the financial statements of the Borrowers and their Subsidiaries dated as of __________________ and for the ______________________ period[s] then ended and such statements fairly present the financial condition of the Borrowers and their Subsidiaries as of the dates indicated and the results of its operations and cash flows for the period[s] indicated.

3. I have reviewed the terms of the Credit Agreement, the Notes and the related Loan Documents and have made, or caused to be made under my supervision, a review in reasonable detail of the transactions and the condition of the Borrowers and their Subsidiaries during the accounting period covered by the financial statements referred to in Paragraph 2 above. Such review has not disclosed the existence during or at the end of such accounting period of any condition or event that constitutes a Default or an Event of Default, nor do I have any knowledge of the existence of any such condition or event as at the date of this Certificate [except, [if such condition or event existed or exists, describe the nature and period of existence thereof and what action the Borrowers have taken, are taking and propose to take with respect thereto]].

4. The Borrowers and their Subsidiaries are in compliance with the covenants contained in Article IX of the Credit Agreement as shown on the attached Schedule 1 and the Borrowers and their Subsidiaries are in compliance with the other covenants and restrictions contained in Articles VIII and X of the Credit Agreement.

[Signature page follows]

WITNESS the following signatures as of the ____ day of _________, ____.

CCA Prison Realty Trust

By: _______________________________
Name: _________________________
Title: ________________________

EXHIBIT G
to
Credit Agreement dated as of July 18, 1997
by and among
CCA Prison Realty Trust,
and
certain Subsidiaries thereof,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,
as Co-Agent

FORM OF
ASSIGNMENT AND ACCEPTANCE

ASSIGNMENT AND ACCEPTANCE

Dated __________

Reference is made to the Credit Agreement dated as of July 18, 1997 (as amended, restated or otherwise modified, the "Credit Agreement"), by and among CCA Prison Realty Trust, a Maryland real estate investment trust ("CCA REIT"), and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to, (collectively, the "Borrowers"), the lenders who are or may become party thereto (the "Lenders"), First Union National Bank of Tennessee, as administrative agent for the Lenders (the "Administrative Agent") and SouthTrust Bank, N.A., as Co-Agent. Capitalized terms which are defined in the Credit Agreement and which are used herein without definition shall have the same meanings herein as in the Credit Agreement.

_______________________ (the "Assignor") and _________________________ (the "Assignee") agree as follows:

1. The Assignor hereby sells and assigns to the Assignee without recourse, representation or warranty of any kind other than as specifically set forth herein, and the Assignee hereby purchases and assumes from the Assignor, as of the Effective Date (as defined below), a ____% interest (the "Assigned Interest") in and to all of the Assignor's interests, rights and obligations under the Credit Agreement and the Assignor thereby retains ____% of its interest therein (the "Retained Interest"). This Assignment and Acceptance is entered pursuant to, and authorized by, Section 13.9 of the Credit Agreement.

2. The Assignor (a) represents that, as of the date hereof, (i) its Commitment Percentage (without giving effect to assignments thereof which have not yet become effective) under the Credit Agreement, (ii) the outstanding balance of its Loans (unreduced by any assignments thereof which have not yet become effective) under the Credit Agreement, and (iii) the outstanding balance of its Commitment Percentage of the L/C Obligations (unreduced by any assignments thereof which have not yet become effective), are each set forth in
Section 2 of Schedule I hereto; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto, other than that the Assignor is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrowers or their Subsidiaries or the performance or

observance by the Borrowers or their Subsidiaries of any of their obligations under the Credit Agreement or any other Loan Document; and (d) attaches the Revolving Credit Note delivered to it under the Credit Agreement and requests that the Borrowers exchange such Note for new Notes payable to each of the Assignor and the Assignee as follows:

Revolving Credit Note
Payable to the order of:      Principal Amount of Note:
------------------------      -------------------------
                                      $
------------------------               ----------
                                      $
------------------------               ----------

3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor or any other Lender or the Administrative Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (d) in taking or not taking action under the Credit Agreement; (d) confirms that it is an Eligible Assignee; (e) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to the agent by the terms thereof, together with such powers as are reasonably incidental thereto; (f) agrees that it will perform in accordance with their terms all the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by it as a Lender; and (g) agrees that it will keep confidential all non-public information with respect to the Borrower obtained pursuant to the Loan Documents in accordance with Section 13.9(g) of the Credit Agreement.

4. The effective date for this Assignment and Acceptance shall be as set forth in Section 1 of Schedule I hereto (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for consent thereby and acceptance and recording in the Registrar.

5. Upon such consents, acceptance and recording, from and after the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and the other Loan Documents to which Lenders are parties and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender under each such agreement, and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be

released from its obligations under the Credit Agreement and the other Loan Documents.

6. Upon such consents, acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the interest assigned hereby (including payments of principal, interest, fees and other amounts) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO BE A CONTRACT UNDER SEAL AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

COMMITMENT PERCENTAGE              %
                      -------------

By:
   ----------------------------------
Title:
      -------------------------------

ASSIGNEE

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

COMMITMENT PERCENTAGE              %
                      -------------

By:
   ----------------------------------
Title:
      -------------------------------

ACKNOWLEDGED AND CONSENTED TO:

CCA PRISON REALTY TRUST

FIRST UNION NATIONAL BANK OF TENNESSEE,
AS ADMINISTRATIVE AGENT

1.  Effective Date
    --------------                     ---------------, ----

2.  Assignor's Interest
    Prior to Assignment
    -------------------

    (a)  Commitment Percentage                                    %
         of Assignor                                     ---------

    (b)  Outstanding balance                            $
         of Assignor's Loans                             ---------

    (c)  Outstanding balance of
         Assignor's Commitment
         Percentage of the L/C                          $
         Obligations                                     ---------

3.  Assigned Interest
    (from Section 1)                                              %
    -----------------                                    ---------

4.  Assignee's Extensions of Credit
    After Effective Date
    -------------------------------

    (a)  Outstanding balance of
         Assignee's Loans                               $
         (line 2(b) times lines 3)                       ---------

    (b)  Outstanding balance of Assignee's
         Commitment Percentage of L/C
         Obligations (line 2(c) times                   $
         line 3)                                         ---------

    (c)  Assignee's Extensions of Credit
         After Effective Date

5.  Retained Interest of Assignor after
    Effective Date
    -----------------------------------

    (a)  Retained Interest (from Section 1)                       %
                                                         ---------

    (b)  Outstanding balance of Assignor's              $
         Loans (line 2(b) times line 5(a))               ---------

6.  Payment Amounts
    ---------------

    (a)  Payable by Assignee to Assignor                $
                                                         ---------

    (b)  Payable by Assignor to Assignee                $
                                                         ---------

                                          5

7.  Payment Instructions
    --------------------

    (a)  If payable to Assignor,
         to the account of Assignor to:

         _______________________________

         _______________________________

Routing No.:___________________

Account No.:___________________

Attn:__________________________

Reference:_____________________

(b) If payable to Assignee, to the account of Assignee to:

Routing No.:___________________

Account No.:___________________

Attn:__________________________

Reference:_____________________

with respect to any of the foregoing, including, without limitation, damages or payments for past or future infringements of any of the foregoing; (d) the right to sue for past, present and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

"UCC" means the Uniform Commercial Code as in effect on the date hereof in the State of North Carolina; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than North Carolina, "UCC" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect or perfection or non-perfection.

"Vehicles" means all cars, trucks, trailers, construction and earth moving equipment of any Grantor and other vehicles covered by a certificate of title law of any state, and all tires and other appurtenances to any of the foregoing.

SECTION 2. The Security Interests.

(a) In order to secure the Credit Agreement in accordance with the terms thereof, and to secure the payment and performance of all of the Secured Obligations, each Grantor hereby grants to the Administrative Agent, for the ratable benefit of itself and the Lenders, a continuing security interest in and to all of such Grantor's estate, right, title and interest in and to all of the following property, whether now or hereafter owned or acquired by such Grantor or in which such Grantor now have or hereafter have or acquire any estate right, title or interest, and wherever located (collectively, along with any other property of such Grantor which may from time to time secure the Secured Obligations, the "Collateral"):

(i) Accounts;
(ii) Inventory;
(iii) Documents;
(iv) Equipment;
(v) Fixtures;
(vi) Instruments;
(vii) General Intangibles;
(viii) Vehicles;

(ix) The Collateral Account, all cash deposited therein from time to time, the investments made pursuant to Section 6 and other monies and property of any kind of any Grantor in the possession or under the control of the Administrative Agent or any Lender;

(x) All books and records (including, without limitation, customer lists, credit files, computer programs, printouts and other computer materials and records) of the Grantor pertaining to any of the Collateral;

(xi) All other goods and personal property of any Grantor, whether tangible or intangible; and

(xii) All products and Proceeds of all or any of the Collateral described in clauses (i) through (xi) hereof.

(b) The Security Interests are granted as security only and shall not subject the Administrative Agent or any Lender to, or transfer to the Administrative Agent or any Lender, or in any way affect or modify, any obligation or liability of the Grantor with respect to any of the Collateral or any transaction in connection therewith.

SECTION 3. Representations and Warranties. Each Grantor represents and warrants as follows:

(a) Such Grantor has the corporate power and authority and the legal right to execute and deliver, to perform its obligations under, and to grant the Security Interests in the Collateral pursuant to, this Agreement and has taken all necessary corporate action to authorize its execution, delivery and performance of, and grant of the Security interests on the Collateral pursuant to, this Agreement.

(b) This Agreement constitutes a legal, valid and binding and obligation of such Grantor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally.

(c) The execution, delivery and performance of this Agreement will not violate any provision of any Applicable Law or contractual obligation of such Grantor and will not result in the creation or imposition of any Lien on any of the properties or revenues of such Grantor pursuant to any Applicable Law or contractual obligation of such Grantor, except as contemplated hereby.

(d) No consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority and no consent of any other person (including, without limitation, any stockholder or creditor of such Grantor), is required in connection

with the execution, delivery, performance, validity or enforceability of this Agreement, except those which have been obtained, UCC filings and required notices under the Federal Assignment of Claims Act or any corresponding state law.

(e) No actions, suits or proceedings are pending nor, to the knowledge of such Borrower, are threatened against or in any other way relate adversely to or affect such Grantor or any of its properties in any court or before any arbitrator of any kind or before or by any Governmental Authority, which, if adversely determined, are reasonably likely to have a Material Adverse Effect.

(f) Such Grantor has good and marketable title to all of its respective collateral, free and clear of any Liens other than Permitted Liens and as otherwise permitted by the Credit Agreement.

(g) Such Grantor has not performed any acts that would prevent or hinder the Administrative Agent from enforcing any of the terms of this Agreement. Other than financing statements or other similar or equivalent documents or instruments with respect to Permitted Liens, no financing statement, mortgage, security agreement or similar or equivalent document or instrument covering all or any part of the Collateral is on file or of record in any jurisdiction. No Collateral is in the possession of any Person (other than such Grantor) asserting any claim thereto or security interest therein, except that the Administrative Agent or its designee may have possession of Collateral as contemplated hereby.

(h) All of the information set forth in the Perfection Certificate is true and correct in all material respects as of the Closing Date.

(i) With respect to the Intellectual Property of such Grantor which is material to the conduct of its business:

(i) such Intellectual Property is subsisting and has not been adjudged invalid or unenforceable, in whole or in part;

(ii) such Intellectual Property is valid and enforceable;

(iii) such Grantor has made all necessary filings and recordations to protect its interest in such Intellectual Property, including, without limitation, recordations of all of its interests in the Patents and Trademarks in the United States Patent and Trademark Office and its claims to the Copyrights in the United States Copyright Office;

(iv) such Grantor is the exclusive owner of the entire and unencumbered right, title and interest in and to such Intellectual Property and such Grantor has not received any

written claim that the use of such Intellectual Property does not or may violate the asserted rights of any third party; and

(v) such Grantor has performed all acts and has paid all required fees and taxes to maintain each and every item of Intellectual Property in full force and effect.

(j) The Financing Statements are in appropriate form and when filed in the offices specified in the Perfection Certificate and upon payment of the filing fees, the Security Interests will constitute valid and perfected security interests in the Collateral, prior to all other Liens and rights of others therein except for the Permitted Liens (to the extent that a security interest therein may be perfected by filing pursuant to the UCC) and all filings and other actions necessary or desirable to perfect and protect such Security Interests have been duly taken.

(k) The Inventory, Fixtures, Equipment and Vehicles are insured in accordance with the requirements hereof and of the Credit Agreement.

(l) All Inventory, if any, has or will have been produced in substantial compliance in all material respects with the applicable requirements of the Fair Labor Standards Act, as amended.

SECTION 4. Further Assurances; Covenants.

(a) General.

(i) No Grantor shall change the location of its chief executive office or principal place of business in any state unless it shall have given the Administrative Agent thirty (30) days prior written notice thereof and executed and delivered to the Administrative Agent all financing statements and financing statement amendments which the Administrative Agent may reasonably request in connection therewith. No Grantor shall change the locations where it keeps or holds any Collateral or any records relating thereto from the applicable location described in the Perfection Certificate unless such Grantor shall have given the Administrative Agent thirty (30) days prior written notice of such change of location and executed and delivered to the Administrative Agent all financing statements and financing statement amendments which the Administrative Agent may reasonably request in connection therewith; provided, however, that such Grantor may keep Inventory at, or in transit to, any location described in the Perfection Certificate. No Grantor shall in any event change the location of any Collateral if such change would cause the Security Interests in such Collateral to lapse or cease to be perfected.

financing statements with respect to any consigned Inventory showing such Grantor as debtor and the Administrative Agent as secured party; (D) after all financing statements referred to in clauses (B) and (C) above shall have been filed, conduct a search of all filings made against the Consignee in all jurisdictions in which the Inventory to be consigned is to be located while on consignment, and deliver to the Administrative Agent copies of the results of all such searches; (E) notify, in writing, all creditors of the Consignee which would be holders of security interests in the Inventory to be consigned that such Grantor expects to deliver certain Inventory to the Consignee, all of which Inventory shall be described in such notice by item or type, and (F) if requested by the Administrative Agent, deliver an opinion of counsel to the effect that all financing statements and amendments or supplements thereto, continuation statements and other documents required to be recorded or filed in order to perfect and protect the Security Interests and priority thereof against all creditors of and purchasers of such Grantor and such Consignee have been filed in each filing office necessary or desirable for such purposes and that all filing fees and taxes, if any, payable in connection with such filings have been paid in full.

(d) Equipment, Etc. With the exception of Equipment disposed of in accordance with Section 10.6 of the Credit Agreement, each Grantor will maintain each item of Equipment in the same condition, repair and working order as when acquired, ordinary wear and tear excepted, and will provide all maintenance, service and repairs necessary for such purpose and will promptly furnish to the Administrative Agent a statement respecting any material loss or damage to any of the Equipment in an amount in excess of $250,000.

(e) Intellectual property.

(i) Each Grantor shall notify the Administrative Agent promptly (a) of its acquisition after the Closing Date of any Patent, Patent License, Trademark or Trademark License and (b) if it knows, or has reason to know of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court) regarding such Grantor's ownership of any Patent or Trademark, its right to register the same, or to keep and maintain the same. In no event shall any Grantor, either itself or through any agent, employee or licensee, file an application for the registration of any Patent or Trademark with the United States Patent and Trademark Office or any similar office or agency in any other country or any political subdivision thereof, unless promptly thereafter it informs the Administrative Agent, and, promptly after issuance of such

EXHIBIT I
to
Credit Agreement dated as of July 18, 1997
by and among
CCA prison Realty Trust,
and
certain Subsidiaries there,
as Borrowers,
the Lenders party thereto,
First Union National Bank of Tennessee,
as Administrative Agent,
and
SouthTrust Bank, N.A.,\as Co-Agent

FORM OF
DEED OF TRUST

STATE OF

COUNTY OF

DEED OF TRUST
AND SECURITY AGREEMENT

THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Deed of Trust") is

made and entered into as of the ______ day of July, 1997, by and among

CCA PRISON REALTY TRUST, a Maryland real estate investment trust, whose address is 2200 Abbott Martin Road, Suite 201, Nashville, Tennessee 37215 ("Grantor");

_______________________, whose address is __________________________ ("Trustee"); and

FIRST UNION NATIONAL BANK OF TENNESSEE, a national banking association, as Administrative Agent for Lenders (as hereinafter defined), whose address is 150 Fourth Avenue North, Nashville, Tennessee 37219 ("Administrative Agent").

Statement of Purpose

Pursuant to the terms of that certain Credit Agreement of even date herewith, as amended, restated or otherwise modified (the "Credit Agreement") among the Grantor and any subsidiary thereof that is joined as a borrower pursuant to the terms thereof (collectively with the Grantor, the "Borrowers"), Administrative Agent, SouthTrust Bank, N.A., as Co-Agent and the lenders who are or may become a party to the Credit Agreement (as therein defined, "Lenders"), Lenders have agreed to extend certain credit facilities to Borrowers of up to One Hundred Fifty Million Dollars ($150,000,000.00) as evidenced by the Notes executed by Borrowers and payable to the order of Lenders. All of the promises, terms, conditions, agreements and obligations imposed on Borrowers under the Notes, the Letters of Credit, the Credit Agreement and the other Loan Documents are to be secured by this Deed of Trust. Defined terms used herein, as indicated by the initial capitalization thereof, shall have the meanings

ascribed to such terms in the Credit Agreement, unless otherwise provided herein.

NOW, THEREFORE, in order to secure the Obligations, and in consideration of Lenders' agreement under the Credit Agreement to make the Extensions of Credit to Borrowers and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, Borrower by these presents does (i) give, grant, bargain, sell, alienate, remise, warrant, convey, release, confirm, assign, transfer and set over unto Trustee, his heirs, successors and assigns, IN TRUST, WITH POWER OF SALE, for the benefit and security of Administrative Agent, for the ratable benefit of itself and Lenders, all of Grantor's right, title and interest in and to the "Land" and the "Improvements" (collectively, the "Premises"), as described below and any real or mixed property referred to in Paragraph E below, TO HAVE AND TO HOLD same unto Trustee, and its successors and assigns forever and (ii) convey and grant a security interest unto Administrative Agent, for the ratable benefit of itself and Lenders, and their successors and assigns in all of Grantor's right, title and interest in and to the "Equipment", the "Proceeds" and any personal property referred to in Paragraph E below. The property and rights (collectively, the "Property") subject to this Deed of Trust are as follows:

COLLATERAL IS OR INCLUDES FIXTURES

A. All of the right, title and interest of Grantor in and to the real estate, as more specifically described in EXHIBIT A attached hereto, together with all of Grantor's rights, title and interest under all easements, rights of way, restrictive covenants, parking agreements, encroachment agreements, licenses, streets, alleys, passages, walkways, strips of land, sewer rights, waters, water courses, water privileges, tenements, hereditaments and other appurtenances and rights, including, but not limited to, air rights, surface rights and subsurface rights relating or appertaining to such real estate (collectively, the "Land").

B. All facilities, buildings, structures, fixtures, improvements and parking areas now or hereafter located on the Land and all replacements thereof and additions thereto (collectively, the "Improvements"); without limiting the foregoing, the term "Improvements" shall include: all buildings, components of buildings, roads, streets, curbs, gutters,

sidewalks and pedestrian ways; all storm drainage, water systems, sewer systems, electrical systems, gas systems and other utilities equipment; and all improvements relating to easements appurtenant to the Land and landscaping, whether or not located on the Land, which are necessary or appropriate to fully benefit and serve the Improvements located on the Land.

C. All chattels, machinery, equipment, goods, construction materials and articles of personal property now or hereafter attached to, incorporated in, or located on the Premises or on appurtenant easements and used or usable in connection with any present or future construction, operation or letting of the Property or the activities at any time conducted therein or thereon which are owned by Grantor (collectively, the "Equipment"), including, but not limited to, any and all types of machinery and equipment, heating, venting and air-conditioning, lighting, laundry, incinerating and power equipment and machinery, plumbing, cleaning, smoke detention, fire prevention and fire extinguishing systems, communications apparatus, sprinkler systems, gas and electric fixtures, awnings, screens, window shades, storm doors and windows, cabinets, ducts and compressors, rugs, carpets, draperies and linens, elevators, escalators, pumps, motors, engines, conduits, dynamos, refrigerators, freezers, incinerators, plants, flowers and shrubbery, and all other machinery, equipment, appliances, fittings, furniture, furnishings, chattels and articles of personalty of every kind and nature used in the operation of the Improvements and structures now or hereafter situated on and constituting part of the Property or on appurtenant easements, together with any and all replacements thereof and additions thereto;

D. Any unearned insurance premiums and any insurance proceeds realized from or as a result of Grantor's ownership or operation of any Property and any and all awards, including interest thereon, heretofore and hereafter made to Grantor for any taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property, including any awards for changes of grade of streets, which awards are hereby assigned to Administrative Agent, for the ratable benefit of itself and Lenders, who is hereby authorized to collect and receive the proceeds of such awards and to give proper receipts and acquittances therefor and to apply the same to the Obligations, to the extent hereinafter provided (all of the foregoing being referred to herein as the "Proceeds");

E. All the property of every kind and description, whether real, personal or mixed, which at any time hereafter, by indenture or indentures supplemental hereto, and by other instruments of transfer, may be expressly conveyed, mortgaged or pledged, delivered, assigned or transferred to Administrative Agent, for the ratable benefit of itself and Lenders, by or on behalf of Grantor, as and for additional or substitute security for the Obligations.

PROVIDED, HOWEVER, if the Obligations shall be paid and performed when due and if Grantor shall keep, perform and observe each of the covenants, agreements and provisions in this Deed of Trust to be kept, performed and observed by Grantor, then this Deed of Trust and the estate and rights hereby granted shall terminate and be of no further force and effect and the lien created by this Deed of Trust shall be released, any and all costs associated with such release to be borne by Grantor.

ARTICLE I
Representations, Warranties and
Covenants of Grantor

Grantor represents, warrants, and covenants with Trustee, Administrative Agent and Lenders as follows

Section 1.01. Payment and Performance of Obligations. Grantor will pay and perform when due the Obligations.

Section 1.02. Priority of Lien. This Deed of Trust is and, prior to the performance and payment of the Obligations in full, shall remain a [first](1) Lien on all of the Property, subject only to those matters in the title insurance policy insuring the lien of the Deed of Trust as delivered as of the date hereof which Administrative Agent has agreed to accept, excepting therefrom all preprinted and/or standard exceptions (the "Permitted Exceptions") or otherwise approved by Administrative Agent in advance. Grantor shall pay or cause to be discharged within twenty (20) days after they shall be payable, or shall make adequate provisions for the satisfaction or discharge of, all lawful claims and demands of mechanics, laborers and materialmen

which, if unpaid, might be a lien or charge on the Property (or any part thereof) or the income therefrom.

Pursuant to the terms of the Credit Agreement, Lenders may be required to make Extensions of Credit from time to time. This Deed of Trust secures the payment of all present and future disbursements, including, without limitation, any future loans, advances or readvances on a revolving basis which may be made by Lenders pursuant to the Credit Agreement, and all of which disbursements shall be equally secured with and of the same priority as any amounts advanced on the date hereof. Although the amount of the Extensions of Credit, including present and future obligations, which Lenders may make to Borrowers may decrease or increase from time to time, the maximum amount which may be outstanding at any time is One Hundred Fifty Million Dollars ($150,000,000.00) plus interest thereon and any other charges, in addition to any disbursements made for the payment of taxes, levies, or insurance on the Property, whether or not such payments are obligatory or are made at the option of Administrative Agent on behalf of Lenders, and any amounts owed to Lenders as a result of any Hedging Agreement required pursuant to Section 8.15 of the Credit Agreement or for other purposes as permitted by the terms of the Loan Documents, together with interest on such disbursements as may be provided herein or therein. The period within which such future advances may be made does not extend more than ten (10) years beyond the date of this Deed of Trust.

Section 1.03. Intentionally Deleted.

Section 1.04. Adequate Access. The Improvements have adequate rights of access to public ways.

Section 1.05. Parking. Parking sufficient to satisfy zoning requirements for the utilization of the Improvements as intended and all requirements of any Lease is available to the Premises by permanent easement or otherwise and is encumbered by this Deed of Trust.

Section 1.06. Expenses. If any action or proceeding is commenced to which Trustee, Administrative Agent or Lenders (or any of them) become or are made a party arising out of or in connection with any of the Loan Documents or the Extensions of Credit, or in which it becomes necessary to enforce, defend or uphold the lien of this Deed of Trust, all court costs and

litigation costs (including, without limitation, attorneys' fees and expenses) incurred by Trustee, Administrative Agent and Lenders shall be paid by Borrowers, and any such sum shall be a lien on the Property, prior to any right, or title to, interest in, or claim upon the Property attaching or accruing subsequent to the lien of this Deed of Trust, and shall be deemed to be secured by this Deed of Trust. In any action or proceeding to foreclose the lien of this Deed of Trust or to recover, collect or compel the performance of the Obligations, the provisions of law respecting the recovery of costs, disbursements and allowances shall prevail unaffected by this covenant.

Section 1.07. Insurance.

(a) Grantor will maintain, or cause to be maintained, in full force and effect all insurance coverage and policies required to be maintained under the terms of the Credit Agreement or any other Loan Document and as set forth herein. Insurance coverage shall include:

(i) insurance against loss or damage to the Property by fire, windstorm, tornado and hail and against loss or damage by such other, further and additional risks as may be now or hereafter embraced by an "all risk" form insurance policy with Extended Coverage Endorsement and replacement cost broad form fire and collapse insurance on the Property with a company or companies approved by Administrative Agent and with coverages and in form, content and amount reasonably acceptable to Administrative Agent. Such policy shall also extend coverage for acts of vandalism and malicious mischief, without co- insurance, in an amount equal to 100% of the replacement cost of the Improvement. For buildings equipped with automatic sprinkler systems designed to discharge an extinguishing agent, including, but not limited to, water, chemicals or gas, such policy shall include Sprinkler Leakage as a covered cause of loss;

(ii) for buildings equipped with boilers, heating and ventilating systems, refrigeration equipment, air conditioning units, pumps, compressors, motors, blowers, generators, transformers and

other types of heavy equipment, Administrative Agent shall require Boiler and Machinery Insurance to cover the sudden and accidental breakdown of such equipment;

(iii) if any Improvements (now or hereafter existing) on the Land are or will be located in an area identified by the U.S. Department of Housing and Urban Development or Federal Emergency Management Agency as an area having "special flood hazards", Grantor shall also furnish flood insurance in the amount which is the lesser of (A) the outstanding balance of the Extensions of Credit or (B) the maximum limited of coverage available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, and the Housing and Community Development Acts of 1974 and 1977, all as amended;

(iv) such worker's compensation insurance as is required by Applicable Law;

(v) rental loss insurance or loss of business income insurance in an amount sufficient to compensate for all rents or income at the Property and real estate taxes and insurance premiums for a period of at least (6) six months;

(vi) single limit comprehensive general public liability insurance against claims for bodily injury, death or property affording protection in respect of injury or death to any person or damage to property of any one owner, and in respect of injury or death to more than one person or damage to property of more than one owner arising from any one accident or occurrence, each to the limit required by Administrative Agent; and

(vii) such other insurance on the Property or on any replacements or substitutions thereof or additions thereto as may from time to time be required by Administrative Agent against other insurable hazards or casualties which at the time are commonly insured against in the case of

property similarly situated, including, without limitation, Sinkhole, Mine Subsidence and Earthquake insurance, due regard being given to the height and type of buildings, their construction, location, use and occupancy.

(b) During the term of the Credit Agreement, the premium on each insurance policy described above shall be prepaid and the policy term renewed annually in the same form and with at least the same coverage as the preceding year, with Administrative Agent to receive notice of renewal at least thirty (30) days prior to expiration. Further, no such policy shall be subject to cancellation, nonrenewal or reduction of coverage unless the insurer has given Administrative Agent at least thirty (30) days' prior written notice of such action. All policies described herein must be issued by insurance companies and agencies licensed by the Insurance Commission of the State in which the Property is located to conduct business in said State and approved by Administrative Agent. Administrative Agent shall have the right to approve each and every insurance carrier and policy.

(c) All policies shall include a standard, non-contributory mortgagee clause naming Administrative Agent and/or Lenders (as may be required) as additional insured under all liability insurance policies, as [FIRST] mortgagee on all property insurance policies and as the loss payee on all loss of rents insurance policies. All policies shall be in form and content as approved by Administrative Agent.

(d) All Insurance Proceeds under any insurance policies which are payable by reason of damage, loss or destruction to any portion of the Improvements during the term of the Credit Agreement will be paid directly to Administrative Agent and applied in accordance with Section 1.12 hereof.

Section 1.08. Removal of Improvements. No Improvements shall be removed, demolished or materially altered without Administrative Agent's prior written consent.

Section 1.09. Security Interest. Grantor shall promptly execute and cause to be filed (as directed by Administrative Agent) any and all documents, including UCC Financing Statements (the "Financing Statements") pursuant to the Uniform Commercial Code of the State in which the Property is located as now enacted and subsequently amended from time to time (the "Code"), as may be necessary, or as Administrative Agent may reasonably request, to preserve and maintain the [first] lien priority of the interest created hereby on all fixtures and personal property constituting part of the Property. Such Financing Statements shall be filed in such places as Administrative Agent reasonably determines. Grantor hereby authorizes and empowers Administrative Agent to execute and file, on Grantor's behalf, all Financing Statements and refilings and continuations thereof as Administrative Agent deems reasonably necessary or advisable to perfect, preserve and protect Trustee's, Administrative Agent's and Lenders' interest in such fixtures and personal property, and Grantor hereby irrevocably appoints Administrative Agent as Grantor's agent and attorney-in-fact (such appointment being coupled with an interest) so to do. This Deed of Trust is deemed a "Security Agreement" (as defined in the Code) and, with respect to the personal property encumbered by this Deed of Trust, the remedies for any violation of the covenants, terms and conditions and agreements contained in the Loan Documents shall be as prescribed (i) herein (Grantor agreeing that all such personal property may be sold by Trustee as part of any sale under his power of sale or any foreclosure sale provided for in Section 3.01(d) hereof), (ii) by Applicable Law or (iii) by the Code, all at Administrative Agent's sole election.

Section 1.10. Sale; Liens; Subdivision. Except as permitted under the Credit Agreement, any other Loan Document or in this Section, Grantor shall not, directly or indirectly, sell, transfer, convey, lease or further encumber or mortgage, whether voluntary, involuntary or by operation of law, or suffer or permit the same, all or any part of the Property or any interest therein or in Grantor. A taking of a portion of the Property by eminent domain (or a conveyance in lieu thereof) will not be considered a violation of this Section so long as (a) no portion of any Improvements are taken (or so conveyed); (b) after such taking (or such conveyance) the Property still complies with all Applicable Law (including all zoning and parking requirements); (c) Administrative Agent, in the exercise of its reasonable judgment, determines that such taking (or such conveyance) will not have a material adverse effect on the operation or leasing of

the Property; and (d) such taking (or such conveyance) will not give any tenant the right to terminate its lease or abate its rent.

Except as otherwise provided in the Credit Agreement or any other Loan Document, Grantor may sell, transfer, convey or otherwise dispose of obsolete, damaged or dilapidated Equipment from time to time without Lender's prior written consent, provided that such obsolete, damaged or dilapidated Equipment is promptly replaced with new Equipment of like kind and number and being of a quality and having a value comparable to the original (i.e., new) quality and value of the Equipment disposed of.

Grantor shall not subdivide the Property, submit the Property, or any portion thereof, to multiple form of ownership, or dedicate any portion of the Property to public ownership, without the prior written consent of Administrative Agent.

Section 1.11. Eminent Domain. Administrative Agent is hereby authorized and empowered to settle, adjust or compromise any and all claims and rights arising from any eminent domain or condemnation action relating to part or all of the Property (or any interest therein) and to collect and receive the proceeds relating to or arising therefrom (collectively, the "Condemnation Proceeds"). Each entity which may hereafter exercise a power of eminent domain or condemnation with respect to part or all of the Property is hereby authorized and directed to pay Condemnation Proceeds directly to Administrative Agent, for the ratable benefit of itself and Lenders, instead of to Grantor and Administrative Agent jointly. In the event any entity which may hereafter exercise a power of eminent domain or condemnation with respect to part or all of the Property fails to disburse Condemnation Proceeds directly and solely to Administrative Agent but disburses such Condemnation Proceeds instead either solely to Grantor or to Grantor and Administrative Agent jointly, Grantor agrees to immediately endorse and transfer such Condemnation Proceeds to Administrative Agent. Upon the failure of Grantor to immediately endorse and transfer such Condemnation Proceeds as aforesaid, Administrative Agent may execute such endorsements or transfers for and in the name of Grantor, and Grantor hereby irrevocably appoints Administrative Agent as Grantor's agent and attorney-in-fact (such appointment being coupled with an interest) so to do. The Condemnation Proceeds shall be applied to the Obligations in the manner set forth in Section 4.5 of the Credit Agreement. If such taking by exercise of a power of

eminent domain or condemnation is not a violation of Section 1.10, then Administrative Agent will disburse from that portion of the Condemnation Proceeds, if any, remaining after the application of such proceeds pursuant to the preceding sentence, an amount which it determines in its reasonable discretion shall be necessary to allow Grantor to repair or restore the Improvements to the condition (as near as possible) it was in prior to such taking or conveyance, and Grantor shall promptly do so. In the event the Condemnation Proceeds remaining after the application of such proceeds pursuant to Section 4.5 of the Credit Agreement are not sufficient to fully restore the Improvements to such condition, Grantor shall immediately upon demand by Administrative Agent promptly deposit any such deficiency with Administrative Agent to be disbursed in connection with such restoration. Such proceeds and additional funds as supplied by Grantor will be disbursed in accordance with procedures substantially similar to those set forth in the Credit Agreement for the disbursement of the original proceeds of the Extensions of Credit. The repair or restoration will be in accordance with plans and specifications subject to Administrative Agent's reasonable approval and in compliance with all Applicable Laws and in accordance with the timetable reasonably approved by Administrative Agent.

Section 1.12. Insurance Proceeds.

(a) Administrative Agent is hereby authorized and empowered to settle, adjust or compromise any claims or rights under any insurance policies maintained pursuant to this Deed of Trust and to collect and receive the proceeds from any such policy or policies (collectively, the "Insurance Proceeds"). Each insurance company is hereby authorized and directed to pay all Insurance Proceeds directly to Administrative Agent, for the ratable benefit of itself and Lenders, instead of to Grantor and Administrative Agent jointly. In the event any insurance company fails to disburse Insurance Proceeds directly and solely to Administrative Agent but disburses such Insurance Proceeds instead either solely to Grantor or to Grantor and Administrative Agent jointly, Grantor agrees to immediately endorse and transfer such Insurance Proceeds to Administrative Agent. Upon the failure of Grantor to endorse and transfer such Insurance Proceeds as aforesaid, Administrative Agent may execute such

endorsements or transfers for and in the name of Grantor, and Grantor hereby irrevocably appoints Administrative Agent as Grantor's agent and attorney-in-fact (such appointment being coupled with an interest) so to do. The Insurance Proceeds shall be applied to the Obligations in the manner set forth in
Section 4.5 of the Credit Agreement. If Administrative Agent elects, in its sole discretion, to make the proceeds available to Grantor in order to restore the Improvements, the disbursement of such proceeds will be subject to such reasonable restrictions and requirements as Administrative Agent shall impose.

(b) Notwithstanding the provisions of Section 1.12(a) above, so long as (i) that certain Master Agreement to Lease dated ________, 1997 (the "Master Lease") and that certain Lease Agreement dated _________, 1997 relating to the Property (the "Supplemental Lease") (the Master Agreement and the Supplemental Lease collectively referred to as the "Leases") between Grantor and Corrections Corporation of America, a Tennessee corporation ("CCA"), are in full force and effect, (ii) there has been no default under the Leases which was not cured within any applicable cure period under the Leases, (iii) CCA is unconditionally obligated to restore the Property after the occurrence of the applicable casualty, taking by right of eminent domain or condemnation and to continue to lease the Property without a permanent reduction in rent and (iv) Administrative Agent determines in the exercise of its reasonable discretion that CCA is financially able to bear any costs of such rebuilding which are not covered by the insurance proceeds or condemnation awards, then if:

(i) no Default or Event of Default has occurred and is continuing beyond any applicable grace period under the Loan Documents; and

(ii) the Property can, in Administrative Agent's judgment, with diligent restoration and repair, be returned to a condition at least equal to the condition thereof that existed prior to the casualty or taking causing the loss or damage from the earlier to occur of (1) six (6) months

after receipt of insurance proceeds or condemnation awards by either Grantor or Administrative Agent, and (2) the Revolving Termination Date; and

(iii) all necessary Governmental Approvals can be obtained to allow the rebuilding and the re- occupancy of the Property as described in Section
(b)(ii) above; and

(iv) there are sufficient sums available through insurance proceeds or condemnation awards and contributions by Grantor or CCA, the full amount of which shall at Administrative Agent's option have been deposited with Administrative Agent, for such restoration and repair (including, without limitation, for any costs and expenses incurred by Administrative Agent in administering said restoration or repair); and

(v) Grantor so elects by written notice delivered to Administrative Agent within five (5) days after settlement of the aforesaid insurance or condemnation claim,

then, Administrative Agent shall, solely for the purposes of such restoration and repair, advance so much of the remainder of such sums as may be required for such restoration or repair and to comply with Grantor's obligations under the terms of Section 10.01 of the Master Lease, and any funds deposited by Grantor or CCA therefore, to Grantor in the manner and upon such terms and conditions as would be required by a prudent interim construction lender (but nevertheless in accordance with the terms of Section 10.01 of the Master Lease), including, but not limited to, the prior approval by Administrative Agent of plans and specifications, contractors and form of construction contracts and the furnishing to Administrative Agent of permits, bonds, lien waivers, invoices, receipts and affidavits from contractors and subcontractors in form and substance satisfactory to Administrative Agent in its discretion, with any remainder being distrib-

uted to Grantor (except as otherwise provided in the Master Lease). In addition, to the extent that Administrative Agent receives any rental loss or loss of business income insurance proceeds in excess of amounts required to ensure no Default occurs with respect to any payment becoming due and payable under the Extensions of Credit for any period of time in which CCA is not required to pay rent due to the casualty or condemnation, and provided further that all operating expenses of the Property have been paid in full, then any such excess shall be distributed by Administrative Agent to Grantor (except as otherwise provided in the Master Lease).

ARTICLE II
Possession and Administration
of the Property

Section 2.01. Impositions. (a) Grantor will pay or cause to be paid in a timely manner all taxes, assessments and other charges now or hereafter levied against the Property, or any part thereof, and also any and all license fees or similar charges which may be imposed by the municipality in which the Premises are situated for the use of walks, areas, air space, parking areas and other space or facilities beyond the lot line and on or abutting the public sidewalks in front of or adjoining the Premises, together with any penalties or interest on any of the foregoing; and in the case of default in the payment thereof, Administrative Agent may (but shall not be obligated to) pay the same and Grantor will repay or cause to be repaid such sum with interest at the Default Rate under the Credit Agreement, and such sum shall be added to the indebtedness secured by this Deed of Trust.

(b) Grantor will not claim any credit on or make any deduction from the interest or principal of the Obligations by reason of the payment of any taxes levied or to be levied on the Property, or any part thereof, during the continuance of the lien of this Deed of Trust.

Section 2.02. Warranty of Title. Grantor warrants that Grantor is indefeasibly seized of the Property in fee simple absolute, free and clear from all encumbrances (subject only to

the Permitted Exceptions), and that Grantor has full power and lawful authority to convey and encumber the same; that Grantor shall and will make, execute, acknowledge and deliver all such further or other deeds, instruments or assurances as may at any time hereafter be reasonably desired or required by Administrative Agent to more fully and effectually convey the Property for the purposes aforesaid unto the Trustee and his successors or assigns and unto all and every person or persons deriving any estate, right, title or interest therein under this Deed of Trust; and that Grantor will warrant and defend the Property against all persons whomsoever, except for claims arising pursuant to the Permitted Exceptions.

Section 2.03. Waste. Grantor will cause the Improvements now or hereafter constructed on, and constituting part of, the Property to be protected and to be kept in good order and repair and will not commit or suffer any waste, deterioration or impairment of the Property whereby the value of the Property might be materially impaired. In the event that such waste, deterioration or impairment of the Property shall occur, which such waste, deterioration or impairment is not promptly cured by Grantor, Administrative Agent may (but shall not be obligated to) take such action as may be necessary to remedy such condition and Grantor shall repay or cause to be repaid all costs and expenses associated with such remedy with interest at the Default Rate under the Credit Agreement, and such sum shall be added to the indebtedness secured by this Deed of Trust.

Section 2.04. Inspection. Administrative Agent and any persons authorized by Administrative Agent shall have the right to enter and inspect the Property at all reasonable times.

Section 2.05. Compliance with Governmental Authorities. Grantor will comply with or cause to be complied with, all statutes, ordinances and requirements of any governmental authority relating to the Property. Grantor will not initiate, join in, or consent to any change in any private restrictive covenant, zoning ordinance or other public or private restrictions, limiting or defining the uses which may be made of the Premises, or any part thereof, without the prior written consent of Administrative Agent.

ARTICLE III
Remedies

Section 3.01. Remedies. Upon the occurrence of an Event of Default, and at any time thereafter during the continuance of such Event of Default, to the extent permitted by Applicable Law, Administrative Agent may, and upon the request of the Required Lenders shall, exercise any or all of the following remedies:

(a) Administrative Agent may enter into and upon all or any part of the Property and may exclude Grantor and its agents and servants wholly therefrom, and having and holding the same may use, operate, develop, manage and control the Property, or any part thereof, and conduct the business of Grantor, including, without limitation, exercising any and all rights of Grantor under the Leases (as defined in that certain Assignment of Rents, Leases and Profits of even date herewith, as amended, restated or otherwise modified (the "Assignment of Leases")) either personally, or by Administrative Agent's agents, attorneys, receivers or trustees, in such manner as Administrative Agent may deem to be to Administrative Agent's best advantage. To the extent permitted by Applicable Law, Administrative Agent, or at Administrative Agent's direction, Trustee, shall be entitled to collect and receive all Rents (as defined in the Assignment of Leases), for the ratable benefit of itself and Lenders, or to otherwise exercise all of Grantor's rights with respect to the Rents after deducting all associated expenses, and all necessary repairs, maintenance, renewals, replacements, alterations, additions, betterments and improvements, and all payments which may be made for taxes, assessments, insurance and other charges creating liens on the Property, or any part thereof, as well as reasonable compensation for their own services and for the services of their counsel, agents, clerks, servants and other employees by them properly engaged and employed. Administrative Agent or Trustee, as the case may be, shall apply the balance of the money derived from the operation and management of the Property and business towards payment in full of the balance due on the Obligations in the manner set forth in Section 4.5 of the Credit Agreement. The surplus, if any, shall be paid to Grantor, its successors or assigns, or to whomsoever as shall be lawfully entitled to receive same, or as a court of competent jurisdiction may direct.

(b) Administrative Agent may bring an appropriate action to recover any sums required to be paid by Grantor under the terms of the Loan Documents, as they become due, without regard to whether or not the principal indebtedness or any other sums evidenced by the Notes and secured by this Deed of Trust

shall be due, and without prejudice to the right of Administrative Agent or Trustee thereafter to bring an action of foreclosure, or any other action, for any Event of Default by Grantor existing at the time the earlier action was commenced.

(c) Administrative Agent may declare the Obligations to be immediately due and payable, and unless same are paid or performed on demand, Administrative Agent and Trustee may resort to any and all remedies provided in any Loan Document or by law and in equity.

(d) Administrative Agent may cause the Trustee to foreclose the lien of this Deed of Trust or to cause the Trustee to sell the Property by power of sale.

Should Administrative Agent or the Required Lenders elect to have Trustee foreclose the lien of this Deed of Trust or to sell the Property under the power of sale herein contained, Administrative Agent shall so notify Trustee and shall deposit with Trustee this Deed of Trust, the Notes, the Letters of Credit and such receipts and evidence of expenditures as have been made and secured hereby. Upon the direction of Administrative Agent, it shall be lawful for and the duty of Trustee, and Trustee is hereby authorized and empowered, to expose to sale and to sell the Property or any part thereof, at public auction for cash, after having first complied with all applicable requirements of the laws of the State in which the Property is located as may be in effect on the date of commencement of said proceeding with respect to the exercise of powers of sale contained in deeds of trust; and upon such sale, Trustee, or any officer of any court empowered to do so, shall convey title to the purchaser in fee simple. After retaining from the proceeds of such sale reasonable compensation for Trustee's services and all expenditures incurred by Trustee, Trustee shall apply the residue of the proceeds in the manner set forth in Section 4.5 of the Credit Agreement. Grantor agrees that in the event of sale hereunder, Administrative Agent, Lenders, or any of them shall be entitled to bid at such sale. In the event a foreclosure is commenced under the power of sale contained herein but such foreclosure is not completed, Grantor shall pay all expenses incurred by Trustee, including attorneys' fees.

To the extent permitted by Applicable Law, the Property may be sold as a whole or as separate parcels, and such sales may be conducted simultaneously or otherwise, all as the Trustee, in its

reasonable discretion, deems to be in the best interest of the parties. To the extent permitted by Applicable Law, should Trustee elect to sell the Property as separate parcels, the exercise of the power of sale with respect to one or more of such parcels shall not extinguish or otherwise affect the right to exercise the power of sale with respect to the remainder of the Property. Further, in the event the Property, or any portion thereof, is sold pursuant to any writ of execution on a judgment obtained by virtue of any Loan Document or pursuant to any other judicial proceedings under any Loan Document, the Property may be sold as a whole or as separate parcels and in such manner or order as Administrative Agent in its reasonable discretion may elect.

To the extent permitted by Applicable Law, any sale or sales made under or by virtue of this Deed of Trust, whether under the power of sale hereby granted or under or by virtue of any judicial proceedings, shall operate to divest all right, title, interest, claim and demand whatsoever, either at law on in equity, of Grantor in and with respect to the Property sold and shall be a perpetual bar, both at law and in equity, against Grantor, its successors and assigns, and against any and all persons claiming the Property, or any part thereof, through or under Grantor.

(e) Administrative Agent may (and may cause Trustee to) exercise any or all of the remedies available to a secured party under the Code, including, but not limited to, selling, leasing or otherwise disposing of any fixtures and personal property which is encumbered hereby at public sale, with or without having such fixtures or personal property at the place of sale, and upon such terms and in such manner as Administrative Agent may determine. Administrative Agent and Lenders, or any of them, may be a purchaser at any such sale of such fixtures or personal property.

(f) Administrative Agent may proceed to protect and enforce Administrative Agent's and Lenders' rights under this Deed of Trust and any other Loan Document by a suit or suits in equity or at law, whether for the specific performance of any covenant or agreement, assistance in connection with the execution of any power granted herein or other appropriate legal or equitable remedy.

(g) Administrative Agent may apply to an appropriate court for the appointment of a receiver of the Rents of the Property, and Administrative Agent shall be entitled to the appointment of such a receiver as a matter of right without consideration of the value of the Property as security for the amounts due Administrative Agent and the Lenders or the solvency of any person or entity liable for the payment of such amounts.

Section 3.02. Remedies Not Exclusive. Trustee, Administrative Agent and Lenders, and each of them, shall be entitled to enforce payment and performance of the Obligations secured hereby and to exercise all rights and powers under this Deed of Trust or any other Loan Document or any laws now or hereafter enforced, notwithstanding that some of the Obligations may now or hereafter be otherwise secured. Neither the acceptance of this Deed of Trust nor its enforcement, whether by court action or pursuant to the power of sale contained herein or other powers set forth herein, shall prejudice or in any manner affect Trustee's, Administrative Agent's or Lenders' right to realize upon or enforce any other security now or hereafter held by Trustee, Administrative Agent or by Lenders, it being agreed that Trustee, Administrative Agent and Lenders, and each of them, shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by Administrative Agent, Lenders or Trustee in such order and manner as they or either of them may in their absolute discretion determine. No remedy herein conferred upon or reserved to Trustee, Administrative Agent or Lenders is intended to be exclusive of any other remedy herein or by Applicable Law provided or to preclude any other remedy herein or by Applicable Law provided or permitted, but each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. Every power or remedy given by any of the Loan Documents to Trustee, Administrative Agent or Lenders, or to which either of them may be otherwise entitled, may be exercised concurrently or independently from time to time and as often as may be deemed expedient by Trustee, Administrative Agent or Lenders.

Section 3.03. Powers and Rights Not Waived. Any failure by Administrative Agent or Lenders to insist upon the strict performance by Grantor of any of the terms and provisions hereof shall not be deemed to be a waiver of any of the terms and provisions hereof, and Administrative Agent and Lenders, notwithstanding any such failure, shall have the right thereafter to insist upon the strict performance by Grantor of any and all of the terms and provisions of this Deed of Trust to be performed by Grantor. Neither Grantor nor any other person now or hereafter obligated for the payment of the whole or any part of the sums now or hereafter secured by this Deed of Trust shall be relieved of such obligation by reason of the failure of Administrative Agent or Lenders to comply with any request of Grantor, or of any other person so obligated, to take action to foreclose this Deed of Trust or otherwise enforce any of the provisions of this Deed of Trust or any obligations secured by this Deed of Trust, or by reason of the release, regardless of consideration, of the whole or any part of the security held for the indebtedness secured by this Deed of Trust, or by reason of any agreement or stipulation between any subsequent owner or owners of the Property and Administrative Agent extending the time of payment or modifying the terms of the Obligations or of this Deed of Trust without first having obtained the consent of Grantor or such other person, and in the latter event, Grantor and all such other persons shall continue to be liable to make such payments according to the terms of any such agreement of extension or modification unless expressly discharged in writing by Administrative Agent. Regardless of consideration, Administrative Agent may, or at the request of the Required Lenders shall, release the obligation of any party at any time liable for any of the Obligations without in any way impairing or affecting the lien hereof, and Administrative Agent and Lenders may resort for the payment of the Obligations to any other security therefor held by Administrative Agent and Lenders in such order and manner as it may elect.

ARTICLE IV
Miscellaneous

Section 4.01. Notices. Any notice, demand or other communication which, by any provision of this Deed of Trust, is required or permitted to be given or served by or to Trustee, Administrative Agent, Lenders or Grantor shall be conclusively deemed to have been properly given or served by the sending party and to be effective if made in compliance with Section 13.1 of the Credit Agreement.

Section 4.02. Severability. To the extent any provision of this Deed of Trust may be deemed invalid or unenforceable under any Applicable Law, such provision shall be deemed void and inoperative and shall not form part of this Deed of Trust, but the remainder of this Deed of Trust shall remain in full force and effect. The parties hereto specifically declare that they would have entered into this Deed of Trust if any such void provisions had been omitted herefrom.

Section 4.03. Governing Law. This Deed of Trust shall be deemed to be a contract entered into pursuant to the laws of the State of North Carolina and shall in all respects be governed by, construed and enforced in accordance with the laws of the State of North Carolina, without reference to the conflicts or choice of law principles thereof; provided, however, that with respect to the creation, perfection, priority and enforcement of the lien or interest of this Deed of Trust, the laws of the State where the Property is located shall apply.

Section 4.04. Stamp Tax Indemnity. Except as may be prohibited by Applicable Law, if at any time the United States of America, any state thereof or any governmental subdivision of such state having jurisdiction, shall require revenue, excise or documentary stamps to be affixed to this Deed of Trust, or other tax to be paid on or in connection therewith, Grantor will pay the same with any interest or penalties imposed in connection therewith.

Section 4.05. Credit Agreement. The terms and provisions of the Credit Agreement are incorporated in this Deed of Trust by reference.

Section 4.06. Successor Trustee. Administrative Agent shall at any time have the irrevocable right to remove Trustee

herein named without notice or cause and to appoint a successor thereto by an instrument in writing, duly acknowledged, in such form as may be required or by law in the State in which the Property is located as to entitle such written instrument to be recorded, if required; and in the event of the death, incapacity or resignation of Trustee herein named, Administrative Agent shall have the right to appoint a successor thereto by such written instrument, and any Trustee so appointed shall be vested with title to the Property and shall possess all the powers, duties and obligations herein conferred on Trustee in the same manner and to the same extent as if originally named herein as Trustee.

Section 4.07. Binding Arbitration. Upon demand of any party, whether made before or after institution of any judicial proceeding, any dispute, claim or controversy arising out of, connected with or relating to the Notes, this Deed of Trust or any other Loan Document ("Disputes"), between or among parties to the Notes, this Deed of Trust or any other Loan Document shall be resolved by binding arbitration as provided herein. Institution of a judicial proceeding by a party does not waive the right of that party to demand arbitration hereunder. Disputes may include, without limitation, tort claims, counterclaims, claims brought as class actions, claims arising from Loan Documents executed in the future, or claims concerning any aspect of the past, present or future relationships arising out or connected with the Loan Documents. Arbitration shall be conducted under and governed by the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings shall be conducted in Charlotte, North Carolina. The expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000. All applicable statutes of limitation shall apply to any Dispute. A judgment upon the award may be entered in any court having jurisdiction. The panel from which all arbitrators are selected shall be comprised of licensed attorneys. The single arbitrator selected for expedited procedure shall be a retired judge from the highest court of general jurisdiction, state or federal, of the state where the hearing will be conducted. Notwithstanding the foregoing, this paragraph shall not apply to any Hedging Agreement that is a Loan Document.

Section 4.08. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GRANTOR HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS DEED OF TRUST, ANY RIGHTS OR OBLIGATION HEREUNDER OR UNDER ANY OF THE LOAN DOCUMENTS, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THIS WAIVER IS A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT AND LENDERS IN MAKING THE EXTENSIONS OF CREDIT.

IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be executed, sealed and delivered by its duly authorized representative all as of the day and year first above written.

"GRANTOR"

CCA PRISON REALTY TRUST,
a Maryland real estate
investment trust [SEAL]

By:_____________________________________
Name:________________________________
Title:_______________________________

[ADD APPROPRIATE NOTARY CLAUSE]

EXHIBIT A
TO
DEED OF TRUST AND SECURITY AGREEMENT

* * * * * * * * * *

[Description of the real property]

EXHIBIT J
to

Credit Agreement dated as of July 18, 1997 by and among CCA Prison Realty Trust, and certain Subsidiaries thereof, as Borrowers, the Lenders party thereto, First Union National Bank of Tennessee, as Administrative Agent, and SouthTrust Bank, N.A., as Co-Agent

FORM OF
ASSIGNMENT OF RENTS, LEASES AND PROFITS

ASSIGNMENT OF RENTS, LEASES AND PROFITS

THIS ASSIGNMENT OF RENTS, LEASES AND PROFITS (this "Assignment") is executed and delivered as of the ____ day of July, 1997, by CCA PRISON REALTY TRUST, a Maryland real estate investment trust, whose address is 2200 Abbott Martin Road, Suite 201, Nashville, Tennessee 37215 ("Assignor"), to and in favor of FIRST UNION NATIONAL BANK OF TENNESSEE, a national banking association, as Administrative Agent for Lenders (as hereinafter defined), whose address is 150 Fourth Avenue North, Nashville, Tennessee 37219, its successors or assigns ("Administrative Agent");

STATEMENT OF PURPOSE

Pursuant to the terms of that certain Credit Agreement among the Assignor, Administrative Agent, SouthTrust Bank, N.A., as Co-Agent and the lenders who are or may become a party to the Credit Agreement (as therein defined, "Lenders") of even date herewith, as amended, restated or otherwise modified (the "Credit Agreement"), Lenders have agreed to extend certain credit facilities to the Borrowers of up to One Hundred Fifty Million Dollars ($150,000,000.00) as evidenced by the Notes executed by Borrowers and payable to the order of Lenders. All of the defined terms used herein, as indicated by the initial capitalization thereof, shall have the meanings ascribed to such terms in the Credit Agreement unless otherwise provided herein. Repayment of Notes and the Reimbursement Obligation is secured by, among other things, a certain Deed of Trust and Security Agreement of even date herewith from the Assignor to Trustee for the ratable benefit of Administrative Agent and Lenders (together with any future restatements, amendments or modifications thereof, the "Deed of Trust") which is a first Lien against the Land of the Assignor more particularly described on EXHIBIT A attached hereto and incorporated herein by reference.

Lenders, as a condition to making the Extensions of Credit and to obtain additional security therefor, have required the Assignor to make the assignment of certain additional property on the terms and conditions contained herein.

NOW THEREFORE, in order to further secure the payment of the Obligations and in further consideration of the sum of TEN AND 00/l00 DOLLARS ($10.00) in hand paid to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby sell, assign, transfer and set over unto Administrative Agent, for the ratable benefit of itself and Lenders, all of its right, title and interest in and to and under (i) all leases, subleases, and any other agreements however characterized and whether oral or in writing pertaining to the occupancy or the use of all or any part of the Property (as defined in the Deed of Trust) whether now in existence or arising hereafter including all renewals, extensions and modifications of any of the foregoing (collectively, the "Leases") and (ii) all income, accounts, cash, rents, issues, profits, royalties, general intangibles, escrows, reserves, receivables, deposits, concessions, rebates and other benefits from or pertaining to the Property or related to the operation thereof, together with any and all other amounts due or to become to Assignor with respect to the Property including all payments and fees received or receivable from concessionaires operating on or in the Property (collectively, the "Rents"). Assignor hereby agrees to execute and deliver such further assignments of said Leases as Administrative Agent may from time to time request.

This Assignment is absolute and effective immediately and without possession; however, Assignor shall have a revocable license to receive, collect and enjoy the Rents accruing from the Property until an Event of Default has occurred. Upon the occurrence of an Event of Default, the license shall be revoked automatically, without need of notice, possession, foreclosure or any other act or procedure, and all Rents assigned hereby shall thereafter be payable to Administrative Agent, for the ratable benefit of itself and Lenders.

PROVIDED ALWAYS, however, that if Assignor shall pay unto Administrative Agent and Lenders the Obligations, and if Assignor shall duly, promptly and fully perform, discharge, execute, effect, complete, comply with and abide by each of the agreements, conditions and covenants of the Loan Documents, then this Assignment and the estates and interests hereby granted and created shall terminate.

1. REPRESENTATIONS AND WARRANTIES OF ASSIGNOR. In furtherance of the foregoing assignment, Assignor:

A. represents and warrants that it is the owner in fee simple of the Property and has good title to the Leases and Rents hereby assigned and good right to assign the same, and that no other person, entity, firm or corporation has any right, title or interest therein; that Assignor has not previously sold, assigned, transferred, mortgaged or pledged said Leases and Rents of the Property; and that payment of any of the same has not otherwise been anticipated, waived, released, discounted, set off or otherwise discharged or compromised;

B. agrees and warrants that, without the prior written consent of Administrative Agent, the terms of any and all Leases will not be amended, altered, modified or changed in a way that could be reasonably expected to have an adverse effect (as determined by Administrative Agent) on Assignor, nor will they be surrendered or canceled, nor will any proceedings for dispossession or eviction of any lessee under said Leases be instituted by Assignor;

C. agrees and warrants that no request will be made of any lessee to pay any Rent, and no rent will be accepted by Assignor, for more than one (1) month in advance of the date such rent becomes due and payable under the terms of any and all Leases, it being agreed by Assignor that rent shall be paid as provided in said Leases and not otherwise;

D. authorizes Administrative Agent, by and through its employees or agents or a duly appointed receiver, at its option, after the occurrence of an Event of Default, to enter upon the Property and to collect, in the name of Assignor, as its lawful attorney, or in its own name, for the ratable benefit of itself and Lenders, any Rents accrued but unpaid or in arrears at the date of such Event of Default, as well as the Rents thereafter accruing and becoming payable during the period of the continuance of the said Default or any other Event of Default; and to this end, Assignor further agrees that it will cooperate with and facilitate, in all reasonable ways, Administrative Agent's collection of said Rents and will, upon request by Administrative Agent or the Required Lenders, execute a written notice to each tenant, occupant or licensee directing said tenant, occupant or licensee to pay directly to Administrative Agent on behalf of Lenders all Rents due and payable under said Leases; provided, however, that such notice to said tenant, occupant or licensee of the effectiveness of this Assignment may be provided without giving notice to Assignor or requesting Assignor to give such notice or join in such notice;

E. authorizes Administrative Agent, upon such entry, at its option, to take over and assume the management, operation and maintenance of the Property and to perform all acts necessary

and proper and to expend such sums out of the Rents of the Property as in Administrative Agent's sole discretion may be reasonable or necessary in connection therewith, in the same manner and to the same extent as Assignor theretofore might do; Assignor hereby releases all claims against Administrative Agent and Lenders arising out of such management, operation and maintenance;

F. agrees to execute, upon the request of Administrative Agent, any and all other instruments requested by Administrative Agent to effectuate this Assignment or to accomplish any other purpose deemed by Administrative Agent to be necessary or appropriate in connection with this Assignment; and

G. agrees and acknowledges that nothing in this Assignment shall be construed to limit or restrict in any way the rights and powers granted to Administrative Agent and Lenders in the other Loan Documents; and agrees that the collection and application of the Rents as described herein shall not constitute a waiver of any default which might at the time of application or thereafter exist under any of the other Loan Documents, and the exercise by Administrative Agent and Lenders, or any of them, of the rights herein provided shall not prevent Administrative Agent's or Lenders', or any of their, exercise of any rights provided under any of the other Loan Documents.

2. RIGHTS FOLLOWING DEFAULT BY BORROWERS. Administrative Agent may, and upon the request of the Required Lenders shall, after the occurrence of an Event of Default, from time to time, appoint and dismiss such agents or employees as shall be necessary or reasonable for the collection of the Rents derived from the Property and for the proper care and operation of the Property, and Assignor hereby grants to Administrative Agent the authority to give such agents or employees so appointed full and irrevocable authority on Assignor's behalf to manage the Property and to do all acts relating to such management, including, without limitation, the entry into and execution of new leases in the name of Assignor or otherwise, the alteration or amendment of existing leases, the authorization to repair or replace any items necessary in order to maintain the building or buildings and chattels incidental thereto in good and tenantable condition, and the effectuation of such alterations or improvements as in the judgment of Administrative Agent may be reasonable or necessary to maintain or increase the income from the Property. Administrative Agent shall have the sole control of such agents or employees, whose remuneration shall be paid out of the Rents as hereinabove provided, at the rate of compensation accepted in the community wherein the Property is situated.

3. APPLICATION BY ADMINISTRATIVE AGENT OF NET INCOME FROM THE PROPERTY. Administrative Agent shall, after payment of all proper charges and expenses enumerated under Paragraph 2 above, credit the net income received by Administrative Agent from the Property, by virtue of this Assignment, to any amounts due and owing to Administrative Agent and Lenders by the Borrowers under and pursuant to the terms of the Loan Documents in the manner set forth in
Section 4.5 of the Credit Agreement. Administrative Agent shall make a reasonable effort to collect Rents, reserving, however, within its sole discretion, the right to determine the method of collection and the extent to which enforcement of the collection of delinquent Rents shall be prosecuted. Notwithstanding the foregoing, no such credit shall be given by Administrative Agent for any sum or sums received from the Rents until the sums collected are actually received by Administrative Agent at its principal office as stated above (or at such other place as Administrative Agent shall designate in writing), and no credit shall be given for any uncollected Rents nor shall credit be given for any Rents under any order of court or by operation of law until such amounts are actually received by Administrative Agent at its principal offices as stated above. The net amount of Rents received by Administrative Agent hereunder and applied by Administrative Agent to the amounts due and owing by the Borrowers shall not serve to cure any default under any of the other Loan Documents, nor shall any amounts received by Administrative Agent hereunder be in full satisfaction of the Obligations unless such amounts are sufficient to pay such Obligations in full (including any prepayment premiums, late payment charges and advancements) in accordance with the terms of the other Loan Documents.

4. LIMITATION OF LIABILITY. Neither Administrative Agent or Lenders shall be obligated to perform or discharge any obligation under the Leases hereby assigned or under or by reason of this Assignment, and Assignor hereby agrees to indemnify and hold Administrative Agent and Lenders harmless against any and all liability, loss or damage which Administrative Agent and Lenders, or any of them, might incur under the Leases or under or by reason of this Assignment and of and from any and all claims and demands whatsoever which may be asserted against Administrative Agent and Lenders, or any of them, by reason of any alleged obligation or undertaking on Administrative Agent's, Lenders' or any of their part to perform or discharge any of the terms of such Leases, except for claims and demands arising by reason of Administrative Agent's, Lenders' or any of their gross negligence or willful misconduct.

5. REINSTATEMENT AFTER DEFAULT. In the event that Borrowers shall, with the consent of Administrative Agent, reinstate the Obligations completely in good standing, having

complied with all the terms, covenants and conditions of the Loan Documents, then, in such event, Administrative Agent or Lenders, as the case may be, shall return possession of the Property to Assignor, and Assignor shall remain in possession of the Property unless and until another Event of Default occurs, at which time Administrative Agent may, or at the request of the Required Lenders shall, again take possession of the Property under authority of and pursuant to the terms and provisions of this Assignment.

6. TENANT'S NOTIFICATION OF ASSIGNMENT. Upon request by Administrative Agent, at any time, Assignor will deliver a written notice to each of the tenants and lessees of the Property, which notice shall inform such tenants and lessees of this Assignment and instruct them that upon receipt of notice by them from Administrative Agent of the existence of an Event of Default, all Rent due thereafter shall be paid directly to Administrative Agent, for the ratable benefit of itself and Lenders.

7. SATISFACTION OF DEED OF TRUST; SATISFACTION OF ASSIGNMENT. This Assignment shall remain in full force and effect as long as the Obligations remain unpaid in whole or in part. A complete release or satisfaction of the Deed of Trust shall operate as a complete release or satisfaction of all of Administrative Agent's and Lenders' rights and interest hereunder.

8. CAPTIONS. The captions set forth at the beginning of the various paragraphs of this Assignment are for convenience only and shall not be used to interpret or construe the provisions of this Assignment.

9. MISCELLANEOUS.

A. The provisions of this Assignment shall inure to the benefit of Administrative Agent and Lenders, and their respective successors and assigns, and shall be binding upon Assignor, its heirs, personal representatives, successors and assigns. The creation of rights and powers under this Assignment in favor of, or available to, Administrative Agent and Lenders, or any of them, shall, in no way whatsoever, be construed to impose concomitant duties or obligations on Administrative Agent and Lenders, or any of them, in favor of Assignor except as expressly set forth herein.

B. This Assignment shall be deemed to be a contract entered into pursuant to the laws of the State of North Carolina and shall in all respects be governed by, construed and enforced in accordance with the laws of the State of North Carolina,

without reference to the conflicts or choice of law principles thereof; provided, however, that with respect to the creation, perfection priority and enforcement of this Assignment, the laws of the state where the Property is located shall apply.

C. Upon demand of any party, whether made before or after institution of any judicial proceeding, any dispute, claim or controversy arising out of, connected with or relating to the Notes, this Assignment or any other Loan Document ("Disputes"), between or among parties to the Notes, this Assignment or any other Loan Document shall be resolved by binding arbitration as provided herein. Institution of a judicial proceeding by a party does not waive the right of that party to demand arbitration hereunder. Disputes may include, without limitation, tort claims, counterclaims, claims brought as class actions, claims arising from Loan Documents executed in the future, or claims concerning any aspect of the past, present or future relationships arising out or connected with the Loan Documents. Arbitration shall be conducted under and governed by the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings shall be conducted in Charlotte, North Carolina. The expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000. All applicable statutes of limitation shall apply to any Dispute. A judgment upon the award may be entered in any court having jurisdiction. The panel from which all arbitrators are selected shall be comprised of licensed attorneys. The single arbitrator selected for expedited procedure shall be a retired judge from the highest court of general jurisdiction, state or federal, of the state where the hearing will be conducted. Notwithstanding the foregoing, this paragraph shall not apply to any Hedging Agreement that is a Loan Document.

D. TO THE EXTENT PERMITTED BY APPLICABLE LAW, ASSIGNOR HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS ASSIGNMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR UNDER ANY OF THE LOAN DOCUMENTS, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THIS WAIVER IS A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT AND LENDERS IN MAKING THE EXTENSIONS OF CREDIT.

IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed, sealed and delivered by its duly authorized representative all as of the day and year first above written.

"ASSIGNOR"

CCA PRISON REALTY TRUST, a Maryland real
estate investment trust
[SEAL]

By:_____________________________________
Name:___________________________________
Title:__________________________________

[ADD APPROPRIATE NOTARY CLAUSE]

EXHIBIT A
TO
ASSIGNMENT OF RENTS, LEASES AND PROFITS
BY
CCA PRISON REALTY TRUST
IN FAVOR OF
FIRST UNION NATIONAL BANK OF TENNESSEE, AS ADMINISTRATIVE AGENT

**********

[Description of the real property]

                                        Revolving
                                        Credit           Commitment
Lender                                  Commitment       Percentage
------                                  -----------      ----------
First Union National Bank               $30,000,000      20.000000000%
 of Tennessee
One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attn: Syndication Agency Services
        Telephone: (704) 383-0281
        Telecopy:  (704) 383-0288

and

First Union National Bank
  Of Tennessee
150 Fourth Avenue North
Nashville, Tennessee 37219
Attn: Tim Fouts
        Telephone: (615) 251-9243
        Telecopy:  (615) 251-9461

SouthTrust Bank, National Association    $25,000,000     16.6666666667%
420 North 20th Street
Birmingham, Alabama 35203
Attn: Jim Sloan
        Telephone: (205) 254-5870
        Telecopy:  (205) 254-8270

AmSouth Bank                             $20,000,000     13.3333333333%
333 Union Street, #200
Nashville, Tennessee 37201
Attn: Dan Andrews
        Telephone: (615) 291-5259
        Telecopy:  (615) 291-5257

[Credit Agreement]

CIBC Inc.                               $15,000,000     10.0000000000%
Two Paces West
2727 Paces Ferry Road, Ste. 1200
Atlanta, Georgia 30339
Attn: Roger Colden
        Telephone: (770) 319-4902
        Telecopy:  (770) 319-4954

Comerica Bank                           $15,000,000     10.0000000000%
9th Floor MC 3280
500 Woodward Avenue
Detroit, Michigan 48226
Attn: Kristine L. Andersen
        Telephone: (313) 222-3648
        Telecopy:  (313) 222-3330

First Tennessee Bank                    $10,000,000     6.6666666667%
511 Union Street
2nd Floor
Nashville, Tennessee 37219
Attn: Laurie D. Gilreath
        Telephone: (615) 734-6216
        Telecopy:  (615) 734-6148

Mercantile Bank, National Association   $10,000,000     6.6666666667%
721 Locust Street, TRAM 12-3
St. Louis, Missouri 63101
Attn: Donald A. Adam
        Telephone: (314) 425-2420
        Telecopy:  (314) 425-3859

Union Planters National Bank            $10,000,000     6.6666666667%
620 Poplar Avenue, 4th Floor
Memphis, Tennessee 38119
Attn: Victoria E. Docauer
        Telephone: (901) 580-5507
        Telecopy:  (901) 580-5451

[Credit Agreement]

Bank Hapoalim, B.M.                     $10,000,000     6.6666666667%
1515 Market Street
Philadelphia, Pennsylvania 19102
Attn: Ellen Frank
        Telephone: (215) 665-2200
        Telecopy:  (215) 665-2217

Bank of Scotland                         $5,000,000     3.3333333333%
111 Riverside Avenue, Suite 230
Jacksonville, Florida 32202
Attn: Hugh Van Seaton
        Telephone: (904) 353-7766
        Telecopy:  (904) 353-7833
                                       ------------     ------------
                                       $150,000,000              100%

[Credit Agreement]

Organization:   Maryland

Qualification:  Tennessee
                Kansas

                           Subsidiaries and Capitalization

Subsidiaries:     None

Capitalization:

                                                            As Adjusted(2)
                                                        (dollars in thousands)

Preferred Shares, $0.01 par value, 10,000,000 shares
authorized, no shares issued and outstanding                 $      -0-

Common Shares, $0.01 par value, 90,000,000 shares
authorized, 1,000 shares issued and outstanding;
18,801,000 shares, as adjusted, issued and
outstanding(1)                                                     188

Additional paid-in capital                                     361,017
                                                              ========

        Total shareholders' equity                             361,205
                                                              --------

        Total capitalization                                  $361,205
                                                              ========

(1) Does not include 1,850,000 Common Shares reserved for issuance pursuant to the Company's Share Incentive Plan or the Company's Non-Employee Trustees' Plan of which 1,075,000 shares will be outstanding upon consummation of the Offering.

(2) Includes (i) 1,000 founder's shares, and (ii) 300,000 shares issued to D. Robert Crants, III and Michael W. Devlin as a development fee and as reimbursement for certain expenses incurred in connection with the promotion and formation of the Company and the consummation of the offering which are valued based upon the initial public offering price.

1.   Project:        Laredo Processing Center, Laredo, Texas

     Date:           April, 1997

     Prepared By:    Resources Consultants


2.   Project:        Central Arizona Detention Center, Florence, Arizona

     Date:           April 12, 1997

     Prepared By:    Continental Envirotech, Inc. and signed by
                     Chad VanMoorlehem, Director of Operations


3.   Project:        Mineral Wells, Texas Facility

     Date:           April, 1997

     Prepared By:    LCA Environmental, Inc. and executed by Y. Lynn Clark,
                     REM and Greg D. Dixon


4.   Project:        T. Don Hutto Correctional Center, Taylor, Texas

     Date:           May, 1995 ESA, updated April 16, 1997, and May, 1995
                     Wetlands Study

     Prepared By:    Update:  Rust Environment & Infrastructure, Inc. and
                              executed by Charles E. Hall, Project Manager


5.   Project:        Houston Processing Center, Houston, Texas

     Date:           April, 1997

     Prepared By:    Resource Consultants


6.   Project:        West Tennessee Detention Facility, Mason, Tennessee

     Date:           April, 1997

     Prepared By:    Resource Consultants, Inc.

7.      Project:        Bridgeport, Texas Facility, Bridgeport, Texas

        Date:           April, 1997

        Prepared by:    LCA Environmental, Inc., executed by Y. Lynn Clark,
                        REM and Greg D. Dixon

8.      Project:        Correctional Facility, Youngstown, Ohio

        Date:           April 16, 1997

        Prepared by:    Resource International Engineering Consultants and
                        executed by Michelle L. Jones, Staff Geologist and
                        Christopher Merklin, P.E., Director-Geotechnical/
                        Environmental Engineering

9.      Project:        CCA Eloy Detention Center, Eloy, Arizona

        Date:           April 16, 1997

        Prepared by:    Continental Envirotech, Inc.

10.     Project:        Leavenworth Correctional Facility, Leavenworth, Kansas

        Date:           April 18, 1997

        Prepared by:    Terracon Environmental, Inc. and executed by Brian A.
                        Huff, Project Geologist and Douglas L. Lemley, CHMM,
                        Project Manager

SCHEDULE 6.1(I)

ERISA Plans

None.

SCHEDULE 6.1(l)

Material Contracts

EXHIBIT 10.20

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Agreement"), dated as of July 18, 1997 is executed by CCA PRISON REALTY TRUST, a Maryland real estate investment trust ("CCA REIT"), and any Subsidiary of CCA REIT that is joined as Borrower pursuant to the terms of the Credit Agreement hereinafter referred to (collectively, the "Grantors"), in favor of FIRST UNION NATIONAL BANK OF TENNESSEE, a national banking association organized under the laws of the United States, as administrative agent (the "Administrative Agent") for the benefit of itself and the financial institutions (the "Lenders") as are, or may from time to time become, parties to the Credit Agreement referred to below.

STATEMENT OF PURPOSE

Pursuant to the Credit Agreement of even date (as amended, restated or otherwise modified the "Credit Agreement"), by and among the Grantors, as Borrowers, the Lenders party thereto, the Administrative Agent and SouthTrust Bank, N.A., as Co-Agent, such Lenders have agreed to extend certain credit facilities to the Borrowers.

The extensions of credit provided for under the Credit Agreement have been and will be made for the purposes of, among other things, financing certain acquisitions of certain Correctional Facilities as described in the Credit Agreement, and funding ongoing working capital and general corporate requirements, and paying approved fees and expenses related to the transactions contemplated in the Credit Agreement.

In order to induce the Lenders and the Administrative Agent to enter into the Credit Agreement, and as a condition to the making of any extensions of credit thereunder, the Lenders require that the Grantors grant a continuing security interest in and to the "Collateral" (as hereinafter defined) to secure the "Secured Obligations" (as hereinafter defined).

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:

SECTION 1. Definitions. Terms defined in the Credit Agreement and not otherwise defined herein, when used in this Agreement including its preamble and recitals, shall have the respective meanings provided for in the Credit Agreement. The following additional terms, when used in this Agreement, shall have the following meanings:

"Account Debtor" means any Person who is or may become obligated to any Grantor under, with respect to, or on account of, an Account.

"Accounts" means all "accounts" (as defined in the UCC) now or hereafter owned or acquired by any Grantor or in which any Grantor now or hereafter has or acquires any right or interest, and, in any event, shall also include, without limitation, all accounts receivable, contract rights, book debts, notes, drafts and other obligations or indebtedness owing to any Grantor arising from the sale, lease, consignment or exchange of goods or other property by it or property to be sold, leased, consigned or exchanged, or the performance of services by it, or to be performed, and all of such Grantor's rights to any goods, services or other property represented by any of the foregoing (including returned or repossessed goods and unpaid sellers' rights of rescission, replevin, reclamation and rights to stoppage in transit) and all monies due to or to become due to such Grantor under all contracts for the sale, lease, consignment or exchange of goods or other property or the performance of services by it (whether or not yet earned by performance on the part of such Grantor), in each case whether now in existence or hereafter arising or acquired, including, without limitation, the right to receive the proceeds of such contracts and all collateral security and guarantees of any kind given by any Person with respect to any of the foregoing.

"Accounts Aging Report" means a detailed aged trial balance of all Accounts existing as of a specified date, specifying the names, addresses, face value and dates of invoices of each Account Debtor obligated on any Accounts so listed, delivered pursuant to Section 4(b)(vi) hereof.

"Collateral" shall have the meaning given thereto in Section 2(a) hereof.

"Collateral Account" means a cash collateral account established by the Grantors with the Administrative Agent, in the name and under the exclusive dominion and control of the Administrative Agent, pursuant to Section 6.

"Copyright License" means any written agreement now or hereafter in existence granting to any Grantor any right to use any Copyright.

"Copyrights" means, collectively, all of the following of any Grantor:
(a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations and copyright applications, including without limitation any thereof referred to on Schedule II hereto; (b) all renewals of any of the foregoing; (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages or payments for past or future infringements of any of the foregoing; (d) the right to sue for past, present and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

"Documents" means all "documents" (as defined in the UCC) or other receipts of any Grantor covering, evidencing or representing goods.

"Equipment" means all "equipment" (as defined in the UCC) of any Grantor and all other machinery, equipment and goods (other than Inventory) of any Grantor used or bought for use primarily in the business of such Grantor, including all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor.

"Financing Statements" shall mean the Uniform Commercial Code Form UCC-1 Financing Statements executed by the Grantor with respect to the Collateral and to be filed in the jurisdictions set forth in the Perfection Certificate.

"Fixtures" shall mean all "fixtures" (as defined in the UCC) of any Grantor.

"General Intangibles" means all "general intangibles" (as defined in the UCC) of any Grantor, including without limitation, all rights to indemnification, and all rights, title and interest which any Grantor may now or hereafter have in or under all contracts (other than contracts described in the definition of Accounts), agreements (including without limitation, all agreements executed by the Grantor in connection with or relating to any acquisition permitted under the Credit Agreement), permits, licenses, causes of action, franchises, tax refund claims, customer lists, Intellectual Property, license royalties, goodwill, trade secrets, data bases, business records, and all other intangible property of every kind and nature.

"Instruments" means all "instruments", "chattel paper" or "letters of credit" (each as defined in the UCC) of any Grantor, including, without limitation, instruments, chattel paper and letters of credit evidencing, representing, arising from or existing in respect of, relating to, securing or otherwise supporting the payment of, any of the Accounts, including (but not limited to) promissory notes, drafts, bills of exchange and trade acceptances.

"Intellectual Property" means, collectively, all of the following of any Grantor: (a) all systems software and applications software, including, but not limited to, screen displays and formats, program structures, sequence and organization, all documentation for such software, including, but not limited to, user manuals, flowcharts, programmer's notes, functional specifications, and operations manuals, all formulas, processes, ideas and know-how embodied in any of the foregoing, and all program materials, flowcharts, notes and outlines created in connection with any of the foregoing, whether or not patentable or copyrightable, (b) concepts, discoveries, improvements and ideas, (c)

any useful information relating to the items described in clause (a) or (b), including know-how, technology, engineering drawings, reports, design information, trade secrets, practices, laboratory notebooks, specifications, test procedures, maintenance manuals, research, development, manufacturing, marketing, merchandising, selling, purchasing and accounting, (d) Patents, Patent rights and Patent applications, Copyrights and Copyright applications, Trademarks, Trademark rights, trade names, trade name rights, service marks, service mark rights, applications for registration of Trademarks, trade names and service marks, and Trademark, trade name and service mark registrations and Patent Licenses, Trademark Licenses, Copyright Licenses, and (e) other licenses to use any of the items described in the foregoing clauses (a), (b), (c) and (d) or any other similar items of any Grantor necessary for the conduct of its business.

"Inventory" means all "inventory" (as defined in the UCC) of any Grantor, including without limitation, all raw materials, inventory and other materials and supplies, work-in-process, finished goods, all accessions thereto, documents therefor and any products made or processed therefrom and all substances, if any, commingled therewith or added thereto.

"Patent License" means any written agreement now or hereafter in existence granting to any Grantor any right to use any invention on which a Patent is in existence.

"Patents" means, collectively, all of the following of any Grantor: (a) all patents and patent applications including all patentable inventions; (b) all reissues, divisions, continuations, renewals, extensions and continuations-in-part of any of the foregoing; (c) all income, royalties, damages or payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages or payments for past or future infringements of any of the foregoing; (d) the right to sue for past, present and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

"Perfection Certificate" means a certificate dated as of even date herewith, setting forth the corporate names, chief executive office or principal place of business in each state and other current locations of each Grantor (including each manufacturing plant, if applicable) and such other information as the Administrative Agent deems pertinent to the perfection of security interests, completed and supplemented with the schedules and attachments contemplated thereby to the reasonable satisfaction of the Administrative Agent, and duly certified by the chief executive, chief financial officer of the Borrower.

"Permitted Investments" means investments described in Section 10.4 of the Credit Agreement.

"Permitted Liens" means all such Liens respecting the Collateral permitted pursuant to Section 10.3 of the Credit Agreement.

"Proceeds" means all proceeds (as defined by the UCC) of, and all other profits, rentals or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or realization upon, Collateral, including, without limitation, all claims of the Grantor against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral and the following types of property acquired with cash proceeds: Accounts, Inventory, Documents, Fixtures, Instruments, General Intangibles, Equipment and Vehicles.

"Secured Obligations" means the Obligations as defined in the Credit Agreement and any renewals or extensions of any of the Obligations.

"Security Interests" means the security interests granted pursuant to
Section 2, as well as all other security interests created or assigned as additional security for the Secured Obligations pursuant to the provisions of this Agreement.

"Schedule of Inventory" means a schedule of Inventory based upon each Grantor's most recent physical inventory and its perpetual inventory records, showing each Grantor's cost of all such Inventory with a monthly reconciliation to the general ledger inventory account of such Grantor, as may be requested by the Administrative Agent or the Required Lenders pursuant to Section 4(c)(i) hereof.

"Trademark License" means any written agreement now or hereafter in existence granting to any Grantor any right to use any Trademark.

"Trademarks" means, collectively, all of the following of any Grantor:
(a) all Trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, other business identifiers, prints and labels on which any of the foregoing have appeared or appear, all registrations and recordings thereof, and all applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision of any thereof, including without limitation any thereof referred to on Schedule I hereto; (b) all reissues, extensions and renewals of any of the foregoing; (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or

with respect to any of the foregoing, including, without limitation, damages or payments for past or future infringements of any of the foregoing; (d) the right to sue for past, present and future infringements of any of the foregoing; and
(e) all rights corresponding to any of the foregoing throughout the world.

"UCC" means the Uniform Commercial Code as in effect on the date hereof in the State of North Carolina; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than North Carolina, "UCC" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.

"Vehicles" means all cars, trucks, trailers, construction and earth moving equipment of any Grantor and other vehicles covered by a certificate of title law of any state, and all tires and other appurtenances to any of the foregoing.

SECTION 2. The Security Interests.

(a) In order to secure the Credit Agreement in accordance with the terms thereof, and to secure the payment and performance of all of the Secured Obligations, each Grantor hereby grants to the Administrative Agent, for the ratable benefit of itself and the Lenders, a continuing security interest in and to all of such Grantors' estate, right, title and interest in and to all of the following property, whether now or hereafter owned or acquired by the Grantor or in which such Grantor now have or hereafter have or acquire any estate right, title or interest, and wherever located (collectively, along with any other property of such Grantor which may from time to time secure the Secured Obligations, the "Collateral"):

(i) Accounts;

(ii) Inventory;

(iii) Documents;

(iv) Equipment;

(v) Fixtures;

(vi) Instruments;

(vii) General Intangibles;

(viii) Vehicles;

(ix) The Collateral Account, all cash deposited therein from time to time, the investments made pursuant to Section 6 and other monies and property of any kind of any Grantor in the possession or under the control of the Administrative Agent or any Lender;

(x) All books and records (including, without limitation, customer lists, credit files, computer programs, printouts and other computer materials and records) of any Grantor pertaining to any of the Collateral;

(xi) All other goods and personal property of any Grantor, whether tangible or intangible; and

(xii) All products and Proceeds of all or any of the Collateral described in clauses (i) through (xi) hereof;

(b) The Security Interests are granted as security only and shall not subject the Administrative Agent or any Lender to, or transfer to the Administrative Agent or any Lender, or in any way affect or modify, any obligation or liability of the Grantor with respect to any of the Collateral or any transaction in connection therewith.

SECTION 3. Representations and Warranties. Each Grantor represents and warrants as follows:

(a) Such Grantor has the corporate power and authority and the legal right to execute and deliver, to perform its obligations under, and to grant the Security Interests in the Collateral pursuant to, this Agreement and has taken all necessary corporate action to authorize its execution, delivery and performance of, and grant of the Security Interests on the Collateral pursuant to, this Agreement.

(b) This Agreement constitutes a legal, valid and binding obligation of such Grantor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally.

(c) The execution, delivery and performance of this Agreement will not violate any provision of any Applicable Law or contractual obligation of such Grantor and will not result in the creation or imposition of any Lien on any of the properties or revenues of such Grantor pursuant to any Applicable Law or contractual obligation of such Grantor, except as contemplated hereby.

(d) No consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority and no consent of any other Person (including, without limitation, any stockholder or creditor of such Grantor), is required in connection

with the execution, delivery, performance, validity or enforceability of this Agreement, except those which have been obtained, UCC filings and required notices under the Federal Assignment of Claims Act or any corresponding state law.

(e) No actions, suits or proceedings are pending nor, to the knowledge of such Borrower, are threatened against or in any other way relate adversely to or affect such Grantor or any of its properties in any court or before any arbitrator of any kind or before or by any Governmental Authority, which, if adversely determined, are reasonably likely to have a Material Adverse Effect.

(f) Such Grantor has good and marketable title to all of its respective collateral, free and clear of any Liens other than Permitted Liens and as otherwise permitted by the Credit Agreement.

(g) Such Grantor has not performed any acts that would prevent or hinder the Administrative Agent from enforcing any of the terms of this Agreement. Other than financing statements or other similar or equivalent documents or instruments with respect to Permitted Liens, no financing statement, mortgage, security agreement or similar or equivalent document or instrument covering all or any part of the Collateral is on file or of record in any jurisdiction. No Collateral is in the possession of any Person (other than such Grantor) asserting any claim thereto or security interest therein, except that the Administrative Agent or its designee may have possession of Collateral as contemplated hereby.

(h) All of the information set forth in the Perfection Certificate is true and correct in all material respects as of the Closing Date.

(i) With respect to any Intellectual Property of such Grantor which is material to the conduct of its business:

(i) such Intellectual Property is subsisting and has not been adjudged invalid or unenforceable, in whole or in part;

(ii) such Intellectual Property is valid and enforceable;

(iii) such Grantor has made all necessary filings and recordations to protect its interest in such Intellectual Property, including, without limitation, recordations of all of its interests in the Patents and Trademarks in the United States Patent and Trademark Office and its claims to the Copyrights in the United States Copyright Office;

(iv) such Grantor is the exclusive owner of the entire and unencumbered right, title and interest in and to such Intellectual Property and such Grantor has not received any

written claim that the use of such Intellectual Property does not or may violate the asserted rights of any third party; and

(v) such Grantor has performed all acts and has paid all required fees and taxes to maintain each and every item of Intellectual Property in full force and effect.

(j) The Financing Statements are in appropriate form and when filed in the offices specified in the Perfection Certificate and upon payment of the filing fees, the Security Interests will constitute valid and perfected security interests in the Collateral, prior to all other Liens and rights of others therein except for the Permitted Liens (to the extent that a security interest therein may be perfected by filing pursuant to the UCC) and all filings and other actions necessary or desirable to perfect and protect such Security Interests have been duly taken.

(k) The Inventory, Fixtures, Equipment and Vehicles are insured in accordance with the requirements hereof and of the Credit Agreement.

(l) All Inventory, if any, has or will have been produced in substantial compliance in all material respects with the applicable requirements of the Fair Labor Standards Act, as amended.

SECTION 4. Further Assurances; Covenants.

(a) General.

(i) No Grantor will change the location of its chief executive office or principal place of business in any state unless it shall have given the Administrative Agent thirty (30) days prior written notice thereof and executed and delivered to the Administrative Agent all financing statements and financing statement amendments which the Administrative Agent may reasonably request in connection therewith. No Grantor shall change the locations where it keeps or holds any Collateral or any records relating thereto from the applicable location described in the Perfection Certificate unless such Grantor shall have given the Administrative Agent thirty (30) days prior written notice of such change of location and executed and delivered to the Administrative Agent all financing statements and financing statement amendments which the Administrative Agent may reasonably request in connection therewith; provided, however, that such Grantor may keep Inventory at, or in transit to, any location described in the Perfection Certificate. No Grantor shall in any event change the location of any Collateral if such change would cause the Security Interests in such Collateral to lapse or cease to be perfected.

(ii) No Grantor will change its name, identity or corporate structure in any manner unless it shall have given the Administrative Agent thirty (30) days prior written notice thereof and executed and delivered to the Administrative Agent all financing statements and financing statement amendments which the Administrative Agent may reasonably request in connection therewith.

(iii) Each Grantor will maintain the Administrative Agent's Lien on the Collateral as a first priority perfected Lien thereon. Each Grantor will, from time to time, at its expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action (including without limitation any filings of financing or continuation statements under the UCC and any filings with the United States Patent and Trademark Office and United States Copyright Office) that from time to time may be necessary, or that the Administrative Agent may reasonably request, in order to create, preserve, perfect or validate the Security Interests or to enable the Administrative Agent and the Lenders to obtain the full benefits of this Agreement, or to enable the Administrative Agent to exercise and enforce any of its rights, powers and remedies hereunder with respect to any of the Collateral. Prior to the irrevocable payment in full of the Secured Obligations, each Grantor hereby authorizes the Administrative Agent, upon the failure of any Grantor to so do within five (5) Business Days after receipt of notice from the Administrative Agent, to execute and file financing statements, financing statement amendments or continuation statements without any Grantor's signature appearing thereon. Each Grantor agrees that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement. The Grantors shall pay the reasonable costs of, or incidental to, any recording or filing of the Financing Statements and any other financing statements, financing statement amendments or continuation statements concerning the Collateral.

(iv) The Grantors shall bear the full risk of any loss of any nature whatsoever with respect to its respective Collateral. At the Grantors' own cost and expense in amounts and with carriers acceptable to the Administrative Agent, the Grantors shall (a) keep the Collateral insured against such hazards, and for such amounts,as is customary in the case of companies engaged in businesses similar to the Grantors including, without limitation, business interruption insurance satisfactory to the Administrative Agent; and (b) furnish to the Administrative Agent loss payable endorsements in form and substance reasonably satisfactory to the Administrative Agent, naming the Administrative Agent as loss payee, on behalf of itself and the Lenders with respect to all insurance coverage

referred to above, and providing (i) that all proceeds thereunder shall be payable to the Administrative Agent, on behalf of itself and the Lenders and
(ii) that such policy and loss payable clauses may not be canceled, amended or terminated unless at least thirty (30) days' prior written notice is sent to the Administrative Agent. The Grantors shall furnish to the Administrative Agent evidence of the maintenance of such policies by the renewal thereof at least thirty (30) days before any expiration date. In the event of any loss thereunder, the carriers named therein hereby are directed by the Administrative Agent and the Grantors to make payment for such loss to the Administrative Agent, on behalf of itself and the Lenders, and not to any Grantor and the Administrative Agent jointly. The Administrative Agent is hereby authorized in its good faith discretion to adjust and compromise claims under insurance coverage referred to above after notifying and consulting with the Grantors with respect thereto.

(v) Each Grantor will, promptly upon request, provide to the Administrative Agent all information the Administrative Agent may reasonably request concerning the Collateral, and in particular the Accounts, to enable the Administrative Agent to enforce the provisions of this Agreement.

(vi) Each Grantor will, upon request by the Administrative Agent, deliver to the Administrative Agent possession of all originals of all negotiable Instruments, documents and chattel paper constituting Collateral currently owned or held by such Grantor, if any (duly endorsed in blank, if requested by the Administrative Agent).

(vii) Each Grantor will observe and remain in compliance with all Applicable Laws and maintain in full force and effect all Governmental Approvals, in each case applicable to the Collateral and the conduct of its business, except to the extent failure to do so is not reasonably likely to have a Material Adverse Effect.

(viii) Each Grantor will pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of its income or profits therefrom, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if (A) the validity thereof is being contested in good faith by appropriate proceedings and (B) such charge is adequately reserved against such Grantor's books in accordance with GAAP.

(ix) No Grantor shall

(1) sell, assign (by operation of law or otherwise) or otherwise dispose of any of the Collateral, except as permitted by the Credit Agreement; or

(2) create or suffer to exist any Lien or other charge or encumbrance upon or with respect to any of the Collateral to secure indebtedness of any Person or entity, except as permitted by the Credit Agreement.

(b) Accounts, Etc.

(i) Each Grantor shall use all reasonable efforts to cause to be collected from its Account Debtors, as and when due, any and all amounts owing under or on account of each Account (including, without limitation, Accounts which are delinquent, such Accounts to be collected in accordance with lawful collection procedures) and to apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account. The reasonable costs and expenses (including, without limitation, attorney's fees), of collection of Accounts incurred by any Grantor or the Administrative Agent shall be borne by the Grantor.

(ii) Upon the occurrence and during the continuance of any Event of Default, upon request of the Administrative Agent or the Required Lenders, each Grantor will promptly notify (and such Grantor hereby authorizes the Administrative Agent so to notify) each Account Debtor in respect of any Account that such Account has been assigned to the Administrative Agent hereunder and that any payments due or to become due in respect of such Account are to be made directly to the Administrative Agent or its designee.

(iii) Each Grantor will perform and comply with all of its obligations in respect of Accounts and General Intangibles and the exercise by the Administrative Agent of any of its rights hereunder shall not release any Grantor from any of its duties or obligations.

(iv) No Grantor shall (A) amend, modify, terminate or waive any provision of any agreement giving rise to an Account in any manner which could reasonably be expected to materially adversely affect the value of such Account as Collateral or (B) fail to exercise promptly and diligently its material rights which it may have under each agreement giving rise to an Account (other than any right of termination).

(v) Other than in the ordinary course of business as generally conducted by the Grantor over a period of time and subject to Section
4(b)(iv), no Grantor will compromise,

compound or settle any Account for less than the full amount thereof, release, wholly or partially, any Person liable for the payment thereof, or allow any credit or discount whatsoever thereon; provided, however, that after an Event of Default, no Grantor will settle or compromise its any Accounts without the prior written consent of the Administrative Agent.

(vi) From time to time, at the request of the Administrative Agent or Required Lenders, each Grantor shall deliver to the Administrative Agent and each Lender an Accounts Aging Report.

(c) Inventory, Etc.

(i) Not more than once each month, at the request of the Administrative Agent or Required Lenders, the Grantor shall deliver to the Administrative Agent with a copy for each Lender a Schedule of Inventory. Unless otherwise indicated in writing by the Grantor, each Schedule of Inventory delivered by such Grantor to the Administrative Agent shall constitute a representation with respect to the Inventory listed thereon or referred to therein that: (A) all such Inventory is located at places of business listed in the Perfection Certificate or as to which the applicable Grantor has complied with the provisions of
Section 4(a)(i) hereof or on the premises identified on the then current Schedule of Inventory or is Inventory in transit from one such location to another such location; (B) no such Inventory is subject to any Lien whatsoever, except for Permitted Liens; (C) no such Inventory in aggregate value exceeding $50,000 at any time is, nor shall at any time or times be, kept, stored or maintained with a bailee, warehouseman, carrier or similar party (other than a carrier delivering Inventory to a purchaser in the ordinary course of such Grantor's business) unless the Required Lenders have given their prior written consent and the applicable Grantor has delivered to the Administrative Agent a Letter satisfactory thereto acknowledging the priority of its security interest.

(ii) If at any time during the term of this Agreement, any Inventory is placed by any Grantor on consignment with any Consignee, such Grantor shall, prior to the delivery of any such consigned Inventory: (A) provide the Administrative Agent with all consignment agreements and other instruments and documentation to be used in connection with such consignment, all of which agreements, instruments and documentation shall be reasonably acceptable in form and substance to the Administrative Agent; (B) prepare, execute and file appropriate financing statements with respect to any consigned Inventory showing the Consignee as debtor, such Grantor as secured party and the Administrative Agent as assignee of secured party; (C) prepare, execute and file appropriate

financing statements with respect to any consigned Inventory showing such Grantor as debtor and the Administrative Agent as secured party;
(D) after all financing statements referred to in clauses (B) and (C)
above shall have been filed, conduct a search of all filings made against the Consignee in all jurisdictions in which the Inventory to be consigned is to be located while on consignment, and deliver to the Administrative Agent copies of the results of all such searches; (E) notify, in writing, all creditors of the Consignee which would be holders of security interests in the Inventory to be consigned that such Grantor expects to deliver certain Inventory to the Consignee, all of which Inventory shall be described in such notice by item or type, and (F) if requested by the Administrative Agent, deliver an opinion of counsel to the effect that all financing statements and amendments or supplements thereto, continuation statements and other documents required to be recorded or filed in order to perfect and protect the Security Interests and priority thereof against all creditors of and purchasers of such Grantor and such Consignee have been filed in each filing office necessary or desirable for such purposes and that all filing fees and taxes, if any, payable in connection with such filings have been paid in full.

(d) Equipment, Etc. With the exception of Equipment disposed of in accordance with Section 10.6 of the Credit Agreement, each Grantor will maintain each item of Equipment in the same condition, repair and working order as when acquired, ordinary wear and tear excepted, and will provide all maintenance, service and repairs necessary for such purpose and will promptly furnish to the Administrative Agent a statement respecting any material loss or damage to any of the Equipment in an amount in excess of $250,000.

(e) Intellectual Property.

(i) Each Grantor shall notify the Administrative Agent promptly (a) of its acquisition after the Closing Date of any Patent, Patent License, Trademark or Trademark License and (b) if it knows, or has reason to know of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court) regarding such Grantor's ownership of any Patent or Trademark, its right to register the same, or to keep and maintain the same. In no event shall any Grantor, either itself or through any agent, employee or licensee, file an application for the registration of any Patent or Trademark with the United States Patent and Trademark Office or any similar office or agency in any other country or any political subdivision thereof, unless promptly thereafter it informs the Administrative Agent, and, promptly after issuance of such

patent or Trademark, executes and delivers any and all agreements, instrument, documents and papers the Administrative Agent may reasonably request to evidence the Security Interests in such Patent or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby. Each Grantor hereby constitutes the Administrative Agent its attorney-in-fact to execute and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed, and such power, being coupled with an interest, shall be irrevocable until the Commitment has terminated and the Secured Obligations are paid in full.

(ii) Each Grantor shall: (a) preserve and maintain in all material respects rights in the Intellectual Property; and (b) upon and after the occurrence of an Event of Default, use its best efforts to obtain any consents, waivers or agreements necessary to enable Administrative Agent to exercise its remedies with respect to the Intellectual Property. No Grantor shall abandon any right to file a Copyright, Patent or Trademark application that is necessary to the business of such Grantor nor shall such Grantor abandon any such necessary pending Copyright, Patent or Trademark application, or Copyright, Copyright License, Patent, Patent License, Trademark or Trademark License without the prior written consent of Administrative Agent.

(iii) Each Grantor hereby assigns, transfers and conveys to Administrative Agent, effective upon the occurrence and during the continuance of any Event of Default, the nonexclusive right and license to use all Intellectual Property owned or used by such Grantor, together with any goodwill associated therewith, all to the extent necessary to enable Administrative Agent to realize on the Collateral (including, without limitation, completing production of, advertising for sale and selling the Collateral) and any successor or assign to enjoy the benefits of the Collateral. This right and license shall inure to the benefit of all successors, assigns and transferees of Administrative Agent and its successors, assigns and transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and license is granted free of charge, without requirement that any monetary payment whatsoever be made to such Grantor by Administrative Agent.

(f) Vehicles. With the exception of Vehicles disposed of in accordance with Section 10.6 of the Credit Agreement, the Grantors will maintain each Vehicle in good operating condition, ordinary wear and tear excepted, and will provide all maintenance, service and repairs necessary for such purpose. Upon the request of the Administrative Agent, all applications for certificates of title or ownership indicating the Administrative Agent's first priority Lien

on the Vehicle covered by such certificate, and any other necessary documentation, shall be filed in each office in each jurisdiction which the Administrative Agent shall deem advisable to perfect its Liens on the Vehicles. Prior thereto, each certificate of title or ownership relating to each Vehicle shall be maintained by the applicable Grantor in accordance with Applicable Law to reflect the ownership interest of such Grantor.

(g) Indemnification. Each Grantor agrees to pay, and to save the Administrative Agent and the Lenders harmless from, any and all liabilities, costs and expenses (including, without limitation, reasonable legal fees and expenses) (i) with respect to, or resulting from, any and all excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral, (ii) with respect to, or resulting from, complying with any Applicable Law applicable to any of the Collateral or (iii) in connection with any of the transactions contemplated by this Agreement (except to the extent any such liabilities, costs and expenses result from the gross negligence or willful misconduct of the Administrative Agent or Lenders). In any suit, proceeding or action brought by the Administrative Agent under any Account for any sum owing thereunder, or to enforce any provisions of any Account, each Grantor will save, indemnify and keep the Administrative Agent and the Lenders harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment or reduction or liability whatsoever of the Account Debtor or any other obligor thereunder, arising out of a breach by any Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such Account Debtor or obligor or its successors from any Grantor (except to the extent any such expense, loss or damage results from the gross negligence or willful misconduct of the Administrative Agent or Lenders). The obligations of the Grantors under this
Section 4(g) shall survive the termination of the other provisions of this Agreement.

SECTION 5. Reporting and Recordkeeping. Each Grantor respectively covenants and agrees with the Administrative Agent and the Lenders that from and after the date of this Agreement and until the Commitments have terminated and all Secured Obligations have been fully satisfied:

(a) Maintenance of Records Generally. Each Grantor will keep and maintain at its own cost and expense complete and accurate records of the Collateral, including, without limitation, a record of all payments received and all credits granted with respect to the Collateral and all other dealings with the Collateral. All chattel paper given to any Grantor with respect to any Accounts will be marked with the following legend: "This writing and the obligations evidenced or secured hereby are subject to the security interest of First Union National Bank of Tennessee, as Administrative Agent", and, if requested thereby or the Required Lenders,

delivered to the Administrative Agent to be held as Collateral. For the Administrative Agent's and the Lenders' further security, each Grantor agrees that upon the occurrence and during the continuation of any Default or Event of Default and upon foreclosure by the Administrative Agent on any property of any Grantor, such Grantor shall deliver and turn over any such books and records directly to the Administrative Agent or its designee. Each Grantor shall permit any representative of the Administrative Agent to inspect such books and records in accordance with Section 8.11 of the Credit Agreement and will provide photocopies thereof to the Administrative Agent upon its reasonable request.

(b) Certain Provisions Regarding Maintenance of Records and Reporting Re: Accounts. Schedule IV hereto sets forth the contract number, date, applicable grantor and Governmental Authority with respect to each Account arising out of a contract with the United States of America, or any department, agency, subdivision or instrumentality thereof, or of any state (or department, agency, subdivision or instrumentality thereof) where such state has a state assignment of claims act or other law comparable to the Federal Assignment of Claims Act. Each Grantor will deliver to the Administrative Agent along with the Officer's Compliance Certificate delivered pursuant to Section 7.2 of the Credit Agreement a revised Schedule VI hereto including all applicable information with respect to each such Account originated during the applicable quarter and (ii) take any other action required or requested by the Administrative Agent or give notice of the Administrative Agent's Security Interest in such Accounts under the provisions of the Federal Assignment of Claims Act or any comparable law or act enacted by any state or local Governmental Authority. Any notifications or other documents executed and delivered to the Administrative Agent in connection with the Federal Assignment of Claims Act or any comparable state law may be promptly filed with the appropriate Governmental Authority by the Administrative Agent or held by the Administrative Agent until the Administrative Agent or the Required Lenders decide in its or their sole discretion to make any such filing.

(c) Further Identification of Collateral. Each Grantor will, if so requested by the Administrative Agent, furnish to the Administrative Agent statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail.

(d) Notices. In addition to the notices required by Section 5(b) hereof, the Grantors will advise the Administrative Agent promptly, in reasonable detail, (i) of any material Lien or claim made or asserted against any of the Collateral, (ii) of any adverse change in the composition of the Collateral which is reasonably likely to have a Material Adverse Effect, and
(iii) of the

occurrence of any other event which is reasonably likely to have a Material Adverse Effect.

SECTION 6. Collateral Account.

(a) There is hereby established with the Administrative Agent a Collateral Account in the name and under the exclusive dominion and control of the Administrative Agent. There shall be deposited from time to time into such account, after the occurrence of and during the continuation of an Event of Default, the cash proceeds of the Collateral required to be delivered to the Administrative Agent pursuant to Section 6(b) or any other provision of this Agreement. Any income received by the Administrative Agent with respect to the balance from time to time standing to the credit of the Collateral Account, including any interest or capital gains on investments of amounts on deposit in the Collateral Account, shall remain, or be deposited, in the Collateral Account together with any investments from time to time made pursuant to subsection (c) of this Section 6, shall vest in the Administrative Agent, shall constitute part of the Collateral hereunder and shall not constitute payment of the Secured Obligations until applied thereto as hereinafter provided.

(b) Upon the occurrence and during the continuance of an Event of Default, if requested by the Administrative Agent, the Grantors shall instruct all Account Debtors and other Persons obligated in respect of all Accounts to make all payments in respect of the Accounts either (i) directly to the Administrative Agent (by instructing that such payments be remitted to a post office box which shall be in the name and under the exclusive dominion and control of the Administrative Agent) or (ii) to one or more other banks in any state in the United States (by instructing that such payments be remitted to a post office box which shall be in the name and under the exclusive dominion and control of such bank) under a Lockbox Letter substantially in the form of Annex I hereto duly executed by the Grantors and such bank or under other arrangements, in form and substance reasonably satisfactory to the Administrative Agent, pursuant to which the Grantors shall have irrevocably instructed such other bank (and such other bank shall have agreed) to remit all proceeds of such payments directly to the Administrative Agent for deposit into the Collateral Account or as the Administrative Agent may otherwise instruct such bank, and thereafter if the proceeds of any Collateral shall be received by any Grantor, such Grantor will promptly deposit such proceeds into the Collateral Account and until so deposited, all such proceeds shall be held in trust by such Grantor for and as the property of the Administrative Agent, for the benefit of itself and the Lenders and shall not be commingled with any other funds or property of such Grantor. At any time after the occurrence and during the continuance of an Event of Default, the Administrative Agent may itself so instruct the Grantors' Account Debtors. All such

payments made to the Administrative Agent shall be deposited in the Collateral Account.

(c) Amounts on deposit in the Collateral Account shall be promptly liquidated and applied to the payment of the Secured Obligations in the manner specified in Section 10 hereof.

SECTION 7. General Authority.

(a) The Grantors hereby irrevocably appoint the Administrative Agent their true and lawful attorney, with full power of substitution, in the name of each Grantor, the Administrative Agent, the Lenders or otherwise, for the sole use and benefit of the Agent and the Lenders, but at the Grantors' expense, to exercise, at any time from time to time all or any of the following powers:

(i) to file the Financing Statements and any financing statements, financing statement amendments and continuation statements referred to in Sections 4(a)(i), 4(a)(ii), 4(a)(iii) and 4(c)(ii) hereof,

(ii) to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due with respect to any Collateral or by virtue thereof,

(iii) to settle, compromise, compound, prosecute or defend any action or proceeding with respect to any Collateral,

(iv) to sell, transfer, assign or otherwise deal in or with the Collateral and the Proceeds thereof, as fully and effectually as if the Agent were the absolute owner thereof, and

(v) to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference to the Collateral;

provided that the Administrative Agent shall not take any of the actions described in this Section 7 except those described in clause (i) above unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall give the Grantors not less than ten (10) days' prior written notice of the time and place of any sale or other intended disposition of any of the Collateral, except any Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market. Each Grantor agrees that any such notice constitutes "reasonable notification" within the meaning of Section 9-504(3) of the UCC (to the extent such Section is applicable).

(b) Ratification. Each Grantor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.

(c) Other Powers. Each Grantor also authorizes the Administrative Agent at any time and from time to time, to execute, in connection with the sale provided for in Section 8 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral.

SECTION 8. Remedies Upon Event of Default.

(a) If any Event of Default has occurred and is continuing, the Administrative Agent may exercise on behalf of itself and Lenders all rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) and, in addition, the Agent may
(i) withdraw all cash, if any, in the Collateral Account and investments made with amounts on deposit in the Collateral Account, and apply such monies, investments and other cash, if any, then held by it as Collateral as specified in Section 10 hereof and (ii) if there shall be no such monies, investments or cash or if such monies, investments or cash shall be insufficient to pay all the Secured Obligations in full, sell the Collateral or any part thereof at public or private sale, for cash, upon credit or for future delivery, and at such price or prices as the Agent may deem satisfactory. The Administrative Agent or any Lender may be the purchaser of any or all of the Collateral so sold at any public sale (or, if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations or if otherwise permitted under applicable law, at any private sale) and thereafter hold the same, absolutely, free from any right or claim of whatsoever kind. Each Grantor will execute and deliver such documents and take such other action as the Administrative Agent deems reasonably necessary or advisable in order that any such sale may be made in compliance with law. Upon any such sale the Administrative Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold (without warranty). Each purchaser at any such sale shall hold the Collateral so sold to it absolutely, free from any claim or right of whatsoever kind, including any equity or right of redemption of any Grantor. To the extent permitted by law, each Grantor hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any law now existing or hereafter adopted. The notice of such sale shall be given to the Grantors ten (10) days prior to such sale and (A) in case of a public sale, state the time and place fixed for such sale, and (B) in the case of a private sale, state the day after which sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Administrative Agent may fix in the notice of such sale. At

any such sale the Collateral may be sold in one lot as an entirety or in separate parcels, as the Administrative Agent may determine. The Administrative Agent shall not be obligated to make any such sale pursuant to any such notice. The Administrative Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by the Administrative Agent until the selling price is paid by the purchaser thereof, but the Administrative Agent shall not incur any liability in case of the failure of such purchaser to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. The Administrative Agent, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. The Grantors shall remain liable for any deficiency.

(b) For the purpose of enforcing any and all rights and remedies under this Agreement, the Administrative Agent may (i) require the Grantors to, and each Grantor agrees that it will, at its expense and upon the request of the Administrative Agent, forthwith assemble all or any part of the Collateral as directed by the Administrative Agent and make it available at a place designated by the Administrative Agent which is, in the Agent's opinion, reasonably convenient to the Agent and such Grantor, whether at the premises of such Grantor or otherwise, (ii) to the extent permitted by applicable law, enter, with or without process of law and without breach of the peace, any premise where any of the Collateral is or may be located and, without charge or liability to the Administrative Agent, seize and remove such Collateral from such premises, (iii) have access to and use such Grantor's books and records relating to the Collateral and (iv) prior to the disposition of the Collateral, store or transfer such Collateral without charge in or by means of any storage or transportation facility owned or leased by such Grantor, process, repair or recondition such Collateral or otherwise prepare it for disposition in any manner and to the extent the Administrative Agent deems appropriate and, in connection with such preparation and disposition, use without charge any Trademark, trade name, Copyright, Patent or technical process used by such Grantor.

(c) Without limiting the generality of the foregoing, if any Event of Default has occurred and is continuing,

(i) the Administrative Agent may license, or sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any Patents or Trademarks

included in the Collateral throughout the world for such term or terms, on such conditions and in such manner as the Administrative Agent shall in its sole discretion determine;

(ii) the Administrative Agent may (without assuming any obligations or liability thereunder), at any time and from time to time, enforce (and shall have the exclusive right to enforce) against any licensee or sublicensee all rights and remedies of the Grantors in, to and under any Patent Licenses or Trademark Licenses and take or refrain from taking any action under any thereof, provided, however, that no such actions shall result in the failure of such Patent Licenses or Trademark Licenses to remain in compliance with all Applicable Law, and each Grantor hereby releases the Administrative Agent and each of the Lenders free and harmless from and against any claims arising out of, any lawful action so taken or omitted to be taken with respect thereto except with respect to the gross negligence or willful misconduct of the Administrative Agent or the Lenders; and

(iii) upon request by the Administrative Agent, each Grantor will execute and deliver to the Administrative Agent a power of attorney, in form and substance satisfactory to the Administrative Agent, for the implementation of any lease, assignment, license, sublicense, grant or option, sale or other disposition of a Patent or Trademark. In the event of any such disposition pursuant to this Section, the Grantors shall supply their know-how and expertise relating to the manufacture and sale of the products bearing Trademarks or the products or services made or rendered in connection with Patents, and its customer lists and other records relating to such Patents or Trademarks and to the distribution of said products, to the Administrative Agent.

SECTION 9. Limitation on Duty of Administrative Agent in Respect of Collateral. Beyond reasonable care in the custody thereof, the Administrative Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Administrative Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and the Administrative Agent shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Administrative Agent in good faith.

SECTION 10. Application of Proceeds. Upon the occurrence and during the continuance of an Event of Default, the proceeds of any

sale of, or other realization upon, all or any part of the Collateral shall be applied by the Administrative Agent as follows:

first, to payment of the out-of-pocket expenses of such sale or other realization, including all reasonable out-of-pocket expenses, liabilities and advances incurred or made by the Administrative Agent in connection therewith, and any other unreimbursed expenses for which the Administrative Agent or any Lender is to be reimbursed pursuant to
Section 13.2 of the Credit Agreement, or Section 4(g) or 13 hereof or any corresponding provision of any of the other Loan Documents;

second, to ratable payment of accrued but unpaid interest (including post-petition interest) on the Secured Obligations and of any unpaid fees owing to the Administrative Agent or any Lender under the Credit Agreement in accordance with the provisions of the Credit Agreement;

third, to the ratable payment of unpaid principal of the Secured Obligations;

fourth, to the ratable payment of all other Secured Obligations, until all Secured Obligations shall have been paid in full; and

finally, to payment to the Grantors or their successors or assigns, or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds.

The Administrative Agent may make distribution hereunder in cash or in kind or, on a ratable basis, in any combination thereof.

SECTION 11. Concerning the Administrative Agent. The provisions of Article XII of the Credit Agreement shall inure to the benefit of the Administrative Agent in respect of this Agreement and shall be binding upon the parties to the Credit Agreement in such respect. In furtherance and not in derogation of the rights, privileges and immunities of the Administrative Agent therein set forth:

(a) The Administrative Agent is authorized to take all such action as is provided to be taken by it as Administrative Agent hereunder and all other action incidental thereto. As to any matters not expressly provided for herein, the Administrative Agent may request instructions from the Lenders and shall act or refrain from acting in accordance with written instructions from the Required Lenders (or, when expressly required by this Agreement or the Credit Agreement, all the Lenders) or, in the absence of such instructions, in accordance with its discretion.

(b) The Administrative Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Security Interests, whether impaired by operation of law or by reason of any action or omission to act on its part (other than any such action or inaction constituting gross negligence or willful misconduct. The Administrative Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Agreement by the Grantors.

SECTION 12. Appointment of Collateral Agents. At any time or times, in order to comply with any legal requirement in any jurisdiction or in order to effectuate any provision of the Loan Documents, the Administrative Agent may appoint another bank or trust company or one or more other Persons, either to act as collateral agent or agents, jointly with the Administrative Agent or separately, on behalf of the Administrative Agent and the Lenders with such power and authority as may be necessary for the effectual operation of the provisions hereof and specified in the instrument of appointment (which may, in the discretion of the Administrative Agent, include provisions for the protection of such collateral agent similar to the provisions of Section 11 hereof).

SECTION 13. Expenses. In the event that the Grantor fail to comply with the provisions of the Credit Agreement, this Agreement or any other Loan Document, such that the value of any Collateral or the validity, perfection, rank or value of the Security Interests are thereby diminished or potentially diminished or put at risk, the Administrative Agent if requested by the Required Lenders may, but shall not be required to, effect such compliance on behalf of such Grantor, and the Grantors shall reimburse the Administrative Agent for the costs thereof on demand. All insurance expenses and all expenses of protecting, storing, warehousing, appraising, insuring, handling, maintaining and shipping the Collateral, any and all excise, stamp, intangibles, transfer, property, sales, and use taxes imposed by any state, federal, or local authority or any other Governmental Authority on any of the Collateral, or in respect of the sale or other disposition thereof, shall be borne and paid by the Grantors; and if the Grantor fail promptly to pay any portion thereof when due, the Administrative Agent or any Lender may, at its option, but shall not be required to, pay the same and charge the Grantors' account therefor, and each Grantor agrees to reimburse the Administrative Agent or such Lender therefor on demand. All sums so paid or incurred by the Administrative Agent or any Lender for any of the foregoing and any and all other sums for which the Grantors may become liable hereunder and all costs and expenses (including reasonable attorneys' fees, legal expenses and court costs) incurred by the Administrative Agent or any Lender in enforcing or protecting the Security Interests or any of their rights or remedies thereon shall be payable by the Grantors on demand and

shall bear interest (after as well as before judgment) until paid at the rate then applicable to Base Rate Loans under the Credit Agreement and shall be additional Secured Obligations hereunder.

SECTION 14. Notices. All notices, communications and distributions hereunder shall be given or made in accordance with Section 13.1 of the Credit Agreement.

SECTION 15. Waivers, Non-Exclusive Remedies. No failure on the part of the Agent or any Lender to exercise, and no delay in exercising and no course of dealing with respect to, any right under the Credit Agreement, this Agreement or any other Loan Document shall operate as a waiver thereof or hereof; nor shall any single or partial exercise by the Agent or any Lender of any right under the Credit Agreement, this Agreement or any other Loan Document preclude any other or further exercise thereof, and the exercise of any rights in this Agreement, the Credit Agreement and the other Loan Documents are cumulative and are not exclusive of any other remedies provided by law. This Agreement is a Loan Document executed pursuant to the Credit Agreement.

SECTION 16. Successors and Assigns. This Agreement is for the benefit of the Agent and the Lenders and their successors and assigns (as permitted by the Credit Agreement), and in the event of an assignment of all or any of the Secured Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Agreement shall be binding on the Grantors and their successors and assigns; provided that the Grantors may not assign any of their rights or obligations hereunder without the prior written consent of the Agent and the Lenders.

SECTION 17. Changes in Writing. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only in writing signed by the Grantors and the Agent with the consent of the Required Lenders (or, when expressly required by this Agreement or the Credit Agreement, all of the Lenders).

SECTION 18. Powers Coupled with an Interest. All authorizations and agencies herein contained with respect to the Collateral are irrevocable and powers coupled with an interest.

SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.

SECTION 20. Binding Arbitration; Waiver of Jury Trial.

(a) Binding Arbitration. Upon demand of any party, whether made before or after institution of any judicial proceeding, any dispute, claim or controversy arising out of, connected with or relating to this Security Agreement ("Disputes"), between or among parties to this Security Agreement shall be resolved by binding arbitration as provided herein. Institution of a judicial proceeding by a party does not waive the right of that party to demand arbitration hereunder. Disputes may include, without limitation, tort claims, counterclaims, claims brought as class actions, claims arising from Loan Documents executed in the future, or claims concerning any aspect of the past, present or future relationships arising out of or connected with this Security Agreement. Arbitration shall be conducted under and governed by the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings shall be conducted in Charlotte, North Carolina. The expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000. All applicable statutes of limitation shall apply to any Dispute. A judgment upon the award may be entered in any court having jurisdiction. The panel from which all arbitrators are selected shall be comprised of licensed attorneys. The single arbitrator selected for expedited procedure shall be a retired judge from the highest court of general jurisdiction, state or federal, of the state where the hearing will be conducted. Notwithstanding the foregoing, this paragraph shall not apply to any Hedging Agreement that is a Loan Document.

(b) Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE AGENT, EACH LENDER AND EACH GRANTOR HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

(c) Preservation of Certain Remedies. Notwithstanding the preceding binding arbitration provisions, the parties hereto and the other Loan Documents preserve, without diminution, certain remedies that such Persons may employ or exercise freely, either alone, in conjunction with or during a Dispute. Each such Person shall have and hereby reserves the right to proceed in any court of proper jurisdiction or by self help to exercise or prosecute the following remedies: (i) all rights to foreclose against any real or personal property or other security by exercising a power of sale granted in the Loan Documents or under applicable law or by judicial foreclosure and sale, (ii) all rights of self help including peaceful occupation of property and collection of rents, set off, and peaceful possession of property, (iii) obtaining provisional or ancillary remedies including injunctive relief,

sequestration, garnishment, attachment, appointment of receiver and in filing an involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by confession of judgment. Preservation of these remedies does not limit the power of an arbitrator to grant similar remedies that may be requested by a party in a Dispute.

SECTION 21. Severability. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Agent and the Lenders in order to carry out the intentions of the parties hereto as nearly as may be possible; and (b) the invalidity or unenforceability of any provisions hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.

SECTION 22. Headings. The various headings of this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provisions hereof.

SECTION 23. Counterparts. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement.

[Signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under seal by their duly authorized officers, all as of the day and year first written above.

GRANTOR:

[CORPORATE SEAL] CCA Prison Realty Trust

Attest:                             By:   /s/ Michael W. Devlin
/s/ Vida H. Carroll                    ________________________________
_______________________                Name:  Michael W. Devlin
      Secretary                        Title: Chief Development Officer

STATE OF         Tennessee
         _________________________

COUNTY OF        Davidson
          ________________________

         This 17th day of July, 1997, personally came before me Michael W.

Devlin, who, being by me duly sworn, says that he is Chief Development Officer of CCA Prison Realty Trust, that the seal affixed to the foregoing instrument in writing is the corporate seal of said Corporation, and that said writing was signed and sealed by him, in behalf of said Corporation, by its authority duly given. And the said Michael W. Devlin acknowledged the said writing to be the act and deed of said Corporation.

/s/ Linda J. Boggess
______________________________
NOTARY PUBLIC

My Commission Expires: 7-25-98

Administrative Agent:

FIRST UNION NATIONAL BANK OF
TENNESSEE, as Administrative Agent

By:   /s/ Timothy B. Fouts
   ----------------------------------
   Name:  Timothy B. Fouts
        -----------------------------
   Title: Vice President
         ----------------------------

[Security Agreement]

ANNEX I
(to Security Agreement)

[FORM OF LOCKBOX LETTER]

_______________, 19___

[Name and Address of Lockbox Bank)

Re: [CORPORATION]

Ladies and Gentlemen:

We hereby notify you that effective ________________ 19__, we have transferred exclusive ownership and control of our lock-box account(s) no[s]. _____________________ (the "Lockbox Account[s]") maintained with you under the terms of the [Lockbox Agreement] attached hereto as Exhibit A (the "Lockbox Agreement[s]") to First Union National Bank of North Carolina, as Administrative Agent (the "Agent").

We hereby irrevocably instruct you to make all payments to be made by you out of or in connection with the Lockbox Account(s) (i) to the Administrative Agent for credit to account no. ________ maintained by it at its office at ________________________ or (ii) as you may otherwise be instructed by the Administrative Agent.

We also hereby notify you that the Administrative Agent shall be irrevocably entitled to exercise any and all rights in respect of or in connection with the Lockbox Account(s), including, without limitation, the right to specify when payments are to be made out of or in connection with the Lockbox Account(s).

All funds deposited into the Lockbox Account(s) will not be subject to deduction, set-off, banker's lien or any other right in favor of any other person than the Administrative Agent, except that you may set-off against the Lockbox Account(s) the face amount of any check deposited in and credited to such Lockbox Account(s) which is subsequently returned for any reason. Your compensation for providing the service contemplated herein shall be mutually agreed between you and us from time to time and we will continue to pay such compensation.

Please confirm your acknowledgment of and agreement to the foregoing instructions by signing in the space provided below

Very truly yours,

By:________________________________ Name:___________________________ Title:__________________________

Acknowledged and agreed
to as of this _____ day of
__________________, 19___.

[LOCKBOX BANK]

By:_______________________
Name: ____________________
Title:____________________

SCHEDULE I
(to Security Agreement)

Trademarks and Related Rights

None.

SCHEDULE II
(to Security Agreement)

Copyrights and Related Rights

None.

Schedule III
(to Security Agreement)

Government Contracts

EXHIBIT 10.21

OFFICER AND TRUSTEE INDEMNIFICATION AGREEMENT

This Agreement is made as of the 18th day of July, 1997, by and between CCA Prison Realty Trust, a Maryland real estate investment trust (the "Company"), and the undersigned Officer or Trustee of the Company (the "Indemnitee").

WHEREAS, Indemnitee is currently serving as an Officer or Trustee of the Company and the Company wishes the Indemnitee to continue in such capacity. The Indemnitee is willing, under certain circumstances, to continue serving as an Officer Trustee of the Company;

WHEREAS, Maryland Code Annotated, Courts of Judicial Proceeding, Article 5-350, provides that a real estate investment trust's Declaration of Trust may include any provision limiting the liability of its officers or trustees to the trust or its shareholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action.

WHEREAS, the Company's Amended and Restated Declaration of Trust provides that to the fullest extent allowed by Maryland law, no officer trustee of the Company shall be liable to the Company or its shareholders for money damages;

WHEREAS, in addition, the Bylaws of the Company provide that the officer trustees of the Company shall be entitled to indemnification on the terms and conditions set forth therein; and

WHEREAS, Indemnitee has indicated that he does not regard the foregoing provisions of the Company's Declaration of Trust and Bylaws as adequate to protect him against the risks associated with his service to the Company and has noted that the Company's directors' and officers' liability insurance policy has numerous exclusions and a deductible and thus does not adequately protect Indemnitee. In this connection the Company and the Indemnitee now agree they should enter into this Indemnification Agreement in order to provide greater protection to Indemnitee against such risks of service to the Company.

NOW, THEREFORE, in order to induce the Indemnitee to continue to serve as a Trustee of the Company and in consideration of his continued service, the Company hereby agrees to indemnify the Indemnitee as follows:

1. Indemnity. The Company will indemnify the Indemnitee, his executors, administrators or assigns, for any Expenses (as defined below) which the Indemnitee is or becomes legally obligated to pay in connection with any Proceeding. As used in this Agreement the term "Proceeding" shall include any threatened, pending or completed claim, action, suit or proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, in which the Indemnitee may be or may have been involved as a party or otherwise, by

reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any actual or alleged error or misstatement or misleading statement made or suffered by the Indemnitee, by reason of any action taken by him or of any inaction on his part while acting as such director or officer, or by reason of the fact that he was serving at the request of the Company as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise; provided, that in each such case Indemnitee acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company, and, in the case of a criminal proceeding, in addition had no reasonable cause to believe that his conduct was unlawful. As used in this Agreement, the term "other enterprise" shall include (without limitation) employee benefit plans and administrative committees thereof, and the term "fines" shall include (without limitations) any excise tax assessed with respect to any employee benefit plan.

2. Expenses. As used in this Agreement, the term "Expenses" shall include, without limitation, damages, judgments, fines, penalties, settlements and costs, attorneys' fees and disbursements and costs of attachment or similar bonds, investigations, and any expenses of establishing a right to indemnification under this Agreement.

3. Enforcement. If a claim or request under this Agreement is not paid by the Company, or on its behalf, within thirty days after a written claim or request has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, the Indemnitee shall be entitled to be paid also the Expenses of prosecuting such suit. The Company shall have the right to recoup from the Indemnitee the amount of any item or items of Expenses theretofore paid by the Company pursuant to this Agreement, to the extent such Expenses are not reasonable in nature or amounts; provided, however, that the Company shall have the burden of proving such Expenses to be unreasonable. The burden of proving that the Indemnitee is not entitled to indemnification for any other reason shall be upon the Company.

4. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

5. Exclusions. The Company shall not be liable under this Agreement to pay any Expenses in connection with any claim made against the Indemnitee:

(a) to the extent that payment is actually made to the Indemnitee under a valid, enforceable and collectible insurance policy;

(b) to the extent that the Indemnitee is indemnified and actually paid otherwise than pursuant to this Agreement;

(c) in connection with a judicial action by or in the right of the Company, in respect of any claim, issue or matter as to which the Indemnitee shall have been adjudged to be liable for gross negligence or intentional misconduct in the performance of his duty to the Company unless and only to the extent that any court in which such action was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper;

(d) if it is proved by final judgment in a court of law or other final adjudication to have been based upon or attributable to the Indemnitee's in fact having gained any personal profit or advantage to which he was not legally entitled;

(e) for a disgorgement of profits made from the purchase and sale by the Indemnitee of securities pursuant to
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any state statutory law or common law;

(f) brought about or contributed to by the dishonesty of the Indemnitee seeking payment hereunder; however, notwithstanding the foregoing, the Indemnitee shall be protected under this Agreement as to any claims upon which suit may be brought against him by reason of any alleged dishonesty on his part, unless a judgment or other final adjudication thereof adverse to the Indemnitee shall establish that he committed
(i) acts of active and deliberate dishonesty, (ii) with actual dishonest purpose and intent, (iii) which acts were material to the cause of action so adjudicated; or

(g) for any judgment, fine or penalty which the Company is prohibited by applicable law from paying as indemnity or for any other reason.

6. Indemnification of Expenses or Successful Party. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been

successful on the merits or otherwise in defense of any Proceeding or in defense of any claim, issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against any and all Expenses incurred in connection therewith.

7. Partial Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not for the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such Expenses to which the Indemnitee is entitled.

8. Advance of Expenses. Expenses incurred by the Indemnitee in connection with any Proceeding, except the amount of any settlement, shall be paid by the Company in advance upon request of the Indemnitee that the Company pay such Expenses. The Indemnitee hereby undertakes to repay to the Company the amount of any Expenses theretofore paid by the Company to the extent that it is ultimately determined that such Expenses were not reasonable or that the Indemnitee is not entitled to indemnification.

9. Approval of Expenses. No Expenses for which indemnity shall be sought under this Agreement, other than those in respect of judgments and verdicts actually rendered, shall be incurred without the prior consent of the Company, which consent shall not be unreasonably withheld.

10. Notice of Claim. The Indemnitee, as a condition precedent to his right to be indemnified under this Agreement, shall give to the Company notice in writing as soon as practicable of any claim made against him for which indemnity will or could be sought under this Agreement. Notice to the Company shall be given at its principal office and shall be directed to the Secretary (or such other address as the Company shall designate in writing to the Indemnitee); notice shall be deemed received if sent by prepaid mail properly addressed, the date of such notice being the date postmarked. In addition, the Indemnitee shall give the Company such information and cooperation as it may reasonable require and as shall be within the Indemnitee's power.

11. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one instrument.

12. Indemnification Hereunder Not Exclusive. Nothing herein shall be deemed to diminish or otherwise restrict the Indemnitee's right to indemnification under any provision of the Declaration of Trust or Bylaws of the Company and amendments thereto or under law.

13. Governing Law. This Agreement shall be governed by and construed in

accordance with the internal laws of the State of Maryland.

14. Saving Clause. Wherever there is conflict between any provision of this Agreement and any applicable present or future statute, law or regulations contrary to which the Company and the Indemnitee have no legal right to contract, the latter shall prevail, but in such event the affected provisions of this Agreement shall be curtailed and restricted only to the extent necessary to bring them within applicable legal requirements.

15. Coverage. The provisions of this Agreement shall apply with respect to the Indemnitee's service as an Officer or Trustee of the Company prior to the date of this Agreement and with respect to all periods of such service after the date of this Agreement, even though the Indemnitee may have ceased to be an Officer or Trustee of the Company.

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

CCA PRISON REALTY TRUST

OFFICER OR TRUSTEE

EXHIBIT 10.22

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made on this 1st day of June, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust (the "Company"), and J. MICHAEL QUINLAN (the "Employee").

WITNESSETH:

WHEREAS, the Company desires to retain the services of the Employee, and the Employee desires to be employed by the Company, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and conditions set forth below, the parties hereto agree as follows:

1. Employment. The Company hereby employs the Employee as its Chief Executive Officer, and the Employee hereby accepts such employment upon the terms and conditions of this Agreement. In such capacity, the Employee shall have such duties, functions, responsibilities and authority as are consistent with the Employee's position, subject to the general direction, approval and control of the Board of Trustees of the Company (the "Board"). The duties of the Employee may be expanded, restricted or otherwise altered from time to time by the Board, consistent with the general duties, authority, and responsibilities set forth herein.

2. Compensation.

(a) Base Salary. In consideration of the services rendered by the Employee pursuant to Section 1 hereof, the Company shall pay the Employee a base salary (the "Base Salary") of $150,000 per annum payable in accordance with the Company's normal payment practices but in no event less frequently than monthly. At the end of each year during the term hereof, the Base Salary shall be reviewed by the Compensation Committee of the Board (the "Compensation Committee") and may be increased (but not decreased) in the Compensation Committee's absolute discretion.

(b) Bonus. In the absolute discretion of the Compensation Committee, the Employee may receive a bonus in an amount to be determined by the Compensation Committee.

(c) Benefits. The Employee shall also be entitled:

(i) to receive upon closing of the initial public offering of the Common Shares (as herein defined) an "incentive stock option" (as defined in Section 422 of the Internal Revenue Code of 1986, as amended) to purchase up to 350,000 common shares, $.01 par value, of the Company (the "Common Shares") under the CCA Realty Trust 1997 Employee Share Incentive Plan (the "Share Incentive Plan"), such option to vest in annual increments of 87,500 shares beginning on the date hereof and to be exercisable during the ten-year period beginning on the date of grant;

(ii) to receive, in the absolute discretion of the Compensation Committee, additional share options (incentive or non-qualified), restricted shares, deferred shares and other awards under the Share Incentive Plan;

(iii) to participate in any executive deferred compensation plan or qualified retirement plan adopted by the Company, subject to and on a basis consistent with the terms, conditions and overall administration of such plans; and

(iv) to participate in or receive benefits under any employee benefit plan or other arrangement including, but not limited to, any medical, dental, retirement, disability, life insurance, sick leave and vacation plans or arrangements made available by the Company to any of its employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans or arrangements.

(d) Expenses. The Company shall promptly reimburse the Employee for all reasonable travel and other business expenses incurred by the Employee in the performance of his duties under this Agreement upon evidence of receipt.

3. Covenants of Employee.

(a) Non-Competition. The Company and the Employee recognize and acknowledge that the Company's business has a national scope and the Company is contemplating doing business in every state in the United States and that it is reasonably anticipated that the Employee will perform his duties under this Agreement in every state in the United States. During the term of this Agreement (and thereafter for a period of three (3) years), the Employee will not, within the United States, directly or indirectly, own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation, or control of a prison real estate investment trust or compete, directly or indirectly, with the Company. The Employee acknowledges that the provisions of this paragraph are essential to the continued goodwill and profitability of the Company. Should any court determine that the provisions of this paragraph shall be unenforceable in respect to scope, duration, or geographic area, such court may substitute to the extent enforceable, provisions similar hereto or other provisions so as to provide the Company, to the fullest extent permitted by applicable law, the benefits intended by this paragraph.

(b) Non-Disclosure. The Employee acknowledges that the Company's knowledge of its business, its development plans, its method of operation and managing the business, its cost control methods, its financial or other performance data, its trade secrets, it methods for bidding on projects, confidential information of the Company, its subsidiaries, affiliates, and franchises and the Company's list of customers and prospective customers (as it may exist from time to time) are valuable, special, and unique assets of the Company and are proprietary to the Company. The Employee will not, during or after the term of his employment, disclose any part thereof to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever.

(c) Remedies. In addition to any other rights and remedies available under this Agreement, at law or otherwise, the Company shall be entitled to an injunction to be issued by any court of competent jurisdiction enjoining and restraining the Employee from committing any violation of subsections (a) and (b) above. Any provisions of subsections (a) and (b) above which are deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this paragraph be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

4. Working Facilities. The Employee shall have such facilities and services as are suitable to his position and appropriate for the performance of his duties, as the Company may determine.

5. Term and Termination.

(a) Term. The term of this Agreement shall begin on the date first written above, and shall terminate on the fourth anniversary date thereof. The term of this Agreement may be extended for an additional period of time by mutual written agreement of the Company and the Employee.

(b) Termination. The Company may terminate the Employee's employment upon thirty (30) days prior written notice to the Employee upon the happening of any of the following events: (i) any act of the Employee which constitutes fraud, gross misconduct, gross negligence or a material breach of this Agreement, (ii) frequent and repeated failure to perform services which have been reasonably requested of the Employee by the Board and which are consistent with the terms of this Agreement, (iii) the death of the Employee,
(iv) disability by the Employee (as determined under the Share Incentive Plan), or (v) a decision by the Company to terminate its business and liquidate; provided, however, that the Company shall not terminate the employment of the Employee pursuant to clause (i) or (ii) hereof unless the Company (A) provides the Employee with at least 15 days' prior written notice of its intention to terminate the Employee's employment hereunder, which notice shall describe the reasons for such termination, and (B) allows the Employee a reasonable opportunity and a reasonable period of time to cure any curable acts or omissions on which its decision to terminate is based.

6. Notices. Any notice required or desired to be given under this Agreement shall be deemed given if in writing sent by certified mail to his residence in the case of the Employee, or to its principal office in the case of the Company.

7. Waiver of Breach. The waiver by the Company of a breach of any provision of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach by the Employee. No waiver shall be valid unless in writing and signed by an authorized officer of the Company.

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

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

10. Counterparts. This Agreement may be executed in two counterparts, each of which may be considered an original but which taken together shall constitute the same instrument.

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

IN WITNESS WHEREOF, the parties have executed this Agreement this the same day and date first written above.

COMPANY:

CCA PRISON REALTY TRUST

EMPLOYEE:

EXHIBIT 10.23

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made on this 1st day of June, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust (the "Company"), and D. ROBERT CRANTS III (the "Employee").

WITNESSETH:

WHEREAS, the Company desires to retain the services of the Employee, and the Employee desires to be employed by the Company, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and conditions set forth below, the parties hereto agree as follows:

1. Employment. The Company hereby employs the Employee as its President, and the Employee hereby accepts such employment upon the terms and conditions of this Agreement. In such capacity, the Employee shall have such duties, functions, responsibilities and authority as are consistent with the Employee's position, subject to the general direction, approval and control of the Board of Trustees of the Company (the "Board"). The duties of the Employee may be expanded, restricted or otherwise altered from time to time by the Board, consistent with the general duties, authority, and responsibilities set forth herein.

2. Compensation.

(a) Base Salary. In consideration of the services rendered by the Employee pursuant to Section 1 hereof, the Company shall pay the Employee a base salary (the "Base Salary") of $100,000 per annum payable in accordance with the Company's normal payment practices but in no event less frequently than monthly. At the end of each year during the term hereof, the Base Salary shall be reviewed by the Compensation Committee of the Board (the "Compensation Committee") and may be increased (but not decreased) in the Compensation Committee's absolute discretion.

(b) Bonus. In the absolute discretion of the Compensation Committee, the Employee may receive a bonus in an amount to be determined by the Compensation Committee.

(c) Benefits. The Employee shall also be entitled:

(i) to receive upon closing of the initial public offering of the Common Shares (as herein defined) an "incentive stock option" (as defined in Section 422 of the Internal Revenue Code of 1986, as amended) to purchase up to 200,000 common shares, $.01 par value, of the Company (the "Common Shares") under the CCA Realty Trust 1997 Employee Share Incentive Plan (the "Share Incentive Plan"), such option to vest in annual increments of 50,000 Common Shares beginning on the date hereof, and to be exercisable during the ten-year period beginning on the date of grant;

(ii) to receive, in the absolute discretion of the Compensation Committee, additional share options (incentive or non-qualified), restricted shares, deferred shares and other awards under the Share Incentive Plan;

(iii) to participate in any executive deferred compensation plan or qualified retirement plan adopted by the Company, subject to and on a basis consistent with the terms, conditions and overall administration of such plans; and

(iv) to participate in or receive benefits under any employee benefit plan or other arrangement including, but not limited to, any medical, dental, retirement, disability, life insurance, sick leave and vacation plans or arrangements made available by the Company to any of its employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans or arrangements.

(d) Expenses. The Company shall promptly reimburse the Employee for all reasonable travel and other business expenses incurred by the Employee in the performance of his duties under this Agreement upon evidence of receipt.

3. Covenants of Employee.

(a) Non-Competition. The Company and the Employee recognize and acknowledge that the Company's business has a national scope and the Company is contemplating doing business in every state in the United States and that it is reasonably anticipated that the Employee will perform his duties under this Agreement in every state in the United States. During the term of this Agreement (and thereafter for a period of three (3) years), the Employee will not, within the United States, directly or indirectly, own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation, or control of a prison real estate investment trust or compete, directly or indirectly, with the Company. The Employee acknowledges that the provisions of this paragraph are essential to the continued goodwill and profitability of the Company. Should any court determine that the provisions of this paragraph shall be unenforceable in respect to scope, duration, or geographic area, such court may substitute to the extent enforceable, provisions similar hereto or other provisions so as to provide the Company, to the fullest extent permitted by applicable law, the benefits intended by this paragraph.

(b) Non-Disclosure. The Employee acknowledges that the Company's knowledge of its business, its development plans, its method of operation and managing the business, its cost control methods, its financial or other performance data, its trade secrets, it methods for bidding on projects, confidential information of the Company, its subsidiaries, affiliates, and franchises and the Company's list of customers and prospective customers (as it may exist from time to time) are valuable, special, and unique assets of the Company and are proprietary to the Company. The Employee will not, during or after the term of his employment, disclose any part thereof to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever.

(c) Remedies. In addition to any other rights and remedies available under this Agreement, at law or otherwise, the Company shall be entitled to an injunction to be issued by any court of competent jurisdiction enjoining and restraining the Employee from committing any violation of subsections (a) and (b) above. Any provisions of subsections (a) and (b) above which are deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this paragraph be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

4. Working Facilities. The Employee shall have such facilities and services as are suitable to his position and appropriate for the performance of his duties, as the Company may determine.

5. Term and Termination.

(a) Term. The term of this Agreement shall begin on the date first written above, and shall terminate on the fourth anniversary date thereof. The term of this Agreement may be extended for an additional period of time by mutual written agreement of the Company and the Employee.

(b) Termination. The Company may terminate the Employee's employment upon thirty (30) days prior written notice to the Employee upon the happening of any of the following events: (i) any act of the Employee which constitutes fraud, gross misconduct, gross negligence or a material breach of this Agreement, (ii) frequent and repeated failure to perform services which have been reasonably requested of the Employee by the Board and which are consistent with the terms of this Agreement, (iii) the death of the Employee,
(iv) disability by the Employee (as determined under the Share Incentive Plan), or (v) a decision by the Company to terminate its business and liquidate; provided, however, that the Company shall not terminate the employment of the Employee pursuant to clause (i) or (ii) hereof unless the Company (A) provides the Employee with at least 15 days' prior written notice of its intention to terminate the Employee's employment hereunder, which notice shall describe the reasons for such termination, and (B) allows the Employee a reasonable opportunity and a reasonable period of time to cure any curable acts or omissions on which its decision to terminate is based.

6. Notices. Any notice required or desired to be given under this Agreement shall be deemed given if in writing sent by certified mail to his residence in the case of the Employee, or to its principal office in the case of the Company.

7. Waiver of Breach. The waiver by the Company of a breach of any provision of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach

by the Employee. No waiver shall be valid unless in writing and signed by an authorized officer of the Company.

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

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

10. Counterparts. This Agreement may be executed in two counterparts, each of which may be considered an original but which taken together shall constitute the same instrument.

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

IN WITNESS WHEREOF, the parties have executed this Agreement this the same day and date first written above.

COMPANY:

CCA PRISON REALTY TRUST

EMPLOYEE:

EXHIBIT 10.24

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made on this 1st day of June, 1997, by and between CCA PRISON REALTY TRUST, a Maryland real estate investment trust (the "Company"), and MICHAEL W. DEVLIN (the "Employee").

WITNESSETH:

WHEREAS, the Company desires to retain the services of the Employee, and the Employee desires to be employed by the Company, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and conditions set forth below, the parties hereto agree as follows:

1. Employment. The Company hereby employs the Employee as its Chief Development Officer, and the Employee hereby accepts such employment upon the terms and conditions of this Agreement. In such capacity, the Employee shall have such duties, functions, responsibilities and authority as are consistent with the Employee's position, subject to the general direction, approval and control of the Board of Trustees of the Company (the "Board"). The duties of the Employee may be expanded, restricted or otherwise altered from time to time by the Board, consistent with the general duties, authority, and responsibilities set forth herein.

2. Compensation.

(a) Base Salary. In consideration of the services rendered by the Employee pursuant to Section 1 hereof, the Company shall pay the Employee a base salary (the "Base Salary") of $100,000 per annum payable in accordance with the Company's normal payment practices but in no event less frequently than monthly. At the end of each year during the term hereof, the Base Salary shall be reviewed by the Compensation Committee of the Board (the "Compensation Committee") and may be increased (but not decreased) in the Compensation Committee's absolute discretion.

(b) Bonus. In the absolute discretion of the Compensation Committee, the Employee may receive a bonus in an amount to be determined by the Compensation Committee.

(c) Benefits. The Employee shall also be entitled:

(i) to receive upon closing of the initial public offering of the Common Shares (as herein defined) an "incentive stock option" (as defined in Section 422 of the Internal Revenue Code of 1986, as amended) to purchase up to 200,000 common shares, $.01 par value, of the Company (the "Common Shares") under the CCA Realty Trust 1997 Employee Share Incentive Plan (the "Share Incentive Plan"), such option to vest in annual increments of 50,000 Common Shares beginning on the date hereof and to be exercisable during the ten-year period beginning on the date of grant;

(ii) to receive, in the absolute discretion of the Compensation Committee, additional share options (incentive or non-qualified), restricted shares, deferred shares and other awards under the Share Incentive Plan;

(iii) to participate in any executive deferred compensation plan or qualified retirement plan adopted by the Company, subject to and on a basis consistent with the terms, conditions and overall administration of such plans; and

(iv) to participate in or receive benefits under any employee benefit plan or other arrangement including, but not limited to, any medical, dental, retirement, disability, life insurance, sick leave and vacation plans or arrangements made available by the Company to any of its employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans or arrangements.

(d) Expenses. The Company shall promptly reimburse the Employee for all reasonable travel and other business expenses incurred by the Employee in the performance of his duties under this Agreement upon evidence of receipt.

3. Covenants of Employee.

(a) Non-Competition. The Company and the Employee recognize and acknowledge that the Company's business has a national scope and the Company is contemplating doing business in every state in the United States and that it is reasonably anticipated that the Employee will perform his duties under this Agreement in every state in the United States. During the term of this Agreement (and thereafter for a period of three (3) years), the Employee will not, within the United States, directly or indirectly, own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation, or control of a prison real estate investment trust or compete, directly or indirectly, with the Company. The Employee acknowledges that the provisions of this paragraph are essential to the continued goodwill and profitability of the Company. Should any court determine that the provisions of this paragraph shall be unenforceable in respect to scope, duration, or geographic area, such court may substitute to the extent enforceable, provisions similar hereto or other provisions so as to provide the Company, to the fullest extent permitted by applicable law, the benefits intended by this paragraph.

(b) Non-Disclosure. The Employee acknowledges that the Company's knowledge of its business, its development plans, its method of operation and managing the business, its cost control methods, its financial or other performance data, its trade secrets, it methods for bidding on projects, confidential information of the Company, its subsidiaries, affiliates, and franchises and the Company's list of customers and prospective customers (as it may exist from time to time) are valuable, special, and unique assets of the Company and are proprietary to the Company. The Employee will not, during or after the term of his employment, disclose any part thereof to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever.

(c) Remedies. In addition to any other rights and remedies available under this Agreement, at law or otherwise, the Company shall be entitled to an injunction to be issued by any court of competent jurisdiction enjoining and restraining the Employee from committing any violation of subsections (a) and (b) above. Any provisions of subsections (a) and (b) above which are deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this paragraph be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

4. Working Facilities. The Employee shall have such facilities and services as are suitable to his position and appropriate for the performance of his duties, as the Company may determine.

5. Term and Termination.

(a) Term. The term of this Agreement shall begin on the date first written above, and shall terminate on the fourth anniversary date thereof. The term of this Agreement may be extended for an additional period of time by mutual written agreement of the Company and the Employee.

(b) Termination. The Company may terminate the Employee's employment upon thirty (30) days prior written notice to the Employee upon the happening of any of the following events: (i) any act of the Employee which constitutes fraud, gross misconduct, gross negligence or a material breach of this Agreement, (ii) frequent and repeated failure to perform services which have been reasonably requested of the Employee by the Board and which are consistent with the terms of this Agreement, (iii) the death of the Employee,
(iv) disability by the Employee (as determined under the Share Incentive Plan), or (v) a decision by the Company to terminate its business and liquidate; provided, however, that the Company shall not terminate the employment of the Employee pursuant to clause (i) or (ii) hereof unless the Company (A) provides the Employee with at least 15 days' prior written notice of its intention to terminate the Employee's employment hereunder, which notice shall describe the reasons for such termination, and (B) allows the Employee a reasonable opportunity and a reasonable period of time to cure any curable acts or omissions on which its decision to terminate is based. On any termination pursuant to this paragraph, the Employee shall be entitled to full compensation through the date of his termination.

6. Notices. Any notice required or desired to be given under this Agreement shall be deemed given if in writing sent by certified mail to his residence in the case of the Employee, or to its principal office in the case of the Company.

7. Waiver of Breach. The waiver by the Company of a breach of any provision of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach

by the Employee. No waiver shall be valid unless in writing and signed by an authorized officer of the Company.

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

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

10. Counterparts. This Agreement may be executed in two counterparts, each of which may be considered an original but which taken together shall constitute the same instrument.

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

IN WITNESS WHEREOF, the parties have executed this Agreement this the same day and date first written above.

COMPANY:

CCA PRISON REALTY TRUST

EMPLOYEE:

EXHIBIT 10.25
CCA PRISON REALTY TRUST

1997 EMPLOYEE SHARE INCENTIVE PLAN

SECTION 1. Purpose; Definitions.

The purpose of the CCA Realty Trust 1997 Employee Share Incentive Plan (the "Plan") is to enable CCA Realty Trust (the "Company") to attract, retain and reward key employees of the Company and the Chairman of the Company's Board of Trustees (the "Board"), and strengthen the mutuality of interests between such individuals and the Company's shareholders, by offering such individuals performance-based share incentives and/or other equity interests or equity-based incentives in the Company, as well as performance-based incentives payable in cash.

For purposes of the Plan, the following terms shall be defined as set forth below:

a. "Affiliate" means any entity other than the Company and its Subsidiaries that is designated by the Board as a participating employer under the Plan, provided that the Company directly or indirectly owns at least 20% of the combined voting power of all classes of stock of such entity or at least 20% of the ownership interests in such entity.

b. "Board" means the Board of Trustees of the Company.

c. "Book Value" means, as of any given date, on a per share basis (i) the shareholders' equity in the Company as of the end of the immediately preceding fiscal year as reflected in the Company's consolidated balance sheet, subject to such adjustments as the Committee shall specify at or after grant, divided by (ii) the number of then outstanding Shares as of such year-end date (as adjusted by the Committee for subsequent events).

d. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

e. "Committee" means the Committee referred to in Section 2 of the Plan. If at any time no Committee shall be in office, then the functions of the Committee specified in the Plan shall be exercised by the Board.

f. "Company" means CCA Prison Realty Trust, a Maryland real estate investment trust, or any successor trust or corporation.

g. "Deferral Period" means the period described in Section 8(a) below.

h. "Deferred Shares" means an award made pursuant to Section 8 below of the right to receive Shares at the end of a specified Deferral Period.

i. "Disability" means disability as determined under procedures established by the Committee for purposes of this Plan.

j. "Early Retirement" means retirement, with the express consent for purposes of this Plan of the Company at or before the time of such retirement, from active employment with the Company and any Subsidiary or Affiliate on or after attainment of age sixty-two (62) but before attainment of age sixty-five (65).

k. "Fair Market Value" means, as of any given date, unless otherwise determined by the Committee in good faith, the reported closing price of the Shares on the New York Stock Exchange or, if no such sale of Shares is reported on the New York Stock Exchange on such date, the fair market value of the Shares as determined by the Committee in good faith.

l. "Immediate Family Member" means a person described in Section 5(e) below.

m. "Incentive Option" means any Share Option intended to be and designated as an "Incentive Stock Option" within the meaning of Section 422 of the Code.

n. "Non-Qualified Option" means any Share Option that is not an Incentive Option.

o. "Normal Retirement" means retirement from active employment with the Company and any Subsidiary or Affiliate on or after age 65.

p. "Other Share-Based Award" means an award under Section 10 below that is valued in whole or in part by reference to, or is otherwise based on, Shares.

q. "Plan" means this CCA Realty Trust 1997 Employee Share Incentive Plan, as hereinafter amended from time to time.

r. "Restricted Shares" means an award of Shares that is subject to restrictions under Section 7 below.

s. "Restriction Period" means the period described in Section 7(c) below.

t. "Retirement" means Normal or Early Retirement.

u. "Shares" means the Common Shares, $.01 par value per share, of the Company.

v. "Share Appreciation Right" means the right pursuant to an award granted under Section 6 below to receive upon exercise an amount equal to the excess of the Fair Market Value of one Share over the price per share specified in the award agreement multiplied by the number of Shares in respect of which a Share Appreciation Right has been exercised.

w. "Share Option" or "Option" means any option to purchase Shares (including Restricted Shares and Deferred Shares, if the Committee so determines) granted pursuant to Section 5 below.

x. "Share Purchase Right" means the right to purchase Shares pursuant to
Section 9.

y. "Subsidiary" means any corporation (or other entity) in an unbroken chain of corporations and other entities beginning with the Company if each of the corporations and other entities (other than the last corporation or other entity in the unbroken chain) owns equity interests possessing more than 50% of the total combined voting power of all classes of equity interests in one of the other corporations or entities in the chain.

In addition, the terms "Change in Control", "Potential Change in Control" and "Change in Control Price" shall have meanings set forth, respectively, in Sections 11(b), (c) and (d) below.

SECTION 2. Administration.

The Plan shall be administered by the Compensation Committee of the Board. The functions of the Committee specified in the Plan shall be exercised by the Board, if and to the extent that no Committee exists which has the authority to so administer the Plan.

The Committee shall have full authority to grant, pursuant to the terms of the Plan, to officers and other key employees eligible under Section 4: (i) Share Options, (ii) Share Appreciation Rights, (iii) Restricted Shares, (iv) Deferred Shares, (v) Share Purchase Rights and/or (vi) Other Share-Based Awards.

In particular, the Committee shall have the authority:

(i) to select the officers and other key employees of the Company and its Subsidiaries and Affiliates to whom Share Options, Share Appreciation Rights, Restricted Shares, Deferred Shares, Share Purchase Rights and/or Other Share-Based Awards may from time to time be granted hereunder;

(ii) to determine whether and to what extent Incentive Options, Non-Qualified Options, Share Appreciation Rights, Restricted Shares, Deferred Shares, Share Purchase Rights and/or Other Share-Based Awards, or any combination thereof, are to be granted hereunder to one or more eligible employees;

(iii) to determine the number of shares to be covered by each such award granted hereunder;

(iv) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder (including, but not limited to, the share price and any

restriction or limitation, or any vesting acceleration or waiver of forfeiture restrictions regarding any Share Option or other award and/or the Shares relating thereto, based in each case on such factors as the Committee shall determine, in its sole discretion);

(v) to determine whether and under what circumstances a Share Option may be settled in cash, Restricted Shares and/or Deferred Shares under Section 5(k) or (l), as applicable, instead of Shares that are neither Restricted Shares nor Deferred Shares;

(vi) to determine whether, to what extent and under what circumstances Option grants and/or other awards under the Plan and/or other cash awards made by the Company are to be made, and operate, on a tandem basis vis-a-vis other awards under the Plan and/or cash awards made outside of the Plan, or on an additive basis;

(vii) to determine whether, to what extent and under what circumstances Shares and other amounts payable with respect to an award under this Plan shall be deferred either automatically or at the election of the participant (including providing for and determining the amount (if any) of any deemed earnings on any deferred amount during any deferral period); and

(viii) to determine the terms and restrictions applicable to Share Purchase Rights and the Shares purchased by exercising such rights.

The Committee shall have the authority to adopt, alter and repeal such rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable; to interpret the terms and provisions of the Plan and any award issued under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan.

All decisions made by the Committee pursuant to the provisions of the Plan shall be made in the Committee's sole discretion and shall be final and binding on all persons, including the Company and Plan participants.

SECTION 3. Shares Subject to Plan.

The total number of Shares reserved and available for distribution under the Plan shall be 1,300,000 shares. Such Shares may consist, in whole or in part, of authorized and unissued Shares or treasury Shares.

Subject to Section 6(b)(iv) below, if any Shares that have been optioned cease to be subject to a Share Option, or if any such Shares that are subject to any Restricted Shares or Deferred Shares award, Share Purchase Right or Other Share-Based Award granted hereunder are forfeited or any such award otherwise terminates without a payment being made to the participant in the form of Shares, such shares shall again be available for distribution in connection with future awards under the Plan.

In the event of any merger, reorganization, consolidation, recapitalization, Share dividend, Share split or other change in corporate structure affecting the Shares, an adjustment shall be made in the aggregate number of shares reserved for issuance under the Plan, in the number and option price of Shares subject to outstanding Options granted under the Plan, in the number and purchase price of Shares subject to outstanding Share Purchase Rights under the Plan, and in the number of Shares subject to other outstanding awards granted under the Plan as may be determined to be appropriate by the Committee, in its sole discretion, provided that the number of shares subject to any award shall always be a whole number. Such adjusted option price shall also be used to determine the amount payable by the Company upon the exercise of any Share Appreciation Right associated with any Share Option.

SECTION 4. Eligibility.

The Chairman of the Board, all Officers and other key employees of the Company and its Subsidiaries and Affiliates (but excluding members of the Committee) who are responsible for or contribute to the management, growth and/or profitability of the business of the Company and/or its Subsidiaries and Affiliates are eligible to be granted awards under the Plan; provided, however, that the Chairman of the Board shall not be eligible to receive Incentive Options hereunder. Except as provided in the preceding sentence, any reference herein to "employees" and their employment by the Company shall be deemed to include the Chairman of the Board and his service as a trustee of the Company, unless otherwise determined by the Committee. Without limiting the generality of the foregoing, the Committee shall have the full authority to interpret the provisions of the Plan as they may apply (or may not apply) to the Chairman of the Board, and any determination by the Committee in this regard shall be final and conclusive.

SECTION 5. Share Options.

Share Options may be granted alone, in addition to or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. Any Share Option granted under the Plan shall be in such form as the Committee may from time to time approve.

Share Options granted under the Plan may be of two types: (i) Incentive Options and (ii) Non-Qualified Options.

The Committee shall have the authority to grant to any optionee Incentive Options, Non-Qualified Options, or both types of Share Options (in each case with or without Share Appreciation Rights).

Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable:

(a) Option Price. The option price per Share purchasable under a Share Option shall be determined by the Committee at the time of grant but shall be not less than 100% of the Fair Market Value of the Shares at grant, in the case of Incentive Options, and not less than 50% of the Fair Market Value of the Shares at grant, in the case of Non-Qualified Options.

(b) Option Term. The term of each Share Option shall be fixed by the Committee, but no Share Option shall be exercisable more than ten years after the date the Option is granted.

(c) Exercisability. Share Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at or after grant; provided, however, that, except as provided in
Section 5(f) and (g) and Section 11, unless otherwise determined by the Committee at or after grant, no Share Option shall be exercisable prior to the later of (i) the first anniversary date of the granting of the Option or (ii) the second anniversary date of employment of the employee by the Company. If the Committee provides, in its sole discretion, that any Share Option is exercisable only in installments, the Committee may waive such installment exercise provisions at any time at or after grant in whole or in part, based on such factors as the Committee shall determine, in its sole discretion.

(d) Method of Exercise. Subject to whatever installment exercise provisions apply under Section 5(c), Share Options may be exercised in whole or in part at any time during the option period, by giving written notice of exercise to the Company specifying the number of shares to be purchased.

Such notice shall be accompanied by payment in full of the purchase price, either by check, note or such other instrument as the Committee may accept. As determined by the Committee, in its sole discretion, at or after grant, payment in full or in part may also be made in the form of a Share Option or unrestricted Shares already owned by the optionee or, in the case of the exercise of a Non-Qualified Option, Restricted Shares or Deferred Shares subject to an award hereunder (based, in each case, on the Fair Market Value of the Share Option or the Shares on the date the option is exercised, as determined by the Committee).

If payment of the option exercise price of a Non-Qualified Option is made in whole or in part in the form of Restricted Shares or Deferred Shares, such Restricted Shares or Deferred Shares (and any replacement shares relating thereto) shall remain (or be) restricted or deferred, as the case may be, in accordance with the original terms of the Restricted Shares award or Deferred Shares award in question, and any additional Shares received upon the exercise shall be subject to the same forfeiture restrictions or deferral limitations, unless otherwise determined by the Committee, in its sole discretion, at or after grant.

No Shares shall be issued until full payment therefor has been made. An optionee shall generally have the rights to dividends or other rights of a shareholder with respect to shares subject to the Option when the optionee has given written notice of exercise, has paid in full for such shares, and, if requested, has given the representation described in Section 14(a).

(e) Transferability of Options. Incentive Options shall be transferable by the optionee only by will or by the laws of descent and shall be exercisable, during the optionee's lifetime, only by the optionee. Non-Qualified Options shall be transferable by the optionee by will or by the laws of descent or to (i) the spouse, children or grandchildren of the optionee ("Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, (iii) a partnership in which such Immediate Family Members are the only partners, or (iv) one or more entities in which the optionee has a 10% or greater equity interest, provided that (y) the share option agreement pursuant to which such Non-Qualified Options are granted must be approved by the Committee, and (z) subsequent transfers of transferred Non-Qualified Options shall be prohibited except those in accordance with this subparagraph (e). Following transfer, any such Non-Qualified Options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of this Plan or the option agreement executed pursuant hereto, the term "optionee" shall be deemed to refer to the transferee.

(f) Termination by Death. Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of death, any Share Option held by such optionee may thereafter be exercised, to the extent such option was exercisable at the time of death or on such accelerated basis as the Committee may determine at or after grant (or as may be determined in accordance with procedures established by the Committee), by the legal representative of the estate or by the legatee of the optionee under the will of the optionee, for a period of one year (or such other period as the Committee may specify at grant) from the date of such death or until the expiration of the stated term of such Share Option, whichever period is the shorter.

(g) Termination by Reason of Disability. Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of Disability, any Share Option held by such optionee may thereafter be exercised by the optionee, to the extent it was exercisable at the time of termination or on such accelerated basis as the Committee may determine at or after grant (or as may be determined in accordance with procedures established by the Committee), for a period of three years (or such other period as the Committee may specify at grant) from the date of such termination of employment or until the expiration of the stated term of such Share Option, whichever period is the shorter; provided, however, that, if the optionee dies within such three-year period (or such other period as the Committee shall specify at grant), any unexercised Share Option held by such optionee shall thereafter be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of such death or until the expiration of the stated term of such Share Option, whichever period is the shorter. In the event of termination of employment by reason of Disability, if an Incentive Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Share Option will thereafter be treated as a Non-Qualified Option.

(h) Termination by Reason of Retirement. Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of Normal or Early Retirement, any Share Option held by such optionee may thereafter be exercised by the optionee, to the extent it was exercisable at the time of such Retirement or on such accelerated basis

as the Committee may determine at or after grant (or as may be determined in accordance with procedures established by the Committee), for a period of three years (or such other period as Committee may specify at grant) from the date of such termination of employment or the expiration of the stated term of such Share Option, whichever period is the shorter; provided, however, that, if the optionee dies within such three-year period (or such other period as the Committee may specify at grant), any unexercised Share Option held by such optionee shall thereafter be exercisable, to the extent to which it was exercisable at the time of death, for a period of one year from the date of such death or until the expiration of the stated term of such Share Option, whichever period is the shorter. In the event of termination of employment by reason of Retirement, if an Incentive Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, the option will thereafter be treated as a Non-Qualified Option.

(i) Other Termination. Unless otherwise determined by the Committee (or pursuant to procedures established by the Committee) at or after grant, if an optionee's employment by the Company and any Subsidiary or Affiliate terminates for any reason other than death, Disability or Normal or Early Retirement, the Share Option shall thereupon terminate.

(j) Incentive Options. Anything in the Plan to the contrary notwithstanding, no term of this Plan relating to Incentive Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of the optionee(s) affected, to disqualify any Incentive Option under such Section 422.

If an Incentive Option granted under this Plan is first exercisable in any calendar year to obtain Shares having a fair market value (determined at the time of grant) in excess of $100,000, the option is treated as an Incentive Option for Shares having a fair market value (determined at the time of grant) equal to $100,000 and as a Non-Qualified Option for the remaining Shares. In making this determination, the rules specified in Section 422(d) of the Code shall be determinative, including the aggregate of all Incentive Options which are first exercisable in that calendar year under any plan of the Company.

To the extent permitted under Section 422 of the Code or the applicable regulations thereunder or any applicable Internal Revenue Service pronouncement:

(i) if (x) a participant's employment is terminated by reason of death, Disability or Retirement and (y) the portion of any Incentive Option that is otherwise exercisable during the post-termination period specified under Section 5(f), (g) or (h), applied without regard to the $100,000 limitation contained in Section 422(b)(7) of the Code, is greater than the portion of such option that is immediately exercisable as an "Incentive Stock Option" during such post-termination period under Section 422, such excess shall be treated as a Non-Qualified Option; and

(ii) if the exercise of an Incentive Option is accelerated by reason of a Change in Control, any portion of such option that is not exercisable as an Incentive Option by reason of the $100,000 limitation contained in Section 422(b)(7) of the Code shall be treated as a Non-Qualified Option.

An employee who owns Shares representing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company shall not be eligible to receive an Incentive Option.

(k) Buyout Provisions. The Committee may at any time offer to buy out for a payment in cash, Shares, Deferred Shares or Restricted Shares an option previously granted, based on such terms and conditions as the Committee shall establish and communicate to the optionee at the time that such offer is made.

(l) Settlement Provisions. If the option agreement so provides at grant or is amended after grant and prior to exercise to so provide (with the optionee's consent), the Committee may require that all or part of the shares to be issued with respect to the spread value of an exercised Option take the form of Deferred or Restricted Shares, which shall be valued on the date of exercise on the basis of the Fair Market Value (as determined by the Committee) of such Deferred or Restricted Shares determined without regard to the deferral limitations and/or forfeiture restrictions involved.

SECTION 6. Share Appreciation Rights.

(a) Grant and Exercise. Share Appreciation Rights may be granted either alone, in addition to or in conjunction with other awards granted under the Plan.

A Share Appreciation Right may be exercised by a right holder, subject to
Section 6(b), in accordance with the procedures established by the Committee for such purpose. Upon such exercise, the right holder shall be entitled to receive an amount determined in the manner prescribed in Section 6(b).

(b) Terms and Conditions. Share Appreciation Rights shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, including the following:

(i) Share Appreciation Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at or after grant; provided, however, that, except as provided in Section 6(b)(iv) and (v) and Section 11, unless otherwise determined by the Committee at or after grant, no Share Appreciation Right shall be exercisable prior to the later of (i) the first anniversary date of the granting of the Share Appreciation Right or (ii) the second anniversary date of employment of the employee by the Company. The exercise of Share Appreciation Rights held by right holders who are

subject to Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act") shall comply with Rule 16b-3 thereunder, to the extent applicable.

(ii) Upon the exercise of a Share Appreciation Right, a right holder shall be entitled to receive an amount in cash (or, if expressly provided in the award agreement, an amount in cash and/or Shares) equal in value to the excess of the Fair Market Value of one Share over the price per share specified in the award agreement multiplied by the number of Shares in respect of which the Share Appreciation Right shall have been exercised. The amount of cash and, if applicable, the number of Shares to be paid shall be calculated on the basis of the Fair Market Value of the Shares on the date of exercise.

(iii) Share Appreciation Rights shall be transferable by the right holder by will or by the laws of descent or to (A) the Immediate Family Members of the right holder, (B) a trust or trusts for the exclusive benefit of such Immediate Family Members, (C) a partnership in which such Immediate Family Members are the only partners, or (D) one or more entities in which the right holder has a 10% or greater equity interest, provided that (y) the award agreement pursuant to which such Share Appreciation Rights are granted must be approved by the Committee, and (z) subsequent transfers of transferred Share Appreciation Rights shall be prohibited except those in accordance with this subparagraph (iii). Following transfer, any such Share Appreciation Rights shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of this Plan or the award agreement executed pursuant hereto, the term "right holder" shall be deemed to refer to the transferee.

(iv) Except as otherwise provided in the award agreement, if a right holder's employment by the Company and any Subsidiary or Affiliate terminates by reason of death, any Share Appreciation Right held by such right holder may thereafter be exercised, to the extent such right was exercisable at the time of death or on such accelerated basis as the Committee may determine at or after grant (or as may be determined in accordance with procedures established by the Committee), by the legal representative of the estate or by the legatee of the right holder under the will of the right holder, for a period of one year (or such other period as the Committee may specify at grant) from the date of such death or until the expiration of the stated term of such Share Appreciation Right, whichever period is the shorter.

(v) Except as otherwise provided in the award agreement, if a right holder's employment by the Company and any Subsidiary or Affiliate terminates by reason of Disability, any Share Appreciation Right held by such right holder may thereafter be exercised by the right holder, to the extent it was exercisable at the time of termination or on such accelerated basis as the Committee may determine at or after grant (or as may be determined in accordance with procedures established by the Committee), for a period of three years (or such other period as the Committee may specify at grant) from the date of such termination of employment or until the expiration of the stated term of such Share

Appreciation Right, whichever period is the shorter; provided, however, that, if the right holder dies within such three-year period (or such other period as the Committee shall specify at grant), any unexercised Share Appreciation Right held by such right holder shall thereafter be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of such death or until the expiration of the stated term of such Share Appreciation Right, whichever period is the shorter.

(vi) Except as otherwise provided in the award agreement, if a right holder's employment by the Company and any Subsidiary or Affiliate terminates by reason of Normal or Early Retirement, any Share Appreciation Right held by such right holder may thereafter be exercised by the right holder, to the extent it was exercisable at the time of such Retirement or on such accelerated basis as the Committee may determine at or after grant (or as may be determined in accordance with procedures established by the Committee), for a period of three years (or such other period as Committee may specify at grant) from the date of such termination of employment or the expiration of the stated term of such Share Appreciation Right, whichever period is the shorter; provided, however, that, if the right holder dies within such three-year period (or such other period as the Committee may specify at grant), any unexercised Share Appreciation Right held by such right holder shall thereafter be exercisable, to the extent to which it was exercisable at the time of death, for a period of one year from the date of such death or until the expiration of the stated term of such Share Appreciation Right, whichever period is the shorter.

(vii) In its sole discretion, the Committee may grant "Limited" Share Appreciation Rights under this Section 6, i.e., Share Appreciation Rights that become exercisable only in the event of a Change in Control and/or a Potential Change in Control, subject to such terms and conditions as the Committee may specify at grant. Such Limited Share Appreciation Rights shall be settled solely in cash.

(viii) The Committee, in its sole discretion, may also provide that, in the event of a Change in Control and/or a Potential Change in Control, the amount to be paid upon the exercise of a Share Appreciation Right or Limited Share Appreciation Right shall be based on the Change in Control Price, subject to such terms and conditions as the Committee may specify at grant.

SECTION 7. Restricted Shares.

(a) Administration. Restricted Shares may be issued either alone, in addition to or in tandem with other awards granted under the Plan and/or cash awards made outside the Plan. The Committee shall determine the eligible persons to whom, and the time or times at which, grants of Restricted Shares will be made, the number of shares to be awarded, the price (if any) to be paid by the recipient of Restricted Shares (subject to Section 7(b)), the time or times within which such awards may be subject to forfeiture, and all other terms and conditions of the awards.

The Committee may condition the grant of Restricted Shares upon the attainment of specified performance goals or such other factors as the Committee may determine, in its sole discretion.

The provisions of Restricted Shares awards need not be the same with respect to each recipient.

(b) Awards and Certificates. The prospective recipient of a Restricted Shares award shall not have any rights with respect to such award, unless and until such recipient has executed an agreement evidencing the award and has delivered a fully executed copy thereof to the Company, and has otherwise complied with the applicable terms and conditions of such award.

(i) The purchase price for Restricted Shares shall be equal to or less than their par value and may be zero.

(ii) Awards of Restricted Shares must be accepted within a period of 60 days (or such shorter period as the Committee may specify at grant) after the award date, by executing a Restricted Shares Award Agreement and paying whatever price (if any) is required under Section 7(b)(i).

(iii) Each participant receiving a Restricted Shares award shall be issued a Share certificate in respect of such Restricted Shares. Such certificate shall be registered in the name of such participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such award.

(iv) The Committee shall require that the share certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any Restricted Shares award, the participant shall have delivered a share power, endorsed in blank, relating to the Shares covered by such award.

(c) Restrictions and Conditions. The Restricted Shares awarded pursuant to this Section 7 shall be subject to the following restrictions and conditions:

(i) Subject to the provisions of this Plan and the award agreement, during a period set by the Committee commencing with the date of such award (the "Restriction Period"), the participant shall not be permitted to sell, transfer, pledge or assign Restricted Shares awarded under the Plan. Within these limits, the Committee, in its sole discretion, may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions in whole or in part, based on service, performance and/or such other factors or criteria as the Committee may determine, in its sole discretion.

(ii) Except as provided in this paragraph (ii) and Section 7(c)(i), the participant shall have, with respect to the Restricted Shares, all of the rights of a shareholder of the Company, including the right to vote the shares, and the right to receive any cash dividends.

The Committee, in its sole discretion, as determined at the time of award, may permit or require the payment of cash dividends to be deferred and, if the Committee so determines, reinvested, subject to Section 14(e), in additional Restricted Shares to the extent shares are available under
Section 3, or otherwise reinvested. Pursuant to Section 3 above, Share dividends issued with respect to Restricted Shares shall be treated as additional restricted Shares that are subject to the same restrictions and other terms and conditions that apply to the shares with respect to which such dividends are issued.

(iii) Subject to the applicable provisions of the award agreement and this Section 7, upon termination of a participant's employment with the Company and any Subsidiary or Affiliate for any reason during the Restriction Period, all shares still subject to restriction will vest, or be forfeited, in accordance with the terms and conditions established by the Committee at or after grant.

(iv) If and when the Restriction Period expires without a prior forfeiture of the Restricted Shares, certificates for an appropriate number of unrestricted shares shall be delivered to the participant promptly.

(d) Minimum Value Provisions. In order to better ensure that award payments actually reflect the performance of the Company and service of the participant, the Committee may provide, in its sole discretion, for a tandem performance-based or other award designed to guarantee a minimum value, payable in cash or Shares to the recipient of a Restricted Shares award, subject to such performance, future service, deferral and other terms and conditions as may be specified by the Committee.

SECTION 8. Deferred Shares.

(a) Administration. Deferred Shares may be awarded either alone, in addition to or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. The Committee shall determine the eligible persons to whom and the time or times at which Deferred Shares shall be awarded, the number of Deferred Shares to be awarded to any person, the duration of the period (the "Deferral Period") during which, and the conditions under which, receipt of the Shares will be deferred, and the other terms and conditions of the award in addition to those set forth in Section 8(b).

The Committee may condition the grant of Deferred Shares upon the attainment of specified performance goals or such other factors or criteria as the Committee shall determine, in its sole discretion.

The provisions of Deferred Shares awards need not be the same with respect to each recipient.

(b) Terms and Conditions. The Deferred Shares awarded pursuant to this
Section 8 shall be subject to the following terms and conditions:

(i) Subject to the provisions of this Plan and the award agreement referred to in Section 8(b)(vi) below, Deferred Shares awards may not be sold, assigned, transferred, pledged or otherwise encumbered during the Deferral Period. At the expiration of the Deferral Period (or the Elective Deferral Period referred to in Section 8(b)(v), where applicable), share certificates shall be delivered to the participant, or his legal representative, in a number equal to the shares covered by the Deferred Shares award.

(ii) Unless otherwise determined by the Committee at grant, amounts equal to any dividends declared during the Deferral Period with respect to the number of shares covered by a Deferred Shares award will be paid to the participant currently, or deferred and deemed to be reinvested in additional Deferred Shares, or otherwise reinvested, all as determined at or after the time of the award by the Committee, in its sole discretion.

(iii) Subject to the provisions of the award agreement and this
Section 8, upon termination of a participant's employment with the Company and any Subsidiary or Affiliate for any reason during the Deferral Period for a given award, the Deferred Shares in question will vest, or be forfeited, in accordance with the terms and conditions established by the Committee at or after grant.

(iv) Based on service, performance and/or such other factors or criteria as the Committee may determine, the Committee may, at or after grant, accelerate the vesting of all or any part of any Deferred Shares award and/or waive the deferral limitations for all or any part of such award.

(v) A participant may elect to further defer receipt of an award (or an installment of an award) for a specified period or until a specified event (the "Elective Deferral Period"), subject in each case to the Committee's approval and to such terms as are determined by the Committee, all in its sole discretion. Subject to any exceptions adopted by the Committee, such election must generally be made at least 12 months prior to completion of the Deferral Period for such Deferred Shares award (or such installment).

(vi) Each award shall be confirmed by, and subject to the terms of, a Deferred Shares agreement executed by the Company and the participant.

(c) Minimum Value Provisions. In order to better ensure that award payments actually reflect the performance of the Company and the service of the participant, the Committee may provide, in its sole discretion, for a tandem performance-based or other award designed to guarantee a minimum value, payable in cash or Shares to the recipient of a Deferred Shares award, subject to such performance, future service, deferral and other terms and conditions as may be specified by the Committee.

SECTION 9. Share Purchase Rights.

(a) Awards and Administration. Subject to Section 3 above, the Committee may grant eligible participants Share Purchase Rights which shall enable such participants to purchase Shares (including Deferred Shares and Restricted Shares):

(i) at its Fair Market Value on the date of grant;

(ii) at 50% or more of such Fair Market Value on such date;

(iii) at an amount equal to Book Value on such date; or

(iv) at an amount equal to the par value of such Shares on such date.

The Committee shall also impose such deferral, forfeiture and/or other terms and conditions as it shall determine, in its sole discretion, on such Share Purchase Rights or the exercise thereof.

The terms of Share Purchase Rights awards need not be the same with respect to each participant.

Each Share Purchase Right award shall be confirmed by, and be subject to the terms of, a Share Purchase Rights Agreement.

(b) Exercisability. Share Purchase Rights shall generally be exercisable for such period after grant as is determined by the Committee not to exceed 30 days. However, the Committee may provide, in its sole discretion, that the Share Purchase Rights of persons potentially subject to Section 16(b) of the Securities Exchange Act of 1934 shall not become exercisable until six months and one day after the grant date, and shall then be exercisable for 10 trading days at the purchase price specified by the Committee in accordance with Section 9(a).

SECTION 10. Other Share-Based Awards.

(a) Administration. Other awards of Shares and other awards that are valued in whole or in part by reference to, or are otherwise based on, Shares ("Other Share-Based Awards"), including, without limitation, performance shares, convertible preferred stock, convertible debentures, exchangeable securities and Share awards or options valued by reference to Book Value or subsidiary performance, may be granted either alone or in addition to or in tandem with Share Options, Share Appreciation Rights, Restricted Shares, Deferred Shares or Share Purchase Rights granted under the Plan and/or cash awards made outside of the Plan.

Subject to the provisions of the Plan, the Committee shall have authority to determine the persons to whom and the time or times at which such awards shall be made, the number of Shares

to be awarded pursuant to such awards, and all other conditions of the awards. The Committee may also provide for the grant of Shares upon the completion of a specified performance period.

The provisions of Other Share-Based Awards need not be the same with respect to each recipient.

(b) Terms and Conditions. Other Share-Based Awards made pursuant to this
Section 10 shall be subject to the following terms and conditions:

(i) Subject to the provisions of this Plan and the award agreement referred to in Section 10(b)(v) below, shares subject to awards made under this Section 10 may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the shares are issued, or, if later, the date o n which any applicable restriction, performance or deferral period lapses.

(ii) Subject to the provisions of this Plan and the award agreement and unless otherwise determined by the Committee at grant, the recipient of an award under this Section 10 shall be entitled to receive, currently or on a deferred basis, interest or dividends or interest or dividend equivalents with respect to the number of shares covered by the award, as determined at the time of the award by the Committee, in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested.

(iii) Any award under Section 10 and any Shares covered by any such award shall vest or be forfeited to the extent so provided in the award agreement, as determined by the Committee, in its sole discretion.

(iv) In the event of the participant's Retirement, Disability or death, or in cases of special circumstances, the Committee may, in its sole discretion, waive in whole or in part any or all of the remaining limitations imposed hereunder (if any) with respect to any or all of an award under this Section 10.

(v) Each award under this Section 10 shall be confirmed by, and subject to the terms of, an agreement or other instrument by the Company and by the participant.

(vi) Shares (including securities convertible into Shares) issued on a bonus basis under this Section 10 may be issued for no cash consideration. Shares (including securities convertible into Shares) purchased pursuant to a purchase right awarded under this Section 10 shall be priced at least 50% of the Fair Market Value of the Shares on the date of grant.

SECTION 11. Change in Control Provisions.

(a) Impact of Event. In the event of:

(1) a "Change in Control" as defined in Section 11(b), or

(2) a "Potential Change in Control" as defined in section 11(c), but only if and to the extent so determined by the Committee or the Board at or after grant (subject to any right of approval expressly reserved by the Committee or the Board at the time of such determination), the following acceleration and valuation provisions shall apply:

(i) Any Share Appreciation Rights (including, without limitation, any Limited Share Appreciation Rights) outstanding for at least six months and any Share Option awarded under the Plan not previously exercisable and vested shall become fully exercisable and vested.

(ii) The restrictions and deferral limitations applicable to any Restricted Shares, Deferred Shares, Share Purchase Rights and Other Share-Based Awards, in each case to the extent not already vested under the Plan, shall lapse and such shares and awards shall be deemed fully vested.

(iii) The value of all outstanding Share Options, Share Appreciation Rights, Restricted Shares, Deferred Shares, Share Purchase Rights and Other Share-Based Awards, in each case to the extent vested, shall, unless otherwise determined by the Committee in its sole discretion at or after grant but prior to any Change in Control, be cashed out on the basis of the "Change in Control Price" as defined in Section 11(d) as of the date such Change in Control or such Potential Change in Control is determined to have occurred or such other date as the Committee may determine prior to the Change in Control.

(b) Definition of "Change in Control". For purposes of Section 11(a), a "Change in Control" means the happening of any of the following:

(i) any person or entity, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, other than the Company or a wholly-owned subsidiary thereof or any employee benefit plan of the Company or any of its Subsidiaries, becomes the beneficial owner of the Company's securities having 20% or more of the combined voting power of the then outstanding securities of the Company that may be cast for the election of trustees of the Company (other than as a result of an issuance of securities initiated by the Company in the ordinary course of business); or

(ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions less than a majority of the combined voting power

of the then outstanding securities of the Company or any successor corporation or entity entitled to vote generally in the election of the trustees of the Company or such other corporation or entity after such transaction are held in the aggregate by the holders of the Company's securities entitled to vote generally in the election of trustees of the Company immediately prior to such transaction; or

(iii) during any period of two consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Company's shareholders, of each trustee of the Company first elected during such period was approved by a vote of at least two-thirds of the trustees of the Company then still in office who were trustees of the Company at the beginning of any such period.

(c) Definition of Potential Change in Control. For purposes of Section
11(a), a "Potential Change in Control" means the happening of any one of the following:

(i) The approval by shareholders of an agreement by the Company, the consummation of which would result in a Change in Control of the Company as defined in Section 11(b); or

(ii) The acquisition of beneficial ownership, directly or indirectly, by any entity, person or group (other than the Company or a Subsidiary or any Company employee benefit plan (including any trustee of such plan acting as such trustee)) of securities of the Company representing 10% or more of the combined voting power of the Company's outstanding securities and the adoption by the Board of Trustees of a resolution to the effect that a Potential Change in Control of the Company has occurred for purposes of this Plan.

(d) Definition of Change in Control Price. For purposes of this Section 11, "Change in Control Price" means the highest price per share paid in any transaction reported on the New York Stock Exchange or paid or offered in any bona fide transaction related to a potential or actual Change in Control of the Company at any time during the 60 day period immediately preceding the occurrence of the Change in Control (or, where applicable, the occurrence of the Potential Change in Control event), in each case as determined by the Committee except that, in the case of Incentive Options and Share Appreciation Rights relating to Incentive Options, such price shall be based only on transactions reported for the date on which the optionee exercises such Share Appreciation Rights (or Limited Share Appreciation Rights) or, where applicable, the date on which a cashout occurs under Section 11(a)(2)(iii).

SECTION 12. Ownership Limitation.

All awards hereunder shall be subject to the ownership limitations set forth in the Declaration of Trust of the Company. Without limiting the generality of the foregoing, any award which causes a recipient, or any constructive or beneficial owner of Shares (as determined under Sections 318 and

544, respectively, of the Code), to own or be deemed to own shares in excess of such ownership limitations shall be void ab initio.

SECTION 13. Amendments and Termination.

The Board may amend, alter, or discontinue the Plan, but no amendment, alteration, or discontinuation shall be made which would impair the rights of an optionee or participant under a Share Option, Share Appreciation Right (or Limited Share Appreciation Right), Restricted or Deferred Shares award, Share Purchase Right or Other Share-Based Award theretofore granted, without the optionee's or participant's consent, or which, without the approval of the Company's shareholders, would:

(a) except as expressly provided in this Plan, increase the total number of shares reserved for the purpose of the Plan; or

(b) change the employees or class of employees eligible to participate in the Plan.

The Committee may amend the terms of any Share Option or other award theretofore granted, prospectively or retroactively, but, subject to Section 3 above, no such amendment shall impair the rights of any holder without the holder's consent. The Committee may also substitute new Share Options for previously granted Share Options (on a one for one or other basis), including previously granted Share Options having higher option exercise prices.

Subject to the above provisions, the Board shall have broad authority to amend the Plan to take into account changes in applicable securities and tax laws and accounting rules, as well as other developments.

SECTION 14. Unfunded Status of Plan.

The Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payments not yet made to a participant or optionee by the Company, nothing contained herein shall give any such participant or optionee any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Shares or payments in lieu of or with respect to awards hereunder; provided, however, that, unless the Committee otherwise determines with the consent of the affected participant, the existence of such trusts or other arrangements is consistent with the "unfunded" status of the Plan.

SECTION 15. General Provisions.

(a) The Committee may require each person purchasing shares pursuant to a Share Option or other award under the Plan to represent to and agree with the Company in writing that the optionee or participant is acquiring the shares without a view to distribution thereof. The certificates

for such shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer.

All certificates for Shares or other securities delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, and any applicable Federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

(b) Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

(c) The adoption of the Plan shall not confer upon any employee of the Company or any Subsidiary or Affiliate any right to continued employment with the Company or a Subsidiary or Affiliate, as the case may be, nor shall it interfere in any way with the right of the Company or a Subsidiary or Affiliate to terminate the employment of any of its employees at any time.

(d) No later than the date as of which an amount first becomes includable in the gross income of the participant for Federal income tax purposes with respect to any award under the Plan, the participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any Federal, state, or local taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Committee, withholding obligations may be settled with Shares, including Shares that are part of the award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries or Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the participant.

(e) The actual or deemed reinvestment of dividends or dividend equivalents in additional Restricted Shares (or in Deferred Shares or other types of Plan awards) at the time of any dividend payment shall only be permissible if sufficient Shares are available under Section 3 for such reinvestment (taking into account then outstanding Share Options, Share Purchase Rights and other Plan awards).

(f) The Plan and all awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Maryland.

SECTION 16. Effective Date of Plan.

The Plan shall be effective as of April 21, 1997, subject to the approval of the Company's shareholders.

SECTION 17. Term of Plan.

No Share Option, Share Appreciation Right, Restricted Shares award, Deferred Shares award, Share Purchase Right or Other Share-Based Award shall be granted pursuant to the Plan on or after the tenth anniversary of the date of shareholder approval, but awards granted prior to such tenth anniversary may extend beyond that date.

SECTION 18. Restrictions on Transfer.

Awards of derivative securities (as defined in Rule 16a-1(c) under the Securities Exchange Act of 1934 or any successor definition adopted by the Securities and Exchange Commission) granted under the Plan shall not be transferable except (a) by will or the laws of descent and distribution, or (b) as provided in Sections 5(e) and 6(b)(iii) of the Plan.

EXHIBIT 10.26

CCA PRISON REALTY TRUST
NON-EMPLOYEE TRUSTEES' SHARE OPTION PLAN

1. Purpose. The purpose of the CCA Prison Realty Trust Non-Employee Trustees' Share Option Plan (the "Plan") is to advance the interests of CCA Prison Realty Trust (the "Company") and its shareholders by encouraging increased share ownership by members of the Board of Trustees (the "Board") of the Company who are not employees of the Company, any subsidiary of the Company, Corrections Corporation of America ("CCA"), or any subsidiary of CCA to enhance long-term shareholder value through continuing ownership of the Company's common shares.

2. Administration.

(a) The Plan shall be administered by the Compensation Committee of the Board. The Compensation Committee shall have all the powers vested in it by the terms of the Plan, which shall include the authority (within the limitations described herein) to prescribe the form of the agreements embodying awards of non-qualified options (the "Options"). The Compensation Committee, subject to the provisions of the Plan, shall grant Options under the Plan and shall have the power to construe the Plan, to determine all questions arising hereunder, and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decision of the Compensation Committee in the administration of the Plan shall be final and conclusive. The Compensation Committee may act only by a majority of its members in office, except that the members of the Compensation Committee may authorize any one or more of their members or the Secretary or any other officer of the Company to execute and deliver documents on behalf of the Compensation Committee.

(b) Each person who is or shall have been a member of the Compensation Committee shall be indemnified and held harmless by the Company against and from any and all loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he may be or become involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him in settlement thereof (with the Company's written approval) or paid by him in satisfaction of a judgment in any such action, suit, or proceeding, except a judgment in favor of the Company based upon a finding of his lack of good faith; subject, however, to the conditions that upon the institution of any claim, action, suit, or proceeding against him, he shall in writing give the Company an opportunity, at its expense, to handle and defend the same before he undertakes to handle and defend it on such person's own behalf. The foregoing right of indemnification shall not be exclusive of any other right to which such person may be entitled as a matter of law or otherwise, or any power that the Company may have to indemnify him or hold him harmless. Each member of the Compensation Committee and each officer and employee of the Company shall be fully justified in relying or acting in good faith upon any information furnished in connection with the administration of the Plan by an appropriate person or persons other than himself. In no event shall any person who is or shall have been a member of the Compensation

Committee or an officer or employee of the Company be held liable for any determination made or other action taken or any omission to act in reliance upon any such information as referred to in the preceding sentence, or for any action (including the furnishing of information) taken or any omission to act, when such determination, action, or omission is made in good faith.

3. Participation. Each member of the Board of the Company who is not an employee of the Company, any subsidiary of the Company, CCA or any subsidiary of CCA (a "Non-Employee Trustee") shall receive Options in accordance with
Section 5 below. As used herein, the term "subsidiary" means any corporation at least 40% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or CCA, as the case may be.

4. Awards Under the Plan.

(a) Type of Awards. Awards under the Plan shall include only Options, which are rights to purchase common shares of the Company having a par value of $.01 per share (the "Shares"). All Options are subject to the terms, conditions, and restrictions specified in Paragraph 5 below.

(b) Maximum Number of Shares That May Be Issued. No more than 150,000 Shares, subject to adjustment as provided in Paragraph 6 below, may be issued under the Plan pursuant to the exercise of Options.

(c) Rights with Respect to Shares. A Non-Employee Trustee to whom an Option is granted (and any person succeeding to such a Non-Employee Trustee rights pursuant to the Plan) shall have no rights as a shareholder with respect to any Shares issuable pursuant to any such Option until the date of the issuance of a share certificate to him for such Shares. Except as provided in Paragraph 6 below, no adjustment shall be made for dividends, distributions, or other rights (whether ordinary or extraordinary, and whether in cash, securities, or other property) for which the record date is prior to the date such share certificate is issued.

5. Non-Qualified Options. All Options shall be options which are not "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). Each Option shall be evidenced by an agreement in such form as the Board shall prescribe from time to time in accordance with the Plan and shall be subject to the following terms and conditions:

(a) The option price per Share shall be 100% of the fair market value per Share at grant. The fair market value per Share on any given date, unless otherwise determined by the Compensation Committee in good faith, shall be the reported closing price of a Share on the New York Stock Exchange or, if no such sale of Shares is reported on the New York Stock Exchange on such date, the fair market value of the Share as determined by the Board

in good faith. The options granted to Founding Trustees (as defined below) upon effectiveness of the Registration Statement (as defined below) will have an exercise price equal to the initial public offering price.

(b) Each Non-Employee Trustee as of the date the initial Registration Statement on Form S-11(the "Registration Statement") is declared effective by the Securities and Exchange Commission relating to the offering of 18,500,000 Shares will receive an Option to purchase 5,000 Shares on the date of the Registration Statement (each such trustee, a "Founding Trustee"). Each Non-Employee Trustee who is not a Founding Trustee (a "NonFounding Trustee") will receive an Option to purchase 5,000 Shares on the date the NonFounding Trustee is first elected or appointed to the Board of Trustees. In addition to the foregoing, each Non-Employee Trustee will receive an Option to purchase 5,000 Shares on each of the nine anniversary dates of the adoption of the Plan.

(c) The term of each Option shall be fixed by the Compensation Committee, but no Option shall be exercisable more than ten years after the date the Option is granted.

(d) Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Board at or after grant. If the Compensation Committee provides, in its sole discretion, that any Option is exercisable only in installments, the Compensation Committee may waive such installment exercise provisions at any time at or after grant in whole or in part, based on such factors as the Compensation Committee shall determine, in its sole discretion.

(e) Subject to whatever installment exercise provisions apply under subparagraph (d), Options may be exercised in whole or in part at any time during the option period, by giving written notice of exercise to the Company specifying the number of Shares to be purchased. Such notice shall be accompanied by payment in full of the purchase price either by check, note or such other instrument as the Compensation Committee may accept. As determined by the Compensation Committee in its sole discretion, at or after grant, payment in full or in part may also be made in the form of a share option or Shares already owned by the Non-Employee Trustee (based, in each case, on the fair market value of the share option or the Shares on the date the Option is exercised, as determined by the Compensation Committee in accordance with subparagraph (a)). No Shares shall be issued until full payment therefor has been made. Upon purchase of Shares, an optionee shall make such representations, warranties and covenants as the Compensation Committee may request.

(f) The Compensation Committee may, in its discretion, authorize all or a portion of the Options to be granted to a Non-Employee Trustee to be on terms which permit transfer by such optionee to (i) the spouse, children or grandchildren of the Non-Employee Trustee ("Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, (iii) a partnership in which such Immediate Family Members are the only partners, or (iv) certain affiliates of the Non-Employee Trustee, as determined

by the Compensation Committee, provided that (x) there may be no consideration for any such transfer, (y) the share option agreement pursuant to which such Options are granted must be approved by the Compensation Committee, and must expressly provide for transferability in a manner consistent with this Section, and (z) subsequent transfers of transferred Options shall be prohibited except those in accordance with this subparagraph (f). Following transfer, any such Options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of this Plan or the option agreement executed pursuant hereto, the term "optionee" or "Non-Employee Trustee" shall be deemed to refer to the transferee.

6. Capital Adjustments. In the event of any merger, reorganization, consolidation, recapitalization, share dividend, share split or other change in corporate structure affecting the Shares, an adjustment shall be made in the aggregate number of Shares reserved for issuance under the Plan and in the number and price of Shares subject to outstanding Options granted under the Plan, as may be determined to be appropriate by the Compensation Committee, in its sole discretion, provided that the number of Shares subject to an Option shall always be a whole number.

7. Authority to Issue Shares. The Company, during the term of the Options granted hereunder, will at all times reserve and keep available, and will seek to obtain from any regulatory body having jurisdiction, any requisite authority in order to issue and sell such number of Shares as shall be sufficient to satisfy the requirements of the Options granted under the Plan. If in the opinion of its counsel the issuance or sale of any Shares hereunder shall not be lawful for any reason, including the inability of the Company to obtain from any regulatory body having jurisdiction, authority deemed by such counsel to be necessary to such issuance or sale, the Company shall not be obligated to issue or sell any such Shares.

8. Ownership Limitation. All Options shall be subject to the ownership limitations set forth in the Declaration of Trust of the Company. Without limiting the generality of the foregoing, any Option which causes a Non-Employee Trustee, or any constructive or beneficial owner of Shares subject to such Option (as determined under Sections 318 and 544, respectively, of the Code), to own or be deemed to own Shares in excess of such ownership limitations shall be void ab initio.

9. Miscellaneous Provisions.

(a) No Non-Employee Trustee or other person shall have any claim or right to be granted an Option under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving a Non-Employee Trustee any right to be retained in the service of the Company.

(b) Except as provided in Section 5 (f), an optionee's rights and interests under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of a optionee's death, by will or the laws of descent and distribution), including, but not by way of limitation, execution, levy, garnishment,

attachment, pledge, bankruptcy, or in any manner, and no such right or interest of any participant in the Plan shall be subject to any obligation or liability of such participant.

(c) No Shares shall be issued hereunder unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state, and other securities laws.

(d) The expenses of administration of the Plan shall be borne by the Company.

(e) The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to ensure the issuance of Shares upon exercise of any Option under the Plan and issuance of Shares upon exercise of Options shall be subordinate to the claims of the Company's general creditors.

(f) By accepting any Option or other benefit under the Plan, each optionee and each person claiming under or through an optionee shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Company or the Compensation Committee.

(g) The appropriate officers of the Company shall cause to be filed any reports, returns, or other information regarding Options hereunder or any Shares issued pursuant hereto as may be required by the Securities Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, or any other applicable statute, rule, or regulation (excluding reports pursuant to Section 16 of the Securities Exchange Act of 1934, which shall be the sole responsibility of a Non-Employee Trustee who exercises an Option).

10. Amendment. The Plan may be amended at any time and from time to time by the Board as the Board shall deem advisable. No amendment of the Plan shall materially and adversely affect any right of any optionee with respect to any Option theretofore granted without such optionee's written consent.

11. Effective Date. This Plan shall be effective on Monday, April 21, 1997.

12. Termination. This Plan shall terminate upon the earlier of the following dates or events to occur:

(a) the adoption of a resolution of the Board terminating the Plan; or

(b) December 31, 2007.

No termination of the Plan shall materially and adversely affect any of the rights or obligations of any person, without his consent, under any Option theretofore granted under the Plan.